OSI SYSTEMS INC Revenue Disclosure
5.CONTRACT ASSETS AND LIABILITIES
The table below shows the balance of contract assets and liabilities as of June 30, 2024 and 2025, including the change between the periods. There were no substantial non-current contract assets for the periods presented.
Contract Assets (dollar amounts in thousands)
June 30, | June 30, |
| ||||||||||
| 2024 |
| 2025 |
| Change |
| % Change |
| ||||
Unbilled revenue (included in accounts receivable, net) | $ | 338,944 | $ | 242,742 | $ | (96,202) | (28) | % | ||||
Contract Liabilities (dollar amounts in thousands)
June 30, | June 30, |
| ||||||||||
| 2024 |
| 2025 |
| Change |
| % Change | |||||
Advances from customers | $ | 53,431 | $ | 68,184 | $ | 14,753 |
| 28 | % | |||
Deferred revenue—current |
| 46,855 |
| 77,788 |
| 30,933 |
| 66 | % | |||
Deferred revenue—long-term |
| 22,809 |
| 18,856 |
| (3,953) |
| (17) | % | |||
Contract Assets. Contract assets decreased by approximately $96.2 million as a result of unbilled revenue primarily from the timing and nature of milestones met in contracts for a number of customers in our Security Division, both within the United States and internationally, where we met the contractual terms to prepare invoices to the customers that reduce unbilled revenue, partially offset by transactions where we met the revenue recognition criteria under ASC 606 in advance of the time when contracts give us the right to invoice customers.
Remaining Performance Obligations. Remaining performance obligations related to ASC 606 represent the portion of the transaction price allocated to performance obligations under an original contract with a term greater than one year which are fully or partially unsatisfied at the end of the period. As of June 30, 2025, the aggregate portion of the transaction price allocated to remaining performance obligations was approximately $820.4 million. We expect to recognize revenue on approximately 53% of the remaining performance obligations over the next 12 months, and the remainder is expected to be recognized thereafter. During the fiscal year ended June 30, 2025, we recognized revenue of $72 million from contract liabilities existing as of July 1, 2024.
Practical Expedients. In cases where we are responsible for shipping after the customer has obtained control of the goods, we have elected to treat the shipping activities as fulfillment activities rather than as a separate performance obligation. Additionally, we have elected to capitalize the cost to obtain a contract only if the period of amortization would be longer than one year. We only give consideration to whether a customer agreement has a financing component if the period of time between transfer of goods and services and customer payment is greater than one year.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Aug 25, 2025 | Showing above |
| 2020 | Aug 21, 2020 | |
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.