Revenues and Deferred Costs

12 Months Ended

Dec. 31, 2023

Revenue from Contract with Customer [Abstract]

Revenues and Deferred Costs

Revenues and Deferred Costs

The Company derives the majority of its revenues from recurring monthly subscription fees charged for the use of its software-as-a-service (“SaaS”) subscription services. Subscription revenues are generally recognized as revenue over the term of the contract as a series of distinct SaaS services bundled into a single performance obligation. Clients are usually charged a one-time, upfront implementation fee and recurring annual and monthly access fees for the use of the online digital relationship banking solution. Implementation and integration of the digital banking platform is complex, and the Company has determined that the one-time, upfront services do not transfer a promised service to the client. As these services are not distinct, they are bundled into the SaaS series of services, and the associated fees are recognized on a straight-line basis over the subscription term. Other services includes professional services and custom development.

The following table disaggregates the Company's revenue by major source for the years ended December 31, 2023, 2022, and 2021:

	Year ended December 31,
(in thousands)	2023		2022		2021
SaaS subscription services	$	252,348	$	194,387	$	143,575
Implementation services	8,488		6,941		6,291
Other services	3,995		2,942		2,293
Total revenues	$	264,831	$	204,270	$	152,159

The Company recognized approximately $8.3 million of revenue during the year ended December 31, 2023 that was included in deferred revenue in the accompanying consolidated balance sheets as of the beginning of the reporting period. For those contracts that were wholly or partially unsatisfied as of December 31, 2023, minimum contracted subscription revenues to be recognized in future periods total approximately $1.1 billion. The Company expects to recognize approximately 46.2% of this amount as subscription services are transferred to customers over the next 24 months, an additional 34.6% in the next 25 to 48 months, and the balance thereafter. This estimate does not include estimated consideration for excess user and transaction processing fees that the Company expects to earn under its subscription contracts.

Contract assets totaled $1.5 million and $0.5 million as of December 31, 2023 and 2022, respectively, which are included in other assets in the accompanying consolidated balance sheets.

Deferred Cost Recognition

The Company capitalized $8.7 million, $8.3 million, and $4.0 million in deferred commissions costs during the years ended December 31, 2023, 2022, and 2021, respectively, and recognized amortization of $3.8 million, $2.9 million, and $2.1 million during the years ended December 31, 2023, 2022, and 2021, respectively. A portion of the increase in deferred commissions from 2021 to 2022 was driven by a change in the Company’s commission plan in 2022, which eliminated a requisite service period condition and resulted in an increase in the portion of commissions that were capitalized. Amortization expense is included in sales and marketing expenses in the accompanying statements of operations. Deferred commissions are considered costs to obtain a contract and are included in deferred implementation costs in the accompanying consolidated balance sheets in the amount of $21.2 million and $16.2 million as of December 31, 2023 and 2022, respectively.

The Company capitalized implementation costs of $8.4 million, $6.9 million, and $6.1 million during the years ended December 31, 2023, 2022, and 2021, respectively, and recognized amortization of $4.9 million, $3.9 million, and $3.0 million during the years ended December 31, 2023, 2022, and 2021, respectively. Amortization expense is included in cost of revenues in the accompanying consolidated statements of operations. These deferred costs are considered costs to fulfill client contracts and are included in deferred implementation costs in the accompanying consolidated balance sheets in the amount of $19.8 million and $16.4 million as of December 31, 2023 and 2022, respectively.

The Company periodically reviews the carrying amount of deferred costs to determine whether events or changes in circumstances have occurred that could impact the period of benefit. No impairment loss was recognized in relation to these capitalized costs for the years ended December 31, 2023, 2022, and 2021.