|6 Months Ended
Jul. 01, 2023
|Revenue from Contract with Customer [Abstract]
The Company accounts for a contract with a customer when both parties have approved the contract and are committed to perform their respective obligations, each party’s rights and payment terms can be identified, the contract has commercial substance, and it is probable that the Company will collect substantially all of the consideration to which it is entitled. Revenue is recognized when, or as, performance obligations are satisfied by transferring control of a promised good or service to a customer.
Contract assets are the rights to consideration in exchange for goods and services that the Company has transferred to a customer. Unbilled receivables result from revenues recognized at a point-in-time and represent an unconditional right to payment subject primarily to the passage of time. Unbilled receivables are recognized as accounts receivable when they are billed. Costs in excess of billings result from revenues recognized over time and represent the net balance of billings that already occurred. Contract liabilities (billings in excess of costs) represent billings to a customer in excess of revenue that has been recognized over time.
Contract balances as of July 1, 2023 were as follows:
During the three and six months ended July 1, 2023, the Company recognized revenue of approximately $6,642 and $18,590 related to contract liabilities at December 31, 2022. This reduction was offset by new billings of approximately $7,171 and $15,985 for product and services for which there were unsatisfied performance obligations to customers and revenue had not yet been recognized for the three and six month periods ended July 1, 2023.
The Company derives subscription revenue from continued software support and through the Nokē Smart Entry System, a product which provides mobile access for tenants and remote monitoring and tracking for operators. We determine standalone selling price for recurring software revenue by using the adjusted market assessment approach. The recurring revenue recognized from the Nokē Smart Entry System for the three months ended July 1, 2023 and July 2, 2022 was $774 and $316, respectively. The recurring revenue recognized from the Nokē Smart Entry System for the six months ended July 1, 2023 and July 2, 2022 was $1,208 and $611, respectively.
Disaggregation of Revenue
The principal categories we use to disaggregate revenues are by timing and sales channel of revenue recognition. The following disaggregation of revenues depict the Company’s reportable segment revenues by timing and sales channel of revenue recognition for the three and six months ended July 1, 2023 and July 2, 2022:
Revenue by Timing of Revenue Recognition
(1) These numbers have been revised for the three and six month periods ended July 2, 2022. See Note 2 to our Unaudited Condensed Consolidated Financial Statements for additional information.
Revenue by Sales Channel