Revenue

9 Months Ended

Sep. 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				Nine months ended
	September 30,				September 30,
	2021		2020		2021		2020
	(in thousands)
Systems	$	126,166	$	70,239	$	307,295	$	229,391
Aftermarket		50,528		40,166		149,449		122,970
Total Revenue	$	176,694	$	110,405	$	456,744	$	352,361

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				Nine months ended
	September 30,				September 30,
	2021		2020		2021		2020
	(in thousands)
North America	$	11,847	$	9,022	$	31,560	$	28,598
Asia Pacific		137,870		89,995		357,903		293,427
Europe		26,977		11,388		67,281		30,336
Total Revenue	$	176,694	$	110,405	$	456,744	$	352,361

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:

	September 30,		December 31,
	2021		2020
	(in thousands)
Contract liabilities	$	58,240	$	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				Nine months ended
	September 30,				September 30,
	2021		2020		2021		2020
	(in thousands)
Balance, beginning of the period	$	35,518	$	30,416	$	23,058	$	29,251
Deferral of revenue		38,867		4,030		55,011		10,320
Recognition of deferred revenue		(16,145)		(17,477)		(19,829)		(22,602)
Balance, end of the period	$	58,240	$	16,969	$	58,240	$	16,969

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.