Revenue Recognition and Contract Assets and Liabilities | Revenue Recognition, and Contract Assets and Liabilities Disaggregation of Revenue The following table presents revenue by major product and service, as well as by primary geographical market, based on the location of the customer: Three Months Ended June 30, (In thousands) 2022 2021 Renewable Products Licenses and Royalties Collaborations, Grants and Other Total Renewable Products Licenses and Royalties Collaborations, Grants and Other Total North America $ 39,963 $ — $ 1,244 $ 41,207 $ 30,123 $ 11,000 $ — $ 41,123 Europe 6,338 6,454 2,927 15,719 2,500 — 2,903 5,403 Asia 5,171 — 192 5,363 3,929 — 1,241 5,170 South America 2,094 — — 2,094 332 — — 332 Other 824 — — 824 288 — — 288 $ 54,390 $ 6,454 $ 4,363 $ 65,207 $ 37,172 $ 11,000 $ 4,144 $ 52,316 Six Months Ended June 30, (In thousands) 2022 2021 Renewable Products Licenses and Royalties Collaborations, Grants and Other Total Renewable Products Licenses and Royalties Collaborations, Grants and Other Total North America $ 72,919 $ 433 $ 2,720 $ 76,072 $ 50,175 $ 11,000 $ 250 $ 61,425 Europe 13,627 15,334 6,190 35,151 5,472 143,800 5,250 154,522 Asia 6,659 — 384 7,043 8,334 — 3,524 11,858 South America 3,113 — — 3,113 789 — — 789 Other 1,537 — — 1,537 581 — — 581 $ 97,855 $ 15,767 $ 9,294 $ 122,916 $ 65,351 $ 154,800 $ 9,024 $ 229,175 The following table presents revenue by major product and service, as well as by management classification: Three Months Ended June 30, (In thousands) 2022 2021 Renewable Products Licenses and Royalties Grants, Collaborations and Other Total Renewable Products Licenses and Royalties Grants, Collaborations and Other Total Consumer $ 42,219 $ 5 $ 749 $ 42,973 $ 20,695 $ — $ — $ 20,695 Technology access 12,171 6,449 3,614 22,234 16,477 11,000 4,144 31,621 $ 54,390 $ 6,454 $ 4,363 $ 65,207 $ 37,172 $ 11,000 $ 4,144 $ 52,316 Six Months Ended June 30, (In thousands) 2022 2021 Renewable Products Licenses and Royalties Grants, Collaborations and Other Total Renewable Products Licenses and Royalties Grants, Collaborations and Other Total Consumer $ 74,861 $ 438 $ 2,225 $ 77,524 $ 36,347 $ — $ — $ 36,347 Technology access 22,994 15,329 7,069 45,392 29,004 154,800 9,024 192,828 $ 97,855 $ 15,767 $ 9,294 $ 122,916 $ 65,351 $ 154,800 $ 9,024 $ 229,175 Significant Revenue Agreements and Customers In connection with the significant revenue agreements discussed below and others previously disclosed (see Note 10, “Revenue Recognition” in Part II, Item 8 of the 2021 Form 10-K), the Company recognized the following revenue: Three Months Ended June 30, (In thousands) 2022 2021 Renewable Products Licenses and Royalties Collaborations, Grants and Other Total Renewable Products Licenses and Royalties Collaborations, Grants and Other Total Sephora $ 10,092 $ — $ — $ 10,092 $ 8,078 $ — $ — $ 8,078 DSM - related party 2,965 6,454 2,000 11,419 4,620 — 2,000 6,620 Ingredion / PureCircle 1,197 — — 1,197 2,253 10,000 — 12,253 Subtotal revenue from significant revenue agreements 14,254 6,454 2,000 22,708 14,951 10,000 2,000 26,951 Revenue from all other customers 40,136 — 2,363 42,499 22,221 1,000 2,144 25,365 Total revenue from all customers $ 54,390 $ 6,454 $ 4,363 $ 65,207 $ 37,172 $ 11,000 $ 4,144 $ 52,316 Six Months Ended June 30, (In thousands) 2022 2021 Renewable Products Licenses and Royalties Collaborations, Grants and Other Total Renewable Products Licenses and Royalties Collaborations, Grants and Other Total Sephora $ 17,725 $ — $ — $ 17,725 $ 12,519 $ — $ — $ 12,519 DSM - related party 7,377 15,270 4,000 26,647 6,281 143,612 4,000 153,893 Ingredion / PureCircle 2,748 — — 2,748 2,253 10,000 — 12,253 Subtotal revenue from significant revenue agreements 27,850 15,270 4,000 47,120 21,053 153,612 4,000 178,665 Revenue from all other customers 70,005 497 5,294 75,796 44,298 1,188 5,024 50,510 Total revenue from all customers $ 97,855 $ 15,767 $ 9,294 $ 122,916 $ 65,351 $ 154,800 $ 9,024 $ 229,175 DSM Ingredients Collaboration Pursuant to the September 2017 research and development collaboration agreement, as amended, the Company provides DSM with research and development services for specific field of use ingredients. The Company concluded the amended agreement contained a single performance obligation to provide research and development services delivered over time and that revenue recognition is based on an input measure of progress as labor hours are expended each quarter. DSM