Quarterly report pursuant to Section 13 or 15(d)

SEGMENT REPORTING AND GEOGRAPHIC INFORMATION

v3.24.3
SEGMENT REPORTING AND GEOGRAPHIC INFORMATION
 3 Months Ended
Sep. 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 Global Service and Support (“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 microelectromechanical systems (“MEMS”), radio frequency (“RF”) 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, 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 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:
  Three Months Ended September 30,
(In thousands) 2024 2023
Semiconductor Process Control:
Revenues $ 2,575,151  $ 2,135,478 
Segment gross profit 1,616,782  1,386,529 
Specialty Semiconductor Process:
Revenues 128,334  126,719 
Segment gross profit 64,494  69,301 
PCB and Component Inspection:
Revenues 137,983  136,043 
Segment gross profit 57,537  39,820 
Totals:
Revenues for reportable segments $ 2,841,468  $ 2,398,240 
Segment gross profit $ 1,738,813  $ 1,495,650 

The following table reconciles total reportable segment revenues to total revenues for the indicated periods:
  Three Months Ended September 30,
(In thousands) 2024 2023
Total revenues for reportable segments $ 2,841,468  $ 2,398,240 
Corporate allocations and effects of changes in foreign currency exchange rates 73  (1,284)
Total revenues $ 2,841,541  $ 2,396,956 

The following table reconciles total segment gross profit to income before income taxes for the indicated periods:
  Three Months Ended September 30,
(In thousands) 2024 2023
Total segment gross profit $ 1,738,813  $ 1,495,650 
Acquisition-related charges, corporate allocations and effects of changes in foreign currency exchange rates(1)
44,703  45,585 
R&D 323,145  311,214 
SG&A 251,042  239,645 
Interest expense 82,171  74,234 
Other expense (income), net (40,935) (26,739)
Income before income taxes $ 1,078,687  $ 851,711 
__________________
(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 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,
2024 2023
Revenues:
China $ 1,198,305  42  % $ 1,025,944  43  %
North America 500,943  18  % 250,713  10  %
Taiwan 461,991  16  % 405,343  17  %
Korea 238,673  8  % 219,821  9  %
Japan 188,569  7  % 227,377  10  %
Europe and Israel 144,820  5  % 168,436  7  %
Rest of Asia 108,240  4  % 99,322  4  %
Total $ 2,841,541  100  % $ 2,396,956  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,
2024 2023
Revenues:
Wafer Inspection $ 1,368,943  48  % $ 1,010,198  42  %
Patterning 576,409  20  % 542,488  23  %
Specialty Semiconductor Process 112,802  4  % 112,103  5  %
PCB and Component Inspection 72,908  3  % 71,164  3  %
Services 644,152  23  % 560,292  23  %
Other 66,327  2  % 100,711  4  %
Total $ 2,841,541  100  % $ 2,396,956  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, 2024, two customers on an individual basis accounted for approximately 12% of total revenues each. In the three months ended September 30, 2023, one customer accounted for approximately 11% of total revenues. Three customers and one customer on an individual basis accounted for greater than 10% of accounts receivable, net, at September 30, 2024 and at June 30, 2024, 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, 2024 June 30, 2024
Land, property and equipment, net:
United States $ 690,454  $ 689,937 
Europe 168,185  155,812 
Singapore 146,259  148,557 
Israel 80,986  84,279 
Rest of Asia 32,428  31,383 
Total $ 1,118,312  $ 1,109,968