XML 31 R20.htm IDEA: XBRL DOCUMENT
v3.25.1

Note 12 - Revenue From Contracts With Customers | 3 Months Ended
--- | ---
Mar. 31, 2025
Notes to Financial Statements |
Revenue from Contract with Customer [Text Block] | NOTE 12 REVENUE FROM CONTRACTS WITH CUSTOMERS Revenue from contracts with customers relates to the Extended Warranty and Kingsway Search Xcelerator segments and includes: vehicle service agreement fees, guaranteed asset protection products ("GAP") commissions, maintenance support service fees, warranty product commissions, business services consulting revenue, healthcare services revenue, software license and support revenue and skilled trades repair and service revenue. Revenue is based on terms of various agreements with credit unions, consumers and businesses. Customers either pay in full at the inception of a warranty contract or commission product sale, or when consulting, healthcare, skilled trades, software license and support services are billed, or on terms subject to the Company’s customary credit reviews. The following table disaggregates revenues from contracts with customers by revenue type for the three months ended March 31, 2025 and March 31, 2024:
(in thousands) |  |  | Three months ended March 31, |
|  |  | 2025 |  |  | 2024 |
Vehicle service agreement fees and GAP commissions | IWS, Geminus and PWI |  | $ | 14,894 |  |  | $ | 14,982 |
Maintenance support service fees | Trinity |  |  | 926 |  |  |  | 763 |
Warranty product commissions | Trinity |  |  | 850 |  |  |  | 939 |
Business services consulting fees | Ravix, CSuite and Image Solutions |  |  | 6,208 |  |  |  | 4,550 |
Healthcare services fees | SNS and DDI |  |  | 4,592 |  |  |  | 4,226 |
Software license and support fees | SPI |  |  | 591 |  |  |  | 700 |
Skilled trades repair and service fees | Bud's Plumbing |  |  | 288 |  |  |  | — |
Service fee and commission revenue |  | $ | 28,349 |  |  | $ | 26,160 |
Vehicle service agreement fees include the fees collected to cover the costs of future automobile mechanical breakdown claims and the associated administration of those claims. Vehicle service agreement fees are earned over the duration of the vehicle service agreement contracts as the single performance obligation is satisfied. Vehicle service agreement fees are initially recorded as deferred service fees with revenues recognized over the term of the contract based on the proportion of expected claims to total overall claims to be incurred over the life of the contract. The Company believes this reasonably represents the transfer of services to the vehicle service contract holder over the warranty term. The Company compares the remaining deferred service fees balance to the estimated amount of expected future claims under the vehicle service agreement contracts and records an additional accrual if the deferred service fees balance is less than expected future claims costs. In certain jurisdictions the Company is required to refund to a customer a pro-rata share of the vehicle service agreement fees if a customer cancels the agreement prior to the end of the term. Depending on the jurisdiction, the Company may be entitled to deduct from the refund a cancellation fee and/or amounts for claims incurred prior to cancellation. While refunds vary depending on the term and type of product offered, historically refunds have averaged 5.91% to 12.00% of the original amount of the vehicle service agreement fee. Revenues recorded by the Company are net of variable consideration related to refunds and the associated refund liability is included in accrued expenses and other liabilities. The Company estimates refunds based on the actual historical refund rates by warranty type taking into consideration current observable refund trends in estimating the expected amount of future customer refunds to be paid at each reporting period. Maintenance support service fees include the service fees collected to administer equipment breakdown and maintenance support services and are earned as services are rendered. Warranty product commissions include the commissions from the sale of warranty contracts for certain new and used heating, ventilation, air conditioning ("HVAC"), standby generator, commercial LED lighting and commercial refrigeration equipment. The Company acts as an agent on behalf of the third-party insurance companies that underwrite and guaranty these warranty contracts. The Company does not guaranty the performance underlying the warranty contracts it sells. Warranty product commissions are earned at the time of the warranty product sales. Business services consulting fees include the revenue from providing outsourced finance and human resources consulting services and information technology ("IT") managed services. The Company invoices for business services revenue based on contracted rates. Revenue is earned over time as services are provided. Healthcare