5.CONTRACT ASSETS AND LIABILITIES

The table below shows the balance of contract assets and liabilities as of June 30, 2025 and 2026, including the change between the periods. There were no substantial non-current contract assets for the periods presented.

Contract Assets (dollar amounts in thousands)

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Contract Liabilities (dollar amounts in thousands)

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Contract Assets. Contract assets decreased by approximately $51.8 million as a result of unbilled revenue primarily from the timing and nature of milestones met in contracts for a number of customers in our Security Division, both within the United States and internationally, where we met the contractual terms to prepare invoices to the customers that reduce unbilled revenue, partially offset by transactions where we met the revenue recognition criteria under ASC 606 in advance of the time when contracts give us the right to invoice customers.

Remaining Performance Obligations. Remaining performance obligations related to ASC 606 represent the portion of the transaction price allocated to performance obligations under contracts which are fully or partially unsatisfied at the end of the period. As of June 30, 2026 and 2025 the aggregate portion of the transaction price allocated to remaining performance obligations was approximately $1.8 billion. During fiscal 2026, we revised the scope of the disclosure of remaining performance obligations to no longer apply the optional disclosure-only exemption in ASC 606-10-50-14(a) that permits an entity to not disclose information about remaining performance obligations for performance obligations that are part of contracts with an original expected duration of one year or less. We believe this change is preferable under the circumstances because the new disclosure provides more useful information to users of the financial statements by presenting a more comprehensive measure of remaining performance obligations. The prior year amount has been revised to conform to the current year presentation. This change only affected the scope of the disclosure of remaining performance obligations and did not affect revenue recognition, results of operations or financial position. As of June 30, 2026, we expect to recognize revenue on approximately 59% of the remaining performance obligations over the next 12 months, and the remainder is expected to be recognized thereafter. During the fiscal year ended June 30, 2026, we recognized revenue of $110.0 million from contract liabilities existing as of July 1, 2025.

Practical Expedients. In cases where we are responsible for shipping after the customer has obtained control of the goods, we have elected to treat the shipping activities as fulfillment activities rather than as a separate performance obligation. Additionally, we have elected to capitalize the cost to obtain a contract only if the period of amortization would be longer than one year. We only give consideration to whether a customer agreement has a financing component if the period of time between transfer of goods and services and customer payment is greater than one year.