v3.26.1
Revenue Recognition
 3 Months Ended
Mar. 31, 2026
Revenue from Contract with Customer [Abstract]  
Revenue Recognition
NOTE 5. REVENUE RECOGNITION

We report our revenues net of sales taxes and record certain regulatory fees, primarily Universal Service Fund (USF) fees, on a net basis. Revenue is disaggregated by services provided by segment, with additional details provided for our Advanced Connectivity consumer and business relationships (see Note 4).

Deferred Customer Contract Acquisition and Fulfillment Costs
Costs to acquire and fulfill customer contracts, including commissions on service activations are deferred and amortized over the contract period or expected customer relationship life, which typically ranges from three years to seven years.
 
The following table presents the deferred customer contract acquisition and fulfillment costs included on our consolidated balance sheets:
 March 31,December 31,
Consolidated Balance Sheets20262025
Deferred Acquisition Costs  
Prepaid and other current assets$3,511 $3,550 
Other Assets4,986 4,778 
Total deferred customer contract acquisition costs$8,497 $8,328 
Deferred Fulfillment Costs
Prepaid and other current assets$1,696 $1,862 
Other Assets2,896 2,864 
Total deferred customer contract fulfillment costs$4,592 $4,726 

The following table presents deferred customer contract acquisition and fulfillment cost amortization, which are primarily included in “Selling, general and administrative” and “Other cost of revenues,” respectively, for the three months ended:
 March 31,March 31,
Consolidated Statements of Income20262025
Deferred acquisition cost amortization$1,006 $906 
Deferred fulfillment cost amortization480 595 
Contract Assets and Liabilities
A contract asset is recorded when revenue is recognized in advance of our right to bill and receive consideration. The contract asset will decrease as services are provided and billed. For example, when installment sales include promotional discounts (e.g., trade-in device credits) the difference between revenue recognized and consideration received is recorded as a contract asset to be amortized over the contract term.

Our contract assets primarily relate to our wireless businesses. Promotional equipment sales where we offer handset credits, which are allocated between equipment and service in proportion to their standalone selling prices, when customers commit to a specified service period result in additional contract assets recognized. These contract assets will amortize over the service contract period, resulting in lower future service revenue.

When consideration is received in advance of the delivery of goods or services, a contract liability is recorded. Reductions in the contract liability will be recorded as we satisfy the performance obligations.

The following table presents contract assets and liabilities on our consolidated balance sheets:
 March 31,December 31,
Consolidated Balance Sheets20262025
Contract asset$8,108 $7,816 
Current portion in “Prepaid and other current assets”
4,320 4,131 
Contract liability4,472 4,409 
Current portion in “Advanced billings and customer deposits”
4,194 4,136 
Our beginning of period contract liability recorded as customer contract revenue during 2026 was $3,287.
 
Remaining Performance Obligations
Remaining performance obligations represent services we are required to provide to customers under bundled or discounted arrangements, which are satisfied as services are provided over the contract term. In determining the transaction price allocated, we do not include non-recurring charges and estimates for usage, nor do we consider arrangements with an original expected duration of less than one year, which are primarily prepaid wireless and residential internet agreements.
 
Remaining performance obligations associated with business contracts reflect recurring charges billed, adjusted to reflect estimates for sales incentives and revenue adjustments. Performance obligations associated with wireless contracts are estimated using a portfolio approach in which we review all relevant promotional activities, calculating the remaining performance obligation using the average service component for the portfolio and the average device price. As of March 31, 2026, the aggregate amount of the transaction price allocated to remaining performance obligations was $44,392, of which we expect to recognize approximately 82% by the end of 2027, with the balance recognized thereafter.