services fees include revenue from providing healthcare professional staffing services and outsourced cardiac telemetry services for long-term acute care and inpatient rehabilitation hospitals. The Company invoices for healthcare services revenue based on contracted rates. Revenue is earned over time as services are provided. Software license and support fees include revenue from the sale or rental of software products created exclusively to serve the management needs of all types of shared-ownership properties. Software licenses are on-premise at customer locations and considered fully functional when made available and delivered to the customer. As the customer can use and benefit from the license on its own, software licenses represent distinct performance obligations. Revenue is recognized upfront at the point in time when control is transferred, which is defined as the point in time when the customer can use and benefit from the license. The Company's software licenses are sold as term licenses, and the contracts include software support services, which are accounted for as separate performance obligations. Software support revenue is recognized ratably over the contract period as services are rendered. For certain SPI contracts, the transaction price of the software license is billed in installments, typically over a three to five year period. The Company allocates a portion of the consideration received from these arrangements to a financing component when it determines that a significant financing component exists. The financing component is subsequently recognized as interest income separate from software license and support fee revenue over the term of the arrangement with the customer. Pursuant to practical expedients afforded under ASC 606, the Company does not recognize a financing component for software license sales that have a term of one year or less. Skilled trades repair and service revenue include the service fees collected to administer plumbing repairs and maintenance support services and are earned as services are rendered. The Company's revenue recognition policies are further described in Note 2(r), "Summary of Significant Accounting Policies - Revenue recognition," to the consolidated financial statements in the 2024 Annual Report. Service fee receivables Receivables from contracts with customers are reported as service fee receivable, net in the consolidated balance sheets and at March 31, 2025 and December 31, 2024 were $10.9 million and $9.4 million, respectively. The increase in receivables from contracts with customers is primarily due to the timing difference between the Company's satisfaction of performance obligations and customer payments. Service fee receivable is reported net of an estimated allowance for credit losses at March 31, 2025 and December 31, 2024 of $0.6 million and $0.6 million, respectively. During the three months ended March 31, 2025 and March 31, 2024, the Company recorded an increase to its allowance for credit losses of less than $0.1 million and $0.1 million, respectively. Service fee receivables that are deemed to be uncollectible are written off against the allowance for credit losses when identified. The Company recorded write-offs of service fee receivables that were deemed to be uncollectible of less than $0.1 million and $0.1 million during the three months ended March 31, 2025 and March 31, 2024, respectively. Contract asset The Company records a contract asset, which is included in other assets in the consolidated balance sheets, when revenue is recognized prior to billing the customer. Upon billing, which typically occurs over a three to five year installment period, the value of the contract asset is reversed and service fee receivable is recorded. Changes in the contract asset for the three months ended March 31, 2025 were as follows:
(in thousands) |  | Three Months Ended March 31, 2025 |
Balance, December 31, 2024 |  | $ | 1,878 |
Contract asset additions |  |  | 33 |
Amounts transferred to service fee receivables |  |  | (116 | )
Write-off of contract asset balances |  |  | (10 | )
Balance, March 31, 2025 |  | $ | 1,785 |
The contract asset is reported net of an estimated allowance for credit losses of zero at March 31, 2025 and December 31, 2024. During the three months ended March 31, 2025 and March 31, 2024, the Company recorded an increase to the contract asset allowance for credit losses of zero and less than $0.1 million. Contract assets that are deemed to be uncollectible are written off against the allowance for credit losses when identified. During the three months ended March 31, 2025 and March 31, 2024, the Company recorded write-offs to the contract asset for amounts that were deemed to be uncollectible of less than $0.1 and zero, respectively. Deferred service fees The Company records deferred service fees resulting from contracts with customers when payment is received in advance of satisfying the performance obligations. Changes in deferred service fees for the three months ended March 31, 2025 were as follows:
