Worthington Steel, Inc. Revenue Disclosure
Note 2 – Revenue Recognition
The Company recognizes revenue upon transfer of control of promised goods or services to customers in an amount that reflects the consideration it expects to receive for those goods or services, including any variable consideration.
The Company generates revenue by processing steel to the precise type, thickness, length, width, shape, and surface quality required by customer specification. The Company can also toll process steel for steel mills, large end-users and service centers. Toll processing revenue is recognized over time. All other revenue is recognized at a point in time, generally upon shipment.
The following table summarizes net sales by product class for fiscal 2025, fiscal 2024 and fiscal 2023:
(In millions) |
2025 |
|
|
2024 |
|
|
2023 |
|
|||
Product class |
|
|
|
|
|
|
|
|
|||
Direct |
$ |
2,943.4 |
|
|
$ |
3,269.4 |
|
|
$ |
3,464.9 |
|
Toll |
|
149.9 |
|
|
|
161.2 |
|
|
|
142.8 |
|
Total |
$ |
3,093.3 |
|
|
$ |
3,430.6 |
|
|
$ |
3,607.7 |
|
The following table summarizes the unbilled receivables at the end of fiscal 2025 and fiscal 2024:
(In millions) |
Balance Sheet Classification |
|
2025 |
|
|
2024 |
|
||
Unbilled receivables |
Receivables |
|
$ |
4.0 |
|
|
$ |
5.6 |
|
Contract assets |
Prepaid expenses and other current assets |
|
$ |
7.0 |
|
|
$ |
7.9 |
|
The following table summarizes the changes in contract liabilities during fiscal 2025 and fiscal 2024:
(In millions) |
|
|
|
Balance at May 31, 2023 |
$ |
6.0 |
|
Unearned revenue from cash received during the period |
|
11.8 |
|
Revenue recognized related to contract liability balance |
|
(10.2 |
) |
Balance at May 31, 2024 |
|
7.6 |
|
Unearned revenue from cash received during the period |
|
6.5 |
|
Revenue recognized related to contract liability balance |
|
(8.9 |
) |
Balance at May 31, 2025 |
$ |
5.2 |
|
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Jul 29, 2025 | Showing above |
| 2024 | Aug 2, 2024 | |
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.