Revenue

6 Months Ended

Jul. 02, 2022

Revenue from Contract with Customer [Abstract]

Revenue

3. Revenue

The following tables represent a disaggregation of revenue from contracts with customers for the three and six months ended July 2, 2022 and July 3, 2021.

Major Products and Service Lines

	Three Months Ended July 2, 2022								Three Months Ended July 3, 2021
	(In thousands)
	HDD		DCP		PV		Total		HDD		DCP		PV		Total
Systems, upgrades and spare parts	$	7,756	$	1	$	82	$	7,839	$	3,955	$	3	$	47	$	4,005
Field service		1,421		43		4		1,468		1,364		—		—		1,364
Total net revenues	$	9,177	$	44	$	86	$	9,307	$	5,319	$	3	$	47	$	5,369

	Six Months Ended July 2, 2022								Six Months Ended July 3, 2021
	(In thousands)
	HDD		DCP		PV		Total		HDD		DCP		PV		ASP		Total
Systems, upgrades and spare parts	$	10,879	$	1	$	135	$	11,015	$	7,539	$	3	$	158	$	3,850	$	11,550
Field service		2,684		43		10		2,737		3,001		14		42		—		3,057
Total net revenues	$	13,563	$	44	$	145	$	13,752	$	10,540	$	17	$	200	$	3,850	$	14,607

Primary Geographical Markets

	Three Months Ended				Six Months Ended
	July 2, 2022		July 3, 2021		July 2, 2022		July 3, 2021
	(In thousands)
United States	$	1,656	$	2,121	$	1,950	$	2,488
Asia		7,651		3,248		11,802		8,269
Europe		—		—		—		3,850
Total net revenues	$	9,307	$	5,369	$	13,752	$	14,607

Timing of Revenue Recognition

	Three Months Ended				Six Months Ended
	July 2, 2022		July 3, 2021		July 2, 2022		July 3, 2021
	(In thousands)
Products transferred at a point in time	$	9,307	$	5,369	$	13,752	$	14,607
Products and services transferred over time		—		—		—		—
Total net revenues	$	9,307	$	5,369	$	13,752	$	14,607

The following table reflects the changes in our contract assets, which we classify as accounts receivable, unbilled and our contract liabilities, which we classify as deferred revenue and customer advances, for the six months ended July 2, 2022:

	July 2, 2022		January 1, 2022		Six Months Change
	(In thousands)
Contract assets:
Accounts receivable, unbilled	$	—	$	99	$	(99	)
Contract liabilities:
Deferred revenue	$	129	$	65	$	64
Customer advances		24,760		2,107		22,653
	$	24,889	$	2,172	$	22,717

Accounts receivable, unbilled represents a contract asset for revenue that has been recognized in advance of billing the customer. For our system and certain upgrade sales, our customers generally pay in three installments, with a portion of the system price billed upon receipt of an order, a portion of the price billed upon shipment, and the balance of the price due upon completion of installation and acceptance of the system at the customer’s factory. Accounts receivable, unbilled generally represents the balance of the system price that is due upon completion of installation and acceptance, less, the amount that has been deferred as revenue for the performance of the installation tasks. During the six months ended July 2, 2022, contract assets decreased by $99,000 primarily due to the billing of accrued revenue related to spare parts sold to a customer as of January 1, 2022.

Customer advances generally represent a contract liability for amounts billed to the customer prior to transferring goods. The Company has elected to use the practical expedient to disregard the effect of the time value of money in a significant financing component when its payment terms are less than one year. These customer advances are liquidated when revenue is recognized. Deferred revenue generally represents a contract liability for amounts billed to a customer for completed systems at the customer site that are undergoing installation and acceptance testing where transfer of control has not yet occurred as Intevac does not yet have a demonstrated history of meeting the acceptance criteria upon the customer’s receipt of product. During the six months ended July 2, 2022, we recognized revenue of $353,000 and $39,000 that was included in customer advances and deferred revenue, respectively, at the beginning of the period.

On July 2, 2022, we had $100.2 million of remaining performance obligations, which we also refer to as total backlog. We expect to recognize approximately 22% of our remaining performance obligations as revenue in 2022, 26% in 2023, 26% in 2024 and 26% in 2025.