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				Nine months ended
	September 30,				September 30,
	2019		2018		2019		2018
	(in thousands)
Systems	$	36,809	$	56,394	$	131,124	$	215,789
Aftermarket		32,644		38,980		104,111		121,103
	$	69,453	$	95,374	$	235,235	$	336,892

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				Nine months ended
	September 30,				September 30,
	2019		2018		2019		2018
	(in thousands)
North America	$	7,681	$	12,115	$	28,670	$	39,123
Asia Pacific		47,756		67,019		160,398		253,179
Europe		14,016		16,240		46,167		44,590
	$	69,453	$	95,374	$	235,235	$	336,892

Our system sales revenue transactions give rise to contract liabilities (in the case of pre-payments and the fair value of goods and services to be delivered after the system delivery, such as installation and warranty obligations).

Contract liabilities are as follows:

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				Nine months ended
	September 30,				September 30,
	2019		2018		2019		2018
	(in thousands)
Balance, beginning of the period	$	14,080	$	15,175	$	22,584	$	18,145
Deferral of revenue		17,254		7,168		20,887		11,586
Recognition of deferred revenue		(3,893)		(4,569)		(16,030)		(11,957)
Balance, ending of the period	$	27,441	$	17,774	$	27,441	$	17,774

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

September 30,

December 31,

(in thousands)

Contract liabilities