CONTRACT ASSETS AND CONTRACT LIABILITIES
Contract assets and liabilities are reflected in the Company’s consolidated balance sheets within the accounts reflected below.
Contract Assets
Accounts receivable represent amounts due from the Company’s customers who are concentrated primarily in the pharmaceutical, biotechnology, and medical device industries. Unbilled represents revenue recognized to date that has not been billed or is not yet contractually billable to the customer. In general, amounts become billable upon the achievement of negotiated contractual events, in accordance with predetermined payment schedules or when a reimbursable expense has been incurred. Amounts classified to unbilled are those billable to customers within one year from the respective balance sheet date.
Accounts receivable and unbilled, net consisted of the following at December 31 (in thousands):
| | | | | | | | | | | |
| 2025 | | 2024 |
| Accounts receivable | $ | 376,755 | | | $ | 291,096 | |
| Unbilled receivables | 25,352 | | | 5,347 | |
| Less: allowance for doubtful accounts | (29) | | | — | |
| Total accounts receivable and unbilled, net | $ | 402,078 | | | $ | 296,443 | |
Contract Liabilities
Advanced billings represents cash received from customers, or billed amounts per an agreed upon payment schedule, in advance of services being performed or revenue being recognized. During the years ended December 31, 2025 and 2024, the Company recognized approximately $613.4 million and $498.5 million, respectively, of revenue that was included in the Advanced billings balance at the beginning of the year.
Advanced billings consisted of the following at December 31 (in thousands):
| | | | | | | | | | | |
| 2025 | | 2024 |
| Advanced billings | $ | 854,390 | | | $ | 710,585 | |
A rollforward of allowance for doubtful account activity is as follows (in thousands):
| | | | | | | | | | | | | | | | | |
| Year Ended December 31, |
| 2025 | | 2024 | | 2023 |
| Allowance for doubtful accounts - beginning balance | $ | — | | | $ | (7) | | | $ | (170) | |
| Current year provision | (29) | | | (113) | | | (3,420) | |
| Write-offs, recoveries and the effects of foreign currency exchange | — | | | 120 | | | 3,583 | |
| Allowance for doubtful accounts - ending balance | $ | (29) | | | $ | — | | | $ | (7) | |
About Revenue Disclosures
Revenue disclosures under ASC 606 explain how a company identifies performance obligations, allocates transaction prices, and determines when revenue is recognized. This section is essential for understanding whether reported revenue reflects genuine economic activity or aggressive accounting choices. Analysts examine the mix of point-in-time versus over-time recognition, which directly affects revenue timing and comparability.
Key signals: rising contract liabilities (deferred revenue) suggest strong future revenue visibility, while declining contract assets may indicate slowing project milestones. Watch for variable consideration estimates — rebates, returns, and performance bonuses that require management judgment. Significant changes in disaggregated revenue by geography or product line can reveal shifting business mix before it appears in headline numbers. Compare revenue growth against contract liability growth to assess sustainability, and scrutinize any changes in the timing of recognition that coincide with earnings pressure.