REVENUE

9 Months Ended

Sep. 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, medical equipment, life science applications, industrial technology and production, scientific instruments, clean technology production, advanced material production, temperature-critical material processing, data center computing, networking, and

telecommunication. 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.

Remaining Performance obligations

Our remaining 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 September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Semiconductor Equipment	$	266,600	$	173,441	$	698,354	$	530,828
Industrial and Medical		119,587		80,800		307,436		242,412
Data Center Computing		87,542		62,231		232,941		190,843
Telecom and Networking		42,545		29,621		115,951		94,941
Total	$	516,274	$	346,093	$	1,354,682	$	1,059,024

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Product	$	471,627	$	312,389	$	1,238,480	$	956,790
Services		44,647		33,704		116,202		102,234
Total	$	516,274	$	346,093	$	1,354,682	$	1,059,024

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
United States	$	197,205	$	139,089	$	530,240	$	410,212
North America (excluding U.S.)		40,910		24,708		96,713		77,067
Asia		215,401		135,838		557,629		434,232
Europe		61,456		44,838		157,972		129,751
Other		1,302		1,620		12,128		7,762
Total	$	516,274	$	346,093	$	1,354,682	$	1,059,024

During the three months ended September 30, 2022, Applied Materials, Inc. and Lam Research Corporation accounted for 19% and 15%, respectively, of our total revenue compared to 22% and 11%, respectively, of our total revenue during the same period in the prior year. During the nine months ended September 30, 2022, Applied Materials, Inc. and Lam Research Corporation accounted for 20% and 14%, respectively, of our total revenue compared to 21% and 10%, respectively, of our total revenue during the same period in the prior year.