BORGWARNER INCBWA
BORGWARNER INC Revenue Disclosure
REVENUE FROM CONTRACTS WITH CUSTOMERS
The Company manufactures and sells products, primarily to OEMs of light vehicles and, to a lesser extent, to OEMs of commercial vehicles and off-highway vehicles, to certain tier one vehicle systems suppliers and into the aftermarket. The Company’s payment terms are based on customary business practices and vary by customer type and products offered. The Company has evaluated the terms of its arrangements and determined that they do not contain significant financing components.
Generally, revenue is recognized upon shipment or delivery; however, a limited number of the Company’s customer arrangements for its highly customized products with no alternative use provide the Company with the right to payment during the production process. As a result, for these limited arrangements, revenue is recognized as goods are produced and control transfers to the customer using the input cost-to-cost method. The Company recorded a contract asset of $15 million December 31, 2025 and 2024, for these arrangements. These amounts are reflected in Prepayments and other current assets in the Company’s Consolidated Balance Sheets.
In limited instances, certain customers have provided payments in advance of receiving related products, typically at the onset of an arrangement prior to the beginning of production. These contract liabilities are reflected as Other current liabilities and Other non-current liabilities in the Consolidated Balance Sheets. As of December 31, 2025, Other current liabilities and Other non-current liabilities were $1 million, respectively. As of December 31, 2024, Other current liabilities and Other non-current liabilities were $13 million and $29 million, respectively. These amounts are reflected as revenue over the term of the arrangement (typically to seven years) as the underlying products are shipped and represent the Company’s remaining performance obligations as of the end of the period.
The Company continually seeks business development opportunities and at times provides customer incentives for new program awards. When the Company determines that the payments are incremental and incurred only if the new business is obtained and expects to recover these amounts from the customer over the term of the new business arrangement, the Company capitalizes these amounts. As of December 31, 2025 and 2024, the Company recorded customer incentive payments of $7 million and $22 million, respectively, in Prepayments and other current assets, and $22 million and $23 million, respectively, in Other non-current assets in the Consolidated Balance Sheets. The Company evaluates the amounts capitalized each period end for recoverability and writes off any amounts that are no longer expected to be recovered over the term of the business arrangement. During the year ended December 31, 2025 , the Company wrote off a $7 million customer incentive asset, which was recorded in Net sales in the Company’s Consolidated Statements of Operations.
The Company’s products can be disaggregated by two types: eProducts and Foundational products. eProducts include all products utilized on or for electric vehicles (“EVs”) plus those same products and components that are included in hybrid powertrains whose underlying technologies are adaptable or applicable to those used in or for EVs. Foundational products include all products utilized on internal combustion engines plus those same products and components that are also included in hybrid powertrains. The following table represents a disaggregation of revenue from contracts with customers by Foundational products and eProducts for the years ended December 31, 2025, 2024, and 2023.
| Year Ended December 31, | |||||||||||||||||
| (in millions) | 2025 | 2024 | 2023 | ||||||||||||||
| Foundational products | $ | 11,746 | $ | 11,751 | $ | 12,161 | |||||||||||
| eProducts | 2,570 | 2,335 | 2,037 | ||||||||||||||
| Total | $ | 14,316 | $ | 14,086 | $ | 14,198 | |||||||||||
The following table represents a disaggregation of revenue from contracts with customers by reportable segment and region for the years ended December 31, 2025, 2024, and 2023. Refer to Note 24,
“Reportable Segments and Related Information” of the Consolidated Financial Statements for additional details.
| Year ended December 31, 2025 | |||||||||||||||||||||||||||||
(in millions) | Turbos & Thermal Technologies | Drivetrain & Morse Systems | PowerDrive Systems | Battery & Charging Systems | Total | ||||||||||||||||||||||||
| North America | $ | 1,403 | $ | 2,088 | $ | 341 | $ | 202 | $ | 4,034 | |||||||||||||||||||
| Europe | 2,844 | 1,252 | 683 | 369 | 5,148 | ||||||||||||||||||||||||
| Asia | 1,263 | 2,295 | 1,298 | 2 | 4,858 | ||||||||||||||||||||||||
| Other | 259 | — | — | 17 | 276 | ||||||||||||||||||||||||
| Total | $ | 5,769 | $ | 5,635 | $ | 2,322 | $ | 590 | $ | 14,316 | |||||||||||||||||||
| Year ended December 31, 2024 | |||||||||||||||||||||||||||||
(in millions) | Turbos & Thermal Technologies | Drivetrain & Morse Systems | PowerDrive Systems | Battery & Charging Systems | Total | ||||||||||||||||||||||||
| North America | $ | 1,432 | $ | 1,943 | $ | 310 | $ | 199 | $ | 3,884 | |||||||||||||||||||
| Europe | 2,941 | 1,273 | 548 | 484 | 5,246 | ||||||||||||||||||||||||
| Asia | 1,304 | 2,348 | 1,050 | 17 | 4,719 | ||||||||||||||||||||||||
| Other | 208 | — | — | 29 | 237 | ||||||||||||||||||||||||
| Total | $ | 5,885 | $ | 5,564 | $ | 1,908 | $ | 729 | $ | 14,086 | |||||||||||||||||||
| Year ended December 31, 2023 | |||||||||||||||||||||||||||||
(in millions) | Turbos & Thermal Technologies | Drivetrain & Morse Systems | PowerDrive Systems | Battery & Charging Systems | Total | ||||||||||||||||||||||||
| North America | $ | 1,529 | $ | 1,972 | $ | 458 | $ | 134 | $ | 4,093 | |||||||||||||||||||
| Europe | 3,026 | 1,299 | 372 | 384 | 5,081 | ||||||||||||||||||||||||
| Asia | 1,250 | 2,272 | 1,268 | 20 | 4,810 | ||||||||||||||||||||||||
| Other | 202 | — | 4 | 8 | 214 | ||||||||||||||||||||||||
| Total | $ | 6,007 | $ | 5,543 | $ | 2,102 | $ | 546 | $ | 14,198 | |||||||||||||||||||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 11, 2026 | Showing above |
| 2024 | Feb 6, 2025 | |
| 2023 | Feb 8, 2024 | |
| 2022 | Feb 9, 2023 | |
| 2021 | Feb 15, 2022 | |
| 2020 | Feb 22, 2021 | |
| 2019 | Feb 13, 2020 | |
| 2018 | Feb 19, 2019 | |
About Revenue Disclosures
Revenue disclosures under ASC 606 explain how a company identifies performance obligations, allocates transaction prices, and determines when revenue is recognized. This section is essential for understanding whether reported revenue reflects genuine economic activity or aggressive accounting choices. Analysts examine the mix of point-in-time versus over-time recognition, which directly affects revenue timing and comparability.
Key signals: rising contract liabilities (deferred revenue) suggest strong future revenue visibility, while declining contract assets may indicate slowing project milestones. Watch for variable consideration estimates — rebates, returns, and performance bonuses that require management judgment. Significant changes in disaggregated revenue by geography or product line can reveal shifting business mix before it appears in headline numbers. Compare revenue growth against contract liability growth to assess sustainability, and scrutinize any changes in the timing of recognition that coincide with earnings pressure.