Quarterly report pursuant to Section 13 or 15(d)

Revenues from Contracts with Customers

v3.10.0.1
Revenues from Contracts with Customers
9 Months Ended
Sep. 30, 2018
Revenue from Contract with Customer [Abstract]  
Revenues from Contracts with Customers

The Company adopted ASC 606 using the modified retrospective method by recognizing the cumulative effect of initially applying ASC 606 as an adjustment to the opening balance of stockholders’ equity at January 1, 2018. Under the new guidance, these service revenues continue to be recognized when the services are provided. However, the new requirement to defer incremental contract acquisition and fulfillment costs, including sales commissions and installation costs, and recognize such costs over the period where control of goods and services are transferred resulted in the recognition of additional deferred contract costs in the consolidated balance sheet at the date of adoption. The following table presents the cumulative effect of the changes made to the consolidated balance sheet at January 1, 2018 (in thousands):

  

    Balance as of     ASC 606     Balance as of  
   

December 31,

2017

   

Transition

Adjustment

   

January 1,

2018

 
Assets                  
Prepaid expenses   $ 6,290     $ 2,203     $ 8,493  
Intangible assets, net     68,834       (3,304 )     65,530  
Other non-current assets     877       4,826       5,703  
    $ 76,001     $ 3,725     $ 79,726  
Stockholders' Equity                        
Accumulated deficit   $ (236,477 )   $ 3,725     $ (232,752 )

 

The following table summarizes the current impacts associated with the adoption of ASC 606 on the accompanying condensed consolidated balance sheet and statement of operations and comprehensive loss (in thousands): 

 

    September 30, 2018    
                Impact of  
    As reported     Previous guidance     Adoption of ASC 606  
Assets                  
Prepaid expenses   $ 11,276     $ 7,443     $ 3,833  
Intangible assets, net     176,465       177,810       (1,345 )
Other non-current assets     32,518       30,204       2,314  
                         
Liabilities                        
Deferred customer revenue     16,440       15,804       636  
                         
Stockholders' Equity                        
Accumulated deficit   $ (282,383 )   $ (276,945 )   $ (5,438 )

 

Amortization of deferred commissions was $1.7 million and $5.1 million for the three and nine months ended September 30, 2018, respectively. 

 

   

For the three months ended

September 30, 2018

 
                Impact of  
    As reported     Previous guidance     Adoption of ASC 606  
                   
Revenues   $ 143,428     $ 143,899     $ (471 )
Selling, general and administrative     46,788       47,731       (943 )
Depreciation and amortization     19,946       20,231       (285 )
Net Impact   $ 76,694     $ 75,937     $ 757  

 

   

For the nine months ended

September 30, 2018

 
                Impact of  
    As reported     Previous guidance     Adoption of ASC 606  
                   
Revenues   $ 367,142     $ 367,778     $ (636 )
Selling, general and administrative     113,555       114,953       (1,398 )
Depreciation and amortization     51,387       52,059       (672 )
Net Impact   $ 202,200     $ 200,766     $ 1,434  

 

The impact associated with the adoption of ASC 606 on net income, basic and diluted net loss per share, consolidated statement of operations and the consolidated statement of cash flows were not material for the three and nine months ended September 30, 2018. 

 

The following table includes estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) at the end of the reporting period (in thousands):

 

    Deferred installation     Deferred installation        
    revenue     costs     Net   
                   
remaining 2018   $ 47     $ (910 )   $ (863 )
2019     185       (2,633 )     (2,448 )
2020     185       (1,887 )     (1,702 )
2021     169       (653 )     (484 )
2022 and thereafter     50       (64 )     (14 )
    $ 636     $ (6,147 )   $ (5,511 )

 

Summary of disaggregated revenue is as follows (in thousands):

   

For the three months ended

September 30,

 
    2018     2017  
Monthly recurring   $ 129,567     $ 94,283  
Usage and other     13,422       17,721  
Installation     439       420  
 Total revenue   $ 143,428     $ 112,424  

 

   

For the nine months ended

September 30,

 
    2018     2017  
Monthly recurring   $ 320,129     $ 294,882  
Usage and other     45,977       48,065  
Installation     1,036       1,220  
 Total revenue   $ 367,142     $ 344,167  

 

Summary of revenue by country is as follows (in thousands):

   

For the three months ended

September 30,

 
     2018      2017  
United States   $ 121,208     $ 86,917  
Canada     22,220       25,507  
 Total revenue   $ 143,428     $ 112,424  

 

   

For the nine months ended

September 30,

 
    2018     2017  
United States   $ 298,353     $ 271,336  
Canada     68,789       72,831  
 Total revenue   $ 367,142     $ 344,167