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REVENUE
 12 Months Ended
Jun. 30, 2025
Revenue from Contract with Customer [Abstract]  
REVENUE

NOTE 3 – REVENUE

 

Our revenue from real estate is primarily rental income from residential and commercial property leases that is accounted for under ASC 842 (Leases). Lease income is recognized on a straight-line basis over the lease term (generally one year or less for residential units). Variable consideration such as reimbursement and fee is recognized as earned. Lease income is outside the scope of ASC 606. Hotel-related revenues (rooms, food and beverage, parking, and other ancillary services) are within the scope of ASC 606 and are recognized as described below.

 

Hotel revenue recognition. We recognize hotel revenues in accordance with ASC 606. Room revenue is recognized over the stay as the services are provided; food and beverage, parking, and other ancillary revenues are recognized when the good or services are delivered. Package arrangements are allocated to performance obligations based on relative standalone selling prices. Advance deposits are recorded as contract liabilities and recognized as revenue when the related services are rendered or upon cancellation consistent with contract terms. We assess taxes collected from customers on a net basis (excluded from revenues). We do not adjust the transaction price for a financing component when the period between payment and performance is one year or less.

 

The following table presents our Hotel revenue disaggregated by revenue streams:

 

For the year ended June 30,  2025   2024 
Hotel revenues:          
Hotel rooms  $39,648,000   $35,239,000 
Food and beverage   2,862,000    3,213,000 
Garage   3,214,000    2,988,000 
Other operating departments   639,000    446,000 
Total Hotel revenue  $46,363,000   $41,886,000 

 

 

Real estate revenue. Real estate revenue primarily consists of base rents from the Company’s multifamily portfolio and its commercial property, plus other property income (e.g., parking, utilities reimbursements, month-to-month premiums, pet rent, laundry and other fees). Lease income is accounted for under ASC 842 and recognized on a straight-line basis over the lease term (generally month-to-month or <12 months for residential). Variable consideration is recognized as earned. We assess collectability each period; when collections of lease payments is not probable, revenue is limited to amounts collected.

 

Disaggregation by major revenue source:

 

For the year ended June 30,  2025   2024 
Hotel revenues  $46,363,000   $41,886,000 
Real estate revenues   18,015,000    16,254,000 
Total revenues  $64,378,000   $58,140,000 

 

Real estate revenues increased to $18,015,000 in fiscal 2025 from $16,254,000 in fiscal 2024, primarily due to higher occupancy and rent levels across the multifamily portfolio, partially offset by market-specific dynamics noted in Item 7.

 

Contract Assets and Liabilities

 

The Company does not have any material contract assets as of June 30, 2025 and 2024, other than trade and other receivables, net on our consolidated balance sheets. Our receivables are primarily the result of contracts with customers, which are reduced by an allowance for doubtful accounts that reflects our estimate of amounts that will not be collected.

 

Portsmouth records contract liabilities when cash payments are received or due in advance of guests staying at our hotel, which are presented within Accounts payable and other liabilities-Hotel on our consolidated balance sheets had an opening balance on July 1, 2024 of $370,000. As of June 30, 2025 contract liabilities were $505,000. The increase during fiscal 2025 primarily reflects higher advance deposits for services to be performed after June 30, 2025.

 

Contract liabilities were $370,000 as of June 30, 2024 compared to $290,000 as of June 30, 2023. The increase for the twelve months ended June 30, 2024 was primarily driven by an increase in advance deposits received from customers for services to be performed after June 30, 2024. Contract liabilities are generally recognized as revenue within twelve months. We do not disclose remaining performance obligations because our customer contracts have an original expected duration of one year or less.

 

Contract Costs

 

We consider sales commissions earned to be incremental costs of obtaining a contract with our customers. We expense incremental costs of obtaining a contract when the amortization period would be one year or less. Travel-agent and group booking commissions related to completed stays are expensed as incurred.