DOW INC.DOW
DOW INC. Revenue Disclosure
REVENUE
1. Europe, Middle East, Africa and India.
The majority of the Company's revenue is derived from product sales. In 2025, 97 percent of the Company's revenue related to product sales (98 percent in 2024 and 2023). The remaining sales were primarily related to the Company's insurance operations and licensing of patents and technologies.
Disaggregation of Revenue
Dow disaggregates its revenue from contracts with customers by operating segment and business, as the Company believes it best depicts the nature, amount, timing and uncertainty of its revenue and cash flows. See details in the tables below:
| Net Trade Sales by Segment and Business | 2025 | 2024 | 2023 | ||||||||
| In millions | |||||||||||
| Hydrocarbons & Energy | $ | 5,376 | $ | 5,759 | $ | 6,566 | |||||
| Packaging and Specialty Plastics | 14,594 | 16,017 | 16,583 | ||||||||
| Packaging & Specialty Plastics | $ | 19,970 | $ | 21,776 | $ | 23,149 | |||||
| Industrial Solutions | $ | 4,036 | $ | 4,179 | $ | 4,207 | |||||
| Polyurethanes & Construction Chemicals | 7,110 | 7,675 | 8,316 | ||||||||
| Others | 17 | 15 | 15 | ||||||||
| Industrial Intermediates & Infrastructure | $ | 11,163 | $ | 11,869 | $ | 12,538 | |||||
| Coatings & Performance Monomers | $ | 3,215 | $ | 3,492 | $ | 3,337 | |||||
| Consumer Solutions | 4,919 | 5,082 | 5,160 | ||||||||
| Performance Materials & Coatings | $ | 8,134 | $ | 8,574 | $ | 8,497 | |||||
| Corporate | $ | 701 | $ | 745 | $ | 438 | |||||
| Total | $ | 39,968 | $ | 42,964 | $ | 44,622 | |||||
| Net Trade Sales by Geographic Region | 2025 | 2024 | 2023 | ||||||||
| In millions | |||||||||||
| U.S. & Canada | $ | 15,806 | $ | 16,423 | $ | 16,640 | |||||
EMEAI 1 | 12,589 | 13,958 | 14,537 | ||||||||
| Asia Pacific | 7,219 | 7,707 | 8,266 | ||||||||
| Latin America | 4,354 | 4,876 | 5,179 | ||||||||
| Total | $ | 39,968 | $ | 42,964 | $ | 44,622 | |||||
Product Sales
Product sales consist of sales of the Company's products to manufacturers and distributors. The Company considers order confirmations or purchase orders, which in some cases are governed by master supply agreements, to be contracts with a customer. Product sale contracts are generally short-term contracts where the time between order confirmation and satisfaction of all performance obligations is less than one year. However, the Company has some long-term contracts which can span multiple years.
Revenues from product sales are recognized when the customer obtains control of the product, which occurs at a point in time, usually upon shipment, with payment terms typically in the range of 30 to 60 days after invoicing, depending on business and geographic region. When the Company performs shipping and handling activities after the transfer of control to the customer (e.g., when control transfers prior to shipment), these are considered fulfillment activities, and accordingly, the costs are accrued when the related revenue is recognized. Taxes collected from customers relating to product sales and remitted to governmental authorities are excluded from revenues. The Company elected to use the practical expedient to expense cash and non-cash sales incentives, as the amortization period for the costs to obtain the contract would have been one year or less.
Certain long-term contracts include a series of distinct goods that are delivered continuously to the customer through a pipeline (e.g., feedstocks). For these types of product sales, the Company invoices the customer in an amount that directly corresponds with the value to the customer of the Company’s performance to date. As a result, the Company recognizes revenue based on the amount billable to the customer in accordance with the right to invoice practical expedient.
The transaction price includes estimates for reductions in revenue from customer rebates and right of returns on product sales. These amounts are estimated based upon the most likely amount of consideration to which the customer will be entitled. All estimates are based on historical experience, anticipated performance and the Company’s best judgment at the time to the extent it is probable that a significant reversal of revenue recognized will not occur. All estimates for variable consideration are reassessed periodically. The Company elected the practical expedient to not adjust the amount of consideration for the effects of a significant financing component for all instances in which the period between payment and transfer of the goods will be one year or less.
