Deferred Revenue | | | | | | | | | | | | | | | |
| | | |
| | | | | | December 31, 2025 | | December 31, 2024 |
| | | | | | | |
| | | | | (in US $ millions) |
| Balance, beginning of the year | | | | | 430 | | | 498 | |
Deferral of revenue(1) | | | | | 224 | | | 207 | |
| | | | | | | |
| Recognition of deferred revenue from beginning balance | | | | | (256) | | | (275) | |
| Balance, end of the year | | | | | 398 | | | 430 | |
(1)Deferral of revenue includes only the portion of collections from merchant billings throughout the year, primarily related to subscription fees, for which the services have not yet been provided. The amounts primarily exclude subscription revenue that has both been deferred and recognized within the period presented.
| | | | | | | | | | | | | | | |
| | | | | December 31, 2025 | | December 31, 2024 |
| | | | | | | |
| | | | | (in US $ millions) |
| Current portion | | | | | 300 | | | 283 | |
| Long-term portion | | | | | 98 | | | 147 | |
| | | | | 398 | | | 430 | |
The opening balances of current and long-term deferred revenue were $302 million and $196 million, respectively, as of January 1, 2024.
As of December 31, 2025, the long-term deferred revenue, excluding non-cash consideration received, will be recognized ratably over the remaining terms of the contracts with the customers, which range from two years to three years.
The Company has received non-cash consideration in the form of equity investments in exchange for services to be rendered as part of strategic partnerships. As the Company is required to provide referral services and other services to support the partners' merchant offerings over the period of the performance obligations, revenue is deferred and recognized over time on a ratable basis over the expected terms of the contracts.
The table below summarizes the gross changes in deferred revenue associated with this non-cash consideration received for the years ended December 31, 2025 and 2024:
| | | | | | | | | | | | | | | |
| | | |
| | | | | | December 31, 2025 | | December 31, 2024 |
| | | | | | | |
| | | | | (in US $ millions) |
| Balance, beginning of the year | | | | | 190 | | | 284 | |
| | | | | | | |
| Revenue recognized related to non-cash consideration | | | | | (49) | | | (94) | |
| Balance, end of the year | | | | | 141 | | | 190 | |
| | | | | | | |
| Current portion | | | | | 48 | | | 50 | |
| Long term portion | | | | | 93 | | | 140 | |
| | | | | 141 | | | 190 | |
The Company will recognize this revenue ratably over the remaining terms of the respective strategic partnership service agreements, which range from two years to four years.
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.