REVENUE AND MAJOR CUSTOMERS

12 Months Ended

Mar. 28, 2020

REVENUE AND MAJOR CUSTOMERS [Abstract]

REVENUE AND MAJOR CUSTOMERS

EVENUE AND MAJOR CUSTOMERS

The Company designs, manufactures, markets, and sells integrated communications and collaboration solutions that span headsets, Open SIP desktop phones, audio and video conferencing, cloud management and analytics software solutions, and services.

Major product categories are Headsets, which includes corded and cordless communication headsets; Voice, Video, and Content Sharing Solutions, which includes open SIP desktop phones, conference room phones, and video endpoints, including cameras, speakers, and microphones. All of Company's solutions are designed to work in a wide range of Unified Communications & Collaboration ("UC&C"), Unified Communication as a Service ("UCaaS"), and Video as a Service ("VaaS") environments. The Company's RealPresence collaboration solutions range from infrastructure to endpoints and allow people to connect and collaborate globally, naturally and seamlessly. In addition, the Company offers comprehensive Support Services including support for its solutions and hardware devices, as well as professional, hosted, and managed services. As announced on February 4, 2020, the Company entered into a definitive agreement with Nacon S.A. and closed the transaction on March 19, 2020, completing the sale of the Company's Consumer Gaming assets for a net amount and resulting pre-tax gain on sale that are not material to the Company's consolidated financial statements.

Product revenue is largely comprised of sales of hardware devices, peripherals, and platform software licenses used in communication and collaboration in offices and contact centers, with mobile devices, cordless phones, and with computers and gaming consoles. Services revenue primarily includes support on hardware devices, professional, hosted and managed services, and solutions to the Company's customers.

The following table disaggregates revenues by major product category for the Fiscal Years ended March 28, 2020, March 30, 2019, and March 31, 2018:

	Fiscal Year Ended
(in thousands)	March 28, 2020		March 30, 2019		March 31, 2018
Net revenues from unaffiliated customers:
Headsets 1	$	773,186	$	910,699	$	856,903
Voice2	377,059		344,586		—
Video2	282,491		255,485		—
Services2	264,254		163,765		—
Total net revenues	$	1,696,990	$	1,674,535	$	856,903

¹As announced on February 4, 2020, the Company entered into a definitive agreement with Nacon S.A. and closed the transaction on March 19, 2020, completing the sale of the Company's Consumer Gaming assets for a net amount that is not material to the Company's consolidated financial statements. The remaining consumer headsets are included in the Company's Enterprise products and all prior periods have been reclassified to conform to current presentation.

²Categories were introduced with the Acquisition of Polycom on July 2, 2018, and amounts are presented net of purchase accounting adjustments. Refer to Note 4, Acquisition, of the accompanying Notes of Consolidated Financial Statements for additional information regarding this acquisition.

For reporting purposes, revenue is attributed to each geographic region based on the location of the customer. Other than the U.S., no country accounted for 10% or more of the Company's net revenues for the Fiscal Years ended March 28, 2020, March 30, 2019, and March 31, 2018.

The following table presents net revenues by geography:

	Fiscal Year Ended
(in thousands)	March 28, 2020		March 30, 2019		March 31, 2018
Products
Net revenues from unaffiliated customers:
U.S.	$	708,566	$	729,930	$	434,053
Europe and Africa	398,721		432,899		250,762
Asia Pacific	221,912		245,499		99,779
Americas, excluding U.S.	103,537		102,442		72,309
Total International net revenues	724,170		780,840		422,850
Product net revenues	1,432,736		1,510,770		856,903
Services
Net revenues from unaffiliated customers:
U.S.	$	102,103	$	59,615	$	—
Europe and Africa	66,900		43,991		—
Asia Pacific	73,424		43,382		—
Americas, excluding U.S.	21,827		16,777		—
Total International net revenues	162,151		104,150		—
Service net revenues	$	264,254	$	163,765	$	—
Total net revenues	$	1,696,990	$	1,674,535	$	856,903

Two customers, ScanSource and Ingram Micro Group, accounted for 19.8% and 17.3%, respectively, of net revenues for the Fiscal Year ended March 28, 2020. Two customers, ScanSource and Ingram Micro Group, accounted for 16.0% and 11.4%, respectively, of net revenues for the Fiscal Year ended March 30, 2019. One customer, Ingram Micro Group, accounted for 10.9% of net revenues in Fiscal Year ended March 31, 2018. Net revenues from ScanSource and Ingram Micro Group was comprised of both Product and Service revenue for the Fiscal Years ended March 28, 2020 and March 30, 2019.

