INTEGRA LIFESCIENCES HOLDINGS CORPIART
INTEGRA LIFESCIENCES HOLDINGS CORP Revenue Disclosure
REVENUES FROM CONTRACTS WITH CUSTOMERS
Summary of Accounting Policies on Revenue Recognition
Revenue is recognized upon the transfer of control of promised products or services to the customers in an amount that reflects the consideration the Company expects to receive in exchange for those products and services.
Performance Obligations
The Company’s performance obligations consist mainly of transferring control of goods and services identified in the contracts, purchase orders, or invoices. The Company has no significant multi-element contracts with customers.
Significant Estimates
Usage-based royalties and licenses are estimated based on the provisions of contracts with customers and recognized in the same period that the royalty-based products are sold by the Company’s strategic partners. The Company estimates and recognizes royalty revenue based upon communication with licensees, historical information, and expected sales trends. Differences between actual reported licensee sales and those that were estimated are adjusted in the period in which they become known, which is typically the following quarter. Historically, such adjustments have not been significant.
The Company estimates returns, price concessions, and discount allowances using the expected value method based on historical trends and other known factors. Rebate allowances are estimated using the most likely method based on each customer contract.
The Company’s return policy, as set forth in its product catalogs and sales invoices, requires review and authorization in advance prior to the return of product. Upon the authorization, a credit will be issued for the goods returned within a set amount of days from the shipment, which is generally 90 days.
The Company disregards the effects of a financing component if the Company expects, at contract inception, that the period between the transfer and customer payment for the goods or services will be one year or less. The Company has no significant revenues recognized on payments expected to be received more than one year after the transfer of control of products or services to customers.
Contract Assets and Liabilities
Revenues recognized from the Company’s private label business that are not invoiced to the customers as a result of recognizing revenue over time are recorded as a contract asset included in the prepaid expenses and other current assets account in the consolidated balance sheet. Upon invoicing to the customer, the balance is recorded in trade receivable, net in the consolidated balance sheet.
Other operating revenues may include fees received under service agreements. Non-refundable fees received under multiple-period service agreements are recognized as revenue as the Company satisfies the performance obligations to the other party. A portion of the transaction price allocated to the performance obligations to be satisfied in the future periods is recognized as contract liability.
The following table summarized the changes in the contract asset and liability balances for the year ended December 31, 2025:
| Dollars in thousands | Total | ||||
| Contract Asset | |||||
Contract asset, January 1, 2025 | $ | 6,146 | |||
| Transferred to trade receivable from contract asset included in beginning of the year contract asset | (6,146) | ||||
| Contract asset, net of transferred to trade receivables on contracts during the period | 6,844 | ||||
Contract asset, December 31, 2025 | $ | 6,844 | |||
| Contract Liability | |||||
Contract liability, January 1, 2025 | $ | 19,669 | |||
| Recognition of revenue included in beginning of year contract liability | (10,151) | ||||
| Contract liability, net of revenue recognized on contracts during the period | 13,361 | ||||
| Foreign currency translation | 131 | ||||
Contract liability, December 31, 2025 | $ | 23,010 | |||
At December 31, 2025, the short-term portion of the contract liability of $11.5 million, representing 50% of unsatisfied or partially unsatisfied performance obligations, is expected to be recognized as revenue within 12 months and is included in current liabilities in the consolidated balance sheet. The long-term portion of $11.5 million, representing the remaining balance to be recognized thereafter, is included in other liabilities in the consolidated balance sheet.
As of December 31, 2025, the Company is expected to recognize revenue from unsatisfied or partially satisfied performance obligations of approximately $11.5 million in 2026, $6.9 million in 2027, $3.4 million in 2028, $0.9 million in 2029 and $0.3 million in 2030.
Shipping and Handling Fees
The Company elected to account for shipping and handling activities as a fulfillment cost rather than a separate performance obligation. Amounts billed to customers for shipping and handling are included as part of the transaction price and recognized as revenue when control of underlying products is transferred to the customer. The related shipping and freight charges incurred by the Company are included in the cost of goods sold.
Product Warranties
Certain of the Company’s medical devices, including monitoring systems and neurosurgical systems, are designed to operate over long periods of time. These products are sold with warranties which may extend for up to two years from the date of purchase. The warranties are not considered a separate performance obligation. The Company estimates its product warranties using the expected value method based on historical trends and other known factors. The Company includes them in accrued expenses and other current liabilities in the consolidated balance sheet.
Taxes Collected from Customers
The Company elected to exclude from the measurement of the transaction price all taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction and collected by the entity from a customer.
Disaggregated Revenue
The following table presents revenues disaggregated by the major sources of revenues for years-ended December 31, 2025, 2024, and 2023 (dollar amounts in thousands):
| Year Ended December 31, 2025 | Year Ended December 31, 2024 | Year Ended December 31, 2023 | |||||||||
| Neurosurgery | $ | 827,667 | $ | 803,816 | $ | 818,101 | |||||
| Instruments | 206,472 | 204,177 | 203,617 | ||||||||
ENT(1)(2) | 166,372 | 135,643 | 37,275 | ||||||||
| Total Codman Specialty Surgical | 1,200,511 | 1,143,636 | 1,058,993 | ||||||||
| Wound Reconstruction and Care | 323,488 | 350,565 | 373,986 | ||||||||
| Private Label | 111,246 | 116,326 | 108,594 | ||||||||
| Total Tissue Technologies | 434,734 | 466,891 | 482,580 | ||||||||
| Total revenue | $ | 1,635,245 | $ | 1,610,527 | $ | 1,541,573 | |||||
(1) See Note 4. Acquisitions and Divestitures for details surrounding the acquisition of Acclarent on April 1, 2024.
(2) Prior period revenues included within our instruments business have been reclassified under the ENT business.
See Note 16. Segment and Geographic Information for details of revenues based on the location of the customer.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 26, 2026 | Showing above |
| 2024 | Feb 25, 2025 | |
| 2023 | Feb 28, 2024 | |
| 2022 | Feb 22, 2023 | |
| 2021 | Feb 24, 2022 | |
| 2020 | Feb 23, 2021 | |
| 2019 | Feb 21, 2020 | |
| 2018 | Feb 26, 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.