Quarterly report pursuant to Section 13 or 15(d)

SEGMENT REPORTING AND GEOGRAPHIC INFORMATION

v3.23.4
SEGMENT REPORTING AND GEOGRAPHIC INFORMATION
 6 Months Ended
Dec. 31, 2023
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.
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 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, 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 comprised 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) 2023 2022 2023 2022
Semiconductor Process Control:
Revenues $ 2,194,079  $ 2,657,395  $ 4,329,557  $ 5,055,154 
Segment gross profit 1,418,339  1,678,037  2,804,868  3,255,019 
Specialty Semiconductor Process:
Revenues 150,065  158,085  276,784  285,952 
Segment gross profit 81,278  84,040  150,579  151,080 
PCB, Display and Component Inspection:
Revenues 143,032  169,959  279,075  370,704 
Segment gross profit 57,165  53,864  96,985  139,538 
Totals:
Revenues for reportable segments $ 2,487,176  $ 2,985,439  $ 4,885,416  $ 5,711,810 
Segment gross profit $ 1,556,782  $ 1,815,941  $ 3,052,432  $ 3,545,637 

The following table reconciles total reportable segment revenues to total revenues for the indicated periods:
  Three Months Ended December 31, Six Months Ended December 31,
(In thousands) 2023 2022 2023 2022
Total revenues for reportable segments $ 2,487,176  $ 2,985,439  $ 4,885,416  $ 5,711,810 
Corporate allocations and effects of changes in foreign currency exchange rates (450) (1,552) (1,734) (3,499)
Total revenues $ 2,486,726  $ 2,983,887  $ 4,883,682  $ 5,708,311 

The following table reconciles total segment gross profit to income before income taxes for the indicated periods:
  Three Months Ended December 31, Six Months Ended December 31,
(In thousands) 2023 2022 2023 2022
Total segment gross profit $ 1,556,782  $ 1,815,941  $ 3,052,432  $ 3,545,637 
Acquisition-related charges, corporate allocations and effects of changes in foreign currency exchange rates(1)
46,802  40,840  92,387  87,338 
R&D 320,418  332,826  631,632  651,341 
SG&A 237,244  243,096  476,889  497,076 
Impairment of goodwill and purchased intangible assets 219,000  —  219,000  — 
Interest expense 74,202  74,280  148,436  148,675 
Loss on extinguishment of debt —  —  —  13,286 
Other expense (income), net (32,154) (18,074) (58,893) (65,080)
Income before income taxes $ 691,270  $ 1,142,973  $ 1,542,981  $ 2,213,001 
__________________
(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 December 31, Six Months Ended December 31,
2023 2022 2023 2022
Revenues:
China $ 1,027,780  41  % $ 681,701  23  % $ 2,053,724  42  % $ 1,521,362  27  %
Taiwan 375,259  15  % 768,999  26  % 780,602  16  % 1,517,333  27  %
Korea 310,672  12  % 590,936  20  % 530,493  11  % 998,398  17  %
Japan 297,757  12  % 269,746  9  % 525,134  11  % 487,455  9  %
North America 263,613  11  % 366,641  12  % 514,326  10  % 600,395  10  %
Europe and Israel 123,362  5  % 169,614  5  % 291,798  6  % 333,687  6  %
Rest of Asia 88,283  4  % 136,250  5  % 187,605  4  % 249,681  4  %
Total $ 2,486,726  100  % $ 2,983,887  100  % $ 4,883,682  100  % $ 5,708,311  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,
2023 2022 2023 2022
Revenues:
Wafer Inspection $ 1,166,484  47  % $ 1,256,540  42  % $ 2,176,682  45  % $ 2,359,082  41  %
Patterning 430,384  17  % 861,262  29  % 972,872  20  % 1,594,632  28  %
Specialty Semiconductor Process 136,278  6  % 145,542  5  % 248,381  5  % 259,986  5  %
PCB, Display and Component Inspection 77,298  3  % 108,644  4  % 148,462  3  % 243,087  4  %
Services 564,917  23  % 520,479  17  % 1,125,209  23  % 1,049,294  18  %
Other 111,365  4  % 91,420  3  % 212,076  4  % 202,230  4  %
Total $ 2,486,726  100  % $ 2,983,887  100  % $ 4,883,682  100  % $ 5,708,311  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, 2023, no customers accounted for greater than 10% of total revenues. In the three months ended December 31, 2022, two customers accounted for approximately 21% and 17% of total revenues, respectively. In the six months ended December 31, 2023, one customer accounted for approximately 11% of total revenues. In the six months ended December 31, 2022, two customers accounted for approximately 21% and 14% of total revenues, respectively. One customer and two customers on an individual basis accounted for greater than 10% of accounts receivable, net, at December 31, 2023 and at June 30, 2023, 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, 2023 June 30, 2023
Land, property and equipment, net:
United States $ 696,386  $ 672,561 
Singapore 153,360  150,989 
Europe 110,041  74,015 
Israel 90,804  92,815 
Rest of Asia 38,233  41,461 
Total $ 1,088,824  $ 1,031,841