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Significant Concentrations
12 Months Ended
Dec. 31, 2018
Risks And Uncertainties [Abstract]  
Significant Concentrations

12.

Significant Concentrations

Significant customer

Honeywell International, Inc. and affiliated entities (“Honeywell”) accounted for revenue and accounts receivable as follows (in thousands, except percentages):

 

 

 

Year Ended December 31,

 

 

 

2018

 

 

2017

 

Honeywell revenue

 

$

7,013

 

 

$

12,278

 

As a percentage of total revenue

 

 

10

%

 

 

15

%

 

 

December 31,

 

 

 

2018

 

 

2017

 

Honeywell accounts receivable

 

$

2,758

 

 

$

8,659

 

As a percentage of total accounts receivable

 

 

24

%

 

 

48

%

 

No other customer accounted for 10% or more of total revenue in 2018 or 2017 or 10% or more of total accounts receivable at December 31, 2018 or 2017.

Significant supplier

Effective March 1, 2019, pursuant to a new Global Partnership Agreement with Microsoft, we are authorized to sell Windows Embedded operating systems in Canada, the United States, Argentina, Brazil, Chile, Mexico, Peru, Venezuela, Puerto Rico, Cuba, Haiti, Dominican Republic, Jamaica, Trinidad and Tobago, Guadeloupe, Martinique, Bahamas, Barbados, Saint Lucia, Curacao, Aruba, Saint Vincent and the Grenadines, U.S. Virgin Islands, Grenada, Dominica, Cayman Islands, Saint Kitts and Nevis, Sint Maarten, Turks and Caicos Islands, Saint Martin, British Virgin Islands, Sint Eustatius, Saba, Anguilla, Montserrat, Colombia, Saint Barthelemy, Antigua and Barbuda.  Our existing distribution agreement for sales of Windows Embedded operating systems in the E.U., the European Free Trade Association, Turkey and Africa, from which we generated approximately 3.7% of our third-party software sales in 2018, expires on June 30, 2019 and will not be renewed thereafter. We have also entered into ODAs with Microsoft pursuant to which we are licensed to sell Microsoft Windows Mobile operating systems to customers in North America, South America, Central America (excluding Cuba), Japan, Taiwan, Europe, the Middle East, and Africa. The ODAs to sell Windows Mobile operating systems are effective through April 30, 2022.     

Software sales under these agreements constitute a significant portion of our software revenue and total revenue. There is no automatic renewal provision in any of these agreements, and these agreements can be terminated unilaterally by Microsoft at any time.

Microsoft currently offers a rebate program to sell Microsoft Windows Embedded operating systems pursuant to which we earn money for achieving certain predefined objectives. In accordance with Microsoft rebate program rules, we allocate 30% of rebates to reduce cost of sales, with the remaining 70% to offset qualified marketing expenses in the period the expenditures are claimed and approved.

Under this rebate program, we recorded rebate credits as follows (in thousands):

 

 

 

Year Ended December 31,

 

 

 

2018

 

 

2017

 

Reductions to cost of revenue

 

$

718

 

 

$

499

 

Reductions to marketing expense

 

$

682

 

 

$

658

 

 

There was a balance of approximately $329,000 in outstanding rebate credits for which we qualified as of December 31, 2018. If qualified program expenditures are made, these will be accounted for as reductions in marketing expense in the period in which such expenditures are made.