Revenue, Deferred Revenue, Deferred Costs and Other

3 Months Ended

Mar. 31, 2021

Revenue, Deferred Revenue, Deferred Costs and Other

Revenue, Deferred Revenue, Deferred Costs and Other

Note 3. Revenue, Deferred Revenue, Deferred Costs and Other

The Company generates access fees from Clients accessing its professional provider network or hosted virtual healthcare platform or chronic care management platforms, visit fee revenue for general medical, expert medical service and other specialty visits as well as other revenue primarily associated with virtual healthcare device equipment included with its hosted virtual healthcare platform. Access revenue accounted for 86% and 76% of our total revenue for the quarters ended March 31, 2021 and 2020, respectively.

The following table presents the Company’s revenues disaggregated by revenue source (in thousands):

	Quarter Ended
	March 31,
	2021		2020
Access Fees Revenue
U.S.	$	350,868	$	107,939
International		37,288		29,114
Total		388,156		137,053
Visit Fee Revenue
U.S.		54,340		43,484
International		122		262
Total		54,462		43,746
Other
U.S.		10,671		0
International		386		0
Total		11,057		0
Total Revenues	$	453,675	$	180,799

Deferred Revenue

Deferred revenue represents billed, but unrecognized revenue, and is comprised of fees received in advance of the delivery or completion of the services and amounts received in instances when revenue recognition criteria have not been met. Deferred revenue associated with upfront payments for a device is amortized ratably over the expected Member enrollment period. Deferred revenue that will be recognized during the succeeding twelve-month period is recorded as current deferred revenue and the remaining portion is recorded as noncurrent deferred revenue.

For certain services, payment is required for future months before the service is delivered to the Member. The Company records deferred revenue when cash payments are received in advance of the Company’s performance obligation to provide services. The net increase of $18.4 million and $4.8 million in the deferred revenue balance for the quarters ended March 31, 2021 and 2020, respectively, is primarily driven by InTouch and Livongo as well as the direct-to-consumer behavioral health product and cash payments received or due in advance of satisfying the Company’s performance obligations, offset by revenue recognized that were included in the deferred revenue balance at the beginning of the period. The Company anticipates that it will satisfy most of its performance obligation associated with the deferred revenue within the prospective fiscal year. Revenue recognized during the first three months of 2021 and 2020 that was included in deferred revenue at the beginning of the periods was $32.7 million and $8.7 million, respectively.

We expect to recognize $62.7 million and $4.4 million of revenue in 2021 and 2022, respectively, related to future performance obligations that are unsatisfied or partially unsatisfied as of March 31, 2021.

Deferred Costs and Other

Deferred costs and other as of March 31, 2021 consist of the following (in thousands):

	As of		As of
	March 31,		December 31,
	2021		2020
Deferred device cost, current	$	10,950	$	3,384
Deferred execution credit, current		792		84
Total deferred cost and other, current		11,742		3,468
Deferred device cost, noncurrent		6,190		2,179
Total Deferred cost and other	$	17,932	$	5,647

Deferred costs and other activity are as follows (in thousands):

	Deferred Device Cost		Deferred Execution Credit			Total
Beginning balance as of December 31, 2020	$	5,563	$	84	$	5,647
Additions		13,827		820		14,647
Revenue recognized		0		(112)		(112)
Cost of revenue recognized		(2,250)		0		(2,250)
Ending balance as of March 31, 2021	$	17,140	$	792	$	17,932