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REVENUE AND MAJOR CUSTOMERS
 9 Months Ended
Dec. 26, 2020
REVENUE AND MAJOR CUSTOMERS [Abstract]  
REVENUE AND MAJOR CUSTOMERS REVENUE AND MAJOR CUSTOMERS
The Company designs, builds, and markets collaboration solutions which combine legendary audio expertise and powerful video and conferencing capabilities to create endpoints that power meaningful human connections and provide solutions that make life easier when they work together and with our partner's services.

The Company’s major product categories are Headsets, Video, Voice, and Services. Headsets include wired and wireless communication headsets; Voice includes open Session Initiation Protocol (“SIP”) and native ecosystem desktop phones as well as conference room phones; Video includes video conferencing solutions and peripherals, such as cameras, speakers, and microphones. The broad portfolio of Services include video interoperability, hardware and support for our solutions and hardware devices, as well as professional, hosted, and managed services that are grounded in our deep expertise aimed at helping customers achieve their goals for collaboration. The Company's cloud management and analytics software enables IT administrators to configure and update firmware, monitor device usage, troubleshoot, and gain a deep understanding of user behavior. All of the Company's solutions are designed to integrate seamlessly with the platform and services of our customers choice in a wide range of Unified Communications & Collaboration ("UC&C"), Unified Communication as a Service ("UCaaS"), and Video as a Service ("VaaS") environments.

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 computers. Services revenue primarily includes support on hardware devices, professional, hosted and managed services, and solutions to the Company's customers. Revenue in the first and second quarter of fiscal year 2021 from a certain product has been reclassified from the Voice product category into the Video product category as a result of a management decision to re-align its product categories.

The following table disaggregates revenues by major product category for the three and nine months ended December 26, 2020 and December 28, 2019:
Three Months EndedNine Months Ended
(in thousands)December 26, 2020December 28, 2019December 26, 2020December 28, 2019
Net revenues from unaffiliated customers:
Headsets1
240,908 167,280 618,498 592,222 
   Voice2
67,076 79,494 156,682 281,794 
   Video2
112,727 69,859 284,666 220,499 
   Services2
63,974 67,838 191,529 199,432 
Total net revenues$484,685 $384,471 $1,251,375 $1,293,947 
1 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 that is not material to the Company's condensed 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.
2 Categories were introduced with the acquisition of Polycom on July 2, 2018, and amounts are presented net of purchase accounting adjustments.
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 three and nine months ended December 26, 2020 and December 28, 2019. The following table presents net revenues by geography:
Three Months EndedNine Months Ended
(in thousands)December 26, 2020December 28, 2019December 26, 2020December 28, 2019
Products
Net revenues from unaffiliated customers:
U.S.$169,812 $149,652 $473,633 $536,368 
Europe and Africa164,896 88,356 357,389 301,134 
Asia Pacific57,481 54,920 155,460 180,993 
Americas, excluding U.S.28,522 23,705 73,364 76,020 
Total international net revenues250,899 166,981 586,213 558,147 
Product net revenues$420,711 $316,633 $1,059,846 $1,094,515 
Services
Net revenues from unaffiliated customers:
U.S.$23,601 $26,204 $71,839 $77,442 
Europe and Africa16,533 17,575 48,545 50,749 
Asia Pacific19,342 18,710 57,196 54,938 
Americas, excluding U.S.4,498 5,349 13,949 16,303 
Total international net revenues40,373 41,634 119,690 121,990 
Service net revenues$63,974 $67,838 $191,529 $199,432 
Total net revenues$484,685 $384,471 $1,251,375 $1,293,947 

Two customers, Ingram Micro Group and ScanSource, accounted for 19.1% and 17.1%, respectively, of net revenues for the three months ended December 26, 2020. Ingram Micro Group and ScanSource, accounted for 12.6% and 10.5%, respectively, of net revenues for the nine months ended December 26, 2020. Two customers, ScanSource and Ingram Micro Group, accounted for 19.2% and 12.7% of net revenues for the three months ended December 28, 2019, respectively. ScanSource and Ingram Micro Group accounted for 19.5% and 15.7%, respectively, of net revenue for the nine months ended December 28, 2019.

