Revenue

Product revenue

The Company develops, manufactures and sells optoelectronic products that transmit, receive, modify and switch high speed digital optical signals for communications networks. Revenue is derived primarily from the sale of hardware products. The Company sells its products worldwide, primarily to leading network equipment manufacturers.

Revenue recognition

Revenue is recognized upon transfer of control of promised products or services to customers in an amount that reflects the consideration the Company expects to receive in exchange for those products or services. The Company generally bears all costs, risk of loss or damage and retains title to the goods up to the point of transfer of control of promised products to customer. Revenue related to the sale of consignment inventories at customer vendor managed locations is not recognized until the products are pulled from consignment inventories by customers. In instances where acceptance of the product or solutions is specified by the customer, revenue is deferred until such required acceptance criteria have been met. Shipping and handling costs are included in the cost of goods sold. The Company presents revenue net of sales taxes and any similar assessments.

Nature of products

Revenue from sale of hardware products is recognized upon transfer of control to the customer. The performance obligation for the sale of hardware products is satisfied at a point in time. The Company has aligned its products in two groups - High Speed Products and Network Products and Solutions. The following presents revenue by product group (in thousands):



	Three Months Ended March 31,
	Three Months Ended March 31,
	2019		2018
High Speed Products	$	70,168	$	59,090
Network Products and Solutions	9,198		9,496
Total revenue	$	79,366	$	68,586

The following table presents the Company's revenue information by geographical region. Revenue is classified based on the ship to location requested by the customer. Such classification recognizes that for many customers, including those in North America or in Europe, designated shipping points are often in China or elsewhere in Asia (in thousands):



	Three Months Ended March 31,
	Three Months Ended March 31,
	2019		2018
China	$	45,547	$	41,672
Americas	13,829		12,208
Rest of world	19,990		14,706
Total revenue	$	79,366	$	68,586

Certain prior period amounts have been reclassified to conform to the current period presentation.

Deferred revenue

The Company records deferred revenue when cash payments are received or due in advance of our performance. Refer to Note 7 for disclosure of deferred revenue balances. The increase in the deferred revenue balance during the three months ended March 31, 2019 was immaterial, offset by approximately $0.6 million of revenue recognized during the three months ended March 31, 2019 that was included in the deferred revenue balance as of December 31, 2018. The increase in the deferred revenue balance during the three months ended March 31, 2018 was immaterial, offset by approximately $0.4 million of revenue recognized that was included in the deferred revenue balance as of December 31, 2017.

Contract assets

The Company records contract assets when the revenue is recognized but the customer payment is contingent on a future event. The balance of contract assets as of March 31, 2019 and December 31, 2018 was immaterial.

Refund liabilities

The Company records refund liabilities when the contract permits the customer to return the product if certain circumstances arise. The balance of refund liabilities as of March 31, 2019 and December 31, 2018 was immaterial.