Deferred Revenue

3 Months Ended

Mar. 31, 2024

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.

The following table provides changes in the deferred revenue balance for the three months ended March 31, 2024 and 2023 (in thousands):

	Three Months Ended March 31,
	2024		2023
Beginning balance	$	11,916	$	13,498
Add: Payments received from current period sales	3,850		6,045
Less: Revenue recognized from current period sales	(572)		(615)
Less: Revenue recognized from beginning balance	(4,739)		(5,229)
Ending balance	$	10,455	$	13,699

Approximately 86% of the Company’s deferred revenue balance of $10.5 million as of March 31, 2024 will be recognized over the next 12 months.

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 March 31, 2024, and December 31, 2023 was $0.8 million and $2.1 million, respectively.

Costs for extended service contracts were $1.6 million for both the three months ended March 31, 2024 and 2023 and were recorded in cost of revenue on the condensed consolidated statements of operations