v3.26.1
REVENUE
 3 Months Ended
Mar. 31, 2026
Revenue from Contract with Customer [Abstract]  
REVENUE

NOTE 12—REVENUE

 

Revenue from the prepayment of monitoring fees (generally paid twelve months in advance) are recorded as deferred revenue upon receipt of payment from the customer and then amortized to revenue over the monitoring service period. This method provides a faithful depiction of the transfer of services as it aligns the recognition of revenue with the period in which the monitoring services are provided. By deferring the revenue and recognizing it over the service period, the financial statements accurately reflect the company’s performance and obligations to its customers.

 

The following table disaggregates the Company’s revenue for the three-month periods ended March 31, 2026 and 2025 (in thousands):

 

   Hardware   Monitoring   Total 
Three months ended March 31, 2026:               
PG Segment  $725   $1,358   $2,083 
CP Segment   85    59    144 
Total Revenue  $810   $1,417   $2,227 

 

   Hardware   Monitoring   Total 
Three months ended March 31, 2025:               
PG Segment  $1,681   $1,206   $2,887 
CP Segment   148    63    211 
Total Revenue  $1,829   $1,269   $3,098 

 

The IS segment had no revenue for the three months ended March 31, 2026 as operations were in the pre-revenue stage.

 

Deferred revenue activity for the three-month period ended March 31, 2026 can be seen in the table below (in thousands):

 

   Hardware   Monitoring   Total 
Balance at December 31, 2025  $168   $3,241   $3,409 
Additions during the period   —    1,387    1,387 
Recognized as revenue   (110)   (1,417)   (1,527)
Balance at March 31, 2026  $58   $3,211   $3,269 
                
Amounts to be recognized as revenue in the twelve-month-period ending:               
March 31, 2027  $58   $2,876   $2,934 
March 31, 2028   —    321    321 
March 31, 2029 and thereafter   —    14    14 
Total  $58   $3,211   $3,269 

 

 

The amount of hardware revenue recognized during the three-month period ended March 31, 2026 that was included in deferred revenue at the beginning of the fiscal year was $110,000. The amount of monitoring revenue during the three-month period ended March 31, 2026 that was included in deferred revenue at the beginning of the fiscal year was $1,255,000.

 

The following table provides a reconciliation of the Company’s hardware revenue for the three-month periods ended March 31, 2026 and 2025 (in thousands):

 

Reconciliation of Hardware Revenue  2026   2025 
  

Three months ended

March 31,

 
Reconciliation of Hardware Revenue  2026   2025 
Amortization of deferred revenue  $110   $315 
Sales of custom designed units and related accessories   19    58 
Hardware sales   556    1,352 
Other accessories, services, shipping and miscellaneous charges   125    104 
Total hardware revenue  $810   $1,829 

 

Deferred COGS relate only to the sale of equipment. Deferred COGS activity for the three-month period ended March 31, 2026 can be seen in the table below (in thousands):

 

      
Balance at December 31, 2025  $70 
Additions, net of adjustments, during the period   — 
Recognized as COGS   (45)
Balance at March 31, 2026  $25 
      
Amounts to be recognized as COGS in the twelve-month-period ending:     
March 31, 2027  $25 

 

The following table provides a reconciliation of the Company’s COGS expense for the three-month periods ended March 31, 2026 and 2025 (in thousands):

 

Reconciliation of COGS Expense  2026   2025 
  

Three months ended

March 31,

 
Reconciliation of COGS Expense  2026   2025 
Amortization of deferred COGS  $45   $135 
COGS of custom designed equipment sold with no monitoring   5    16 
COGS of hardware sales   245    469 
Data costs for monitoring   84    74 
Other COGS of accessories, services, shipping and miscellaneous charges   63    78 
Total COGS expense  $442   $772 

 

 

The following table provides a reconciliation of the Company’s sales commissions contract assets for the three-month period ended March 31, 2026 (in thousands):

 

   Hardware   Monitoring   Total 
Balance at December 31, 2025  $16   $148   $164 
Additions during the period   —    9    9 
Amortization of sales commissions   (10)   (17)   (27)
Balance at March 31, 2026  $6   $140   $146 

 

The capitalized sales commissions are included in other current assets ($64,000) and other assets ($82,000) in the Company’s unaudited condensed consolidated balance sheet at March 31, 2026. The capitalized sales commissions are included in other current assets ($76,000) and other assets ($88,000) in the Company’s condensed consolidated balance sheet at December 31, 2025.

 

Amounts to be recognized as sales commission expense in the twelve-month-period ending (in thousands):

 

      
March 31, 2027  $64 
March 31, 2028   44 
March 31, 2029 and thereafter   38 
Total  $146