Revenue Recognition
Deferred Revenue
Deferred revenue is recorded when cash payments are received or due in advance of revenue recognition from software licenses, professional services, and maintenance agreements. The timing of revenue recognition may differ from when customers are invoiced.
Deferred revenue is as follows:
| | | | | | | | | | | |
| (in thousands) | December 31, 2025 | | December 31, 2024 |
| Current | $ | 25,913 | | | $ | 23,166 | |
| Non-current | 1,841 | | | 1,529 | |
| Total | $ | 27,754 | | | $ | 24,695 | |
Most performance obligations greater than one year relate to service and support contracts that the Company expects to fulfill within 36 months. The Company expects to fulfill 100% of service and support contracts within 60 months.
The changes in deferred revenue, inclusive of both current and long-term, are as follows:
| | | | | | | | | | | |
| (in thousands) | 2025 | | 2024 |
| Beginning balance - January 1 | $ | 24,695 | | | $ | 11,454 | |
| Acquired deferred revenue (refer to "Note 3 - Acquisitions") | 809 | | | 13,283 | |
| Recognition of deferred revenue | (150,986) | | | (113,016) | |
| Deferral of revenue | 151,966 | | | 114,755 | |
| Impact of foreign currency translation of deferred revenue | 1,270 | | | (1,781) | |
| Ending balance - December 31 | $ | 27,754 | | | $ | 24,695 | |
The above tables exclude customer deposits of $2.0 million and $1.8 million as of December 31, 2025 and 2024, respectively. During the years ended December 31, 2025 and 2024, the Company recognized revenue included in contract liabilities at the beginning of each respective period of $22.6 million and $7.1 million.
Disaggregated Revenue
The Company disaggregates revenue from contracts with customers by major product line because the Company believes it best depicts how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors.
Disaggregated revenue is as follows:
| | | | | | | | | | | | | | | |
| Year Ended December 31, 2025 |
| (in thousands) | Point in time | | Over time | | | | |
| Subscription service | $ | — | | | $ | 291,170 | | | | | |
| Hardware | 106,410 | | | — | | | | | |
| Professional service | 19,769 | | | 38,198 | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| Total | $ | 126,179 | | | $ | 329,368 | | | | | |
| | | | | | | | | | | | | | | |
| Year Ended December 31, 2024 |
| (in thousands) | Point in time | | Over time | | | | |
| Subscription service | $ | — | | | $ | 207,422 | | | | | |
| Hardware | 87,040 | | | — | | | | | |
| Professional service | 21,322 | | | 34,198 | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| Total | $ | 108,362 | | | $ | 241,620 | | | | | |
| | | | | | | | | | | | | | | |
| Year Ended December 31, 2023 |
| (in thousands) | Point in time | | Over time | | | | |
| Subscription service | $ | — | | | $ | 122,597 | | | | | |
| Hardware | 103,391 | | | — | | | | | |
| Professional service | 21,565 | | | 29,161 | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| Total | $ | 124,956 | | | $ | 151,758 | | | | | |
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.