Revenues

Revenue Recognition

The Company earns revenues from sales of its medication and supply dispensing automation systems, along with consumables and related services, which are sold in the healthcare industry, its principal market. The Company’s customer arrangements typically include one or more of the following performance obligations:

Products. Software-enabled equipment that manages and regulates the storage and dispensing of pharmaceuticals, consumable blister cards and packaging equipment and other medical supplies.

Software. Additional software applications that enable incremental functionality of the Company’s equipment or services.

Installation. Installation of equipment as integrated systems at customer sites.

Post-installation technical support. Phone support, on-site service, parts, and access to unspecified software updates and enhancements, if and when available.

Professional services. Other customer services, such as training and consulting.

A portion of the Company’s sales are made to customers who are members of Group Purchasing Organizations (“GPOs”). GPOs are often owned fully or in part by the Company’s customers, and the Company pays fees to the GPO on completed contracts. The Company considers these fees consideration paid to customers and records them as reductions to revenue. Fees to GPOs were $2.2 million and $1.9 million for the three months ended March 31, 2019 and 2018, respectively.

Disaggregation of Revenues

The following table summarizes the Company’s product revenues disaggregated by revenue type for the three months ended March 31, 2019 and 2018:



	Three months ended March 31,
	2019		2018
	(In thousands)
Hardware and software	$	120,221	$	107,451
Consumables	21,087		19,438
Other	4,302		3,770
Total product revenues	$	145,610	$	130,659

The following table summarizes the Company’s revenues disaggregated by geographic region, which is determined based on customer location, for the three months ended March 31, 2019 and 2018:



	Three months ended March 31,
	2019		2018
	(In thousands)
United States	$	180,020	$	158,202
Rest of world ⁽¹⁾	22,497		24,417
Total revenues	$	202,517	$	182,619

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⁽¹⁾	No individual country represented more than 10% of the respective totals.

Contract Assets and Contract Liabilities

The following table reflects the Company’s contract assets and contract liabilities:



	March 31, 2019		December 31, 2018
	(In thousands)
Short-term unbilled receivables - included in accounts receivable and unbilled receivables	$	8,708	$	9,191
Long-term unbilled receivables - included in other long-term assets	11,423		16,481
Total contract assets	$	20,131	$	25,672

Short-term deferred revenues, net	$	90,104	$	81,835
Long-term deferred revenues	10,302		10,582
Total contract liabilities	$	100,406	$	92,417

The portion of the transaction price allocated to the Company’s unsatisfied performance obligations is recorded as deferred revenues.

Short-term deferred revenues of $90.1 million and $81.8 million include deferred revenues from product sales and service contracts, net of deferred cost of sales, of $12.2 million and $11.1 million as of March 31, 2019 and December 31, 2018, respectively. The short-term deferred revenues from product sales relate to delivered and invoiced products, pending installation and acceptance, expected to occur within the next twelve months. During the three months ended March 31, 2019, the Company recognized revenues of $39.3 million that were included in the corresponding gross short-term deferred revenues balance of $92.9 million as of December 31, 2018.

Long-term deferred revenues include deferred revenues from service contracts of $10.3 million and $10.6 million as of March 31, 2019 and December 31, 2018, respectively. Remaining performance obligations primarily relate to maintenance contracts and are recognized ratably over the remaining term of the contract, generally not more than five years.

Significant Customers

There were no customers that accounted for more than 10% of the Company’s total revenues for the three months ended March 31, 2019 and 2018. Also, there were no customers that accounted for more than 10% of the Company’s accounts receivable as of March 31, 2019 and December 31, 2018.