Revenues

6 Months Ended

Jun. 30, 2020

Revenue Recognition [Abstract]

Revenues

Revenues

Revenue Recognition

The Company earns revenues from sales of its products 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. On premise or cloud-based subscription solutions that improve medication management and adherence outcomes or enable incremental functionality of the Company’s equipment.

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 technology-enabled services, 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 $1.7 million and $2.6 million for the three months ended June 30, 2020 and 2019, respectively, and $4.6 million and $4.8 million for the six months ended June 30, 2020 and 2019, respectively.

Disaggregation of Revenues

The following table summarizes the Company’s product revenues disaggregated by revenue type for the three and six months ended June 30, 2020 and 2019:

	Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019
	(In thousands)
Hardware and software	$	116,919	$	133,005	$	259,352	$	251,819
Consumables	18,063		21,795		41,333		45,502
Other	3,960		3,579		8,330		6,668
Total product revenues	$	138,942	$	158,379	$	309,015	$	303,989

The following table summarizes the Company’s revenues disaggregated by geographic region, which is determined based on customer location, for the three and six months ended June 30, 2020 and 2019:

	Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019
	(In thousands)
United States	$	178,052	$	195,811	$	385,786	$	375,831
Rest of world (1)	21,569		21,602		43,521		44,099
Total revenues	$	199,621	$	217,413	$	429,307	$	419,930

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⁽¹⁾ No individual country represented more than 10% of total revenues.

Contract Assets and Contract Liabilities

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

	June 30, 2020		December 31, 2019
	(In thousands)
Short-term unbilled receivables, net (1)	$	9,602	$	11,707
Long-term unbilled receivables, net (2)	16,132		12,260
Total contract assets	$	25,734	$	23,967
Short-term deferred revenues, net	$	107,940	$	90,894
Long-term deferred revenues	6,101		7,083
Total contract liabilities	$	114,041	$	97,977

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⁽¹⁾ Included in accounts receivable and unbilled receivables in the Condensed Consolidated Balance Sheets.

⁽²⁾ Included in other long-term assets in the Condensed Consolidated Balance Sheets.

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

Short-term deferred revenues of $107.9 million and $90.9 million include deferred revenues from product sales and service contracts, net of deferred cost of sales of $19.6 million and $13.1 million, as of June 30, 2020 and December 31, 2019, 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 and six months ended June 30, 2020, the Company recognized revenues of $20.9 million and $64.3 million, respectively, that were included in the corresponding gross short-term deferred revenues balance of $104.0 million as of December 31, 2019.

Long-term deferred revenues include deferred revenues from service contracts of $6.1 million and $7.1 million as of June 30, 2020 and December 31, 2019, 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 and six months ended June 30, 2020 and 2019. Also, there were no customers that accounted for more than 10% of the Company’s accounts receivable balance as of June 30, 2020 and December 31, 2019.