Revenue

9 Months Ended

Sep. 30, 2022

Revenue from Contract with Customer [Abstract]

Revenue

NOTE 6 – Revenue

Revenue is recognized upon transfer of control of promised products or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for promised goods or services. The Company’s performance obligations are satisfied either over time or at a point in time. Revenue from performance obligations that transferred at a point in time accounted for approximately 94% and 96% of the Company’s consolidated revenue for the three months ended September 30, 2022 and 2021, respectively. Revenue recognized over time was 6% and 4% of the Company’s consolidated revenue for the three months ended September 30, 2022 and 2021, respectively. Revenue from performance obligations that transferred at a point in time accounted for approximately 92% and 97% of the Company’s consolidated revenue for the nine months ended September 30, 2022 and 2021, respectively. Revenue recognized over time was 8% and 3% of the Company’s consolidated revenue for the nine months ended September 30, 2022 and 2021, respectively.

Nature of Products and Services

Hardware

The Company generally has one performance obligation in its arrangements involving the sales of digital signal processing hardware, power meters, analyzers, noise/signal generators, phase noise analyzers and other components. When the terms of a contract include the transfer of multiple products, each distinct product is identified as a separate performance obligation. Generally, satisfaction occurs when control of the promised goods is transferred to the customer in exchange for consideration in an amount for which we expect to be entitled. Generally, control is transferred when legal title of the asset moves from the Company to the customer. We sell our products to a customer based on a purchase order, and the shipping terms per each individual order are primarily used to satisfy the single performance obligation. However, in order to determine when control has transferred to the customer, the Company also considers:

● when the Company has a present right to payment for the asset;

● when the Company has transferred physical possession of the asset to the customer;

● when the customer has the significant risks and rewards of ownership of the asset; and

● when the customer has accepted the asset.

Software

Arrangements involving licenses of software in the CommAgility brand may involve multiple performance obligations, most notably subsequent releases of the software. The Company has concluded that each software release in a multiple deliverable arrangement involving CommAgility software licenses is a distinct performance obligation and, accordingly, transaction price is allocated to each release when the customer obtains control of the software.

Performance obligations that are not distinct at contract inception are combined. Specifically, with the Company’s sales of software, contracts that include customization may result in the combination of the customization services with the license as one distinct performance obligation and recognized over time. The duration of these performance obligations are typically one year or less.

Services

Arrangements involving calibration and repair services of the Company’s products are generally considered a single performance obligation and are recognized as the services are rendered.

Shipping and Handling

Shipping and handling activities performed after the customer obtains control are accounted for as fulfillment activities and recognized as cost of revenues.

Significant Judgments

For the Company’s more complex software and services arrangements, significant judgment is required in determining whether licenses and services are distinct performance obligations that should be accounted for separately or are not distinct and thus accounted for together. Further, in cases where we determine that performance obligations should be accounted for separately, judgment is required to determine the standalone selling price for each distinct performance obligation.

Contract Balances

The timing of revenue recognition may differ from the timing of invoicing to customers and these timing differences result in contract assets (unbilled revenue) or contract liabilities (deferred revenue) on the Company’s Consolidated Balance Sheet. The Company records unbilled revenue when revenue is recognized prior to invoicing, or deferred revenue when revenue is recognized subsequent to invoicing. Unbilled revenue was $100,000 and $292,000 as of September 30, 2022 and December 31, 2021, respectively, and recorded in prepaid expenses and other current assets. Deferred revenue was $92,000 and $408,000 as of September 30, 2022 and December 31, 2021, respectively. The decrease in deferred revenue from December 31, 2021 is due to recognition of revenue for certain CommAgility projects involving multiple performance obligations.

Disaggregated Revenue

We disaggregate our revenue from contracts with customers by product family and geographic location as we believe it best depicts how the nature, timing and uncertainty of our revenue and cash flows are affected by economic factors. See details in the tables below (in thousands).

	Three Months Ended September 30, 2022						Nine Months Ended September 30, 2022
	Test and Measurement		Radio, Baseband, Software		Consolidated		Test and Measurement		Radio, Baseband, Software		Consolidated
Total net revenues by revenue type
Signal generators and components	$	2,428	$	-	$	2,428	$	9,475	$	-	$	9,475
Signal analyzers and power meters		1,232		-		1,232		4,738		-		4,738
Signal processing hardware		-		885		885		-		1,446		1,446
Software licenses		-		66		66		-		481		481
Services		420		299		719		1,415		1,439		2,854
Total net revenue	$	4,080	$	1,250	$	5,330	$	15,628	$	3,366	$	18,994
Total net revenues by geographic areas
Americas	$	2,925	$	332	$	3,257	$	11,012	$	1,822	$	12,834
EMEA		452		899		1,351		1,952		1,370		3,322
APAC		703		19		722		2,664		174		2,838
Total net revenue	$	4,080	$	1,250	$	5,330	$	15,628	$	3,366	$	18,994

	Three Months Ended September 30, 2021						Nine Months Ended September 30, 2021
	Test and Measurement		Radio, Baseband, Software		Consolidated		Test and Measurement		Radio, Baseband, Software		Consolidated
Total net revenues by revenue type
Signal generators and components	$	3,485	$	-	$	3,485	$	10,002	$	-	$	10,002
Signal analyzers and power meters		1,996		-		1,996		5,392		-		5,392
Signal processing hardware		-		813		813		-		3,826		3,826
Software licenses		-		178		178		-		1,508		1,508
Services		450		454		904		1,385		1,235		2,620
Total net revenue	$	5,931	$	1,445	$	7,376	$	16,779	$	6,569	$	23,348
Total net revenues by geographic areas
Americas	$	4,219	$	488	$	4,707	$	11,988	$	2,640	$	14,628
EMEA		517		808		1,325		2,015		3,741		5,756
APAC		1,195		149		1,344		2,776		188		2,964
Total net revenue	$	5,931	$	1,445	$	7,376	$	16,779	$	6,569	$	23,348