REVENUE FROM CONTRACTS WITH CUSTOMERS

12 Months Ended

Sep. 30, 2022

REVENUE FROM CONTRACTS WITH CUSTOMERS

REVENUE FROM CONTRACTS WITH CUSTOMERS

4.REVENUE FROM CONTRACTS WITH CUSTOMERS

DSA

The DSA segment generates service revenue through drug discovery and development services. The DSA segment generates product revenue through internally-manufactured scientific instruments for life sciences research and the related software for use by pharmaceutical companies, universities, government research centers and medical research institutions under the Company’s BASi product line. Refer to Note 2 – Summary of Significant Accounting Policies for further discussion of DSA revenue and related accounting policies.

RMS

The RMS segment generates products revenue through the commercial production and sale of research models, diets and bedding and bioproducts. The RMS segment generates service revenue through GEMS, client-owned animal colony care, and health monitoring and diagnostics services related to research models. Refer to Note 2 – Summary of Significant Accounting Policies for further discussion of RMS revenue and related accounting policies.

Contract Assets and Liabilities from Contracts with Customers

The timing of revenue recognition, billings and cash collections results in billed receivables (trade receivables), contract assets (unbilled revenue), and contract liabilities (customer deposits and deferred revenue) on the consolidated balance sheets.

The following table provides information about contract assets (trade receivables and unbilled revenue, excluding allowances for credit losses), and fees invoiced in advance (customer deposits and deferred revenue):

	Balance at		Balance at
	September 30,		September 30,
	2022		2021
Contract Assets: Trade receivables	$	88,867	$	22,838
Contract Assets: Unbilled revenue		17,474		6,194
Contract liabilities: Customer deposits		39,222		—
Contract liabilities: Deferred revenue		29,420		26,614

The Company expects all deferred revenue to be recognized as revenue in fiscal year 2023.

Changes in the contract asset and the contract liability balances during twelve months ended September 30, 2022 include the following:

● Acquisitions – Refer to Note 3 – Business Combinations for further discussion of acquired contract assets and liabilities.

● A change in the time frame for a right for consideration to become unconditional – Approximately 84% of unbilled revenue as of September 30, 2021, was billed during fiscal year 2022.

● A change in the time frame for a performance obligation to be satisfied – Approximately 81% of contract liabilities as of September 30, 2021, were recognized as revenue during fiscal year 2022.

Allowance for Credit Losses

The Company’s allowance for credit losses was $6,268 and $668 at September 30, 2022 and 2021, respectively. A summary of activity in our allowance for credit losses is as follows:

	Fiscal Years Ended
	September 30,
	2022		2021
Opening balance	$	668	$	561
Acquired		4,406		—
Charged to expense		1,220		208
Uncollectible invoices written off		(26)		(77)
Amounts collected		—		(24)
Ending balance	$	6,268	$	668