Note 3 - Revenue Recognition

12 Months Ended

Dec. 31, 2024

Notes to Financial Statements

Revenue from Contract with Customer [Text Block]

(3) Revenue Recognition

The Company recognizes revenue in accordance with ASC 606 “Revenue Recognition” by applying the following steps:

 

Step 1: Identify the contract(s) with a customer.

 

Step 2: Identify the performance obligation(s) in the contract.

 

Step 3: Determine the transaction price.

 

Step 4: Allocate the transaction price to the performance obligation(s) in the contract.

 

Step 5: Recognize when (or as) the entity satisfies the performance obligation(s).

The Company derives its revenue primarily from software subscriptions and software development services. Applicable revenue recognition criteria are considered separately for each performance obligation as follows:

• Subscription revenue consists primarily of revenue earned from subscription fees for access to the Company’s SaaS platform and products and, to a lesser extent, licensing fees for software products. The majority of subscription contracts are recurring, paid in advance and recognized over the term of the subscription, which is typically one to three years.

• Service revenue consists primarily of revenue earned from the performance of software development services and, to a lesser extent, professional services. The majority of software development contracts are structured as time and materials agreements. Revenue for services is generally recognized as the services are performed. Billing for services rendered generally occurs within one month after the services are provided.

Customer arrangements may contain multiple deliverables such as software platform subscriptions, software product subscriptions, and professional services. Subscriptions and services offered are usually distinct performance obligations. When they are not capable of being distinct, they are combined with other subscriptions or services until a distinct performance obligation is identified. To determine the transaction price, management considers the terms of the contract and the Company’s customary business practices. Some contracts may contain variable consideration. In those cases, management estimates the amount of variable consideration based on the sum of probability-weighted amounts in a range of possible consideration amounts. As part of this assessment, management evaluates whether any of the variable consideration is constrained and if it is, it is not included in the transaction price. The consideration is allocated between distinct performance obligations based on their stand-alone selling prices. When the standalone selling prices are not directly observable, management makes estimates based on reasonably available information, including market conditions, specific factors affecting the Company, and information about the customer. The Company recognizes the revenue associated with each performance obligation as the obligation is fulfilled, which for subscriptions is typically recognized ratably over time and for services is typically recognized when they are performed.

 

All revenue recognized in the Consolidated Statements of Operations is considered to be revenue from contracts with customers.

The following table provides information about disaggregated revenue by major target market in the Company’s single reporting segment:

	Year Ended December 31,
	2024		2023
Commercial:
Subscription	$	21,218	$	17,773
Service		1,308		1,042
Total Commercial	$	22,526	$	18,815
Government:
Subscription	$	1,200	$	1,200
Service		14,692		14,836
Total Government		15,892		16,036
Total	$	38,418	$	34,851

The Company has contract assets from contracts with customers that are classified as “trade accounts receivable” in the Consolidated Balance Sheets. See Note 7 for more information about trade accounts receivable.

The Company has contract assets from capitalized contract acquisition costs that are classified as “other current assets” and “other assets” in the Consolidated Balance Sheet. These contract acquisition costs are recognized in proportion to the revenue recognized from the contract they are associated with.

The following table provides information about contract assets:

	December 31,		December 31,
	2024		2023
Contract acquisition costs, current	$	38	$	113
Contract acquisition costs, long-term		—		9
Total	$	38	$	122

The Company has contract liabilities from contracts with customers that are classified as “deferred revenue” in the Consolidated Balance Sheets. Deferred revenue consists of billings in advance for subscriptions and services for which the performance obligation has not been satisfied.

The following table provides information about contract liabilities:

	December 31,		December 31,
	2024		2023
Deferred revenue, current	$	4,020	$	5,853
Deferred revenue, long-term		2		7
Total	$	4,022	$	5,860

The Company recognized $5,725 of revenue during the year ended  December 31, 2024 that was included in the contract liability balance as of December 31, 2023.

The aggregate amount of the transaction prices from contractual obligations that are unsatisfied or partially unsatisfied was $25,215 and $31,798, as of  December 31, 2024 and 2023, respectively. As of  December 31, 2024, the Company expects $20,171 of the $25,215 to be recognized as revenue during 2025.