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Revenue Recognition | 6 Months Ended
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Sep. 30, 2023
Revenue from Contract with Customer [Abstract] |
Revenue Recognition | Revenue RecognitionIn accordance with ASC Topic 606 ("Revenue from Contracts with Customers"), the Company generates revenue by selling prescription and non-prescription pet medication products, pet food, supplements, supplies, membership fees, and veterinary services. Certain pet supplies offered on the Company’s website are drop shipped to customers. The Company considers itself the principal in the arrangement because the Company controls the specified good before it is transferred to the customer. Revenue contracts contain one performance obligation, which is delivery of the product. Customer care and support is deemed not to be a material right to the contract. The transaction price is adjusted at the date of sale for any applicable sales discounts and an estimate of product returns, which are based on historical patterns, however this is not considered a key judgment. Revenue is recognized when control transfers to the customer at the point in time at which the shipment of the product occurs. This key judgment is determined as the shipping point, which represents the point in time when the Company has a present right to payment, title has transferred to the customer, and the customer has assumed the risks and rewards of ownership. Virtually all the Company’s sales are paid by credit cards and the Company usually receives the cash settlement in two to three banking days. Credit card sales minimize the accounts receivable balances relative to sales. Outbound shipping and handling fees are an accounting policy election and are included in sales as the Company considers itself the principal in the arrangement given its responsibility for supplier selection and discretion over pricing. Shipping costs associated with outbound freight after control over a product has transferred to a customer are an accounting policy election and are accounted for as fulfillment costs and are included in cost of sales. Membership fees represent the amounts recognized periodically from two membership models. The first is the PetPlus membership for PetCareRx customers, the second is a partner membership provided through PetCareRx. These memberships provide discounted pricing, free standard shipping, veterinary telehealth services and local Caremark Pharmacy prescription pickup which represent a single stand-ready performance obligation to provide these benefits. The PetPlus membership fee is an upfront annual charge and automatically renews one year from the initial enrollment date. The Company recognizes the revenue ratably over the term of the PetPlus membership which is generally one year. As shown in the following table, under the PetPlus program, the Company recognized $1.7 million and $3.5 million of previously deferred annual membership fees in the three and six months ended September 30, 2023, respectively, and had $3.6 million of deferred revenue as of the quarter ended September 30, 2023 (amounts in millions).
|  | 2023
Deferred revenue, March 31, |  | $ | – |
Deferred revenue acquired with PetCareRx |  | 3.0 |
Deferred memberships fees received |  | 2.0 |
Deferred membership fee revenue recognized |  | (1.8) |
Deferred revenue, June 30, |  | 3.2 |
Deferred memberships fees received |  | 2.1 |
Deferred membership fee revenue recognized |  | (1.7) |
Deferred revenue, September 30, |  | 3.6 |
In addition to annual membership fees earned under the PetPlus program, the Company also earns membership fees on a month-to-month basis under its PetCareRx partner membership program. For the three and six months ended September 30, 2023, membership fees earned under the partner program were $0.7 million and $1.3 million, respectively. The Company has no material contract asset or liability balances at September 30, 2023 and March 31, 2023, respectively. The Company disaggregates sales in the following categories: reorder sales vs new order sales vs membership fees. The following table illustrates sales in those categories:
|  | Three Months Ended September 30, |  | Increase (Decrease)
Revenue (in thousands) |  | 2023 |  | % |  | 2022 |  | % |  | $ |  | %
Reorder sales |  | $ | 62,403 |  |  | 87.9 | % |  | $ | 59,729 |  |  | 91.3 | % |  | $ | 2,674 |  |  | 4.5 | %
New order sales |  | 6,172 |  |  | 8.7 | % |  | 5,665 |  |  | 8.7 | % |  | 507 |  |  | 8.9 | %
Membership fees |  | 2,424 |  |  | 3.4 | % |  | – |  |  | – | % |  | 2,424 |  |  | – | %
Total net sales |  | $ | 70,999 |  |  | 100.0 | % |  | $ | 65,394 |  |  | 100.0 | % |  | $ | 5,605 |  |  | 8.6 | %
|  | Six Months Ended September 30, |  | Increase (Decrease)
Revenue (in thousands) |  | 2023 |  | % |  | 2022 |  | % |  | $ |  | %
Reorder sales |  | $ | 130,441 |  |  | 87.4 | % |  | $ | 123,068 |  |  | 90.8 | % |  | $ | 7,373 |  |  | 6.0 | %
New order sales |  | 13,992 |  |  | 9.4 | % |  | 12,513 |  |  | 9.2 | % |  | 1,479 |  |  | 11.8 | %
Membership fees |  | 4,810 |  |  | 3.2 | % |  | – |  |  | – | % |  | 4,810 |  |  | – | %
Total net sales |  | $ | 149,243 |  |  | 100.0 | % |  | $ | 135,581 |  |  | 100.0 | % |  | $ | 13,662 |  |  | 10.1 | %

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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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