Annual report pursuant to Section 13 and 15(d)


12 Months Ended
Dec. 31, 2023
Revenue from Contract with Customer [Abstract]  
Sales and usage-based taxes are excluded from revenues. No sales to an individual customer or in a country other than the United States accounted for 10% or more of the sales for the periods listed in the following tables. Revenue, classified by the major geographic areas in which our customers are located, was as follows:
2023 2022 2021
(in thousands)
United States $ 2,853,321  $ 2,498,363  $ 2,240,226 
Other countries 219,957  197,460  184,074 
Total Revenues $ 3,073,278  $ 2,695,823  $ 2,424,300 
Revenue from external customers, classified by significant product and service offerings, was as follows:
(in thousands) 2023 2022 2021
Residential revenue $ 1,409,872  $ 1,207,089  $ 1,099,360 
Commercial revenue 1,024,176  920,625  834,624 
Termite completions, bait monitoring, renewals, & ancillary 605,533  535,494  464,043 
Franchise revenues 16,475  15,590  15,532 
Other revenues 17,222  17,025  10,741 
Total Revenues $ 3,073,278  $ 2,695,823  $ 2,424,300 
Subsequent to the issuance of the Company's 2022 financial statements, management determined that certain immaterial reclassifications within the product and service offerings were required for the years ended December 31, 2022 and 2021. Revenues classified by significant product and service offerings for the years ended December 31, 2022 and 2021 have been restated from the amounts previously reported to correct the classification of such revenues. There was no impact on our consolidated statements of income, financial position, or cash flows.
Unearned revenues recognized for the year ended December 31, 2023 and 2022 was $231.7 million and $205.3 million, respectively. Changes in unearned revenues were as follows:
Year Ended December 31,
2023 2022
(in thousands)
Beginning balance $ 187,994  $ 168,607 
Deferral of unearned revenue 253,776  224,647 
Recognition of unearned revenue (231,711) (205,260)
Ending balance $ 210,059  $ 187,994 
Revenue allocated to remaining performance obligations represents contracted revenue that has not yet been recognized (“contracted not recognized revenue”), which includes both unearned revenue and revenue that will be billed and recognized in future periods. The Company has no material contracted but not yet recognized revenue as of December 31, 2023 or December 31, 2022.
At December 31, 2023 and December 31, 2022, the Company had long-term unearned revenue of $37.7 million and $29.9 million, respectively. Unearned short-term revenue is recognized over the next 12-month period. The majority of unearned long-term revenue is recognized over a period of five years or less with immaterial amounts recognized through 2033.
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 December 31, 2023, we have $22.0 million of unamortized capitalized costs to obtain a contract, of which $15.3 million is recorded within other current assets and $6.7 million is recorded within other assets on our consolidated statement of financial position. During the year ended December 31, 2023, we recorded approximately $8.6 million amortization of capitalized costs, which is recorded within sales, general and administrative expense on our consolidated statement of income. As of December 31, 2022, we had no unamortized capitalized costs to obtain a contract and we recorded no amortization of capitalized costs.