Extended Maintenance Contracts and Warranty Reserve

3 Months Ended

Mar. 31, 2025

Extended Maintenance Contracts and Warranty Reserve.

Extended Maintenance Contracts and Warranty Reserve

10. Extended Maintenance Contracts and Warranty Reserve

Loss Accrual

On a quarterly basis, we evaluate any potential losses related to our extended maintenance contracts for sales of equipment, related infrastructure and other that have been sold. The following table shows the roll forward of balances in the accrual for loss contracts (in thousands):

	Three months ended		Year ended
	March 31, 2025		December 31, 2024
Beginning balance	$	134,356	$	137,853
Provision for loss accrual		9,460		45,226
Releases to service cost of sales		(11,825)		(51,578)
Increase to loss accrual related to customer warrants		(572)		3,313
Foreign currency translation adjustment		319		(458)
Ending balance	$	131,738	$	134,356

Product Warranty Reserve

On a quarterly basis, we evaluate our product warranty reserve. The Company applies a failure rate based on product type on a contract-by-contract basis to determine its product warranty reserve liability. The Company’s product warranty reserve liability balance as of March 31, 2025 and December 31, 2024 was $12.4 million and $12.1 million, respectively.