REVENUE FROM CONTRACTS WITH CUSTOMERS

3 Months Ended

Dec. 31, 2024

Revenue from Contract with Customer [Abstract]

REVENUE FROM CONTRACTS WITH CUSTOMERS

2.    REVENUE FROM CONTRACTS WITH CLIENTS

DSA

The DSA segment generates service revenue through drug discovery and development services. The DSA segment generates product revenue through internally-manufactured scientific instruments for life sciences research and the related software for use by pharmaceutical companies, universities, government research centers and medical research institutions under the Company’s BASi product line. Refer to Note 1 – Description of the Business and Basis of Presentation for further discussion of types of services and products offered within the DSA segment.

RMS

The RMS segment generates product revenue through the commercial production, procurement and sale of research models, diet, bedding and enrichment products and bioproducts. The RMS segment generates service revenue through Genetically Engineered Models and Services ("GEMS"), client-owned animal colony care, and health monitoring and diagnostics services related to research models. Refer to Note 1 – Description of the Business and Basis of Presentation for further discussion of types of services and products offered within the RMS segment.

Contract Assets and Liabilities from Contracts with Clients

The timing of revenue recognition, billings and cash collections results in billed receivables (trade receivables), contract assets (unbilled revenue), and contract liabilities (client deposits and deferred revenue) on the condensed consolidated balance sheets. The following table provides information about contract assets (trade receivables and unbilled revenue, excluding allowances for credit losses), and fees invoiced in advance (client deposits and deferred revenue):

	Balance at December 31, 2024		Balance at September 30, 2024
Contract assets: Trade receivables	$	61,255	$	65,867
Contract assets: Unbilled revenue	15,306		14,624
Contract liabilities: Client deposits	28,902		24,898
Contract liabilities: Deferred revenue	17,227		17,088

When the Company does not have the unconditional right to advanced billings, both advanced client payments and unpaid advanced client billings are excluded from deferred revenue, with the advanced billings also being excluded from client receivables. The Company excluded approximately $8,500 and $10,399 of unpaid advanced client billings from both client receivables and deferred revenue as of December 31, 2024 and September 30, 2024, respectively.

The Company expects approximately 80% of deferred revenue to be recognized as revenue within the next twelve months and the remainder to be recognized thereafter during the remaining contract term.

Changes in the contract asset and the contract liability balances during the three months ended December 31, 2024 include the following:

•Changes in the time frame for a right for consideration to become unconditional – approximately 50% of unbilled revenue as of September 30, 2024, was billed during the three months ended December 31, 2024; and

•Changes in the time frame for a performance obligation to be satisfied – approximately 50% of deferred revenue as of September 30, 2024, was recognized as revenue during the three months ended December 31, 2024.