Non-Insurance Revenues from Contracts with Customers
Non-Insurance revenue is recognized when obligations under the terms of a contract with a customer are satisfied; generally this occurs over time as obligations are fulfilled. Revenue is measured as the amount of consideration the Company expects to receive in exchange for providing services.
Deferred Non-Insurance Warranty Revenue
The Company had deferred non-insurance warranty revenue balances of $4.1 billion and $4.5 billion reported in Deferred non-insurance warranty revenue as of December 31, 2025 and 2024. The decrease in the deferred revenue balance for the year ended December 31, 2025 was primarily driven by recognized revenue from prior periods outpacing new growth in the business. For the year ended December 31, 2025, the Company recognized $1.4 billion of revenues that were included in the deferred revenue balance as of January 1, 2025. For the year ended December 31, 2024, the Company recognized $1.4 billion of revenues that were included in the deferred revenue balance as of January 1, 2024. For the years ended December 31, 2025 and 2024, Non-insurance warranty revenue recognized from performance obligations related to prior periods due to a change in estimate was not material. The Company expects to recognize approximately $1.3 billion of the deferred revenue in 2026, $1.0 billion in 2027, $0.7 billion in 2028 and $1.1 billion thereafter.
Cost to Obtain and Fulfill Non-Insurance Warranty Contracts with Customers
For the years ended December 31, 2025 and 2024, capitalized commission costs were $3.2 billion and $3.5 billion and capitalized administrator service costs were $61 million and $68 million. For the years ended December 31, 2025 and 2024, the amount of amortization of capitalized costs was $1.2 billion and there were no impairment losses related to the costs capitalized. There were no adjustments to deferred costs recorded for the years ended December 31, 2025 and 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.