Otis Worldwide CorpOTIS

Otis Worldwide Corp Revenue Disclosure

10-KFiled Feb 5, 20261 min read
Contract Assets and Liabilities
Contract assets reflect revenue recognized in advance of customer billings. Contract liabilities are recognized when a customer pays consideration, or we have an unconditional right to receive consideration, in advance of the satisfaction of performance obligations under the contract. We receive payments from customers based on the terms established in our contracts, which are payments in advance of performing work, progress payments as we perform contract work over time, or in some cases, payments upon completion of work.
Total Contract assets and Contract liabilities as of December 31, 2025 and 2024 are as follows:

(dollars in millions)20252024
Contract assets, current$699 $706 
Total contract assets699 706 
Contract liabilities, current(2,611)(2,598)
Contract liabilities, noncurrent (included within Other long-term liabilities)(29)(38)
Total contract liabilities (2,640)(2,636)
Net contract liabilities$(1,941)$(1,930)

Contract assets decreased by $7 million and Contract liabilities increased by $4 million during 2025 due to the progression of current contracts and timing of billing on customer contracts, net of the foreign exchange increases of $33 million and $120 million, respectively.

During 2025, 2024 and 2023, we recognized revenue of approximately $2.0 billion each year related to the contract liabilities as of January 1, 2025, 2024, and 2023.

Historical Timeline

Fiscal YearFiled
2025Feb 5, 2026Showing above
2023Feb 2, 2024
2022Feb 3, 2023
2021Feb 4, 2022
2020Feb 5, 2021

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.

Other Available Disclosures

Income TaxesEarnings Per ShareFair ValuePP&EGoodwill & IntangiblesLeasesSegmentsDebtCommitmentsNew StandardsPay vs Performance