REVENUE AND DEFERRED REVENUE

6 Months Ended

Jun. 30, 2024

REVENUE AND DEFERRED REVENUE

REVENUE AND DEFERRED REVENUE

13.     REVENUE AND DEFERRED REVENUE

Payment terms typically require payment upon shipment or installation of the NeuroStar Advanced Therapy System and additional payments as access codes for treatment sessions are delivered, which can span several years after the NeuroStar Advanced Therapy System is first delivered and installed. The timing of revenue recognition compared to billings and cash collections typically results in accounts receivable. However, sometimes customer advances and deposits may be required for certain customers and are recorded as contract liabilities (deferred revenue). For multi-year agreements, the Company generally

invoices customers annually at the beginning of each annual coverage period and recognizes revenue over the term of the coverage period.

As of June 30, 2024, the Company expects to recognize approximately the following percentages of deferred revenue by year:

	Revenue
Year:	Recognition
Remainder of 2024	62	%
2025	35	%
2026	2	%
2027	1	%
Total	100	%

Revenue recognized for the three months ended June 30, 2024 and 2023 that was included in the contract liability balance at the beginning of the year was $0.4 million and $0.5 million, respectively. Revenue recognized for the six months ended June 30, 2024 and 2023 that was included in the contract liability balance at the beginning of the year was $1.1 million and $1.4 million, respectively, and primarily represented revenue earned from separately priced extended warranties, customer deposits, milestone revenue, and clinical training.

Customers

Significant customers are those that represent more than 10% of the Company’s total revenue. For the three months ended June 30, 2024 and 2023, one customer accounted for 14% of the Company’s revenue. For the six months ended June 30, 2024 and 2023, one customer accounted for 13% and 16% of the Company’s revenue, respectively.

Accounts receivable outstanding related to that customer was $2.0 million and $1.9 million as of June 30, 2024 and December 31, 2023, respectively.

Notes receivable outstanding related to that customer was $4.4 million and $5.2 million as of June 30, 2024 and December 31, 2023, respectively.

Geographical information

The following geographic data includes revenue generated from the Company’s third-party distributors. The Company’s revenue was generated in the following geographic regions and by product line for the periods indicated (in thousands):

	Revenues by Geography
	Three Months Ended June 30,
	2024				2023
			% of				% of
	Amount		Revenues		Amount		Revenues
	(in thousands, except percentages)
U.S.	$	16,130	98	%	$	17,289	98	%
International		320	2	%		321	2	%
Total revenues	$	16,450	100	%	$	17,610	100	%

	U.S. Revenues by Product Category
	Three Months Ended June 30,
	2024				2023
			% of				% of
	Amount		Revenues		Amount		Revenues
	(in thousands, except percentages)
NeuroStar Advanced Therapy System	$	4,000	25	%	$	4,489	26	%
Treatment sessions		11,660	72	%		12,314	71	%
Other		470	3	%		486	3	%
Total U.S. revenues	$	16,130	100	%	$	17,289	100	%

	International Revenues by Product Category
	Three Months Ended June 30,
	2024				2023
			% of				% of
	Amount		Revenues		Amount		Revenues
	(in thousands, except percentages)
NeuroStar Advanced Therapy System	$	—	—	%	$	56	18	%
Treatment sessions		139	43	%		126	39	%
Other		181	57	%		139	43	%
Total international revenues	$	320	100	%	$	321	100	%

	Revenues by Geography
	Six Months Ended June 30,
	2024				2023
			% of				% of
	Amount		Revenues		Amount		Revenues
	(in thousands, except percentages)
U.S.	$	32,923	97	%	$	32,253	97	%
International		944	3	%		897	3	%
Total revenues	$	33,867	100	%	$	33,150	100	%

	U.S. Revenues by Product Category
	Six Months Ended June 30,
	2024				2023
			% of				% of
	Amount		Revenues		Amount		Revenues
	(in thousands, except percentages)
NeuroStar Advanced Therapy System	$	7,310	22	%	$	8,339	26	%
Treatment sessions		24,648	75	%		22,957	71	%
Other		965	3	%		957	3	%
Total U.S. revenues	$	32,923	100	%	$	32,253	100	%

	International Revenues by Product Category
	Six Months Ended June 30,
	2024				2023
			% of				% of
	Amount		Revenues		Amount		Revenues
	(in thousands, except percentages)
NeuroStar Advanced Therapy System	$	259	27	%	$	314	35	%
Treatment sessions		309	33	%		310	35	%
Other		376	40	%		273	30	%
Total International revenues	$	944	100	%	$	897	100	%