Andersons, Inc.ANDE
Andersons, Inc. Revenue Disclosure
Revenue
A majority of the Company's Sales and merchandising revenues are generated from contracts that are outside the scope of ASC 606, Revenues from Contracts with Customers. Approximately 85% of the Company's sales contracts are derivatives within the scope of ASC 815, Derivatives and Hedging, with the remaining 15% accounted for under ASC 606. Substantially all sales and merchandising revenues subject to ASC 606 are recognized at a point in time, with the vast majority generated by the Agribusiness segment. Therefore, a further disaggregation of ASC 606 Sales and merchandising revenues and detail of outstanding contract balances within the Agribusiness segment have been provided below:
| Year Ended December 31, | ||||||||||||||||||||
| (in thousands) | 2025 | 2024 | 2023 | |||||||||||||||||
| Specialty and primary nutrients | $ | 815,484 | $ | 699,048 | $ | 822,302 | ||||||||||||||
| Premium ingredients | 263,111 | 337,642 | 434,304 | |||||||||||||||||
| Propane and fuels | 242,114 | 210,195 | 190,221 | |||||||||||||||||
| Other | 210,366 | 156,497 | 185,379 | |||||||||||||||||
| Total | $ | 1,531,075 | $ | 1,403,382 | $ | 1,632,206 | ||||||||||||||
Specialty and primary nutrients
The company sells several different types of specialty nutrient products, including: low-salt liquid starter fertilizers, micro-nutrients and other specialty lawn products. These products can be sold through the wholesale distribution channels as well as directly to end users at the farm center locations. Similarly, the Company sells several different types of primary nutrient products, including: nitrogen, phosphorus, and potassium. These products may be purchased and re-sold as is or sold as finished goods resulting from a blending and manufacturing process. The contracts associated specialty and primary nutrients generally have a single performance obligation, as the Company has elected the accounting policy to consider shipping and handling costs as fulfillment costs. Revenue is recognized when control of the product has passed to the customer. Payment terms generally range from 0 - 30 days.
Premium Ingredients
The Company's premium ingredient products are mainly comprised of pulses, organics and pet food ingredients. Contracts for premium ingredients generally have a single performance obligation, as the Company has elected the accounting policy to consider shipping and handling costs as fulfillment costs. Revenue is recognized when control of the product has passed to the customer which follows shipping terms on the contract. Payment terms for premium ingredients generally range from 30 - 120 days.
Propane and Fuels
Revenue is recognized at a point in time when obligations under the terms of the contract with the customer are satisfied. This occurs with the transfer of control to customers when products are shipped for direct sales to customers or when the product is picked up by a customer. Contracts contain one performance obligation which is the delivery to the customer at a point in time. Revenue is measured as the amount of consideration received in exchange for transferring products. The Company recognizes the cost for shipping as an expense in Cost of sales and merchandising revenues when control over the product has transferred to the customer. Payment terms generally range from 0 - 30 days.
Contract balances
The balances of the Company's contract liabilities were $30.5 million and $24.8 million as of December 31, 2025 and December 31, 2024, respectively. The difference between the opening and closing balances of the Company’s contract liabilities primarily results from the timing difference between the Company’s performance and the customer’s payment. The main driver of the contract liabilities balance is payments for primary and specialty nutrients within the Agribusiness segment received in advance of fulfilling the performance obligations of customers contracts. Contract liabilities are generally built up at year-end and through the first quarter as a result of payments in advance of fulfilling our performance obligations under our customer contracts in preparation for the spring application season. Revenue is then recognized as the Company fulfills its contract obligations through the application season. Contract liabilities at December 31, 2025, increased slightly compared to the prior year due to the timing of farmer prepayments.
About Revenue Disclosures
Revenue disclosures under ASC 606 explain how a company identifies performance obligations, allocates transaction prices, and determines when revenue is recognized. This section is essential for understanding whether reported revenue reflects genuine economic activity or aggressive accounting choices. Analysts examine the mix of point-in-time versus over-time recognition, which directly affects revenue timing and comparability.
Key signals: rising contract liabilities (deferred revenue) suggest strong future revenue visibility, while declining contract assets may indicate slowing project milestones. Watch for variable consideration estimates — rebates, returns, and performance bonuses that require management judgment. Significant changes in disaggregated revenue by geography or product line can reveal shifting business mix before it appears in headline numbers. Compare revenue growth against contract liability growth to assess sustainability, and scrutinize any changes in the timing of recognition that coincide with earnings pressure.