REVENUE

6 Months Ended

Jun. 30, 2022

REVENUE

REVENUE

2. REVENUE

The Company’s products and services are reported under two segments—AIR MILES Reward Program and BrandLoyalty, as shown below. The following tables present revenue disaggregated by major source, as well as geographic region based on the location of the subsidiary that generally correlates with the location of the customer:

	AIR MILES
Three Months Ended June 30, 2022	Reward Program		BrandLoyalty		Eliminations		Total
	(in thousands)
Disaggregation of Revenue by Major Source:
Coalition loyalty program	$	63,161	$	—	$	—	$	63,161
Campaign-based loyalty programs		—		103,930		—		103,930
Other		39		1,362		(43)		1,358
Revenue from contracts with customers	$	63,200	$	105,292	$	(43)	$	168,449
Investment income		3,354		—		—		3,354
Total	$	66,554	$	105,292	$	(43)	$	171,803

	AIR MILES
Three Months Ended June 30, 2021	Reward Program		BrandLoyalty		Eliminations		Total
	(in thousands)
Disaggregation of Revenue by Major Source:
Coalition loyalty program	$	68,544	$	—	$	—	$	68,544
Campaign-based loyalty programs		—		76,630		—		76,630
Other		2		2,338		—		2,340
Revenue from contracts with customers	$	68,546	$	78,968	$	—	$	147,514
Investment income		3,391		—		—		3,391
Total	$	71,937	$	78,968	$	—	$	150,905

	AIR MILES
Six Months Ended June 30, 2022	Reward Program		BrandLoyalty		Eliminations		Total
	(in thousands)
Disaggregation of Revenue by Major Source:
Coalition loyalty program	$	125,562	$	—	$	—	$	125,562
Campaign-based loyalty programs		—		191,530		—		191,530
Other		80		3,043		(87)		3,036
Revenue from contracts with customers	$	125,642	$	194,573	$	(87)	$	320,128
Investment income		6,620		—		—		6,620
Total	$	132,262	$	194,573	$	(87)	$	326,748

	AIR MILES
Six Months Ended June 30, 2021	Reward Program		BrandLoyalty		Eliminations		Total
	(in thousands)
Disaggregation of Revenue by Major Source:
Coalition loyalty program	$	135,290	$	—	$	—	$	135,290
Campaign-based loyalty programs		—		182,927		—		182,927
Other		1		2,338		—		2,339
Revenue from contracts with customers	$	135,291	$	185,265	$	—	$	320,556
Investment income		6,903		—		—		6,903
Total	$	142,194	$	185,265	$	—	$	327,459

	AIR MILES
Three Months Ended June 30, 2022	Reward Program		BrandLoyalty		Eliminations		Total
	(in thousands)
Disaggregation of Revenue by Geographic Region:
United States	$	—	$	—	$	—	$	—
Canada		66,554		1,664		(43)		68,175
Europe, Middle East and Africa		—		80,504		—		80,504
Asia Pacific		—		20,028		—		20,028
Other		—		3,096		—		3,096
Total	$	66,554	$	105,292	$	(43)	$	171,803

	AIR MILES
Three Months Ended June 30, 2021	Reward Program		BrandLoyalty		Eliminations		Total
	(in thousands)
Disaggregation of Revenue by Geographic Region:
United States	$	—	$	1,497	$	—	$	1,497
Canada		71,937		1,589		—		73,526
Europe, Middle East and Africa		—		52,431		—		52,431
Asia Pacific		—		19,809		—		19,809
Other		—		3,642		—		3,642
Total	$	71,937	$	78,968	$	—	$	150,905

	AIR MILES
Six Months Ended June 30, 2022	Reward Program		BrandLoyalty		Eliminations		Total
	(in thousands)
Disaggregation of Revenue by Geographic Region:
United States	$	—	$	—	$	—	$	—
Canada		132,262		7,684		(87)		139,859
Europe, Middle East and Africa		—		143,193		—		143,193
Asia Pacific		—		38,306		—		38,306
Other		—		5,390		—		5,390
Total	$	132,262	$	194,573	$	(87)	$	326,748

	AIR MILES
Six Months Ended June 30, 2021	Reward Program		BrandLoyalty		Eliminations		Total
	(in thousands)
Disaggregation of Revenue by Geographic Region:
United States	$	—	$	2,542	$	—	$	2,542
Canada		142,194		11,270		—		153,464
Europe, Middle East and Africa		—		131,854		—		131,854
Asia Pacific		—		34,723		—		34,723
Other		—		4,876		—		4,876
Total	$	142,194	$	185,265	$	—	$	327,459

Contract Liabilities

The Company records a contract liability when cash payments are received in advance of its performance, which applies to the service and redemption of an AIR MILES reward mile and the reward products for its campaign-based loyalty programs.

A reconciliation of contract liabilities for the AIR MILES Reward Program is as follows:

	Deferred Revenue
	Service		Redemption		Total
	(in thousands)
Balance at January 1, 2022	$	230,492	$	791,464	$	1,021,956
Cash proceeds		87,110		135,513		222,623
Revenue recognized (1)		(93,593)		(164,770)		(258,363)
Other		—		417		417
Effects of foreign currency translation		(4,155)		(14,200)		(18,355)
Balance at June 30, 2022	$	219,854	$	748,424	$	968,278
Amounts recognized in the consolidated balance sheets:
Deferred revenue (current)	$	126,001	$	748,424	$	874,425
Deferred revenue (non-current)	$	93,853	$	—	$	93,853

(1) Reported on a gross basis herein.

The deferred redemption obligation associated with the AIR MILES Reward Program is effectively due on demand from the collector base, thus the timing of revenue recognition is based on the redemption by the collector. Service revenue is amortized over the expected life of a mile, with the deferred revenue balance expected to be recognized into revenue in the amount of $77.5 million in 2022, $86.4 million in 2023, $46.2 million in 2024, and $9.8 million in 2025.

The contract liabilities for BrandLoyalty’s campaign-based loyalty programs are recognized in other current liabilities in the Company’s unaudited condensed consolidated balance sheets. The beginning balance as of January 1, 2022 was $85.4 million and the closing balance as of June 30, 2022 was $103.3 million, with the change due to cash payments received in advance of program performance, offset in part by revenue recognized of approximately $146.5 million and the effect of foreign currency translation of $7.8 million during the six months ended June 30, 2022.