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Note 5 - Revenue Recognition
 9 Months Ended
Sep. 30, 2024
Notes to Financial Statements  
Revenue from Contract with Customer [Text Block]

NOTE 5:

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 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.

 

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

2024

    

2025

    

2026 and

thereafter

  

Licensing and related revenues

   $ 3,421     $ 11,098     $ 2,725  

 

 

Disaggregation of revenue:

 

The following table provides information about disaggregated revenue by primary geographical, use cases for the Company's technology portfolio, and timing of revenue recognition:

 

   

Nine months ended September 30, 2024

(unaudited)

    

Three months ended September 30, 2024

(unaudited)

  
   

Licensing and related

revenues

    

Royalties

   

Total

    

Licensing and related

revenues

    

Royalties

   

Total

  

Geography

                                                

United States

   $ 7,985     $ 4,037     $ 12,022     $ 7,174     $ 945     $ 8,119  

Europe and Middle East

     8,318       3,326       11,644       1,473       1,217       2,690  

Asia Pacific

     27,950       26,087       54,037       6,927       9,471       16,398  

Other

     13       —       13       —       —       —  

Total

   $ 44,266     $ 33,450     $ 77,716     $ 15,574     $ 11,633     $ 27,207  
                                                 

Use cases for the Company’s technology portfolio

                                                

Connect (baseband for handset and other devices, Bluetooth, Wi-Fi and NB-IoT)

   $ 39,283     $ 25,533     $ 64,816     $ 12,960     $ 8,801     $ 21,761  

Sense & Infer (sensor fusion, audio, sound, imaging, vision and AI)

     4,983       7,917       12,900       2,614       2,832       5,446  

Total

   $ 44,266     $ 33,450     $ 77,716     $ 15,574     $ 11,633     $ 27,207  
                                                 

Timing of revenue recognition

                                                

Products transferred at a point in time

   $ 38,154     $ 33,450     $ 71,604     $ 13,431     $ 11,633     $ 25,064  

Products and services transferred over time

     6,112       —       6,112       2,143       —       2,143  

Total

   $ 44,266     $ 33,450     $ 77,716     $ 15,574     $ 11,633     $ 27,207  

 

 

   

Nine months ended September 30, 2023

(unaudited)

    

Three months ended September 30, 2023

(unaudited)

  
   

Licensing and related

revenues

    

Royalties

   

Total

    

Licensing and related

revenues

    

Royalties

   

Total

  

Geography

                                                

United States

   $ 1,399     $ 4,269     $ 5,668     $ 360     $ 1,208     $ 1,568  

Europe and Middle East

     8,378       2,140       10,518       4,796       828       5,624  

Asia Pacific

     35,442       21,109       56,551       8,765       8,097       16,862  

Other

     520       —       520       19       —       19  

Total

   $ 45,739     $ 27,518     $ 73,257     $ 13,940     $ 10,133     $ 24,073  
                                                 

Use cases for the Company’s technology portfolio

                                                

Connect (baseband for handset and other devices, Bluetooth, Wi-Fi and NB-IoT)

   $ 40,787     $ 20,093     $ 60,880     $ 13,120     $ 7,648     $ 20,768  

Sense & Infer (sensor fusion, audio, sound, imaging, vision and AI)

     4,952       7,425       12,377       820       2,485       3,305  

Total

   $ 45,739     $ 27,518     $ 73,257     $ 13,940     $ 10,133     $ 24,073  
                                                 

Timing of revenue recognition

                                                

Products transferred at a point in time

   $ 36,504     $ 27,518     $ 64,022     $ 11,479     $ 10,133     $ 21,612  

Products and services transferred over time

     9,235       —       9,235       2,461       —       2,461  

Total

   $ 45,739     $ 27,518     $ 73,257     $ 13,940     $ 10,133     $ 24,073  

 

 

Contract balances:

 

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

 

   

September 30,

2024

    

December 31,

2023

 
                 

Currents assets (classified under “Trade receivables”):

                

Trade receivables

   $ 15,250     $ 8,433  

Unbilled receivables (associated with licensing and related revenue)

     12,522       9,735  

Unbilled receivables (associated with royalties)

     10,858       12,139  

Total current assets

     38,630       30,307  
                 

Long-term assets (classified under “Other long-term assets”):

                

Unbilled receivables (associated with licensing and related revenue)

     2,733       —  
                 

Deferred revenues (short-term contract liabilities)

     3,418       3,018  

 

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 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 nine months ended September 30, 2024, the Company recognized $235 and $2,158, respectively, that was included in deferred revenues (short-term contract liability) balance at January 1, 2024.