Company: SERV
Filing Date: 2025-05-08
Form Type: 10-Q
Source: 0001832483-25-000038
Chunk: 63

Company: Serve Robotics Inc. /DE/
Filing Date: 2025-05-08
Form: 10-Q
Item: Part I, Item 8
Chunk 63
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, if factors change and management uses different assumptions, stock-based compensation expense could be materially different for future awards.

9

Revenue RecognitionThe Company accounts for revenue under ASC 606 – Revenue from Contracts with Customers. The Company determines revenue recognition through the following steps:•Identification of a contract with a customer;•Identification of the performance obligations in the contract;•Determination of the transaction price;•Allocation of the transaction price to the performance obligations in the contract; and•Recognition of revenue when or as the performance obligations are satisfied.Revenue is recognized when control of the promised goods or services is transferred to customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. As a practical expedient, the Company does not adjust the transaction price for the effects of a significant financing component if, at contract inception, the period between customer payment and the transfer of goods or services is expected to be one year or less.The Company recognizes revenue on its fleet services when the performance obligation is satisfied. The fleet performs delivery services and branding services. The company's performance obligation on a delivery is satisfied when the delivery is complete, which is the point in time control of the delivered product transfers to the customer. The company's performance obligation on branding services is to continually promote a brand over the duration of the contractual term, which is typically less than one year. The Company primarily recognizes revenue in the amount that it has the right to invoice as advertising services are rendered.The Company recognizes revenue on its software services over time based on the contract term. The Company determines measurable performance obligations, which are assessed on a contract by contract basis.  The Company develops certain measures to estimate the progress of the performance obligation at each reporting period end. Software service fees that have been invoiced or paid but performance obligations have not been met are recorded as deferred revenue. As of March 31, 2025, the Company had no deferred revenue pertaining to software services.Disaggregation of RevenueThe disaggregation of revenue is as follows: Three Months Ended March 31, 20252024Software services$228,847 $851,101 Fleet services211,618 95,610  $440,465 $946,711 Cost of RevenueCost of revenue consists primarily of allocations of depreciation on robot assets used for revenue producing activities, personnel time related to revenue-producing activities, and costs related to data, software and similar costs that allow the robots to function as intended and for the Company to communicate with the robots while