Leases

3 Months Ended

Mar. 31, 2024

Leases [Abstract]

Leases

Leases

Lessee

The Company has operating leases for office facilities, equipment, and satellite service capacity and related equipment. Lease expense was $353 and $452 for the three months ended March 31, 2024 and 2023, respectively. Short-term operating lease costs were $19 and $25 for the three months ended March 31, 2024 and 2023, respectively. Maturities of lease liabilities as of March 31, 2024 under operating leases having an initial or remaining non-cancelable term of one year or more are as follows:

Remainder of 2024	$	1,023
2025	349
2026	116
2027	110
2028 and thereafter	107
Total minimum lease payments	$	1,705
Less amount representing interest	$	(96)
Present value of net minimum operating lease payments	$	1,609
Less current installments of obligation under current-operating lease liabilities	$	1,211
Obligations under long-term operating lease liabilities, excluding current installments	$	398
Weighted-average remaining lease term - operating leases (years)	2.00
Weighted-average discount rate - operating leases	5.50		%

Lessor

The Company enters into leases with certain customers primarily for the TracPhone VSAT systems. These leases are classified as sales-type leases because title to the equipment transfers to the customer at the end of the lease term. The Company records the leases at a price typically equivalent to normal selling price and in excess of the cost or carrying amount. Upon delivery, the Company records the net present value of all payments under these leases as product revenue, and the related costs of the product are charged to cost of sales. Interest income is recognized throughout the lease term (typically three to five years) using an implicit interest rate. The sales-type leases do not have unguaranteed residual assets.

Upon adoption of ASC 842, the Company elected to apply the practical expedient provided to lessors to combine the lease and non-lease component of a contract where the revenue recognition pattern is the same and where the lease component, when accounted for separately, would be considered an operating lease. The practical expedient also allows a lessor to account for the combined lease and non-lease components under ASC 606, Revenue from Contracts with Customers, when the non-lease component is the predominant element of the combined component.

The current portion of the net investment in these leases was $3,284 as of March 31, 2024 and the non-current portion of the net investment in these leases was $3,269 as of March 31, 2024. The current portion of the net investment in the leases is included in accounts receivable, net of allowance for doubtful accounts on the accompanying consolidated balance sheets and the non-current portion of the net investment in these leases is included in other non-current assets on the accompanying consolidated balance sheets. Interest income from sales-type leases was $129 and $168 during the three months ended March 31, 2024 and 2023, respectively.

The future undiscounted cash flows from these leases as of March 31, 2024 are:

Remainder of 2024	$	2,989
2025	2,150
2026	1,188
2027	658
2028	230
2029	9
Total undiscounted cash flows	$	7,224
Present value of lease payments	$	6,553
Difference between undiscounted cash flows and discounted cash flows	$	671

In 2021, the Company began entering into three-year leases for its TracPhone VSAT systems, in which ownership of the hardware does not transfer to the lessee by the end of the lease term. As a result, and in light of other factors indicated in ASC 842, these leases are classified as operating leases.

As of March 31, 2024, the gross costs and accumulated depreciation associated with these operating leases are included in revenue generating assets and amounted to $1,861 and $975, respectively. They are depreciated on a straight-line basis over a five-year estimated useful life. Depreciation expense for these assets was $93 for the three months ended March 31, 2024, respectively.

Lease revenue recognized was $125 for the three months ended March 31, 2024, respectively, in service sales in the consolidated statements of operations.

As of March 31, 2024, minimum future lease payments to be recognized on the operating leases are as follows:

Remainder of 2024	$	217
2025	25
Total	$	242

Leases

Leases

Lessee

The Company has operating leases for office facilities, equipment, and satellite service capacity and related equipment. Lease expense was $353 and $452 for the three months ended March 31, 2024 and 2023, respectively. Short-term operating lease costs were $19 and $25 for the three months ended March 31, 2024 and 2023, respectively. Maturities of lease liabilities as of March 31, 2024 under operating leases having an initial or remaining non-cancelable term of one year or more are as follows:

Remainder of 2024	$	1,023
2025	349
2026	116
2027	110
2028 and thereafter	107
Total minimum lease payments	$	1,705
Less amount representing interest	$	(96)
Present value of net minimum operating lease payments	$	1,609
Less current installments of obligation under current-operating lease liabilities	$	1,211
Obligations under long-term operating lease liabilities, excluding current installments	$	398
Weighted-average remaining lease term - operating leases (years)	2.00
Weighted-average discount rate - operating leases	5.50		%

Lessor

The Company enters into leases with certain customers primarily for the TracPhone VSAT systems. These leases are classified as sales-type leases because title to the equipment transfers to the customer at the end of the lease term. The Company records the leases at a price typically equivalent to normal selling price and in excess of the cost or carrying amount. Upon delivery, the Company records the net present value of all payments under these leases as product revenue, and the related costs of the product are charged to cost of sales. Interest income is recognized throughout the lease term (typically three to five years) using an implicit interest rate. The sales-type leases do not have unguaranteed residual assets.

Upon adoption of ASC 842, the Company elected to apply the practical expedient provided to lessors to combine the lease and non-lease component of a contract where the revenue recognition pattern is the same and where the lease component, when accounted for separately, would be considered an operating lease. The practical expedient also allows a lessor to account for the combined lease and non-lease components under ASC 606, Revenue from Contracts with Customers, when the non-lease component is the predominant element of the combined component.

