Revenue

6 Months Ended

Jun. 30, 2021

Revenue.

Revenue

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,
	2021		2020		2021		2020
	(in thousands)
Systems	$	100,138	$	76,815	$	181,129	$	159,152
Aftermarket		47,136		46,150		98,921		82,804
Total Revenue	$	147,274	$	122,965	$	280,050	$	241,956

We also consider revenue by geography. Revenue is allocated to geographic markets based upon the location to which our products are shipped and in which our services are performed. Revenue in our principal geographic markets is as follows:

	Three months ended				Six months ended
	June 30,				June 30,
	2021		2020		2021		2020
	(in thousands)
North America	$	10,204	$	8,915	$	19,712	$	19,576
Asia Pacific		116,642		106,604		220,033		203,432
Europe		20,428		7,446		40,305		18,948
Total Revenue	$	147,274	$	122,965	$	280,050	$	241,956

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 certain warranty obligations).

Contract liabilities are as follows:

	June 30,		December 31,
	2021		2020
	(in thousands)
Contract liabilities	$	35,518	$	23,058

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,
	2021		2020		2021		2020
	(in thousands)
Balance, beginning of the period	$	22,142	$	34,106	$	23,058	$	29,251
Deferral of revenue		21,893		6,248		30,117		10,724
Recognition of deferred revenue		(8,517)		(9,937)		(17,657)		(9,558)
Balance, end of the period	$	35,518	$	30,417	$	35,518	$	30,417

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 usually provide that payment is due either within 30 or 60 days after the service is provided or parts delivered.