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SEGMENT REPORTING AND GEOGRAPHIC INFORMATION | 6 Months Ended
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Dec. 31, 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. Our operating segments are aggregated into reportable segments based on several factors including, but not limited to, customer base, homogeneity of products, technology, delivery channels and similar economic characteristics. We have three reportable segments: Semiconductor Process Control; Specialty Semiconductor Process; and PCB and Component Inspection. 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. 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. 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. In March 2024, we made the decision to exit the Display business by announcing we would end manufacturing of most Display products but 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 December 31, |  | Six Months Ended December 31,
(In thousands) | 2024 |  | 2023 |  | 2024 |  | 2023
Semiconductor Process Control: |  |  |  |  |  |  |
Revenues | $ | 2,755,743 |  |  | $ | 2,194,079 |  |  | $ | 5,330,894 |  |  | $ | 4,329,557 |
Segment gross profit | 1,763,077 |  |  | 1,418,339 |  |  | 3,379,859 |  |  | 2,804,868 |
Specialty Semiconductor Process: |  |  |  |  |  |  |
Revenues | 160,407 |  |  | 150,065 |  |  | 288,741 |  |  | 276,784 |
Segment gross profit | 81,122 |  |  | 81,278 |  |  | 145,616 |  |  | 150,579 |
PCB and Component Inspection: |  |  |  |  |  |  |
Revenues | 161,080 |  |  | 143,032 |  |  | 299,063 |  |  | 279,075 |
Segment gross profit | 55,526 |  |  | 57,165 |  |  | 113,063 |  |  | 96,985 |
Totals: |  |  |  |  |  |  |
Revenues for reportable segments | $ | 3,077,230 |  |  | $ | 2,487,176 |  |  | $ | 5,918,698 |  |  | $ | 4,885,416 |
Segment gross profit | $ | 1,899,725 |  |  | $ | 1,556,782 |  |  | $ | 3,638,538 |  |  | $ | 3,052,432 |
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) | 2024 |  | 2023 |  | 2024 |  | 2023
Total revenues for reportable segments | $ | 3,077,230 |  |  | $ | 2,487,176 |  |  | $ | 5,918,698 |  |  | $ | 4,885,416 |
Corporate allocations and effects of changes in foreign currency exchange rates | (379) |  |  | (450) |  |  | (306) |  |  | (1,734) |
Total revenues | $ | 3,076,851 |  |  | $ | 2,486,726 |  |  | $ | 5,918,392 |  |  | $ | 4,883,682 |
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) | 2024 |  | 2023 |  | 2024 |  | 2023
Total segment gross profit | $ | 1,899,725 |  |  | $ | 1,556,782 |  |  | $ | 3,638,538 |  |  | $ | 3,052,432 |
Acquisition-related charges, corporate allocations and effects of changes in foreign currency exchange rates(1) | 44,335 |  |  | 46,802 |  |  | 89,038 |  |  | 92,387 |
R&D | 346,157 |  |  | 320,418 |  |  | 669,302 |  |  | 631,632 |
SG&A | 267,081 |  |  | 237,244 |  |  | 518,123 |  |  | 476,889 |
Impairment of goodwill and purchased intangible assets | 239,100 |  |  | 219,000 |  |  | 239,100 |  |  | 219,000 |
Interest expense | 74,981 |  |  | 74,202 |  |  | 157,152 |  |  | 148,436 |
Other expense (income), net | (44,458) |  |  | (32,154) |  |  | (85,393) |  |  | (58,893) |
Income before income taxes | $ | 972,529 |  |  | $ | 691,270 |  |  | $ | 2,051,216 |  |  | $ | 1,542,981 |
