REVENUE AND MAJOR CUSTOMERS

12 Months Ended

Apr. 03, 2021

REVENUE AND MAJOR CUSTOMERS [Abstract]

REVENUE AND MAJOR CUSTOMERS

EVENUE AND MAJOR CUSTOMERS

The Company designs, builds, and markets collaboration solutions which combine legendary audio expertise and powerful video and conferencing capabilities to create endpoints that power meaningful human connections and provide solutions that make life easier when they work together and with our partner's services.

The Company’s major product categories are Headsets, Video, Voice, and Services. Headsets include wired and wireless communication headsets; Voice includes open SIP and native ecosystem desktop phones as well as conference room phones; Video includes video conferencing solutions and peripherals, such as cameras, speakers, and microphones. The broad portfolio of Services include video interoperability, hardware and support for our solutions and hardware devices, as well as professional, hosted, and managed services that are grounded in our deep expertise aimed at helping customers achieve their goals for collaboration. The Company's cloud management and analytics software enables IT administrators to configure and update firmware, monitor device usage, troubleshoot, and gain a deep understanding of user behavior. All of the Company's solutions are designed to integrate seamlessly with the platform and services of our customers choice in a wide range of Unified Communications & Collaboration ("UC&C"), Unified Communication as a Service ("UCaaS"), and Video as a Service ("VaaS") environments. The Company's RealPresence collaboration solutions range from infrastructure to endpoints and allow people to connect and collaborate globally, naturally and seamlessly. As announced on February 4, 2020, the Company entered into a definitive agreement with Nacon S.A. and closed the transaction on March 19, 2020, completing the sale of the Company's consumer gaming assets for a net amount and resulting pre-tax gain on sale that are not material to the Company's Consolidated Financial Statements.

Product revenue is largely comprised of sales of hardware devices, peripherals, and platform software licenses used in communication and collaboration in offices and contact centers, with mobile devices, cordless phones, and computers. Services revenue primarily includes support on hardware devices, professional, hosted and managed services, and solutions to the Company's customers.

The following table disaggregates revenues by major product category for Fiscal Years 2021, 2020 and 2019:

	Fiscal Year Ended
(in thousands)	April 3, 2021		March 28, 2020		March 30, 2019
Net revenues
Headsets	$	823,451	$	773,186	$	910,699
Voice	221,131		375,505		344,586
Video	426,244		284,045		255,485
Services	256,781		264,254		163,765
Total net revenues	$	1,727,607	$	1,696,990	$	1,674,535

For reporting purposes, revenue is attributed to each geographic region based on the location of the customer. Other than the U.S., no country accounted for 10% or more of the Company's Total Net Revenues for the Fiscal Years 2021, 2020 or 2019.

The following table presents Total Net Revenues by geography:

	Fiscal Year Ended
(in thousands)	April 3, 2021		March 28, 2020		March 30, 2019
Net product revenues
U.S.	$	647,321	$	708,566	$	729,930
Europe, Middle East, and Africa	512,196		398,721		432,899
Asia Pacific	208,597		221,912		245,499
Americas, excluding U.S.	102,712		103,537		102,442
Total international net product revenues	823,505		724,170		780,840
Total net product revenues	$	1,470,826	$	1,432,736	$	1,510,770
Net service revenues
U.S.	$	96,548	$	102,103	$	59,615
Europe and Africa	64,660		66,900		43,991
Asia Pacific	77,158		73,424		43,382
Americas, excluding U.S.	18,415		21,827		16,777
Total international net service revenues	160,233		162,151		104,150
Total service net revenues	256,781		264,254		163,765
Total net revenues	$	1,727,607	$	1,696,990	$	1,674,535

Two customers, Ingram Micro Group and ScanSource, accounted for 19.3% and 19.0%, respectively, of Total Net Revenues for Fiscal Year 2021. Two customers, ScanSource and Ingram Micro Group accounted for 19.8% and 17.3%, respectively, of Total Net Revenues for Fiscal Year 2020. Two customers, ScanSource and Ingram Micro Group, accounted for 16.0% and 11.4%, respectively, of Total Net Revenues in Fiscal Year 2019. Total Net Revenues from ScanSource and Ingram Micro Group was comprised of both Product and Service revenue for all periods presented. ScanSource and Ingram Micro Group accounted for 24.9% and 24.7%, respectively, of Accounts Receivable, net as of April 3, 2021. Three customers, Ingram Micro Group, ScanSource, and Synnex Group, accounted for 22.2%, 17.3%, and 15.6%, respectively, of Accounts Receivable, net as of March 28, 2020.

