REVENUE RECOGNITION

4 Months Ended

Apr. 30, 2024

REVENUE RECOGNITION

REVENUE RECOGNITION

2. REVENUE RECOGNITION

Disaggregated Revenue

The following table presents the disaggregation of our revenue for the four months ended April 30, 2024 and three months ended March 31, 2023 (in thousands):

		Four Months Ended April 30, 2024		Three Months Ended March 31, 2023
Fixed fee license revenue	$	39,131	$	1,214
Per-unit royalty revenue		6,651		5,795
Total royalty and license revenue		45,782		7,009
Development, services, and other revenue		—		65
Total revenues	$	45,782	$	7,074

As a result of accruing per-unit royalty revenue for the reporting period based on estimates, adjustments may be required in the following quarter to true up revenue to the actual amounts reported by our licensees. In the four months ended April 30, 2024, we recorded no adjustments to royalty revenue recognized in the previous reporting period. In the three months ended March 31, 2023, we recorded adjustments of $0.4 million to increase royalty revenue recognized in the previous reporting period.

In February 2024, we entered into a new license agreement to settle a material litigation to protect our IP. We accounted for this agreement in accordance with provisions of Accounting Standard Codification 606, Revenue from Contracts with Customers, (“ASC 606”), and recorded $0.6 million, based on the remaining performance obligations, as Deferred revenue-current on our Condensed Consolidated Balance Sheet as of April 30, 2024. We will recognize this deferred revenue once the remaining performance obligations are met. 

Contract Assets

As of April 30, 2024, we had contract assets of $6.6 million included within Prepaid expenses and other current assets on the Condensed Consolidated Balance Sheets. As of December 31, 2023, we had contract assets of $7.7 million included within Prepaid expenses and other current assets, and $0.1 million included within Other assets on the Condensed Consolidated Balance Sheets. 

Contract assets decreased by $1.2 million from January 1, 2024 to April 30, 2024, primarily due to actual royalties billed during the four months ended April 30, 2024.

       Based on contracts signed and payments received as of April 30, 2024, we expect to recognize $20.5 million in revenue under our fixed fee license agreements, which are satisfied over time, including $17.1 million over one to three years and $3.4 million over more than three years.

Deferred Revenue

The following table presents changes in deferred revenue associated with contract liabilities (in thousands): 

		April 30, 2024
Deferred revenue at December 31, 2023	$	12,629
Additions to deferred revenue during the period		9,437
Reductions to deferred revenue for revenue recognized during the period		(1,594	)
Deferred revenue balance at April 30, 2024	$	20,472

As of December 31, 2023, total deferred revenue was $12.6 million. We recognized $1.6 million of deferred revenue during the four months ended April 30, 2024. We recognized $1.2 million of deferred revenue during the three months ended March 31, 2023.