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Revenue from Contracts with Customers
 9 Months Ended
Sep. 30, 2024
Revenue from Contract with Customer [Abstract]  
Revenue from Contracts with Customers

3. Revenue from Contracts with Customers

Disaggregation of Revenue

The table below presents the Company’s revenues disaggregated by type of services performed.

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

Software revenue

 

$

30,664

 

 

$

28,919

 

 

$

90,266

 

 

$

83,135

 

Payment revenue

 

 

80,697

 

 

 

68,485

 

 

 

230,082

 

 

 

190,894

 

Services revenue

 

 

1,411

 

 

 

1,276

 

 

 

3,154

 

 

 

2,627

 

Total revenues

 

$

112,772

 

 

$

98,680

 

 

$

323,502

 

 

$

276,656

 

 

Contract Assets and Liabilities

The Company’s rights to payments are not conditional on any factors other than the passage of time, and as such, the Company does not have any contract assets. Contract liabilities consist primarily of advance cash receipts for services (deferred revenue) and are recognized as revenue when the services are provided.

The table below presents information on accounts receivable and contract liabilities.

 

 

As of September 30, 2024

 

 

As of December 31, 2023

 

Trade accounts receivable, net

 

$

22,825

 

 

$

16,261

 

Payment processing receivable, net

 

 

33,277

 

 

 

30,428

 

Accounts receivable, net

 

$

56,102

 

 

$

46,689

 

Contract liabilities

 

$

25,471

 

 

$

27,593

 

 

Significant changes in the contract liabilities balance are as follows:

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

Revenue recognized included in beginning of period balance

 

$

(2,120

)

 

$

(3,351

)

 

$

(8,733

)

 

$

(8,264

)

Cash received, excluding amounts recognized as revenue during the period

 

 

2,733

 

 

 

1,656

 

 

 

6,611

 

 

 

6,613

 

 

The tables below present a summary of changes in the Company’s allowances for credit losses and returns for the nine months ended September 30, 2024 and 2023:

 

 

Accounts Receivable

 

 

 

 

 

 

Allowance for Credit Losses

 

 

Allowance for Returns

 

 

Supplier Advances Receivable Allowance

 

Allowance balance, December 31, 2023

 

$

2,142

 

 

$

2,089

 

 

$

1,333

 

Amounts charged to contra revenue, cost of revenues and expenses

 

 

1,016

 

 

 

(200

)

 

 

1,127

 

Amounts written off as uncollectable

 

 

(309

)

 

 

-

 

 

 

(1,593

)

Recoveries of amounts previously written off

 

 

-

 

 

 

-

 

 

 

797

 

Deduction released to revenue

 

 

-

 

 

 

-

 

 

 

-

 

Allowance balance, September 30, 2024

 

$

2,849

 

 

$

1,889

 

 

$

1,664

 

 

 

 

Accounts Receivable

 

 

 

 

 

 

Allowance for Credit Losses

 

 

Allowance for Returns

 

 

Supplier Advances Receivable Allowance

 

Allowance balance, December 31, 2022

 

$

1,539

 

 

$

1,584

 

 

$

1,872

 

Amounts charged to contra revenue, cost of revenues and expenses

 

 

945

 

 

 

375

 

 

 

210

 

Amounts written off as uncollectable

 

 

(484

)

 

 

(1

)

 

 

(1,701

)

Recoveries of amounts previously written off

 

 

-

 

 

 

-

 

 

 

932

 

Deduction released to revenue

 

 

-

 

 

 

(92

)

 

 

-

 

Allowance balance, September 30, 2023

 

$

2,000

 

 

$

1,866

 

 

$

1,313

 

 

Transaction Price Allocated to Remaining Performance Obligations

Transaction price allocated to the remaining performance obligations represents contracted revenue that has not yet been recognized. These revenues are subject to future economic risks including customer cancellations, bankruptcies, regulatory changes and other market factors.

The Company applies the practical expedient in ASC Topic 606, Revenue from Contracts with Customers (“Topic 606”), paragraph 606-10-50-14(b) and does not disclose information about remaining performance obligations related to transaction and processing services that qualify for recognition in accordance with paragraph 606-10-55-18 of Topic 606. These contracts contain variable consideration for stand-ready performance obligations for which the exact quantity and mix of transactions to be processed are contingent upon buyer or supplier request. These contracts also contain fixed fees and non-refundable upfront fees; however, these amounts are not considered material to total consolidated revenue.

The Company’s remaining performance obligation consists of contracts with financial institutions who are using the ASCEND solution. These contracts generally have a duration of two to five years and contain fixed maintenance fees that are considered fixed price guarantees. Remaining performance obligation consisted of the following:

 

 

Current

 

 

Noncurrent

 

 

Total

 

As of September 30, 2024

 

$

15,073

 

 

$

20,252

 

 

$

35,325

 

As of December 31, 2023

 

 

15,031

 

 

 

20,403

 

 

 

35,434

 

 

Contract Costs

The Company incurs incremental costs to obtain a contract, as well as costs to fulfill a contract with buyer customers that are expected to be recovered. These costs consist primarily of sales commissions incurred if a contract is obtained, and customer implementation related costs.

The Company utilizes a portfolio approach when estimating the amortization of contract acquisition and fulfillment costs. These costs are amortized on a straight-line basis over the expected benefit period of generally five years, which was determined by taking into consideration customer attrition rates, estimated terms of customer relationships, useful lives of technology, industry peers, and other factors. The amortization of contract fulfillment costs associated with implementation activities are recorded as cost of revenues in the Company's consolidated statements of operations. The amortization of contract acquisition costs associated with sales commissions that qualify for capitalization is recorded as sales and marketing expense in the Company’s consolidated statements of operations. Costs to obtain or fulfill a contract are classified as deferred customer origination costs in the Company’s consolidated balance sheets.

The following tables present information about deferred contract costs:

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

Capitalized sales commissions and implementation costs

 

$

3,016

 

 

$

3,045

 

 

$

9,496

 

 

$

8,422

 

Amortization of deferred contract costs

 

 

 

 

 

 

 

 

 

 

 

 

Costs to obtain contracts included in sales and marketing expense

 

$

1,615

 

 

$

1,550

 

 

$

4,858

 

 

$

4,489

 

Costs to fulfill contracts included in cost of revenue

 

$

1,528

 

 

$

1,564

 

 

 

4,623

 

 

 

4,718