Odysight.ai Inc. Revenue Disclosure
NOTE 9 – REVENUES AND ENTITY WIDE DISCLOSURES:
| a. | Disaggregation of revenue |
| (1) | During the second quarter of 2022, the Company completed the development of a customer-specific project for a Fortune 500 medical company customer (the “Client”) and moved from the project development phase to its production phase. Through March 30, 2025, the Company recognized development services revenues and costs that had been previously deferred based on the expected manufacturing term of the product, which the Company estimated originally at seven years. During the first quarter of 2025, due to the fact that the Company has not received a purchase order from the Client and does not expect to receive such order, the Company decided to fully derecognize the fulfilment asset and contract liability associated with the Client, in the amount of $957 thousand and $1,690 thousand, respectively.
The balance of $847 thousand related to the Client, presented under the “accounts receivable” of the balance sheet as of December 31, 2024, was paid in full during 2025. | |
| (2) | During the year ended December 31, 2025 the Company recognized revenues from customization and development services in which the performance obligation is satisfied over time in the amount of $1,150 thousand. |
| b. | Revenues by geographical area (based on the location of customers) |
The following is a summary of revenues within geographic areas:
| Year ended on December 31, |
||||||||
| 2025 | 2024 | |||||||
| USD in thousands | ||||||||
| United States | 1,856 | 3,014 | ||||||
| Israel | 1,150 | 911 | ||||||
| Other | 9 |
39 | ||||||
| 3,015 | 3,964 | |||||||
| c. | Major customers |
Set forth below is a breakdown of Company’s revenue by major customers (major customer –revenues from these customers constituted at least 10% of total revenues in a certain year):
| Year ended on | ||||||||
| December 31, | ||||||||
| 2025 | 2024 | |||||||
| USD in thousands | ||||||||
| Customer A | 1,856 | 3,000 | ||||||
| Customer B | 927 | 531 | ||||||
ODYSIGHT.AI INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 9 – REVENUES AND ENTITY WIDE DISCLOSURES (continued):
| d. | Contract fulfillment assets and Contract liabilities: |
| December 31, | ||||||||
| 2025 | 2024 | |||||||
| USD in thousands | ||||||||
| Contract fulfillment assets | 1,017 | |||||||
| Contract liabilities | 165 | 2,075 | ||||||
Contract liabilities include deferred service and advance payments.
The change in contract fulfillment assets:
| December 31, | ||||||||
| 2025 | 2024 | |||||||
| USD in thousands | ||||||||
| Balance at beginning of year | 1,017 | 1,256 | ||||||
| Contract costs recognized during the period | (1,017 | ) | (239 | ) | ||||
| Balance at end of year | 1,017 | |||||||
The change in contract liabilities:
| December 31, | ||||||||
| 2025 | 2024 | |||||||
| USD in thousands | ||||||||
| Balance at beginning of year | 2,075 | 2,322 | ||||||
| Deferred revenue during the year | 178 | 253 | ||||||
| Revenue recognized during the year | (2,088 | ) | (500 | ) | ||||
| Balance at end of year | 165 | 2,075 | ||||||
Remaining Performance Obligations
Remaining Performance Obligations (“RPO”) represents contracted revenue that has not yet been recognized, which includes deferred revenue and amounts that are expected to be invoiced and recognized as revenue in future periods. As of December 31, 2025, the total RPO amounted to approximately $13.8 million. The total RPO amount includes an amount exceeding $10 million related to a long-term purchase order agreement signed in the third quarter of 2024 with a leading international defense contractor.
ODYSIGHT.AI INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 19, 2026 | Showing above |
| 2024 | Mar 26, 2025 | |
| 2023 | Mar 26, 2024 | |
| 2022 | Mar 28, 2023 | |
| 2021 | Mar 30, 2022 | |
| 2020 | Mar 31, 2021 | |
| 2019 | Mar 16, 2020 | |
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.