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Revenue
 6 Months Ended
Jun. 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 primary locations where the customer is situated, 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 are as follows (in thousands):
Three Months Ended June 30,
20212020
Revenue% of RevenueRevenue% of Revenue
Revenue by primary geographical market:
North America$4,061 64 %$640 19 %
Asia Pacific154 2 %205 6 %
Europe and Middle East2,094 33 %2,579 75 %
Total$6,309 100 %$3,424 100 %
Revenue by timing of recognition:
Recognized at a point in time$1,988 32 %$182 5 %
Recognized over time4,321 68 %3,242 95 %
Total$6,309 100 %$3,424 100 %
Revenue by segment:
Autonomy Solutions$5,822 92 %$2,809 82 %
Component Sales487 8 %615 18 %
Total$6,309 100 %$3,424 100 %
Six Months Ended June 30,
20212020
Revenue% of RevenueRevenue% of Revenue
Revenue by primary geographical market:
North America$6,600 57 %$1,725 24 %
Asia Pacific475 4 %213 3 %
Europe and Middle East4,547 39 %5,358 73 %
Total$11,622 100 %$7,296 100 %
Revenue by timing of recognition:
Recognized at a point in time$4,041 35 %$790 11 %
Recognized over time7,581 65 %6,506 89 %
Total$11,622 100 %$7,296 100 %
Revenue by segment:
Autonomy Solutions$10,158 87 %$6,106 84 %
Component Sales1,464 13 %1,190 16 %
Total$11,622 100 %$7,296 100 %
Volvo Stock Purchase Warrant
In March 2020, the Company issued a stock purchase warrant to Volvo Car Technology Fund AB (“VCTF”) in connection with an engineering services contract. VCTF is entitled to purchase from the Company up to 4,089,280 shares of Class A common stock, at a price of $3.1769 per share. The warrants vest and become exercisable in two tranches based on satisfaction of certain commercial milestones and the probability of reaching commercial production and delivering production units. The fair value of warrants, aggregating $2.9 million, represents consideration payable to a customer and would be recognized as reduction in revenue consistent with the revenue recognition pattern when these warrants become probable of
vesting. The Company’s management determined that the vesting of these warrants was not probable as of June 30, 2021. The following factors were considered in this determination:
During the second quarter of 2021, the Company issued a joint press release stating that Volvo intends to include Luminar’s Iris unit, the Company’s latest generation lidar sensor which meets the size, weight, cost, power and reliability requirements of automotive qualified series production, as standard on one of its vehicle programs as opposed to being only an option. While the announcement increased the targeted volume for the Company’s expected business with Volvo, the anticipated start of production and the necessary prototype testing procedures were not modified. As a result, this announcement does not impact the probability or likelihood of reaching commercial production.
The Company is in the process of transitioning from currently producing B-sample prototype Iris units at its advanced manufacturing operations in Orlando, Florida to producing C-sample prototype Iris units at its contract manufacturing partner. This transition is expected to occur by the end of this calendar year.
The Company recently completed its initial design freeze for the prototype C-sample Iris units. This design includes modifications from the Company’s B-sample Iris units as well as modifications to the production process for its contract manufacturing partner. The prototype units produced with this design and production process will need to undergo certain industry standard testing procedures. The Company’s management anticipates reaching the probability threshold for the initial tranche tied to reaching commercial production once it substantially completes these industry standard testing procedures, which is expected to be achieved in the second half of 2021.
Contract assets and liabilities
Contract assets primarily represent revenues recognized for performance obligations that have been satisfied but have not been billed. The Company’s contract assets as of June 30, 2021 and December 31, 2020 were $5.0 million and $0, respectively. Contract liabilities consist of deferred revenue and customer advanced payments. Deferred revenue includes billings in excess of revenue recognized related to product sales and other services revenue and is recognized as revenue when the Company performs under the contract. Customer advanced payments represent required customer payments in advance of product shipments according to customer’s payment term. Customer advance payments are recognized in revenue as or when control of the performance obligation is transferred to the customer. The Company’s contract liabilities were $0.6 million and $2.3 million as of June 30, 2021 and December 31, 2020, respectively, and were included in accrued and other current liabilities in the condensed consolidated balance sheets.
The significant changes in contract liabilities balances consisted of the following (in thousands): 
 June 30, 2021December 31, 2020
Beginning balance$2,284 $225 
Revenue recognized that was included in the contract liabilities beginning balance(2,284)(225)
Net increase due to cash received and not recognized as revenue and billings in excess of revenue recognized during the period586 2,284 
Ending balance$586 $2,284