Distribution Solutions Group, Inc.DSGR

Distribution Solutions Group, Inc. Revenue Disclosure

10-KFiled Mar 5, 20262 min read
Note 4 – Revenue Recognition

Disaggregation of Revenue

The Company’s revenue is primarily comprised of product sales to customers. The Company has disaggregated revenue by geographic area and by segment as it most reasonably depicts the amount, timing and uncertainty of revenue and cash flows generated from our contracts with customers. Disaggregated consolidated revenue by geographic area (based on the location to which the product is shipped to):
Year Ended December 31,
(in thousands)202520242023
United States$1,459,885 $1,389,754 $1,253,401 
Canada293,004 192,213 141,125 
Europe64,711 58,144 79,643 
Pacific Rim32,247 20,584 13,515 
Latin America117,833 131,345 74,577 
Other14,726 14,006 9,841 
Intersegment revenue elimination(2,383)(1,942)(1,700)
Total revenue$1,980,023 $1,804,104 $1,570,402 

See Note 14 – Segment Information for disaggregation of revenue by segment.

Rental Revenue

TestEquity rents new and used electronic test and measurement equipment to customers in multiple industries. Lawson leases parts washer machines to customers. This leased equipment is included in Rental equipment, net in the Consolidated Balance Sheets, and rental revenue is included in Revenue in the Consolidated Statements of Operations and Comprehensive Income (Loss). The unearned rental revenue related to customer prepayments on equipment leases was nominal at December 31, 2025 and December 31, 2024.

Rental revenue from operating leases:
Year Ended December 31,
(in thousands)202520242023
Revenue from operating leases$26,872 $17,519 $17,186 

Contract Liabilities

Deferred consideration for the service performance obligations that have not been satisfied will be recognized within twelve months of the respective balance sheet date. The table below summarizes our changes in contract liabilities for the periods presented.

Year Ended December 31,
(in thousands)202520242023
Beginning balance
$3,727 $810 $2,313 
Additions
5,207 3,727 810 
Revenue recognized
(3,727)(810)(2,313)
Ending balance
$5,207 $3,727 $810 

Historical Timeline

Fiscal YearFiled
2025Mar 5, 2026Showing above
2024Mar 6, 2025
2023Mar 7, 2024
2022Mar 14, 2023
2021Feb 24, 2022
2020Feb 26, 2021
2019Feb 27, 2020
2018Mar 4, 2019

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.

Other Available Disclosures

Income TaxesEarnings Per SharePP&EGoodwill & IntangiblesLeasesSegmentsDebtCommitmentsStock CompensationNew StandardsPay vs Performance