Revenue

6 Months Ended

Jun. 30, 2021

Revenue

Revenue

2. Revenue

Disaggregation of Revenue

Total revenues consisted of the following:

	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Core services revenue	$	28,684	$	11,709	$	39,708	$	20,837
Managed services revenue		9,669		3,698		14,314		7,833
Software and service subscription revenue		12,987		1,715		24,061		3,526
Total revenue	$	51,340	$	17,122	$	78,083	$	32,196

Revenue from Divested Businesses

There were no divestitures during the three months and six months ended June 30, 2021. Total revenue reported includes revenue from divested businesses of $1.8 million and $4.3 million for the three months ended June 30, 2020 and six months ended June 30, 2021 and 2020, respectively.

Contracts with Customers

Contract Assets - Long-term Insurance Commissions Receivable

A summary of the activity impacting the contract assets during the six months ended June 30, 2021 is presented below:

	Contract Assets
Balance at December 31, 2020	$	3,529
Estimated lifetime value of insurance policies sold by carriers		3,816
Cash receipts		(966)
Balance at June 30, 2021	$	6,379

As of June 30, 2021, $239 of contract assets are expected to be collected within the next 12 months and therefore are included in current accounts receivable on the consolidated balance sheets. The remaining $6,140 of contract assets

are expected to be collected in the following periods and are included in long-term insurance commissions receivable on the consolidated balance sheets.

Contract Liabilities — Refundable Customer Deposits

In September 2019, the Company entered into a Lead Buyer Agreement with a customer (“Buyer”) that provides residential security systems. Under the Lead Buyer Agreement, the Buyer pays the Company a referral fee for leads resulting in completed installations of certain residential security systems. At inception of this agreement, the Buyer made a prepayment of $7,000, which is to be credited over the term from October 2019 to September 2022, from earned referral fees for leads provided by the Company. This prepayment represents a contract liability since it is an advanced deposit for services the Company has yet to provide.

A summary of the activity impacting the contract liabilities during the six months ended June 30, 2021 is presented below:

	Contract
	Liabilities
Balance at December 31, 2020	$	3,193
Additions to contract liabilities		966
Additions to contract liabilities – significant financing component interest		110
Contract liabilities transferred to revenue		(1,592)
Balance at June 30, 2021	$	2,677

As of June 30, 2021, $2,299 of contract liabilities are expected to be transferred to revenue within the next 12 months and therefore are included in current refundable customer deposits on the unaudited condensed consolidated balance sheets. The remaining $378 of contract liabilities are expected to be transferred to revenue over the remaining term of the contract and are included in refundable customer deposits, non-current on the unaudited condensed consolidated balance sheets.

Deferred Revenue

Timing may differ between the satisfaction of performance obligations and collection of amounts from customers. Liabilities are recorded for amounts that are collected in advance of the satisfaction of performance obligations. To the extent the amounts relate to services or coverage performed by the Company over time, these liabilities are classified as deferred revenue. If the amounts collected related to a point in time obligation which has yet to be performed, these liabilities are classified as refundable customer deposits.

A summary of the activity impacting deferred revenue balances related to contracts with customers during the six months ended June 30, 2021 is presented below:

	Deferred
	Revenue
Balance at December 31, 2020	$	5,208
Revenue recognized		(16,759)
Additional amounts deferred		32,842
Impact of acquisitions		141,336
Balance at June 30, 2021	$	162,627

Deferred revenue presented on the Company’s condensed consolidated balance sheet includes $148.9 million and $10.0 million of unearned premiums and unearned ceding commissions, respectively.

Remaining Performance Obligations

Contracts with customers include amounts allocated to performance obligations that will be satisfied at a later date. These amounts primarily include performance obligations that are recorded in the consolidated balance sheets as deferred revenue. The amount of the transaction price allocated to performance obligations to be satisfied at a later date, which is not recorded in the condensed consolidated balance sheets, is immaterial as of June 30, 2021 and December 31, 2020.

The Company has applied the practical expedients provided for in the accounting standards, and does not present unsatisfied performance obligations for (i) contracts with an original expected length of one year or less, (ii) contracts with variable consideration that is allocated entirely to unsatisfied performance obligations or to a wholly unsatisfied promise accounted for under the series guidance, and (iii) contracts for which the Company recognizes revenue at the amount which we have the right to invoice for services performed. Additionally, the Company excludes amounts related to performance obligations that are billed and recognized as they are delivered.