Qnity Electronics, Inc.Q
Qnity Electronics, Inc. Revenue Disclosure
REVENUE
Revenue Recognition
Products
Substantially all of Qnity's revenue is derived from product sales. Product sales consist of sales of Qnity's products to supply manufacturers and distributors. Qnity considers purchase orders, which in some cases are governed by master supply agreements, to be a contract with a customer. Contracts with customers are considered to be short-term when the time between order confirmation and satisfaction of the performance obligations is equal to or less than one year.
Revenue from product sales is recognized when the customer obtains control of the Company’s 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. 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. 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. The transaction price includes estimates for reductions in revenue from customer rebates and rights of return 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.
Net sales to Samsung Electronics Co., Ltd accounted for 11%, 12%, and 12% of total net sales for each of the years ended December 31, 2025, 2024 and 2023, respectively. Additionally, net sales to Taiwan Semiconductor Manufacturing Company Limited (TSMC) accounted for 8%, 7%, and 6% of total net sales for the years ended December 31, 2025, 2024 and 2023, respectively. The majority of revenues for both customers relate to the Semiconductor Technologies segment. See Note 22 for more information.
Disaggregation of Revenue
The Company disaggregates its revenue from contracts with customers by segment and geographic region, as the Company believes it best depicts the nature, amount, timing and uncertainty of its revenue and cash flows. Sales are attributed to geographic regions based on customer location.
| Net Sales by Segment | For the Year Ended December 31, | ||||||||||
| In millions | 2025 | 2024 | 2023 | ||||||||
| Semiconductor Technologies | $ | 2,642 | $ | 2,450 | $ | 2,251 | |||||
| Interconnect Solutions | 2,112 | 1,885 | 1,784 | ||||||||
| Total | $ | 4,754 | $ | 4,335 | $ | 4,035 | |||||
| Net Sales by Segment by Geographic Region | For the Year Ended December 31, | ||||||||||
| 2025 | |||||||||||
| Semiconductor Technologies | Interconnect Solutions | Total | |||||||||
| In millions | |||||||||||
| Americas: | $ | 293 | $ | 336 | $ | 629 | |||||
| United States | 290 | 301 | 591 | ||||||||
Other Americas 1 | 3 | 35 | 38 | ||||||||
EMEA 2 | 206 | 172 | 378 | ||||||||
| Asia Pacific: | 2,143 | 1,604 | 3,747 | ||||||||
| China | 713 | 857 | 1,570 | ||||||||
| Rest of Asia Pacific: | 1,430 | 747 | 2,177 | ||||||||
| South Korea | 617 | 108 | 725 | ||||||||
| Taiwan | 535 | 172 | 707 | ||||||||
| Other | 278 | 467 | 745 | ||||||||
| Total | $ | 2,642 | $ | 2,112 | $ | 4,754 | |||||
| Net Sales by Segment by Geographic Region | For the Year Ended December 31, | ||||||||||
| 2024 | |||||||||||
| Semiconductor Technologies | Interconnect Solutions | Total | |||||||||
| In millions | |||||||||||
| Americas: | $ | 274 | $ | 285 | $ | 559 | |||||
| United States | 271 | 257 | 528 | ||||||||
Other Americas 1 | 3 | 28 | 31 | ||||||||
EMEA 2 | 197 | 161 | 358 | ||||||||
| Asia Pacific: | 1,979 | 1,439 | 3,418 | ||||||||
| China | 656 | 801 | 1,457 | ||||||||
| Rest of Asia Pacific: | 1,323 | 638 | 1,961 | ||||||||
| South Korea | 596 | 103 | 699 | ||||||||
| Taiwan | 458 | 137 | 595 | ||||||||
| Other | 269 | 398 | 667 | ||||||||
| Total | $ | 2,450 | $ | 1,885 | $ | 4,335 | |||||
| Net Sales by Segment by Geographic Region | For the Year Ended December 31, | ||||||||||
| 2023 | |||||||||||
| Semiconductor Technologies | Interconnect Solutions | Total | |||||||||
| In millions | |||||||||||
| Americas: | $ | 310 | $ | 272 | $ | 582 | |||||
| United States | 308 | 247 | 555 | ||||||||
Other Americas 1 | 2 | 25 | 27 | ||||||||
EMEA 2 | 198 | 169 | 367 | ||||||||
| Asia Pacific: | 1,743 | 1,343 | 3,086 | ||||||||
| China | 496 | 706 | 1,202 | ||||||||
| Rest of Asia Pacific: | 1,247 | 637 | 1,884 | ||||||||
| South Korea | 562 | 115 | 677 | ||||||||
| Taiwan | 381 | 131 | 512 | ||||||||
| Other | 304 | 391 | 695 | ||||||||
| Total | $ | 2,251 | $ | 1,784 | $ | 4,035 | |||||
1.Includes Canada and Latin America.
2.Europe, Middle East and Africa.
Contract Balances
From time to time, the Company enters into arrangements in which it receives payments from customers based upon contractual billing schedules. The Company records accounts receivables when the right to consideration becomes unconditional. Contract liabilities primarily reflect deferred revenue from advance payment for product that the Company has received from customers. The Company classifies deferred revenue as current or noncurrent based on the timing of when the Company expects to recognize revenue.
Revenue recognized for the years ended December 31, 2025 and 2024 from amounts included in contract liabilities at the beginning of the period was insignificant. The Company did not recognize any asset impairment charges related to contract assets during the period. The Company will begin recognizing its deferred revenue when the project associated with the revenue that was deferred is completed and commercial production begins, currently expected in 2027.
| Contract Balances | December 31, 2025 | December 31, 2024 | ||||||
| In millions | ||||||||
Accounts receivable - trade 1 | $ | 656 | $ | 580 | ||||
Deferred revenue - current 2 | $ | 1 | $ | 1 | ||||
Deferred revenue - non-current 3 | $ | 46 | $ | 35 | ||||
1.Included in "Accounts and notes receivable - net" in the Consolidated Balance Sheets.
2.Included in "Accrued and other current liabilities" in the Consolidated Balance Sheets.
3.Included in "Other noncurrent obligations" in the Consolidated Balance Sheets.
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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.