Revenue Recognition |
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| Revenue Recognition |
7. Revenue Recognition The following table presents disaggregated revenue by business group (in thousands):
Contract Balances The Company’s deferred revenues consist of advance payments for microturbine products, parts, accessories, and parts ordered under an FPP plan, but not yet delivered (contract liabilities), as well as advanced payments on service obligations and extended warranties. The current portion of deferred revenue is included in Deferred revenue and the non-current portion of deferred revenue is included in Deferred revenue, non-current in the consolidated balance sheets. As of March 31, 2023, the balance of deferred revenue was approximately $24.2 million compared to $15.8 million as of March 31, 2022. This overall increase in the balance of deferred revenue of $8.4 million during Fiscal 2023 was comprised of increases in deferred revenue attributable to deposits of $8.4 million and FPP contracts of $0.3 million, offset by a decrease in deferred revenue attributable to Distributor Support System (“DSS program”) of $0.3 million. Changes in deferred revenue are as follows (in thousands):
Deferred revenue attributed to FPP contracts represents the unearned portion of the Company’s agreements. FPP agreements are generally paid quarterly in advance with revenue recognized on a straight-line basis over the contract period. The DSS program provides additional support for distributor business development activities, customer lead generation, brand awareness and tailored marketing services for each of the Company’s major geography and market vertical. This program is funded by the Company’s distributors and was developed to provide improved worldwide distributor training, sales efficiency, website development, company branding and provide funding for increased strategic marketing activities. DSS program revenue is generally paid quarterly with revenue recognized on a straight-line basis over a calendar year period. Deposits are primarily non-refundable cash payments from distributors for future orders. As of March 31, 2023, approximately $4.9 million of revenue is expected to be recognized from remaining performance obligations for FPP service contracts. The Company expects to recognize revenue on approximately $4.1 million of these remaining performance obligations over the next 12 months and the balance of $0.8 million will be recognized thereafter. |
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