Revenue Recognition and Accounts Receivable
The Company’s disaggregated revenues are as follows:
| | | | | | | | | | | |
| Year Ended December 31, |
| 2025 | | 2024 |
| Temporary placement services | $ | 431,401,261 | | | $ | 438,820,825 | |
| Permanent placement and other services | 4,477,469 | | | 3,788,989 | |
| Total service revenues, net | $ | 435,878,730 | | | $ | 442,609,814 | |
When disaggregating revenue, the Company considered all of the economic factors that may affect its revenues. Because all its revenues are from placement services, there are no differences in the nature, timing and uncertainty of the Company’s revenues and cash flows from its revenue generating activities. For the period ended December 31, 2024, revenues from the Company’s largest customer accounted for approximately 16% of consolidated revenues; no other customers accounted for more than 10% of the Company’s consolidated revenues in either period. Economic factors specific to this customer could impact the nature, timing and uncertainty of the Company’s revenues and cash flows.
Contract assets consists of unbilled accounts receivable of $4,242,245 and $9,368,565 as of December 31, 2025 and December 31, 2024, respectively. Accounts receivable are uncollateralized customer obligations due under normal trade terms requiring payment upon receipt of invoice.
Accounts receivable is as follows:
| | | | | | | | | | | |
| December 31, 2025 | | December 31, 2024 |
| Accounts receivable | $ | 68,973,316 | | | $ | 66,800,444 | |
| Allowance for doubtful accounts | (3,222,723) | | | (2,726,107) | |
| Accounts receivable, net | $ | 65,750,593 | | | $ | 64,074,337 | |
The Company’s accounts receivable serves as collateral for the current Revolver and the Term Note has a second lien after the Revolver.
The Company recognized $1,037,806 and $957,031 of bad debt expense during the years ended December 31, 2025 and 2024, respectively.
None of the Company’s customers accounted for more than 10% of the Company’s accounts receivable as of December 31, 2025 and December 31, 2024.
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.