Revenue from Contracts with Customers (Policies)

12 Months Ended

Jun. 30, 2023

Revenue from Contract with Customer [Abstract]

Revenue from Contract with Customer [Policy Text Block]

Revenue from Contracts with Customers

Contract Assets and Contract Liabilities

The contract assets are subject to credit risk and reviewed in accordance with ASC 326, Financial Instruments-Credit Losses. The Company monitors the credit quality of customer contract asset balances on an individual basis, at each reporting date, through credit characteristics, geographic location, and the industry in which they operate. The Company recognizes an impairment on contract assets if, subsequent to contract inception, it becomes probable payment is not collectible. An allowance for expected credit loss reflects losses expected over the remaining term of the contract asset and is determined based upon historical losses, customer-specific factors, and current economic conditions. The potential impact of credit losses on contract assets was immaterial as of June 30, 2023. The Company's contract assets and contract liabilities were as follows as of June 30, 2023 and 2022:

	June 30,
	2023		2022
	(Dollars in Thousands)
Contract assets	903,643		857,065
Contract liabilities	(181,553)		(164,408)
	$	722,090	$	692,657

The majority of the Company’s contract balances are related to arrangements where revenue is recognized at a point in time and payments are made according to a contractual billing schedule. The change in the net contract asset balance during

fiscal 2023 was primarily due to greater revenue recognition as compared to billings. Revenue recognized during fiscal 2023 included $113.8 million that was included in the beginning contract liability balance.

Contract Costs

The Company pays commissions for new product sales and implementation services as well as for renewals of existing contracts. Commissions paid to obtain renewal contracts are not commensurate with the commissions paid for new product sales or implementation services, and therefore, a portion of the commissions paid for new contracts and implementation services relate to future renewals and are therefore deferred and amortized over an estimated period of benefit of four years to eight years.

The Company accounts for new product sales commissions using a portfolio approach and allocates the cost of commissions in proportion to the allocation of transaction price of license and maintenance performance obligations, including assumed renewals. Commissions allocated to the license and license renewal components are expensed at the time the license revenue is recognized. Commissions allocated to maintenance are capitalized and amortized on a straight-line basis over a period of four years to eight years for new contracts, reflecting the Company's estimate of the expected period that they will benefit from those commissions.

Amortization of capitalized contract costs is included in selling and marketing expenses in the Company's statement of operations.

Transaction Price Allocated to Remaining Performance Obligations

The following table includes the aggregate amount of the transaction price allocated as of June 30, 2023 to the performance obligations that are unsatisfied (or partially unsatisfied) at the end of the reporting period:

	Year Ended June 30,
	2024		2025		2026		2027		2028		Thereafter		Total
	(Dollars in Thousands)
License and solutions	$	173,439	$	93,226	$	29,501	$	7,872	$	762	$	585	$	305,385
Maintenance	303,462		205,930		153,905		110,455		64,004		29,818		867,574
Services and other	79,903		17,743		10,519		3,802		2,251		2,456		116,674
Total	556,804		316,899		193,925		122,129		67,017		32,859		1,289,633

Disaggregated Revenue Information

The table below reflects disaggregated revenues by business for fiscal 2023, 2022 and 2021:

	Year Ended June 30, 2023		Nine Months Ended June 30, 2022		Year Ended September 30, 2021
	(Dollars in Thousands)
Heritage AspenTech	$	760,802	$	173,810	$	—
SSE	120,092		88,272		127,388
OSI Inc.	163,284		143,214		173,252
Total	$	1,044,178	$	405,296	$	300,640

The Company did not have any customer that accounted for 10 percent or more of the Company’s revenues for fiscal 2023, 2022 and 2021, respectively.