Revenue, Deferred Revenue, and Deferred Device and Contract Costs |
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Revenue, Deferred Revenue, and Deferred Device and Contract Costs | Revenue, Deferred Revenue, and Deferred Device and Contract CostsThe Company generates access fees from customers, which primarily consist of employers, health plans, hospitals and health systems, insurance and financial services companies (collectively “Clients”), as well as individual members who utilize the Company’s solutions, accessing its professional provider network, hosted virtual healthcare platform, and chronic care management platforms. Visit fee revenue is generated for general medical, expert medical service, and other specialty visits and is reported as a component of other revenue when disaggregated revenue is presented. Revenue associated with virtual healthcare device equipment sales included with the Company’s hosted virtual healthcare platform is also reported in other revenue. The following table presents the Company’s revenues disaggregated by revenue source and also by geography (in thousands):
During the fourth quarter of 2022, the Company refined its definition of other revenue to capture revenues associated with visit fee, virtual healthcare device equipment sales, and its hosted virtual healthcare platform. Prior period amounts have been recast to conform with the current presentation. Deferred Revenue Deferred revenue represents billed, but unrecognized revenue, and is comprised of fees received in advance of the delivery or completion of the services and amounts received in instances when revenue recognition criteria have not been met. The Company records deferred revenue when cash payments are received in advance of the Company’s performance obligation to provide services. Deferred revenue is derived from 1) upfront payments for a device, which is amortized ratably over the expected member enrollment period; 2) upfront payments for certain services where payment is required for future periods before the service is delivered to the member, which is recognized when the services are provided; and 3) upfront payments from third-party financing companies with whom the Company works to provide certain Clients with a rental option, which is recognized over the rental period. Deferred revenue that will be recognized during the next twelve-month period is recorded as current deferred revenue and the remaining portion is recorded as non-current deferred revenue. Deferred revenue, current plus long-term, was $112.3 million at September 30, 2023, a net decrease of $1.4 million from December 31, 2022, and $111.3 million at September 30, 2022, a net increase of $9.3 million from December 31, 2021. These changes were driven by increased cash payments received in advance of satisfying performance obligations, offset by revenue recognized that had been included in the deferred revenue balance at the beginning of the period. The amount of revenue recognized in the periods that was included in the opening current deferred revenue was $88.6 million and $68.2 million for the nine months ended September 30, 2023 and 2022, respectively. The Company expects to recognize $65.3 million of revenue throughout the remainder of 2023, $36.1 million of revenue in the year ending December 31, 2024, and the remaining balance thereafter related to future performance obligations that are unsatisfied or partially unsatisfied as of September 30, 2023. Deferred Device and Contract Costs Deferred device and contract costs are classified as a component of prepaid expenses and other current assets or other assets, depending on term, and consisted of the following (in thousands):
Deferred device and contract costs were as follows (in thousands):
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