Revenue from Contracts with Customers

6 Months Ended

Jul. 02, 2023

Revenue from Contract with Customer [Abstract]

Revenue from Contracts with Customers

REVENUE FROM CONTRACTS WITH CUSTOMERS

Disaggregation of Revenue

The following table represents disaggregated revenue from contracts with customers for the three and six months ended July 2, 2023 and July 3, 2022:

	Three Months Ended				Six Months Ended
(In thousands)	July 2, 2023		July 3, 2022		July 2, 2023		July 3, 2022
Solar power systems sales	$	368,084	$	320,294	$	714,633	$	591,938
Component sales	88,281		74,542		174,812		134,419
Light commercial sales	60		24,569		612		38,765
Services and other	7,426		(1,633)		14,672		2,927
Total revenues	$	463,851	$	417,772	$	904,729	$	768,049

We recognize revenue from contracts with customers when we have completed our performance obligations under an identified contract. The revenue is recognized in an amount that reflects the consideration for the corresponding performance obligations for the goods and services transferred.

Contract Assets and Liabilities

Contract assets represent accounts receivable unbilled for transactions where revenue has been recognized in advance of billing the customer. Revenue may be recognized in advance of billing the customer, resulting in an amount recorded to “contract assets” or “accounts receivable, net” depending on the expected timing of payment for such unbilled accounts receivable. Once we have an unconditional right to consideration, we typically bill our customer and reclassify the “contract assets” to “accounts receivable, net.” Contract liabilities consist of deferred revenue and customer advances, which represent consideration received from a customer prior to transferring control of goods or services to the customer under the terms of a sales contract. Total contract assets and contract liabilities balances as of the respective dates are as follows:

	As of
(In thousands)	July 2, 2023		January 1, 2023
Contract assets	$	49,666	$	51,001
Contract liabilities1	$	234,326	$	155,764

1 As of July 2, 2023 and January 1, 2023, we had indemnifications of $1.0 million retained in connection with our C&I Solutions sale, which are presented within “contract liabilities, net of current portion” on our condensed consolidated balance sheets.

During the three and six months ended July 2, 2023, we recognized revenue of $82.1 million and $91.4 million that was included in contract liabilities as of April 2, 2023 and January 1, 2023, respectively. During the three and six months ended July 3, 2022, we recognized revenue of $40.0 million and $38.1 million that was included in contract liabilities as of April 3, 2022 and January 2, 2022.

As of July 2, 2023, we have entered into contracts with customers for sales of solar systems and components for an aggregate transaction price of $755.4 million, the substantial majority of which we expect to recognize over the next 12 months.