Quarterly report pursuant to Section 13 or 15(d)

SEGMENT REPORTING AND GEOGRAPHIC INFORMATION

v3.22.2.2
SEGMENT REPORTING AND GEOGRAPHIC INFORMATION
 3 Months Ended
Sep. 30, 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 three reportable segments: Semiconductor Process Control; Specialty Semiconductor Process; and Printed Circuit Board (“PCB”), Display and Component Inspection. 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. Prior to July 1, 2022, we had a fourth segment, Other, but core assets were sold and there are no longer operations.
Semiconductor Process Control
The Semiconductor Process Control segment offers a comprehensive portfolio of inspection, metrology and data analytics products, and related services, which helps 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.
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 changes in 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 three reportable segments for the indicated periods:
  Three Months Ended September 30,
(In thousands) 2022 2021
Semiconductor Process Control:
Revenues $ 2,397,759  $ 1,779,083 
Segment gross profit 1,576,982  1,161,929 
Specialty Semiconductor Process:
Revenues 127,867  102,029 
Segment gross profit 67,040  54,721 
PCB, Display and Component Inspection:
Revenues 200,745  202,808 
Segment gross profit 85,674  94,476 
Totals:
Revenues for reportable segments $ 2,726,371  $ 2,083,920 
Segment gross profit $ 1,729,696  $ 1,311,126 

The following table reconciles total revenues for reportable segments to total revenues for the indicated periods:
  Three Months Ended September 30,
(In thousands) 2022 2021
Total revenues for reportable segments $ 2,726,371  $ 2,083,920 
Corporate allocations and effects of changes in foreign currency exchange rates (1,947) (82)
Total revenues $ 2,724,424  $ 2,083,838 

The following table reconciles total segment gross profit to total income before income taxes for the indicated periods:
  Three Months Ended September 30,
(In thousands) 2022 2021
Total segment gross profit $ 1,729,696  $ 1,311,126 
Acquisition-related charges, corporate allocations, and effects of changes in foreign currency exchange rates(1)
46,498  40,912 
R&D 318,515  258,153 
SG&A 253,980  193,261 
Interest expense 74,395  38,312 
Loss on extinguishment of debt 13,286  — 
Other expense (income), net (47,006) 14,140 
Income before income taxes $ 1,070,028  $ 766,348 
__________________
(1)Acquisition-related charges primarily include amortization of intangible assets, amortization of inventory fair value adjustments and other acquisition-related costs classified or 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 September 30,
2022 2021
Revenues:
China $ 839,661  31  % $ 685,156  33  %
Taiwan 748,334  27  % 627,084  30  %
Korea 407,462  15  % 239,183  12  %
North America 233,754  9  % 177,740  9  %
Japan 217,709  8  % 175,167  8  %
Europe and Israel 164,073  6  % 87,440  4  %
Rest of Asia 113,431  4  % 92,068  4  %
Total $ 2,724,424  100  % $ 2,083,838  100  %
The following is a summary of revenues by major product categories for the indicated periods:
(Dollar amounts in thousands) Three Months Ended September 30,
2022 2021
Revenues:
Wafer Inspection $ 1,102,542  41  % $ 887,512  43  %
Patterning 733,370  27  % 439,591  21  %
Specialty Semiconductor Process 114,444  4  % 93,120  4  %
PCB, Display and Component Inspection 134,443  5  % 137,887  7  %
Services 528,815  19  % 453,950  22  %
Other 110,810  4  % 71,778  3  %
Total $ 2,724,424  100  % $ 2,083,838  100  %
Wafer Inspection and Patterning products are offered in the Semiconductor Process Control 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 Semiconductor Process Control segment.
In the three months ended September 30, 2022, two customers accounted for approximately 20% and 11% of total revenues, respectively. In the three months ended September 30, 2021, one customer accounted for approximately 24% of total revenues. Two customers and one customer on an individual basis accounted for greater than 10% of net accounts receivable at September 30, 2022 and at June 30, 2022, respectively.
Land, property and equipment, net by geographic region as of the dates indicated below were as follows: 
As of As of
(In thousands) September 30, 2022 June 30, 2022
Land, property and equipment, net:
United States $ 596,069  $ 547,454 
Singapore 148,789  146,057 
Israel 73,965  72,791 
Europe 62,404  55,370 
Rest of Asia 31,775  28,257 
Total $ 913,002  $ 849,929