Revenue Recognition (Notes)

12 Months Ended

Dec. 31, 2023

Revenue Recognition [Abstract]

Revenue from contracts with customers [Text Block]

Revenue Recognition

We recognize revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers.

Nature of Performance Obligations and Significant Judgments

At contract inception, the Company assesses the goods and services promised in its contracts with customers and identifies a performance obligation for each promised good or service (or bundle of goods and services) that is distinct. To identify the performance obligations, the Company considers all of the goods or services promised in the contract regardless of whether they are explicitly stated or are implied by customary business practices. A description of our performance obligations is included below.

•Residential and Commercial Services - We provide a wide array of services for our residential and commercial customers including the treatment, preservation, maintenance, removal and planting of trees, shrubs and other plant life, landscaping, grounds maintenance, the application of fertilizer, herbicides and insecticides, natural resource management and consulting, forestry research and development, and environmental planning. A contract with a customer may include only one of these services, all of these services, or a combination of these services. For contracts in which we provide all, or a combination of, these services, we believe that the nature of our promise is to provide an integrated property management service for our customer. In these contracts, the customer has effectively outsourced the care and maintenance of its property grounds to us during the duration of the contract as we are responsible for providing a continuous delivery of outsourced maintenance activities over the contract

term. As such, for contracts that contain a combination of services, we have concluded that we have a single performance obligation, which is accounted for as a series of distinct services.

•Utility Services - We provide a suite of vegetation management or arboricultural services to our utility customers (investor-owned, municipal utilities, and rural electric cooperatives) including the practice of line-clearing and vegetation management around power lines and rights-of-way, chemical brush control, natural resource management and consulting, forestry research and development, and environmental planning. A contract with a customer may include only one of these services, all of these services, or a combination of these services. For contracts in which we provide all, or a combination of, these services, we believe that the nature of our promise is to provide an integrated overall vegetation management service, rather than the performance of discrete activities or services for the customer. As such, for contracts that contain a combination of services, we have concluded that we have a single performance obligation, which is accounted for as a series of distinct services.

Contracts with our customers generally originate upon the completion of a quote for services for residential and commercial customers or the receipt of a purchase order (or similar work order) for utility customers. In some cases, our contracts are governed by master services agreements, in which case our contract under ASC 606 consists of the combination of the master services agreement and the quote/purchase order. Many of our contracts have a stated duration of one year or less or contain termination clauses that allow the customer to cancel the contract after a specified notice period, which is typically less than 90 days. Due to the fact that many of our arrangements allow the customer to terminate for convenience, the duration of the contract for revenue recognition purposes generally does not extend beyond the services that we have actually transferred. As a result, many of our contracts are, in effect, day-to-day or month-to-month contracts.

Revenue from our residential, commercial, and utility performance obligations is recognized over time as the customer simultaneously receives and consumes the benefits of our services as we perform them. Many of our contracts compensate us based on an agreed upon price for each increment of service provided to the customer. Therefore, revenue is mainly recognized as each increment of service is provided to the customer at the amount to which we are contractually entitled. For contracts that contain a fixed price, we generally use a units-delivered based output method to measure progress. Revenue from our consulting services is also recognized over time and we use a cost-based input method to measure progress. Payment for our services is generally due within 30 days of such services being provided to the customer.

The transaction price for our contracts is determined upon establishment of the contract that contains the final terms of the sale, including the description, quantity, and price of each service purchased. Certain of our contracts contain variable consideration, including index-based pricing, chargebacks, and prompt payment discounts. The Company estimates variable consideration and performs a constraint analysis for these contracts on the basis of both historical information and current trends. However, these types of variable consideration do not have a material effect on the Company’s revenue, either individually or in the aggregate. In addition, although our contracts generally include fixed pricing for each increment of service, the ultimate quantity of services that will be required in order to fulfill our performance obligations is unknown at contract inception. Therefore, our total transaction price ultimately varies based on the quantity and types of services provided to our customer. However, this type of variable consideration is allocated entirely to the distinct services within the series to which it relates.

Disaggregation of Revenue

The following tables disaggregate our revenue for the years ended December 31, 2023, December 31, 2022 and December 31, 2021 by major sources:

Year Ended December 31, 2023	Utility		Residential and Commercial		All Other		Consolidated
Type of service:
Tree and plant care	$	563,222	$	411,508	$	(756)	$	973,974
Grounds maintenance	—		185,994		—		185,994
Storm damage services	12,049		13,123		—		25,172
Consulting and other	359,706		143,830		4,805		508,341
Total revenues	$	934,977	$	754,455	$	4,049	$	1,693,481
Geography:
United States	$	881,428	$	709,069	$	4,049	$	1,594,546
Canada	53,549		45,386		—		98,935
Total revenues	$	934,977	$	754,455	$	4,049	$	1,693,481
Year Ended December 31, 2022	Utility		Residential and Commercial		All Other		Consolidated
Type of service:
Tree and plant care	$	545,048	$	383,148	$	(174)	$	928,022
Grounds maintenance	—		169,948		—		169,948
Storm damage services	21,437		9,665		—		31,102
Consulting and other	274,068		104,211		3,730		382,009
Total revenues	$	840,553	$	666,972	$	3,556	$	1,511,081
Geography:
United States	$	800,590	$	621,873	$	3,556	$	1,426,019
Canada	39,963		45,099		—		85,062
Total revenues	$	840,553	$	666,972	$	3,556	$	1,511,081
Year Ended December 31, 2021	Utility		Residential and Commercial		All Other		Consolidated
Type of service:
Tree and plant care	$	530,632	$	358,589	$	(337)	$	888,884
Grounds maintenance	—		155,543		—		155,543
Storm damage services	16,763		6,690		—		23,453
Consulting and other	217,677		89,844		2,652		310,173
Total revenues	$	765,072	$	610,666	$	2,315	$	1,378,053
Geography:
United States	$	723,577	$	566,604	$	2,315	$	1,292,496
Canada	41,495		44,062		—		85,557
Total revenues	$	765,072	$	610,666	$	2,315	$	1,378,053

Contract Balances

Our contract liabilities consist of advance payments, billings in excess of costs incurred and deferred revenue. The Company has recognized $2,266 and $1,997 of revenue for the twelve months ended December 31, 2023 and December 31, 2022, respectively, that was included in the contract liability balance at December 31, 2022 and December 31, 2021, respectively. Net contract liabilities consisted of the following:

	December 31, 2023		December 31, 2022
Contract liabilities - current	$	3,430	$	3,723
Contract liabilities - noncurrent	3,700		4,145
Net contract liabilities	$	7,130	$	7,868

Practical Expedients & Accounting Policy Elections

•Remaining performance obligations - The Company’s contracts for service revenue have an original duration of one year or less. Therefore, because of the short duration of these contracts, the Company has not disclosed the transaction price for the future performance obligations as of the end of each reporting period or when the Company expects to recognize this revenue.

•Incremental costs of obtaining a contract - The Company’s contracts for service revenue have an original duration of one year or less. Therefore, the Company has elected to expense these costs as incurred.

•Right to invoice - For the Company’s contracts in which it has the right to invoice the customer on the basis of actual work performed (i.e., output), the Company has elected to measure the satisfaction of performance obligation(s) on the basis of actual work performed, as the invoiced amount directly corresponds to the value transferred to the customer.

•Sales taxes - The Company has, as an accounting policy election, decided to exclude from the measurement of the transaction price all sales taxes assessed by a governmental authority.

•Significant financing component - The Company’s contracts do not allow for payment terms which exceed one year, and thus need not account for the effects of a significant financing component.