Note 3 - Balance Sheet Components

6 Months Ended

Jun. 30, 2026

Supplemental Balance Sheet Disclosures [Text Block]

3. BALANCE SHEET COMPONENTS

Accounts Receivable

Accounts receivable includes amounts that are unbilled at the end of the period that are expected to be billed and collected within a 12‑month period. Unbilled accounts receivable, included in accounts receivable, totaled $46.5 million and $44.8 million as of June 30, 2026, and December 31, 2025, respectively. Unbilled accounts receivable that are not expected to be billed and collected during the succeeding 12‑month period are recorded in other non-current assets and totaled $8.7 million as of June 30, 2026, and December 31, 2025.

The Company performs ongoing credit evaluations of its customers’ financial condition. An allowance for credit losses is maintained for probable credit losses based upon the Company’s assessment of the expected collectibility of the accounts receivable. The allowance for credit losses is reviewed on a quarterly basis to assess the adequacy of the allowance. The allowance for credit losses was $0.9 million as of June 30, 2026, and December 31, 2025.

Prepaid expenses and other current assets

Prepaid expenses and other current assets consist of the following (in thousands):

	*June 30,*		*December 31,*
	*2026*		*2025*
Net investments in sales-type leases - current portion (1)	$	19,293	$	14,248
Contract assets (2)		14,350		11,267
Prepaid expense		7,037		6,595
Costs capitalized to obtain revenue contracts (3)		2,785		2,489
Other		3,682		4,136
Total prepaid expenses and other current assets	$	47,147	$	38,735

	(1)	See “Other Non-current Assets” section under Note 3, Balance Sheet Components.
	(2)	See “Contract Balances” section under Note 2, Revenue from Contracts with Customers.
	(3)	See “Costs to Obtain or Fulfill a Contract” section under Note 2, Revenue from Contracts with Customers.

Property and Equipment

Property and equipment, net consist of the following (in thousands):

	*June 30,*			*December 31,*
	*2026*			*2025*
Computer equipment	$	15,143		$	14,547
Software and capitalized software development cost		15,320			10,408
Furniture, fixtures, and equipment		2,728			2,668
Leasehold improvements		7,142			7,033
Laboratory and other equipment		7,259			6,737
Test equipment		46,171			33,268
Property and equipment in progress:
DirectScan system assets		46,622			49,184
CV system and other assets		8,417			8,621
Total property and equipment		148,802			132,466
Less: Accumulated depreciation and amortization		(54,282	)		(50,857	)
Total property and equipment, net	$	94,520		$	81,609

Test equipment mainly includes DirectScan system and CV system assets at customer sites that generate revenue. Property and equipment in progress represent mainly the development or construction of property and equipment that have not yet been placed in service for the Company’s intended use and are not depreciated. Depreciation and amortization expense was $2.1 million and $0.8 million during the three months ended June 30, 2026 and 2025, respectively, and $3.7 million and $1.5 million during the six months ended June 30, 2026, and 2025, respectively.

Goodwill and Intangible Assets, Net

The changes in goodwill were as follows (in thousands):

	*Six Months Ended June 30,*
	*2026*			*2025*
Balance at the beginning of period	$	95,005		$	14,953
Addition (1)		—			81,799
Measurement period acquisition adjustment		15			—
Foreign currency translation adjustment		(34	)		46
Balance at the end of period	$	94,986		$	96,798

(1)

The Company completed the acquisition of SecureWise LLC (“SecureWise”) on March 7, 2025. See Note 14, Business Combination, for additional information related to the goodwill and intangible assets added from this acquisition in 2025.

