Quarterly report [Sections 13 or 15(d)]

REVENUE

v3.25.1
REVENUE
 3 Months Ended
Mar. 31, 2025
Revenue from Contract with Customer [Abstract]  
REVENUE REVENUE
Revenue, classified by the major geographic areas in which our customers are located, was as follows:
Three Months Ended
March 31,
(in thousands) 2025 2024
United States $ 763,350  $ 693,860 
Other countries 59,154  54,489 
Total Revenues $ 822,504  $ 748,349 
Revenue from external customers, classified by significant product and service offerings, was as follows:
Three Months Ended
March 31,
(in thousands) 2025 2024
Residential revenue $ 356,313  $ 329,338 
Commercial revenue 284,357  258,114 
Termite completions, bait monitoring, & renewals 172,130  152,060 
Franchise revenues 3,770  3,961 
Other revenues 5,934  4,876 
Total Revenues $ 822,504  $ 748,349 
The Company records unearned revenue when we have either received payment or contractually have the right to bill for services in advance of the services or performance obligations being performed. Unearned revenue recognized in the three months ended March 31, 2025 and 2024 was $67.0 million and $61.9 million. Changes in unearned revenue were as follows:
Three Months Ended
March 31,
(in thousands) 2025 2024
Beginning balance $ 223,872  $ 210,059 
Deferral of unearned revenue 76,506  74,796 
Recognition of unearned revenue (67,013) (61,888)
Ending balance $ 233,365  $ 222,967 
As of March 31, 2025 and December 31, 2024, the Company had long-term unearned revenue of $42.2 million and $43.0 million, respectively, recorded in other long-term accrued liabilities. Unearned short-term revenue is recognized over the next 12-month period. We recognized $45.2 million and $43.1 million of revenue in the quarters ended March 31, 2025 and 2024, respectively, that was included in the balance of unearned revenue at the beginning of each respective fiscal year. The majority of unearned long-term revenue is recognized over a period of five years or less with immaterial amounts recognized through 2035.
Incremental Costs of Obtaining a Contract with a Customer
Incremental costs of obtaining a contract include only those costs that we incur to obtain a contract that we would not have incurred if the contract had not been obtained, primarily sales commissions. These costs are recorded as an asset and amortized to expense over the life of the contract to the extent such costs are expected to be recovered. As of March 31, 2025, we have $16.8 million of unamortized capitalized costs to obtain a contract, of which $14.8 million is recorded within other current assets and $2.0 million is recorded within other assets on our condensed consolidated statement of financial position. As of December 31, 2024, we had $23.4 million of unamortized capitalized costs to obtain a contract, of which $19.3 million was recorded within other current assets and $4.1 million was recorded within other assets on our condensed consolidated statement of financial position. During the three months ended March 31, 2025 and 2024, we recorded approximately $7.1 million and $3.8 million, respectively, of amortization of capitalized costs, which is recorded within sales, general and administrative expense on our condensed consolidated statement of income.