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Revenue
 6 Months Ended
Jun. 30, 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 tables disaggregate revenue by reportable segment and revenue category:

 

 

 

Three Months Ended

 

 

 

June 30, 2024

 

 

June 30, 2023

 

(In thousands)

 

Network Solutions

 

 

Services & Support

 

 

Total

 

 

Network Solutions

 

 

Services & Support

 

 

Total

 

Optical Networking Solutions

 

$

51,467

 

 

$

22,220

 

 

$

73,687

 

 

$

120,221

 

 

$

22,775

 

 

$

142,996

 

Access & Aggregation Solutions

 

 

54,112

 

 

 

15,795

 

 

 

69,907

 

 

 

89,263

 

 

 

13,454

 

 

 

102,717

 

Subscriber Solutions

 

 

73,615

 

 

 

8,782

 

 

 

82,397

 

 

 

73,518

 

 

 

8,147

 

 

 

81,665

 

Total

 

$

179,194

 

 

$

46,797

 

 

$

225,991

 

 

$

283,002

 

 

$

44,376

 

 

$

327,378

 

 

 

 

Six Months Ended

 

 

 

June 30, 2024

 

 

June 30, 2023

 

(In thousands)

 

Network Solutions

 

 

Services & Support

 

 

Total

 

 

Network Solutions

 

 

Services & Support

 

 

Total

 

Optical Networking Solutions

 

$

104,594

 

 

$

44,186

 

 

$

148,780

 

 

$

247,798

 

 

$

42,954

 

 

$

290,752

 

Access & Aggregation Solutions

 

 

121,889

 

 

 

29,330

 

 

 

151,219

 

 

 

173,817

 

 

 

25,720

 

 

 

199,537

 

Subscriber Solutions

 

 

133,984

 

 

 

18,181

 

 

 

152,165

 

 

 

143,805

 

 

 

17,196

 

 

 

161,001

 

Total

 

$

360,467

 

 

$

91,697

 

 

$

452,164

 

 

$

565,420

 

 

$

85,870

 

 

$

651,290

 

 

The aggregate amount of transaction price allocated to remaining performance obligations that have not been satisfied as of June 30, 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 $276.9 million and $314.8 million, respectively. As of June 30, 2024, approximately 57% 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 June 30, 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)

 

June 30, 2024

 

 

December 31, 2023

 

Accounts receivable, net

 

$

186,176

 

 

$

216,445

 

Contract assets(1)

 

$

719

 

 

$

691

 

Unearned revenue

 

$

55,107

 

 

$

46,731

 

Non-current unearned revenue

 

$

26,584

 

 

$

25,109

 

 

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

Accounts Receivable

The allowance for credit losses was $0.2 million and $0.4 million as of June 30, 2024, and December 31, 2023, respectively, related to accounts receivable.

Contract Assets

No allowance for credit losses was recorded for the three and six months ended June 30, 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 (“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 and $0.6 million for the three and six months ended June 30, 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 (“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 $17.3 million and $14.3 million as of June 30, 2024 and December 31, 2023, respectively, leaving $22.4 million and $25.4 million available for future borrowings as of June 30, 2024 and December 31, 2023, respectively. Accounts receivable pledged as collateral related to the secured borrowings were $21.2 million and $16.8 million as of June 30, 2024 and December 31, 2023, respectively. For the three and six months ended June 30, 2024, the Company incurred program fee expenses of $0.3 million and $0.6 million, respectively. As of June 30, 2024, the program fee rate was 6.88% percent.

Of the outstanding unearned revenue balances as of December 31, 2023, $13.7 million and $33.1 million were recognized as revenue during the three and six months ended June 30, 2024, respectively. Of the $60.4 million of outstanding unearned revenue balances as of December 31, 2022, $24.8 million and $50.5 million were recognized as revenue during the three and six months ended June 30, 2023, respectively.