Revenue

12 Months Ended

Jun. 30, 2020

Revenue From Contract With Customer [Abstract]

Revenue

Note 3. Revenue

Contract Balances

The timing of revenue recognition, billings, and cash collections results in trade, 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:

	June 30, 2020		June 30, 2019
(Dollars in thousands)	Amount		Amount
Assets:
Unbilled accounts receivable – current (1)	$	11,739	$	5,260
Interest receivable – current (2)		493		361
Long-term accounts receivable (3)		3,810		4,116
Interest receivable – non-current (3)		1,342		1,255
Liabilities:
Customer advances		22,571		20,395
Deferred revenue – current		83,207		78,332
Deferred revenue – non-current		24,125		26,639

(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

During the years ended June 30, 2020 and June 30, 2019, the Company recognized revenues of $87.7 million and $78.6 million, respectively, which were included in the deferred revenue balances at June 30, 2019 and June 30, 2018, 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 non-cancelable 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 to not disclose the unsatisfied performance obligations for contracts with an original expected duration of one year or less.

As of June 30, 2020, total remaining performance obligations amounted to $976.3 million. Of this total amount, $78.5 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 June 30, 2020 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)	2021		2022		2023		Thereafter
Long-term warranty and service	$	35,223	$	23,957	$	9,833	$	9,470

For the remaining $897.8 million of performance obligations, the Company estimates 21% to 28% 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. Based on historical experience approximately 21% of the Company’s open contracts may never result in revenue due to cancellation.

Capitalized Contract Costs

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.

As of June 30, 2020 and 2019, the balance of capitalized costs to obtain a contract was $7.9 million and $8.4 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 incurred a $1.2 million and $0.5 million impairment loss for the years ended June 30, 2020 and 2019, respectively. During the years ended June 30, 2020 and 2019 the Company recognized $1.9 million and $2.2 million, respectively, in expense related to the amortization of the capitalized contract costs.