Revenue

6 Months Ended

Jun. 30, 2022

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,
	2022		2021		2022		2021
	(in thousands)
Systems	$	165,350	$	100,138	$	317,152	$	181,129
Aftermarket		55,827		47,136		107,620		98,921
Total Revenue	$	221,177	$	147,274	$	424,772	$	280,050

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,
	2022		2021		2022		2021
	(in thousands)
North America	$	34,683	$	10,204	$	59,596	$	19,712
Asia Pacific		168,705		116,642		317,945		220,033
Europe		17,789		20,428		47,231		40,305
Total Revenue	$	221,177	$	147,274	$	424,772	$	280,050

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,
	2022		2021
	(in thousands)
Contract liabilities	$	71,549	$	68,436

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,
	2022		2021		2022		2021
	(in thousands)
Balance, beginning of the period	$	74,840	$	22,142	$	68,436	$	23,058
Deferral of revenue		28,703		21,893		46,697		30,117
Recognition of deferred revenue		(31,994)		(8,517)		(43,584)		(17,657)
Balance, end of the period	$	71,549	$	35,518	$	71,549	$	35,518

The majority of our system transactions have payment terms of 90% due upon shipment of the system 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.