METHODE ELECTRONICS INC Revenue Disclosure
Note 2. Revenue
The Company generates revenue from manufacturing of products for customers in diversified global markets under multi-year programs. Typically, these programs do not contain a firm commitment by the customer for volume or price and do not reach the level of a performance obligation until the Company receives either a purchase order and/or a materials release from the customer for a specific quantity at a specified price, at which point an enforceable contract exists. Contracts may also provide for annual price reductions over the production life of a program, and prices may be adjusted on an ongoing basis to reflect changes in product content/cost and other commercial factors.
The majority of the Company’s revenue is recognized at a point in time. The Company has determined that the most definitive demonstration that control has transferred to a customer is physical shipment or delivery, depending on the contractual shipping terms, except for consignment transactions. Consignment transactions are arrangements where the Company transfers product to a customer location but retains ownership and control of such product until it is used by the customer. Revenue for consignment arrangements is recognized upon the customer’s usage. The Company’s revenue also includes customer cost recoveries, which represent reimbursements the Company receives from customers for incremental costs associated with spot purchases of raw materials and premium freight incurred in fulfilling its performance obligation to the customer. Given these cost recoveries are generally negotiated after contract inception, the Company accounts for these cost recoveries as a modification to the existing contract. The Company recognizes cost recoveries as revenue when (or as) the remaining performance obligations per the contract are satisfied, or on the modification date if all performance obligations under the contract have been previously satisfied.
Revenue associated with products which the Company believes have no alternative use (such as highly customized parts), and where the Company has an enforceable right to payment, are recognized on an over time basis. Revenue is recognized based on progress to date, which is typically even over the production process through transfer of control to the customer.
The Company’s payment terms with its customers are typically 30-60 days from the time control transfers. As the Company’s standard payment terms are less than one year, the Company has elected the practical expedient under ASC 606 to not assess whether a contract has a significant financing component.
Costs to fulfill/obtain a contract
The Company incurs pre-production tooling costs related to products produced for customers under long-term supply arrangements. These costs are capitalized and recognized into income upon acceptance. The Company concluded that pre-production tooling and engineering costs do not represent a promised good or service under ASC 606, and as such, reimbursements received are accounted for as a reimbursement of the expense, not revenue.
The Company has not historically incurred material costs to obtain a contract. In the instances that costs to obtain contracts are incurred, the Company will capitalize the payment as an asset and amortize the asset as a reduction of revenue over the life of the contract.
Contract balances
The Company receives payment from customers based on the contractual billing schedule and specific performance requirements established in the contract. Billings are recorded as accounts receivable when an unconditional right to the contractual consideration exists. A contract asset is an entity’s right to consideration in exchange for goods or services that the entity has transferred to a customer. A contract liability exists when an entity has received consideration, or the amount is due from the customer in advance of revenue recognition. Contract assets and contract liabilities are recognized in other current assets and other accrued liabilities, respectively in the consolidated balance sheets and were immaterial as of May 3, 2025 and April 27, 2024.
Disaggregated revenue information
The following table represents a disaggregation of revenue from contracts with customers by segment and geographical location. Net sales are attributed to regions based on the location of production. Though revenue recognition patterns and contracts are generally consistent, the amount, timing and uncertainty of revenue and cash flows may vary in each reportable segment due to geographic and economic factors.
