REVENUE AND OTHER CONTRACTS WITH CUSTOMERS

9 Months Ended

Sep. 30, 2022

Revenue from Contract with Customer [Abstract]

REVENUE AND OTHER CONTRACTS WITH CUSTOMERS

(3) REVENUE AND OTHER CONTRACTS WITH CUSTOMERS

Revenue is recognized for each distinct performance obligation as control is transferred to the customer. Revenue attributable to hardware products bundled with Software-as-a-Service (“SaaS”) offerings are recognized at the time control of the product transfers to the customer. The transaction price allocated to the SaaS offering is recognized ratably beginning when the customer is expected to activate their account and over a three-year period that the Company has estimated based on the expected replacement of the hardware.

Transaction Price Allocated to the Remaining Performance Obligations

The remaining performance obligations represent the transaction price allocated to performance obligations that are unsatisfied or partially unsatisfied as of the end of the reporting period. Unsatisfied and partially unsatisfied performance obligations consist of contract liabilities, in-transit orders with destination terms, and non-cancellable backlog. Non-cancellable backlog includes goods for which customer purchase orders have been accepted, that are scheduled or in the process of being scheduled for shipment, and that are not yet invoiced.

Contract costs

The Company recognizes the incremental costs of obtaining a contract with a customer if the Company expects the benefit of those costs to be longer than one year. The Company has determined that certain sales commissions meet the requirements to be capitalized, and the Company amortizes these costs on a consistent basis with the pattern of transfer of the goods and services in the contract. Total capitalized costs to obtain a contract were immaterial during the periods presented and are included in other current and long-term assets on our consolidated balance sheets.

The Company applies a practical expedient to expense costs as incurred for costs to obtain a contract when the amortization period is one year or less. These costs include sales commissions on SaaS contracts with a contract period of one year or less as sales commissions on contract renewals are commensurate with those paid on the initial contract.

Contract Balances

The Company records accounts receivable when it has an unconditional right to the consideration. Contract liabilities consist of deferred revenue, which represents payments received in advance of revenue recognition related to SaaS agreements and for prepayments for products or services yet to be delivered.

Payment terms vary by customer. The time between invoicing and when payment is due is not significant. For certain products or services and customer types, payment is required before the products or services are delivered to the customer.

The following table reflects the contract balances as of the periods ended:

	September 30,		December 31,
	2022		2021
Accounts receivable	$	6,210,464	$	4,880,663
Total contract assets	$	6,210,464	$	4,880,663
Deferred revenue, current	$	563,026	$	291,296
Deferred revenue, noncurrent		690,698		443,452
Total contract liabilities	$	1,253,724	$	734,748

During the three and nine months ended September 30, 2022, the change in contract liabilities balances was as follows:

Balance at December 31, 2021	$	734,748
Billings		177,759
Revenue recognized		(80,483	)
Balance at March 31, 2022	$	832,024
Billings		365,868
Revenue recognized		(95,327	)
Balance at June 30, 2022	$	1,102,565
Billings		274,347
Revenue recognized		(123,188	)
Balance at September 30, 2022	$	1,253,724

Disaggregation of Revenue

The following table sets forth our revenues by distribution channel:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Retailers	$	13,463,696	$	14,377,917	$	38,548,176	$	41,165,195
Distributors		180,800		645,568		550,177		3,431,652
Other		188,284		12,685		897,450		350,042
	$	13,832,780	$	15,036,170	$	39,995,803	$	44,946,889

The following table sets forth our revenues by product:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Cable modems & gateways	$	13,363,315	$	14,561,563	$	38,460,865	$	41,956,973
Other networking products		233,962		268,324		1,009,469		483,659
SaaS		235,503		206,283		525,469		2,506,257
	$	13,832,780	$	15,036,170	$	39,995,803	$	44,946,889