Revenue from Contracts with Clients and Customers

6 Months Ended

Jun. 30, 2023

Revenue from Contract with Customer [Abstract]

Revenue from Contracts with Clients and Customers

Revenue from Contracts with Clients and Customers

Contract Assets and Contract Liabilities

Costs to fulfill contract assets decreased $1.3 million from December 31, 2022 to June 30, 2023, primarily due to amortization and recognition of costs. Costs to fulfill contract assets relate to deferred costs, which are included within other current assets and/or other assets, and software development costs, which are included within property and equipment, in our condensed consolidated balance sheets.

Contract liabilities were $7.5 million at December 31, 2022, of which $2.1 million was recognized as revenue during the six months ended June 30, 2023.

The timing of revenue recognition, billings and cash collections results in billed accounts receivable, unbilled receivables, and client advances and deposits (contract liabilities) on the condensed consolidated balance sheets. Changes in the contract asset and liability balances during the six months ended June 30, 2023 were not materially impacted by any other factors.

Contract balances consist of the following (in thousands):

	June 30, 2023		December 31, 2022
Contract Assets
Costs to fulfill	$	2,487	$	3,829
Total contract assets	$	2,487	$	3,829
Contract Liabilities
Accrued contract liabilities	$	1,649	$	2,757
Deferred revenue	3,451		4,776
Total contract liabilities	$	5,100	$	7,533

Remaining performance obligations represent the transaction price of firm orders for which work has not yet been performed. The amount reported for remaining performance obligations does not include 1) contracts that are less than one year in duration, 2) contracts for which we recognize revenue based on the right to invoice for services performed, or 3) variable consideration allocated entirely to a wholly unsatisfied performance obligation. Much of our revenue qualifies for one of these exemptions. As of June 30, 2023, the aggregate amount of the transaction price allocated to remaining performance obligations for contracts with an original expected duration of one year or more was $22.1 million. We expect to recognize revenue on approximately 33% of the remaining performance obligations in 2023, 33% in 2024, and the remaining recognized thereafter.

Disaggregation of Revenues

The following table presents our revenues, excluding sales and usage-based taxes, disaggregated by region (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Revenues by region:
United States	$	56,375	$	54,358	$	114,180	$	110,298
Canada	1,066		1,090		2,350		2,322
Europe	10,481		9,186		20,656		18,501
Total revenues	$	67,922	$	64,634	$	137,186	$	131,121