The timing of revenue recognition may differ from the timing of invoicing to customers. The timing of invoicing to customers does not necessarily correlate with the timing of revenues being recognized under the cost-to-cost method of accounting. Contracts from contracting services are billed as work progresses in accordance with agreed upon contractual terms. Generally, billing to the customer occurs contemporaneous to revenue recognition. A variance in timing of the billings may result in a contract asset or a contract liability. A contract asset occurs when revenues are recognized under the cost-to-cost measure of progress, which exceeds amounts billed on uncompleted contracts. Such amounts will be billed as standard contract terms allow, usually based on various measures of performance or achievement. A contract liability occurs when there are billings in excess of revenues recognized under the cost-to-cost measure of progress on uncompleted contracts. Contract liabilities decrease as revenue is recognized from the satisfaction of the related performance obligation.


	September 30, 2025		December 31, 2024		Change
	(In thousands)
Contract assets1	$	67,886	$	31,283	$	36,603
Contract liabilities1	(42,837)		(42,126)		(711)
Net contract assets (liabilities)	$	25,049	$	(10,843)	$	35,892
1.Following the issuance of the FASB Staff Educational Paper on Topic 606: Presentation and Disclosure of Retainage for Construction Contractors, we have reclassed retention receivables on a contract-by-contract basis from accounts receivable to contract assets and liabilities. The change in presentation was on a prospective basis beginning with balances as of December 31, 2025

We recognized $2.7 million and $31.1 million in revenue for the three and nine months ended September 30, 2026, respectively, which was previously included in contract liabilities at December 31, 2025. The change in the contract assets balance between December 31, 2025 and September 30, 2026 is a result of acquisitions and an increase in contracting services activity. We recognized $2.0 million and $39.9 million in revenue for the three and nine months ended September 30, 2025, respectively, which was previously included in contract liabilities at December 31, 2024.

We recognized a net increase in revenues of $7.7 million and $8.7 million for the three and nine months ended September 30, 2026, respectively, from performance obligations satisfied in prior periods. We recognized a net increase in revenues of $11.8 million and $24.1 million for the three and nine months ended September 30, 2025, respectively, from performance obligations satisfied in prior periods.

The remaining performance obligations, also referred to as backlog, include unrecognized revenues that we reasonably expect to be realized. These unrecognized revenues can include: projects that have a written award, a letter of intent, a notice to proceed, an agreed upon work order to perform work on mutually accepted terms and conditions, and change orders or claims to the extent management believes additional contract revenues will be earned and are deemed probable of collection. The majority of our contracts for contracting services have an original duration of less than one year.

At September 30, 2026, our remaining performance obligations were $857.2 million. We expect to recognize the following revenue amounts in future periods related to these remaining performance obligations: $691.1 million within the next 12 months or less; $94.6 million within the next 13 to 24 months; and $71.5 million in 25 months or more.