GrowGeneration Corp.GRWG

GrowGeneration Corp. Revenue Disclosure

10-KFiled Mar 13, 20252 min read
4. REVENUE RECOGNITION
Disaggregation of Revenues
Net sales are disaggregated by the Company's segments, which represent its principal lines of business, as well as by major product line, including proprietary brands, non-proprietary brands, and commercial fixtures, and by product type, including consumable and durable products. Refer to Note 15, Segments, for disaggregated revenue disclosures.
Contract Assets and Liabilities
Depending on the timing of when title of product transfers to a customer and when a customer makes payments for such product, the Company recognizes an accounts receivable (contract asset) or a customer deposit (contract liability). The opening and closing balances of the Company's accounts receivables and customer deposits are as follows:
Accounts Receivable, NetCustomer Deposits
Balance as of January 1, 2024$8,895 $5,359 
Balance as of December 31, 20247,361 2,404 
Decrease$(1,534)$(2,955)
Balance as of January 1, 2023$8,336 $4,338 
Balance as of December 31, 20238,895 5,359 
Increase$559 $1,021 
Of the total amount of customer deposits as of January 1, 2024, $4.8 million was reported as revenue during the year ended December 31, 2024. Of the total amount of customer deposits as of January 1, 2023, $3.4 million was reported as revenue during the year ended December 31, 2023.
The Company also has notes receivable under longer term financing arrangements at interest rates typically ranging from 12% to 14% with repayment terms typically ranging for 12 to 18 months.
Notes receivable at December 31, 2024 and 2023 are as follows: 
December 31,
20242023
Notes receivable$1,056 $2,031 
Allowance for credit losses— (1,732)
Notes receivable, net$1,056 $299 
The following table summarizes changes in notes receivable balances that have been deemed impaired.
December 31,
20242023
Notes receivable$— $1,732 
Allowance for credit losses— (1,732)
Notes receivable, net$— $— 
During the year ended December 31, 2024, the Company received a $0.3 million settlement related to a $1.5 million note receivable, which had been fully reserved as of December 31, 2023. Refer to Note 16, Commitment and Contingencies, for additional information regarding the settlement.
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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

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