funds the development work with $2.0 million quarterly from January 1, 2022 to June 30, 2022 for services focused on achieving certain fermentation yield and cost targets related to certain molecules. During the three and six months ended June 30, 2022, the Company recognized $2.0 million and $4.0 million of collaboration revenue in connection with the agreement. DSM License Agreement and Contract Assignment In March 2021 the Company and DSM entered into a license agreement and asset purchase agreement pursuant to which DSM acquired exclusive rights to the Company’s Flavor and Fragrance (F&F) product portfolio. The Company granted DSM exclusive licenses covering specific intellectual property of the Company and assigned the Company’s rights and obligations under certain F&F ingredients supply agreements to DSM, in exchange for non-refundable upfront consideration totaling $150 million, and up to $235 million of contingent consideration if and when certain commercial milestones are achieved in each of the calendar years 2022 through 2024. The Company determined the licenses to be functional intellectual property and allocated $143.6 million of the transaction price to the licenses and recorded $143.6 million of licenses and royalties revenues in the three-months ended March 31, 2021. The Company also concluded the additional contingent consideration represents variable consideration that is subject to a sales/usage-based threshold and is dependent up on the IP License. The Company is required to apply the royalty recognition constrain guidance in ASC 606-10-55-65 and will recognize revenue at the later of (1) when the underlying sales or usage has occurred and (2) the related performance obligation has been satisfied (or partially satisfied). During the three and six months ended June 30, 2022, the Company recorded $6.5 million and $15.3 million, respectively, of license and royalties revenue and a corresponding contract asset under the contingent consideration provisions of the agreements. Contract Assets and Liabilities When a contract results i n revenue being recognized in excess of the amount the Company has invoiced or has the right to invoice to the customer, a contract asset is recognized. Contract assets are transferred to accounts receivable, net when the rights to the consideration become unconditional. Contract liabilities consist of payments received from customers, or such consideration that is contractually due, in advance of providing the product or performing services such that control has not passed to the customer. Trade receivables related to revenue from contracts with customers are included in accounts receivable on the condensed consolidated balance sheets, net of the allowance for doubtful accounts. Trade receivables are recorded for the sale of goods or the performance of services at the point of renewable product sale or in accordance with the contractual payment terms for licenses and royalties, and grants and collaborative research and development services for the amount payable by the customer to the Company. Contract Balances The following table provides information about accounts receivable, contract assets and contract liabilities from contracts with customers: (In thousands) June 30, 2022 December 31, 2021 Accounts receivable, net $ 41,125 $ 37,074 Accounts receivable - related party, net $ 5,001 $ 5,667 Contract assets $ 3,946 $ 4,227 Contract assets - related party $ 15,265 $ — Contract liabilities $ 816 $ 2,530 Contract liabilities, noncurrent (1) $ — $ 111 (1) As of June 30, 2022 and December 31, 2021, contract liabilities, noncurrent is presented in Other noncurrent liabilities in the condensed consolidated balance sheets. Remaining Performance Obligations The following table provides information regarding the estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) based on the Company's existing agreements with customers as of June 30, 2022. (In thousands) As of June 30, 2022 Remaining 2022 $ 526 2023 143 2024 143 2025 143 2026 and thereafter 143 Total from all customers $ 1,098 In accordance with the disclosure provisions of ASC 606, the table above excludes estimated future revenues for performance obligations that are part of a contract that has an original expected duration of one year or less or a performance obligation with variable consideration that is recognized using the sales-based royalty exception for licenses of intellectual property. |