BALANCE SHEET COMPONENTS

3 Months Ended

Mar. 31, 2024

BALANCE SHEET COMPONENTS

BALANCE SHEET COMPONENTS

3. BALANCE SHEET COMPONENTS

Accounts Receivable

Accounts receivable include amounts that are unbilled at the end of the period that are expected to be billed and collected within a 12-month period. Unbilled accounts receivable, included in accounts receivable, totaled $17.4 million and $16.4 million as of March 31, 2024, and December 31, 2023, respectively. Unbilled accounts receivable that are not expected to be billed and collected during the succeeding 12-month period are recorded in other non-current assets and totaled $2.2 million and $1.1 million as of March 31, 2024, and December 31, 2023, respectively.

The Company performs ongoing credit evaluations of its customers’ financial condition. An allowance for credit losses is maintained for probable credit losses based upon the Company’s assessment of the expected collectibility of the accounts receivable. The allowance for credit losses is reviewed on a quarterly basis to assess the adequacy of the allowance.

Property and Equipment

Property and equipment, net consist of the following (in thousands):

	March 31,		December 31,
	2024		2023
Computer equipment	$	12,124	$	12,515
Software		5,599		5,596
Furniture, fixtures, and equipment		2,519		2,501
Leasehold improvements		6,463		6,475
Laboratory and other equipment		5,102		4,891
Test equipment		22,324		25,044
Property and equipment in progress:
DFI™ system assets		22,086		22,864
CV® system and other assets		7,192		6,977
		83,409		86,863
Less: Accumulated depreciation and amortization		(47,321)		(49,525)
Total	$	36,088	$	37,338

Test equipment mainly includes DFI™ system and CV^® system assets at customer sites that are contributing to revenue. Property and equipment in progress represent the development or construction of property and equipment that have not yet been placed in service for the Company’s intended use and are not depreciated. 

Depreciation and amortization expense was $1.1 million and $1.3 million during the three months ended March 31, 2024 and 2023, respectively.

Goodwill and Intangible Assets, Net

As of March 31, 2024, and December 31, 2023, the carrying amount of goodwill was $15.0 million and $15.0 million, respectively.

Intangible assets, net, consisted of the following (in thousands):

		March 31, 2024						December 31, 2023
	Amortization	Gross				Net		Gross				Net
	Period	Carrying		Accumulated		Carrying		Carrying		Accumulated		Carrying
	(Years)	Amount		Amortization		Amount		Amount		Amortization		Amount
Acquired identifiable intangibles:
Customer relationships	1-10	$	9,505	$	(7,500)	$	2,005	$	9,508	$	(7,335)	$	2,173
Developed technology	4-9		34,623		(22,723)		11,900		34,650		(22,094)		12,556
Tradename and trademarks	2-10		1,598		(1,052)		546		1,598		(1,025)		573
Patent	6-10		2,100		(1,804)		296		2,100		(1,782)		318
Noncompetition agreements	3		848		(848)		—		848		(848)		—
Total		$	48,674	$	(33,927)	$	14,747	$	48,704	$	(33,084)	$	15,620

The weighted average amortization period for acquired identifiable intangible assets was 5.0 years as of March 31, 2024. The following table summarizes intangible assets amortization expense in the accompanying condensed consolidated statements of comprehensive income (loss) (in thousands):

	Three Months Ended March 31,
	2024		2023
Amortization of acquired technology included under costs of revenues	$	584	$	553
Amortization of acquired intangible assets presented separately under costs and expenses		259		325
Total amortization of acquired intangible assets	$	843	$	878

The Company expects annual amortization of acquired identifiable intangible assets to be as follows (in thousands):

Year Ending December 31,	Amount
2024 (remaining nine months)	$	2,388
2025		3,068
2026		2,899
2027		2,746
2028		2,441
2029 and thereafter		1,205
Total future amortization expense	$	14,747

There were no impairment charges for goodwill and intangible assets during the three months ended March 31, 2024 and 2023.

Other Non-current Assets

Other non-current assets consisted of the following (in thousands):

	March 31,		December 31,
	2024		2023
Costs capitalized to obtain revenue contracts – non-current (1)	$	3,645	$	2,587
Unbilled accounts receivable – non-current (2)		2,248		1,069
Contract assets – non-current (1)		687		933
Net investments in sales-type leases – non-current (3)		20,035		12,196
Deposits and other non-current prepaid expenses		2,167		2,433
Total other non-current assets	$	28,782	$	19,218

(1) See Note 2, Revenue from Contracts with Customers.

(2) See Note 3, Balance Sheet Components – Accounts Receivable.

(3) The Company had net investments in sales-type leases for its DFI™ system and CV® system assets. The following table summarizes the components of the Company’s net investments in sales-type leases in the condensed consolidated balance sheets (in thousands):

	March 31,		December 31,
	2024		2023
Lease receivables	$	16,493	$	9,460
Unguaranteed residual assets		6,786		4,717
Net investments in sales-type leases		23,279		14,177
Less: Current portion of lease receivables under prepaid expenses and other current assets		(3,244)		(1,981)
Net investments in sales-type leases – non-current	$	20,035	$	12,196

Maturities of leases payments under sales-type leases as of March 31, 2024, were as follows (in thousands):

Year Ending December 31,	Amount
2024 (remaining nine months)	$	3,211
2025		7,883
2026		7,519
2027		2,674
2028		68
Total future sales-type lease payments		21,355
Less: Present value adjustment (a)		(4,862)
Present value of lease receivables	$	16,493

(a) Calculated using the rate implicit in the lease determined for each lease.

There was no allowance for credit losses on lease receivables as of March 31, 2024, and December 31, 2023. The Company’s ongoing risk management strategy for residual assets includes performing regular reviews of estimated residual values.