Revenue Recognition

9 Months Ended

Sep. 30, 2022

Revenue Recognition

Revenue Recognition

Note 4. Revenue Recognition

Disaggregation of Revenue

The Company disaggregates revenue from contracts with customers by product type and by geographical market. The Company believes that these categories aggregate the payor types by nature, amount, timing and uncertainty of their revenue streams. The following table summarizes the Company’s disaggregated revenue (in thousands) for the three and nine months ended September 30, 2022 and 2021:

	Pattern of	Three months ended September 30,				Nine months ended September 30,
	Recognition	2022		2021		2022		2021
By Product Type:
Devices and accessories	Point-in-time	$	13,164	$	10,848	$	37,607	$	33,455
Software and other services	Over time		6,454		3,773		16,800		10,123
Total revenue		$	19,618	$	14,621	$	54,407	$	43,578
By Geographical Market:
United States		$	13,582	$	10,220	$	37,881	$	30,320
International			6,036		4,401		16,526		13,258
Total revenue		$	19,618	$	14,621	$	54,407	$	43,578

Contract Balances

Contract balances represent amounts presented in the condensed consolidated balance sheets when either the Company has transferred goods or services to the customer, or the customer has paid consideration to the Company under the contract. These contract balances include trade accounts receivable and deferred revenue. Deferred revenue represents cash consideration received from customers for software and other services that are transferred to the customer over the respective subscription period. The accounts receivable balances represent amounts billed to customers for goods and services where the Company has an unconditional right to payment of the amount billed.

The Company recognizes a receivable when it has an unconditional right to payment, and payment terms are typically 30 days for all product and service sales. The allowance for doubtful accounts was $0.4 million as of September 30, 2022 and December 31, 2021.

The amount of revenue recognized during the three months ended September 30, 2022 and 2021 that was included in the deferred revenue balance at the beginning of the period was $5.1 million and $4.3 million, respectively. The amount of revenue recognized during the nine months ended September 30, 2022 and 2021 that was included in the deferred revenue balance at the beginning of the period was $11.2 million and $7.2 million, respectively.

The Company incurs incremental costs of obtaining contracts and costs of fulfilling contracts with customers. The amount of costs capitalized for the periods presented herein was not significant.

Transaction Price Allocated to Remaining Performance Obligations

On September 30, 2022, the Company had $23.2 million of remaining performance obligations. The Company expects to recognize 70% of its remaining performance obligations as revenue in the next twelve months, and an additional 30% thereafter.