REVENUE

3 Months Ended

Mar. 31, 2024

Revenue from Contract with Customer [Abstract]

REVENUE

Revenue, classified by the major geographic areas in which our customers are located, was as follows:

	Three Months Ended March 31,
(in thousands)	2024		2023
United States	$	693,860	$	609,311
Other countries	54,489		48,704
Total Revenues	$	748,349	$	658,015

Revenue from external customers, classified by significant product and service offerings, was as follows:

	Three Months Ended March 31,
(in thousands)	2024		2023
Residential revenue	$	329,338	$	282,757
Commercial revenue	258,114		231,707
Termite completions, bait monitoring, & renewals	152,060		136,131
Franchise revenues	3,961		3,789
Other revenues	4,876		3,631
Total Revenues	$	748,349	$	658,015

Revenues classified by significant product and service offerings for the three months ended March 31, 2023 were misstated by an immaterial amount and have been restated from the amounts previously reported to correct the classification of such revenues. There was no impact on our condensed consolidated statements of income, financial position, or cash flows.

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, 2024 and 2023 was $61.9 million and $55.5 million, respectively. Changes in unearned revenue were as follows:

	Three Months Ended March 31,
(in thousands)	2024		2023
Beginning balance	$	210,059	$	187,994
Deferral of unearned revenue	74,796		65,626
Recognition of unearned revenue	(61,888)		(55,466)
Ending balance	$	222,967	$	198,154

As of March 31, 2024 and December 31, 2023, the Company had long-term unearned revenue of $36.9 million and $37.7 million, respectively, recorded in other long-term accrued liabilities. 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 2034.

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, 2024, we have $18.4 million of unamortized capitalized costs to obtain a contract, of which $15.4 million is recorded within other current assets and $3.0 million is recorded within other assets on our condensed consolidated statement of financial position. During the quarter ended March 31, 2024, we recorded approximately $3.8 million amortization of capitalized costs, which is recorded within sales, general and administrative expense on our condensed consolidated statement of income. During the quarter ended March 31, 2023, we had no unamortized capitalized costs to obtain a contract and we recorded no amortization of capitalized costs.