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Revenue
 9 Months Ended
Sep. 30, 2021
Revenue from Contract with Customer [Abstract]  
Revenue Revenue
Disaggregation of Revenues
The Company disaggregates its revenue from contracts with customers by geographic region based on the shipping location of the customer, type of good or service and timing of transfer of goods or services to customers (point-in-time or over time), as it believes it best depicts how the nature, amount, timing and uncertainty of its revenue and cash flows are affected by economic factors.
Total revenue based on the disaggregation criteria described above is as follows (dollar in thousands):

Three Months Ended September 30,Nine Months Ended September 30,
2021202020212020
% of Revenue% of Revenue% of Revenue% of Revenue
RevenueRevenueRevenueRevenue
Revenue by geography:
North America$5,526 43 %$22,081 69 %$15,841 36 %$35,984 46 %
Asia Pacific3,813 29 %4,907 15 %18,574 42 %30,681 40 %
Europe, Middle East and Africa3,721 28 %5,111 16 %9,967 22 %10,851 14 %
Total$13,060 100 %$32,099 100 %$44,382 100 %$77,516 100 %
Revenue by products and services:
Products$11,782 90 %$26,099 81 %$34,345 77 %$53,948 70 %
License and services1,278 10 %6,000 19 %10,037 23 %23,568 30 %
Total$13,060 100 %$32,099 100 %$44,382 100 %$77,516 100 %
Revenue by timing of recognition:
Goods transferred at a point in time$11,738 90 %$31,024 97 %$40,680 92 %$75,946 98 %
Goods and services transferred over time1,322 10 %1,075 3 %3,702 8 %1,570 2 %
Total$13,060 100 %$32,099 100 %$44,382 100 %$77,516 100 %


In June 2020, the Company entered into a patent cross-license agreement related to its litigation settlement with a customer in Asia Pacific. Under the terms of the arrangement, the customer agreed to make a one-time license payment upon settlement, will make annual fixed royalty payments through 2023, and thereafter, will make product sales royalty payments through February 2030. In September 2020, Velodyne entered into another patent cross-license agreement related to its litigation with a different customer in Asia Pacific. The Company recorded license revenue of $0.7 million and $8.0 million, respectively, related to these patent cross-license agreements for the three and nine months ended September 30, 2021. As of September 30, 2021 and December 31, 2020, the Company recorded $3.5 million and $3.4 million, respectively, in current deferred revenue, and $12.1 million and $13.7 million, respectively, in long-term deferred revenue associated with the rights granted as part of these patent cross-license agreements to receive future patents as they represent stand ready obligations. As
of September 30, 2021 and December 31, 2020, the Company also recorded $13.5 million and $11.3 million, respectively, of contract assets related to these patent cross-license agreements.

Contract Assets and Contract Liabilities
Contract assets primarily relates to unbilled accounts receivable. Unbilled amounts arise when the timing of billing differs from the timing of revenue recognized, such as when revenue recognized on the guaranteed minimums at the inception of the contract when there is not yet a right to invoice in accordance with contract terms. Unbilled amounts are recorded as a contract asset when the revenue associated with the contract is recognized prior to billing and reclassified to accounts receivable when billed in accordance with the terms of the contract.
Contract liabilities consist of deferred revenue, customer advanced payments and customer deposits. Deferred revenue includes billings in excess of revenue recognized related to product sales, licenses, extended warranty and other services revenue, and is recognized as revenue when the Company performs under the contract. The long-term portion of deferred revenue, mostly related to obligations under license arrangements and extended warranty, is classified as non-current contract liabilities and is included in other long-term liabilities in the Company’s consolidated balance sheets. Customer advanced payments represent required customer payments in advance of product shipments according to customer’s payment term. Customer advance payments are recognized as revenue when control of the performance obligation is transferred to the customer. Customer deposits represent consideration received from a customer which can be applied to future product or service purchases, or refunded.
Contract assets and contract liabilities consisted of the following as of September 30, 2021 and December 31, 2020 (in thousands):

September 30,December 31,
20212020
Contract assets, current
Unbilled accounts receivable$3,313 $2,813 
Contract assets, long-term
Unbilled accounts receivable10,148 8,440 
Total contract assets$13,461 $11,253 
Contract liabilities, current
Deferred revenue, current$7,283 $7,143 
Customer advance payment326 180 
Total7,609 7,323 
Contract liabilities, long-term
Deferred revenue, long-term12,706 14,732 
Total contract liabilities$20,315 $22,055 

The following table shows the significant changes in contract assets and contract liabilities balances (in thousands):

Nine Months Ended September 30,
20212020
Contract assets:
Beginning balance$11,253 $— 
Transferred to receivables from contract assets recognized at the beginning of the period(2,813)— 
Increase due to unbilled and recognized as revenue in excess of billings during the period, net of amounts transferred to receivables5,021 8,439 
Ending balance$13,461 $8,439 
Contract liabilities:
Beginning balance$22,055 $19,164 
Revenue recognized that was included in the contract liabilities beginning balance(9,729)(12,016)
Increase due to cash received and not recognized as revenue and billings in excess of revenue recognized during the period7,989 20,611 
Customer deposits reclassified to refund liabilities— (6,083)
Ending balance$20,315 $21,676 
During the nine months ended September 30, 2020, the Company reclassified customer deposit of $6.1 million to refund liabilities and refunded the entire amount to a customer.