Revenue

6 Months Ended

Dec. 31, 2021

Revenue From Contract With Customer [Abstract]

Revenue

Note 3. Revenue

Contract Balances

The timing of revenue recognition, billings, and cash collections results in trade and unbilled receivables, and deferred revenues on the consolidated balance sheets. The Company may offer longer or extended payments of more than one year for qualified customers in some circumstances. At times, revenue recognition occurs before the billing, resulting in an unbilled receivable, which represents a contract asset. The contract asset is a component of accounts receivable and other assets for the current and non-current portions, respectively.

When the Company receives advances or deposits from customers before revenue is recognized, this results in a contract liability. It can take up to two and half years from the time of order to revenue recognition due to the Company’s long sales cycle.

Changes in the contract assets and contract liabilities are as follows:

	December 31, 2021		June 30, 2021
(Dollars in thousands)	Amount		Amount
Contract Assets:
Unbilled accounts receivable – current (1)	$	11,447	$	12,354
Interest receivable – current (2)		534		512
Long-term accounts receivable (3)		5,118		4,970
Interest receivable – non-current (3)		844		1,083
Contract Liabilities:
Customer advances		24,610		24,937
Deferred revenue – current		76,585		81,660
Deferred revenue – non-current		25,175		23,685

(1)Included in accounts receivable on the Company’s consolidated balance sheet

(2)Included in prepaid expenses and other current assets on the Company’s consolidated balance sheet

(3)Included in other assets on the Company’s consolidated balance sheet

During the quarter ended December 31, 2021, contract assets changed primarily due to changes in the timing of billings that occurred after revenues were recognized and changes in transactions with payment terms exceeding 12 months. Contract liabilities changed due to changes in the timing of recognition of revenue for system sales for which the warranty has not yet started and was deferred and due to changes in transaction price.

During the three and six months ended December 31, 2021, the Company recognized revenues of $22.3 million and $55.8 million, respectively, which were included in the deferred revenues balances at June 30, 2021.

During the three and six months ended December 31, 2020, the Company recognized revenues of $8.4 million and $17.2 million, respectively, which were included in the deferred revenues balances at June 30, 2020.

Remaining Performance Obligations

Remaining performance obligations represent deferred revenue from open contracts for which performance has already started and the transaction price from executed contracts for which performance has not yet started. Service contracts in general are considered month-to-month contracts.

As of December 31, 2021, total remaining performance obligations amounted to $1,102.7 million. Of this total amount, $70.5 million related to long-term warranty and service, such as non cancellable post contract services and system warranty, which is expected to be recognized over the remaining service period and warranty period for systems that have been delivered, respectively.

The following table represents the Company's remaining performance obligations related to long-term warranty and non cancellable post warranty services as of December 31, 2021 and the estimated revenue expected to be recognized (the time bands reflect management’s best estimate of when the Company will transfer control to the customer and may change based on timing of shipment, readiness of customers’ facilities for installation, installation requirements, and availability of products).

	Fiscal years of revenue recognition
(Dollars in thousands)	2022		2023		2024		Thereafter
Long-term warranty and service	$	16,584	$	25,674	$	15,130	$	13,149

For the remaining $1,032.2 million of performance obligations, the Company estimates 21% to 29% will be recognized in the next 12 months, and the remaining portion will be recognized thereafter. The Company’s historical experience indicates that some of its customers will cancel or renegotiate contracts as economic conditions change or when product offerings change during the long sales cycle. The Company anticipates a portion of its open contracts may never result in revenue recognition primarily due to the long sales cycle and factors outside of its control including changes in customers' needs or financial condition, changes in government or health insurance reimbursement policies or changes to regulatory requirements. Based on historical experience, approximately 23% of the Company’s $1,032.2 million open contracts may never result in revenue.

Capitalized Contract Costs

As of December 31, 2021 and June 30, 2021, the balance of capitalized costs to obtain a contract was $10.3 million and $8.9 million, respectively. The Company has classified the capitalized costs to obtain a contract as a component of prepaid expenses and other current assets and other assets with respect to the current and non-current portions of capitalized costs, respectively, on the consolidated balance sheets. The Company incurred impairment losses of $0.2 million and $0.3 million, respectively, in the three and six month periods ended December 31, 2021 and $0.2 million and $0.3 million, respectively, in the three and six month periods ended December 31, 2020, respectively. During the three and six months period ended December 31, 2021, the Company recognized $0.9 million and $1.8 million, respectively in expense related to the amortization of the capitalized contract costs. During the three and six months ended December 31, 2020, the Company recognized $0.6 million and $1.2 million, respectively, in expense related to the amortization of the capitalized contract costs.