REVENUE AND CONTRACT LIABILITY

3 Months Ended

Mar. 31, 2024

Revenue from Contract with Customer [Abstract]

REVENUE AND CONTRACT LIABILITY

14. REVENUE AND CONTRACT LIABILITY

Unearned Revenue

The following table provides information about unearned revenue from contracts with customers, including significant changes in unearned revenue balances during the periods presented (in thousands):

	Amount
Unearned revenue at December 31, 2022	$	44,480
Increase due to deferral of revenue at period end, net	35,290
Decrease due to beginning contract liabilities recognized as revenue	(30,173)
Unearned revenue at December 31, 2023	49,597
Increase due to deferral of revenue at period end, net	33,448
Decrease due to beginning contract liabilities recognized as revenue	(28,370)
Unearned revenue at March 31, 2024	$	54,675

Our total unearned revenue related to outstanding loyalty program rewards was $12.9 million and $12.1 million at March 31, 2024 and December 31, 2023, respectively. Breakage income related to loyalty program rewards and gift cards is recognized in Net revenue in our consolidated statements of operations. Breakage included in revenue was $1.3 million and $849,000 for the three months ended March 31, 2024 and 2023, respectively. The timing of revenue recognition of these reward dollars is driven by actual customer activities, such as redemptions and expirations. At March 31, 2024, we had an additional $5.3 million of unearned contract revenue classified within Other long-term liabilities on our consolidated balance sheets.

Sales returns allowance

The following table provides additions to and deductions from the sales returns allowance, which is included in our Accrued liabilities balance in our consolidated balance sheets (in thousands):

	Amount
Allowance for returns at December 31, 2022	$	10,222
Additions to the allowance	121,939
Deductions from the allowance	(123,510)
Allowance for returns at December 31, 2023	8,651
Additions to the allowance	27,429
Deductions from the allowance	(25,515)
Allowance for returns at March 31, 2024	$	10,565