Quarterly report pursuant to Section 13 or 15(d)

Revenue Recognition

v3.21.2
Revenue Recognition
 9 Months Ended
Sep. 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:
September 30, 2021 December 31, 2020
Deferred extended maintenance and support $ 2,387  $ 2,902 
Deferred royalties 280  282 
Deferred device and advances 73  118 
Total deferred revenues 2,740  3,302 
Less current portion (1,291) (1,496)
Deferred revenues, non-current $ 1,449  $ 1,806 
 
Deferred revenue activity consisted of the following for the nine months ended September 30, 2021:
Beginning balance $ 3,302 
Deferral of revenue 799 
Recognition of deferred revenue (1,361)
Ending balance $ 2,740 
 
As of September 30, 2021, the Company’s deferred revenue was $2,740. The Company expects to recognize approximately $443 of the deferred revenue during the remainder of 2021, $1,055 in 2022, and $1,242 thereafter.

In addition to deferred revenue, the Company has non-cancellable backlog of $1,103 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 September 30, 2021 and December 31, 2020, total accounts receivable, net of allowance for doubtful accounts, were $3,245 and $3,439, respectively, and are included in accounts receivable, net and other 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 September 30, 2021:
  EksoHealth EksoWorks Total
Device revenue $ 1,791  $ 240  $ 2,031 
Service and support 477  —  477 
Subscriptions 173  66  239 
Parts and other 233  27  260 
Collaborative arrangements 42  —  42 
  $ 2,716  $ 333  $ 3,049 

The following table disaggregates the Company’s revenue by major source for the nine months ended September 30, 2021:
  EksoHealth EksoWorks Total
Device revenue $ 3,900  $ 625  $ 4,525 
Service and support 1,412  —  1,412 
Subscriptions 510  188  698 
Parts and other 427  51  478 
Collaborative arrangements 57  —  57 
  $ 6,306  $ 864  $ 7,170 

The following table disaggregates the Company’s revenue by major source for the three months ended September 30, 2020:
  EksoHealth EksoWorks Total
Device revenue $ 2,018  $ 127  $ 2,145 
Service and support 455  —  455 
Rentals and subscriptions 178  7  185 
Parts and other 32  24  56 
Collaborative arrangements 56  —  56 
  $ 2,739  $ 158  $ 2,897 

The following table disaggregates the Company’s revenue by major source for the nine months ended September 30, 2020:
  EksoHealth EksoWorks Total
Device revenue $ 3,706  $ 543  $ 4,249 
Service and support 1,170  —  1,170 
Rentals and subscriptions 656  10  666 
Parts and other 255  60  315 
Collaborative arrangements 228  —  228 
  $ 6,015  $ 613  $ 6,628