10-Q
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Table of Contents

 

lane

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

(Mark One)

Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended September 30, 2023

OR

Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from to

Commission File Number: 001-35429

 

BRIGHTCOVE INC.

(Exact name of registrant as specified in its charter)

 

Delaware

20-1579162

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

281 Summer Street

Boston, MA 02210

(Address of principal executive offices)

(888) 882-1880

(Registrant’s telephone number, including area code)

 

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, par value $0.001 per share

BCOV

The NASDAQ Global Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

Accelerated filer

 

 

Non-accelerated filer

Smaller reporting company

Emerging growth company

 

 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No

As of October 30, 2023, there were 43,472,029 shares of the registrant’s common stock, $0.001 par value per share, outstanding.

 

 

 


Table of Contents

 

BRIGHTCOVE INC.

Table of Contents

 

 

Page

PART I. FINANCIAL INFORMATION

 

4

Item 1. Financial Statements (Unaudited)

 

4

Condensed Consolidated Balance Sheets as of September 30, 2023 and December 31, 2022

 

4

Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2023 and 2022

 

5

Condensed Consolidated Statements of Comprehensive Loss for the three and nine months ended September 30, 2023 and 2022

 

6

Condensed Consolidated Statements of Stockholders’ Equity for the three and nine months ended September 30, 2023 and 2022

 

7

Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2023 and 2022

 

8

Notes to Condensed Consolidated Financial Statements

 

9

 

 

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

15

 

 

Item 3. Quantitative and Qualitative Disclosures About Market Risk

 

29

 

 

Item 4. Controls and Procedures

 

30

 

 

PART II. OTHER INFORMATION

 

31

 

 

Item 1. Legal Proceedings

 

31

 

 

Item 1A. Risk Factors

 

31

 

 

Item 5. Other Information

 

33

 

 

Item 6. Exhibits

 

34

 

 

Signatures

 

35

 

2


Table of Contents

 

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

 

This Quarterly Report on Form 10-Q contains “forward-looking statements” that involve risks and uncertainties, as well as assumptions that, if they never materialize or prove incorrect, could cause our results to differ materially from those expressed or implied by such forward-looking statements. The statements contained in this Quarterly Report on Form 10-Q that are not purely historical are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, or Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or Exchange Act. Such forward-looking statements include any expectation of earnings, revenue or other financial items; any statements of the plans, strategies and objectives of management for future operations; factors that may affect our operating results; statements related to adding employees; statements related to potential benefits of acquisitions; statements related to future capital expenditures; statements related to future economic conditions or performance; statements as to industry trends and other matters that do not relate strictly to historical facts or statements of assumptions underlying any of the foregoing. Forward-looking statements are often identified by the use of words such as, but not limited to, “anticipate,” “believe,” “can,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “will,” “plan,” “project,” “seek,” “should,” “target,” “will,” “would,” and similar expressions or variations intended to identify forward-looking statements. These statements are based on the beliefs and assumptions of our management based on information currently available to management. Such forward-looking statements are subject to risks, uncertainties and other important factors that could cause actual results and the timing of certain events to differ materially from future results expressed or implied by such forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those identified below, and those discussed in the section titled “Risk Factors” included in Item 1A of Part II of this Quarterly Report on Form 10-Q, and the risks discussed in our other Securities and Exchange Commission, or SEC, filings. Furthermore, such forward-looking statements speak only as of the date of this report. Except as required by law, we undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date of such statements. However, any further disclosures made on related subjects in our subsequent reports filed with the
 

SEC should be consulted. Forward-looking statements in this Quarterly Report on Form 10-Q may include statements about:

our ability to achieve profitability;
our competitive position and the effect of competition in our industry;
our ability to retain and attract new customers;
our ability to penetrate existing markets and develop new markets for our services;
our ability to retain or hire qualified accounting and other personnel;
our ability to successfully integrate acquired businesses;
our ability to protect our intellectual property and operate our business without infringing upon the intellectual property rights of others;
our ability to maintain the security and reliability of our systems;
our estimates with regard to our future performance and total potential market opportunity;
our estimates regarding our anticipated results of operations, future revenue, bookings growth, capital requirements, our needs for additional financing and broader economic challenges, including interest rate fluctuations; and
our goals and strategies, including those related to revenue and bookings growth.

 

3


Table of Contents

 

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

Brightcove Inc.

