6. Contract Assets and Liabilities
As a result of changes in contract transaction price related to performance obligations that were satisfied or partially satisfied prior to the end of the periods we recognized revenue of $169.1 million, $220.7 million and $147.4 million during the years ended December 31, 2025, 2024 and 2023, respectively. The changes in contract transaction price were from items such as executed or estimated change orders, contract modifications and claims.
As of December 31, 2025 and 2024, the aggregate claim recovery estimates included in contract asset and liability balances were $19.4 million and $46.6 million, respectively.
The components of the contract asset balances as of the respective dates were as follows:
| | | | | | | | | | | |
| (in thousands) | December 31, 2025 | | December 31, 2024 |
| Costs in excess of billings and estimated earnings | $ | 73,079 | | | $ | 139,436 | |
| Contract retention | 163,800 | | | 188,917 | |
| Total contract assets | $ | 236,879 | | | $ | 328,353 | |
The decrease in contract assets is primarily due to decreased costs in excess of billings and estimated earnings mainly resulting from resolution of claims. The balances in costs in excess of billings and estimated earnings relate to disputed work on certain ongoing projects. In addition, contract retention decreased primarily due to the collection of $29.2 million from Brightline Trains Florida LLC in the first quarter of 2025. As of December 31, 2025 and December 31, 2024, no contract retention receivable individually exceeded 10% of total contract assets. The majority of the contract retention balance is expected to be collected within one year.
As work is performed, revenue is recognized and the corresponding contract liabilities are reduced. During the years ended December 31, 2025, 2024 and 2023, we recognized revenue of $350.5 million, $276.6 million and $191.8 million, respectively, that was included in the contract liability balances at December 31, 2024, 2023 and 2022, respectively.
The components of the contract liability balances as of the respective dates were as follows:
| | | | | | | | | | | |
| (in thousands) | December 31, 2025 | | December 31, 2024 |
| Billings in excess of costs and estimated earnings | $ | 320,593 | | | $ | 288,495 | |
| Provisions for losses | 6,779 | | | 11,176 | |
| Total contract liabilities | $ | 327,372 | | | $ | 299,671 | |
The increase in contract liabilities is primarily due to increases in billings in excess of costs on new projects partially offset by reductions in provisions for losses as certain loss projects progress towards completion.
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.