Revenue Recognition

12 Months Ended

Dec. 31, 2025

Revenue Recognition

Revenue Recognition

Note 18 Revenue Recognition

We recognize revenue when control of a good or service promised in a contract (i.e., performance obligation) is transferred to a customer. Control is obtained when a customer has the ability to direct the use of and obtain substantially all the remaining benefits from that good or service. Contract drilling revenues are recorded over time utilizing the input method based on time elapsed. The measurement of progress considers the transfer of the service to the customer as we provide daily drilling services. We receive payment after the services have been performed by billing customers periodically (typically monthly). However, a portion of our revenues are recognized at a point-in-time as control is transferred at a distinct point in time such as with the sale of our top drives and other capital equipment. Within our drilling contracts, we have identified one performance obligation in which the transaction price is allocated.

Disaggregation of revenue

In the following table, revenue is disaggregated by geographical region. The table also includes a reconciliation of the disaggregated revenue with the reportable segments:

	Year Ended
	December 31, 2025
		U.S. Drilling		International Drilling		Drilling Solutions		Rig Technologies		Other		Total
	(In thousands)
Lower 48	$	745,162	$	—	$	256,203	$	73,723	$	—	$	1,075,088
U.S. Offshore		113,979		—		9,357		—		—		123,336
Alaska		117,503		—		7,967		4		—		125,474
Canada		—		46,696		2,142		6,287		—		55,125
Middle East & Asia		—		1,060,497		122,474		68,528		—		1,251,499
Latin America		—		372,967		88,185		4,110		—		465,262
Europe, Africa & CIS		—		117,605		26,955		1,384		—		145,944
Eliminations & other		—		—		—		—		(57,035)		(57,035)
Total	$	976,644	$	1,597,765	$	513,283	$	154,036	$	(57,035)	$	3,184,693

	Year Ended
	December 31, 2024
		U.S. Drilling		International Drilling		Drilling Solutions		Rig Technologies		Other		Total
	(In thousands)
Lower 48	$	872,432	$	—	$	172,832	$	83,313	$	—	$	1,128,577
U.S. Offshore		107,253		—		9,943		—		—		117,196
Alaska		48,437		—		2,447		—		—		50,884
Canada		—		—		1,847		6,331		—		8,178
Middle East & Asia		—		1,002,350		51,222		91,344		—		1,144,916
Latin America		—		360,092		74,225		14,310		—		448,627
Europe, Africa & CIS		—		83,650		1,555		6,379		—		91,584
Eliminations & other		—		—		—		—		(59,836)		(59,836)
Total	$	1,028,122	$	1,446,092	$	314,071	$	201,677	$	(59,836)	$	2,930,126

	Year Ended
	December 31, 2023
		U.S. Drilling		International Drilling		Drilling Solutions		Rig Technologies		Other		Total
	(In thousands)
Lower 48	$	1,052,274	$	—	$	196,252	$	121,958	$	—	$	1,370,484
U.S. Offshore		118,218		—		11,147		—		—		129,365
Alaska		37,137		—		1,733		—		—		38,870
Canada		—		—		1,522		7,270		—		8,792
Middle East & Asia		—		943,285		44,896		93,032		—		1,081,213
Latin America		—		341,470		44,422		11,162		—		397,054
Europe, Africa & CIS		—		60,494		1,785		9,346		—		71,625
Eliminations & other		—		—		—		—		(91,422)		(91,422)
Total	$	1,207,629	$	1,345,249	$	301,757	$	242,768	$	(91,422)	$	3,005,981

Contract balances

We perform our obligations under a contract with a customer by transferring goods or services in exchange for consideration from the customer. We recognize a contract asset or liability when we transfer goods or services to a customer and bill an amount which differs from the revenue allocated to the related performance obligations.

The timing of revenue recognition may differ from the timing of invoicing to customers and these timing differences result in receivables, contract assets, or contract liabilities (deferred revenue) on our consolidated balance sheet. In general, we receive payments from customers based on dayrates as stipulated in our contracts (i.e. operating rate, standby rate). The invoices billed to the customer are based on the varying rates applicable to the operating status on each rig. Accounts receivable are recorded when the right to consideration becomes unconditional.

Dayrate contracts also may contain fees charged to the customer for up-front rig modifications, mobilization and demobilization of equipment and personnel. These fees are associated with contract fulfillment activities, and the related revenue (subject to any constraint on estimates of variable consideration) is allocated to a single performance obligation and recognized ratably over the initial term of the contract. Mobilization fees are generally billable to the customer in the initial phase of a contract and generate contract liabilities until they are recognized as revenue. Demobilization fees are generally received at the end of the contract and generate contract assets when they are recognized as revenue prior to becoming receivables from the customer.

We receive reimbursements from our customers for the purchase of supplies, equipment, personnel services and other services provided at their request. Reimbursable revenues are variable and subject to uncertainty as the amounts received and timing thereof are dependent on factors outside of our influence. Accordingly, these revenues are constrained and not recognized until the uncertainty is resolved, which typically occurs when the related costs are incurred on behalf of the customer. We are generally considered a principal in these transactions and record the associated revenues at the gross amounts billed to the customer.

The opening and closing balances of our receivables, contract assets and current and long-term contract liabilities are as follows:

			Contract		Contract		Contract		Contract
	Contract		Assets		Assets		Liabilities		Liabilities
	Receivables		(Current)		(Long-term)		(Current)		(Long-term)
	(In thousands)
As of December 31, 2024	$	433,562	$	17,510	$	9,742	$	24,002	$	13,424
As of December 31, 2025	$	446,310	$	19,335	$	12,053	$	41,927	$	28,646

Approximately 41% of the contract liability balance at the beginning of the period was recognized as revenue during 2025 and 17% is expected to be recognized in 2026. The remaining 42% of the contract liability balance at the beginning of the period is expected to be recognized as revenue during 2027 or thereafter.

Additionally, 42% of the contract asset balance at the beginning of the period was recognized as expense during 2025 and 25% is expected to be recognized in 2026. The remaining 33% of the contract asset balance at the beginning of the period is expected to be recognized as expense during 2027 or thereafter. This disclosure does not include variable consideration allocated entirely to a wholly unsatisfied performance obligation or promise to transfer a distinct good or service that forms part of a single performance obligation.