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REVENUE AND CONTRACT BALANCES
 9 Months Ended
Jun. 29, 2024
Revenue from Contract with Customer [Abstract]  
REVENUE AND CONTRACT BALANCES 11. REVENUE AND CONTRACT BALANCES
The Company recognizes revenue when we satisfy performance obligations as evidenced by the transfer of control of our products or services to customers. In general, the Company generates revenue from product sales, either directly to customers or to distributors. In determining whether a contract exists, we evaluate the terms of the agreement, the relationship with the customer or distributor and their ability to pay. Service revenue is generally recognized over time as the services are performed. For the three and nine months ended June 29, 2024 and July 1, 2023, the service revenue was not material.
The Company reports revenue based on its reportable segments and end markets, which provides information about how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors. Please refer to Note 14: Segment Information, for disclosure of revenue by segment and end markets.
Contract Balances
As of
(in thousands)June 29, 2024September 30, 2023
$ Change
% Change
Contract assets
$— $10,181 $(10,181)(100)%
Contract liabilities
$8,223 $4,797 $3,426 71.4 %
Our contract assets relate to our rights to consideration for revenue with collection dependent on events other than the passage of time, such as the achievement of specified payment milestones. The contract assets will be transferred to net account receivables as our right to consideration for these contract assets become unconditional. Contracts assets are reported in the accompanying Consolidated Condensed Balance Sheets within prepaid expenses and other current assets. The change in contract assets during the nine months ended June 29, 2024 was mainly due to $10.2 million of contract assets reclassified to accounts receivable, net, as our right to consideration for these contract assets became unconditional.
Our contract liabilities are primarily related to payments received in advance of satisfying performance obligations, and are reported in the accompanying Consolidated Condensed Balance Sheets within accrued expenses and other current liabilities.
Contract liabilities increased as a result of receiving new advance payments from customers, partially offset by recognition in revenue of $4.4 million that was included in contract liabilities as of September 30, 2023.