REVENUE RECOGNITION

9 Months Ended

Sep. 30, 2024

Revenue from Contract with Customer [Abstract]

REVENUE RECOGNITION

NOTE 4: REVENUE RECOGNITION

The following table represents a disaggregation of revenue for the three and nine months ended September 30, 2024, and 2023 (in thousands):

	Three months ended September 30, 2024
	Over time		Point in time		Total
Energy	$	-	$	448	$	448
Aerospace		3,814		969		4,783
Industrial		1,522		368		1,890
Research		927		146		1,073
Total	$	6,263	$	1,931	$	8,194

	Three months ended September 30, 2023
	Over time		Point in time		Total
Energy	$	970	$	136	$	1,106
Aerospace		2,511		371		2,882
Industrial		695		739		1,434
Research		504		308		812
Total	$	4,680	$	1,554	$	6,234

CVD EQUIPMENT CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Unaudited)

NOTE 4: REVENUE RECOGNITION (continued)

	Nine months ended September 30, 2024
	Over time		Point in time		Total
Energy	$	216	$	500	$	716
Aerospace		8,285		1,488		9,773
Industrial		4,324		1,142		5,466
Research		2,963		544		3,507
Total	$	15,788	$	3,674	$	19,462

	Nine months ended September 30, 2023
	Over time		Point in time		Total
Energy	$	4,246	$	189	$	4,435
Aerospace		2,774		1,226		4,000
Industrial		5,450		1,866		7,316
Research		2,960		1,287		4,247
Total	$	15,430	$	4,568	$	19,998

The energy market includes customers involved in the manufacture of silicon carbide wafers and batteries. Aerospace market includes customers that manufacture aircraft engines. Industrial end market consists of various end customers in diverse industries. Research market principally represents customers such as universities and other research institutions.

The Company has unrecognized contract revenue of approximately $17.0 million at September 30, 2024, which it expects to substantially recognize as revenue within the next twelve months based on over time revenue recognition.

Judgment is required to evaluate assumptions including the amount of net contract revenues and the total estimated costs to determine our progress towards contract completion and to calculate the corresponding amount of revenue to recognize.

Changes in estimates for sales of systems may occur for a variety of reasons, including but not limited to (i) build accelerations or delays, (ii) product cost forecast changes, (iii) cost related change orders or add-ons, or (iv) changes in other information used to estimate costs. Changes in estimates may have a material effect on the Company’s condensed consolidated statements of operations.

CVD EQUIPMENT CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Unaudited)

NOTE 4: REVENUE RECOGNITION (continued)

Contract assets and liabilities

Contract assets and contract liabilities on input method type contracts in progress are summarized as follows as of September 30, 2024 (in thousands):

Costs incurred on contracts in progress	$	13,540
Estimated earnings		6,672
		20,212
Billings to date		(21,693	)
		(1,481	)
Deferred revenue related to non-system contracts		(459	)
	$	(1,940	)
Included in accompanying condensed consolidated balance sheet as of September 30, 2024 under the following captions (in thousands):
Contract assets	$	1,348
Contract liabilities	$	3,288

Of the contract liability balances at December 31, 2023 and 2022 of $4.6 million and $4.0 million, respectively, $4.2 million and $3.7 million was recognized as revenue during the nine months ended September 30, 2024 and 2023, respectively.