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Revenue and Contract Balances | 9 Months Ended
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Jun. 30, 2024
Revenue from Contract with Customer [Abstract] |
Revenue and Contract Balances | Revenue and Contract Balances We disaggregate revenue by client sector and contract type, as we believe it best depicts how the nature, timing and uncertainty of our revenue and cash flows are affected by economic factors. The following tables present our revenue disaggregated by client sector and contract type (in thousands):
| Three Months Ended |  | Nine Months Ended
| June 30, 2024 |  | July 2, 2023 |  | June 30, 2024 |  | July 2, 2023
Client Sector: |  |  |  |  |  |  |
U.S. federal government (1) | $ | 432,242 |  |  | $ | 338,022 |  |  | $ | 1,221,320 |  |  | $ | 996,471 |
U.S. state and local government | 146,401 |  |  | 151,462 |  |  | 444,877 |  |  | 452,447 |
U.S. commercial | 241,838 |  |  | 225,907 |  |  | 665,675 |  |  | 633,401 |
International (2) | 523,842 |  |  | 493,556 |  |  | 1,492,333 |  |  | 1,179,619 |
Total | $ | 1,344,323 |  |  | $ | 1,208,947 |  |  | $ | 3,824,205 |  |  | $ | 3,261,938 |
Contract Type: |  |  |  |  |  |  |
Fixed-price | $ | 548,452 |  |  | $ | 452,605 |  |  | $ | 1,478,915 |  |  | $ | 1,194,266 |
Time-and-materials | 589,301 |  |  | 596,904 |  |  | 1,730,796 |  |  | 1,550,970 |
Cost-plus | 206,570 |  |  | 159,438 |  |  | 614,494 |  |  | 516,702 |
Total | $ | 1,344,323 |  |  | $ | 1,208,947 |  |  | $ | 3,824,205 |  |  | $ | 3,261,938 |
(1) Includes revenue generated under U.S. federal government contracts performed outside the United States. (2) Includes revenue generated from non-U.S. clien ts, primarily in Canada, Australia, Europe and the United Kingdom. Other than the U.S. federal government, no single client accounted for more than 10% of our revenue for the three and nine months ended June 30, 2024 and July 2, 2023. Contract Assets and Contract Liabilities We invoice customers based on the contractual terms of each contract. However, the timing of revenue recognition may differ from the timing of invoice issuance. Contract assets represent revenue recognized in excess of the amounts for which we have the contractual right to bill our customers. Such amounts are recoverable from customers based upon various measures of performance, including achievement of certain milestones or completion of a contract. In addition, many of our time-and-materials arrangements are billed in arrears pursuant to contract terms that are standard within the industry, resulting in contract assets and/or unbilled receivables being recorded, as revenue is recognized in advance of billings. Contract retentions, included in contract assets, represent amounts withheld by clients until certain conditions are met or the project is completed, which may extend beyond one year. Contract liabilities consist of billings in excess of revenue recognized. Contract liabilities decrease as we recognize revenue from the satisfaction of the related performance obligation and increase as billings in advance of revenue recognition occur. Contract assets and liabilities are reported in a net position on a contract-by-contract basis at the end of each reporting period. There were no substantial non-current contract assets or liabilities for the periods presented. Net contract assets/liabilities consisted of the following (in thousands):
| Balance at
| June 30, 2024 |  | October 1, 2023
Contract assets (1) | $ | 118,556 |  |  | $ | 113,939 |
Contract liabilities | (372,283) |  |  | (335,044) |
Net contract liabilities | $ | (253,727) |  |  | $ | (221,105) |
(1) Inclu des $6.2 million and $6.8 million of contract retentions at June 30, 2024 and October 1, 2023, respectively. Both our contract assets and contract liabilities increased in the third quarter of fiscal 2024 compared to fiscal 2023 year-end, due to the timing of our milestone billing on fixed-price contracts which were different from the timing of revenue recognition on those contracts. For the first nine months of fiscal 2024 and 2023, we recognized revenue of approximately $214 million and $143 million, respectively, from the amounts included in the contract liability balances at the end of fiscal 2023 and 2022, respectively. Revenue is recognized by measuring progress over time under Accounting Standards Codification Topic 606, "Revenue from Contracts with Customers". We estimate and measure progress on our contracts over time whereby we compare our total costs incurred on each contract as a percentage of the total expected contract costs. Changes in those estimates could result in the recognition of cumulative catch-up adjustments to the contract’s inception-to-date revenue, costs and profit in the period in which such changes are made. As a resu lt, for the third quarter and first nine months of fiscal 2024, we recognized net favorable revenue and operating income adjustmen ts of $6.5 million and $16.4 million, respectively. For the first nine months of fiscal 2023, we recognized net favorable revenue and operating income adjustments of $4.0 million (substantially all in the first quarter). C hanges in revenue and cost estimates could also result in a projected loss, determined at the contract level, which would be recorded immediately in earnings. At June 30, 2024 and October 1, 2023, our consolidated balance sheets included liabilities for anticipated losses of $15.0 million and $8.5 million, respectively. The estimated cost to complete these related contracts was approximately $95 million and $68 million at June 30, 2024 and October 1, 2023, respectively. Accounts Receivable, Net Net accounts receivable consisted of the following (in thousands):
