COHERENT, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 3. REVENUE RECOGNITION Disaggregation of Revenue Based on the information that our chief operating decision maker ("CODM") uses to manage the business, we disaggregate revenue by type and market application within each segment. No other level of disaggregation is required considering the type of products, customers, markets, contracts, duration of contracts, timing of transfer of control and sales channels. The following tables summarize revenue from contracts with customers (in thousands): Sales by revenue type and segment See Note 17, "Segment and Geographic Information" for revenue disaggregation by reportable segment and geographic region. We record accounts receivable when we have an unconditional right to the consideration. Contract liabilities are recorded when cash payments are received or due in advance of performance. Contract liabilities consist of customer deposits and deferred revenue, where we have unsatisfied or partly satisfied performance obligations. Contract liabilities classified as customer deposits are included in other current liabilities and contract liabilities classified as deferred revenue are included in other current liabilities or other long-term liabilities on our condensed consolidated balance sheets. Payment terms vary by customer. Contract Balances Fiscal 2019 2018 2017 OEM Laser Sources Industrial Lasers & Systems OEM Laser Sources Industrial Lasers & Systems OEM Laser Sources Industrial Lasers & Systems Net sales: Products (1) $ 532,863 $ 430,878 $ 890,591 $ 512,818 $ 813,343 $ 472,970 Other product and service revenues (2) 353,813 113,086 368,886 130,278 330,277 106,721 Total net sales $ 886,676 $ 543,964 $ 1,259,477 $ 643,096 $ 1,143,620 $ 579,691 (1) Net sales primarily recognized at a point in time. (2) Includes sales of spare parts, related accessories and other consumable parts as well as revenues from service agreements, of which $54.3 million for fiscal 2019 was recognized over time. Sales by market application and segment Fiscal 2019 2018 2017 OEM Laser Sources Industrial Lasers & Systems OEM Laser Sources Industrial Lasers & Systems OEM Laser Sources Industrial Lasers & Systems Net sales: Microelectronics $ 568,387 $ 63,789 $ 951,166 $ 85,188 $ 838,268 $ 55,975 Materials processing 38,017 366,861 46,467 474,437 57,055 454,854 OEM components and instrumentation 163,095 103,693 140,616 80,207 135,624 67,458 Scientific and government programs 117,177 9,621 121,228 3,264 112,673 1,404 Total net sales $ 886,676 $ 543,964 $ 1,259,477 $ 643,096 $ 1,143,620 $ 579,691 84 Table of Contents