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

NOTE 4 - REVENUE, CONTRACT ASSETS AND CONTRACT LIABILITIES

 

Net Revenue

 

For the three months ended March 31, 2026 and 2025, the components of revenue from contracts with customers and the related timing of revenue recognition is set forth in the table below (in thousands):

   

   Three Months Ended March 31, 
   2026   2025 
         
Product revenue          
Appliances  $422   $1,273 
Tooth positioners   1,018    540 
Total product revenue   1,440(1)   1,813(1)
           
Service revenue          
Sleep testing services  $2,296(3)  $323(3)
VIP   37(2)   223(2)
Billing intelligence services   145(3)   181(3)
Myofunctional therapy services   125(2)   148(2)
Treatment centers   892(2)   -(2)
Sponsorship/seminar/other   205(3)   328(3)
Total service revenue   3,701    1,203 
           
Total revenue  $5,141   $3,016 

 

(1) Product revenue from the sale of appliances and tooth positioners is typically fixed at the inception of the contract and is recognized at the point in time when shipment of the related products occurs.
   
(2) Service revenue from the sale of VIP enrollments, billing service and therapy is typically fixed at the inception of the contract and is recognized ratably over time as the services are performed and the performance obligations completed.
   
(3) Sleep testing, treatment center, and other revenue is recognized at a point in time.

 

 

Changes in Contract Liabilities

 

The key components of changes in contract liabilities for three months ended March 31, 2026 and 2025 are as follows (in thousands):

  

   2026   2025 
         
Beginning balance, January 1  $479   $993 
           
New contracts, net of cancellations   178    23 
Revenue recognized   (162)   (422)
           
Ending balance, March 31  $495   $594 

 

The current portion of deferred revenue is approximately $0.5 million, which is expected to be recognized over the next 12 months from the date of the period presented. Additionally, revenue from breakage on contract liabilities was approximately $0 and $0.1 million for the three months ended March 31, 2026 and 2025 respectively.

 

Changes in Accounts Receivable

 

Our customers are billed based on fees agreed upon in each customer contract. Receivables from customers were $1.8 million at March 31, 2026 and $1.6 million at December 31, 2025. Adjustments to the allowance are recorded in bad debt expense under general and administrative expenses in the consolidated statement of operations. An allowance of $1.2 and $0.9 million existed as of March 31, 2026 and December 31, 2025.