Quarterly report pursuant to Section 13 or 15(d)

Revenues

v3.23.3
Revenues
 9 Months Ended
Sep. 30, 2023
Revenue from Contract with Customer [Abstract]  
Revenues
Note L – Revenues
The table below presents revenues by customer grouping for the following periods:
Three Months Ended Nine Months Ended
  September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022
Civil space
 $ 29,336  $ 13,391  $ 82,831  $ 46,405 
National security
 13,393  12,032  38,153  29,242 
Commercial and other
 19,883  11,826  59,331  31,197 
Total revenues
 $ 62,612  $ 37,249  $ 180,315  $ 106,844 

The table below presents revenues based on the geographic location of the Company’s customers for the following periods:
Three Months Ended Nine Months Ended
September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022
U.S.
 $ 47,138  $ 36,190  $ 135,574  $ 102,813 
Europe 15,468  1,008  44,658  3,641 
Other 6  51  83  390 
Total revenues
 $ 62,612  $ 37,249  $ 180,315  $ 106,844 

The majority of the Company’s revenues are derived from government contracts. Customers comprising 10% or more of revenues are presented below for the following periods:
Three Months Ended Nine Months Ended
  September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022
Customer A(1)
$ 12,862  $ —  $ 31,703  $ — 
Customer B(1)
8,385  —  25,334  — 
Customer C(1)
6,886  4,796  18,208  19,203 
Customer D(1)
—  4,338  —  15,979 
Customer E(1)
—  4,105  —  — 
Total $ 28,133  $ 13,239  $ 75,245  $ 35,182 
(1) While revenue may have been generated during each of the periods presented, amounts are only disclosed for the periods in which revenues represented 10% or more of total revenue.

Contract Balances
The table below presents the contract assets and contract liabilities included on the condensed consolidated balance sheets for the following periods:
September 30,
2023		 December 31,
2022
Contract assets
 $ 39,779  $ 31,041 
 
Contract liabilities $ 27,059  $ 29,817 

The increase in contract assets was primarily driven by revenue growth and the timing of billable milestones occurring during the nine months ended September 30, 2023.

The change in contract liabilities was primarily driven by the timing of billable milestones occurring during the nine months ended September 30, 2023. Revenue recognized in the nine months ended September 30, 2023 that was included in the contract liability balance as of December 31, 2022 was $27.8 million. Revenue recognized in the nine months ended September 30, 2022 that was included in the contract liability balance as of December 31, 2021 was $12.8 million.
The Company evaluates the contract value and cost estimates at completion (“EAC”) for performance obligations at least quarterly and more frequently when circumstances significantly change. Due to the nature of the work required to be performed on many of the Company’s performance obligations, the estimate of total revenue and cost at completion is complex, subject to many variables and requires significant judgment by management on a contract-by-contract basis. As part of this process, management reviews information including, but not limited to, labor productivity, the nature and technical complexity of the work to be performed, availability and cost volatility of materials, subcontractor and vendor performance, volume assumptions, inflationary trends, and schedule and performance delays. Management’s judgment related to these considerations has become increasingly more significant given the current macroeconomic environment.

When the Company’s estimate of total costs to be incurred to satisfy a performance obligation exceeds the expected revenue, the Company recognizes the loss immediately. When the Company determines that a change in estimate has an impact on the associated profit of a performance obligation, the Company records the cumulative positive or negative adjustment to the statement of operations and comprehensive income (loss). Changes in estimates and assumptions related to the status of certain long-term contracts may have a material effect on the Company’s operating results.

The below table summarizes the favorable (unfavorable) impact of the net EAC adjustments for the following periods:
Three Months Ended Nine Months Ended
  September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022
Net EAC adjustments, before income taxes $ 2,453  $ (1,159) $ 769  $ (4,377)
Net EAC adjustments, net of income taxes 2,360  (962) 754  (4,106)
Net EAC adjustments, net of income taxes, per diluted share 0.04  (0.02) 0.01  (0.07)
The change in net EAC adjustments in 2023 were primarily due to the release of contract reserves and favorable contract adjustments resulting from contract modifications during the three months ended September 30, 2023. The change in net EAC adjustments in 2022 were primarily due to increased production costs and labor market constraints driven by macroeconomic factors, including inflation.

Remaining Performance Obligations
As of September 30, 2023, the aggregate amount of the transaction price allocated to remaining performance obligations was $223.3 million. The Company expects to recognize approximately 66% of its remaining performance obligations as revenue within the next 12 months and the balance thereafter.