Quarterly report pursuant to Section 13 or 15(d)

SEGMENT REPORTING AND GEOGRAPHIC INFORMATION

v3.22.1
SEGMENT REPORTING AND GEOGRAPHIC INFORMATION
 9 Months Ended
Mar. 31, 2022
Segment Reporting [Abstract]  
SEGMENT REPORTING AND GEOGRAPHIC INFORMATION SEGMENT REPORTING AND GEOGRAPHIC INFORMATION
ASC 280, Segment Reporting, establishes standards for reporting information about operating segments. Operating segments are defined as components of an enterprise about which separate financial information is evaluated regularly by the chief operating decision maker (“CODM”) in deciding how to allocate resources and in assessing performance. Our CODM is our Chief Executive Officer.
We have four reportable segments: Semiconductor Process Control (“SPC”); Specialty Semiconductor Process; Printed Circuit Board (“PCB”), Display and Component Inspection; and Other. The reportable segments are determined based on several factors including, but not limited to, customer base, homogeneity of products, technology, delivery channels and similar economic characteristics.
Semiconductor Process Control
The SPC segment offers a comprehensive portfolio of inspection, metrology and data analytics products, and related service, which helps integrated circuit (“IC”) manufacturers achieve target yield throughout the entire semiconductor fabrication process – from R&D to final volume production. Our differentiated products and services are designed to provide comprehensive solutions that help our customers accelerate development and production ramp cycles, achieve higher and more stable semiconductor die yields and improve their overall profitability. This reportable segment is composed of two operating segments, Wafer Inspection and Patterning and GSS.
Specialty Semiconductor Process
The Specialty Semiconductor Manufacturing segment develops and sells advanced vacuum deposition and etching process tools, which are used by a broad range of specialty semiconductor customers, including manufacturers of microelectromechanical systems, radio frequency communication chips and power semiconductors for automotive and industrial applications. This reportable segment is composed of one operating segment.
PCB, Display and Component Inspection
The PCB, Display and Component Inspection segment enables electronic device manufacturers to inspect, test and measure PCBs, flat panel displays and ICs to verify their quality, pattern the desired electronic circuitry on the relevant substrate and perform three-dimensional shaping of metalized circuits on multiple surfaces. This segment also engages in the development and marketing of character recognition solutions to banks, financial and other payment processing institutions and healthcare providers. This reportable segment is composed of two operating segments, PCB and Display and Component Inspection.
Other
The Other segment is composed of one operating segment. During the fourth quarter of fiscal 2020, we entered into an Asset Purchase Agreement to sell certain core assets of our non-strategic solar energy business, which accounted for the majority of our Other reportable segment. The sale was completed in the first quarter of fiscal 2021.
The CODM assesses the performance of each operating segment and allocates resources to those segments based on total revenues and segment gross profit and does not evaluate the segments using discrete asset information. Segment gross profit excludes corporate allocations and effects of foreign currency exchange rates, amortization of intangible assets, amortization of inventory fair value adjustments, and transaction costs associated with our acquisitions related to costs of revenues.
The following is a summary of results for each of our four reportable segments for the indicated periods:
  Three Months Ended March 31, Nine Months Ended March 31,
(In thousands) 2022 2021 2022 2021
SPC:
Revenues $ 1,979,295  $ 1,506,140  $ 5,810,580  $ 4,154,278 
Segment gross profit 1,284,450  982,511  3,789,316  2,681,411 
Specialty Semiconductor Process:
Revenues 117,253  91,724  332,020  271,264 
Segment gross profit 61,521  51,720  176,516  152,819 
PCB, Display and Component Inspection:
Revenues 192,533  205,202  583,318  565,646 
Segment gross profit 93,298  100,311  270,096  275,064 
Other:
Revenues —  149  —  739 
Segment gross profit —  40  —  (68)
Totals:
Revenues for reportable segments $ 2,289,081  $ 1,803,215  $ 6,725,918  $ 4,991,927 
Segment gross profit $ 1,439,269  $ 1,134,582  $ 4,235,928  $ 3,109,226 
The following table reconciles total revenues for reportable segments to total revenues for the indicated periods:
  Three Months Ended March 31, Nine Months Ended March 31,
(In thousands) 2022 2021 2022 2021
Total revenues for reportable segments $ 2,289,081  $ 1,803,215  $ 6,725,918  $ 4,991,927 
Corporate allocations and effects of changes in foreign currency exchange rates (405) 558  (774) 1,336 
Total revenues $ 2,288,676  $ 1,803,773  $ 6,725,144  $ 4,993,263 

