Revenue

6 Months Ended

Jun. 30, 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				Six months ended
	June 30,				June 30,
	2024		2023		2024		2023
	(in thousands)
Systems	$	198,645	$	215,174	$	394,076	$	410,372
Aftermarket		57,867		58,796		114,807		117,618
Total Revenue	$	256,512	$	273,970	$	508,883	$	527,990

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,
	2024		2023		2024		2023
	(in thousands)
North America	$	34,373	$	37,918	$	79,876	$	83,084
Asia Pacific		196,159		205,941		384,376		397,044
Europe		25,980		30,111		44,631		47,862
Total Revenue	$	256,512	$	273,970	$	508,883	$	527,990

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,
	2024		2023
	(in thousands)
Contract liabilities	$	174,011	$	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				Six months ended
	June 30,				June 30,
	2024		2023		2024		2023
	(in thousands)
Balance, beginning of the period	$	208,418	$	201,725	$	210,885	$	154,777
Deferral of revenue*		19,625		34,977		55,227		107,556
Recognition of deferred revenue		(54,032)		(54,162)		(92,101)		(79,793)
Balance, end of the period	$	174,011	$	182,540	$	174,011	$	182,540

* Amount is net of a reclassification of $4.7 million from deferred revenue to refund liability for the three and six months ended June 30, 2024.

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.