Condensed Consolidated Balance Sheets

(unaudited)

 

 

 

September 30, 2023

 

 

December 31, 2022

 

 

 

(in thousands, except share
 and per share data)

 

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

16,422

 

 

$

31,894

 

Accounts receivable, net of allowance of $269 and $294 at September 30, 2023 and December 31, 2022, respectively

 

 

30,262

 

 

 

26,004

 

Prepaid expenses

 

 

7,537

 

 

 

8,700

 

Other current assets

 

 

12,206

 

 

 

10,722

 

Total current assets

 

 

66,427

 

 

 

77,320

 

Property and equipment, net

 

 

42,730

 

 

 

39,677

 

Operating lease right-of-use asset

 

 

16,823

 

 

 

18,671

 

Intangible assets, net

 

 

7,290

 

 

 

10,279

 

Goodwill

 

 

74,859

 

 

 

74,859

 

Other assets

 

 

6,016

 

 

 

7,007

 

Total assets

 

$

214,145

 

 

$

227,813

 

Liabilities and stockholders’ equity

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

13,857

 

 

$

11,326

 

Accrued expenses

 

 

17,519

 

 

 

26,877

 

Operating lease liability

 

 

4,403

 

 

 

4,157

 

Deferred revenue

 

 

67,248

 

 

 

61,597

 

Total current liabilities

 

 

103,027

 

 

 

103,957

 

Operating lease liability, net of current portion

 

 

18,143

 

 

 

20,528

 

Other liabilities

 

 

673

 

 

 

981

 

Total liabilities

 

$

121,843

 

 

$

125,466

 

Commitments and contingencies (Note 8)

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

 

Undesignated preferred stock, $0.001 par value; 5,000,000 shares authorized;
   
no shares issued

 

 

 

 

 

 

Common stock, $0.001 par value; 100,000,000 shares authorized; 43,600,854 and 42,449,677 shares issued at September 30, 2023 and December 31, 2022, respectively

 

 

44

 

 

 

42

 

Additional paid-in capital

 

 

325,402

 

 

 

314,825

 

Treasury stock, at cost; 135,000 shares

 

 

(871

)

 

 

(871

)

Accumulated other comprehensive loss

 

 

(1,845

)

 

 

(1,593

)

Accumulated deficit

 

 

(230,428

)

 

 

(210,056

)

Total stockholders’ equity

 

 

92,302

 

 

 

102,347

 

Total liabilities and stockholders’ equity

 

$

214,145

 

 

$

227,813

 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

 

4


Table of Contents

 

Brightcove Inc.

Condensed Consolidated Statements of Operations

(unaudited)

 

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

 

 

(in thousands, except share and per share data)

 

Revenue:

 

 

 

 

 

 

 

 

 

 

 

 

Subscription and support revenue

 

$

48,571

 

 

$

51,814

 

 

$

144,686

 

 

$

156,403

 

Professional services and other revenue

 

 

2,409

 

 

 

2,130

 

 

 

6,345

 

 

 

5,367

 

Total revenue

 

 

50,980

 

 

 

53,944

 

 

 

151,031

 

 

 

161,770

 

Cost of revenue:

 

 

 

 

 

 

 

 

 

 

 

 

Cost of subscription and support revenue

 

 

16,892

 

 

 

18,247

 

 

 

51,760

 

 

 

52,172

 

Cost of professional services and other revenue

 

 

2,369

 

 

 

1,816

 

 

 

6,269

 

 

 

5,575

 

Total cost of revenue

 

 

19,261

 

 

 

20,063

 

 

 

58,029

 

 

 

57,747

 

Gross profit

 

 

31,719

 

 

 

33,881

 

 

 

93,002

 

 

 

104,023

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

 

8,730

 

 

 

7,931

 

 

 

28,941

 

 

 

24,540

 

Sales and marketing

 

 

17,222

 

 

 

19,023

 

 

 

55,721

 

 

 

55,272

 

General and administrative

 

 

7,941

 

 

 

7,748

 

 

 

27,410

 

 

 

24,391

 

Merger-related

 

 

117

 

 

 

 

 

 

307

 

 

 

747

 

Other expense

 

 

 

 

 

 

 

 

 

 

 

1,149

 

Total operating expenses

 

 

34,010

 

 

 

34,702

 

 

 

112,379

 

 

 

106,099

 

Loss from operations

 

 

(2,291

)

 

 

(821

)

 

 

(19,377

)

 

 

(2,076

)

Other income (expense), net

 

 

130

 

 

 

(668

)

 

 

9

 

 

 

(1,880

)

Loss before income taxes

 

 

(2,161

)

 

 

(1,489

)

 

 

(19,368

)

 

 

(3,956

)

Loss (benefit) from provision for income taxes

 

 

260

 

 

