REGIS CORPRGS
REGIS CORP Revenue Disclosure
REVENUE RECOGNITION:
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Revenue Recognition and Deferred Revenue:
Revenue recognized over time
Royalty and advertising fund revenues represent sales-based royalties that are recognized in the period in which the sales occur. Generally, royalty and advertising fund revenues are billed and collected monthly in arrears. Advertising fund revenues and expenditures, which must be spent on marketing and related activities per the franchise agreements, are recorded on a gross basis within the Consolidated Statements of Operations. The treatment increases both the gross amount of reported revenue and expense and generally has no impact on operating income and net income. Franchise fees are billed and received upon the signing of the franchise agreement. Recognition of these fees is deferred until the salon opens and typically recognized over 10 years. Franchise rental income is a result of the Company signing leases on behalf of franchisees and entering into sublease arrangements with the franchisees. The Company recognizes franchise rental income and expense when it is due to the landlord.
Revenue recognized at point of sale
Company-owned salon revenues are recognized at the time when the services are provided, or the guest receives and pays for the merchandise. Revenues from purchases made with gift cards are also recorded when the guest takes possession of the merchandise or services are provided. Gift cards issued by the Company are recorded as a liability (deferred revenue) upon sale and recognized as revenue upon redemption by the guest. Gift card breakage, the amount of gift cards which will not be redeemed, is recognized based on gift card balances with no activity over a 36-month basis. In the fourth quarter of fiscal year 2024, the Company revised its estimate related to the gift card breakage and recognized $1.3 million of non-cash gift card revenue. Product sales to franchisees are recorded at the time product is delivered to the franchisee.
Information about receivables, broker fees, and deferred revenue subject to the revenue recognition guidance is as follows:
| June 30, 2025 | June 30, 2024 | Balance Sheet Classification | ||||||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||||
| Receivables from contracts with customers, net | $ | 7,378 | $ | 6,887 | Receivable, net | |||||||||||||||
| Broker fees | 5,997 | 9,369 | Other assets | |||||||||||||||||
| Deferred revenue: | ||||||||||||||||||||
| Current | ||||||||||||||||||||
| Gift card liability | $ | 476 | $ | 366 | Accrued expenses | |||||||||||||||
| Deferred franchise fees open salons | 3,832 | 4,738 | Accrued expenses | |||||||||||||||||
| Total current deferred revenue | $ | 4,308 | $ | 5,104 | ||||||||||||||||
| Non-current | ||||||||||||||||||||
| Deferred franchise fees unopened salons | $ | 1,475 | $ | 1,783 | Other non-current liabilities | |||||||||||||||
| Deferred franchise fees open salons | 9,394 | 14,972 | Other non-current liabilities | |||||||||||||||||
| Total non-current deferred revenue | $ | 10,869 | $ | 16,755 | ||||||||||||||||
Receivables relate primarily to payments due for royalties, advertising fees, rent, franchise product sales, and sales of salon services and product paid by credit card. The receivables balance is presented net of an allowance for expected credit losses (i.e., doubtful accounts), related to receivables from franchisees. Management estimates the allowance based on the age of the receivable and creditworthiness of the franchisee. The following table is a rollforward of the allowance for credit losses for the periods indicated:
| Fiscal Years | ||||||||||||||
| 2025 | 2024 | |||||||||||||
| (Dollars in thousands) | ||||||||||||||
| Balance at beginning of period | $ | 6,227 | $ | 7,297 | ||||||||||
| Provision for doubtful accounts (1) | 3,040 | 538 | ||||||||||||
| Provision for franchisee rent (2) | 790 | 1,538 | ||||||||||||
| Recoveries | (2,266) | 47 | ||||||||||||
| Other | 78 | (75) | ||||||||||||
| Write-offs | (2,854) | (3,118) | ||||||||||||
| Balance at end of period | $ | 5,015 | $ | 6,227 | ||||||||||
(1)The provision for credit losses is recognized as general and administrative expense in the Consolidated Statements of Operations.
(2)The provision for franchisee rent is recognized as rent in the Consolidated Statements of Operations.
Broker fees are the costs associated with using external brokers to identify new franchisees. These fees are paid upon the signing of the franchise agreement and recognized as general and administrative expense over the term of the franchise agreement in the Consolidated Statements of Operations. The following table is a rollforward of the broker fee balance for the periods indicated:
| Fiscal Years | ||||||||||||||
| 2025 | 2024 | |||||||||||||
| (Dollars in thousands) | ||||||||||||||
| Balance at beginning of period | $ | 9,369 | $ | 12,471 | ||||||||||
| Amortization | (2,313) | (2,749) | ||||||||||||
| Write-offs | (1,059) | (353) | ||||||||||||
| Balance at end of period | $ | 5,997 | $ | 9,369 | ||||||||||
Deferred revenue includes the gift card liability and deferred franchise fees for unopened salons and open salons. Deferred franchise fees related to open salons are generally recognized on a straight-line basis over the term of the franchise agreement. Franchise fee revenue for fiscal years 2025, 2024, and 2023 was $6.8 million, $6.5 million, and $6.7 million, respectively. Estimated revenue expected to be recognized in the future related to deferred franchise fees for open salons as of June 30, 2025, is as follows (in thousands):
| 2026 | $ | 3,769 | ||||||
| 2027 | 3,311 | |||||||
| 2028 | 2,649 | |||||||
| 2029 | 2,190 | |||||||
| 2030 | 895 | |||||||
| Thereafter | 412 | |||||||
| Total | $ | 13,226 | ||||||
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Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Sep 3, 2025 | Showing above |
| 2024 | Aug 28, 2024 | |
| 2023 | Aug 23, 2023 | |
| 2022 | Aug 23, 2022 | |
| 2021 | Aug 26, 2021 | |
| 2020 | Aug 31, 2020 | |
| 2019 | Aug 27, 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.