The following table reconciles total segment gross profit to total income before income taxes for the indicated periods:
  Three Months Ended March 31, Nine Months Ended March 31,
(In thousands) 2022 2021 2022 2021
Total segment gross profit $ 1,439,269  $ 1,134,582  $ 4,235,928  $ 3,109,226 
Acquisition-related charges, corporate allocations, and effects of changes in foreign currency exchange rates(1)
42,684  40,438  124,661  115,887 
R&D 285,189  238,957  808,373  687,059 
SG&A 216,489  183,040  623,229  537,580 
Interest expense 39,978  39,092  116,142  117,358 
Other expense (income), net 8,644  (7,348) 23,985  (269)
Income before income taxes $ 846,285  $ 640,403  $ 2,539,538  $ 1,651,611 
__________________
(1)Acquisition-related charges primarily include amortization of intangible assets and amortization of inventory fair value adjustments presented as part of costs of revenues.
Our significant operations outside the United States include manufacturing facilities in China, Germany, Israel and Singapore and sales, marketing and service offices in Japan, the rest of the Asia Pacific region and Europe. For geographical revenue reporting, revenues are attributed to the geographic location in which the customer is located. Long-lived assets consist of land, property and equipment, net, and are attributed to the geographic region in which they are located.
The following is a summary of revenues by geographic region, based on ship-to location, for the indicated periods:
(Dollar amounts in thousands) Three Months Ended March 31, Nine Months Ended March 31,
2022 2021 2022 2021
Revenues:
China $ 709,502  31  % $ 353,393  20  % $ 1,939,195  29  % $ 1,221,639  24  %
Taiwan 515,097  22  % 401,797  22  % 1,918,623  29  % 1,151,683  23  %
Korea 474,019  21  % 557,514  31  % 1,036,297  16  % 1,094,979  22  %
North America 219,267  10  % 174,728  10  % 668,601  10  % 559,712  11  %
Europe and Israel 164,246  7  % 95,080  5  % 426,881  6  % 278,398  6  %
Japan 132,829  6  % 161,190  9  % 504,278  7  % 482,330  10  %
Rest of Asia 73,716  3  % 60,071  3  % 231,269  3  % 204,522  4  %
Total $ 2,288,676  100  % $ 1,803,773  100  % $ 6,725,144  100  % $ 4,993,263  100  %
The following is a summary of revenues by major product categories for the indicated periods:
(Dollar amounts in thousands) Three Months Ended March 31, Nine Months Ended March 31,
2022 2021 2022 2021
Revenues:
Wafer Inspection $ 919,072  40  % $ 714,990  40  % $ 2,910,616  43  % $ 1,921,571  38  %
Patterning 610,821  27  % 399,533  22  % 1,559,197  23  % 1,077,977  22  %
Specialty Semiconductor Process 105,832  5  % 76,852  4  % 303,884  5  % 222,857  4  %
PCB, Display and Component Inspection 123,384  5  % 141,539  8  % 383,021  6  % 377,990  8  %
Services 488,017  21  % 428,453  24  % 1,398,828  21  % 1,234,425  25  %
Other 41,550  2  % 42,406  2  % 169,598  2  % 158,443  3  %
Total $ 2,288,676  100  % $ 1,803,773  100  % $ 6,725,144  100  % $ 4,993,263  100  %
Wafer Inspection and Patterning products are offered in the SPC segment. Services are offered in multiple segments. Other includes primarily refurbished systems, remanufactured legacy systems, and enhancements and upgrades for previous-generation products that are part of the SPC segment.
In the three months ended March 31, 2022, two customers accounted for approximately 17% and 16% of total revenues. In the three months ended March 31, 2021, two customers accounted for approximately 24% and 16% of total revenues. In the nine months ended March 31, 2022, two customers accounted for approximately 22% and 12% of total revenues. In the nine months ended March 31, 2021, two customers accounted for approximately 17% and 15% of total revenues. Two customers and one customer on an individual basis accounted for greater than 10% of net accounts receivable at March 31, 2022 and at June 30, 2021, respectively.
Land, property and equipment, net by geographic region as of the dates indicated below were as follows: 
As of As of
(In thousands) March 31, 2022 June 30, 2021
Land, property and equipment, net:
United States $ 530,852  $ 447,359 
Singapore 128,640  76,882 
Israel 65,238  57,403 
Europe 55,000  56,895 
Rest of Asia 29,144  24,488 
Total $ 808,874  $ 663,027