v3.25.2
Revenue Recognition
 9 Months Ended
Jun. 30, 2025
Revenue from Contract with Customer [Abstract]  
Revenue Recognition Revenue Recognition
We primarily derive revenue from the following sources: (1) royalty-based software license arrangements, (2) connected services, and (3) professional services. Revenue is reported net of applicable sales and use tax, value-added tax and other transaction taxes imposed on the related transaction including mandatory government charges that are passed through to our customers. We account for a contract when both parties have approved and committed to the contract, the rights of the parties are identified, payment terms are identified, the contract has commercial substance and collectability of consideration is probable.
(a)Disaggregated Revenue
Revenues, classified by the major geographic region in which our customers are located, for the three and nine months ended June 30, 2025 and 2024 (dollars in thousands):
Three Months Ended June 30,Nine Months Ended June 30,
2025202420252024
Revenues:
United States$10,905 $12,729 $29,701 $128,216 
Other Americas245 314 892 450 
Germany21,470 17,518 60,577 72,075 
Other Europe, Middle East and Africa5,956 4,838 17,109 13,070 
Japan6,353 25,010 30,811 35,181 
Other Asia-Pacific17,307 10,130 52,052 27,707 
Total revenues$62,236 $70,539 $191,142 $276,699 
For the three and nine months ended June 30, 2025, revenues within Korea were $8.0 million and $26.2 million, respectively, which were more than 10% of total revenues. For the three months ended June 30, 2025, revenues within China were $7.3 million, which were more than 10% of total revenues. For the nine months ended June 30, 2025, revenues within China were $17.6 million, which were less than 10% of total revenues.
Revenues relating to three customers accounted for $9.4 million, or 15.1%, $7.1 million, or 11.4%, and $6.9 million, or 11.1% of revenues for the three months ended June 30, 2025. Revenues relating to one customer accounted for $23.9 million, or 12.5% of revenues for the nine months ended June 30, 2025.
Revenues relating to one customer accounted for $20.6 million, or 29.2% of revenues for the three months ended June 30, 2024. Revenues relating to one customer accounted for $81.5 million, or 29.5%, of revenues for the nine months ended June 30, 2024. On October 31, 2023, we entered into an early termination agreement relating to a legacy contract acquired by Nuance Communications Inc. (“Nuance”) through a 2013 acquisition. Previously, the term of the contract ended on December 31, 2025, whereas the agreement signed on October 31, 2023 updated the termination date to December 31, 2023. There is no cash flow associated with this legacy contract. The effect of this change was to accelerate $67.8 million of deferred revenue into the first quarter of fiscal year 2024. The acceleration of deferred revenue into the first quarter of fiscal year 2024 was included in the total for the United States major geographic region in the table above.
(b)Contract Acquisition Costs
We are required to capitalize certain contract acquisition costs. The capitalized costs primarily relate to paid commissions. The current and noncurrent portions of contract acquisition costs are included in Prepaid expenses and other current assets and in Other assets, respectively. As of June 30, 2025 and September 30, 2024, we had $5.7 million and $7.1 million of contract acquisition costs, respectively. We had amortization expense of $0.6 million and $1.0 million related to these costs during the three months ended June 30, 2025 and 2024, respectively, and $1.8 million and $2.7 million for the nine months ended June 30, 2025 and 2024, respectively. There was no impairment related to contract acquisition costs.
(c)Capitalized Contract Costs
We capitalize incremental costs incurred to fulfill our contracts that (i) relate directly to the contract, (ii) are expected to generate resources that will be used to satisfy our performance obligation under the contract, and (iii) are expected to be recovered through revenue generated under the contract. The current and noncurrent portions of capitalized contract fulfillment costs are presented as Deferred costs.
We had amortization expense of $1.5 million and $1.3 million related to these costs during the three months ended June 30, 2025 and 2024, respectively, and $5.0 million and $7.1 million for the nine months ended June 30, 2025 and 2024, respectively. There was no impairment related to contract costs capitalized.
(d)Trade Accounts Receivable and Contract Balances
We classify our right to consideration in exchange for deliverables as either a receivable or a contract asset. A receivable is a right to consideration that is unconditional (i.e., only the passage of time is required before payment is due). We present such receivables in Accounts receivable, net at their net estimated realizable value. Accounts receivable, net as of September 30, 2024 and 2023 was $62.8 million and $61.3 million, respectively. We maintain an allowance for credit losses to provide for the estimated amount of receivables and contract assets that may not be collected.
Our contract assets and liabilities are reported in a net position on a contract-by-contract basis at the end of each reporting period.
Contract assets include unbilled amounts from long-term contracts when revenue recognized exceeds the amount billed to the customer, and the right to payment is not solely subject to the passage of time. Contract assets were $56.7 million as of September 30, 2023. The current and noncurrent portions of contract assets are included in Prepaid expenses and other current assets and Other assets, respectively. The table below shows significant changes in contract assets (dollars in thousands):
Contract assets
Balance as of September 30, 2024$22,219 
Revenues recognized but not billed21,494 
Amounts reclassified to Accounts receivable, net(27,490)
Effect of foreign currency translation66 
Balance as of June 30, 2025$16,289 
Our contract liabilities, which we present as deferred revenue, consist of advance payments and billings in excess of revenues recognized. Deferred revenues were $222.6 million as of September 30, 2023. We classify deferred revenue as current or noncurrent based on when we expect to recognize the revenues. The table below shows significant changes in deferred revenue (dollars in thousands):
Deferred revenue
Balance as of September 30, 2024$167,176 
Amounts billed but not recognized74,008 
Revenue recognized(61,400)
Effect of foreign currency translation6,207 
Balance as of June 30, 2025$185,991 
(e) Remaining Performance Obligations
The following table includes estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied or partially unsatisfied at June 30, 2025 (dollars in thousands):
Within One
Year
Two to Five
Years
Greater
than
Five Years
Total
Total revenue$85,885 $82,851 $55,786 $224,522 
The table above includes fixed remaining performance obligations and does not include contingent usage-based activities, such as royalties and usage-based connected services.