Revenue Recognition

6 Months Ended

Jun. 30, 2023

Revenue from Contract with Customer [Abstract]

Revenue Recognition

Revenue Recognition

Contract Balances

The following table provides information about accounts receivables, contract assets, customer deposits and deferred revenue from contracts with customers (in thousands):

	June 30,		December 31,
	2023		2022
Accounts receivable	$	351,021	$	250,995
Contract assets	35,182		46,727
Customer deposits	78,820		121,085
Deferred revenue	85,110		94,355

Contract assets relate to contracts for which revenue is recognized upon transfer of control of performance obligations, but where billing milestones have not been reached. Customer deposits and deferred revenue include payments received from customers or invoiced amounts prior to transfer of controls of performance obligations. At December 31, 2022, customer deposits included $24.6 million related to transactions with SK ecoplant and refundable fees received from customers. At June 30, 2023 there were no customer deposits related to transactions with SK ecoplant (see Note 15 - SK ecoplant Strategic Investment).

Contract assets and contract liabilities are reported in a net position on an individual contract basis at the end of each reporting period. Contract assets are classified as current in the condensed consolidated balance sheets when both the milestones other than the passage of time, are expected to be complete and the customer is invoiced within one year of the balance sheet date, and as long-term when both the above-mentioned milestones are expected to be complete, and the customer is invoiced more than one year out from the balance sheet date. Contract liabilities are classified as current in the condensed consolidated balance sheets when the revenue recognition associated with the related customer payments and invoicing is expected to occur within one year of the balance sheet date and as long-term when the revenue recognition associated with the related customer payments and invoicing is expected to occur in more than one year from the balance sheet date.

Contract Assets

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Beginning balance	$	47,778	$	13,533	$	46,727	$	25,201
Transferred to accounts receivable from contract assets recognized at the beginning of the period	(23,228)		(1,387)		(27,404)		(15,963)
Revenue recognized and not billed as of the end of the period	10,632		21,228		15,859		24,136
Ending balance	$	35,182	$	33,374	$	35,182	$	33,374

Deferred Revenue

Deferred revenue activity, including deferred incentive revenue activity, during the three and six months ended June 30, 2023 and 2022 consisted of the following (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Beginning balance	$	87,848	$	103,489	$	94,355	$	115,476
Additions	265,408		182,067		490,346		348,744
Revenue recognized	(268,146)		(189,179)		(499,591)		(367,843)
Ending balance	$	85,110	$	96,377	$	85,110	$	96,377

Deferred revenue is equivalent to the total transaction price allocated to the performance obligations that are unsatisfied, or partially unsatisfied, as of the end of the period. Primary component of deferred revenue at the end of the period consists of performance obligations relating to the provision of maintenance services under current contracts and future renewal periods. Some of these obligations provide customers with material rights over a period that we estimate will be largely commensurate with the period of their expected use of the associated Energy Server. As a result, we expect to recognize these amounts as revenue over a period of up to 21 years, predominantly on a relative standalone selling price basis that reflects the cost of providing these services. Deferred revenue also includes performance obligations relating to product acceptance and installation. A significant amount of this deferred revenue is reflected as additions and revenue recognized in the same 12-month period, and a portion of this deferred revenue is expected to be recognized beyond 12-month period mainly due to deployment schedules.

We do not disclose the value of the unsatisfied performance obligations for (i) contracts with an original expected length of one year or less and (ii) contracts for which we recognize revenue at the amount to which we have the right to invoice for services performed.

Disaggregated Revenue

We disaggregate revenue from contracts with customers into four revenue categories: product, installation, services and electricity (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Revenue from contracts with customers:
Product revenue	$	214,706	$	173,625	$	408,451	$	307,172
Installation revenue	24,321		12,729		44,846		26,282
Services revenue	42,298		38,426		82,961		73,665
Electricity revenue	3,966		2,794		7,804		5,476
Total revenue from contract with customers	285,291		227,574		544,062		412,595
Revenue from contracts that contain leases:
Electricity revenue	15,804		15,662		32,224		31,680
Total revenue	$	301,095	$	243,236	$	576,286	$	444,275