LiveWire Group, Inc.

4. Revenue

The Company recognizes revenue when it satisfies a performance obligation by transferring control of a good or service to a customer. Revenue is measured based on the consideration that the Company expects to be entitled to in exchange for the goods or services transferred. Taxes that are collected from a customer concurrent with revenue-producing activities are excluded from revenue.

Disaggregated revenue, net by major source was as follows (in thousands):

Revenue from the sale of LiveWire One and, beginning in August 2026, revenue from the sale of S4 Honcho TM electric motorcycles, electric balance bikes, electric bikes, as well as parts and accessories and apparel are recorded when control is transferred to the customer, generally at the time of shipment to independent dealers and distributors or at the time of delivery to retail customers. In March 2025, STACYC launched an adult pedal assist electric bike (“electric bike”) that can operate with or without a battery. Currently, the electric bike is only sold with batteries and revenue related to both performance obligations is recognized when control is transferred to the customer, as discussed above. S2 electric motorcycles, being motorcycles produced from LiveWire’s S2 platform using the Arrow Architecture model, containtwo performance obligations, which are the sale of the electric motorcycle and a stand ready obligation to transfer Firmware Over The Air (“FOTA”) software updates to the electric motorcycle, when-and-if available, to the customer. Revenue on the sale of the S2 electric motorcycles is recorded at a point-in-time when control is transferred to the customer. As the unspecified FOTA software updates to S2 electric motorcycles are provided when-and-if they become available, revenue related to these updates is recognized ratably over the period the updates will be provided, estimated by management to befive years, commencing when control of the electric motorcycle is transferred to the customer. The standalone selling prices of performance obligations are estimated by considering costs to develop and deliver the good or service, third-party pricing of similar goods or services and other information that may be available. The Company allocates the transaction price among the performance obligations in proportion to the standalone selling price of the Company’s performance obligations.

The Company offers sales incentive programs to independent dealers, distributors and retail customers designed to promote the sale of its products. The Company estimates its variable consideration related to its sales incentive programs using the expected value method. The Company accounts for consideration payable as part of its sales incentives as a reduction of revenue, which is accrued at the later of the date the related sale is recorded or the date the incentive program is both approved and communicated. Variable consideration related to sales incentives and rights to return is adjusted at the earliest of when the amount of consideration the Company expects to receive changes, or the consideration becomes fixed.

In July 2025, the Company announced a new retail partner incentive program effective through December 31, 2025. In August 2025, the Company announced the “Twist & Go Promotion” offering temporary incentives from August 29, 2025 to October 31, 2025 on S2 electric motorcycles. As a result of these incentives in 2025, for the three and nine months ended September 30, 2025, the Company recorded $982 thousand and $897 thousand, respectively, for variable consideration related to previously recognized sales. In late October 2025, the Company approved and subsequently announced the extension of the Twist & Go Promotion through December 15, 2025. Adjustments for variable consideration for the three and nine months ended September 30, 2026 werenot material.

The Company offers the right to return eligible parts and accessories and apparel, electric balance bikes, electric bikes and, in limited circumstances, on electric motorcycles. The Company estimates returns based on an analysis of historical trends and probability of returns and records revenue on the initial sale only in the amount that it expects to be entitled. The remaining consideration is deferred in a refund liability account. The refund liability is remeasured for changes in the estimate at each reporting date with a corresponding adjustment to revenue. The Company records a refund asset at the carrying amount of the goods at the time of sale, less any expected costs to recover the goods and any expected reduction in value as a reduction to Cost of goods sold. This amount is monitored and adjusted for impairment, as necessary. The refund assets of $219 thousand and $298 thousand were included in Other current assets as of September 30, 2026 and December 31, 2025, respectively, and $247 thousand and $326 thousand of the refund liabilities were included in Accrued liabilities as of September 30, 2026 and December 31, 2025, respectively, in the Company’s consolidated balance sheets.

Shipping and handling costs associated with freight after control of a product has transferred to a customer are accounted for as fulfillment costs in Cost of goods sold. The Company accrues for the shipping and handling in the same period that the related revenue is recognized.

The Company offers standard, limited warranties on its electric motorcycles, electric balance bikes, electric bikes and parts and accessories. These warranties provide assurance that the product will function as expected and are not separate performance obligations. The Company accounts for estimated warranty costs as a liability when control of the product transfers to the customer.

Contract Liabilities

The Company maintains certain contract liability balances related to payments received at contract inception in advance of the Company’s performance under the contract that generally relates to customer deposits for electric balance bikes, electric bikes and electric motorcycles and consideration received upon transfer of control of the S2 motorcycles for FOTA software updates. Contract liabilities are recognized as revenue once the Company performs under the contract. The current portion of contract liabilities of $376 thousand and $662 thousand were included in Accrued liabilities and the long-term portion of contract liabilities of $373 thousand and $410 thousand were included in Other long-term liabilities in the Company's consolidated balance sheets as of September 30, 2026 and December 31, 2025, respectively. The Company expects to recognize $373 thousand included in Other long-term liabilities in the Company’s consolidated balance sheet at September 30, 2026 over the next five years.

Previously deferred revenue recognized as revenue in the three months ended September 30, 2026 and 2025 was $52 thousand and $31 thousand, respectively, and $327 thousand and $92 thousand in the nine months ended September 30, 2026 and 2025, respectively.