Revenue from Contracts with Customers

6 Months Ended

Mar. 31, 2020

Revenue from Contract with Customer [Abstract]

Revenue from Contracts with Customers

14. Revenue from Contracts with Customers

Disaggregated Revenue

The Company disaggregates revenue from contracts with customers in a manner that depicts how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors. The Company disaggregates revenue based on the transfer of control of the underlying performance obligations, the geographic location in which customer orders are placed and by reporting unit.

The Company transfers control of its performance obligations at a point in time or over time, depending on the nature of the product or service being provided. Revenue from contracts with customers is attributed to geographic areas based on locations in which the customer orders are placed. The Company reports financial results for two reportable segments which consist of Brooks Semiconductor Solutions Group segment and Brooks Life Sciences segment. The Company also consists of five reporting units, including three reporting units within the Brooks Semiconductor Solutions Group reportable segment and two reporting units within the Brooks Life Sciences reportable segment. The

following is a reconciliation of revenue disaggregated in a manner discussed above to segment revenue for the three and six months ended March 31, 2020 and 2019 (in thousands):

	Brooks Semiconductor		Brooks Life
	Solutions Group		Sciences		Total
Three months ended March 31, 2020
Point in time	$	122,694	$	24,341	$	147,035
Over time		2,229		70,963		73,192
	$	124,923	$	95,304	$	220,227
Three months ended March 31, 2019
Point in time	$	111,710	$	24,983	$	136,693
Over time		1,167		60,530		61,697
	$	112,877	$	85,513	$	198,390
Six Months Ended March 31, 2020
Point in time	$	239,483	$	45,660	$	285,143
Over time		4,251		141,333		145,584
	$	243,734	$	186,993	$	430,727
Six Months Ended March 31, 2019
Point in time	$	223,626	$	48,150	$	271,776
Over time		1,958		104,023		105,981
	$	225,584	$	152,173	$	377,757

The following is revenue by geographic location and reporting unit for the three and six months ended March 31, 2020 and 2019 (in thousands):

	Three months ended March 31,				Six months ended March 31,
	2020		2019		2020		2019
Geographic Location
North America	$	85,887	$	83,156	$	166,118	$	152,053
Asia/Pacific/Other		105,014		77,653		208,553		157,112
United Kingdom		10,384		12,540		20,305		24,618
Rest of Europe		18,942		25,041		35,751		43,974
	$	220,227	$	198,390	$	430,727	$	377,757
Reporting Unit
Automation Solutions	$	68,733	$	72,445	$	132,970	$	146,120
Contamination Control Solutions		45,463		30,047		89,804		58,003
Global Semiconductor Services		10,727		10,385		20,960		21,461
Brooks Semiconductor Solutions Group		124,923		112,877		243,734		225,584
Sample Management		54,289		52,590		106,007		102,892
GENEWIZ		41,015		32,923		80,986		49,281
Brooks Life Sciences		95,304		85,513		186,993		152,173
Total	$	220,227	$	198,390	$	430,727	$	377,757

Contract Balances

Accounts Receivable, Net. Accounts receivable represent rights to consideration in exchange for products or services that have been transferred by the Company, when payment is unconditional and only the passage of time is required before payment is due. Accounts receivable do not bear interest and are recorded at the invoiced amount. The Company

maintains an allowance for doubtful accounts representing its best estimate of probable credit losses related to its existing accounts receivable and their net realizable value. The Company determines the allowance for doubtful accounts based on a number of factors, including an evaluation of customer credit worthiness, the age of the outstanding receivables, economic trends and historical experience. Accounts receivable, net were $179.0 million and $165.6 million at March 31, 2020 and September 30, 2019, respectively.

Contract Assets. Contract assets represent rights to consideration in exchange for products or services that have been transferred by the Company, when payment is conditional on something other than the passage of time. These amounts typically relate to contracts within the Brooks Life Sciences segment where the right to payment is not present until completion of the contract or the achievement of specified milestones and the value of the products or services transferred exceed this constraint. Contract assets are classified as current. Contract asset balances which are included within “Prepaid expenses and other current assets” on the Company’s Consolidated Balance Sheet, were $15.1 million and $14.0 million at March 31, 2020 and September 30, 2019, respectively.

Deferred Commissions. Deferred commissions represent a direct and incremental cost of obtaining a contract. These amounts primarily relate to sales commissions within the Brooks Life Sciences segment and are deferred and amortized over a 60 month period, which represents the average period of contract performance. The Company classifies deferred commissions as noncurrent as the original amortization period of this asset is greater than one year. Deferred commissions balances are included within “Other assets” on the Company’s Consolidated Balance Sheet. Deferred commissions were $0.6 million and $0.8 million at March 31, 2020 and September 30, 2019, respectively. The Company recorded amortization expense related to deferred commissions of $0.1 million and $0.3 million, respectively for the three and six months ended March 31, 2020.

Contract Liabilities. Contract liabilities represent the Company’s obligation to transfer products or services to a customer for which consideration has been received, or for which an amount of consideration is due from the customer. Contract assets and liabilities are reported on a net basis at the contract level, depending on the contracts position at the end of each reporting period. Contract liabilities are included within Deferred revenue on the Company’s Consolidated Balance Sheet. Contract liabilities were $29.1 million and $29.4 million at March 31, 2020 and September 30, 2019, respectively. Revenue recognized from the contract liability balance at September 30, 2019 was $10.1 million for the six months ended March 31, 2020.

Remaining Performance Obligations. Remaining performance obligations represent the transaction price of unsatisfied or partially satisfied performance obligations within contracts with an original expected contract term that is greater than one year and for which fulfillment of the contract has started as of the end of the reporting period. The aggregate amount of transaction consideration allocated to remaining performance obligations as of March 31, 2020 was $34.1 million. The following table summarizes when the Company expects to recognize the remaining performance obligations as revenue, the Company will recognize revenue associated with these performance obligations as transfer of control occurs (in thousands):

		As of March 31, 2020
	Less than 1 Year		Greater than 1 Year		Total
Remaining Performance Obligations	$	25,337	$	8,805	$	34,142

Cost to Obtain and Fulfill a Contract

The Company capitalizes sales commissions when incurred if they are (i) incremental costs of obtaining a contract, (ii) expected to be recovered and (iii) have an expected amortization period that is greater than one year. As part of the Company’s cumulative effect adjustment, incremental costs associated with obtaining a contract were capitalized and have been classified as deferred commissions within the Company’s Consolidated Balance Sheet. These amounts primarily relate to sales commissions within the Brooks Life Sciences segment and are being amortized over a 60 month period, which represents the average period of contract performance. The Company did not capitalize any sales commissions during the three or six months ended March 31, 2020 as the amount of sales commissions that qualified for capitalization during the reporting period was insignificant. Sales commissions incurred during the reporting period have

been expensed as incurred. These costs are recorded within “Selling, general, and administration expenses”. The Company has concluded that none of its costs incurred in fulfillment of customer contracts meet the capitalization criteria. The Company will account for shipping and handling activities as fulfillment activities and recognize the associated expense when transfer of control of the product has transferred to the customer.