No Backlog: $1.5 Billion of Deferred RevenueNarrow moat

Home Depot (HD) — moat facet

Home Depot has nothing contracted beyond about three months, so no customer can concentrate its revenue and no order book can cushion a downturn.

Home Depot's contracts with customers are short. The 10-K says performance obligations are part of contracts with expected original durations of typically three months or less1, and deferred revenue for products and services was $1.5 billion at both 1 February 2026 and 2 February 20252. Unredeemed gift cards were $1.1 billion3.

Deferred revenue and gift cards ($bn)1.5Products andservices, FY20241.5Products andservices, FY20251.1Gift cards, FY20252.575Balance sheetline, FY2025Home Depot Form 10-K fiscal 2025, revenue note and balance sheet
A few days of sales, at most.

Against sales of $164,683 million4, that is a few days of business. Home Depot has no order book that could concentrate in one customer, and none that could cushion a downturn.

The balance-sheet deferred revenue line, which includes gift cards, was $2,575 million at the end of fiscal 2025 against $2,610 million5. It moves with the season, not with contracts.

The absence of a backlog is why the company guides one year at a time and why its results follow the housing market so closely. Distributors like SRS may have longer relationships, but the filings disclose no backlog for them either.

Gift cards are the one prepayment of any size. Unredeemed gift cards were $1.1 billion at both year ends, and breakage income was immaterial6; they are generally redeemed within six months of issue7. Even the company's prepayments turn over within a season.

This is a stable feature, neither a moat nor a weakness. Deferred revenue is the figure that would change it: a sharp rise would signal longer project contracts, probably from installation services or the distributors, and with them a new kind of concentration.

Moat trajectory: Holding steady

Deferred revenue $1.5bn for products and services at both year ends.

The number that tests this moat
Reported
Deferred revenue on the balance sheet, latest year end
$2,575M (1 February 2026) against $2,610M

Customer prepayments; a sharp rise would signal longer contracts and a new form of concentration.

Source: Home Depot Form 10-K, fiscal 2025 ↗
References
  1. ReportedThe 10-K says performance obligations are part of contracts with expected original durations of typically three months or less, and deferred revenue for products and services was $1.5 billion at both 1 February 2026 and 2 February 2025.
    The Home Depot Form 10-K for fiscal 2025 (the 52 weeks ended 1 February 2026) - financial statements and notes: earnings, cash flow, balance sheet, debt and acquisitions. — Fiscal 2025 · publ. 18 March 2026 · source ↗
  2. ReportedThe 10-K says performance obligations are part of contracts with expected original durations of typically three months or less, and deferred revenue for products and services was $1.5 billion at both 1 February 2026 and 2 February 2025.
    The Home Depot Form 10-K for fiscal 2025 (the 52 weeks ended 1 February 2026) - financial statements and notes: earnings, cash flow, balance sheet, debt and acquisitions. — Fiscal 2025 · publ. 18 March 2026 · source ↗
  3. ReportedUnredeemed gift cards were $1.1 billion.
    The Home Depot Form 10-K for fiscal 2025 (the 52 weeks ended 1 February 2026) - Item 1 business and Item 2 properties: stores, Pros, SRS, competition and supply chain. — Fiscal 2025 · publ. 18 March 2026 · source ↗
  4. ReportedAgainst sales of $164,683 million, that is a few days of business.
    The Home Depot Form 10-K for fiscal 2025 (the 52 weeks ended 1 February 2026) - Item 1 business and Item 2 properties: stores, Pros, SRS, competition and supply chain. — Fiscal 2025 · publ. 18 March 2026 · source ↗
  5. ReportedThe balance-sheet deferred revenue line, which includes gift cards, was $2,575 million at the end of fiscal 2025 against $2,610 million.
    The Home Depot Form 10-K for fiscal 2025 (the 52 weeks ended 1 February 2026) - financial statements and notes: earnings, cash flow, balance sheet, debt and acquisitions. — Fiscal 2025 · publ. 18 March 2026 · source ↗
  6. ReportedUnredeemed gift cards were $1.1 billion at both year ends, and breakage income was immaterial; they are generally redeemed within six months of issue.
    The Home Depot Form 10-K for fiscal 2025 (the 52 weeks ended 1 February 2026) - Item 1 business and Item 2 properties: stores, Pros, SRS, competition and supply chain. — Fiscal 2025 · publ. 18 March 2026 · source ↗
  7. ReportedUnredeemed gift cards were $1.1 billion at both year ends, and breakage income was immaterial; they are generally redeemed within six months of issue.
    The Home Depot Form 10-K for fiscal 2025 (the 52 weeks ended 1 February 2026) - Item 1 business and Item 2 properties: stores, Pros, SRS, competition and supply chain. — Fiscal 2025 · publ. 18 March 2026 · source ↗
Sources
Generated September 26, 2026