Note 4. Revenue Recognition from Contracts with Customers

Disaggregation of Revenue

The Company’s primary revenue streams include fabrication services and product sales across multiple geographic regions, primarily the Americas, Asia and Europe.

Fabrication Services

Fabrication services revenue includes Non-Recurring Engineering (“NRE”) and backend wafer services. For the backend wafer service contracts, products are delivered to the customer at the completion of the service which represents satisfaction of the performance obligation as well as transfer of title. On NRE contracts, the majority of the contracts include language which provides for an enforceable right to payment for performance completed to date, rather than upon completion of the contract. NRE revenue is generally recognized over the period during which the work is performed using a formula that accounts for the actual costs or expenses incurred, which generally include labor cost, fabrication and materials, as a percentage of total estimated budget for the completion of the NRE contract. Any revenues earned but not yet billed to the customer as of the date of consolidated financial statements are recorded as contract assets and are included in other current assets on the condensed consolidated balance sheet. When invoicing occurs prior to revenue recognition a contract liability is recorded. The Company recognized $0.6 million and $0.8 million in revenue from NRE contracts during the three months ended September 30, 2024 and September 30, 2023, respectively.

Product Sales

Product sales revenue consists of sales of RF filters which are sold with contract terms stating that title passes, and the customer takes control, at the time of shipment. Revenue is then recognized when the devices are shipped, and the performance obligation has been satisfied. If devices are sold under contract terms that specify that the customer does not take ownership until the goods are received, revenue is recognized when the customer receives the goods.

The following table summarizes the revenues of the Company’s reportable segments by geographic region for the three months ended September 30, 2024 (in thousands):

The following table summarizes the revenues of the Company’s reportable segments by geographic region for the three months ended September 30, 2023 (in thousands):

Performance Obligations

The Company has determined that contracts for product sales revenue and fabrication services revenue involve one performance obligation, which is delivery of the final product.

Contract Balances

The following table summarizes the changes in the opening and closing balances of the Company’s contract asset (included in Other current assets on the Condensed Consolidated Balance Sheet) and contract liability (included as Deferred revenue on the Condensed Consolidated Balance Sheet) for the first three months of fiscal years 2025 and 2024 (in thousands):

The Company records a receivable when the title for goods has transferred. Generally, all sales are contract sales (with either an underlying contract or purchase order), resulting in all receivables being contract receivables. When invoicing occurs prior to revenue recognition a contract liability is recorded (as deferred revenue on the Condensed Consolidated Balance Sheets). The amount of revenue recognized in the three months ended September 30, 2024, that was included in the opening contract liability balance was $131 thousand which related to timing of shipments.

Contract assets are recorded when revenue recognized exceeds the amount invoiced. The difference between the opening and closing balances of the Company’s contract assets and contract liabilities primarily results from the timing difference between the Company’s performance and the customer’s payment. The amount of contract assets invoiced in the three months ended September 30, 2024, that was included in the opening contract asset balance was $1.2 million, which primarily related to non-recurring engineering services.

Backlog of Remaining Customer Performance Obligations

Revenue expected to be recognized and recorded as sales during the remainder of this fiscal year from the backlog of performance obligations that are unsatisfied (or partially unsatisfied) at September 30, 2024 was $0.3 million. The Company’s backlog may vary significantly each reporting period based on the timing of major new contract commitments. In addition, the Company’s customers have the right, under some infrequent circumstances, to terminate contracts or defer the timing of the Company's services and their payments to the Company.