Revenue from Contracts with Customers

9 Months Ended

Jun. 30, 2020

Revenue from Contract with Customer [Abstract]

Revenue from Contracts with Customers

14. Revenue from Contracts with Customers

Disaggregated Revenue

The Company disaggregates revenue from contracts with customers in a manner that depicts how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors. The Company disaggregates revenue based on the transfer of control of the underlying performance obligations, the geographic location in which customer orders are placed and by reporting unit.

The Company transfers control of its performance obligations at a point in time or over time, depending on the nature of the product or service being provided. Revenue from contracts with customers is attributed to geographic areas based on locations in which the customer orders are placed. The Company reports financial results for two reportable segments which consist of Brooks Semiconductor Solutions Group segment and Brooks Life Sciences segment. The Company also consists of six reporting units, including three reporting units within the Brooks Semiconductor Solutions Group reportable segment and three reporting units within the Brooks Life Sciences reportable segment. The following

is a reconciliation of revenue disaggregated in a manner discussed above to segment revenue for the three and nine months ended June 30, 2020 and 2019 (in thousands):

	Brooks Semiconductor		Brooks Life
	Solutions Group		Sciences		Total
Three months ended June 30, 2020
Point in time	$	125,237	$	27,001	$	152,238
Over time		1,815		66,297		68,112
	$	127,052	$	93,298	$	220,350
Three months ended June 30, 2019
Point in time	$	115,910	$	23,121	$	139,031
Over time		130		64,719		64,849
	$	116,040	$	87,840	$	203,880
Nine Months Ended June 30, 2020
Point in time	$	364,720	$	72,661	$	437,381
Over time		6,066		207,630		213,696
	$	370,786	$	280,291	$	651,077
Nine Months Ended June 30, 2019
Point in time	$	339,537	$	71,270	$	410,807
Over time		2,087		168,743		170,830
	$	341,624	$	240,013	$	581,637

The following is revenue by geographic location and reporting unit for the three and nine months ended June 30, 2020 and 2019 (in thousands):

	Three months ended June 30,				Nine months ended June 30,
	2020		2019		2020		2019
Geographic Location
North America	$	79,882	$	88,744	$	246,000	$	240,796
Asia/Pacific/Other		99,415		77,275		307,969		234,388
United Kingdom		15,441		13,879		35,745		38,497
Rest of Europe		25,612		23,982		61,363		67,956
	$	220,350	$	203,880	$	651,077	$	581,637
Reporting Unit
Automation Solutions	$	81,656	$	77,410	$	214,627	$	223,531
Contamination Control Solutions		34,780		28,606		124,584		86,610
Global Semiconductor Services		10,616		10,024		31,575		31,483
Brooks Semiconductor Solutions Group		127,052		116,040		370,786		341,624
Life Science Products		30,421		28,022		91,138		86,933
Sample Repository Solutions		25,591		22,761		70,878		66,742
GENEWIZ		37,286		37,057		118,275		86,338
Brooks Life Sciences		93,298		87,840		280,291		240,013
Total	$	220,350	$	203,880	$	651,077	$	581,637

Contract Balances

Accounts Receivable, Net. Accounts receivable represent rights to consideration in exchange for products or services that have been transferred by the Company, when payment is unconditional and only the passage of time is required

before payment is due. Accounts receivable do not bear interest and are recorded at the invoiced amount. The Company maintains an allowance for doubtful accounts representing its best estimate of probable credit losses related to its existing accounts receivable and their net realizable value. The Company determines the allowance for doubtful accounts based on a number of factors, including an evaluation of customer credit worthiness, the age of the outstanding receivables, economic trends and historical experience. Accounts receivable, net were $183.2 million and $165.6 million at June 30, 2020 and September 30, 2019, respectively.

Contract Assets. Contract assets represent rights to consideration in exchange for products or services that have been transferred by the Company, when payment is conditional on something other than the passage of time. These amounts typically relate to contracts within the Brooks Life Sciences segment where the right to payment is not present until completion of the contract or the achievement of specified milestones and the value of the products or services transferred exceed this constraint. Contract assets are classified as current. Contract asset balances which are included within “Prepaid expenses and other current assets” on the Company’s Consolidated Balance Sheet, were $15.5 million and $14.0 million at June 30, 2020 and September 30, 2019, respectively.

Deferred Commissions. Deferred commissions represent a direct and incremental cost of obtaining a contract. These amounts primarily relate to sales commissions within the Brooks Life Sciences segment and are deferred and amortized over a 60 month period, which represents the average period of contract performance. The Company classifies deferred commissions as noncurrent as the original amortization period of this asset is greater than one year. Deferred commissions balances are included within “Other assets” on the Company’s Consolidated Balance Sheet. Deferred commissions were $0.5 million and $0.8 million at June 30, 2020 and September 30, 2019, respectively. The Company recorded amortization expense related to deferred commissions of $0.1 million and $0.4 million, respectively for the three and nine months ended June 30, 2020.

Contract Liabilities. Contract liabilities represent the Company’s obligation to transfer products or services to a customer for which consideration has been received, or for which an amount of consideration is due from the customer. Contract assets and liabilities are reported on a net basis at the contract level, depending on the contracts position at the end of each reporting period. Contract liabilities are included within Deferred revenue on the Company’s Consolidated Balance Sheet. Contract liabilities were $31.2 million and $29.4 million at June 30, 2020 and September 30, 2019, respectively. Revenue recognized from the contract liability balance at September 30, 2019 was $19.2 million for the nine months ended June 30, 2020.

Remaining Performance Obligations. Remaining performance obligations represent the transaction price of unsatisfied or partially satisfied performance obligations within contracts with an original expected contract term that is greater than one year and for which fulfillment of the contract has started as of the end of the reporting period. The aggregate amount of transaction consideration allocated to remaining performance obligations as of June 30, 2020 was $55.1 million. The following table summarizes when the Company expects to recognize the remaining performance obligations as revenue, the Company will recognize revenue associated with these performance obligations as transfer of control occurs (in thousands):

		As of June 30, 2020
	Less than 1 Year		Greater than 1 Year		Total
Remaining Performance Obligations	$	35,213	$	19,927	$	55,140

Cost to Obtain and Fulfill a Contract

The Company capitalizes sales commissions when incurred if they are (i) incremental costs of obtaining a contract, (ii) expected to be recovered and (iii) have an expected amortization period that is greater than one year. As part of the Company’s cumulative effect adjustment, incremental costs associated with obtaining a contract were capitalized and have been classified as deferred commissions within the Company’s Consolidated Balance Sheet. These amounts primarily relate to sales commissions within the Brooks Life Sciences segment and are being amortized over a 60 month period, which represents the average period of contract performance. The Company did not capitalize any sales commissions during the three or nine months ended June 30, 2020 as the amount of sales commissions that qualified for

capitalization during the reporting period was insignificant. Sales commissions incurred during the reporting period have been expensed as incurred. These costs are recorded within “Selling, general, and administration expenses”. The Company has concluded that none of its costs incurred in fulfillment of customer contracts meet the capitalization criteria. The Company will account for shipping and handling activities as fulfillment activities and recognize the associated expense when transfer of control of the product has transferred to the customer.