__________________ (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,
2024 |  | 2023 |  | 2024 |  | 2023
Revenues: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
China | $ | 1,092,525 |  |  | 36 | % |  | $ | 1,027,780 |  |  | 41 | % |  | $ | 2,290,829 |  |  | 39 | % |  | $ | 2,053,724 |  |  | 42 | %
Taiwan | 881,211 |  |  | 29 | % |  | 375,259 |  |  | 15 | % |  | 1,343,202 |  |  | 23 | % |  | 780,602 |  |  | 16 | %
Korea | 357,434 |  |  | 12 | % |  | 310,672 |  |  | 12 | % |  | 596,108 |  |  | 10 | % |  | 530,493 |  |  | 11 | %
North America | 286,191 |  |  | 9 | % |  | 263,613 |  |  | 11 | % |  | 787,134 |  |  | 13 | % |  | 514,326 |  |  | 10 | %
Japan | 228,614 |  |  | 7 | % |  | 297,757 |  |  | 12 | % |  | 417,183 |  |  | 7 | % |  | 525,134 |  |  | 11 | %
Europe and Israel | 134,266 |  |  | 4 | % |  | 123,362 |  |  | 5 | % |  | 279,086 |  |  | 5 | % |  | 291,798 |  |  | 6 | %
Rest of Asia | 96,610 |  |  | 3 | % |  | 88,283 |  |  | 4 | % |  | 204,850 |  |  | 3 | % |  | 187,605 |  |  | 4 | %
Total | $ | 3,076,851 |  |  | 100 | % |  | $ | 2,486,726 |  |  | 100 | % |  | $ | 5,918,392 |  |  | 100 | % |  | $ | 4,883,682 |  |  | 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,
2024 |  | 2023 |  | 2024 |  | 2023
Revenues: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Wafer Inspection | $ | 1,562,610 |  |  | 51 | % |  | $ | 1,166,484 |  |  | 47 | % |  | $ | 2,931,553 |  |  | 50 | % |  | $ | 2,176,682 |  |  | 45 | %
Patterning | 530,680 |  |  | 17 | % |  | 430,384 |  |  | 17 | % |  | 1,107,089 |  |  | 19 | % |  | 972,872 |  |  | 20 | %
Specialty Semiconductor Process | 142,987 |  |  | 5 | % |  | 136,278 |  |  | 6 | % |  | 255,789 |  |  | 4 | % |  | 248,381 |  |  | 5 | %
PCB and Component Inspection | 93,327 |  |  | 3 | % |  | 77,298 |  |  | 3 | % |  | 166,235 |  |  | 3 | % |  | 148,462 |  |  | 3 | %
Services | 667,389 |  |  | 22 | % |  | 564,917 |  |  | 23 | % |  | 1,311,541 |  |  | 22 | % |  | 1,125,209 |  |  | 23 | %
Other | 79,858 |  |  | 2 | % |  | 111,365 |  |  | 4 | % |  | 146,185 |  |  | 2 | % |  | 212,076 |  |  | 4 | %
Total | $ | 3,076,851 |  |  | 100 | % |  | $ | 2,486,726 |  |  | 100 | % |  | $ | 5,918,392 |  |  | 100 | % |  | $ | 4,883,682 |  |  | 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, 2024, one customer accounted for approximately 23% of total revenues. In the three months ended December 31, 2023, no customers accounted for greater than 10% of revenues. In the six months ended December 31, 2024, one customer accounted for approximately 18% of total revenues. In the six months ended December 31, 2023, one customer accounted for approximately 11% of total revenues. One customer on an individual basis accounted for greater than 10% of accounts receivable, net, at December 31, 2024 and at June 30, 2024. 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, 2024 |  | June 30, 2024
Land, property and equipment, net: |  |  |
United States | $ | 700,963 |  |  | $ | 689,937 |
Europe | 218,372 |  |  | 155,812 |
Singapore | 147,895 |  |  | 148,557 |
Israel | 75,685 |  |  | 84,279 |
Rest of Asia | 31,013 |  |  | 31,383 |
Total | $ | 1,173,928 |  |  | $ | 1,109,968 |

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- Definition The entire disclosure for reporting segments including data and tables. 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