TOMI Environmental Solutions, Inc. Revenue Disclosure
We recognize revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers. We recognize revenue when we transfer promised goods or services to customers in an amount that reflects the consideration to which we expect to be entitled in exchange for those goods or services. To determine revenue recognition, we perform the following five steps: (i) identify the contract with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when or as we satisfy the performance obligations.
We must use judgment to determine: (a) the number of performance obligations and whether they are distinct from one another; (b) the transaction price; and (c) the standalone selling price for each performance obligation for purposes of transaction price allocation.
Title and risk of loss generally pass to our customers upon shipment. Shipping and handling costs charged to customers are included in product revenues, and the associated expenses are treated as fulfillment costs included in cost of revenues. Revenues are reported net of sales taxes collected from customers.
Product revenue includes sales of our standard and customized equipment, BIT Solution and accessories, recognized upon transfer of control to the customer. Service and training revenue includes high-level decontamination engagements, equipment validation and customer training, recognized as the agreed-upon services are rendered
A portion of our revenue is derived from SIS and CES, which may involve multiple performance obligations including equipment supply, installation, validation and ongoing service. For these arrangements, management exercises judgment in identifying distinct performance obligations, allocating the transaction price based on relative standalone selling prices, and determining the point at which control transfers to the customer, and allocating the transaction price based on relative standalone selling prices, when applicable. Delays in project completion or customer acceptance can affect the timing of revenue recognition.
We record estimated allowances for sales returns using a specific identification method based on subsequent return activity and historical averages. For the years ended December 31, 2025 and 2024, we recorded allowances of $47,844 and $227,000, respectively.
Disaggregation of Revenue
The following table presents our revenues disaggregated by revenue source (rounded to nearest thousand).
Product and Service Revenue
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| For the years ended December 31, |
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| 2025 |
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| 2024 |
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| Change |
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Product |
| $ | 3,965,000 |
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| $ | 6,035,000 |
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| $ | (2,070,000 | ) |
Service |
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| 1,671,000 |
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| 1,704,000 |
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| (33,000 | ) |
Total |
| $ | 5,636,000 |
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| $ | 7,739,000 |
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| $ | (2,103,000 | ) |
Revenue by Geographic Region
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| For the years ended December 31, |
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| 2025 |
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| 2024 |
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| Change |
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United States |
| $ | 4,011,000 |
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| $ | 6,098,000 |
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| $ | (2,087,000 | ) |
International |
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| 1,625,000 |
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| 1,641,000 |
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| (16,000 | ) |
Total |
| $ | 5,636,000 |
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| $ | 7,739,000 |
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| $ | (2,103,000 | ) |
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 31, 2026 | Showing above |
| 2024 | Apr 14, 2025 | |
| 2023 | Apr 1, 2024 | |
| 2022 | Mar 16, 2023 | |
| 2021 | Mar 29, 2022 | |
| 2020 | Mar 30, 2021 | |
| 2019 | Mar 30, 2020 | |
| 2016 | Mar 29, 2017 | |
| 2015 | Mar 30, 2016 | |
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.