Revenue

3 Months Ended

Dec. 31, 2023

Revenue from Contract with Customer [Abstract]

Revenue

Note 3. Revenue

The amount of revenue recognized as point in time or over time follows:

	Three Months Ended December 31, 2023						Three Months Ended December 31, 2022
	Aerospace		Industrial		Consolidated		Aerospace		Industrial		Consolidated
Point in time	$	188,503	$	186,630	$	375,133	$	169,840	$	139,839	$	309,679
Over time		272,253		139,344		411,597		225,845		83,095		308,940
Total net sales	$	460,756	$	325,974	$	786,730	$	395,685	$	222,934	$	618,619

Accounts Receivable

Accounts receivable consisted of the following:

	December 31, 2023			September 30, 2023
Billed receivables
Trade accounts receivable	$	426,598		$	434,287
Other (Chinese financial institutions)		57,098			50,940
Total billed receivables		483,696			485,227
Current unbilled receivables (contract assets)		300,146			270,479
Total accounts receivable		783,842			755,706
Less: Allowance for uncollectible amounts		(5,777	)		(5,847	)
Total accounts receivable, net	$	778,065		$	749,859

As of December 31, 2023, “Other assets” on the Condensed Consolidated Balance Sheets includes $6,945 of unbilled receivables not expected to be invoiced and collected within a period of twelve months, compared to $7,332 as of September 30, 2023.

Accounts receivable in Woodward’s Condensed Consolidated Financial Statements represent the net amount expected to be collected, and an allowance for uncollectible amounts related to credit losses is established based on expected losses. Expected losses are estimated by reviewing specific customer accounts, taking into consideration accounts receivable aging, credit risk of the customers, and historical payment history, as well as current and forecasted economic conditions and other relevant factors.

The allowance for uncollectible amounts and change in expected credit losses for trade accounts receivable and unbilled receivables (contract assets) consisted of the following:

	Three Months Ended December 31,
	2023			2022
Balance, beginning	$	5,847		$	3,922
Changes in estimates		298			344
Write-offs		(459	)		(83	)
Other1		91			20
Balance, ending	$	5,777		$	4,203

(1)Includes effects of foreign exchange rate changes during the period.

Contract liabilities

Contract liabilities consisted of the following:

	December 31, 2023				September 30, 2023
	Current		Noncurrent		Current		Noncurrent
Deferred revenue from material rights from GE joint venture formation	$	6,255	$	232,553	$	6,147	$	233,997
Deferred revenue from advanced invoicing and/or prepayments from customers		9,638		4,196		6,868		2,196
Liability related to customer supplied inventory		14,357		—		14,543		—
Deferred revenue from material rights related to engineering and development funding		6,872		183,190		6,190		178,464
Net contract liabilities	$	37,122	$	419,939	$	33,748	$	414,657

Woodward recognized revenue of $13,033 in the three months ended December 31, 2023 from contract liabilities balances recorded as of October 1, 2023, compared to $8,885 in the three months ended December 31, 2022 from contract liabilities balances recorded as of October 1, 2022.

Remaining performance obligations

Remaining performance obligations related to the aggregate amount of the total contract transaction price of firm orders for which the performance obligation has not yet been recognized in revenue as of December 31, 2023 was $2,435,837, compared to $2,325,533 as of September 30, 2023, the majority of which relates to Woodward’s Aerospace segment in both periods. Woodward expects to recognize almost all of these remaining performance obligations within two years after December 31, 2023.

Remaining performance obligations related to material rights that have not yet been recognized in revenue as of December 31, 2023 was $472,957, compared to $457,391 as of September 30, 2023, of which $8,865 is expected to be recognized in the remainder of fiscal year 2024, $13,291 is expected to be recognized in fiscal year 2025, and the remaining balance is expected to be recognized thereafter. Woodward expects to recognize revenue from performance obligations related to material rights over the life of the underlying programs, which may be as long as forty years.

Disaggregation of Revenue

Woodward designs, produces, and services reliable, efficient, low-emission, and high-performance energy control products for diverse applications in markets throughout the world. Woodward reports financial results for each of its Aerospace and Industrial reportable segments. Woodward further disaggregates its revenue from contracts with customers by primary market as Woodward believes this best depicts how the nature, amount, timing, and uncertainty of its revenue and cash flows are affected by economic factors.

Revenue by primary market for the Aerospace reportable segment was as follows:

	Three Months Ended December 31,
	2023		2022
Commercial OEM	$	171,354	$	138,875
Commercial aftermarket		137,544		126,643
Defense OEM		93,425		89,762
Defense aftermarket		58,433		40,405
Total Aerospace segment net sales	$	460,756	$	395,685

Revenue by primary market for the Industrial reportable segment was as follows:

	Three Months Ended December 31,
	2023		2022
Power generation	$	98,106	$	81,577
Transportation		174,469		88,915
Oil and gas		53,399		52,442
Total Industrial segment net sales	$	325,974	$	222,934

During fiscal year 2023, for purposes of how we assess performance, we determined that certain revenue was better aligned with our markets consisting of power generation, transportation, and oil and gas, rather than the reciprocating engines and industrial turbines, as previously reported. For comparability, we have reclassified revenue for the three months ended December 31, 2022 to conform to the new presentation. This reclassification of revenue had no impact on our consolidated financial results.

The customers who each account for approximately 10% or more of net sales of each of Woodward’s reportable segments are as follows:

	Three Months Ended December 31, 2023	Three Months Ended December 31, 2022
Aerospace	General Electric Company, RTX Corporation, The Boeing Company	RTX Corporation, General Electric Company, The Boeing Company
Industrial	Weichai Westport, Rolls-Royce PLC, Caterpillar, Inc.	Rolls-Royce PLC, Caterpillar, Inc., Wartsila, General Electric Company