Revenue

3 Months Ended

Sep. 30, 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:

	September 30, 2021		June 30, 2021
(Dollars in thousands)	Amount		Amount
Contract Assets:
Unbilled accounts receivable – current (1)	$	11,255	$	12,354
Interest receivable – current (2)		565		512
Long-term accounts receivable (3)		4,854		4,970
Interest receivable – non-current (3)		954		1,083
Contract Liabilities:
Customer advances		22,828		24,937
Deferred revenue – current		78,890		81,660
Deferred revenue – non-current		23,828		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 September 30, 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 September 30, 2021 and 2020, the Company recognized revenues of $33.5 million, and $8.8 million, respectively, which were included in the deferred revenues balances at June 30, 2021 and 2020, 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.

As of September 30, 2021, total remaining performance obligations amounted to $1,091.0 million. Of this total amount, $73.7 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 contract services as of September 30, 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	$	25,128	$	24,587	$	12,635	$	11,314

For the remaining $1,017.3 million of performance obligations, the Company estimates 20% 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 cancellations, approximately 26% of the Company’s $1,017.3 million open contracts may never result in revenue due to cancellation.

Capitalized Contract Costs

As of September 30, 2021 and June 30, 2021, the balance of capitalized costs to obtain a contract was $9.6 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. During the three months period ended September 30, 2021 and 2020, the Company recognized $0.9 million and $0.7 million, respectively in expense related to the amortization of the capitalized contract costs. Included in the amortization expense, the Company booked $0.1 million in impairment loss for both of the three months periods ended September 30, 2021 and 2020, respectively.