Two customers, Ingram Micro Group and ScanSource accounted for 21.5% and 19.6%, respectively, of total net accounts receivable at December 26, 2020. 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.

Revenue is recognized when obligations under the terms of a contract with the Company's customer are satisfied; generally, this occurs with the transfer of control of its products or services. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring goods or providing services. The majority of the Company's business relates to physical product shipments, for which revenue is generally recognized once title and risk of loss of the product are transferred to the customer. The Company believes that transfer of title and risk of loss best represent the moment at which the customer’s ability to direct the use of and obtain substantially all the benefits of an asset have been achieved. The Company has elected to account for shipping and handling as fulfillment cost and recognize the related costs when control over products have transferred to the customer as an expense in Cost of Revenues.
The Company's service revenue is recognized either over-time or at a point-in-time depending on the nature of the offering. Revenues associated with non-cancelable maintenance and support contracts comprise approximately 90% of the Company's overall service revenue and are recognized ratably over the contract term, which typically ranges between one and three years. The Company believes this recognition period faithfully depicts the pattern of transfer of control for maintenance and support as the services are a series of distinct services available and delivered daily over the term. For certain products, support is provided free of charge without the purchase of a separate maintenance contract. If the support is determined to rise to the level of a performance obligation, the Company allocates a portion of the transaction price to the implied support obligation and recognizes service revenue over the estimated implied support period which can range between one month to several years, depending on the circumstances. Revenues associated with Professional Services are recognized when the Company has objectively determined that the obligation has been satisfied, which is usually upon customer acceptance.

The Company's contracts with customers often include promises to transfer multiple products and services to a customer. Determining whether products and services are considered distinct performance obligations that should be accounted for separately versus together may require significant judgment. The Company allocates the transaction price of a contract, to each identified performance obligation based on stand-alone selling price (“SSP”). The Company determines if variable consideration is associated with one or many, but not all of the performance obligations and allocates accordingly. Judgment is also required to determine the SSP for each distinct performance obligation. The Company derives SSP for its performance obligations through a stratification methodology and considers a few characteristics including consideration related to different service types, customer and geography characteristics. In instances where SSP is not directly observable, such as when the Company does not sell the product or service separately, the Company determines the SSP using information that may include market conditions and other observable inputs.

On occasion, the Company will fulfill only part of a purchase order due to lack of current availability for one or more items requested on an order. Its practice is to ship what is on hand, with the remaining goods shipped once the product is in stock. Shipment generally occurs less than one year from the date of the order. Depending on the terms of the contract or operationally, undelivered or backordered items may be canceled by either party at their discretion.

As of December 26, 2020, the Company's deferred revenue balance was $216.4 million. As of March 28, 2020, the Company's deferred revenue balance was $208.5 million. During the three months ended December 26, 2020, the Company recognized $50.9 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 December 26, 2020:
December 26, 2020
(in millions)CurrentNoncurrentTotal
Performance obligations$147.8 $69.5 $217.3 

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, upon the start of service entitlement, or upon completion of services. Revenue is not generally recognized in advance of billings. The balance of contract assets as of December 26, 2020 was $6.3 million. As of March 28, 2020, the Company's contract assets balance was $3.7 million. 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.
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 has considered a constraint accordingly. Provisions for Sales Returns are presented within accrued liabilities in the Company's condensed 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 condensed consolidated balance sheets. See Note 5, Details of Certain Balance Sheet Accounts above 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 $4.8 million as of December 26, 2020. Amortization of capitalized contract costs for the three and nine months ended December 26, 2020 was immaterial and $1.6 million, respectively.