Three customers, Ingram Micro Group, ScanSource, and Synnex Group accounted for 22.2%, 17.3%, and 15.6% respectively, of total net accounts receivable at March 28, 2020. Three customers, Ingram Micro Group, ScanSource, and D&H Distributors, accounted for 21.3%, 19.2%, and 10.9%, respectively, of total net accounts receivable at March 31, 2019.

Deferred revenue is primarily comprised of non-cancelable maintenance support performance obligations on hardware devices which are typically billed in advance and recognized ratably over the contract term as the services are delivered.

In Fiscal Year 2020, the Company's deferred revenue balance was $208.5 million, which represents 12.3% of total net revenues. In Fiscal Year 2019, the Company's deferred revenue balance was $193.9 million, which represents 11.6% of total net revenues. In Fiscal 2018, the Company’s deferred revenue balance was $3.0 million, which represents less than 1% of total net revenues. The increase is the result of the Acquisition of Polycom on July 2, 2018 and the acquired deferred service revenue balances in addition to new service contracts entered into subsequent to the Acquisition.

In Fiscal Year 2020, the Company recognized $133.2 million in revenues that were reflected in deferred revenue at the beginning of the period.

The table below represents aggregate amount of the transaction price allocated to the performance obligations that are unsatisfied (or partially unsatisfied) as of March 28, 2020:

	As of March 28, 2020
(in millions)	Current		Noncurrent		Total
Performance obligations	$	148.7	$	64.5	$	213.2

Upon establishment of creditworthiness, the Company may extend credit terms to its customers which typically ranges between 30 and 90 days from the date of invoice depending on geographic region and type of customer. The Company typically bills upon product hardware shipment, at time of software activation or upon completion of services. Revenue is not generally recognized in advance of billing. The balance of contract assets as of March 28, 2020 was $3.7 million and not considered material in prior years. None of the Company's contracts are deemed to have significant financing components.

Sales, value add, and other taxes collected concurrent with revenue producing activities are excluded from revenue.

The Company's indirect channel model includes both a two-tiered distribution structure, where the Company sells to distributors that subsequently sell to resellers, and a one-tiered structure where the Company sells directly to resellers. For these arrangements, transfer of control begins at the time access to the Company's services is made available to the end customer and entitlements have been contractually established, provided all other criteria for revenue recognition are met.

Commercial distributors and retailers represent the Company's largest sources of net revenues. Sales through its distribution and retail channels are made primarily under agreements allowing for rights of return and include various sales incentive programs, such as back end rebates, discounts, marketing development funds, price protection, and other sales incentives. The Company has an established sales history for these arrangements and the Company records the estimated reserves at the inception of the contract as a reflection of the reduced transaction price. Customer sales returns are estimated based on historical data, relevant current data, and the monitoring of inventory build-up in the distribution channel. Revenue reserves represent a reasonable estimation made by management and are subject to significant judgment. Estimated reserves may differ from actual returns or incentives provided, due to unforeseen customer return or claim patterns or changes in circumstances. For certain customer contracts which have historically demonstrated variability, the Company has considered the likelihood of being under-reserved and have considered a constraint accordingly. Provisions for Sales Returns are presented within Accrued Liabilities in the Company's Consolidated Balance Sheets. Provisions for promotions, rebates, and other sales incentives are presented as a reduction of Accounts Receivable unless there is no identifiable right offset, in which case they are presented within Accrued Liabilities on its Consolidated Balance Sheets. Refer to Note 7, Details of Certain Balance Sheet Accounts for additional details.

For certain arrangements, the Company pays commissions, bonuses and taxes associated with obtaining the contracts. The Company capitalizes such costs if they are deemed to be incremental and recoverable. The Company has elected to use the practical expedient to record the incremental costs of obtaining a contract as an expense when incurred if the amortization period of the asset that the entity otherwise would have recognized is one year or less. Determining the amortization period of costs related to obtaining a contract involves judgment. Capitalized commissions and related expenses, on hardware sales and services recognized at a point in time generally have an amortization period of less than one year. Maintenance-related performance obligations generally have an amortization period greater than one year when considering renewals. Capitalized commissions are amortized to Sales and Marketing Expense on a straight-line basis. The capitalized amount of incremental and recoverable costs of obtaining contracts with an amortization period of greater than one year are $2.7 million as of March 28, 2020. Amortization of capitalized contract costs for the Fiscal Year ended March 28, 2020 was immaterial.