AVANOS MEDICAL, INC.AVNS

AVANOS MEDICAL, INC. Revenue Disclosure

10-KFiled Feb 24, 20262 min read
Revenue
Sales revenue is recognized when control of the products transfers to the customer, in an amount that represents the consideration that we expect to be entitled to receive in exchange for our products.
We provide a portfolio of innovative product offerings within our SNS and PM&R segments to improve patient outcomes and reduce the cost of care. Our management evaluates net sales disaggregated by product category within these two reportable
segments as follows (in millions):
Year Ended December 31,
202520242023
Specialty Nutrition Systems:
Enteral feeding$314.7 $289.7 $283.3 
Neonate solutions118.2 106.7 88.3 
Total Specialty Nutrition Systems432.9 396.4 371.6 
Pain Management and Recovery:
Surgical pain and recovery98.8 108.0 117.5 
Radiofrequency ablation139.0 126.2 109.8 
Total Pain Management and Recovery237.8 234.2 227.3 
Corporate and Other30.5 57.2 74.4 
Total Net Sales$701.2 $687.8 $673.3 
Specialty Nutrition Systems is a portfolio of products including:
•Enteral feeding, which includes products such as our MIC-KEY enteral feeding tubes and Corpak patient feeding solutions; and
•Neonate solutions, which includes NeoMed neonatal and pediatric feeding solutions and Nexus’ TKO anti-reflux needleless connectors.
Pain Management and Recovery is a portfolio of products including:
•Surgical pain and recovery products such as ON-Q and ambIT surgical pain pumps and Game Ready cold and compression therapy systems; and
•RFA solutions, which provide minimally invasive pain relief therapies, such as our COOLIEF pain therapy and our Trident and ESENTEC RFA products used to treat chronic pain conditions.
Liabilities for estimated returns, rebates and incentives as of December 31, 2025 and 2024 are presented in the table below (in millions):
As of December 31,
20252024
Accrued rebates$3.3 $13.3 
Accrued incentives9.8 10.9 
Accrued rebates and incentives (See Note 1)
13.1 24.2 
Accrued sales returns(a)
0.1 0.1 
Total estimated liabilities$13.2 $24.3 
__________________________________________________
(a)Accrued sales returns are included in “Other” in the accrued expenses table in “Supplemental Balance Sheet Information” in Note 6.
Due to the nature of our business, we receive purchase orders for products under supply agreements which are normally fulfilled within three to four weeks. Our performance obligations under purchase orders are satisfied and revenue is recognized at a point in time, which is upon shipment or upon delivery of our products, depending on shipping terms. Accordingly, we normally do not have transactions that give rise to material unfulfilled performance obligations.

Historical Timeline

Fiscal YearFiled
2025Feb 24, 2026Showing above
2024Feb 26, 2025

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.

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