ACORN ENERGY, INC. Revenue Disclosure

NOTE 13—REVENUE

 

OmniMetrix sells monitoring equipment (“HW”) and monitoring services (“Monitoring”). Prior to September 1, 2023, sales of OmniMetrix equipment typically did not qualify as a separate unit of accounting. As a result, revenue (and related costs) associated with sale of equipment was recorded to deferred revenue (and deferred cost of goods sold) upon shipment of PG and CP monitoring units. Revenue and related costs with respect to the sale of equipment were recognized over the estimated life of the units which was estimated to be three years. On September 1, 2023, OmniMetrix launched an updated version of its products that includes new functionality in its TrueGuard, AIRGuard, Patriot and Hero products that allows its customers to have options as it relates to obtaining and utilizing the data that is provided by its hardware devices. This new functionality allows for SIM card options, configuration options regarding IP address endpoints and DNS routes, and access to OmniMetrix’s over-the-air data protocol. This product update allows customers to have the option to purchase OmniMetrix’s monitoring service, monitor the products themselves if they have the ability in-house, or choose another monitoring provider if they so desire. OmniMetrix’s prior hardware product version could not function as a distinct product independent from its monitoring services. This new version’s functionality results in OmniMetrix’s hardware and monitoring services being capable of being two distinct products and services. OmniMetrix recognizes revenue, COGS and commissions from the sale of the new version of its hardware products when the product is shipped rather than over the estimated time that the unit is in service for the customer. The remaining balance of deferred hardware revenue from the prior version of these products will continue to be amortized each period until it is fully amortized. The modifications to the circuit boards and embedded firmware of hardware enclosures in inventory as of August 31, 2023 were made such that only the new version of these products was sold subsequent to this date.

 

The following table disaggregates the Company’s revenue for the years ended December 31, 2025 and 2024 (in thousands):

 SCHEDULE OF DISAGGREGATES OF REVENUE

		HW				Monitoring				Total
Year ended December 31, 2025:
PG Segment		$	5,424			$	5,317			$	10,741
CP Segment			494				243				737
Total Revenue		$	5,918			$	5,560			$	11,478

 

		HW				Monitoring				Total
Year ended December 31, 2024:
PG Segment		$	5,579			$	4,303			$	9,882
CP Segment			854				250				1,104
Total Revenue		$	6,433			$	4,553			$	10,986

 

Deferred revenue activity for the year ended December 31, 2025 can be seen in the table below (in thousands):

 SCHEDULE OF DEFERRED REVENUE ACTIVITY

		HW				Monitoring				Total
Balance at December 31, 2024		$	1,124			$	3,109			$	4,233
Additions during the period			—				5,693				5,693
Recognized as revenue			(956	)			(5,561	)			(6,517	)
Balance at December 31, 2025		$	168			$	3,241			$	3,409
Amounts to be recognized as revenue in the year ending:
December 31, 2026		$	168			$	2,929			$	3,097
December 31, 2027			—				307				307
December 31, 2028 and thereafter			—				5				5
Total		$	168			$	3,241			$	3,409

 

 

The amount of hardware revenue recognized during the year ended December 31, 2025 that was included in deferred revenue at the beginning of the fiscal year was $956,000. The amount of monitoring revenue during the year ended December 31, 2025 that was included in deferred revenue at the beginning of the fiscal year was $2,893,000.

 

 

 SCHEDULE OF RECONCILIATION OF HARDWARE REVENUE

Reconciliation of Hardware Revenue		2025				2024
Amortization of deferred revenue		$	956			$	1,841
Sales of custom designed units and related accessories			183				26
Hardware sales under the Material Contract			2,293				1,637
Hardware sales			1,944				2,378
Other accessories, services, shipping and miscellaneous charges			542				551
Total hardware revenue		$	5,918			$	6,433

 

Deferred charges relate only to the sale of HW. Deferred charges activity for the year ended December 31, 2025 can be seen in the table below (in thousands):

 SCHEDULE OF DEFERRED CHARGES ACTIVITY

Balance at December 31, 2024		$	476
Additions during the period			—
Recognized as cost of sales			(406	)
Balance at December 31, 2025		$	70
Amounts to be recognized as cost of sales in the year ending:
December 31, 2026		$	70

 

Deferred charges relate only to the sale of HW. Deferred charges activity for the year ended December 31, 2024 can be seen in the table below (in thousands):

 

Balance at December 31, 2023		$	1,285
Additions during the period			—
Recognized as cost of sales			(809	)
Balance at December 31, 2024		$	476

 

The following table provides a reconciliation of the Company’s sales commissions contract assets for the year ended December 31, 2025 (in thousands):

 SCHEDULE OF SALES COMMISSIONS CONTRACT ASSETS

		HW				Monitoring				Total
Balance at December 31, 2024		$	104			$	124			$	228
Additions during the period			—				84				84
Amortization of sales commissions			(88	)			(60	)			(148	)
Balance at December 31, 2025		$	16			$	148			$	164

 

 

The capitalized sales commissions are included in other current assets ($76,000) and other assets ($88,000) in the Company’s Consolidated Balance Sheet at December 31, 2025.

 SCHEDULE OF SALES COMMISSIONS EXPENSE

Amounts to be recognized as sales commissions expense in the year ending:
December 31, 2026		$	76
December 31, 2027			45
December 31, 2028 and thereafter			43
Total		$	164

 

The following table provides a reconciliation of the Company’s sales commissions contract assets for the year ended December 31, 2024 (in thousands):

 

The capitalized sales commissions are included in other current assets ($137,000) and other assets ($91,000) in the Company’s Consolidated Balance Sheets at December 31, 2024.