REVENUE

6 Months Ended

Jun. 30, 2022

REVENUE

REVENUE

NOTE 3.    REVENUE

Nature of goods and services

Products

Advanced Energy provides highly engineered, mission-critical, precision power conversion, measurement, and control solutions to our global customers. We design, manufacture, sell, and support precision power products that transform, refine, and modify the raw electrical power coming from either the utility or the building facility and convert it into various types of highly controllable, usable power that is predictable, repeatable, and customizable to meet the necessary requirements for powering a wide range of complex equipment.

Our power solutions enable innovation in complex semiconductor and thin film plasma processes such as dry etch, strip and deposition, high and low voltage applications such as process control, data center computing, networking, telecommunication, medical equipment, life science applications, industrial technology and production, scientific instruments, clean technology production, advanced material production and temperature-critical thermal applications such as material and chemical processing. We also supply related sensing, controls, and instrumentation products for advanced measurement and calibration of RF power and temperature, electrostatic instrumentation products for test and measurement applications, and gas sensing and monitoring solutions for multiple industrial markets. Our network of global service support centers provides a recurring revenue opportunity as we offer repair services, conversions, upgrades, refurbishments, and used equipment to companies using our products.

Services

Our services group offers warranty and after-market repair services in the regions in which we operate, providing us with preventive maintenance opportunities. Our customers continue to pursue low cost of ownership of their capital equipment and are increasingly sensitive to the costs of system downtime. They expect that suppliers offer comprehensive local repair service and customer support. To meet these market requirements, we maintain a worldwide support organization in the U.S., the People’s Republic of China ("PRC"), Japan, Korea, Taiwan, Germany, Ireland, Singapore, Israel, and Great Britain. Support services include warranty and non-warranty repair services, upgrades, and refurbishments on the products we sell.

As part of our ongoing service business, we satisfy our service obligations under preventative maintenance contracts and extended warranties which had previously been offered on our discontinued inverter products. Any up-front fees received for extended warranties or maintenance plans are deferred. Revenue under these arrangements is recognized ratably over the underlying terms as we do not have historical information which would allow us to project the estimated service usage pattern at this time.

Performance obligations

Our unsatisfied performance obligations primarily relate to customer purchase orders for products we have not yet shipped. We expect to fulfill the majority of these performance obligations within one year. As a result, we elected not to disclose the amount of these remaining performance obligations.

Disaggregation of revenue

The following tables present additional information regarding our revenue:

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Semiconductor Equipment	$	228,797	$	176,671	$	431,754	$	357,387
Industrial and Medical		104,951		83,197		187,849		161,612
Data Center Computing		69,161		69,458		145,399		128,612
Telecom and Networking		38,040		31,985		73,406		65,320
Total	$	440,949	$	361,311	$	838,408	$	712,931

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Product	$	403,977	$	325,522	$	766,853	$	644,401
Services		36,972		35,789		71,555		68,530
Total	$	440,949	$	361,311	$	838,408	$	712,931

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
United States	$	174,293	$	139,525	$	333,035	$	271,123
North America (excluding U.S.)		31,824		26,112		55,803		52,359
Asia		180,181		148,803		342,228		298,394
Europe		49,851		44,491		96,516		84,913
Other		4,800		2,380		10,826		6,142
Total	$	440,949	$	361,311	$	838,408	$	712,931

During the three months ended June 30, 2022, Applied Materials, Inc. and Lam Research Corporation accounted for 20% and 15%, respectively, of our total revenue compared to 20% and 10%, respectively, of our total revenue during the same period in the prior year. During the six months ended June 30, 2022, Applied Materials, Inc. and Lam Research Corporation accounted for 21% and 14%, respectively, of our total revenue compared to 20% and 10%, respectively, of our total revenue during the same period in the prior year.