Revenue

3 Months Ended

Mar. 31, 2024

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
	March 31,
	2024		2023
	(in thousands)
Systems	$	195,432	$	195,198
Aftermarket		56,940		58,822
Total Revenue	$	252,372	$	254,020

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,
	2024		2023
	(in thousands)
North America	$	45,503	$	45,166
Asia Pacific		188,217		191,103
Europe		18,652		17,751
Total Revenue	$	252,372	$	254,020

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,
	2024		2023
	(in thousands)
Contract liabilities	$	208,418	$	210,885

Contract liabilities are reflected as deferred revenue on the consolidated balance sheets and include payments received in advance of system sales as well as deferral of revenue from systems sales for installation and other future performance obligations. Contract liabilities are recognized as revenue upon the fulfillment of performance obligations.

	Three months ended
	March 31,
	2024		2023
	(in thousands)
Balance, beginning of the period	$	210,885	$	154,777
Deferral of revenue		42,974		88,048
Recognition of deferred revenue		(45,441)		(41,100)
Balance, end of the period	$	208,418	$	201,725

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%, with the remainder due upon shipment, less 10% due 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.