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Revenue
6 Months Ended
Sep. 30, 2024
Revenue from Contract with Customer [Abstract]  
Revenue Revenue
The Company's revenues from contracts with customers (clients) are derived from offerings that include management and technology consulting services, analytics, digital solutions, engineering, mission operations, cyber services and artificial intelligence, substantially all with the U.S. government and its agencies and, to a lesser extent, subcontractors. The Company also serves foreign governments, as well as domestic and international commercial clients. The Company performs and generates revenue under three basic types of contracts, which include cost-reimbursable contracts, time-and-materials contracts, and fixed-price contracts.
Contract Estimates
We recognize revenue for many of our contracts under a contract cost-based input method and require an Estimate-at-Completion (“EAC”) process, which management uses to review and monitor the progress towards the completion of our performance obligations. Under this process, management considers various inputs and assumptions related to the EAC, including, but not limited to, progress towards completion, labor costs and productivity, material and subcontractor costs, and identified risks. Estimating the total cost at the completion of our performance obligations is subjective and requires management to make assumptions about future activity and cost drivers under the contract. Changes in these estimates can occur for a variety of reasons and, if significant, may impact the profitability of the Company’s contracts. Changes in estimates related to contracts accounted for under the EAC process are recognized on a cumulative catch-up basis in the period when such changes are determinable and reasonably estimable. If the estimate of contract profitability indicates an anticipated loss on a contract, the Company recognizes the total loss at the time it is identified. For each of the three and six months ended September 30, 2024 and 2023, the aggregate impact of adjustments in contract estimates was not material.
Disaggregation of Revenue
We disaggregate our revenue from contracts with customers by contract type and by customer type, as well as by whether the Company acts as prime contractor or sub-contractor, as we believe these categories best depict how the nature, amount, timing and uncertainty of our revenue and cash flows are affected by economic factors. The following series of tables presents our revenue disaggregated by these categories.
Revenue by Contract Type:
The Company performs and generates revenue under the following three basic types of contracts:
Cost-Reimbursable Contracts: Cost-reimbursable contracts provide for the payment of allowable costs incurred during performance of the contract, up to a ceiling based on the amount that has been funded, plus a fixed fee or award fee.
Time-and-Materials Contracts: Under contracts in this category, we are paid a fixed hourly rate for each direct labor hour expended, and we are reimbursed for billable material costs and billable out-of-pocket expenses inclusive of allocable indirect costs. We assume the financial risk on time-and-materials contracts because our costs of performance may exceed negotiated hourly rates.
Fixed-Price Contracts: Under a fixed-price contract, we agree to perform the specified work for a predetermined price. To the extent our actual direct and allocated indirect costs decrease or increase from the estimates upon which the price was negotiated, we will generate more or less profit, respectively, or could incur a loss.
The table below presents the total revenue for each type of contract:
 Three Months Ended
September 30,
Six Months Ended
September 30,
 2024202320242023
Cost-reimbursable$1,781,044 57 %$1,463,949 55 %$3,440,967 56 %$2,914,133 55 %
Time-and-materials722,818 23 %638,607 24 %1,393,386 23 %1,274,340 24 %
Fixed-price642,524 20 %563,726 21 %1,253,830 21 %1,132,295 21 %
Total Revenue$3,146,386 100 %$2,666,282 100 %$6,088,183 100 %$5,320,768 100 %
Revenue by Customer Type:
Three Months Ended
September 30,
Six Months Ended
September 30,
2024202320242023
Defense Clients
$1,544,108 49 %$1,270,943 47 %$2,960,978 48 %$2,492,638 47 %
Intelligence Clients
496,420 16 %442,924 17 %957,459 16 %920,456 17 %
Civil Clients (1)
1,105,858 35 %952,415 36 %2,169,746 36 %1,907,674 36 %
Total Revenue$3,146,386 100 %$2,666,282 100 %$6,088,183 100 %$5,320,768 100 %
(1) As of the first quarter of fiscal 2025, Civil Clients includes revenue from Global Commercial Clients, which was previously separately reported. Prior periods’ revenues have been recast to reflect the change.
