Annual report [Section 13 and 15(d), not S-K Item 405]

REVENUE

v3.25.2
REVENUE
 12 Months Ended
Jun. 30, 2025
Revenue from Contract with Customer [Abstract]  
REVENUE REVENUE
Contract Balances
The following table represents the opening and closing balances of accounts receivable, net, contract assets and contract liabilities as of the indicated dates.
As of As of As of
(In thousands, except for percentages) June 30, 2025 June 30, 2024 June 30, 2023 Change in Fiscal 2025 Change in Fiscal 2024
Accounts receivable, net $ 2,263,915  $ 1,833,041  $ 1,753,361  $ 430,874  24  % $ 79,680  5  %
Contract assets $ 105,081  $ 69,259  $ 117,137  $ 35,822  52  % $ (47,878) (41) %
Contract liabilities $ 1,713,689  $ 1,782,242  $ 1,245,007  $ (68,553) (4) % $ 537,235  43  %
Our payment terms and conditions vary by contract type, although terms generally include a requirement of payment of 70% to 90% of total contract consideration within 30 to 60 days of shipment, with the remainder payable within 30 days of acceptance.
The change in contract assets during the fiscal year ended June 30, 2025 was mainly due to $94.4 million of revenue recognized for which the payment is subject to conditions other than the passage of time, partially offset by $58.8 million of contract assets reclassified to net accounts receivable as our right to consideration for these contract assets became unconditional. Contract assets are included in other current assets on our Consolidated Balance Sheets.
The change in contract liabilities during the fiscal year ended June 30, 2025 was mainly due to the recognition in revenue of $1.39 billion that was included in contract liabilities as of June 30, 2024, partially offset by the value of products and services billed to customers for which control of the products and services has not transferred to the customers. Contract liabilities are included in current and non-current liabilities on our Consolidated Balance Sheet.
Remaining Performance Obligations
As of June 30, 2025, we had $7.86 billion of remaining performance obligations (“RPO”), which represents our obligation to deliver products and services, and primarily consists of sales orders where written customer requests have been received. This amount includes customer deposits of $643.2 million as disclosed in Note 4 “Financial Statement Components” and excludes contract liabilities of $1.71 billion as disclosed above. We expect to recognize approximately 71% to 76% of these performance obligations as revenue in the next 12 months, 20% to 25% in the subsequent 12 months and the remainder thereafter, but this estimate is subject to constant change.
The amount of our RPO and timing of revenue recognition of our RPO are evaluated quarterly and are largely driven by multiple variables, many of which are beyond our control, such as: changes in regulations, the readiness of customer fabs, end market needs for capacity, changes in the estimated versus actual start time of customers’ projects, timing of delivery and installation dates and supply chain constraints. As customers try to balance the evolution of their technological, production or market needs with the timing and content of orders placed with us, there is elevated risk of order modifications, pushouts or cancellations.
Practical expedients
We apply the following practical expedients in accordance with ASC 606, Revenue from Contracts with Customers:
•We account for shipping and handling costs as activities to fulfill the promise to transfer goods, instead of a promised service to our customer.
•We have elected to not adjust the promised amount of consideration for the effects of a significant financing component as we expect, at contract inception, that the period between when we transfer a promised good or service to a customer and when the customer pays for that good or service will generally be one year or less.
•We have elected to expense costs to obtain a contract as incurred because the expected amortization period is one year or less.
Refer to Note 18 “Segment Reporting and Geographic Information” for information related to revenues by geographic region as well as significant product and service offerings.