Revenue

3 Months Ended

Mar. 31, 2023

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
	March 31,
	2023		2022
	(in thousands)
Systems	$	195,198	$	151,801
Aftermarket		58,822		51,794
Total Revenue	$	254,020	$	203,595

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
	March 31,
	2023		2022
	(in thousands)
North America	$	45,166	$	24,913
Asia Pacific		191,103		149,240
Europe		17,751		29,442
Total Revenue	$	254,020	$	203,595

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:

	March 31,		December 31,
	2023		2022
	(in thousands)
Contract liabilities	$	201,725	$	154,777

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
	March 31,
	2023		2022
	(in thousands)
Balance, beginning of the period	$	154,777	$	68,436
Deferral of revenue		88,048		23,394
Recognition of deferred revenue		(41,100)		(16,990)
Balance, end of the period	$	201,725	$	74,840

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