4. Revenue Recognition

Revenue by Service Line

 

 

Year Ended December 31,

 

(in thousands)

 

2025

 

 

2024

 

Biologics and drug delivery

 

 

 

 

 

 

Disposable products

 

$

7,338

 

 

$

5,606

 

Services and license fees

 

 

11,702

 

 

 

11,704

 

Subtotal – Biologics and drug delivery revenue

 

 

19,040

 

 

 

17,310

 

Neurosurgery navigation and therapy

 

 

 

 

 

 

Disposable products

 

 

14,831

 

 

 

10,285

 

Subtotal – Neurosurgery navigation and therapy revenue

 

 

14,831

 

 

 

10,285

 

Capital equipment and software

 

 

 

 

 

 

Systems and software products

 

 

1,690

 

 

 

2,735

 

Services

 

 

1,410

 

 

 

1,060

 

Subtotal – Capital equipment and software revenue

 

 

3,100

 

 

 

3,795

 

Total revenue

 

$

36,971

 

 

$

31,390

 

 

Contract Balances

Contract assets – The timing of revenue recognition may differ from the time of billing to the Company's customers. In most cases, customers are billed upon shipment of such products or delivery of such services and the related contract assets, which represent an unconditional right to consideration and comprise the accounts receivable balance. When revenue is recognized in advance of its right to bill and receive consideration, the Company records this unbilled receivable as a contract asset, which is classified as other current assets in the accompanying consolidated balance sheets. Additionally, at December 31, 2025, the Company recorded as a contract asset up-front costs for direct materials incurred to fulfill a customer contract.

 

(in thousands)

 

December 31, 2025

 

 

December 31, 2024

 

 

December 31, 2023

 

Accounts receivable, net

 

$

6,549

 

 

$

4,713

 

 

$

3,211

 

Other contract assets

 

 

 

 

 

 

 

 

 

Unbilled receivables

 

$

714

 

 

$

642

 

 

$

733

 

Deferred contract costs

 

$

150

 

 

$

 

 

$

 

 

Contract liabilities – Contract liabilities consist of amounts that have been invoiced and for which the Company has the right to bill, but that have not been recognized as revenue as the related goods or services have not been transferred. The Company's
contract liabilities are generally comprised of the following (1) capital equipment and software-related service fees that are typically billed and collected at the inception of the service agreements, which have terms ranging from one to three years; (2) annual fees for agreements with customers that bundle the capital equipment and software-related service fees with software and hardware upgrades that are made commercially available over the term of the contract; and (3) up-front payments from customers made in connection with consulting services.

 

(in thousands)

 

December 31, 2025

 

 

December 31, 2024

 

 

December 31, 2023

 

Contract liabilities

 

$

2,250

 

 

$

2,557

 

 

$

3,154

 

 

During the years ended December 31, 2025 and 2024, the Company recognized capital equipment and software-related service revenue of approximately $2.1 million and $2.3 million, respectively, which was previously included in contract liabilities in the accompanying consolidated balance sheets at December 31, 2024 and 2023, respectively.

Transaction price allocated to remaining performance obligations represents contracted revenue that has not yet been recognized, which includes deferred revenue that will be recognized as revenue in future periods. The majority of the remaining performance obligations relate to capital equipment and software-related service agreements and the upfront payments discussed under the heading “Contract Balances” above, which amounted to approximately $2.1 million at December 31, 2025. The Company expects to recognize approximately 72% of this revenue over the next twelve months and the remainder thereafter.

Historical Timeline

Fiscal YearFiled
2025Mar 17, 2026Showing above
2024Feb 26, 2025
2023Mar 12, 2024
2022Mar 1, 2023
2021Mar 9, 2022
2020Mar 22, 2021
2019Mar 27, 2020
2018Apr 1, 2019

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.