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Revenues
 6 Months Ended
Dec. 31, 2024
Revenue from Contract with Customer [Abstract]  
Revenues
3.
Revenues

The Company accounts for revenues in accordance with Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers. The Company derives the majority of its revenues from sales of its networking equipment, with the remaining revenues generated from sales of subscription and support, which primarily includes software subscriptions delivered as software as a service (“SaaS”) and additional revenues from maintenance contracts, professional services and training for its products. The Company sells its products, SaaS and maintenance contracts direct to customers and partners in two distribution channels, or tiers. The first tier consists of a limited number of independent distributors that stock the Company's products and sell primarily to resellers. The second tier of the distribution channel consists of non-stocking distributors and value-added resellers that sell directly to end-users. Products and subscription and support may be sold separately or in bundled packages.

Revenue Recognition

Performance Obligations. A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of account in ASC 606. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. Certain of the Company’s contracts have multiple performance obligations, as the promise to transfer individual goods or services is separately identifiable from other promises in the contracts and, therefore, is distinct. For contracts with multiple performance obligations, the Company allocates the contract’s transaction price to each performance obligation based on its relative standalone selling price. The stand-alone selling prices are determined based on the prices at which the Company separately sells these products. For items that are not sold separately, the Company estimates the stand-alone selling prices using other observable inputs.

The Company’s performance obligations are satisfied at a point in time or over time as the customer receives and consumes the benefits provided. Substantially all of the Company’s product sales revenues are recognized at a point in time. Substantially all of the Company’s subscription and support revenues are recognized over time. For revenues recognized over time, the Company primarily uses an input measure, days elapsed, to measure progress.

As of December 31, 2024, the Company had $589.5 million of remaining performance obligations, which primarily comprised of deferred SaaS subscription and deferred support revenues. The Company expects to recognize approximately 31% of its deferred revenue as revenue in the remainder of fiscal 2025, an additional 34% in fiscal 2026, and the remaining 35% of the balance thereafter.

Contract Balances. The timing of revenue recognition, billings and cash collections results in billed accounts receivable and deferred revenue in the condensed consolidated balance sheets. Services provided under renewable SaaS subscription and support arrangements of the Company are billed in accordance with agreed-upon contractual terms, which are either billed fully at the inception of contract or at periodic intervals (e.g., quarterly or annually). The Company generally receives payments from its customers in advance of services being provided, resulting in deferred revenues. These liabilities are reported on the condensed consolidated balance sheets on a contract-by-contract basis at the end of each reporting period.

Revenue recognized for the three months ended December 31, 2024 and 2023 that was included in the deferred revenue balance at the beginning of each period was $101.3 million and $105.7 million, respectively. Revenue recognized for the six months ended December 31, 2024 and 2023 that was included in the deferred revenue balance at the beginning of each period was $183.3 million and $172.0 million, respectively.

Contract Costs. The Company recognizes the incremental costs of obtaining contracts as an expense when incurred if the amortization period of the assets that the Company otherwise would have recognized is one year or less. Management expects that commission fees paid to sales representatives as a result of obtaining subscription and support contracts and contract renewals are recoverable and therefore the Company’s condensed consolidated balance sheets included capitalized balances in the amount of $24.7 million as of December 31, 2024 and June 30, 2024. Capitalized commissions are included within other assets in the condensed consolidated balance sheets. Capitalized commission fees are amortized on a straight-line basis over the average period of service contracts of approximately three years, and are included in “Sales and marketing” in the accompanying condensed consolidated statements of operations. Amortization recognized during the three months ended December 31, 2024 and 2023 was $3.1 million and $2.7 million, respectively. Amortization recognized during the six months ended December 31, 2024 and 2023 was $6.1 million and $5.2 million, respectively.

Estimated Variable Consideration. There were no material changes in the current period to the estimated variable consideration for performance obligations, which were satisfied or partially satisfied during previous periods.

Revenues by Geography

The Company operates in three geographic regions: Americas, EMEA (Europe, Middle East and Africa) and APAC (Asia Pacific). The following table sets forth the Company’s net revenues disaggregated by geographic region (in thousands):

 

Three Months Ended

 

Six Months Ended

 

 

 

December 31,
2024

 

 

December 31,
2023

 

 

December 31,
2024

 

 

December 31,
2023

 

Americas:

 

 

 

 

 

 

 

 

 

 

 

 

United States

 

 

119,678

 

 

$

149,549

 

 

 

272,931

 

 

$

332,301

 

Other

 

 

11,710

 

 

 

13,086

 

 

 

23,892

 

 

 

25,983

 

Total Americas

 

 

131,388

 

 

 

162,635

 

 

 

296,823

 

 

 

358,284

 

EMEA

 

 

128,257

 

 

 

110,605

 

 

 

213,175

 

 

 

254,208

 

APAC

 

 

19,710

 

 

 

23,137

 

 

 

38,561

 

 

 

37,022

 

Total net revenues

 

$

279,355

 

 

$

296,377

 

 

$

548,559

 

 

$

649,514

 

 

Geographic Concentrations

 

For the three and six months ended December 31, 2024, the Company generated 15% and 11% of its net revenues from the Netherlands, respectively. For the three months ended December 31, 2023, the Company generated 10% of its net revenues from Germany and for the six months ended December 31, 2023, the Company generated approximately 11% of its net revenues from the Netherlands. No other foreign country accounted for 10% or more of the Company's net revenues for the three and six months ended December 31, 2024 and 2023.

 

Customer Concentrations

The Company performs ongoing credit evaluations of its customers and generally does not require collateral in exchange for credit.

The following table sets forth customers accounting for 10% or more of the Company’s net revenues for the periods indicated below:

 

 

Three Months Ended

 

Six Months Ended

 

 

December 31,
2024

 

December 31,
2023

 

December 31,
2024

 

December 31,
2023

Westcon Group, Inc.

 

22%

 

10%

 

18%

 

18%

TD Synnex Corporation

 

17%

 

24%

 

19%

 

21%

Jenne, Inc.

 

15%

 

23%

 

18%

 

25%

 

The following table sets forth major customers accounting for 10% or more of the Company’s net accounts receivable balance:

 

 

 

 

 

December 31,
2024

 

June 30,
2024

Jenne, Inc.

 

26%

 

64%

ScanSource, Inc.

 

*

 

11%

 * Less than 10% of accounts receivable