Revenue From Contracts With Customers

The Company derives revenue from the (i) sale or license of multi-client and proprietary data, imaging services and E&P Advisors consulting services within its E&P Technologies & Services segment; (ii) sale, license and repair of seismic data acquisition systems and other equipment; and (iii) sale or license of seismic command and control software systems and software solutions for operations management within its Operations Optimization segment. All E&P Technology & Services’ revenues and the services component of Optimization Software & Services’ revenues under Operations Optimization segment are classified as service revenues. All other revenues are classified as product revenues.

The Company uses a five-step model to determine proper revenue recognition from customer contracts in accordance with Accounting Standards Codification Topic 606 (“ASC 606”). Revenue is recognized when (i) a contract is approved by all parties; (ii) the goods or services promised in the contract are identified; (iii) the consideration we expect to receive in exchange for the goods or services promised is determined; (iv) the consideration is allocated to the goods and services in the contract; and (v) control of the promised goods or services is transferred to the customer. The Company applies the practical expedient in ASC 606 and does not disclose information about remaining contractual future performance obligations with an original term of one year or less within the footnotes. The Company does not have any contractual future performance obligations with an original term of over one year.

Revenue by Geographic Area

The following table is a summary of net revenues by geographic area (in thousands):



	Three Months Ended September 30,				Nine Months Ended September 30,
	2019		2018		2019		2018
Latin America	$	22,720	$	19,910	$	50,572	$	37,356
North America	12,182		13,095		32,984		25,452
Europe	8,335		8,202		24,850		19,811
Asia Pacific	2,744		3,718		8,287		11,581
Africa	2,874		1,121		7,541		8,362
Middle East	3,899		717		6,364		1,907
Commonwealth of Independent States	485		437		1,372		982
Total	$	53,239	$	47,200	$	131,970	$	105,451

See Note 3“Segment Information” for revenue by segment for the three and nine months ended September 30, 2019 and 2018.

Unbilled Receivables

Unbilled receivables relate to revenues recognized on multi-client surveys, imaging services and devices equipment repairs on a proportionate basis, and on licensing of multi-client data libraries for which invoices have not yet been presented to the customer. The following table is a summary of unbilled receivables (in thousands):



	September 30, 2019		December 31, 2018
New Venture	$	22,373	$	38,430
Imaging Services	7,016		5,075
Devices	1,601		527
Total	$	30,990	$	44,032

The changes in unbilled receivables are as follows (in thousands):



Unbilled receivables at December 31, 2018	$	44,032
Recognition of unbilled receivables	125,586
Revenues billed to customers	(138,628		)
Unbilled receivables at September 30, 2019	$	30,990

Deferred Revenue

Billing practices are governed by the terms of each contract based upon achievement of milestones or pre-agreed schedules. Billing does not necessarily correlate with revenue recognized on a proportionate basis as work is performed and control is transferred to the customer. Deferred revenue represents cash received in excess of revenue recognized as of the reporting period, but will be recognized in future periods. The following table is a summary of deferred revenues (in thousands):



	September 30, 2019		December 31, 2018
New Venture	$	1,973	$	5,797
Imaging Services	1,219		307
Devices	1,018		626
Optimization Software & Services	1,100		980
Total	$	5,310	$	7,710

The changes in deferred revenues are as follows (in thousands):



Deferred revenue at December 31, 2018	$	7,710
Cash collected in excess of revenue recognized	3,984
Recognition of deferred revenue^(a)	(6,384		)
Deferred revenue at September 30, 2019	$	5,310

^(a)The majority of deferred revenue recognized relates to Company’s Ventures group.

The Company expects to recognize all deferred revenue within the next 12 months.

Credit Risks

For the nine months ended September 30, 2019 and 2018, the Company had one customer with sales that exceeded 10% of the Company’s consolidated net revenues. Revenues related to each of these customers are included within the E&P Technology & Services segment.

At September 30, 2019, the Company had two customers with balances that, combined, accounted for 40% of the Company’s total combined accounts receivable and unbilled receivable balances. At September 30, 2018, the Company had one customer with a balance that accounted for 29% of the Company’s total combined accounts receivable and unbilled receivable balances.