Note 4. Revenue

To reflect the organization of our business operations, we divide revenue into two categories: revenue from sales of new systems and revenue arising from the sale of used systems, parts and labor to customers who own systems, which we refer to as Aftermarket.

Revenue by categories used by management are as follows:


	Three months ended				Six months ended
	June 30,				June 30,
	2019		2018		2019		2018
	(in thousands)
Systems	$	37,224	$	73,919	$	94,316	$	159,395
Aftermarket		37,081		45,414		71,466		82,123
	$	74,305	$	119,333	$	165,782	$	241,518

Revenue by geographic markets is determined based upon the location of where our products are shipped and our services are performed. Revenue in our principal geographic markets is as follows:


	Three months ended				Six months ended
	June 30,				June 30,
	2019		2018		2019		2018
	(in thousands)
North America	$	9,380	$	16,485	$	20,988	$	27,008
Asia Pacific		49,717		88,471		112,643		186,160
Europe		15,208		14,377		32,151		28,350
	$	74,305	$	119,333	$	165,782	$	241,518

Contract assets and contract liabilities are as follows:


	June 30,		December 31,
	2019		2018
	(in thousands)
Contract assets	$	—	$	—

Contract liabilities	$	14,080	$	22,584

Contract liabilities are reflected as deferred revenue on the consolidated balance sheet and relate to payments invoiced or received in advance of completion of performance obligations under a contract. Contract liabilities are recognized as revenue upon the fulfillment of performance obligations.


	Three months ended				Six months ended
	June 30,				June 30,
	2019		2018		2019		2018
	(in thousands)
Balance, beginning of the period	$	20,481	$	18,522	$	22,584	$	18,145
Deferral of revenue		3,943		5,440		6,225		7,647
Recognition of deferred revenue		(10,344)		(8,787)		(14,729)		(10,617)
Balance, ending of the period	$	14,080	$	15,175	$	14,080	$	15,175

The majority of our system transactions have payment terms of 90% due upon shipment of the tool and 10% due upon installation. Aftermarket transaction payment terms are such that payment is due either within 30 or 60 days of service provided or delivery of parts.