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

Note 4 – Revenue Recognition

The Company’s revenues are derived from multiple sources. The following are descriptions of its principal revenue generating activities.

Rental Revenue

The company earns rental revenue from leasing production equipment, primarily artificial lift and compression systems, under operating leases in accordance with the authoritative guidance for leases (“ASC 842”). Rental contracts range from month to month up to 48 months, with billing at a fixed monthly rate and payment typically due within 15 to 60 days. Upon lease commencement, the Company evaluates rental agreements to determine classification, but all agreements have been classified as operating leases, keeping the equipment on the balance sheet and depreciating it accordingly. Rental revenue is recognized on a straight-line basis over the lease term. Additionally, the Company has elected a practical expedient to combine lease and non-lease components (such as maintenance services) into a single component, as their timing and pattern of transfer are the same. To protect its assets, the company incorporates risk mitigation measures in rental agreements, including monitoring, maintenance, and customer liability clauses for damage or loss.

Sales Revenue

Sales revenue is recognized in accordance with ASC 606, which follows a five-step model to determine when and how revenue is recorded. Typically, contracts involve a single performance obligation, and revenue is recognized at a point in time when control of the product transfers to the customer. Sales revenue is measured as the fixed consideration expected from the customer, with payments generally collected within 15 to 70 days. Since the time between the sale and payment does not exceed a year, the Company does not include a financing component in its contracts. Additionally, there are no material costs associated with obtaining contracts, no right of return, and no significant post-delivery obligations.

The Company’s sales revenue primarily comes from three categories: (i) equipment and compressors, (ii) oil & gas products and parts, and (iii) maintenance and repair services:

•
For equipment and compressors, revenue is recognized when fabrication is complete, the product is segregated, and the customer has been notified that it is ready for pickup. At this point, the Company invoices the customer, and ownership risks and rewards transfer to the customer per the contract terms. The customer is responsible for arranging transportation, and while awaiting pickup (typically within 2 to 14 days), the equipment remains in the Company’s possession but is designated for the specific customer. The Company does not have the right to direct the product elsewhere.
•
For oil and gas products and parts, the Company has a single performance obligation – the manufacture and sale of the contracted goods. Revenue is recognized upon the transfer of control which occurs at a point in time upon delivery. The transaction price is based on the standalone sales price of each good, and payments are typically collected within 15 to 70 days. Shipping and handling are treated as fulfillment activities and recognized as costs of sales. Any sales taxes collected are excluded from revenue.
•
For maintenance and repair services, the Company provides services for gas lift systems, plunger lift systems, downhole fluid recovery, and related activities. Revenue is recognized at a point in time upon completion of the service, which typically takes one to three days from commencement. The transaction price corresponds to the standalone price of the completed service, with payments generally collected within 30 to 45 days. Similar to product sales, taxes collected from customers are excluded from reported revenues.

Disaggregation of Revenues

The following table presents our third-party revenue from contracts with customers by reportable segment (see Note 17 – Segment Information) and disaggregated by major product and service lines, timing of revenue recognition, and geographical markets for the three months ended March 31, 2026 (in thousands):

 

 

Three Months Ended March 31, 2026

 

Segments

 

Production
Solutions

 

 

Natural Gas
Technologies

 

 

Other and Eliminations

 

 

Total

 

Major Product/Service Lines

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Surface Equipment (1)

 

$

 

70,027

 

 

$

 

—

 

 

$

 

—

 

 

$

 

70,027

 

Downhole Components

 

 

 

70,136

 

 

 

 

—

 

 

 

 

—

 

 

 

 

70,136

 

Vapor Recovery (1)

 

 

 

—

 

 

 

 

62,111

 

 

 

 

(43

)

 

 

 

62,068

 

Natural Gas Systems

 

 

 

—

 

 

 

 

18,519

 

 

 

 

(11,220

)

 

 

 

7,299

 

Total

 

$

 

140,163

 

 

$

 

80,630

 

 

$

 

(11,263

)

 

$

 

209,530

 

Timing of Revenue Recognition

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Goods and services transferred at a point in time

 

$

 

65,446

 

 

$

 

33,474

 

 

$

 

(11,263

)

 

$

 

87,657

 

Services transferred over time

 

 

 

74,717

 

 

 

 

47,156

 

 

 

 

—

 

 

 

 

121,873

 

Total

 

$

 

140,163

 

 

$

 

80,630

 

 

$

 

(11,263

)

 

$

 

209,530

 

Geographical Markets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

United States

 

$

 

138,341

 

 

$

 

80,325

 

 

$

 

(11,263

)

 

$

 

207,403

 

International

 

 

 

1,822

 

 

 

 

305

 

 

 

 

—

 

 

 

 

2,127

 

Total

 

$

 

140,163

 

 

$

 

80,630

 

 

$

 

(11,263

)

 

$

 

209,530

 

____________________________

(1) All of revenue for these service lines are recognized in accordance with ASC 842 as described within the Revenue Recognition section above.

The following table presents our third-party revenue from contracts with customers by reportable segment (see Note 17 – Segment Information) and disaggregated by major product and service lines, timing of revenue recognition, and geographical markets for the three months ended March 31, 2025 (in thousands):

 

 

Three Months Ended March 31, 2025

 

Segments

 

Production
Solutions

 

 

Natural Gas
Technologies

 

 

Other and Eliminations

 

 

Total

 

Major Product/Service Lines

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Surface Equipment (1)

 

$

 

54,598

 

 

$

 

—

 

 

$

 

—

 

 

$

 

54,598

 

Downhole Components

 

 

 

61,394

 

 

 

 

—

 

 

 

 

—

 

 

 

 

61,394

 

Vapor Recovery (1)

 

 

 

—

 

 

 

 

56,616

 

 

 

 

(45

)

 

 

 

56,571

 

Natural Gas Systems

 

 

 

—

 

 

 

 

28,881

 

 

 

 

(9,094

)

 

 

 

19,787

 

Total

 

$

 

115,992

 

 

$

 

85,497

 

 

$

 

(9,139

)

 

$

 

192,350

 

Timing of Revenue Recognition

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Goods and services transferred at a point in time

 

$

 

61,394

 

 

$

 

42,799

 

 

$

 

(9,139

)

 

$

 

95,054

 

Services transferred over time

 

 

 

54,598

 

 

 

 

42,698

 

 

 

 

—

 

 

 

 

97,296

 

Total

 

$

 

115,992

 

 

$

 

85,497

 

 

$

 

(9,139

)

 

$

 

192,350

 

Geographical Markets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

United States

 

$

 

113,458

 

 

$

 

85,298

 

 

$

 

(9,139

)

 

$

 

189,617

 

International

 

 

 

2,534

 

 

 

 

199

 

 

 

 

—

 

 

 

 

2,733

 

Total

 

$

 

115,992

 

 

$

 

85,497

 

 

$

 

(9,139

)

 

$

 

192,350

 

___________________________

(1) All of revenue for these service lines are recognized in accordance with ASC 842 as described within the Revenue Recognition section above.

Deferred Revenue

As of March 31, 2026, the Company had a deferred revenue balance of $16.7 million compared to the December 31, 2025 balance of $7.4 million. Deferred revenue represents our obligation to transfer products to or perform services for a customer for which we have received cash or billed in advance. The revenue that has been deferred will be recognized upon product delivery or as services are performed. As of March 31, 2026, the Company 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.