Quarterly report pursuant to Section 13 or 15(d)

SEGMENT REPORTING AND GEOGRAPHIC INFORMATION

v3.22.4
SEGMENT REPORTING AND GEOGRAPHIC INFORMATION
 6 Months Ended
Dec. 31, 2022
Segment Reporting [Abstract]  
SEGMENT REPORTING AND GEOGRAPHIC INFORMATION SEGMENT REPORTING AND GEOGRAPHIC INFORMATION
Accounting Standards Codification 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, 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 (“MEMS”), radio frequency (“RF”) 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 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 December 31, Six Months Ended December 31,
(In thousands) 2022 2021 2022 2021
Semiconductor Process Control:
Revenues $ 2,657,395  $ 2,052,202  $ 5,055,154  $ 3,831,285 
Segment gross profit 1,678,037  1,342,937  3,255,019  2,504,866 
Specialty Semiconductor Process:
Revenues 158,085  112,738  285,952  214,767 
Segment gross profit 84,040  60,274  151,080  114,995 
PCB, Display and Component Inspection:
Revenues 169,959  187,977  370,704  390,785 
Segment gross profit 53,864  82,322  139,538  176,798 
Totals:
Revenues for reportable segments $ 2,985,439  $ 2,352,917  $ 5,711,810  $ 4,436,837 
Segment gross profit $ 1,815,941  $ 1,485,533  $ 3,545,637  $ 2,796,659 

The following table reconciles total revenues for reportable segments to total revenues for the indicated periods:
  Three Months Ended December 31, Six Months Ended December 31,
(In thousands) 2022 2021 2022 2021
Total revenues for reportable segments $ 2,985,439  $ 2,352,917  $ 5,711,810  $ 4,436,837 
Corporate allocations and effects of changes in foreign currency exchange rates (1,552) (287) (3,499) (369)
Total revenues $ 2,983,887  $ 2,352,630  $ 5,708,311  $ 4,436,468 
The following table reconciles total segment gross profit to total income before income taxes for the indicated periods:
  Three Months Ended December 31, Six Months Ended December 31,
(In thousands) 2022 2021 2022 2021
Total segment gross profit $ 1,815,941  $ 1,485,533  $ 3,545,637  $ 2,796,659 
Acquisition-related charges, corporate allocations, and effects of changes in foreign currency exchange rates(1)
40,840  41,065  87,338  81,977 
R&D 332,826  265,031  651,341  523,184 
SG&A 243,096  213,479  497,076  406,740 
Interest expense 74,280  37,852  148,675  76,164 
Loss on extinguishment of debt —  —  13,286  — 
Other expense (income), net (18,074) 1,201  (65,080) 15,341 
Income before income taxes $ 1,142,973  $ 926,905  $ 2,213,001  $ 1,693,253 
__________________
(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 December 31, Six Months Ended December 31,
2022 2021 2022 2021
Revenues:
Taiwan $ 768,999  26  % $ 776,442  33  % $ 1,517,333  27  % $ 1,403,526  31  %
China 681,701  23  % 544,537  23  % 1,521,362  27  % 1,229,693  28  %
Korea 590,936  20  % 323,095  14  % 998,398  17  % 562,278  13  %
North America 366,641  12  % 271,594  12  % 600,395  10  % 449,334  10  %
Japan 269,746  9  % 196,282  8  % 487,455  9  % 371,449  8  %
Europe and Israel 169,614  5  % 175,195  7  % 333,687  6  % 262,635  6  %
Rest of Asia 136,250  5  % 65,485  3  % 249,681  4  % 157,553  4  %
Total $ 2,983,887  100  % $ 2,352,630  100  % $ 5,708,311  100  % $ 4,436,468  100  %
The following is a summary of revenues by major product categories for the indicated periods:
(Dollar amounts in thousands) Three Months Ended December 31, Six Months Ended December 31,
2022 2021 2022 2021
Revenues:
Wafer Inspection $ 1,256,540  42  % $ 1,104,032  48  % $ 2,359,082  41  % $ 1,991,544  45  %
Patterning 861,262  29  % 508,785  22  % 1,594,632  28  % 948,376  21  %
Specialty Semiconductor Process 145,542  5  % 104,932  4  % 259,986  5  % 198,052  4  %
PCB, Display and Component Inspection 108,644  4  % 121,750  5  % 243,087  4  % 259,637  6  %
Services 520,479  17  % 456,861  19  % 1,049,294  18  % 910,811  21  %
Other 91,420  3  % 56,270  2  % 202,230  4  % 128,048  3  %
Total $ 2,983,887  100  % $ 2,352,630  100  % $ 5,708,311  100  % $ 4,436,468  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 December 31, 2022, two customers accounted for approximately 20% and 11% of total revenues, respectively. In the three months ended December 31, 2021, two customers accounted for approximately 26% and 10% of total revenues, respectively. In the six months ended December 31, 2022, two customers accounted for approximately 21% and 14% of total revenues, respectively. In the six months ended December 31, 2021, one customer accounted for approximately 25% of total revenues. Three customers and one customer on an individual basis accounted for greater than 10% of net accounts receivable at December 31, 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) December 31, 2022 June 30, 2022
Land, property and equipment, net:
United States $ 629,076  $ 547,454 
Singapore 154,655  146,057 
Israel 88,404  72,791 
Europe 55,621  55,370 
Rest of Asia 37,057  28,257 
Total $ 964,813  $ 849,929