Intangible assets, net, consisted of the following (in thousands):

		*June 30, 2026*							*December 31, 2025*
	*Amortization*	*Gross*					*Net*		*Gross*					*Net*
	*Period*	*Carrying*		*Accumulated*			*Carrying*		*Carrying*		*Accumulated*			*Carrying*
	*(Years)*	*Amount*		*Amortization*			*Amount*		*Amount*		*Amortization*			*Amount*
Acquired intangible assets:
Customer relationships	1 - 13	$	38,400	$	(11,335	)	$	27,065	$	38,404	$	(10,034	)	$	28,370
Developed technology	4 - 9		46,180		(30,541	)		15,639		46,215		(28,466	)		17,749
Tradename and trademarks	2 - 10		8,198		(2,967	)		5,231		8,198		(2,267	)		5,931
Patent	6 - 10		2,100		(1,979	)		121		2,100		(1,956	)		144
Noncompetition agreements	3		848		(848	)		—		848		(848	)		—
Total		$	95,726	$	(47,670	)	$	48,056	$	95,765	$	(43,571	)	$	52,194

The weighted average amortization period for acquired identifiable intangible assets was 8.3 years as of June 30, 2026. The amortization expense related to intangible assets were as follows (in thousands):

	*Three Months Ended June 30,*				*Six Months Ended June 30,*
	*2026*		*2025*		*2026*		*2025*
Amortization of acquired technology (included in costs of revenues)	$	998	$	998	$	1,996	$	1,676
Amortization of acquired intangible assets (presented separately under costs and expenses)		1,058		1,068		2,117		1,446
Total amortization expense	$	2,056	$	2,066	$	4,113	$	3,122

The estimated future amortization of acquired identifiable intangible assets were as follows (in thousands):

Year Ending December 31,	*Amount*
2026 (remaining six months)	$	3,982
2027		7,940
2028		7,635
2029		5,950
2030		4,506
2031 and thereafter		18,043
Total future amortization expense	$	48,056

There was no impairment charge for goodwill and intangible assets during the three and six months ended June 30, 2026 and 2025.

Other Non-current Assets

Other non-current assets were as follows (in thousands):

	*June 30,*		*December 31,*
	*2026*		*2025*
Unbilled accounts receivable (1)	$	8,737	$	8,719
Costs capitalized to obtain revenue contracts (2)		2,676		3,395
Contract assets (2)		169		—
Net investments in sales-type leases (3)		11,736		7,588
Other		1,399		1,447
Total other non-current assets	$	24,717	$	21,149

	(1)	See Note 3, Balance Sheet Components – Accounts Receivable.
	(2)	See “Costs to Obtain or Fulfill a Contract” section under Note 2, Revenue from Contracts with Customers.
	(3)	The Company’s net investments in sales-type leases were for its DirectScan system and CV system assets. The components of net investments in sales-type leases were as follows (in thousands):

	*June 30,*		*December 31,*
	*2026*		*2025*
Present value of lease receivables	$	17,805	$	10,890
Unguaranteed residual assets		13,224		10,946
Total net investments in sales-type leases	$	31,029	$	21,836
Reported as:
Current (included in Prepaid expenses and other current assets)	$	19,293	$	14,248
Non-current (included in Other non-current assets)		11,736		7,588
Total net investments in sales-type leases	$	31,029	$	21,836

Maturities of leases payments under sales-type leases as of June 30, 2026, were as follows (in thousands):

Year Ending December 31,	*Amount*
2026 (remaining six months)	$	6,995
2027		2,191
2028		3,109
2029		3,109
2030		2,915
2031 and thereafter		2,930
Total future sales-type lease payments		21,249
Less: Implied interest (1)		(3,444	)
Present value of lease receivables	$	17,805

(1)

Calculated using the rate implicit in the lease determined for each lease.

There was no allowance for credit losses on lease receivables as of June 30, 2026, and December 31, 2025. The Company’s ongoing risk management strategy for residual assets includes performing regular reviews of estimated residual values.

Accrued and other current liabilities

Accrued and other current liabilities were as follows (in thousands):

	*June 30,*		*December 31,*
	*2026*		*2025*
Accrued expenses	$	6,513	$	7,061
Accrued income taxes		318		297
Other		1,991		1,361
Total accrued and other current liabilities	$	8,822	$	8,719