Quarterly report pursuant to Section 13 or 15(d)

Revenues

v3.24.3
Revenues
 9 Months Ended
Sep. 30, 2024
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, 2024 September 30, 2023 September 30, 2024 September 30, 2023
Civil space
 $ 21,359  $ 29,336  $ 69,337  $ 82,831 
National security
 26,097  13,393  56,266  38,153 
Commercial and other
 21,182  19,883  108,938  59,331 
Total revenues
 $ 68,638  $ 62,612  $ 234,541  $ 180,315 
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, 2024 September 30, 2023 September 30, 2024 September 30, 2023
U.S.
 $ 41,290  $ 47,138  $ 105,131  $ 135,574 
Europe 27,334  15,468  129,325  44,658 
Other 14  6  85  83 
Total revenues
 $ 68,638  $ 62,612  $ 234,541  $ 180,315 

Customers comprising 10% or more of revenues are presented below for the following periods:
Three Months Ended Nine Months Ended
  September 30, 2024 September 30, 2023 September 30, 2024 September 30, 2023
Customer A(1)
$ —  $ 12,862  $ —  $ 31,703 
Customer B(1)
7,305  8,385  24,804  25,334 
Customer C(1)
—  6,886  —  18,208 
Customer D(1)
16,298  —  93,527  — 
(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, 2024 December 31, 2023
Contract assets
 $ 46,069  $ 36,961 
 
Contract liabilities $ 56,684  $ 52,645 

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, 2024.

The increase in contract liabilities during 2024 was primarily driven by the timing of large billable milestones occurring during the nine months ended September 30, 2024. Revenue recognized in the nine months ended September 30, 2024 that was included in the contract liability balance as of December 31, 2023 was $48.8 million. 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.

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.

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, 2024 September 30, 2023 September 30, 2024 September 30, 2023
Net EAC adjustments, before income taxes $ (1,552) $ 2,453  $ (8,579) $ 769 
Net EAC adjustments, net of income taxes (1,518) 2,360  (8,519) 754 
Net EAC adjustments, net of income taxes, per diluted share (0.02) 0.04  (0.13) 0.01 

The net unfavorable EAC adjustments in 2024 were primarily due to additional unplanned labor, design and test cycles required to meet customer requirements in the Company’s structures and mechanisms, avionics and sensors, and power generation space infrastructure offerings. The net favorable EAC adjustments in 2023 were primarily due to the release of contract reserves and favorable contract adjustments resulting from contract modifications.

Remaining Performance Obligations
As of September 30, 2024, the aggregate amount of the transaction price allocated to remaining performance obligations was $313.1 million. The Company expects to recognize approximately 76% of its remaining performance obligations as revenue within the next 12 months and the balance thereafter.