HEXCEL CORP /DE/ Revenue Disclosure
Note 11 — Revenue
Our revenue is primarily derived from the sale of inventory under long-term contracts with our customers. The majority of our revenue is recognized at a point in time. In instances where our customers acquire our goods related to government contracts, the contracts are typically subject to terms similar, or equal to, the Federal Acquisition Regulation Part 52.249-2, which contains a termination for convenience clause ("T for C") that requires the customer to pay for the cost of both the finished and unfinished goods at the time of cancellation plus a reasonable profit.
We recognize revenue over time for those contracts that have a T for C clause and where the products being produced have no alternative use. As our production cycle is typically nine months or less, it is expected that goods related to the revenue recognized over time will be shipped and billed within the next twelve months.
We disaggregate our revenue based on market for analytical purposes. The following table details our revenue by market for the years ended December 31, 2025, 2024 and 2023:
(In millions) |
|
2025 |
|
|
2024 |
|
|
2023 |
|
|||
Consolidated Net Sales |
|
$ |
1,893.9 |
|
|
$ |
1,903.0 |
|
|
$ |
1,789.0 |
|
Commercial Aerospace |
|
|
1,146.9 |
|
|
|
1,194.2 |
|
|
|
1,068.2 |
|
Defense, Space & Other |
|
|
747.0 |
|
|
|
708.8 |
|
|
|
720.8 |
|
Revenue recognized over time gives rise to contract assets, which represent revenue recognized but unbilled. Contract assets are included in our Consolidated Balance Sheets as a component of current assets. The activity related to contract assets is as follows:
|
|
Composite |
|
|
Engineered |
|
|
|
|
|||
(In millions) |
|
Materials |
|
|
Products |
|
|
Total |
|
|||
Opening adjustment - January 1, 2023 |
|
$ |
9.1 |
|
|
$ |
22.9 |
|
|
$ |
32.0 |
|
Net revenue billed |
|
|
(0.8 |
) |
|
|
(6.1 |
) |
|
|
(6.9 |
) |
Balance at December 31, 2023 |
|
$ |
8.3 |
|
|
$ |
16.8 |
|
|
$ |
25.1 |
|
Net revenue billed |
|
|
0.8 |
|
|
|
3.9 |
|
|
|
4.7 |
|
Balance at December 31, 2024 |
|
$ |
9.1 |
|
|
$ |
20.7 |
|
|
$ |
29.8 |
|
Net revenue billed |
|
|
2.3 |
|
|
|
3.8 |
|
|
|
6.1 |
|
Balance at December 31, 2025 |
|
$ |
11.4 |
|
|
$ |
24.5 |
|
|
$ |
35.9 |
|
Contract assets as of December 31, 2025, will be billed and reclassified to accounts receivable during 2026. Accounts receivable, net, includes amounts billed to customers where the right to payment is unconditional.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 11, 2026 | Showing above |
| 2024 | Feb 5, 2025 | |
| 2023 | Feb 7, 2024 | |
| 2022 | Feb 8, 2023 | |
| 2021 | Feb 9, 2022 | |
| 2020 | Feb 9, 2021 | |
| 2019 | Feb 18, 2020 | |
| 2018 | Feb 6, 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.