(in thousands) |  | Three Months Ended March 31, 2025 |
Balance, December 31, 2024 |  | $ | 83,108 |
Deferral of revenue |  |  | 16,280 |
Recognition of deferred service fees |  |  | (15,052 | )
Balance, March 31, 2025 |  | $ | 84,336 |
The increase in deferred service fees between December 31, 2024 and March 31, 2025 is primarily due to additions to deferred service fees in excess of deferred service fees recognized during the three months ended March 31, 2025. Approximately $13.1 million and $12.6 million of service fee and commission revenue recognized during the three months ended March 31, 2025 and March 31, 2024 was included in deferred service fees as of December 31, 2024 and December 31, 2023, respectively. Remaining performance obligations The Company expects to recognize within one year as service fee and commission revenue approximately 49.9% of the outstanding performance obligations as of March 31, 2025. The balance relates primarily to vehicle service agreement fees. Deferred contract costs Deferred contract costs represent the deferral of incremental costs to obtain or fulfill a contract with a customer. Incremental costs to obtain a contract with a customer primarily include sales commissions. The Company capitalizes costs incurred to fulfill a contract if the costs are identifiable, generate or enhance resources used to satisfy future performance obligations and are expected to be recovered. Costs to fulfill a contract include labor costs for set-up activities directly related to the acquisition of vehicle service agreements. Contract costs are deferred and amortized over the expected customer relationship period consistent with the pattern in which the related revenues are earned. Amortization of incremental costs to obtain a contract and costs to fulfill a contract with a customer are recorded in commissions and cost of services sold, respectively, in the unaudited consolidated statements of operations. No impairment charges related to deferred contract costs were recorded during the three months ended March 31, 2025 and March 31, 2024. The deferred contract costs balances and related amortization expense for the three months ended March 31, 2025 and March 31, 2024 are comprised as follows:
(in thousands) |  | Three months ended March 31, 2025 |  |  | Three months ended March 31, 2024 |
|  | Costs to Obtain a Contract |  |  | Costs to Fulfill a Contract |  |  | Total |  |  | Costs to Obtain a Contract |  |  | Costs to Fulfill a Contract |  |  | Total |
Balance at December 31, net |  | $ | 13,808 |  |  | $ | 81 |  |  | $ | 13,889 |  |  | $ | 13,653 |  |  | $ | 81 |  |  | $ | 13,734 |
Additions |  |  | 2,701 |  |  |  | 7 |  |  |  | 2,708 |  |  |  | 2,337 |  |  |  | 7 |  |  |  | 2,344 |
Amortization |  |  | (2,439 | ) |  |  | (5 | ) |  |  | (2,444 | ) |  |  | (2,277 | ) |  |  | (8 | ) |  |  | (2,285 | )
Balance at March 31, net |  | $ | 14,070 |  |  | $ | 83 |  |  | $ | 14,153 |  |  | $ | 13,713 |  |  | $ | 80 |  |  | $ | 13,793 |

X
- References No definition available. + Details
Name: | us-gaap_DisclosureTextBlockAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 7 -Publisher FASB -URI https://asc.fasb.org/1943274/2147479806/606-10-50-7 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 9 -Publisher FASB -URI https://asc.fasb.org/1943274/2147479806/606-10-50-9 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 10 -Publisher FASB -URI https://asc.fasb.org/1943274/2147479806/606-10-50-10 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 15 -Publisher FASB -URI https://asc.fasb.org/1943274/2147479806/606-10-50-15 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 12 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147479806/606-10-50-12 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 12 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org/1943274/2147479806/606-10-50-12 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 12 -Subparagraph (c) -Publisher FASB -URI https://asc.fasb.org/1943274/2147479806/606-10-50-12 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 12 -Subparagraph (d) -Publisher FASB -URI https://asc.fasb.org/1943274/2147479806/606-10-50-12 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 12 -Subparagraph (e) -Publisher FASB -URI https://asc.fasb.org/1943274/2147479806/606-10-50-12 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 13 -Subparagraph (b)(2) -Publisher FASB -URI https://asc.fasb.org/1943274/2147479806/606-10-50-13 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Name Accounting Standards Codification -Topic 606 -Publisher FASB -URI https://asc.fasb.org/606/tableOfContent + Details
Name: | us-gaap_RevenueFromContractWithCustomerTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration