Revenue from Contracts with Customers

6 Months Ended

Jun. 30, 2022

Revenue from Contract with Customer [Abstract]

Revenue from Contracts with Customers

5. Revenue from Contracts with Customers

The Company markets and sells its products through e-commerce online channels, retail brick-and-mortar wholesale partners, Purple retail showrooms, and third-party online retailers. Revenue is recognized when the Company satisfies its performance obligations. These performance obligations generally relate to delivering products to a customer, subject to the shipping terms of the contract.

Disaggregated Revenue

The Company classifies revenue into two sales categories: Direct-to-Consumer (“DTC”) and wholesale. The DTC category is comprised of the Company’s e-commerce channel that sells directly to consumers who purchase online and through our contact center, and the Purple retail showrooms channel that sells directly to consumers who purchase at a Company showroom location. The wholesale category includes all product sales to our retail brick and mortar wholesale partners where consumers make purchases at their retail locations or through their online channels. The Company classifies products into two major types: sleep products and other. Sleep products include mattresses, platforms, adjustable bases, mattress protectors, pillows and sheets. Other products include cushions and various other products.

The following tables present the Company’s net revenue disaggregated by sales category and product type (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
Channel	2022		2021		2022		2021
DTC	$	81,628	$	116,219	$	167,164	$	241,123
Wholesale		62,481		66,367		120,124		127,892
Revenues, net	$	144,109	$	182,586	$	287,288	$	369,015

	Three Months Ended June 30,				Six Months Ended June 30,
Product	2022		2021		2022		2021
Sleep products	$	131,738	$	166,708	$	260,704	$	338,551
Other		12,371		15,878		26,584		30,464
Revenues, net	$	144,109	$	182,586	$	287,288	$	369,015

Contract Balances

Payment for sale of products through the e-commerce online channel, third-party online retailers, Purple retail showrooms and contact center is collected at point of sale in advance of shipping the products. Amounts received for unshipped products are recorded as customer prepayments. Customer prepayments totaled $5.1 million and $10.9 million at June 30, 2022 and December 31, 2021, respectively. During the three months ended June 30, 2022 and 2021, the Company recognized all revenue that was deferred in customer prepayments at March 31, 2022 and 2021, respectively.