Annual report pursuant to Section 13 and 15(d)

SEGMENT REPORTING AND GEOGRAPHIC INFORMATION

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SEGMENT REPORTING AND GEOGRAPHIC INFORMATION
 12 Months Ended
Jun. 30, 2024
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 PCB 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.
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 comprised of two operating segments, Wafer Inspection and Patterning and GSS.
Specialty Semiconductor Process
The Specialty Semiconductor Process 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 MEMS, radio frequency communication chips, and power semiconductors for automotive and industrial applications. This reportable segment is comprised of one operating segment.
PCB and Component Inspection
The PCB and Component Inspection segment enables electronic device manufacturers to inspect, test and measure PCBs, FPDs 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 reportable segment is comprised of two operating segments, PCB and Component Inspection. In March 2024, we made the decision to exit the Display business by announcing
the end of manufacturing of most Display products by December 31, 2024, but we will continue to provide services to the installed base of Display products for existing customers.
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.
  Year Ended June 30,
(In thousands) 2024 2023 2022
Semiconductor Process Control:
Revenues $ 8,733,556  $ 9,324,190  $ 7,924,822 
Segment gross profit $ 5,629,302  $ 5,957,573  $ 5,167,679 
Specialty Semiconductor Process:
Revenues $ 528,701  $ 543,398  $ 456,579 
Segment gross profit $ 282,910  $ 281,942  $ 242,520 
PCB and Component Inspection:
Revenues $ 552,491  $ 631,604  $ 832,176 
Segment gross profit $ 158,960  $ 221,251  $ 378,964 
Totals:
Revenues for reportable segments $ 9,814,748  $ 10,499,192  $ 9,213,577 
Segment gross profit $ 6,071,172  $ 6,460,766  $ 5,789,163 
The following table reconciles total reportable segment revenue to total revenue for the indicated periods:
  Year Ended June 30,
(In thousands) 2024 2023 2022
Total revenues for reportable segments $ 9,814,748  $ 10,499,192  $ 9,213,577 
Corporate allocations and effects of changes in foreign currency exchange rates (2,501) (3,136) (1,694)
Total revenues $ 9,812,247  $ 10,496,056  $ 9,211,883 
The following table reconciles total segment gross profit to total income before income taxes for the indicated periods:
  Year Ended June 30,
(In thousands) 2024 2023 2022
Total segment gross profit $ 6,071,172  $ 6,460,766  $ 5,789,163 
Acquisition-related charges, corporate allocations and effects of changes in foreign currency exchange rates(1)
186,998  183,017  169,721 
R&D 1,278,981  1,296,727  1,105,254 
SG&A 969,509  986,326  860,007 
Impairment of goodwill and purchased intangible assets 289,474  —  — 
Interest expense 311,253  296,940  160,339 
Loss on extinguishment of debt —  13,286  — 
Other expense (income), net (155,075) (104,720) 4,605 
Income before income taxes $ 3,190,032  $ 3,789,190  $ 3,489,237 
__________________
(1)Acquisition-related charges primarily include amortization of intangible assets and other acquisition-related costs classified or presented as part of Costs of revenues.
Our significant operations outside the U.S. 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) Year Ended June 30,
2024 2023 2022
Revenues:
China $ 4,196,727  43  % $ 2,867,443  27  % $ 2,660,438  29  %
Taiwan 1,738,065  18  % 2,493,379  24  % 2,528,482  27  %
North America 1,070,791  11  % 1,254,956  12  % 928,043  10  %
Japan 963,203  10  % 888,016  9  % 724,773  8  %
Korea 906,924  9  % 1,895,710  18  % 1,430,495  16  %
Europe and Israel 540,263  6  % 682,103  6  % 636,664  7  %
Rest of Asia 396,274  3  % 414,449  4  % 302,988  3  %
Total $ 9,812,247  100  % $ 10,496,056  100  % $ 9,211,883  100  %
The following is a summary of revenues by major product categories for the indicated periods:
(Dollar amounts in thousands) Year ended June 30,
2024 2023 2022
Revenues:
Wafer Inspection $ 4,333,296  44  % $ 4,336,663  41  % $ 4,014,726  44  %
Patterning 2,054,442  21  % 2,791,130  26  % 2,050,025  22  %
Specialty Semiconductor Process 470,565  5  % 492,109  5  % 414,811  4  %
PCB and Component Inspection 291,161  3  % 378,030  4  % 562,464  6  %
Services 2,329,568  24  % 2,117,031  20  % 1,910,455  21  %
Other 333,215  3  % 381,093  4  % 259,402  3  %
Total $ 9,812,247  100  % $ 10,496,056  100  % $ 9,211,883  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 fiscal year ended June 30, 2024, one customer accounted for approximately 13% of total revenues. In the fiscal year ended June 30, 2023, two customers accounted for approximately 18% and 15% of total revenues. In the fiscal year ended June 30, 2022, two customers accounted for approximately 20% and 12% of total revenues.
Land, property and equipment, net by geographic region as of the dates indicated below were as follows:
  As of June 30,
(In thousands) 2024 2023
Land, property and equipment, net:
U.S. $ 689,937  $ 672,561 
Europe 155,812  74,015 
Singapore 148,557  150,989 
Israel 84,279  92,815 
Rest of Asia 31,383  41,461 
Total $ 1,109,968  $ 1,031,841