Revenue

3 Months Ended

Mar. 31, 2024

Revenue from Contract with Customer [Abstract]

Revenue

Note 9 – Revenue

The Company’s revenues are generated primarily from its manufacturing services, which entails the sale of manufactured products built to customer specifications. The Company also generates revenue from design, development and engineering services, in addition to the sale of other inventory.

Revenue is measured based on the consideration specified in a contract with a customer. The Company recognizes revenue when it satisfies a performance obligation by transferring control over a manufactured product to a customer. The Company’s contracts with customers are generally short-term in nature. Customers are generally billed when the product is shipped or as services are performed. Under the majority of the Company’s manufacturing contracts with customers, the customer controls all of the work-in-progress as products are being built. Revenues under these contracts are recognized progressively based on the cost-to-cost method. For other manufacturing contracts, the customer does not take control of the product until it is completed. Under these contracts, the Company recognizes revenue upon transfer of control of the product to the customer, which is generally when goods are shipped. Revenue from design, development and engineering services is recognized over time as the services are performed. The Company assumes no significant obligations after shipment as it typically warrants workmanship only. Therefore, the warranty provisions are generally not significant.

If the Company records revenue, but does not issue an invoice, a contract asset is recognized. The contract asset is transferred to trade accounts receivable when the entitlement to payment becomes unconditional.

Taxes assessed by governmental authorities that are imposed on and concurrent with a specific revenue-producing transaction and collected by the Company from a customer, are excluded from revenue.

Shipping and handling costs associated with outbound freight after control over a product has transferred to a customer are accounted for as fulfillment costs and are included in cost of sales.

Disaggregation of Revenue

The following tables provide a summary of the Company’s revenue disaggregated by market sector and a reconciliation of the disaggregated revenue to the Company’s revenue by reportable operating segment:

	Three Months Ended March 31, 2024
(in thousands)	Americas		Asia		Europe		Total
Market sector:
Semi-Cap	$	53,658	$	81,899	$	30,382	$	165,939
Complex Industrials		29,650		84,211		27,171		141,032
Medical		61,863		42,226		10,638		114,727
A&D		86,863		9,122		9,849		105,834
Advanced Computing		83,184		7,345		—		90,529
Next-Generation Communications		33,448		24,049		17		57,514
External revenue		348,666		248,852		78,057		675,575
Elimination of intersegment sales		23,663		8,964		2,439		35,066
Segment revenue	$	372,329	$	257,816	$	80,496	$	710,641

	Three Months Ended March 31, 2023
(in thousands)	Americas		Asia		Europe		Total
Market sector:
Semi-Cap	$	60,949	$	64,737	$	22,783	$	148,469
Complex Industrials		29,048		80,052		34,426		143,526
Medical		68,282		54,158		14,609		137,049
A&D		66,302		7,923		5,190		79,415
Advanced Computing		88,604		7,394		—		95,998
Next-Generation Communications		51,389		38,803		46		90,238
External revenue		364,574		253,067		77,054		694,695
Elimination of intersegment sales		32,633		14,976		801		48,410
Segment revenue	$	397,207	$	268,043	$	77,855	$	743,105

The timing of revenue recognition, billings and cash collections results in billed accounts receivable, contract assets and advance payments from customers. During the three months ended March 31, 2024 and 2023, 85.3% and 87.9%, respectively, of the Company’s revenue was recognized as products and services that were transferred over time.

Contract assets primarily relate to the Company’s right to consideration for work completed but not billed to the customer as of period end. Contract asset balances are transferred to trade accounts receivable when the rights become unconditional.

A summary of activity related to the Company’s contract assets follows:

	Three Months Ended March 31,
(in thousands)	2024			2023
Balance as of the beginning of the year	$	174,979		$	183,613
Revenue recognized		577,000			630,774
Amounts collected or invoiced		(571,165	)		(620,253	)
Balance as of the end of the period	$	180,814		$	194,134

As of March 31, 2024 and December 31, 2023, the Company had $189.2 million and $204.9 million, respectively, in advance payments from customers. Of those amounts, $176.2 million and $191.6 million, respectively, were customer deposits and prepayments of inventory and $13.0 million and $13.3 million, respectively, were related to the contractual timing of payments. The advance payments are not considered a significant financing component because they are used to meet working capital demands of a contract, offset inventory risks and protect the Company from the failure of other parties to fulfill obligations under a contract.