REVENUES

9 Months Ended

Jun. 30, 2025

13. REVENUES

Disaggregation of Revenues

Revenues by customer type, geographic location, and revenue recognition method for the three and nine-month periods ended June 30, 2025 are presented in the tables below as the Company deems it best depicts how the nature, amount, timing and uncertainty of net sales and cash flows are affected by economic factors. The tables below also include a reconciliation of the disaggregated revenue from continuing operations within each reportable segment.


Three months ended June 30, 2025
(In thousands)	A&D		USG		Test		Total
Customer type:
Commercial	$	57,297	$	87,653	$	50,591	$	195,541
Government		79,027		4,704		17,072		100,803
Total revenues	$	136,324	$	92,357	$	67,663	$	296,344

Geographic location:
United States	$	94,518	$	63,062	$	36,188	$	193,768
International		41,806		29,295		31,475		102,576
Total revenues	$	136,324	$	92,357	$	67,663	$	296,344

Revenue recognition method:
Point in time	$	66,833	$	74,143	$	11,123	$	152,099
Over time		69,491		18,214		56,540		144,245
Total revenues	$	136,324	$	92,357	$	67,663	$	296,344


Nine months ended June 30, 2025
(In thousands)	A&D		USG		Test		Total
Customer type:
Commercial	$	151,756	$	261,581	$	124,831	$	538,168
Government		156,063		8,203		40,280		204,546
Total revenues	$	307,819	$	269,784	$	165,111	$	742,714

Geographic location:
United States	$	226,444	$	173,121	$	97,086	$	496,651
International		81,375		96,663		68,025		246,063
Total revenues	$	307,819	$	269,784	$	165,111	$	742,714

Revenue recognition method:
Point in time	$	166,191	$	216,423	$	32,522	$	415,136
Over time		141,628		53,361		132,589		327,578
Total revenues	$	307,819	$	269,784	$	165,111	$	742,714

Revenues by customer type, geographic location, and revenue recognition method for the three and nine-month periods ended June 30, 2024 are presented in the tables below.


Three months ended June 30, 2024
(In thousands)	A&D		USG		Test		Total
Customer type:
Commercial	$	43,927	$	88,076	$	42,327	$	174,330
Government		43,308		2,201		13,729		59,238
Total revenues	$	87,235	$	90,277	$	56,056	$	233,568

Geographic location:
United States	$	69,228	$	54,063	$	32,575	$	155,866
International		18,007		36,214		23,481		77,702
Total revenues	$	87,235	$	90,277	$	56,056	$	233,568

Revenue recognition method:
Point in time	$	51,234	$	72,985	$	11,426	$	135,645
Over time		36,001		17,292		44,630		97,923
Total revenues	$	87,235	$	90,277	$	56,056	$	233,568


Nine months ended June 30, 2024
(In thousands)	A&D		USG		Test		Total
Customer type:
Commercial	$	126,191	$	254,765	$	111,951	$	492,907
Government		115,088		5,805		31,821		152,714
Total revenues	$	241,279	$	260,570	$	143,772	$	645,621

Geographic location:
United States	$	190,264	$	165,789	$	82,370	$	438,423
International		51,015		94,781		61,402		207,198
Total revenues	$	241,279	$	260,570	$	143,772	$	645,621

Revenue recognition method:
Point in time	$	137,769	$	209,973	$	29,706	$	377,448
Over time		103,510		50,597		114,066		268,173
Total revenues	$	241,279	$	260,570	$	143,772	$	645,621

Revenue Recognition

Payment terms with our customers vary by the type and location of the customer and the products or services offered. Arrangements with customers that include payment terms extending beyond one year are not significant. The transaction price for these contracts reflects our estimate of returns and discounts, which are based on historical, current and forecasted information to determine the expected amount to which we will be entitled in exchange for transferring the promised goods or services to the customer. The realization of variable consideration occurs within a short period of time from product delivery; therefore, the time value of money effect is not significant. We primarily provide standard warranty programs for products in our commercial businesses for periods that typically range from one to two years. These assurance-type programs typically cannot be purchased separately and do not meet the criteria to be considered a performance obligation. Under the typical payment terms of our long term fixed price contracts, the customer pays us either performance-based or progress payments. Performance-based payments represent interim payments based on quantifiable measures of performance or on the achievement of specified events or milestones. Progress payments are interim payments of costs incurred as the work progresses.

For our overtime revenue recognized using the output method of costs incurred, contract cost is estimated utilizing current contract specifications and expected engineering requirements. Contract costs typically are incurred over a period of several months to one or more years, and the estimation of these costs requires judgment. Our cost estimation process is based on the professional knowledge and experience of engineers and program managers along with finance professionals. We review and update our projections of costs quarterly or more frequently when circumstances significantly change. In addition, in the USG segment, we recognize revenue as a series of distinct services based on each day of providing services (straight-line over the contract term) for certain of our USG segment contracts. Under the typical payment terms of our service contracts, the customer pays us in advance of when services are performed. In addition, in the Test segment, we use milestones to measure progress for our Test segment contracts because it best depicts the transfer of control to the customer that occurs as we incur costs on our contracts.

Remaining Performance Obligations

Remaining performance obligations, which is the equivalent of backlog, represent the expected transaction price allocated to contracts that the Company expects to recognize as revenue in future periods when the Company performs under the contracts. These remaining obligations include amounts that have been formally appropriated under contracts with the U.S. Government, and exclude unexercised contract options and potential orders under ordering-type contracts such as Indefinite Delivery, Indefinite Quantity contracts. At June 30, 2025, the Company had $1,165.4 million in remaining performance obligations of which the Company expects to recognize revenues of approximately 66% in the next twelve months.

Contract assets, contract liabilities and accounts receivable

Assets and liabilities related to contracts with customers are reported on a contract-by-contract basis at the end of each reporting period. At June 30, 2025, contract assets, contract liabilities and accounts receivable from continuing operations totaled $91.7 million, $214.1 million and $238.0 million, respectively. During the first nine months of 2025, the Company recognized approximately $54 million in revenues that were included in the contract liabilities balance at September 30, 2024. At September 30, 2024, contract assets, contract liabilities and accounts receivable from continuing operations totaled $66.7 million, $90.3 million and $222.1 million, respectively.

- 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 7
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479806/606-10-50-7

Reference 2: 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 3: 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 4: 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 5: 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 6: 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 7: 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 8: 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 9: 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 10: 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 11: http://www.xbrl.org/2003/role/disclosureRef
-Name Accounting Standards Codification
-Topic 606
-Publisher FASB
-URI https://asc.fasb.org/606/tableOfContent

+ Details

ESCO TECHNOLOGIES INC 10-Q