Revenue

6 Months Ended

Jun. 30, 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				Six months ended
	June 30,				June 30,
	2023		2022		2023		2022
	(in thousands)
Systems	$	215,174	$	165,350	$	410,372	$	317,152
Aftermarket		58,796		55,827		117,618		107,620
Total Revenue	$	273,970	$	221,177	$	527,990	$	424,772

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,
	2023		2022		2023		2022
	(in thousands)
North America	$	37,918	$	34,683	$	83,084	$	59,596
Asia Pacific		205,941		168,705		397,044		317,945
Europe		30,111		17,789		47,862		47,231
Total Revenue	$	273,970	$	221,177	$	527,990	$	424,772

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,
	2023		2022
	(in thousands)
Contract liabilities	$	182,540	$	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				Six months ended
	June 30,				June 30,
	2023		2022		2023		2022
	(in thousands)
Balance, beginning of the period	$	201,725	$	74,840	$	154,777	$	68,436
Deferral of revenue		34,977		28,703		107,556		46,697
Recognition of deferred revenue		(54,162)		(31,994)		(79,793)		(43,584)
Balance, end of the period	$	182,540	$	71,549	$	182,540	$	71,549

The majority of our system transactions have either (1) payment terms of 90% due upon shipment of the system and 10% due upon acceptance or (2) a deposit with the remaining balance due at shipment and 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.