Quarterly report pursuant to Section 13 or 15(d)

GOODWILL AND PURCHASED INTANGIBLE ASSETS

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GOODWILL AND PURCHASED INTANGIBLE ASSETS
 3 Months Ended
Sep. 30, 2024
Goodwill and Intangible Assets Disclosure [Abstract]  
GOODWILL AND PURCHASED INTANGIBLE ASSETS GOODWILL AND PURCHASED INTANGIBLE ASSETS
Goodwill
Goodwill represents the excess of the purchase price over the fair value of the net tangible and identifiable intangible assets acquired in business combinations. We have three reportable segments, five operating segments and six reporting units.
The following table presents changes in goodwill carrying value by reportable segment during the three months ended September 30, 2024:
(In thousands) Semiconductor Process Control Specialty Semiconductor Process Printed Circuit Board (“PCB”) and Component Inspection Total
Balances as of June 30, 2024
Goodwill $ 1,030,588  $ 826,037  $ 651,324  $ 2,507,949 
Accumulated impairment losses (277,570) (144,179) (70,474) (492,223)
$ 753,018  $ 681,858  $ 580,850  $ 2,015,726 
Activity for the three months ended September 30, 2024
Foreign currency adjustments (5) —  —  (5)
Balances as of September 30, 2024
Goodwill 1,030,583  826,037  651,324  $ 2,507,944 
Accumulated impairment losses (277,570) (144,179) (70,474) (492,223)
$ 753,013  $ 681,858  $ 580,850  $ 2,015,721 
Goodwill is not subject to amortization but is tested for impairment annually during the third fiscal quarter, as well as whenever events or changes in circumstances indicate that the carrying value may not be recoverable.
As of September 30, 2024, there have been no significant events or circumstances affecting the valuation of goodwill subsequent to the assessments performed in the third quarter of the fiscal year ended June 30, 2024. As a result of those assessments, we recorded a $70.5 million impairment charge in the Display reporting unit in the three months ended March 31,
2024. For additional details, refer to Note 7 “Goodwill and Purchased Intangible Assets” to our Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended June 30, 2024.
Purchased Intangible Assets
The components of purchased intangible assets as of the dates indicated below were as follows:
(In thousands)   As of September 30, 2024 As of June 30, 2024
Category
Range of
Useful 
Lives
(in years)
 Gross
Carrying
Amount		 Accumulated
Amortization
and
Impairment		 Net
Amount		 Gross
Carrying
Amount		 Accumulated
Amortization
and
Impairment		 Net
Amount
Existing technology
4-8
 $ 1,552,074  $ 1,089,685  $ 462,389  $ 1,552,074  $ 1,045,585  $ 506,489 
Customer relationships
4-9
 358,567  257,125  101,442  358,567  248,106  110,461 
Trade name / Trademark
4-7
 119,083  100,691  18,392  119,083  97,106  21,977 
Order backlog and other
<1-7
 83,336  82,789  547  83,336  82,740  596 
Intangible assets subject to amortization
 2,113,060  1,530,290  582,770  2,113,060  1,473,537  639,523 
In-process research and development 46,074  16,833  29,241  46,074  16,833  29,241 
Total $ 2,159,134  $ 1,547,123  $ 612,011  $ 2,159,134  $ 1,490,370  $ 668,764 

Purchased intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be fully recoverable. Impairment indicators primarily include declines in our operating cash flows from the use of these assets. If impairment indicators are present, we are required to perform a recoverability test by comparing the sum of estimated undiscounted future cash flows attributable to those long-lived assets to their carrying value.
As of September 30, 2024, there were no impairment indicators for purchased intangible assets.
Amortization expense for purchased intangible assets for the periods indicated below was as follows:
Three Months Ended September 30,
(In thousands) 2024 2023
Amortization expense - Costs of revenues $ 44,099  $ 46,088 
Amortization expense - SG&A 12,654  17,216 
Total $ 56,753  $ 63,304 
Based on the purchased intangible assets gross carrying amount recorded as of September 30, 2024, the remaining estimated annual amortization expense is expected to be as follows:
Fiscal year ending June 30: Amortization (In thousands)
2025 (remaining nine months) $ 161,654 
2026 198,078 
2027 125,517 
2028 48,849 
2029 34,530 
2030 and thereafter 14,142 
Total $ 582,770