Deferred revenue is primarily comprised of non-cancelable maintenance support performance obligations on hardware devices which are typically billed in advance and recognized ratably over the contract term as the services are delivered. The Company's deferred revenue balance was $213.8 million as of April 3, 2021, which represents 12.4% of Total Net Revenues for Fiscal Year 2021, and was $208.5 million as of March 28, 2020, which represents 12.3% of Total Net Revenues for Fiscal Year 2020. During Fiscal Year 2021, the Company recognized $144.1 million in Total Net Revenues that was recorded in deferred revenue at the beginning of the period.

The table below represents aggregate amount of the transaction price allocated to the performance obligations that are unsatisfied (or partially unsatisfied) as of April 3, 2021:

	April 3, 2021
(in millions)	Current		Non-current		Total
Unsatisfied (or partially unsatisfied) performance obligations	$	141.4	$	72.4	$	213.8

Upon establishment of creditworthiness, the Company may extend credit terms to its customers which typically ranges between 30 and 90 days from the date of invoice depending on geographic region and type of customer. The Company typically bills upon product hardware shipment, at time of software activation, upon the start of service entitlement, or upon completion of services. Revenue is not generally recognized in advance of billings. The balance of contract assets was $4.1 million and $3.7 million as of as of April 3, 2021 and March 28, 2020, respectively. None of the Company's contracts are deemed to have significant financing components.

Sales, value add, and other taxes collected concurrent with revenue producing activities are excluded from revenue.

The Company's indirect channel model includes both a two-tiered distribution structure, where the Company sells to distributors that subsequently sell to resellers, and a one-tiered structure where the Company sells directly to resellers. For these arrangements, transfer of control begins at the time access to the Company's services is made available to the end customer and entitlements have been contractually established, provided all other criteria for revenue recognition are met.

Commercial distributors and retailers represent the Company's largest sources of net revenues. Sales through its distribution and retail channels are made primarily under agreements allowing for rights of return and include various sales incentive programs, such as back end rebates, discounts, marketing development funds, price protection, and other sales incentives. The Company has an established sales history for these arrangements and the Company records the estimated reserves at the inception of the contract as a reflection of the reduced transaction price. Customer sales returns are estimated based on historical data, relevant current data, and the monitoring of inventory build-up in the distribution channel. Revenue reserves represent a reasonable estimation made by management and are subject to significant judgment. Estimated reserves may differ from actual returns or incentives provided, due to unforeseen customer return or claim patterns or changes in circumstances. For certain customer contracts which have historically demonstrated variability, the Company has considered the likelihood of being under-reserved and have considered a constraint accordingly. Provisions for Sales Returns are presented within Accrued Liabilities in the Company's Consolidated Balance Sheets. Provisions for promotions, rebates, and other sales incentives are presented as a reduction of Accounts Receivable unless there is no identifiable right offset, in which case they are presented within Accrued Liabilities on its Consolidated Balance Sheets. Refer to Note 7, Details of Certain Balance Sheet Accounts for additional details.

For certain arrangements, the Company pays commissions, bonuses and taxes associated with obtaining the contracts. The Company capitalizes such costs if they are deemed to be incremental and recoverable. The Company has elected to use the practical expedient to record the incremental costs of obtaining a contract as an expense when incurred if the amortization period of the asset that the entity otherwise would have recognized is one year or less. Determining the amortization period of costs related to obtaining a contract involves judgment. Capitalized commissions and related expenses, on hardware sales and services recognized at a point in time generally have an amortization period of less than one year. Maintenance-related performance obligations generally have an amortization period greater than one year when considering renewals. Capitalized commissions are amortized to sales and marketing Expense on a straight-line basis. The capitalized amount of incremental and recoverable costs of obtaining contracts with an amortization period of greater than one year are $4.9 million as of April 3, 2021. Amortization of capitalized contract costs for Fiscal Year 2021 was $2.3 million.