Revenue (Notes)

9 Months Ended

Sep. 30, 2022

Revenue from Contract with Customer [Abstract]

Revenue from Contract with Customer [Text Block]

RevenueRevenue Recognition

    Following our acquisition of Smiths Medical, our primary product lines are Infusion Consumables, Infusion Systems, IV Solutions, Critical Care, Infusion Systems-Smiths Medical, Vascular Access-Smiths Medical and Vital Care-Smiths Medical. The vast majority of our sales of these products are made on a stand-alone basis to hospitals and distributors. Revenue is typically recognized upon transfer of control of the products, which we deem to be at point of shipment. However, for purposes of revenue recognition for our software licenses and renewals, we consider the control of these products to be transferred to a customer at a certain point in time; therefore, we recognize revenue at the start of the applicable license term.

    Payment is typically due in full within 30 days of delivery or the start of the contract term. Revenue is recorded in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services. We offer certain volume-based rebates to our distribution customers, which we record as variable consideration when calculating the transaction price. Rebates are offered on both a fixed and tiered/variable basis. In both cases, we use information available at the time and our historical experience with each customer to estimate the most likely rebate amount. We also provide chargebacks to distributors that sell to end customers at prices determined under a contract between us and the end customer. Chargebacks are the difference between the prices we charge our distribution customers and the contracted prices we have with the end customer which are processed as credits to our distribution customers. In estimating the expected value of chargeback amounts in order to determine the transaction price, we use information available at the time, including our historical experience.

    We also warranty products against defects and have a policy permitting the return of defective products, for which we accrue and expense at the time of sale using information available at that time and our historical experience. We also provide for extended service-type warranties, which we consider to be separate performance obligations. We allocate a portion of the transaction price to the extended service-type warranty based on its estimated relative selling price, and recognize revenue over the period the warranty service is provided. Our revenues are recorded at the net sales price, which includes an estimate for variable consideration related to rebates, chargebacks and product returns.

Revenue disaggregated

The following table represents our revenues disaggregated by product line (in thousands):

	Three months ended September 30,				Nine months ended September 30,
Product line	2022		2021		2022		2021
Infusion Consumables	$	141,073	$	144,850	$	426,050	$	407,419
Infusion Systems	87,846		90,688		262,111		259,683
IV Solutions	96,366		89,237		278,959		271,834
Critical Care	10,877		11,285		35,407		36,847
Infusion Systems-Smiths Medical	96,890		—		240,992		—
Vascular Access-Smiths Medical	95,284		—		251,350		—
Vital Care-Smiths Medical	69,521		—		207,114		—
Total Revenues	$	597,857	$	336,060	$	1,701,983	$	975,783

Infusion Systems-Smiths Medical, Vascular Access-Smiths Medical and Vital Care-Smiths Medical represent our newly integrated product lines following our acquisition of Smiths Medical on January 6, 2022.

    The following table represents our revenues disaggregated by geography (in thousands):

	Three months ended September 30,				Nine months ended September 30,
Geography	2022		2021		2022		2021
United States	$	376,691	$	245,298	$	1,088,348	$	697,316
Canada	29,129		19,026		86,473		61,560
LATAM	23,599		14,875		59,827		44,191
Americas	429,419		279,199		1,234,648		803,067
Europe, the Middle East and Africa	101,869		36,239		275,488		108,800
APAC	66,569		20,622		191,847		63,916
Total Revenues	$	597,857	$	336,060	$	1,701,983	$	975,783

Contract balances

    The following table presents the changes in our contract balances for the nine months ended September 30, 2022 and 2021 (in thousands):

	Contract Liabilities
Beginning balance, January 1, 2022	$	(7,461)
Fair value of acquired deferred revenue	(51,245)
Equipment revenue recognized	22,757
Equipment revenue deferred due to implementation	(13,420)
Software revenue recognized	12,761
Software revenue deferred due to implementation	(12,978)
Government grant deferred revenue	(3,434)
Government grant recognized	178
Other deferred revenue	(1,285)
Other deferred revenue recognized	3,488
Ending balance, September 30, 2022	$	(50,639)
Beginning balance, January 1, 2021	$	(6,430)
Equipment revenue recognized	7,193
Equipment revenue deferred due to implementation	(8,652)
Software revenue recognized	6,194
Software revenue deferred due to implementation	(2,967)
Ending balance, September 30, 2021	$	(4,662)

    As of September 30, 2022, revenue from remaining performance obligations is as follows:

	Recognition Timing
(in millions)	< 12 Months		> 12 Months
Equipment revenue	$	(17,514)	$	(621)
Software revenue	(8,248)		(566)
Government grant revenue	(1,524)		(13,735)
Other revenue*	(1,490)		(6,941)
Total	$	(28,776)	$	(21,863)

_________________________________

*Other deferred revenue includes pump development programs, purchased training and extended warranty.