Revenue

12 Months Ended

Jun. 30, 2023

Revenue from Contract with Customer [Abstract]

Revenue

Note 2. Revenue

Contract Balances

The timing of revenue recognition, billings, and cash collections results in trade receivables, 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 two or more 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 (dollars in thousands):

					Change
	June 30, 2023		June 30, 2022		$			%
Assets:
Unbilled accounts receivable – current (1)	$	9,847	$	13,325		(3,478	)		(26	)
Interest receivable – current (2)		379		493		(114	)		(23	)
Long-term accounts receivable (3)		4,734		5,301		(567	)		(11	)
Interest receivable – non-current (3)		673		683		(10	)		(1	)
Liabilities:
Customer advances		20,777		25,290		(4,513	)		(18	)
Deferred revenue – current		72,185		75,375		(3,190	)		(4	)
Deferred revenue – non-current		27,079		24,694		2,385			10

(1)Included in accounts receivable on the consolidated balance sheets

(2)Included in prepaid expenses and other current assets on the consolidated balance sheets

(3)Included in other assets on the consolidated balance sheets

During the year ended June 30, 2023, contract assets changed primarily due to the timing of billings that occurred after revenues were recognized, and changes in transactions with payment terms exceeding 12 months. During the year ended June 30, 2023, contract liabilities changed due to the timing of revenue recognition as a result of changes in shipping timing, transaction price, reduced customer deposits for system sales, and for which the warranty was deferred.

During the years ended June 30, 2023 and June 30, 2022, the Company recognized revenues of $84.9 million and $81.2 million, respectively, which were included in the deferred revenue balances at June 30, 2022 and June 30, 2021, respectively.

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 June 30, 2023, total remaining performance obligations amounted to $1,061.7 million. Of this total amount, $72.2 million related to long-term warranty and non-cancellable post-warranty services, which is the estimated revenue expected to be recognized over the remaining service period and warranty period for systems that have been delivered (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). The Company has elected the practical expedient to not disclose the unsatisfied performance obligations of contracts with an original expected duration of one year or less.

The following table represents the Company's expected revenue recognition based on the remaining performance obligations related to long-term warranty and non-cancellable post-warranty services as of June 30, 2023 (in thousands):

	Fiscal years
	2024		2025		2026		Thereafter
Long-term warranty and service	$	29,796	$	21,962	$	13,127	$	7,358

For the remaining $989.5 million of performance obligations (open systems sales, upgrades, training and other miscellaneous items), the Company estimates 27% to 30% 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 and management's best estimate, approximately 20% of the Company’s $939.8 million open system sales contracts may never result in revenue.

Capitalized Contract Costs

As of June 30, 2023, and 2022, the balance of capitalized costs to obtain a contract was $11.0 million and $11.4 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 recognized expenses related to the amortization of capitalized contract costs of $3.6 million, $3.3 million and $2.8 million, during the years ended June 30, 2023, 2022 and 2021, respectively. The Company incurred impairment losses related to capitalized contract costs of $0.8 million, $0.6 million and $0.6 million for the years ended June 30, 2023, 2022 and 2021, respectively.