Quarterly report pursuant to Section 13 or 15(d)

Revenue Recognition

v3.21.2
Revenue Recognition
 6 Months Ended
Jun. 30, 2021
Revenue from Contract with Customer [Abstract]  
Revenue Recognition Revenue Recognition
Revenue is recognized upon transfer of control of promised products or services to customers in an amount that reflects the consideration the Company expects to receive in exchange for those products or services. The Company enters into contracts that can include various combinations of products and services, which when capable of being distinct, are accounted for as separate performance obligations. Revenue recognition is evaluated based on the following five steps: (i) identification of the contract with the customer; (ii) identification of the performance obligations in the contract; (iii) determination of the transaction price; (iv) allocation of the transaction price to the performance obligations in the contract; and (v) recognition of revenue when or as a performance obligation is satisfied.
 
For multiple-element arrangements, revenue is allocated to each performance obligation based on its relative standalone selling price. Standalone selling prices are determined based on observable prices at which the Company separately sells its products or services. If a standalone selling price is not directly observable, judgment is made to estimate the selling price based on market conditions and entity-specific factors including cost plus analyses, features and functionality of the product and/or services, the geography of the Company’s customers, and type of the Company’s markets. Any discounts or other reductions to the transaction price are allocated proportionately to all performance obligations within the multiple-element arrangement. The Company periodically validates the stand-alone selling price for performance obligations by evaluating whether changes in the key assumptions used to determine the stand-alone selling prices will have a significant effect on the allocation of transaction price between multiple performance obligations.

The Company exercised judgement to determine that a product returns reserve was not required as historical returns activity have not been material.
 
Contract Balances
 
Timing of revenue recognition may differ from the timing of invoicing to customers and receipt of payment. For the sale of its products, the Company generally recognizes revenue at a point in time through the ship-and-bill performance obligations. For the subscription of its products, the Company generally recognizes revenue over the subscription term commencing upon the completion of customer training. For service agreements, the Company generally invoices customers at the beginning of the coverage period and records revenue related to the billed amounts over time, equivalent to the coverage period of the maintenance and support contract.
 
Deferred revenue is comprised mainly of unearned revenue related to extended support and maintenance contracts (Ekso Care), but also includes other offerings for which the Company has been paid in advance and earns revenue when the Company transfers control of the product or service.
 
Deferred revenue consisted of the following:
June 30, 2021 December 31, 2020
Deferred extended maintenance and support $ 2,568  $ 2,902 
Deferred royalties 280  282 
Deferred device and advances 100  118 
Total deferred revenues 2,948  3,302 
Less current portion (1,422) (1,496)
Deferred revenues, non-current $ 1,526  $ 1,806 
 
Deferred revenue activity consisted of the following for the six months ended June 30, 2021:
Beginning balance $ 3,302 
Deferral of revenue 548 
Recognition of deferred revenue (902)
Ending balance $ 2,948 
 
As of June 30, 2021, the Company’s deferred revenue was $2,948. The Company expects to recognize approximately $839 of the deferred revenue during the remainder of 2021, $1,011 in 2022, and $1,098 thereafter.

In addition to deferred revenue, the Company has non-cancellable backlog of $1,348 related to its contracts for subscription units with its customers. These subscription contracts typically have 12-month terms and subscription income is recognized on a straight-line basis over the lease term.
 
As of June 30, 2021 and December 31, 2020, accounts receivable, net of allowance for doubtful accounts, were $2,756 and $3,224, respectively, and are included in current assets on the Company’s condensed consolidated balance sheets.
 
The allowance for doubtful accounts reflects the Company’s best estimate of probable losses inherent in the accounts receivable balance. The Company determines the allowance based on known troubled accounts, historical experience, and other currently available evidence. Payment terms and conditions vary by contract type, although terms generally include a requirement of payment within 30 to 90 days.
 
Disaggregation of revenue
 
The following table disaggregates the Company’s revenue by major source for the three months ended June 30, 2021:
  EksoHealth EksoWorks Total
Device revenue $ 1,090  $ 288  $ 1,378 
Service and support 447  —  447 
Subscriptions 185  52  237 
Parts and other 140  9  149 
  $ 1,862  $ 349  $ 2,211 

The following table disaggregates the Company’s revenue by major source for the six months ended June 30, 2021:
  EksoHealth EksoWorks Total
Device revenue $ 2,109  $ 386  $ 2,495 
Service and support 935  —  935 
Subscriptions 337  122  459 
Parts and other 194  24  218 
Collaborative arrangements 14  —  14 
  $ 3,589  $ 532  $ 4,121 

The following table disaggregates the Company’s revenue by major source for the three months ended June 30, 2020:
  EksoHealth EksoWorks Total
Device revenue $ 1,382  $ 161  $ 1,543 
Service and support 333  —  333 
Rentals and subscriptions 197  3  200 
Parts and other 69  14  83 
Collaborative arrangements 105  —  105 
  $ 2,086  $ 178  $ 2,264 

The following table disaggregates the Company’s revenue by major source for the six months ended June 30, 2020:
  EksoHealth EksoWorks Total
Device revenue $ 1,688  $ 416  $ 2,104 
Service and support 715  —  715 
Rentals and subscriptions 478  3  481 
Parts and other 223  36  259 
Collaborative arrangements 172  —  172 
  $ 3,276  $ 455  $ 3,731