Revenue

12 Months Ended

Dec. 31, 2019

Revenue from Contract with Customer [Abstract]

REVENUE

Our revenue is substantially generated from product sales derived from the sale of drilling and production equipment. Service revenue is earned as technical advisory assistance and field services related to our products are provided. Lease revenue is derived from rental income of leased production equipment and is recognized ratably over the lease term.

The majority of our revenue is short cycle in nature, with shipments occurring within a year from the customer order date. A small portion of our revenue is derived from contracts extending over one year. Our payment terms generally range between 30 to 90 days and vary by the location of our businesses and the types and volumes of products manufactured and sold, among other factors. Costs incurred to obtain a customer contract are not material to us.

Disaggregation of Revenue

Revenue disaggregated by revenue type was as follows:



	Years Ended December 31,
(in thousands)	2019		2018		2017 ⁽¹⁾
Product revenue	$	1,000,630	$	1,090,218	$	922,692
Service revenue	82,021		83,334		63,386
Lease and other revenue	48,600		44,604		24,388
Total revenue	$	1,131,251	$	1,218,156	$	1,010,466

Revenue disaggregated by end market in each of our reportable segments was as follows:



	Years Ended December 31,
(in thousands)	2019			2018			2017 ⁽¹⁾
Drilling Technologies	$	246,887		$	285,565		$	227,653
Production & Automation Technologies:
Artificial lift	687,607			725,584			602,287
Digital products	134,660			119,293			82,093
Other production equipment	63,117			88,754			103,564
Intra-segment eliminations	(1,020		)	(1,040		)	(5,131		)
	884,364			932,591			782,813
Total revenue	$	1,131,251		$	1,218,156		$	1,010,466

Revenue disaggregated by geography was as follows:



	Years Ended December 31,
(in thousands)	2019		2018		2017 ⁽¹⁾
United States	$	861,001	$	959,167	$	770,843
Canada	70,314		79,816		79,186
Middle East	60,064		53,516		48,899
Europe	51,965		38,669		28,112
Latin America	32,408		33,976		34,350
Australia	30,841		33,247		23,667
Asia-Pacific and other	24,658		19,765		25,409
Total revenue	$	1,131,251	$	1,218,156	$	1,010,466

_______________________

⁽¹⁾Revenue for the year ended December 31, 2017 is presented in accordance with accounting standards in effect prior to our adoption of ASU No. 2014-09 on January 1, 2018.

Revenue is attributed to regions based on the location of our direct customer.

Performance Obligations

The majority of our contracts have a single performance obligation which represents, in most cases, the equipment or product sold to the customer. Some contracts include multiple performance obligations, often satisfied at or near the same time, such as a product and the related installation, extended warranty and/or maintenance services. For contracts with multiple performance obligations, we allocate the transaction price to each performance obligation based on the estimated relative standalone selling prices of the promised goods or services underlying each performance obligation. We typically use observable prices to determine the stand-alone selling price of a performance obligation and utilize a cost plus margin approach when observable prices are not available.

Substantially all of our performance obligations are recognized at a point in time and are primarily related to our product revenue derived from the sale of drilling and production equipment. Revenue is recognized when control transfers to the customer upon shipment or completion of installation, testing, or certification as required under the contract. Leased equipment damaged in operation is generally charged to the customer and recognized as product revenue. Revenue is recognized over time for our service and lease offerings. Service revenue is recognized over time as we provide technical advisory assistance and field services related to our products.

Warranties

The majority of our contracts contain standard warranties in connection with the sale of a product to a customer which provide a customer assurance that the related product will function for a period of time as the parties intended. In addition to our standard warranties, we also offer extended warranties to our customers. Warranties that represent a distinct service are recognized as service revenue over the related warranty period.

Remaining performance obligations

As of December 31, 2019, we did not have any contracts with an original length of greater than a year from which revenue is expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied).

Contract Balances

The beginning and ending contract asset and contract liability balances from contracts with customers were as follows:



(in thousands)	December 31, 2019		December 31, 2018		January 1, 2018
Contract assets	$	285	$	4,571	$	4,733
Contract liabilities	$	6,148	$	5,863	$	3,912

Contract assets primarily relate to work completed for performance obligations that are satisfied over time and are recorded in “prepaid expenses and other current assets” on our consolidated balance sheets. Contract assets are transferred to receivables when the right to consideration becomes unconditional. Contract liabilities relate to our obligation to transfer goods or services to a customer for which we have received advance consideration (or an amount of consideration is due) from the customer. Current contract liabilities are recorded in other “accrued expenses and other current liabilities” on our consolidated balance sheets.