 

191

 

 

 

1,004

 

 

 

(338

)

Net loss

 

$

(2,421

)

 

$

(1,680

)

 

$

(20,372

)

 

$

(3,618

)

Net loss per share—basic and diluted

 

 

 

 

 

 

 

 

 

 

 

 

         Basic

 

$

(0.06

)

 

$

(0.04

)

 

$

(0.47

)

 

$

(0.09

)

         Diluted

 

$

(0.06

)

 

$

(0.04

)

 

$

(0.47

)

 

$

(0.09

)

Weighted-average shares—basic and diluted

 

 

 

 

 

 

 

 

 

 

 

 

         Basic

 

 

43,332

 

 

 

41,972

 

 

 

42,976

 

 

 

41,712

 

         Diluted

 

 

43,332

 

 

 

41,972

 

 

 

42,976

 

 

 

41,712

 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

 

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Table of Contents

 

Brightcove Inc.

Condensed Consolidated Statements of Comprehensive Loss

(unaudited)

 

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

 

 

(in thousands)

 

Net loss

 

$

(2,421

)

 

$

(1,680

)

 

$

(20,372

)

 

$

(3,618

)

Other comprehensive income:

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation adjustments

 

 

(410

)

 

 

(716

)

 

 

(252

)

 

 

(1,816

)

Comprehensive loss

 

$

(2,831

)

 

$

(2,396

)

 

$

(20,624

)

 

$

(5,434

)

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

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Table of Contents

 

Brightcove Inc.

Condensed Consolidated Statements of Stockholders’ Equity

(unaudited)

 

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

 

 

(in thousands, except share data)

 

Shares of common stock issued

 

 

 

 

 

 

 

 

 

 

 

 

Balance, beginning of period

 

 

43,376,006

 

 

 

42,029,575

 

 

 

42,449,677

 

 

 

41,384,643

 

Issuance of common stock upon exercise of stock options and vesting of restricted stock units

 

 

224,848

 

 

 

163,929

 

 

 

1,151,177

 

 

 

808,861

 

Balance, end of period

 

 

43,600,854

 

 

 

42,193,504

 

 

 

43,600,854

 

 

 

42,193,504

 

Shares of treasury stock

 

 

 

 

 

 

 

 

 

 

 

 

Balance, beginning of period

 

 

(135,000

)

 

 

(135,000

)

 

 

(135,000

)

 

 

(135,000

)

Balance, end of period

 

 

(135,000

)

 

 

(135,000

)

 

 

(135,000

)

 

 

(135,000

)

Par value of common stock issued

 

 

 

 

 

 

 

 

 

 

 

 

Balance, beginning of period

 

$

43

 

 

$

42

 

 

$

42

 

 

$

41

 

Issuance of common stock upon exercise of stock options and vesting of restricted stock units

 

 

1

 

 

 

 

 

 

2

 

 

 

 

Common stock issued upon acquisition

 

 

 

 

 

 

 

 

 

 

 

1

 

Balance, end of period

 

$

44

 

 

$

42

 

 

$

44

 

 

$

42

 

Value of treasury stock

 

 

 

 

 

 

 

 

 

 

 

 

Balance, beginning of period

 

$

(871

)

 

$

(871

)

 

$

(871

)

 

$

(871

)

Balance, end of period

 

$

(871

)

 

$

(871

)

 

$

(871

)

 

$

(871

)

Additional paid-in capital

 

 

 

 

 

 

 

 

 

 

 

 

Balance, beginning of period

 

$

321,870

 

 

$

308,314

 

 

$

314,825

 

 

$

298,793

 

Issuance of common stock upon exercise of stock options and vesting of restricted stock units, net of tax

 

 

 

 

 

(8

)

 

 

(1

)

 

 

91

 

Stock-based compensation expense

 

 

3,532

 

 

 

2,977

 

 

 

10,834

 

 

 

10,412

 

Withholding tax on restricted stock

 

 

 

 

 

 

 

 

(256

)

 

 

 

Common stock issued upon acquisition

 

 

 

 

 

 

 

 

 

 

 

1,987

 

Balance, end of period

 

$

325,402

 

 

$

311,283

 

 

$

325,402

 

 

$

311,283

 

Accumulated deficit

 

 

 

 

 

 

 

 

 

 

 

 

Balance, beginning of period

 

$

(228,007

)

 

$

(202,979

)

 

$

(210,056

)

 

$

(201,041

)

Net loss

 

 

(2,421

)

 

 

(1,680

)

 

 

(20,372

)

 

 

(3,618

)

