Revenue from Contracts with Customers

9 Months Ended

Sep. 30, 2022

Revenue from Contract with Customer [Abstract]

Revenue from Contracts with Customers

Note 2—Revenue from Contracts with Customers

Revenue Recognition Overview

The Company recognizes revenue when control of the promised goods or services is transferred to its customers, in an amount that reflects the consideration to which it expects to be entitled in exchange for the goods or services. To achieve that core principle, a five-step approach is applied: (1) identify the contract with a customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract, and (5) recognize revenue allocated to each performance obligation when the Company satisfies the performance obligation. A performance obligation is a promise in a contract to transfer a distinct good or service to the customer, and is the unit of account for revenue recognition.

The Company is generally the principal in its customer contracts because it has control over the goods and services prior to their transfer to the customer, and as such, revenue is recognized on a gross basis. Sales and usage-based taxes are excluded from revenue. Revenue is recognized net of allowances for returns and any taxes collected from customers, which

are subsequently remitted to governmental authorities. The table below presents the Company’s revenue disaggregated by revenue source (in thousands):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2021		2022		2021		2022
Product revenue:
Volume-related
Fuel sales(1)	$	52,343	$	78,512	$	72,237	$	204,224
Change in fair value of derivative instruments(2)		268		508		(2,240)		(1,606)
RIN Credits		8,134		9,270		21,916		26,997
LCFS Credits		5,744		2,595		12,976		10,114
AFTC (3)		5,287		16,057		15,008		16,279
Total volume-related product revenue		71,776		106,942		119,897		256,008
Station construction sales		2,578		6,418		13,184		15,712
Total product revenue		74,354		113,360		133,081		271,720
Service revenue:
Volume-related, O&M services		11,676		11,982		30,506		33,727
Other services		65		345		131		961
Total service revenue		11,741		12,327		30,637		34,688
Total revenue	$	86,095	$	125,687	$	163,718	$	306,408

(1) Includes non-cash stock-based sales incentive contra-revenue charges associated with the Amazon Warrant. For the three and nine months ended September 30, 2021, contra-revenue charges recognized in fuel revenue were $2.2 million and $80.2 million, respectively. For the three and nine months ended September 30, 2022, contra-revenue charges recognized in fuel revenue were $7.0 million and $15.5 million, respectively. See Note 14 for more information.

(2) Represents changes in fair value of derivative instruments related to the Company’s commodity swap and customer fueling contracts associated with the Company’s Zero Now truck financing program. The amounts are classified as revenue because the Company’s commodity swap contracts are used to economically offset the risk associated with the diesel-to-natural gas price spread resulting from customer fueling contracts under the Company’s Zero Now truck financing program. See Note 6 for more information about these derivative instruments.

(3) Represents the federal alternative fuel excise tax credit (“AFTC”), which was renewed and extended for three years beginning retroactively to January 1, 2022. See Note 19 for more information.

Remaining Performance Obligations

Remaining performance obligations represent the transaction price of customer orders for which the work has not been performed. As of September 30, 2022, the aggregate amount of the transaction price allocated to remaining performance obligations was $23.1 million, which related to the Company’s station construction sale contracts. The Company expects to recognize revenue on the remaining performance obligations under these contracts over the next 12 to 24 months.

For volume-related revenue, the Company has elected to apply an optional exemption, which waives the requirement to disclose the remaining performance obligation for revenue recognized through the ‘right to invoice’ practical expedient.

Contract Balances

The timing of revenue recognition, billings and cash collections results in billed accounts receivable, unbilled receivables (contract assets), and customer advances and deposits (contract liabilities) in the accompanying condensed consolidated balance sheets.

As of December 31, 2021 and September 30, 2022, the Company’s contract balances were as follows (in thousands):

	December 31,		September 30,
	2021		2022
Accounts receivable, net	$	87,433	$	92,161
Contract assets - current	$	966	$	2,046
Contract assets - non-current		3,532		3,115
Contract assets - total	$	4,498	$	5,161
Contract liabilities - current	$	5,523	$	4,583
Contract liabilities - non-current		—		—
Contract liabilities - total	$	5,523	$	4,583

Accounts Receivable, Net

"Accounts receivable, net" in the accompanying condensed consolidated balance sheets includes amounts billed and currently due from customers. The amounts due are stated at their net estimated realizable value. The Company maintains an allowance to provide for the estimated amount of receivables that will not be collected. The allowance is based upon an assessment of customer creditworthiness, historical payment experience, the age of outstanding receivables, and economic conditions that may affect a customer’s ability to pay.

Contract Assets

Contract assets include unbilled amounts typically resulting from the Company’s station construction sale contracts, when the cost-to-cost method of revenue recognition is utilized and revenue recognized exceeds the amount billed to the customer, and right to payment is not just subject to the passage of time. Amounts may not exceed their net realizable value. Contract assets are classified as current or noncurrent based on the timing of billings. The current portion is included in “Prepaid expenses and other current assets” and the noncurrent portion is included in “Notes receivable and other long-term assets, net” in the accompanying condensed consolidated balance sheets.

Contract Liabilities

Contract liabilities consist of billings in excess of revenue recognized from the Company’s station construction sale contracts and payments received primarily from customers of NG Advantage, LLC (“NG Advantage”) in advance of the performance obligations and are classified as current or noncurrent based on when the related revenue is expected to be recognized. The current portion and noncurrent portion of contract liabilities are included in “Deferred revenue” and “Other long-term liabilities,” respectively, in the accompanying condensed consolidated balance sheets.

Revenue recognized during the nine months ended September 30, 2021 related to the Company’s contract liability balances as of December 31, 2020 was $1.5 million. The decrease in the contract liability balances during the nine months ended September 30, 2022 is primarily driven by $2.5 million of revenue recognized related to the Company’s contract liability balances as of December 31, 2021, partially offset by billings in excess of revenue recognized.