Deferred Revenue

9 Months Ended

Sep. 30, 2023

Revenue from Contract with Customer [Abstract]

Deferred Revenue

Deferred Revenue

The Company records deferred revenue when revenue is to be recognized subsequent to invoicing. For extended service contracts, the Company generally invoices customers at the beginning of the extended service contract term. The Company’s extended service contracts typically have one to three-year terms. Deferred revenue also includes payments for training not yet delivered. Approximately 88% of the Company’s deferred revenue balance of $13.1 million as of September 30, 2023 will be recognized over the next 12 months.

The following table provides changes in the deferred revenue balance for the three and nine months ended September 30, 2023 and 2022 (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Beginning balance	$	14,007	$	11,527	$	13,498	$	10,825
Add: Payments received from current period sales	5,005		5,738		15,140		14,755
Less: Revenue recognized from current period sales	(405)		(487)		(4,902)		(4,569)
Less: Revenue recognized from beginning balance	(5,499)		(4,377)		(10,628)		(8,610)
Ending balance	$	13,108	$	12,401	$	13,108	$	12,401

The fixed annual license fees received related to the AviClear contracts are deferred and recognized over the annual lease periods. The AviClear deferred license fee balance included in the total deferred revenue balance at September 30, 2023, and December 31, 2022, was $3.2 million and $2.3 million, respectively.

Costs for extended service contracts were $2.1 million and $5.8 million for the three and nine months ended September 30, 2023, respectively, and were $1.4 million and $4.6 million for three and nine months ended September 30, 2022, respectively.