REVENUE
Disaggregated Revenue
The following table shows revenue by product and services groups (in thousands):
| | | | | | | | | | | | | |
| Year Ended December 31, |
| 2025 | | 2024 | | |
Licensing, support and maintenance | $ | 63,859 | | | $ | 52,815 | | | |
Variable royalties | 6,596 | | | 4,405 | | | |
Other | 124 | | | 504 | | | |
Total | $ | 70,579 | | | $ | 57,724 | | | |
Contract Balances
The following table provides information about accounts receivable, net, contract assets and deferred revenue (in thousands):
| | | | | | | | | | | |
| As of December 31, |
| 2025 | | 2024 |
Accounts receivable, net | $ | 19,183 | | | $ | 20,608 | |
Contract assets, current portion | $ | — | | | $ | 167 | |
| Deferred revenue | $ | 95,341 | | | $ | 75,622 | |
During the years ended December 31, 2025, and 2024, the Company recognized revenue of $44.0 million and $35.6 million, respectively, that was included in the deferred revenue balance at the beginning of the respective periods. Contract assets, current are included in prepaid expenses and other current assets on the consolidated balance sheets.
As of December 31, 2025, non-cancelable contracted but unsatisfied or partially satisfied performance obligations that have not yet been recognized were $112.4 million which include deferred revenue, amounts that will be invoiced and recognized as revenues in future periods and Flexible Spending Accounts (FSA) commitments, from customers where actual product selection and quantities of specific products are to be determined by customers at a future period. The Company expects to recognize $56.8 million of this balance over the next 12 months and the remainder thereafter. FSA commitments amounted to $3.8 million and $2.3 million as of December 31, 2025, and 2024, respectively. The Company has elected to exclude the potential future royalty receipts from these amounts.
Costs of Obtaining a Contract with a Customer
Incremental costs of obtaining a contract with a customer consist primarily of direct sales commissions incurred upon execution of the contract. These costs are required to be capitalized under ASC 340-40, Other Assets and Deferred Costs—Contracts With Customers, and amortized over the license term. As direct sales commissions paid for term extensions are commensurate with the amounts paid for initial contracts, the deferred incremental costs for initial contracts and for term extensions are recognized over the respective contract terms. Total capitalized direct commission costs were as follows (in thousands):
| | | | | | | | | | | |
| As of December 31, |
| 2025 | | 2024 |
| Short-term commission capitalized in prepaid expenses and other current assets | $ | 3,124 | | | $ | 2,311 | |
| Long-term commission capitalized in other assets | 2,417 | | | 1,789 | |
Total | $ | 5,541 | | | $ | 4,100 | |
Amortization of capitalized sales commissions was $3.6 million and $3.5 million for the years ended December 31, 2025, and 2024, respectively, and are included in sales and marketing expense in the consolidated statements of operations.
About Revenue Disclosures
Revenue disclosures under ASC 606 explain how a company identifies performance obligations, allocates transaction prices, and determines when revenue is recognized. This section is essential for understanding whether reported revenue reflects genuine economic activity or aggressive accounting choices. Analysts examine the mix of point-in-time versus over-time recognition, which directly affects revenue timing and comparability.
Key signals: rising contract liabilities (deferred revenue) suggest strong future revenue visibility, while declining contract assets may indicate slowing project milestones. Watch for variable consideration estimates — rebates, returns, and performance bonuses that require management judgment. Significant changes in disaggregated revenue by geography or product line can reveal shifting business mix before it appears in headline numbers. Compare revenue growth against contract liability growth to assess sustainability, and scrutinize any changes in the timing of recognition that coincide with earnings pressure.