Revenue from contracts with customers is recognized when control of the promised goods or services is transferred to the customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services.

Remaining performance obligations represent the transaction price allocated to performance obligations that are unsatisfied or partially unsatisfied as of the end of the reporting period. Unsatisfied and partially unsatisfied performance obligations consist of contract liabilities, in-transit orders with destination terms, and non-cancellable backlog. Non-cancellable backlog includes goods and services for which customer purchase orders have been accepted and that are scheduled or in the process of being scheduled for shipment.

The following table includes estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied or partially unsatisfied as of December 31, 2019:

Costs to fulfill a contract are capitalized when they relate directly to an existing contract or specific anticipated contract, generate or enhance resources that will be used to fulfill performance obligations and are recoverable. These costs include direct cost incurred at inception of a contract which enables the fulfillment of the performance obligation and totaled $1.5 million and $7.4 million as of December 31, 2019 and 2018, respectively. There was no impairment of capitalized contract costs in the fiscal years of 2019 and 2018.

Applying the practical expedient, the Company recognizes the incremental costs of obtaining contracts as an expense when incurred if the amortization period of the assets that otherwise would have been recognized is one year or less. These costs are included in Sales and marketing and General and administrative expenses. If the incremental direct costs of obtaining a contract, which consist of sales commissions, relate to a service recognized over a period longer than one year, costs are deferred and amortized in line with the related services over the period of benefit. Deferred commissions are classified as non-current based on the original amortization period of over one year. As of December 31, 2019 and 2018, there were no deferred commissions.

The Company records accounts receivable when it has an unconditional right to consideration. Contract liabilities are recorded when cash payments are received or due in advance of performance. Contract liabilities consist of advance payments and deferred revenue, where the Company has unsatisfied performance obligations. Contract liabilities are mainly classified as Deferred revenue on the consolidated balance sheets.

Payment terms vary by customer. The time between invoicing and when payment is due is not significant. For certain products or services and customer types, payment is required before the products or services are delivered to the customer.

The following table reflects the contract balances as of December 31, 2019 and 2018 and January 1, 2018, respectively:

* Includes the adjustments made upon ASC 606 adoption using the modified retrospective method.

The difference in the balances of the Company’s contract assets and liabilities as of December 31, 2019 and December 31, 2018 primarily results from the timing difference between the Company’s performance and the customer’s payment.

During the years ended December 31, 2019 and 2018, $14.5 million and $14.8 million of revenue was deferred due to unsatisfied performance obligations, $17.9 million and $9.0 million of revenue was recognized for the satisfaction of performance obligations, $9.9 million and $4.4 million of the recognized revenue was included in the contract liability balance at the beginning of the period, respectively.

There were no significant changes in estimates during the periods that would affect the contract balances.

In the following tables, net revenue is disaggregated by geographic region and sales channel. The Company conducts business across three geographic regions: Americas; Europe, Middle-East and Africa (“EMEA”); and Asia Pacific ("APAC"). The tables also include reconciliations of the disaggregated revenue by reportable segment. The Company operates and reports in two segments: Connected Home, and Small and Medium Business (“SMB”). Sales and usage-based taxes are excluded from net revenue.

	Year Ended December 31,
	2019						2018						2017 ⁽¹⁾
	Connected Home		SMB		Total		Connected Home		SMB		Total		Connected Home		SMB		Total
Geographic regions:
Americas	$	529,982	$	123,024	$	653,006	$	576,476	$	124,217	$	700,693	$	547,314	$	117,775	$	665,089
EMEA		91,586		108,513		200,099		97,979		109,620		207,599		93,438		103,636		197,074
APAC		89,823		55,835		145,658		96,605		53,919		150,524		127,509		49,497		177,006
Total	$	711,391	$	287,372	$	998,763	$	771,060	$	287,756	$	1,058,816	$	768,261	$	270,908	$	1,039,169
Sales channels:
Service provider	$	128,852	$	4,465	$	133,317	$	156,671	$	3,624	$	160,295	$	190,186	$	3,268	$	193,454
Non-service provider		582,539		282,907		865,446		614,389		284,132		898,521		578,075		267,640		845,715
Total	$	711,391	$	287,372	$	998,763	$	771,060	$	287,756	$	1,058,816	$	768,261	$	270,908	$	1,039,169