v3.26.1
Revenue Recognition
 3 Months Ended
Mar. 31, 2026
Revenue Recognition and Deferred Revenue [Abstract]  
Revenue Recognition Revenue Recognition
The Company recognizes revenue in accordance with Accounting Standards Codification 606 – Revenue from Contracts with Customers (“ASC 606”). Under ASC 606, revenue is recognized when a customer obtains control of promised goods or services, in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. In order to achieve this core principle, the Company applies the following five steps when recording revenue: (1) identify the contract, or contracts, with the customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract and (5) recognize revenue when, or as, performance obligations are satisfied.
The Company derives revenue from (1) subscription arrangements generally accounted for as operating leases, including SaaS and maintenance, (2) the sale of products, (3) SaaS and maintenance related to products sold to customers either by the Company or by Columbia Tech pursuant to the Distribution and License Agreement (as defined below), (4) license fees related to the Distribution and License Agreement (as defined below), and (5) professional services, including installation, training, and event support. Maintenance consists of preventative maintenance, technical support, bug fixes, and when-and-if available threat updates. Our arrangements are generally noncancelable and nonrefundable after ownership passes to the customer. Revenue is recognized net of sales tax.

Distribution and License Agreement
In March 2023, the Company entered into a distributor licensing agreement (the "Distribution and License Agreement") with Columbia Electrical Contractors, Inc. ("Columbia Tech"). Columbia Tech, a wholly-owned subsidiary of Coghlin Companies, which had served as the Company's primary contract manufacturer. Under this arrangement, the Company granted a license of its intellectual property to Columbia Tech, which contracted directly with certain of the Company's resellers to fulfill sales demand where the end-user customer preferred to purchase the hardware equipment as
opposed to lease the equipment. Columbia Tech paid the Company a hardware license fee for each system it manufactured and sold under the agreement. In these instances, the Company still contracted directly with the reseller to provide a multi-year SaaS and maintenance subscription to the end-users. The Distribution and License Agreement expired on December 31, 2025, and the Company no longer offers the distributor license model.
The Company previously assessed whether it operated as the principal or as an agent in relation to the sale of product made by Columbia Tech to the Company's resellers pursuant to the Distribution and License Agreement. The Company considered various factors, including but not limited to, inventory risk, discretion in establishing pricing, and which entity is primarily responsible for fulfillment. Based on an evaluation of the facts and circumstances, the Company concluded that Columbia Tech was the principal in the arrangement. The Company therefore did not recognize revenue in relation to sales of product pursuant to the Distribution and License Agreement, but did recognize revenue in relation to license fees received from Columbia Tech and the SaaS and maintenance subscription contracts, each as further described below.

Remaining Performance Obligations
The following table includes estimated revenues expected to be recognized in the future related to performance obligations that are unsatisfied (or partially satisfied) as of March 31, 2026:
Less than 1 year1 - 2 yearsMore than 2 yearsTotal
Product revenue$5,004 $— $— $5,004 
Subscription revenue69,191 72,105 76,799 218,095 
Service revenue25,259 23,311 26,602 75,172 
License fee and other revenue575 38 78 691 
Total revenue$100,029 $95,454 $103,479 $298,962 
Contract Balances from Contracts with Customers
Contract assets arise from unbilled amounts in customer arrangements when revenue recognized exceeds the amount billed to the customer and the Company’s right to payment is unconditional and only subject to the passage of time. As of March 31, 2026 and December 31, 2025, the Company had $1.2 million and $0.9 million in current portion of contract assets and both less than $0.1 million in contract assets, noncurrent on the condensed consolidated balance sheets, respectively.
Contract liabilities represent the Company’s obligation to transfer goods or services to a customer for which it has received consideration (or the amount is due) from the customer. The Company has a contract liability related to service revenue, which consists of amounts that have been invoiced but that have not been recognized as revenue. Amounts expected to be recognized as revenue within 12 months of the balance sheet date are classified as current deferred revenue and amounts expected to be recognized as revenue beyond 12 months of the balance sheet date are classified as deferred revenue, noncurrent. The Company recognized revenue of $31.0 million during the three months ended March 31, 2026 that was included in the December 31, 2025 deferred revenue balance. The Company recognized revenue of $24.7 million during the three months ended March 31, 2025 that was included in the December 31, 2024 deferred revenue balance.
The following table provides a rollforward of deferred revenue (in thousands):
Balance at December 31, 2025$91,640 
Revenue recognized in relation to the beginning of the year contract liability balance(31,024)
Revenue deferred31,734 
Balance at March 31, 2026$92,350 
The following table presents the Company’s components of lease revenue (in thousands):
Three Months Ended
March 31,
20262025
Interest income on lease receivables$15 $29 
Lease income - operating leases23,148 19,237 
Total lease revenue$23,163 $19,266 
The interest income on lease receivables is classified under interest income in the condensed consolidated statements of operations and comprehensive loss. Lease income from operating leases is related to the leased equipment under subscription arrangements and is classified as subscription revenue in the condensed consolidated statements of operations and comprehensive loss.

