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Revenue from Contracts with Customers
 9 Months Ended
Sep. 30, 2023
Revenue from Contracts with Customers  
Revenue from Contracts with Customers

Note 7. Revenue from Contracts with Customers

The Company’s net sales are generated primarily from sales of its iStent family of products and sales of Photrexa and associated drug formulations, KXL systems and royalty income. The Company’s customers are primarily comprised of ambulatory surgery centers, hospitals and physician private practices, with distributors being used in certain international locations where the Company currently does not have a direct commercial presence.

The Company concluded that one performance obligation exists for the majority of its contracts with customers which is to deliver products in accordance with the Company’s normal delivery times. Revenue is recognized when this performance obligation is satisfied, which is the point in time when the Company considers control of a product to have transferred to the customer. Revenue recognized reflects the consideration to which the Company expects to be entitled in exchange for those products or services. The Company has determined the transaction price to be the invoice price,

net of adjustments that reduce revenue, which included estimates of volume-based rebates, variable consideration for product returns and warranty replacements and other discounts and incentives that reduce revenue.

​

Revenue is recognized at an amount that reflects the consideration the Company expects to be entitled to in exchange for goods or services, and substantially all of the Company’s net sales for the three and nine months ended September 30, 2023 are considered revenue from contracts with customers.

Disaggregation of Revenue

​

The Company’s revenues disaggregated by product category and geography for the three and nine months ended September 30, 2023 and September 30, 2022 were as follows (in thousands):

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​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Three Months Ended

​

​

September 30, 

​

​

United States

​

International

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Total

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2023

​

2022

    

2023

​

2022

    

2023

​

2022

​

​

​

​

    

​

​

​

​

​

    

​

​

​

​

​

    

​

​

Glaucoma

​

$

38,060

​

$

37,214

​

$

20,280

​

$

16,532

    

$

58,340

​

$

53,746

Corneal Health

​

​

17,338

​

 

14,992

​

​

2,370

​

 

2,531

​

​

19,708

​

 

17,523

Total

​

$

55,398

​

$

52,206

​

$

22,650

​

$

19,063

 

$

78,048

​

$

71,269

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​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Nine Months Ended

​

​

September 30, 

​

​

United States

​

International

​

Total

​

    

2023

​

2022

    

2023

​

2022

    

2023

​

2022

​

​

​

​

    

​

​

​

​

​

    

​

​

​

​

​

    

​

​

Glaucoma

​

$

112,765

​

$

109,312

​

$

63,703

​

$

52,047

    

$

176,468

​

$

161,359

Corneal Health

​

​

48,227

​

 

42,643

​

​

7,651

​

 

7,633

​

​

55,878

​

 

50,276

Total

​

$

160,992

​

$

151,955

​

$

71,354

​

$

59,680

 

$

232,346

​

$

211,635

​

Contract Balances

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Contract Assets

​

Amounts are recorded as accounts receivable when the Company’s right to consideration becomes unconditional. Payment terms on invoiced amounts are typically 30 days for glaucoma and corneal health products, though extended payment terms on corneal health products may be offered. However, the Company does not consider any significant financing components in customer contracts given the expected time between transfer of the promised products and the payment of the associated consideration is less than one year. As of September 30, 2023 and December 31, 2022, substantially all amounts included in accounts receivable, net on the condensed consolidated balance sheets are related to contracts with customers.

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Aside from the aforementioned contract assets, the Company does not have any contract assets given that the Company does not have any unbilled receivables and sales commissions on products are expensed within selling, general

and administrative expenses within the condensed consolidated statements of operations when incurred as any incremental cost of obtaining contracts with customers would have an amortization period of less than one year.

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Contract Liabilities

​

Contract liabilities reflect consideration received from customers’ purchases allocated to the Company’s future performance obligations.

​

The Company has a performance obligation to issue a rebate to customers who may be eligible for a rebate at the conclusion of their contract term. This performance obligation is transferred over time and the Company’s method of measuring progress is the output method, whereby the progress is measured by the estimated rebate earned to date over the total rebate estimated to be earned over the contract period. The Company’s rebate allowance is included in accrued liabilities in the condensed consolidated balance sheets and estimated rebates accrued were not material during the periods presented.

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During the three and nine months ended September 30, 2023 and September 30, 2022, the Company did not recognize any revenue related to material changes in transaction prices regarding its contracts with customers and did not recognize any material changes in revenue related to amounts included in contract liabilities at the beginning of the period.

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The Company’s net sales within a fiscal year may be impacted seasonally, as demand for U.S. ophthalmic procedures is typically softer in the first quarter and stronger in the fourth quarter of a given year. The Company experienced some continuing disruptions to its seasonal patterns in 2022 due to the COVID-19 pandemic. The Company’s revenue patterns were also disrupted in 2022 and the first three quarters of 2023 as a result of the reimbursement cuts enacted by the U.S. Centers for Medicare & Medicaid Services that were effective January 1, 2022.