Revenue and Deferred Revenue

6 Months Ended

Jun. 30, 2024

Revenue from Contract with Customer [Abstract]

Revenue and Deferred Revenue

NOTE 4. REVENUE AND DEFERRED REVENUE

Disaggregation of Revenue

In the following tables, revenue is disaggregated by primary geographical market, type of revenue, and SmartRent Solution.

	For the three months ended June 30,				For the six months ended June 30,
	2024		2023		2024		2023
Revenue by geography
United States	$	47,852	$	52,627	$	98,153	$	117,560
International		666		775		854		921
Total revenue	$	48,518	$	53,402	$	99,007	$	118,481
	For the three months ended June 30,				For the six months ended June 30,
	2024		2023		2024		2023
Revenue by type
Hardware	$	24,676	$	27,788	$	53,753	$	65,113
Professional services		5,816		10,050		9,274	$	22,819
Hosted services		18,026		15,564		35,980	$	30,549
Total revenue	$	48,518	$	53,402	$	99,007	$	118,481

	For the three months ended June 30,																For the six months ended June 30,
	2024								2023								2024										2023
	(dollars in thousands)																(dollars in thousands)
SmartRent Solutions	Hardware		Professional Services		Hosted Services		Total 2024		Hardware		Professional Services		Hosted Services		Total 2023		Hardware			Professional Services			Hosted Services		Total 2024		Hardware			Professional Services		Hosted Services		Total 2023
Smart Communities Solutions
Smart Apartments	$	22,124	$	4,461	$	14,146	$	40,731	$	26,600	$	8,103	$	12,111	$	46,814	$	49,556		$	7,171		$	28,216	$	84,943	$	62,994		$	19,800	$	23,680	$	106,474
Access Control		866		918		379		2,163		950		1,120		161		2,231		1,883			1,517			735		4,135		1,734			2,160		314		4,208
Community WiFi		13		221		179		413		73		783		149		1,005		147			234			346		727		77			788		299		1,164
Other		1,673		216		551		2,440		165		44		371		580		2,170			396			961		3,527		315			71		676		1,062
Smart Operations Solutions		-		-		2,771		2,771		-		-		2,772		2,772		(3	)		(44	)		5,722		5,675		(7	)		-		5,580		5,573
Total Revenue	$	24,676	$	5,816	$	18,026	$	48,518	$	27,788	$	10,050	$	15,564	$	53,402	$	53,753		$	9,274		$	35,980	$	99,007	$	65,113		$	22,819	$	30,549	$	118,481

Remaining Performance Obligations

Advance payments received from customers are recorded as deferred revenue and are recognized upon the completion of related performance obligations over the period of service. Advance payments for non-distinct Hub Devices were recorded as deferred revenue and recognized over their average in-service life. Advance payments received from customers for subscription services are recorded as deferred revenue and recognized over the term of the subscription. A summary of the change in deferred revenue is as follows.

	For the six months ended June 30,
	2024			2023
Deferred revenue balance as of January 1	$	123,159		$	139,948
Revenue recognized from balance of deferred revenue       at the beginning of the period		(8,656	)		(14,505	)
Revenue deferred during the period		7,075			19,593
Revenue recognized from revenue originated      and deferred during the period		(2,010	)		(2,067	)
Deferred revenue balance as of March 31		119,568			142,969
Revenue recognized from balance of deferred revenue       at the beginning of the period		(8,914	)		(11,896	)
Revenue deferred during the period		4,244			16,954
Revenue recognized from revenue originated      and deferred during the period		(3,040	)		(5,191	)
Deferred revenue balance as of June 30		111,858			142,836

As of June 30, 2024, the Company expects to recognize 61% of its total deferred revenue within the next 12 months, 19% of its total deferred revenue between 13 and 36 months, 18% between 37 and 60 months, and the remainder is expected to be recognized beyond five years. Contracts may contain termination for convenience provisions that allow the Company, customer, or both parties the ability to terminate for convenience, either at any time or upon providing a specified notice period, without a substantive termination penalty. Included in deferred revenue as of June 30, 2024 and 2023 are $30,635 and $39,725, respectively, of prepaid fees related to contracts with termination for convenience provisions which are refundable at the request of the customer. Based on the Company's historical experience, customers do not typically exercise their termination for convenience rights. Deferred cost of revenue includes all direct costs included in cost of revenue that have been deferred to future periods.