Construction & Engineering: Contract assets & liabilities

Contract liabilities consist of advance payments and billings in excess of revenue recognized. Advance payments from customers related to work not yet started are classified as deferred revenue. Contract liabilities are not considered to have a significant financing component, as they are used to meet working capital requirements that are generally higher in the early stages of a contract and are intended to protect us from the other party failing to meet its obligations under the contract. Our contract assets and liabilities are reported in a net position on a contract-by-contract basis at the end of each reporting period.

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Contract assets and liabilities in the Consolidated Balance Sheet consisted of the following amounts as of December 31, 2025 and December 31, 2024 (in thousands):

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​	​	​	​	​	​
​	December 31, 2025	​	December 31, 2024
Contract assets:	​	​	​	​	​
Costs and estimated earnings in excess of billings, less allowance for credit losses	88,817	​	91,681
Contract liabilities:	​	​	​	​	​
Billings in excess of costs and estimated earnings and deferred revenue	2,120,262	​	1,149,257

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Contract assets and liabilities fluctuate year to year based on various factors, including, but not limited to, the variability in billing and payment terms of customers and changes in the number and size of projects in progress at period end. Contract assets decreased from December 31, 2024 to December 31, 2025 by approximately $ 2.9 million. Contract liabilities increased from December 31, 2024 to December 31, 2025 by approximately $ 971.0 million. The decrease in contract assets included a decrease of $ 7.5 million attributable to the timing of billings, partially offset by an increase of $ 4.6 million related to our 2025 acquisitions. The increase in contract liabilities is primarily due to an increase of $ 910.1 million related to an increase in billings in excess of costs recognized on our performance obligations, primarily from the timing of billings on projects within the technology sector. Additionally, there was an increase of $ 60.9 million as a result of our 2025 acquisitions.

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During the years ended December 31, 2025 and 2024, we recognized revenue of $ 1.00 billion and $ 816.8 million, respectively, related to our contract liabilities at January 1, 2025 and January 1, 2024, respectively.

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