Revenue by Whether the Company Acts as a Prime Contractor or a Subcontractor:
Three Months Ended
September 30,
Six Months Ended
September 30,
2024202320242023
Prime Contractor$3,001,344 95 %$2,537,085 95 %$5,809,029 95 %$5,054,643 95 %
Subcontractor145,042 %129,197 %$279,154 %266,125 %
Total Revenue$3,146,386 100 %$2,666,282 100 %$6,088,183 100 %$5,320,768 100 %
Performance Obligations
Remaining performance obligations represent the transaction price of exercised contracts for which work has not yet been performed, irrespective of whether funding has or has not been authorized and appropriated as of the date of exercise. Remaining performance obligations exclude negotiated but unexercised options, the unfunded value of expired contracts, and certain variable consideration which the Company does not expect to recognize as revenue.
As of September 30, 2024 and March 31, 2024, the Company had $11.0 billion and $8.7 billion of remaining performance obligations, respectively. We expect to recognize approximately 70% of the remaining performance obligations at September 30, 2024 as revenue over the next 12 months, and approximately 80% over the next 24 months. The remainder is expected to be recognized thereafter.
Contract Balances
The Company's performance obligations are typically satisfied over time and revenue is generally recognized using a cost-based input method. Fixed-price contracts are typically billed to the customer using milestone or fixed monthly payments, while cost-reimbursable-plus-fee and time-and-material contracts are typically billed to the customer at periodic intervals (e.g., monthly or weekly) as indicated by the terms of the contract. Disparities between the timing of revenue recognition and customer billings and cash collections result in net contract assets or liabilities being recognized at the end of each reporting period.
Contract assets primarily consist of unbilled receivables typically resulting from revenue recognized exceeding the amount billed to the customer and right to payment is not just subject to the passage of time. Unbilled amounts represent revenues for which billings have not been presented to customers. These amounts are generally billed and collected within one year subject to various conditions including, without limitation, appropriated and available funding. Long-term unbilled receivables not anticipated to be billed and collected within one year, which are primarily related to retainage, holdbacks, and long-term rate settlements to be billed at contract closeout, are included in other long-term assets in the accompanying condensed consolidated balance sheets. Contract liabilities primarily consist of advance payments, billings in excess of costs incurred and deferred revenue. Contract assets and liabilities are reported on a net contract basis at the end of each reporting period. The Company maintains an allowance for credit losses to provide for an estimate of uncollectible receivables. Provision for credit losses recognized was not material for each of the three and six months ended September 30, 2024 and 2023.
The following table summarizes the contract assets and liabilities, and accounts receivable, net of allowance recognized on the Company’s condensed consolidated balance sheets:
September 30,
2024
March 31,
2024
Current assets
Accounts receivable–billed$696,976 $700,066 
Accounts receivable–unbilled (contract assets)1,529,647 1,347,577 
Allowance for credit losses(1,265)(301)
Accounts receivable, net2,225,358 2,047,342 
Other long-term assets
Accounts receivable–unbilled (contract assets)57,703 57,355 
Total accounts receivable, net$2,283,061 $2,104,697 
Other current liabilities
Advance payments, billings in excess of costs incurred and deferred revenue (contract liabilities)$17,065 $15,527 
Changes in contract assets and contract liabilities are primarily due to the timing difference between the Company’s performance of services and payments from customers. For the three months ended September 30, 2024 and 2023, we recognized revenue of $1.1 million and $1.7 million, respectively, and for the six months ended September 30, 2024 and 2023, we recognized revenue of $9.5 million and $16.2 million, respectively, related to our contract liabilities on April 1, 2024 and 2023, respectively. To determine revenue recognized from contract liabilities during the reporting periods, the Company allocates revenue to individual contract liability balances and applies revenue recognized during the reporting periods first to the beginning balances of contract liabilities until the revenue exceeds the balances.