Revenue

9 Months Ended

Mar. 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:

	March 31, 2021		June 30, 2020
(Dollars in thousands)	Amount		Amount
Contract Assets:
Unbilled accounts receivable – current (1)	$	10,589	$	11,739
Interest receivable – current (2)		569		493
Long-term accounts receivable (3)		3,286		3,810
Interest receivable – non-current (3)		1,110		1,342
Contract Liabilities:
Customer advances		23,231		22,571
Deferred revenue – current		80,677		83,207
Deferred revenue – non-current		23,212		24,125

(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 March 31, 2021, contract assets changed primarily due 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 months ended March 31, 2021 and 2020, the Company recognized revenues of $6.5 million, and $11.3 million, which were included in the deferred revenues balances at December 31, 2020 and 2019, respectively. During the nine months ended March 31, 2021 and 2020, the Company recognized revenues of $23.7 million, and $38.2 million, respectively, which were included in the deferred revenue balances at June 30, 2020 and 2019, 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 and non-cancellable contracts for which performance has not yet started. Service contracts in general are considered month-to-month contracts, and therefore, the Company has elected the practical expedient 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, 2021, total remaining performance obligations amounted to $1,041.8 million. Of this total amount, $75.4 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 and installed. 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, 2021 and the estimated revenue expected to be recognized:

	Fiscal years of revenue recognition
(Dollars in thousands)	2021		2022		2023		Thereafter
Long-term warranty and service	$	9,675	$	31,617	$	19,740	$	14,420

For the remaining $966.4 million of performance obligations, the Company estimates 17% to 23% will be recognized in the next 12 months, and the remaining portion 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. Based on historical cancellations, approximately 23% 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.

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 following the pattern of transfer of control of the performance obligations to the customer. The contract acquisition costs asset is evaluated for recoverability and impairment on an ongoing basis.

The balance of capitalized costs to obtain a contract was $7.8 million and $7.9 million as of March 31, 2021 and June 30, 2020, 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 $0.5 million in the three and nine month periods ended March 31, 2021 and $0.5 and $0.7 million in the three and nine month periods ended March 31, 2020. During the three and nine months ended March 31, 2021, the Company recognized $0.8 million and $2.0 million, respectively, in expense related to the amortization of the capitalized contract costs. During the three and nine months ended March 31, 2020, the Company recognized $0.7 million and $1.7 million, respectively, in expense related to the amortization of the capitalized contract costs.