Revenue

6 Months Ended

Dec. 31, 2019

Revenue from Contract with Customer [Abstract]

Disaggregation of Revenue

The Company disaggregates revenue by type of product, by geographical market, and by products sold to indirect sales channel partners or direct customers and original equipment manufacturers ("OEMs") that depict the nature, amount, and timing of revenue and cash flows. Service revenues are not a significant component of total revenue and are aggregated within the respective categories.

The following is a summary of net sales by product type (in thousands):



	Three Months Ended December 31,								Six Months Ended December 31,
	2019				2018				2019				2018
	Amount		Percent of Net Sales		Amount		Percent of Net Sales		Amount		Percent of Net Sales		Amount		Percent of Net Sales
Server and storage systems	$	672,727	77.2	%	$	762,622	81.9	%	$	1,308,753	78.3	%	$	1,568,538	82.4	%
Subsystems and accessories	198,216		22.8	%	168,887		18.1	%	361,994		21.7	%	334,089		17.6	%
Total	$	870,943	100.0	%	$	931,509	100.0	%	$	1,670,747	100.0	%	$	1,902,627	100.0	%

Server and storage systems constitute an assembly and integration of subsystems and accessories, and related services.

Subsystems and accessories are comprised of serverboards, chassis and accessories.

International net sales are based on the country and region to which the products were shipped. The following is a summary for the three and six months ended December 31, 2019 and 2018, of net sales by geographic region (in thousands):



	Three Months Ended December 31,				Six Months Ended December 31,
	2019		2018		2019		2018
United States	$	527,404	$	511,913	$	996,245	$	1,079,528
Europe	147,564		180,976		275,623		343,536
Asia	165,716		196,308		327,355		403,176
Others	30,259		42,312		71,524		76,387
	$	870,943	$	931,509	$	1,670,747	$	1,902,627

The following table presents the percentages of net sales from products sold through the Company's indirect sales channel and to its direct customers and OEMs for the three and six months ended December 31, 2019 and 2018:



	Three Months Ended December 31,				Change		Six Months Ended December 31,				Change
	2019		2018		%		2019		2018		%
Indirect sales channel	51.4	%	40.8	%	10.6	%	50.7	%	37.5	%	13.2	%
Direct customers and OEMs	48.6	%	59.2	%	(10.6	)%	49.3	%	62.5	%	(13.2	)%
Total net sales	100.0	%	100.0	%			100.0	%	100.0	%

Contract Balances

Generally, the payment terms of the Company’s offerings range from 30 to 60 days. In certain instances, customers may prepay for products and services in advance of delivery. Receivables relate to the Company’s right to consideration for performance obligations completed (or partially completed) for which the Company has an unconditional right to consideration.

Contract assets are rights to consideration in exchange for goods or services that the Company has transferred to a customer when such right is conditional on something other than the passage of time. Such contract assets are insignificant to the Company’s condensed consolidated financial statements.

Contract liabilities consist of deferred revenue and relate to amounts invoiced to or advance consideration received from customers, which precede the Company’s satisfaction of the associated performance obligation(s). The Company’s deferred revenue primarily results from customer payments received upfront for extended warranties and on-site services because these performance obligations are satisfied over time. Revenue recognized during the three and six months ended December 31, 2019, which was included in the opening deferred revenue balance as of June 30, 2019, was $23.2 million and $48.7 million, respectively.

Deferred revenue decreased during the six months ended December 31, 2019 because the recognition of revenue from contracts entered into in prior periods exceeded the amounts for service contracts invoiced during the period.

Transaction Price Allocated to the Remaining Performance Obligations

Remaining performance obligations represent in aggregate the amount of transaction price that has been allocated to performance obligations not delivered, or only partially undelivered, as of the end of the reporting period. The Company applies the optional exemption to not disclose information about remaining performance obligations that are part of a contract that has an original expected duration of one year or less. These performance obligations generally consist of services, such as on-site integration services that are contracted for one year or less, and products for which control has not yet been transferred. The value of the transaction price allocated to remaining performance obligations as of December 31, 2019 was approximately $215.6 million. The Company expects to recognize approximately 53% of remaining performance obligations as revenue in the next 12 months, and the remainder thereafter.