The current portion of the net investment in these leases was $3,284 as of March 31, 2024 and the non-current portion of the net investment in these leases was $3,269 as of March 31, 2024. The current portion of the net investment in the leases is included in accounts receivable, net of allowance for doubtful accounts on the accompanying consolidated balance sheets and the non-current portion of the net investment in these leases is included in other non-current assets on the accompanying consolidated balance sheets. Interest income from sales-type leases was $129 and $168 during the three months ended March 31, 2024 and 2023, respectively.

The future undiscounted cash flows from these leases as of March 31, 2024 are:

Remainder of 2024	$	2,989
2025	2,150
2026	1,188
2027	658
2028	230
2029	9
Total undiscounted cash flows	$	7,224
Present value of lease payments	$	6,553
Difference between undiscounted cash flows and discounted cash flows	$	671

In 2021, the Company began entering into three-year leases for its TracPhone VSAT systems, in which ownership of the hardware does not transfer to the lessee by the end of the lease term. As a result, and in light of other factors indicated in ASC 842, these leases are classified as operating leases.

As of March 31, 2024, the gross costs and accumulated depreciation associated with these operating leases are included in revenue generating assets and amounted to $1,861 and $975, respectively. They are depreciated on a straight-line basis over a five-year estimated useful life. Depreciation expense for these assets was $93 for the three months ended March 31, 2024, respectively.

Lease revenue recognized was $125 for the three months ended March 31, 2024, respectively, in service sales in the consolidated statements of operations.

As of March 31, 2024, minimum future lease payments to be recognized on the operating leases are as follows:

Remainder of 2024	$	217
2025	25
Total	$	242

Leases

Leases

Lessee

The Company has operating leases for office facilities, equipment, and satellite service capacity and related equipment. Lease expense was $353 and $452 for the three months ended March 31, 2024 and 2023, respectively. Short-term operating lease costs were $19 and $25 for the three months ended March 31, 2024 and 2023, respectively. Maturities of lease liabilities as of March 31, 2024 under operating leases having an initial or remaining non-cancelable term of one year or more are as follows:

Remainder of 2024	$	1,023
2025	349
2026	116
2027	110
2028 and thereafter	107
Total minimum lease payments	$	1,705
Less amount representing interest	$	(96)
Present value of net minimum operating lease payments	$	1,609
Less current installments of obligation under current-operating lease liabilities	$	1,211
Obligations under long-term operating lease liabilities, excluding current installments	$	398
Weighted-average remaining lease term - operating leases (years)	2.00
Weighted-average discount rate - operating leases	5.50		%

Lessor

The Company enters into leases with certain customers primarily for the TracPhone VSAT systems. These leases are classified as sales-type leases because title to the equipment transfers to the customer at the end of the lease term. The Company records the leases at a price typically equivalent to normal selling price and in excess of the cost or carrying amount. Upon delivery, the Company records the net present value of all payments under these leases as product revenue, and the related costs of the product are charged to cost of sales. Interest income is recognized throughout the lease term (typically three to five years) using an implicit interest rate. The sales-type leases do not have unguaranteed residual assets.

Upon adoption of ASC 842, the Company elected to apply the practical expedient provided to lessors to combine the lease and non-lease component of a contract where the revenue recognition pattern is the same and where the lease component, when accounted for separately, would be considered an operating lease. The practical expedient also allows a lessor to account for the combined lease and non-lease components under ASC 606, Revenue from Contracts with Customers, when the non-lease component is the predominant element of the combined component.

The current portion of the net investment in these leases was $3,284 as of March 31, 2024 and the non-current portion of the net investment in these leases was $3,269 as of March 31, 2024. The current portion of the net investment in the leases is included in accounts receivable, net of allowance for doubtful accounts on the accompanying consolidated balance sheets and the non-current portion of the net investment in these leases is included in other non-current assets on the accompanying consolidated balance sheets. Interest income from sales-type leases was $129 and $168 during the three months ended March 31, 2024 and 2023, respectively.

The future undiscounted cash flows from these leases as of March 31, 2024 are:

Remainder of 2024	$	2,989
2025	2,150
2026	1,188
2027	658
2028	230
2029	9
Total undiscounted cash flows	$	7,224
Present value of lease payments	$	6,553
Difference between undiscounted cash flows and discounted cash flows	$	671

In 2021, the Company began entering into three-year leases for its TracPhone VSAT systems, in which ownership of the hardware does not transfer to the lessee by the end of the lease term. As a result, and in light of other factors indicated in ASC 842, these leases are classified as operating leases.

As of March 31, 2024, the gross costs and accumulated depreciation associated with these operating leases are included in revenue generating assets and amounted to $1,861 and $975, respectively. They are depreciated on a straight-line basis over a five-year estimated useful life. Depreciation expense for these assets was $93 for the three months ended March 31, 2024, respectively.

Lease revenue recognized was $125 for the three months ended March 31, 2024, respectively, in service sales in the consolidated statements of operations.

As of March 31, 2024, minimum future lease payments to be recognized on the operating leases are as follows:

Remainder of 2024	$	217
2025	25
Total	$	242