Revenue from Contracts with Customers

3 Months Ended

Apr. 04, 2026

Revenue from Contract with Customer [Abstract]

Revenue from Contracts with Customers

Revenue from Contracts with Customers

Disaggregation of Revenue

The following table summarizes the disaggregation of the Company's revenue by segment, region, major products and services and customer type for the three months ended April 4, 2026 and March 29, 2025, consistent with the information reviewed by the Company's chief operating decision maker for evaluating the financial performance of the Company's reportable segments:

	Three Months Ended
	April 4, 2026						March 29, 2025
(In millions)	Products and Systems Integration		Software and Services		Total		Products and Systems Integration		Software and Services		Total
Regions:
North America	$	1,064	$	793	$	1,857	$	1,178	$	674	$	1,852
International	495		362		857		368		308		676
	$	1,559	$	1,155	$	2,714	$	1,546	$	982	$	2,528
Major Products and Services:
Mission Critical Networks (MCN)	$	1,288	$	680	$	1,968	$	1,315	$	586	$	1,901
Video	271		239		510		231		210		441
Command Center	—		236		236		—		186		186
	$	1,559	$	1,155	$	2,714	$	1,546	$	982	$	2,528
Customer Types:
Direct	$	944	$	1,053	$	1,997	$	1,016	$	907	$	1,923
Indirect	615		102		717		530		75		605
	$	1,559	$	1,155	$	2,714	$	1,546	$	982	$	2,528

Remaining Performance Obligations

Remaining performance obligations represent the revenue that is expected to be recognized in future periods related to performance obligations that are unsatisfied, or partially unsatisfied, as of the end of a period. Remaining performance obligations are equal to disclosed backlog, except within our Software and Services contracts where multi-year contract terms may be limited by the customer's ability to terminate for convenience. Where termination for convenience exists in the Company's service contracts, its disclosure of the remaining performance obligations that are unsatisfied assumes the contract term is limited until renewal. The transaction value associated with remaining performance obligations which were not yet satisfied as of April 4, 2026 was $9.5 billion, of which $4.1 billion is expected to be recognized in the next twelve months. The remaining amounts will generally be satisfied over time as systems are implemented and services are performed.

Contract Balances

(In millions)	April 4, 2026		December 31, 2025
Accounts receivable, net	$	2,046	$	2,200
Contract assets	1,388		1,574
Contract liabilities	2,296		2,265
Non-current contract liabilities	761		751

Payment terms on system contracts are typically tied to implementation milestones associated with progress on contracts, while revenue recognition is over time based on a cost-to-cost method of measuring performance. The Company may recognize a Contract asset or Contract liability, depending on whether revenue has been recognized in excess of billings or billings in excess of revenue. Services contracts are typically billed in advance, generating Contract liabilities until the Company has performed the services. The Company does not record a financing component to contracts when it expects, at contract inception, that the period between the transfer of a promised good or service and related payment terms are less than a year.

Revenue recognized during the three months ended April 4, 2026 which was previously included in Contract liabilities as of December 31, 2025 was $691 million, compared to $537 million of revenue recognized during the three months ended March 29, 2025 which was previously included in Contract liabilities as of December 31, 2024. Revenue of $2 million was recognized during the three months ended April 4, 2026 related to performance obligations satisfied, or partially satisfied, in previous periods,

compared to $9 million reversed for the three months ended March 29, 2025, primarily driven by changes in the estimates of progress on system contracts.

There were no material expected credit losses recorded on contract assets during each of the three months ended April 4, 2026 and March 29, 2025.

Contract Cost Balances

(In millions)	April 4, 2026		December 31, 2025
Current contract cost assets	$	81	$	72
Non-current contract cost assets	147		152

Contract cost assets include incremental costs to obtain a contract, primarily related to the Company's sales incentive plans, and certain costs to fulfill contracts. Contract cost assets are amortized into expense over a period that follows the passage of control to the customer over time. Incremental costs to obtain a contract with the Company's sales incentive plans are accounted for under a portfolio approach, with amortization ranging from one to eight years to approximate the recognition of revenues over time. Where incremental costs to obtain a contract will be recognized in one year or less, the Company applies a practical expedient around expensing amounts as incurred. Amortization of contract cost assets was $14 million for the three months ended April 4, 2026, and $13 million for the three months ended March 29, 2025, respectively.