14. REVENUES

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Revenue Recognition

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Revenue is measured as the amount of consideration expected to be received in exchange for transferring goods or providing service.

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Product and Sold Equipment

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Product revenue is generated from sales of cleaning, sanitizing, water treatment, process treatment and colloidal silica products. In addition, the Company sells equipment which may be used in combination with its specialized products. Revenue from product and sold equipment is recognized when obligations under the terms of a contract with the customer are satisfied, which generally occurs with the transfer of the product or delivery of the equipment.

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Service and Lease Equipment

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Service and lease equipment revenue is generated from providing services or leasing equipment to customers. Service offerings include installing or repairing certain types of equipment, activities that supplement or replace headcount at the customer location, or fulfilling deliverables included in the contract. Global Water segment services are associated with water treatment and paper process applications. Global Institutional & Specialty segment services include cleaning and sanitizing programs and wash process solutions. Global Life Sciences segment services include pharmaceutical and personal care solutions. Revenues included in Global Pest Elimination primarily relate to services designed to detect, eliminate and prevent pests. Revenue from service and leased equipment is recognized when the services are provided, or the customer receives the benefit from the leased equipment, which is over time. Service revenue is recognized over time utilizing an input method and aligns with when the services are provided. Typically, revenue is recognized using costs incurred to date because the effort provided by the field selling and service organization represents services provided, which corresponds with the transfer of control. Revenue for leased equipment is accounted for under Topic 842 Leases and recognized on a straight-line basis over the length of the lease contract.

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The Company’s operating lease revenue, including an immaterial amount of variable lease revenue, was as follows:

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The following table shows principal activities, separated by reportable segments, from which the Company generates its revenue.

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Net sales at public exchange rates by reportable segment are as follows:

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Net sales at public exchange rates by geographic region for the first quarter ended March 31 are as follows:

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Net sales by geographic region were determined based on sales destination. The United States made up 52% and 54% of total revenues during the quarter ended March 31, 2026 and 2025, respectively.

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Accounts Receivable and Allowance for Expected Credit Losses

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Accounts receivable are carried at the invoiced amounts, less an allowance for expected credit losses, and generally do not bear interest. The Company’s allowance for expected credit losses estimates the amount of expected future credit losses by analyzing accounts receivable balances by age and applying historical write-off and collection experience. The Company’s estimates separately consider macroeconomic trends, specific circumstances and credit conditions of customer receivables. Account balances are written off against the allowance when it is determined the receivable will not be recovered.

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The Company’s allowance for expected return of products shipped and credits related to pricing or quantities shipped was $42.5 million and $42.7 million as of March 31, 2026 and December 31, 2025, respectively. Credit activity is recorded directly as a reduction to revenue.

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The following table summarizes the activity in the allowance for expected credit losses:

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Contract Asset and Liability

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Payments received from customers are based on invoices or billing schedules as established in contracts with customers. Accounts receivable are recorded when the right to consideration becomes unconditional. The Company has contract assets which relate to performance under the contract in advance of billings. Contract assets were $126.1 and $117.4 million as of March 31, 2026 and December 31, 2025. In addition, the Company has contract liabilities which relate to billings in advance of performance (primarily service obligations) under the contract. Contract liabilities are recognized as revenue when the performance obligation has been performed, which primarily occurs during the subsequent quarter.

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