Balance, end of period

 

$

(230,428

)

 

$

(204,659

)

 

$

(230,428

)

 

$

(204,659

)

Accumulated other comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

 

Balance, beginning of period

 

$

(1,435

)

 

$

(1,762

)

 

$

(1,593

)

 

$

(662

)

Foreign currency translation adjustment

 

 

(410

)

 

 

(716

)

 

 

(252

)

 

 

(1,816

)

Balance, end of period

 

$

(1,845

)

 

$

(2,478

)

 

$

(1,845

)

 

$

(2,478

)

Total stockholders’ equity

 

$

92,302

 

 

$

103,317

 

 

$

92,302

 

 

$

103,317

 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

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Brightcove Inc.

Condensed Consolidated Statements of Cash Flows

(unaudited)

 

 

 

Nine Months Ended September 30,

 

 

 

2023

 

 

2022

 

 

 

(in thousands)

 

Operating activities

 

 

 

 

 

 

Net loss

 

$

(20,372

)

 

$

(3,618

)

Adjustments to reconcile net loss to net cash provided by operating activities:

 

 

 

 

 

 

Depreciation and amortization

 

 

12,244

 

 

 

7,141

 

Stock-based compensation

 

 

10,440

 

 

 

9,969

 

Provision for reserves on accounts receivable

 

138

 

 

 

166

 

Changes in assets and liabilities:

 

 

 

 

 

 

Accounts receivable

 

 

(4,556

)

 

 

(1,871

)

Prepaid expenses and other current assets

 

 

(684

)

 

 

(1,351

)

Other assets

 

 

1,042

 

 

 

38

 

Accounts payable

 

 

3,065

 

 

 

863

 

Accrued expenses

 

 

(6,737

)

 

 

(242

)

Operating leases

 

 

(291

)

 

 

5,202

 

Deferred revenue

 

 

6,017

 

 

 

3,452

 

Net cash provided by operating activities

 

 

306

 

 

 

19,749

 

Investing activities

 

 

 

 

 

 

Cash paid for acquisition, net of cash acquired

 

 

 

 

 

(13,215

)

Purchases of property and equipment

 

 

(2,820

)

 

 

(8,617

)

Capitalized internal-use software costs

 

 

(10,037

)

 

 

(9,678

)

Net cash used in investing activities

 

 

(12,857

)

 

 

(31,510

)

Financing activities

 

 

 

 

 

 

Proceeds from exercise of stock options

 

 

 

 

 

142

 

Deferred acquisition payments

 

 

(1,700

)

 

 

 

Other financing activities

 

 

(256

)

 

 

(50

)

Net cash (used in) provided by financing activities

 

 

(1,956

)

 

 

92

 

Effect of exchange rate changes on cash and cash equivalents

 

 

(965

)

 

 

(2,722

)

Net decrease in cash and cash equivalents

 

 

(15,472

)

 

 

(14,391

)

Cash and cash equivalents at beginning of period

 

 

31,894

 

 

 

45,739

 

Cash and cash equivalents at end of period

 

$

16,422

 

 

$

31,348

 

Supplemental disclosure of cash flow information

 

 

 

 

 

 

Cash paid for operating lease liabilities

 

$

2,751

 

 

$

1,548

 

Cash received for lease inducement

 

 

 

 

 

3,437

 

Cash paid for income taxes

 

$

1,197

 

 

$

527

 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

 

8


Table of Contents

 

Brightcove Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

(in thousands, except share and per share data, unless otherwise noted)

 

1. Business Description and Basis of Presentation

Business Description

Brightcove Inc. (the “Company”) is a leading global provider of cloud services for video which enable its customers to publish and distribute video to Internet-connected devices quickly, easily and in a cost-effective and high-quality manner.

The Company is headquartered in Boston, Massachusetts and was incorporated in the state of Delaware on August 24, 2004.

Basis of Presentation

The accompanying interim condensed consolidated financial statements are unaudited. These unaudited condensed consolidated financial statements and notes should be read in conjunction with the audited consolidated financial statements and related notes contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022.

The accompanying unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States have been condensed or omitted pursuant to such rules and regulations. In the opinion of management, the unaudited condensed consolidated financial statements and notes have been prepared on the same basis as the audited consolidated financial statements for the year ended December 31, 2022 contained in the Company’s Annual Report on Form 10-K and include all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of the Company’s financial position and results of operations for the three and nine months ended September 30, 2023 and 2022. These interim periods are not necessarily indicative of the results to be expected for any other interim period or the full year.