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|
Fiscal Year Ended May 3, 2025 (53 Weeks) |
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(in millions) |
|
Automotive |
|
|
Industrial |
|
|
Interface |
|
|
Medical |
|
|
Total |
|
|||||
Geographic net sales: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
North America |
|
$ |
237.1 |
|
|
$ |
179.3 |
|
|
$ |
51.8 |
|
|
$ |
— |
|
|
$ |
468.2 |
|
Europe, the Middle East & Africa ("EMEA") |
|
|
239.5 |
|
|
|
177.8 |
|
|
|
— |
|
|
|
— |
|
|
|
417.3 |
|
Asia |
|
|
32.3 |
|
|
|
130.3 |
|
|
|
— |
|
|
|
— |
|
|
|
162.6 |
|
Total net sales |
|
$ |
508.9 |
|
|
$ |
487.4 |
|
|
$ |
51.8 |
|
|
$ |
— |
|
|
$ |
1,048.1 |
|
Timing of revenue recognition: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Goods transferred at a point in time |
|
$ |
498.2 |
|
|
$ |
487.4 |
|
|
$ |
51.8 |
|
|
$ |
— |
|
|
$ |
1,037.4 |
|
Goods transferred over time |
|
|
10.7 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
10.7 |
|
Total net sales |
|
$ |
508.9 |
|
|
$ |
487.4 |
|
|
$ |
51.8 |
|
|
$ |
— |
|
|
$ |
1,048.1 |
|
|
|
Fiscal Year Ended April 27, 2024 (52 Weeks) |
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(in millions) |
|
Automotive |
|
|
Industrial |
|
|
Interface |
|
|
Medical |
|
|
Total |
|
|||||
Geographic net sales: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
North America |
|
$ |
265.6 |
|
|
$ |
186.2 |
|
|
$ |
53.8 |
|
|
$ |
2.3 |
|
|
$ |
507.9 |
|
EMEA |
|
|
216.2 |
|
|
|
174.2 |
|
|
|
— |
|
|
|
— |
|
|
|
390.4 |
|
Asia |
|
|
116.4 |
|
|
|
99.7 |
|
|
|
— |
|
|
|
0.1 |
|
|
|
216.2 |
|
Total net sales |
|
$ |
598.2 |
|
|
$ |
460.1 |
|
|
$ |
53.8 |
|
|
$ |
2.4 |
|
|
$ |
1,114.5 |
|
Timing of revenue recognition: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Goods transferred at a point in time |
|
$ |
583.4 |
|
|
$ |
460.1 |
|
|
$ |
53.8 |
|
|
$ |
2.4 |
|
|
$ |
1,099.7 |
|
Goods transferred over time |
|
|
14.8 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
14.8 |
|
Total net sales |
|
$ |
598.2 |
|
|
$ |
460.1 |
|
|
$ |
53.8 |
|
|
$ |
2.4 |
|
|
$ |
1,114.5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
Fiscal Year Ended April 29, 2023 (52 Weeks) |
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(in millions) |
|
Automotive |
|
|
Industrial |
|
|
Interface |
|
|
Medical |
|
|
Total |
|
|||||
Geographic net sales: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
North America |
|
$ |
349.0 |
|
|
$ |
160.5 |
|
|
$ |
54.7 |
|
|
$ |
3.6 |
|
|
$ |
567.8 |
|
EMEA |
|
|
231.2 |
|
|
|
139.9 |
|
|
|
— |
|
|
|
— |
|
|
|
371.1 |
|
Asia |
|
|
156.0 |
|
|
|
84.5 |
|
|
|
0.2 |
|
|
|
— |
|
|
|
240.7 |
|
Total net sales |
|
$ |
736.2 |
|
|
$ |
384.9 |
|
|
$ |
54.9 |
|
|
$ |
3.6 |
|
|
$ |
1,179.6 |
|
Timing of revenue recognition: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Goods transferred at a point in time |
|
$ |
717.4 |
|
|
$ |
384.9 |
|
|
$ |
54.9 |
|
|
$ |
3.6 |
|
|
$ |
1,160.8 |
|
Goods transferred over time |
|
|
18.8 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
18.8 |
|
Total net sales |
|
$ |
736.2 |
|
|
$ |
384.9 |
|
|
$ |
54.9 |
|
|
$ |
3.6 |
|
|
$ |
1,179.6 |
|
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Jul 9, 2025 | Showing above |
| 2024 | Jul 11, 2024 | |
| 2023 | Jun 27, 2023 | |
| 2022 | Jun 23, 2022 | |
| 2021 | Jun 24, 2021 | |
| 2020 | Jun 30, 2020 | |
| 2019 | Jun 20, 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.