Revenue

9 Months Ended

Sep. 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				Nine months ended
	September 30,				September 30,
	2023		2022		2023		2022
	(in thousands)
Systems	$	231,454	$	171,092	$	641,825	$	488,243
Aftermarket		60,872		58,083		178,491		165,704
Total Revenue	$	292,326	$	229,175	$	820,316	$	653,947

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,
	2023		2022		2023		2022
	(in thousands)
North America	$	51,563	$	36,036	$	134,647	$	95,633
Asia Pacific		185,194		166,342		582,238		484,286
Europe		55,569		26,797		103,431		74,028
Total Revenue	$	292,326	$	229,175	$	820,316	$	653,947

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,
	2023		2022
	(in thousands)
Contract liabilities	$	202,029	$	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				Nine months ended
	September 30,				September 30,
	2023		2022		2023		2022
	(in thousands)
Balance, beginning of the period	$	182,540	$	71,549	$	154,777	$	68,436
Deferral of revenue		62,787		70,706		154,216		108,472
Recognition of deferred revenue		(43,298)		(19,666)		(106,964)		(54,319)
Balance, end of the period	$	202,029	$	122,589	$	202,029	$	122,589

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 pre-shipment deposit ranging from 20% to 60%, 70% to 30% due upon shipment and 10% at 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.