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Revenue
 3 Months Ended
Mar. 31, 2024
Revenue from Contract with Customer [Abstract]  
Revenue

2. REVENUE

The following is a description of the principal activities from which revenue is generated by reportable segment:

Network Solutions Segment - Includes hardware and software products that enable a digital future which support the Company's Subscriber, Access & Aggregation, and Optical Networking Solutions.

Services & Support Segment - Includes network design, implementation, maintenance and cloud-hosted services supporting the Company's Subscriber, Access & Aggregation, and Optical Networking Solutions.

Revenue by Category

In addition to the Company's reportable segments, revenue is also reported for the following three categories – Subscriber Solutions, Access & Aggregation Solutions and Optical Networking Solutions.

Our Subscriber Solutions portfolio is used by Service Providers to terminate their access services infrastructure at the customer premises while providing an immersive and interactive experience for residential, business and wholesale subscribers. This revenue category includes hardware- and software-based products and services. These solutions include fiber termination solutions for residential, business and wholesale subscribers, Wi-Fi access solutions for residential and business subscribers, Ethernet switching and network edge virtualization solutions for business subscribers, and cloud software solutions covering a mix of subscriber types.

Our Access & Aggregation Solutions are solutions that are used by communications Service Providers to connect residential subscribers, business subscribers and mobile radio networks to the Service Providers’ metro network, primarily through fiber-based connectivity. This revenue category includes hardware- and software-based products and services. Our solutions within this category are a mix of fiber access and aggregation platforms, precision network synchronization and timing solutions, and access orchestration solutions that ensure highly reliable and efficient network performance.

Our Optical Networking Solutions are used by communications Service Providers, internet content providers and large-scale enterprises to securely interconnect metro and regional networks over fiber. This revenue category includes hardware- and software-based products and services. Our solutions within this category include open optical terminals, open line systems, optical subsystems and modules, network infrastructure assurance systems, and automation platforms that are used to build high-scale, secure and assured optical networks.

The following table disaggregates revenue by reportable segment and revenue category:

 

 

 

Three Months Ended

 

 

 

March 31, 2024

 

 

March 31, 2023

 

(In thousands)

 

Network Solutions

 

 

Services & Support

 

 

Total

 

 

Network Solutions

 

 

Services & Support

 

 

Total

 

Subscriber Solutions

 

$

60,369

 

 

$

9,399

 

 

$

69,767

 

 

$

70,287

 

 

$

9,049

 

 

$

79,336

 

Access & Aggregation Solutions

 

 

67,777

 

 

 

13,535

 

 

 

81,312

 

 

 

84,554

 

 

 

12,266

 

 

 

96,820

 

Optical Networking Solutions

 

 

53,127

 

 

 

21,966

 

 

 

75,094

 

 

 

127,577

 

 

 

20,179

 

 

 

147,756

 

Total

 

$

181,273

 

 

$

44,900

 

 

$

226,173

 

 

$

282,418

 

 

$

41,494

 

 

$

323,912

 

 

The aggregate amount of transaction price allocated to remaining performance obligations that have not been satisfied as of March 31, 2024 and December 31, 2023 related to contractual maintenance agreements, contractual SaaS and subscription services, and hardware contracts that exceed one year in duration amounted to $346.9 million and $314.8 million, respectively. As of March 31, 2024, approximately 61.0% is expected to be recognized over the next 12 months and the remainder recognized thereafter. The majority of the Company's remaining performance obligations as of March 31, 2024 are related to contracts or orders that have an original expected duration of one year or less, for which the Company is electing to utilize the practical expedient available within the guidance, and are excluded from the transaction price related to these future obligations. The Company will generally satisfy the remaining performance obligations as we transfer control of the products ordered or services to our customers, excluding maintenance services, which are satisfied over time.

The following table provides information about accounts receivable, contract assets and unearned revenue from contracts with customers:

 

 

 

As of

 

 

As of

 

(In thousands)

 

March 31, 2024

 

 

December 31, 2023

 

Accounts receivable, net

 

$

187,554

 

 

$

216,445

 

Contract assets(1)

 

$

815

 

 

$

691

 

Unearned revenue

 

$

55,124

 

 

$

46,731

 

Non-current unearned revenue

 

$

22,884

 

 

$

25,109

 

 

(1) Included in other receivables on the Condensed Consolidated Balance Sheets.

Accounts Receivable

The allowance for credit losses was $0.4 million as of March 31, 2024 and December 31, 2023, related to accounts receivable.

Contract Assets

No allowance for credit losses was recorded for the three months ended March 31, 2024 and 2023 related to contract assets.

Receivables Purchase Agreement

The Company was party to a receivable purchase agreement with a third-party financial institution (the “Factor”), which accelerates receivable collection and helps to better manage cash flow. As of December 31, 2023 no accounts receivable were factored under the agreement or held in the reserve account. The cost of receivables purchase agreement is included in interest expense in the Condensed Consolidated Statements of Loss and totaled $0.3 million for the three months ended March 31, 2023.

On December 19, 2023, the agreement with the Factor was terminated and the Company, entered into a receivables purchase agreement with a third-party financial institution (the “New Factor”) to replace the Company’s prior accounts receivable purchase agreement and to sell, on a revolving basis, undivided interests in the Company’s accounts receivable. The New Factor provides for up to $40.0 million in borrowing capacity, subject to eligible receivables and reserve requirements, secured by the receivables. The New Factor qualifies for treatment as a secured borrowing with a pledge of collateral under Accounting Standards Codification ("ASC") Topic 810, Consolidations. Total secured borrowings under the agreement were $12.6 million and $14.3 million as of March 31, 2024 and December 31, 2023, respectively, leaving $27.2 million and $25.4 million available for future borrowings as of March 31, 2024 and December 31, 2023, respectively. Accounts receivable pledged as collateral related to the secured borrowings were $16.4 million and $16.8 million as of March 31, 2024 and December 31, 2023, respectively. For the three months ended March 31, 2024, the Company incurred program fee expenses of $0.3 million. As of March 31, 2024, the program fee rate was 6.88% percent.

Of the outstanding unearned revenue balances as of December 31, 2023, $19.7 million were recognized as revenue during the three months ended March 31, 2024. Of the $60.4 million of outstanding unearned revenue balances as of December 31, 2022, $25.6 million were recognized as revenue during the three months ended March 31, 2023.