NOTE 3 – REVENUE RECOGNITION

Disaggregation of revenue

Revenues are recognized when control of the promised goods or services is transferred to our customers, in an amount that best reflects the consideration we expect to receive in exchange for those goods or services.

The following table disaggregates revenue based on type for the years ended December 31, 2025 and 2024:

Revenue by Type

SUNation NY

HEC

2025

2024

2025

2024

Residential contracts

$

40,215,497

$

30,715,255

$

20,993,980

$

15,984,618

Commercial contracts

6,894,923

6,700,469

189,694

429,259

Service revenue

2,489,891

2,317,638

1,121,542

714,514

$

49,600,311

$

39,733,362

$

22,305,216

$

17,128,391

The following table disaggregates revenue based on the timing of satisfaction of the performance obligations for the years ended December 31, 2025 and 2024:

SUNation NY

HEC

2025

2024

2025

2024

Performance obligations satisfied at a point in time

$

42,705,388

$

33,032,893

$

22,115,522

$

16,699,132

Performance obligations satisfied over time

6,894,923

6,700,469

189,694

429,259

$

49,600,311

$

39,733,362

$

22,305,216

$

17,128,391

Contract Balances

Contract assets represent costs and earnings in excess of amounts billed and direct costs, including commissions, financing and permitting fees paid prior to recording revenue. Contract liabilities represent amounts billed to clients in excess of revenue recognized to date and billings in excess of costs and earnings. Retainage on commercial revenue contracts is included within accounts receivable and totaled $455,660 and $189,880 at December 31, 2025 and 2024, respectively. Contract assets were $658,177, $560,648 and $57,241 at December 31, 2025, 2024, and 2023, respectively. Contract liabilities were $2,737,151, $2,314,483 and $2,552,452 at December 31, 2025, 2024, and 2023, respectively. During 2024, $2,552,452 within contract liabilities as of December 31, 2023 was recognized within revenue. During 2025, $2,186,702 within contract liabilities as of December 31, 2024 has been recognized within revenue.

Historical Timeline

Fiscal YearFiled
2025Mar 23, 2026Showing above
2024Apr 15, 2025
2023Apr 1, 2024
2022Apr 14, 2023
2021Mar 14, 2022
2020Mar 31, 2021
2018Mar 8, 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.