Quarterly report pursuant to Section 13 or 15(d)

Revenue Recognition

v3.24.1.u1
Revenue Recognition
9 Months Ended
Mar. 31, 2024
Notes to Financial Statements  
Revenue Recognition

Note 2. Revenue Recognition:

Consumables revenues consist of specialized proteins, immunoassays, antibodies, reagents, blood chemistry and blood gas quality controls, and hematology instrument controls that are typically single-use products recognized at a point in time following the transfer of control of such products to the customer, which generally occurs upon shipment. Instruments revenues typically consist of longer-lived assets that, for the substantial majority of sales, are recognized at a point in time in a manner similar to consumables. Service revenues consist of extended warranty contracts, post contract support, and custom development projects that are recognized over time as either the customers receive and consume the benefits of such services simultaneously or the underlying asset being developed has no alternative use for the Company at contract inception and the Company has an enforceable right to payment for the portion of the performance completed. Service revenues also include laboratory services recognized at point in time.

We recognize royalty revenues in the period the sales occur using third party evidence. The Company elected the "right to invoice" practical expedient based on the Company's right to invoice a customer at an amount that approximates the value to the customer and the performance completed to date.

The Company elected the exemption to not disclose the unfulfilled performance obligations for contracts with an original length of one year or less and the exemption to exclude future performance obligations that are accounted under the sales-based or usage-based royalty guidance. The Company’s unfulfilled performance obligations for contracts with an original length greater than one year were not material as of March 31, 2024.

Contracts with customers that contain instruments may include multiple performance obligations. For these contracts, the Company allocates the contract’s transaction price to each performance obligation on a relative standalone selling price basis. Allocation of the transaction price is determined at the contracts’ inception.

Payment terms for shipments to end-users are generally net 30 days. Payment terms for distributor shipments may range from 30 to 90 days. Service arrangements commonly call for payments in advance of performing the work (e.g. extended warranty and service contracts), upon completion of the service (e.g. custom development manufacturing) or a mix of both.

Contract assets include revenues recognized in advance of billings. Contract assets are included within Other current assets in the accompanying balance sheet as the amount of time expected to lapse until the Company's right to consideration becomes unconditional is less than one year. We elected the practical expedient allowing us to expense contract costs that would otherwise be capitalized and amortized over a period of less than one year. Contract assets as of March 31, 2024 are not material.

Contract liabilities include billings in excess of revenues recognized, such as those resulting from customer advances and deposits and unearned revenue on warranty contracts. Contract liabilities as of March 31, 2024 and June 30, 2023 were approximately $32.0 million and $24.6 million, respectively. Contract liabilities as of June 30, 2023 subsequently recognized as revenue during the quarter and nine month period ended March 31, 2024 were approximately $3.2 million and $19.5 million, respectively. Contract liabilities in excess of one year are included in Other long-term liabilities on the Consolidated Balance Sheet.

Any claims for credit or return of goods must be made within 10 days of receipt. Revenues are reduced to reflect estimated credits and returns. Although the amounts recorded for these revenue deductions are dependent on estimates and assumptions, historically our adjustments to actual results have not been material.

Taxes collected from customers relating to product sales and remitted to governmental authorities are excluded from revenue. Amounts billed to customers for shipping and handling are included in revenue, while the related shipping and handling costs are reflected in cost of products. We elected the practical expedient that allows us to account for shipping and handling activities that occur after the customer has obtained control of a good as a fulfillment cost, and we accrue costs of shipping and handling when the related revenue is recognized.

The following tables present our disaggregated revenue for the periods presented.

Revenue by type is as follows (in thousands):

    

Quarter Ended

Nine Months Ended

March 31, 

March 31, 

    

2024

    

2023

2024

    

2023

Consumables

$

246,732

$

240,659

$

682,405

$

674,419

Instruments

 

26,493

 

25,449

 

81,178

 

84,208

Services

 

25,501

 

23,312

 

71,084

 

60,609

Total product and services revenue, net

$

298,726

$

289,420

$

834,667

$

819,236

Royalty revenues

 

4,702

 

4,726

 

18,294

 

16,146

Total revenues, net

$

303,428

$

294,146

$

852,961

$

835,382

Revenue by geography is as follows (in thousands):

    

Quarter Ended

Nine Months Ended

March 31, 

March 31, 

    

2024

    

2023

2024

    

2023

 

  

 

  

  

 

  

United States

$

173,315

$

163,197

$

480,213

$

467,633

EMEA, excluding United Kingdom

 

60,533

 

59,702

 

177,866

 

160,246

United Kingdom

 

15,122

 

13,811

 

38,249

 

36,385

APAC, excluding Greater China

 

18,253

 

20,159

 

54,645

 

55,592

Greater China

 

25,598

 

26,256

 

75,542

 

88,103

Rest of World

 

10,607

 

11,021

 

26,446

 

27,423

Net sales

$

303,428

$

294,146

$

852,961

$

835,382