| Balance at
| June 30, 2024 |  | October 1, 2023
Billed | $ | 685,184 |  |  | $ | 672,712 |
Unbilled | 372,913 |  |  | 306,788 |
Total accounts receivable | 1,058,097 |  |  | 979,500 |
Allowance for doubtful accounts | (4,339) |  |  | (4,965) |
Total accounts receivable, net | $ | 1,053,758 |  |  | $ | 974,535 |
Billed accounts receivable represent amounts billed to clients that have not been collected. Unbilled accounts receivable, which represent an unconditional right to payment subject only to the passage of time, include unbilled amounts typically resulting from revenue recognized but not yet billed pursuant to contract terms or billed after the period end date. Substantially all of our unbilled receivables at June 30, 2024 are expected to be billed and collecte d within 12 months. The allowance for doubtful accounts represents amounts that are expected to become uncollectible or unrealizable in the future. We determine an estimated allowance for uncollectible accounts based on management's consideration of trends in the actual and forecasted credit quality of our clients, including delinquency and payment history; type of client, such as a government agency or a commerci al sector client; and general economic and industry conditions, which may affect our clients' ability to pay. Other than the U.S. federal government, no single client accounted for more than 10% of our accounts receivable at June 30, 2024 and October 1, 2023. Remaining Unsatisfied Performance Obligation (“RUPO”) Our RUPO represents a measure of the total dollar value of work to be performed on contracts awarded and in progress. We had $5.2 billion of RUPO at June 30, 2024. Our RUPO increases with awards from new contracts or additions on existing contracts, and decreases as work is performed and revenue is recognized on existing contracts. Our RUPO may also decrease when projects are canceled or modified in scope. We include a contract within our RUPO when the contract is awarded and an agreement on contract terms has been reached. We expect to satisfy our RUPO at June 30, 2024 over the following periods (in thousands):
| Amount
Within 12 months | $ | 3,508,571 |
Beyond | 1,683,295 |
Total | $ | 5,191,866 |
Although RUPO reflects business that is considered to be firm, cancellations, deferrals or scope adjustments may occur. Our RUPO is adjusted to reflect any known project cancellations, revisions to project scope and cost, foreign currency exchange fluctuations and project deferrals, as appropriate. Our operations and maintenance contracts can generally be terminated by the clients without a substantive financial penalty; therefore, the remaining performance obligations on such contracts are limited to the notice period required for the termination (usually 30, 60, or 90 days).

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- Definition The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 9 -Publisher FASB -URI https://asc.fasb.org/1943274/2147479806/606-10-50-9 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 10 -Publisher FASB -URI https://asc.fasb.org/1943274/2147479806/606-10-50-10 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 15 -Publisher FASB -URI https://asc.fasb.org/1943274/2147479806/606-10-50-15 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 12 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147479806/606-10-50-12 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 12 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org/1943274/2147479806/606-10-50-12 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 12 -Subparagraph (c) -Publisher FASB -URI https://asc.fasb.org/1943274/2147479806/606-10-50-12 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 12 -Subparagraph (d) -Publisher FASB -URI https://asc.fasb.org/1943274/2147479806/606-10-50-12 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 12 -Subparagraph (e) -Publisher FASB -URI https://asc.fasb.org/1943274/2147479806/606-10-50-12 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 13 -Subparagraph (b)(2) -Publisher FASB -URI https://asc.fasb.org/1943274/2147479806/606-10-50-13 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Name Accounting Standards Codification -Topic 606 -Publisher FASB -URI https://asc.fasb.org/606/tableOfContent + Details
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