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Revenue Recognition
 6 Months Ended
Jun. 30, 2022
Revenue from Contract with Customer [Abstract]  
Revenue Recognition REVENUE RECOGNITION
We recognize revenue in accordance with ASC Topic 606, "Revenue from Contracts with Customers." The unit of account in ASC 606 is a performance obligation, which is a promise in a contract with a customer to transfer a good or service to the customer.
The majority of our revenue is recognized over time, as control is transferred continuously to our customers who receive and consume benefits as we perform, and is classified as services revenue. Revenue transferred to customers over time accounted for 90% and 93% of our revenue for the three and six months ended June 30, 2022, and 91% and 92% of our revenue for the three and six months ended June 30, 2021, respectively. All of our business groups earn services revenue under a variety of contract types, including time and materials, firm-fixed price, firm-fixed price level of effort, and cost-plus fixed fee contract types, which may include variable consideration as discussed further below.
Revenue transferred to customers at a point in time accounted for 10% and 7% of our revenue for the three and six months ended June 30, 2022, and 9% and 8% of our revenue for the three and six months ended June 30, 2021, respectively. Revenue on these contracts is recognized when the customer obtains control of the transferred product or service, which is generally upon delivery of the product to the customer for their use, due to us maintaining control of the product until that point.
For certain performance obligations where we are not primarily responsible for fulfilling the promise to provide the goods or services to the customer, do not have inventory risk and have limited discretion in establishing the price for the goods or services, we recognize revenue on a net basis.
We provide for anticipated losses on contracts during the period when the loss is determined by recording an expense for the total expected costs that exceed the total estimated revenue for a performance obligation. No contract losses were recorded during the three and six months ended June 30, 2022 and 2021.
Disaggregated Revenues
We have identified two reportable segments. We treat sales to U.S. customers as sales within the U.S., regardless of where the services are performed. Substantially all of our revenues are generated from U.S. customers.
Table 3.1: Revenue by Operating Segments
For the Three Months EndedFor the Six Months Ended
June 30, 2022June 30, 2021June 30, 2022June 30, 2021
(in thousands)
Security Solutions:
Services$25,298 $27,595 $50,165 $46,725 
Products5,521 4,641 7,573 8,341 
Total Security Solutions revenue30,819 32,236 57,738 55,066 
Secure Networks:
Services24,972 21,408 48,213 54,336 
Products— — — — 
Total Secure Networks revenue24,972 21,408 48,213 54,336 
Total revenue$55,791 $53,644 $105,951 $109,402 
Table 3.2: Revenue by Customer Type
For the Three Months EndedFor the Six Months Ended
June 30, 2022June 30, 2021June 30, 2022June 30, 2021
(in thousands)
Security Solutions:
Federal$27,251 $29,830 $51,853 $50,281 
State & local, and commercial3,568 2,406 5,885 4,785 
Total Security Solutions revenue30,819 32,236 57,738 55,066 
Secure Networks:
Federal24,962 21,302 48,203 54,198 
State & local, and commercial10 106 10 138 
Total Secure Networks revenue24,972 21,408 48,213 54,336 
Total revenue$55,791 $53,644 $105,951 $109,402 
Table 3.3: Revenue by Contract Type
For the Three Months EndedFor the Six Months Ended
June 30, 2022June 30, 2021June 30, 2022June 30, 2021
(in thousands)
Security Solutions:
Firm fixed-price$26,275 $27,457 $48,742 $45,469 
Time-and-materials2,731 3,059 5,646 6,060 
Cost plus fixed fee1,813 1,720 3,350 3,537 
Total Security Solutions revenue$30,819 $32,236 $57,738 $55,066 
Secure Networks:
Firm fixed-price19,030 18,885 37,839 50,014 
Time-and-materials— — — 29 
Cost plus fixed fee5,942 2,523 10,374 4,293 
Total Secure Networks revenue24,972 21,408 48,213 54,336 
Total revenue$55,791 $53,644 $105,951 $109,402 
Revenue resulting from contracts and subcontracts with the U.S. government accounted for 94% and 95% of our revenue for the three months ended June 30, 2022 and 2021, respectively, and 94% and 96% of our revenue for the six months ended June 30, 2022 and 2021, respectively. As our primary customer base includes agencies of the U.S. government, we have a concentration of credit risk associated with our accounts receivable, as 95% of our billed accounts receivable as of June 30, 2022, were directly with U.S. government customers. We perform ongoing credit evaluations of all our customers and generally do not require collateral or other guarantee from our customers. We maintain allowances for potential losses.
Table 3.4: Revenue Concentrations Greater than 10% of Total Revenue
For the Three Months EndedFor the Six Months Ended
June 30, 2022June 30, 2021June 30, 2022June 30, 2021
U.S. Department of Defense ("DoD")72%67%71%76%
Civilian22%28%23%20%
Contract Balances
Table 3.5: Contract Balances
June 30, 2022December 31, 2021
(in thousands)
Contract assets (unbilled receivables)$36,216 $41,374 
Contract liabilities4,799 6,381 
The change in the Company's contract assets and contract liabilities during the period were primarily the result of the timing differences between the Company's performance, invoicing and customer payments. Revenue recognized for the three and six months ended June 30, 2022, that was included in the contract liabilities balance at the beginning of each reporting period was $1.6 million and $4.1 million, respectively. Revenue recognized for the three and six months ended June 30, 2021, that was included in the contract liabilities balance at the beginning of each reporting period was $1.2 million and $3.2 million, respectively.
As of June 30, 2022, we had $100.5 million of remaining performance obligations, which we also refer to as funded backlog. We expect to recognize approximately 76% of our remaining performance obligations as revenue in 2022, an additional 20% in 2023, and the balance thereafter.