Revenue

9 Months Ended

Sep. 30, 2022

Revenue

Revenue

Note 5. 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,
	2022		2021		2022		2021
	(in thousands)
Systems	$	171,092	$	126,166	$	488,243	$	307,295
Aftermarket		58,083		50,528		165,704		149,449
Total Revenue	$	229,175	$	176,694	$	653,947	$	456,744

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,
	2022		2021		2022		2021
	(in thousands)
North America	$	36,036	$	11,847	$	95,633	$	31,560
Asia Pacific		166,342		137,870		484,286		357,903
Europe		26,797		26,977		74,028		67,281
Total Revenue	$	229,175	$	176,694	$	653,947	$	456,744

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,
	2022		2021
	(in thousands)
Contract liabilities	$	122,589	$	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				Nine months ended
	September 30,				September 30,
	2022		2021		2022		2021
	(in thousands)
Balance, beginning of the period	$	71,549	$	35,518	$	68,436	$	23,058
Deferral of revenue		70,706		38,867		108,472		55,011
Recognition of deferred revenue		(19,666)		(16,145)		(54,319)		(19,829)
Balance, end of the period	$	122,589	$	58,240	$	122,589	$	58,240

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.