 

2. Quarterly Update to Significant Accounting Policies

Allowance for Doubtful Accounts

The following details the changes in the Company’s reserve allowance for estimated credit losses for accounts receivable for the period:

 

 

 

Allowance for Credit Losses

 

 

 

(in thousands)

 

Balance as of December 31, 2022

 

$

294

 

Current provision for credit losses

 

 

138

 

Write-offs against allowance

 

 

(163

)

Balance as of September 30, 2023

 

$

269

 

Estimated credit losses for unbilled trade accounts receivable were not material.

 

Other Expense.

Other expense, reflects other operating costs that do not directly relate to research and development, sales and marketing, general and administrative, and merger related. The Company did not incur expenses of this nature during the three and nine months ended September 30, 2023.

On March 28, 2022, the Chief Executive Officer (“CEO”) of the Company retired. Pursuant to a Transition Agreement that was entered into by the CEO and the Company in October 2021, the Company recorded $1.1 million of expense reflecting both wages and stock compensation in the first quarter of 2022.

 

Recently Issued and Adopted Accounting Pronouncements

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In March 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-01, Leases (Topic 842): Common Control Arrangements, which amends Accounting Standards Codification ("ASC") 842 with respect to arrangements between related parties under common control. The guidance is effective for interim and annual periods beginning after December 15, 2023, with early adoption permitted. The Company does not expect the impact of the adoption of this standard on the Company’s consolidated financial statements to be material.

 

 

3. Revenue from Contracts with Customers

The Company primarily derives revenue from the sale of its online video platform, which enables its customers to publish and distribute video to Internet-connected devices quickly, easily and in a cost-effective and high-quality manner. Revenue is derived from three primary sources: (1) the subscription to its technology and related support; (2) hosting, bandwidth and encoding services; and (3) professional services, which include initiation, set-up and customization services.

The following summarizes the opening and closing balances of receivables, contract assets and contract liabilities from contracts with customers.

 

(in thousands)

 

Accounts Receivable, net

 

 

Contract Assets (current)

 

 

Deferred Revenue (current)

 

 

Deferred Revenue (non-current)

 

 

Total Deferred Revenue

 

Balance at December 31, 2022

 

$

26,004

 

 

$

1,786

 

 

$

61,597

 

 

$

360

 

 

$

61,957

 

Balance at September 30, 2023

 

 

30,262

 

 

 

2,164

 

 

 

67,248

 

 

 

115

 

 

 

67,363

 

Revenue recognized for the three and nine months ended September 30, 2023 from amounts included in deferred revenue at the beginning of the period was approximately $10.2 million and $57.8 million, respectively. Revenue recognized for the three and nine months ended September 30, 2022 from amounts included in deferred revenue at the beginning of the period was approximately $9.1 million and $57.2 million, respectively. During the three and nine months ended September 30, 2023, the Company did not recognize a material amount of revenue from performance obligations satisfied or partially satisfied in previous periods.

The assets recognized for costs to obtain a contract were $13.2 million as of September 30, 2023 and $12.4 million as of December 31, 2022 and are recorded in other current assets and other assets. Amortization expense recognized for the three and nine months ended September 30, 2023 related to costs to obtain a contract was $2.8 million and $7.8 million, respectively, and is included in operating expenses for the respective period. Amortization expense recognized for the three and nine months ended September 30, 2022 related to costs to obtain a contract was $2.7 million and $7.7 million, respectively, and is included in operating expenses for the respective period.

Transaction Price Allocated to Future Performance Obligations

As of September 30, 2023, the total aggregate transaction price allocated to the unsatisfied performance obligations for subscription and support contracts was approximately $174.2 million, of which approximately $121.0 million is expected to be recognized over the next 12 months. The Company expects to recognize substantially all of the remaining unsatisfied performance obligations by September 2027.

 

4. Cash and Cash Equivalents

Cash and cash equivalents as of September 30, 2023 consist of the following:

 

 

 

September 30, 2023

 

Description

 

Contracted
Maturity

 

Cost

 

 

Fair Market
Value

 

 

 

(in thousands)

 

Cash

 

Demand

 

$

16,379

 

 

$

16,379

 

Money market funds

 

Demand

 

 

43

 

 

 

43

 

Total cash and cash equivalents

 

 

 

$

16,422

 

 

$

16,422

 

 

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Table of Contents

 

 

Cash and cash equivalents as of December 31, 2022 consist of the following:

 

 

 

December 31, 2022

 

Description

 

Contracted
Maturity

 

Cost

 

 

Fair Market
Value

 

 

 

(in thousands)

 

Cash

 

Demand