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Note 4 - Revenue Recognition
 6 Months Ended
Jun. 30, 2023
Notes to Financial Statements  
Revenue from Contract with Customer [Text Block]

NOTE 4:

REVENUE RECOGNITION

 

Under ASC No. 606, “Revenue from Contracts with Customers” (“ASC 606”), an entity recognizes revenue when or as it satisfies a performance obligation by transferring intellectual property (“IP”) licenses or services to the customer, either at a point in time or over time. The Company recognizes most of its revenues at a point in time upon delivery when the customer accepts control of the IP. The Company recognizes revenue over time on NRE services or on significant license customization contracts that are in the scope of ASC 606 by using cost inputs to measure progress toward completion of its performance obligations.

 

Revenues that are derived from the sale of a licensee’s products that incorporate the Company’s IP are classified as royalty revenues. Royalty revenues are recognized during the quarter in which the sale of the product incorporating the Company’s IP occurs. Royalties are calculated either as a percentage of the revenues received by the Company’s licensees on sales of products incorporating the Company’s IP or on a per unit basis, as specified in the agreements with the licensees. When the Company does not receive actual sales data from the customer prior to the finalization of its financial statements, royalty revenues are recognized based on the Company’s estimation of the customer’s sales during the quarter.

 

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS- CONTINUED

 

The following table includes estimated revenue expected to be recognized in future periods related to performance obligations that are unsatisfied or partially unsatisfied at the end of the reporting period. The estimated revenues do not include amounts of royalties or unexercised contract renewals:

 

  

Remainder of 2023

  

2024

  

2025

 

Licensing, NRE and related revenues

 $8,160  $2,194  $676 

 

Disaggregation of revenue:

 

The following table provides information about disaggregated revenue by primary geographical market, major product line and timing of revenue recognition:

 

  

Six months ended June 30, 2023 (unaudited)

  

Three months ended June 30, 2023 (unaudited)

 
  

Licensing, NRE and related revenues

  

Royalties

  

Total

  

Licensing, NRE and related revenues

  

Royalties

  

Total

 

Primary geographical markets

                        

United States

 $5,700  $3,061  $8,761  $2,909  $1,411  $4,320 

Europe and Middle East

  4,643   1,312   5,955   2,309   453   2,762 

Asia Pacific

  26,677   13,012   39,689   11,556   7,507   19,063 

Other

  502   —   502   27   —   27 

Total

 $37,522  $17,385  $54,907  $16,801  $9,371  $26,172 
                         

Major product/service lines

                        

Connectivity products (baseband for handset and other devices, Bluetooth, Wi-Fi, NB-IoT and SATA/SAS)

 $29,739  $12,445  $42,184  $13,207  $6,780  $19,987 

Smart sensing products (AI, sensor fusion, audio/sound and imaging and vision)

  7,783   4,940   12,723   3,594   2,591   6,185 

Total

 $37,522  $17,385  $54,907  $16,801  $9,371  $26,172 
                         

Timing of revenue recognition

                        

Products transferred at a point in time

 $25,524  $17,385  $42,909  $10,903  $9,371  $20,274 

Products and services transferred over time

  11,998   —   11,998   5,898   —   5,898 

Total

 $37,522  $17,385  $54,907  $16,801  $9,371  $26,172 

 

  

Six months ended June 30, 2022 (unaudited)

  

Three months ended June 30, 2022 (unaudited)

 
  

Licensing, NRE and related revenues

  

Royalties

  

Total

  

Licensing, NRE and related revenues

  

Royalties

  

Total

 

Primary geographical markets

                        

United States

 $9,637  $4,100  $13,737  $5,162  $1,829  $6,991 

Europe and Middle East

  2,534   1,340   3,874   2,097   675   2,772 

Asia Pacific

  32,345   17,630   49,975   14,864   8,568   23,432 

Total

 $44,516  $23,070  $67,586  $22,123  $11,072  $33,195 
                         

Major product/service lines

                        

Connectivity products (baseband for handset and other devices, Bluetooth, Wi-Fi, NB-IoT and SATA/SAS)

 $32,810  $17,262  $50,072  $15,995  $8,200  $24,195 

Smart sensing products (AI, sensor fusion, audio/sound and imaging and vision)

  11,706   5,808   17,514   6,128   2,872   9,000 

Total

 $44,516  $23,070  $67,586  $22,123  $11,072  $33,195 
                         

Timing of revenue recognition

                        

Products transferred at a point in time

 $30,776  $23,070  $53,846  $14,844  $11,072  $25,916 

Products and services transferred over time

  13,740   —   13,740   7,279   —   7,279 

Total

 $44,516  $23,070  $67,586  $22,123  $11,072  $33,195 

 

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS- CONTINUED

 

Contract balances:

 

The following table provides information about trade receivables, unbilled receivables and contract liabilities from contracts with customers:

 

  

June 30, 2023

(unaudited)

  

December 31,

2022

 
         

Trade receivables

 $13,502  $12,297 

Unbilled receivables (associated with licensing, NRE and related revenue)

  8,570   8,695 

Unbilled receivables (associated with royalties)

  9,800   10,258 

Deferred revenues (short-term contract liabilities)

  3,788   3,168 

 

The Company receives payments from customers based upon contractual payment schedules; trade receivables are recorded when the right to consideration becomes unconditional, and an invoice is issued to the customer. Unbilled receivables associated with licensing, NRE and other include amounts related to the Company’s contractual right to consideration for completed performance objectives not yet invoiced. Unbilled receivables associated with royalties are recorded as the Company recognizes revenues from royalties earned during the quarter, but not yet invoiced, either by actual sales data received from customers, or, when applicable, by the Company’s estimation. Contract liabilities (deferred revenue) include payments received in advance of performance under the contract, and are realized with the associated revenue recognized under the contract.

 

During the three and six months ended June 30, 2023, the Company recognized $835 and $2,396, respectively, that was included in deferred revenues (short-term contract liability) balance at January 1, 2023.