Disaggregated Revenue

The following table presents the Company’s revenue by revenue stream (in thousands):

Three Months Ended
March 31,
20262025
Product revenue$13,421 $2,322 
Subscription revenue23,148 19,237 
Service revenue8,589 6,730 
License fees172 3,203 
Professional services and other revenue998 515 
Total revenue$46,328 $32,007 

Partner Rebate Program
In 2025, the Company implemented a channel partner rebate program (the “Rebate Program”) for eligible resellers. Under the Rebate Program, eligible resellers that attain at least 25% of their current fiscal year total contract value (“TCV”) target (“Annual Target”) in a given quarter are eligible for a rebate based upon a percentage of their TCV for that quarter. In addition, resellers that meet their Annual Target are eligible for a one-time rebate based upon a percentage of their total fiscal year TCV, applied as a credit in the subsequent fiscal year. All rebates are issued as credits against future purchases, and no cash rebates are paid. Unused rebate credits are forfeited in the event of a reseller agreement termination.
As of March 31, 2026 and December 31, 2025, the Company has accrued $0.5 million and $1.2 million related to the Rebate Program, respectively, which is included in accrued expenses and other current liabilities in our condensed consolidated balance sheets. As a substantial amount of the Company's revenue from eligible resellers is recognized over-time, rebate liabilities are recognized as contract assets, amortized as reductions to revenue over time, consistent with the recognition of the underlying revenue. As of March 31, 2026, the Company's condensed balance sheet includes $0.2 million and $0.8 million in current portion of contract asset and contract asset, noncurrent, respectively. The Company
recognized $0.2 million and $0.6 million of current portion of contract asset and contract asset, noncurrent in our condensed consolidated balance sheets, respectively, as of December 31, 2025. The Company recognized $0.1 million and less than $0.1 million as reduction of revenue for the three months ended March 31, 2026 and 2025, respectively.
Commissions
The Company incurs and pays commissions on sales of its products and services. The Company applies the practical expedient for contracts less than one year in duration to expense the commission costs in the period in which they were incurred. Commissions on product sales and services are expensed in the period in which the related revenue is recognized. Commissions on subscription arrangements and maintenance are expensed ratably over the life of the contract. The Company had a deferred asset related to commissions of $12.3 million and $13.1 million as of March 31, 2026 and December 31, 2025, respectively. During the three months ended March 31, 2026 and 2025, the Company recognized commission expense of $2.3 million and $1.5 million, respectively.

Leases
The amount of minimum future leases is based on expected income recognition. As of March 31, 2026, future minimum payments on noncancelable leases are as follows (in thousands):
Year Ending December 31:
2026 (nine months remaining)$69,191 
202772,105 
202846,042 
202925,278 
20305,249 
Thereafter230 
$218,095