Revenue Recognition |
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| Revenue Recognition | Revenue Recognition We account for revenue in accordance with Accounting Standards Codification ("ASC") Topic 606: Revenue from Contracts with Customers. Contract Assets and Liabilities. Contract assets reflect revenue recognized in advance of customer billing. Contract liabilities are recognized when a customer pays consideration, or we have an unconditional right to receive consideration, in advance of the satisfaction of performance obligations under the contract. We receive payments from customers based on the terms established in our contracts, which are payments in advance of performing work, progress payments as we perform contract work over time, or in some cases, payments upon completion of work. Total Contract assets and Contract liabilities as of June 30, 2026 and December 31, 2025 are as follows:
Contract assets increased by $125 million during the six months ended June 30, 2026, as a result of the progression and timing of billing on customer contracts. Contract liabilities increased by $409 million during the six months ended June 30, 2026 primarily due to the timing of billings on customer contracts in excess of revenue earned. In the six months ended June 30, 2026 and 2025, we recognized revenue of approximately $1.7 billion and $1.6 billion related to contract liabilities as of January 1, 2026 and 2025, respectively. Remaining Performance Obligations ("RPO"). RPO represents the aggregate amount of total contract transaction price that is unsatisfied or partially unsatisfied. As of June 30, 2026, our total RPO was approximately $19.7 billion. Of the total RPO as of June 30, 2026, we expect approximately 75% will be recognized as sales over the following 24 months.
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