BALANCE SHEET COMPONENTS

3 Months Ended

Mar. 31, 2025

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 $27.0 million and $23.0 million as of March 31, 2025, and December 31, 2024, 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 $8.6 million and $9.0 million as of March 31, 2025, and December 31, 2024, 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. The allowance for credit losses was $0.9 million as of March 31, 2025 and December 31, 2024.

Prepaid expenses and other current assets

Prepaid expenses and other current assets consist of the following (in thousands):

	March 31,		December 31,
	2025		2024
Prepaid expense	$	7,840	$	6,481
Contract assets		6,423		3,224
Costs capitalized to obtain revenue contracts		2,494		2,929
Net investments in sales-type leases - current portion		5,274		4,526
Income tax receivable		769		285
Total prepaid expenses and other current assets	$	22,800	$	17,445

Property and Equipment

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

	March 31,		December 31,
	2025		2024
Computer equipment	$	12,751	$	10,799
Software and capitalized software development cost		6,646		5,617
Furniture, fixtures, and equipment		2,553		2,529
Leasehold improvements		6,850		6,691
Laboratory and other equipment		6,009		5,734
Test equipment		21,681		22,680
Property and equipment in progress:
DFI system assets		40,231		34,935
CV system and other assets		7,508		6,431
Total property and equipment		104,229		95,416
Less: Accumulated depreciation and amortization		(47,665)		(46,951)
Total property and equipment, net	$	56,564	$	48,465

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 $0.7 million and $1.1 million for the three months ended March 31, 2025 and 2024, respectively.

Goodwill and Intangible Assets, Net

The following table summarizes goodwill transactions for the periods presented (in thousands):

	Three Months Ended March 31,
	2025		2024
Balance at beginning of the period	$	14,953	$	15,029
Addition		81,686		—
Foreign currency translation adjustment		6		(76)
Balance at end of the period	$	96,645	$	14,953

The Company completed the acquisition of SecureWise LLC (“SecureWise”) on March 7, 2025. See Note 14, “Business Combination” for additional information related to the goodwill and intangible assets added from this acquisition.

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

		March 31, 2025						December 31, 2024
	Amortization	Gross				Net		Gross				Net
	Period	Carrying		Accumulated		Carrying		Carrying		Accumulated		Carrying
	(Years)	Amount		Amortization		Amount		Amount		Amortization		Amount
Acquired intangible assets:
Customer relationships	1 - 13	$	38,400	$	(8,080)	$	30,320	$	9,499	$	(7,866)	$	1,633
Developed technology	4 - 9		46,173		(25,326)		20,847		34,566		(24,601)		9,965
Tradename and trademarks	2 - 10		8,198		(1,216)		6,982		1,598		(1,120)		478
Patent	6 - 10		2,100		(1,892)		208		2,100		(1,869)		231
Noncompetition agreements	3		848		(848)		—		848		(848)		—
Total		$	95,719	$	(37,362)	$	58,357	$	48,611	$	(36,304)	$	12,307

The weighted average amortization period for acquired identifiable intangible assets was 9.1 years as of March 31, 2025. The amortization expense related to intangible assets were as follows (in thousands):

	Three Months Ended March 31,
	2025		2024
Amortization of acquired technology (included in costs of revenues)	$	678	$	584
Amortization of acquired intangible assets (presented separately under costs and expenses)		378		259
Total amortization of acquired intangible assets	$	1,056	$	843

The estimated future amortization of acquired identifiable intangible assets as follows (in thousands):

Year Ending December 31,	Amount
2025 (remaining nine months)	$	6,196
2026		8,092
2027		7,939
2028		7,634
2029		5,949
2030 and thereafter		22,547
Total future amortization expense	$	58,357

There was no impairment charges for goodwill and intangible assets during the three months ended March 31, 2025 and 2024.

Other Non-current Assets

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

	March 31,		December 31,
	2025		2024
Net investments in sales-type leases (3)	$	16,492	$	13,226
Unbilled accounts receivable (2)		8,587		8,983
Costs capitalized to obtain revenue contracts (1)		4,147		2,385
Contract assets (1)		505		617
Other		4,174		4,302
Total other non-current assets	$	33,905	$	29,513

(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,
	2025		2024
Present value of lease receivables	$	13,784	$	13,238
Less: Contract liability		—		(3,235)
Net lease receivables		13,784		10,003
Unguaranteed residual assets		7,982		7,749
Total net investments in sales-type leases	$	21,766	$	17,752
Reported as:
Current (included in Prepaid expenses and other current assets)	$	5,274	$	4,526
Non-current (included in Other non-current assets)		16,492		13,226
Total net investments in sales-type leases	$	21,766	$	17,752

Maturities of leases payments under sales-type leases as of March 31, 2025, were as follows (in thousands):

Year Ending December 31,	Amount
2025 (remaining nine months)	$	5,715
2026		8,086
2027		1,724
2028		56
Total future sales-type lease payments		15,581
Less: Present value adjustment (a)		(1,797)
Present value of lease receivables	$	13,784

(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, 2025, and December 31, 2024. The Company’s ongoing risk management strategy for residual assets includes performing regular reviews of estimated residual values.