On July 1, 2018, the Company adopted ASC 606 electing the modified retrospective method for contracts that were still open as of July 1, 2018. Results for reporting periods after July 1, 2018 are presented under ASC 606, while prior period amounts are not adjusted and continue to be reported in accordance with legacy accounting guidance under ASC 605.

The beginning net cumulative-effect adjustment to retained earnings for the adoption of ASC 606 is as follows:

							Balance as
	Balance at			Adjustment Due to			Reported at
(Dollars in thousands)	July 1, 2018			ASC 606			June 30, 2018
Assets:
Account receivable, net	$	66,251		$	257		$	65,994
Deferred cost of revenue - current		677			(464	)		1,141
Prepaid expenses and other current assets		16,239			670			15,569
Other assets		17,416			5,840			11,576
Liabilities and Stockholders' Equity:
Other accrued liabilities		23,059			611			22,448
Deferred revenue - current		75,515			111			75,404
Long-term other liabilities		9,075			467			8,608
Accumulated deficit		(469,171	)		5,114			(474,285	)

Select unaudited condensed consolidated balance sheets line items, which reflect the adoption of ASC 606 are as follows:

	March 31, 2019
(Dollars in thousands)	As Reported			Adjustments			Balances Without Adoption
Assets:
Account receivable, net	$	99,774		$	5,698		$	94,076
Deferred cost of revenue - current		157			(7,301	)		7,458
Prepaid expenses and other current assets		21,452			2,262			19,190
Other assets		16,180			6,666			9,514
Liabilities and Stockholders' Equity:
Other accrued liabilities		26,945			760			26,185
Deferred revenue - current		78,833			(8,553	)		87,386
Long-term other liabilities		8,168			1,857			6,311
Accumulated deficit		(484,140	)		13,261			(497,401	)

Select unaudited condensed consolidated statements of operations and comprehensive loss line items for the three and nine months ended March 31, 2019, which reflect the adoption of ASC 606 are as follows:

	Three Months Ended March 31, 2019								Nine Months Ended March 31, 2019
(Dollars in thousands)	As Reported			Adjustments			Balances Without Adoption		As Reported			Adjustments			Balances Without Adoption
Net revenue	$	103,221		$	(10,491	)	$	113,712	$	301,368		$	13,352		$	288,016
Cost of goods sold		62,755			(5,101	)		67,856		184,643			6,605			178,038
Other expense, net		3,829			(190	)		4,019		11,133			(449	)		11,582
Research and development		12,913			(43	)		12,956		40,442			(179	)		40,621
Selling and marketing		12,903			(98	)		13,001		41,078			(557	)		41,635
General and administrative		11,769			(94	)		11,863		37,880			(383	)		38,263
Provision for income taxes		236			198			38		1,222			168			1,054
Net loss		(1,184	)		(5,163	)		3,979		(15,030	)		8,147			(23,177	)
Net loss per share - basic and diluted	$	(0.01	)	$	(0.06	)	$	0.05	$	(0.17	)	$	0.09		$	(0.27	)

The adoption of ASC 606 had no impact to net cash from or used in operating, investing or financing activities in the Company's unaudited condensed consolidated statements of cash flows.

The timing of revenue recognition, billings, and cash collections results in trade, unbilled receivables, and deferred revenues on the unaudited condensed consolidated statement of 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.

	March 31, 2019		July 1, 2018		Change
(Dollars in thousands)	Amount		Amount		$			%
Assets:
Unbilled accounts receivable – current (1)	$	8,016	$	3,218		4,798			60
Interest receivable – current (2)		239		—		239			100
Long-term accounts receivable (3)		3,949		6,833		(2,884	)		(73	)
Interest receivable – non-current (3)		1,232		611		621			50
Liabilities:
Customer advances		22,822		22,896		(74	)		—
Deferred revenue – current		78,833		75,515		3,318			4
Deferred revenue – non-current		23,291		20,976		2,315			10

(1)

Included in accounts receivable on consolidated balance sheets

(2)

Included in prepaid expenses and other current assets on consolidated balance sheets

(3)

Included in other assets on consolidated balance sheets

	Three Months Ended			Nine Months Ended
(Dollars in thousands)	March 31, 2019			March 31, 2019
Balance at beginning of period	$	96,132		$	96,491
New billings		109,213			307,001
Recognition of deferred revenue		(103,221	)		(301,368	)
Balance at end of period	$	102,124		$	102,124

During the three months ended March 31, 2019, the Company recognized revenues of $14.7 million, which were included in the deferred revenues balance at December 31, 2018. During the nine months ended March 31, 2019, the Company recognized revenues of $57.8 million, which were included in the deferred revenues balance at June 31, 2018.

Remaining performance obligations represent deferred revenue from open contracts for which performance has already started and the transaction price from signed contracts for which performance has not yet started. Service contracts in general are considered month-to-month contracts, and the Company has elected the practical expedient available in the guidance related to ASC 606, to not disclose the value of unsatisfied performance obligations for contracts with an original expected duration of one year or less.

As of March 31, 2019, total remaining performance obligations amounted to $830.1 million. Of this total amount, $72.0 million related to long-term warranty and service, which is expected to be recognized over the remaining warranty period for systems that have been delivered. For systems that have been delivered but not yet installed, management estimates the timing of installation since warranty starts upon installation.

The following table represents the Company's remaining performance obligations related to long-term warranty and service as of March 31, 2019 and the estimated revenue expected to be recognized:

For the remaining $758.1 million of performance obligations, the Company estimates 25% to 35% will be recognized in the next 12 months, and the remaining 65% to 75% will be recognized in the 30 months 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. As such, about 15% to 25% of the Company’s contracts may never result in revenue due to cancellation.

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 capitalizes and amortizes the incremental costs of obtaining a contract, primarily related to certain bonuses and sales commissions. The capitalized bonuses and sales commissions are amortized over a period of five years commencing upon the initial transfer of control of the system to the customer. The pattern of amortization is commensurate with the pattern of transfer of control of the performance obligations to the customer.

The opening balance of capitalized costs to obtain a contract was $5.9 million as of July 1, 2018. As of March 31, 2019, the balance of capitalized costs to obtain a contract was $7.3 million. 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 a de minimis impairment loss for the periods presented. During the three and nine months ended March 31, 2019, the Company recognized $0.5 million and $1.8 million, respectively, in expense related to the amortization of the capitalized contract costs.