Revenue

3 Months Ended

Dec. 31, 2022

Revenue from Contract with Customer [Abstract]

REVENUE

REVENUE

Revenue Disaggregation

The following table summarizes our revenue by geographic location of our customers (in thousands):

	Three months ended December 31,
	2022		2021
North America, primarily the United States	$	83,465	$	66,243
Europe, Middle East & Africa	15,877		10,159
Rest of world	9,964		7,855
Total revenue	$	109,306	$	84,257

The following table summarizes our revenue by the timing of revenue recognition (in thousands):

	Three months ended December 31,
	2022		2021
Transferred at a point in time	$	85,486	$	66,535
Transferred over time	23,820		17,722
Total revenue	$	109,306	$	84,257

Contract Balances

Contract Related Assets

Our contract related assets consist of subscriber assets that are equipment that we provide to customers pursuant to subscription-based contracts.  In these cases, we retain the ownership of the equipment that the customer uses and charge them subscription fees to receive our end-to end solutions. The total net book value of subscriber assets of $17.1 million and $16.5 million as of December 31, 2022 and September 30, 2022, respectively, are included in property, equipment and improvements, net. Depreciation expense for these subscriber assets, which is included in cost of sales, was $0.9 million and $0.8 million for the three months ended December 31, 2022 and 2021, respectively. We depreciate the cost of this equipment over its useful life.

Contract Assets

Contract assets at Digi consist of products and services that have been fulfilled, but for which revenue has not yet been recognized. Our contract asset balances were immaterial as of December 31, 2022 and 2021.

Contract Liabilities

The timing of revenue recognition may differ from the timing of invoicing to customers. Customers are invoiced for subscription services on a monthly, quarterly or annual basis. Contract liabilities consist of unearned revenue related to annual or multi-year contracts for subscription services and related implementation fees, as well as product sales that have been invoiced, but not yet fulfilled.

Our contract liabilities were $23.0 million and $24.3 million at December 31, 2022 and 2021, respectively.

Of the $21.6 million and $15.5 million balances as of September 30, 2022 and 2021, Digi recognized $6.1 million and $4.9 million as revenue in the three months ended December 31, 2022 and 2021, respectively.

Remaining Transaction Price

Transaction price allocated to the remaining performance obligations represents contracted revenue that has not been recognized. This includes unearned revenue and unbilled amounts that will be recognized as revenue in future periods so long as we perform our obligations. As of December 31, 2022, approximately $23.0 million of revenue is expected to be recognized from remaining performance obligations. We expect to recognize revenue on approximately $20.4 million of remaining performance obligations over the next twelve months. Revenue from the remaining performance obligations we expect to recognize over a range of two to five years.