REVENUE AND CONTRACT BALANCES

12 Months Ended

Oct. 01, 2022

Revenue from Contract with Customer [Abstract]

REVENUE AND CONTRACT BALANCES

REVENUE AND CONTRACT BALANCES

The Company recognizes revenue when we satisfy performance obligations as evidenced by the transfer of control of our products or services to customers. In general, the Company generates revenue from product sales, either directly to customers or to distributors. In determining whether a contract exists, we evaluate the terms of the agreement, the relationship with the customer or distributor and their ability to pay. Service revenue is generally recognized over time as the services are performed. For the fiscal years ended October 1, 2022, and October 2, 2021, service revenue is not material. Please refer to Note 1: Basis of Presentation- Revenue Recognition, for additional disclosure on the Company’s revenue recognition policy.

The Company reports revenue based on our reportable segments. The Company believes that reporting revenue on this basis provides information about how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors. Please refer to Note 16: Segment Information, for disclosure of revenue by segment.

Contract Balances

Our contract assets relate to our rights to consideration for revenue with collection dependent on events other than the passage of time, such as the achievement of specified payment milestones. The contract assets will be transferred to net account receivables as our right to consideration for these contract assets become unconditional. Contracts assets are reported in the accompanying Consolidated Balance Sheets within prepaid expenses and other current assets.

Our contract liabilities are primarily related to payments received in advance of satisfying performance obligations, and are reported in the accompanying Consolidated Balance Sheets within accrued expenses and other current liabilities.

Contract liabilities increase as a result of receiving new advance payments from customers and decrease as revenue is recognized from product sales under advance payment arrangements upon satisfying the performance obligations.

The following table shows the changes in contract asset balances during the fiscal years ended October 1, 2022 and October 2, 2021:

	Fiscal
(in thousands)	2022		2021
Contract assets, beginning of period	$	—	$	—
Additions	51,774		—
Transferred to accounts receivable or collected	(25,457)		—
Contract assets, end of period	$	26,317	$	—

The following table shows the changes in contract liability balances during the fiscal years ended October 1, 2022 and October 2, 2021:

	Fiscal
(in thousands)	2022		2021
Contract liabilities, beginning of period	$	15,596	$	2,958
Revenue recognized	(116,399)		(59,368)
Additions	103,963		72,006
Contract liabilities, end of period	$	3,160	$	15,596