XML 32 R20.htm IDEA: XBRL DOCUMENT v3.22.0.1
REVENUE AND MAJOR CUSTOMERS
 9 Months Ended
Jan. 01, 2022
Revenue from Contract with Customer [Abstract]  
REVENUE AND MAJOR CUSTOMERS REVENUE 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 partners' 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.

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 the three and nine months ended January 1, 2022 and December 26, 2020:
Three Months EndedNine Months Ended
(in thousands)January 1, 2022December 26, 2020January 1, 2022December 26, 2020
Net revenues
Headsets$195,479 $240,908 $553,452 $618,498 
   Voice53,156 67,076 174,159 156,682 
   Video105,387 112,727 358,996 284,666 
   Services55,544 63,974 173,155 191,529 
Total net revenues$409,566 $484,685 $1,259,762 $1,251,375 

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 three and nine months ended January 1, 2022 and December 26, 2020. The following table presents total net revenues by geography:
Three Months EndedNine Months Ended
(in thousands)January 1, 2022December 26, 2020January 1, 2022December 26, 2020
Net product revenues
U.S.$160,731 $169,812 $522,770 $473,633 
Europe, Middle East, and Africa119,067 164,896 327,868 357,389 
Asia Pacific46,273 57,481 161,836 155,460 
Americas, excluding U.S.27,951 28,522 74,133 73,364 
Total international net product revenues193,291 250,899 563,837 586,213 
Total net product revenues$354,022 $420,711 $1,086,607 $1,059,846 
Net service revenues
U.S.$21,498 $23,601 $66,347 $71,839 
Europe, Middle East, and Africa14,117 16,533 43,199 48,545 
Asia Pacific16,140 19,342 51,643 57,196 
Americas, excluding U.S.3,789 4,498 11,966 13,949 
Total international net service revenues34,046 40,373 106,808 119,690 
Total net service revenues$55,544 $63,974 $173,155 $191,529 
Total net revenues$409,566 $484,685 $1,259,762 $1,251,375 

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. As of January 1, 2022 and April 3, 2021, the Company's deferred revenue balance was $199.2 million and $213.8 million, respectively. During the three months ended January 1, 2022, the Company recognized $46.2 million in total net revenues that were 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 January 1, 2022:
(in thousands)CurrentNon-CurrentTotal
Unsatisfied (or partially unsatisfied) performance obligations$132,498 $66,695 $199,193 

Sales, value add, and other taxes collected concurrently 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 has considered a constraint accordingly. Provisions for sales returns are presented within accrued liabilities in the condensed 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 to offset, in which case they are presented within accrued liabilities on the condensed consolidated balance sheets. See Note 4, Details of Certain Balance Sheet Accounts.

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 selling, general, and administrative expense on a straight-line basis. The capitalized amount of incremental and recoverable costs of obtaining contracts and related amortization was not material as of and for the three and nine months ended January 1, 2022.