Quarterly report [Sections 13 or 15(d)]

REVENUE FROM CONTRACTS WITH CUSTOMERS

v3.26.1
REVENUE FROM CONTRACTS WITH CUSTOMERS
 3 Months Ended
Mar. 31, 2026
Revenue from Contract with Customer [Abstract]  
REVENUE FROM CONTRACTS WITH CUSTOMERS
NOTE 2. REVENUE FROM CONTRACTS WITH CUSTOMERS
Long-term Contracts
We have certain arrangements, primarily long-term maintenance agreements, construction contracts, product sales with associated performance obligations extending beyond a year, product sales with lead times extending beyond one year that are non-cancellable or for which the customer incurs a penalty for cancellation and extended warranty coverage arrangements that span a period in excess of one year. The aggregate amount of the transaction price for these contracts, excluding extended warranty coverage arrangements, at March 31, 2026, was $6.9 billion. We expect to recognize the related revenue of $4.0 billion over the next 12 months and $2.9 billion over periods up to 10 years. See NOTE 10, “PRODUCT WARRANTY LIABILITY,” for additional disclosures on extended warranty coverage arrangements. Our other contracts generally are for a duration of less than one year, include payment terms that correspond to the timing of costs incurred when providing goods and services to our customers or represent sales-based royalties.
Deferred and Unbilled Revenue
The following is a summary of our unbilled and deferred revenue and related activity:
In millions March 31,
2026		 December 31,
2025
Unbilled revenue $ 323  $ 439 
Deferred revenue 2,644  2,660 
We recognized revenue of $519 million for the three months ended March 31, 2026, compared with $350 million for the comparable period in 2025, that was included in the deferred revenue balance at the beginning of each year. We did not record any impairment losses on our unbilled revenues during the three months ended March 31, 2026 or 2025.
Disaggregation of Revenue
Consolidated Revenue
The table below presents our consolidated net sales by country based on the location of the customer:
Three months ended
  March 31,
In millions 2026 2025
United States $ 4,497  $ 4,750 
China 1,000  779 
India 471  426 
Other international 2,430  2,219 
Total net sales $ 8,398  $ 8,174 
Segment Revenue
Engine segment external sales by market were as follows:
Three months ended
March 31,
In millions 2026 2025
Heavy-duty truck $ 563  $ 654 
Medium-duty truck and bus 613  700 
Light-duty automotive 448  425 
Total on-highway 1,624  1,779 
Off-highway 342  261 
Total sales $ 1,966  $ 2,040 
Components segment external sales by business were as follows:
Three months ended
March 31,
In millions 2026 2025
Drivetrain and braking systems $ 918  $ 1,056 
Emission solutions 807  791 
Components and software 325  306 
Automated transmissions 88  117 
Total sales $ 2,138  $ 2,270 
Distribution segment external sales by region were as follows:
Three months ended
March 31,
In millions 2026 2025
North America $ 2,168  $ 2,099 
Asia Pacific 327  240 
Europe 303  269 
China 120  113 
India 84  72 
Africa and Middle East 56  59 
Latin America 51  50 
Total sales $ 3,109  $ 2,902 
Distribution segment external sales by product line were as follows:
Three months ended
March 31,
In millions 2026 2025
Power generation $ 1,271  $ 1,090 
Parts 1,063  1,026 
Service 433  416 
Engines 342  370 
Total sales $ 3,109  $ 2,902 
Power Systems segment external sales by product line were as follows:
Three months ended
March 31,
In millions 2026 2025
Power generation $ 640  $ 445 
Industrial 293  284 
Generator technologies 160  143 
Total sales $ 1,093  $ 872