For contracts with multiple performance obligations, the Company allocates the transaction price to each performance obligation based on the relative standalone selling price. The standalone selling price is the observable price which depicts the price as if sold to a similar customer in similar circumstances.
Patents, Trademarks and Licenses
The Company enters into licensing arrangements in which it licenses certain rights of its patents and technology to customers. Revenue from the majority of the Company’s licenses for patents and technology is derived from sales-based royalties and licensing arrangements. The Company estimates the amount of sales-based royalties it expects to be entitled to based on historical sales to the customer. For the revenue related to licensing arrangements, payments are typically received from the Company's licensees based on billing schedules established in each contract. Revenue is recognized when the performance obligation is satisfied.
Remaining Performance Obligations
Remaining performance obligations represent the transaction price allocated to unsatisfied or partially unsatisfied performance obligations. At December 31, 2025, the Company had unfulfilled performance obligations of $617 million ($759 million at December 31, 2024) related to the licensing of technology and expects revenue to be recognized for the remaining performance obligations over the next five years.
The Company has additional remaining performance obligations for product sales that have expected durations of one year or less, product sales of materials delivered through a pipeline for which the Company has elected the "right to invoice" practical expedient, and variable consideration attributable to royalties for licenses of patents and technology. The Company has received advance payments from customers related to long-term supply agreements that are deferred and recognized over the life of the contract, with remaining contract terms that range up to 18 years. The Company will have rights to future consideration for revenue recognized when product is delivered to the customer. These payments are included in "Accrued and other current liabilities" and "Other noncurrent obligations" in the consolidated balance sheets.
Contract Assets and Liabilities
The Company receives payments from customers based upon contractual billing schedules. Accounts receivable are recorded when the right to consideration becomes unconditional. Contract assets include amounts related to the Company’s contractual right to consideration for completed performance obligations not yet invoiced. Contract liabilities include payments received in advance of performance under the contract and are recognized in revenue when the performance obligations are met. "Contract liabilities - current" primarily reflects deferred revenue from prepayments from customers for product to be delivered in 12 months or less and royalty payments that are deferred and will be recognized in 12 months or less. "Contract liabilities - noncurrent" includes advance payments that the Company has received from customers related to long-term supply agreements and royalty payments that are deferred and recognized over the life of the contract.
Revenue recognized in 2025 from amounts included in contract liabilities at the beginning of the period was approximately $235 million (approximately $190 million in 2024 and $315 million in 2023). In 2025 and 2024, the amount of contract assets reclassified to receivables as a result of the right to the transaction consideration becoming unconditional was insignificant. The Company did not recognize any asset impairment charges related to contract assets in 2025 (no impairment charges in 2024 and 2023).
The following table summarizes contract assets and liabilities at December 31, 2025 and 2024:
| Contract Assets and Liabilities at Dec 31 | Balance Sheet Classification | 2025 | 2024 | ||||||||
| In millions | |||||||||||
| Accounts and notes receivable - trade | Accounts and notes receivable - trade | $ | 4,762 | $ | 4,756 | ||||||
| Contract assets - noncurrent | Deferred charges and other assets | $ | — | $ | 2 | ||||||
| Contract liabilities - current | Accrued and other current liabilities | $ | 221 | $ | 244 | ||||||
Contract liabilities - noncurrent 1 | Other noncurrent obligations | $ | 1,727 | $ | 1,480 | ||||||
1.The increase from December 31, 2024 to December 31, 2025 was primarily due to advance payments on long-term supply agreements.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 3, 2026 | Showing above |
| 2024 | Feb 4, 2025 | |
| 2023 | Jan 31, 2024 | |
| 2022 | Feb 1, 2023 | |
| 2021 | Feb 4, 2022 | |
| 2019 | Feb 7, 2020 | |
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.