Quarterly report [Sections 13 or 15(d)]

REVENUE FROM CONTRACTS WITH CUSTOMERS

v3.26.3
REVENUE FROM CONTRACTS WITH CUSTOMERS
 9 Months Ended
Sep. 30, 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 September 30, 2026, was $8.1 billion. We expect to recognize the related revenue of $4.8 billion over the next 12 months and $3.3 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 September 30,
2026		 December 31,
2025
Unbilled revenue $ 345  $ 439 
Deferred revenue 2,857  2,660 
We recognized revenue of $235 million and $1,059 million for the three and nine months ended September 30, 2026, compared with $222 million and $814 million for the comparable periods 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 and nine months ended September 30, 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 Nine months ended
September 30, September 30,
In millions 2026 2025 2026 2025
United States $ 5,427  $ 4,663  $ 15,229  $ 14,278 
China 974  844  3,048  2,449 
India 466  447  1,383  1,288 
Other international 2,571  2,363  7,633  7,119 
Total net sales $ 9,438  $ 8,317  $ 27,293  $ 25,134 
Segment Revenue
Engine segment external sales by market were as follows:
Three months ended Nine months ended
September 30, September 30,
In millions 2026 2025 2026 2025
Heavy-duty truck $ 803  $ 540  $ 2,105  $ 1,921 
Medium-duty truck and bus 767  533  2,152  1,909 
Light-duty automotive 496  583  1,434  1,490 
Total on-highway 2,066  1,656  5,691  5,320 
Off-highway 323  266  1,013  804 
Total sales $ 2,389  $ 1,922  $ 6,704  $ 6,124 
Components segment external sales by business were as follows:
Three months ended Nine months ended
September 30, September 30,
In millions 2026 2025 2026 2025
Drivetrain and braking systems $ 1,107  $ 916  $ 3,144  $ 3,066 
Emission solutions 837  702  2,497  2,270 
Components and software 308  281  968  888 
Automated transmissions 145  87  357  327 
Total sales $ 2,397  $ 1,986  $ 6,966  $ 6,551 
Distribution segment external sales by region were as follows:
Three months ended Nine months ended
September 30, September 30,
In millions 2026 2025 2026 2025
North America $ 2,302  $ 2,200  $ 6,823  $ 6,373 
Asia Pacific 367  311  1,013  831 
Europe 285  273  888  865 
China 143  121  393  357 
India 95  93  271  256 
Africa and Middle East 69  74  195  193 
Latin America 46  98  153  231 
Total sales $ 3,307  $ 3,170  $ 9,736  $ 9,106 
Distribution segment external sales by product line were as follows:
Three months ended Nine months ended
September 30, September 30,
In millions 2026 2025 2026 2025
Power generation $ 1,328  $ 1,246  $ 3,976  $ 3,536 
Parts 1,049  1,014  3,190  3,051 
Service 482  494  1,385  1,349 
Engines 448  416  1,185  1,170 
Total sales $ 3,307  $ 3,170  $ 9,736  $ 9,106 
Power Systems segment external sales by product line were as follows:
Three months ended Nine months ended
September 30, September 30,
In millions 2026 2025 2026 2025
Power generation $ 742  $ 623  $ 2,126  $ 1,652 
Industrial 301  323  892  905 
Generator technologies 207  180  542  495 
Total sales $ 1,250  $ 1,126  $ 3,560  $ 3,052