Business Segments, Geographic Information, and Concentrations of Risk

3 Months Ended

Sep. 29, 2023

Business Segments, Geographic Information, and Concentrations of Risk

The following table summarizes the operating performance of the Company’s reportable segments:


	Three Months Ended
	September 29, 2023			September 30, 2022
	$ in millions
Net revenue:
Flash	$	1,556		$	1,722
HDD	1,194			2,014
Total net revenue	$	2,750		$	3,736
Gross profit:
Flash	$	(161)		$	422
HDD	273			574
Total gross profit for segments	112			996
Unallocated corporate items:
Stock-based compensation expense	(13)			(14)
Amortization of acquired intangible assets	—			(1)




Total unallocated corporate items	(13)			(15)
Consolidated gross profit	$	99		$	981
Gross margin:
Flash	(10.3)		%	24.5		%
HDD	22.9		%	28.5		%
Consolidated gross margin	3.6		%	26.3		%

Disaggregated Revenue

The Company’s broad portfolio of technology and products address multiple end markets. Cloud is comprised primarily of products for public or private cloud environments and end customers, which the Company believes it is uniquely positioned to address as the only provider of both Flash and HDD. Through the Client end market, the Company provides its original equipment manufacturer (“OEM”) and channel customers a broad array of high-performance flash and hard drive solutions across personal computer, mobile, gaming, automotive, virtual reality headsets, at-home entertainment, and industrial spaces. The Consumer end market is highlighted by the Company’s broad range of retail and other end-user products, which capitalize on the strength of the Company’s product brand recognition and vast points of presence around the world.

The Company’s disaggregated revenue information is as follows:



	Three Months Ended
		September 29, 2023		September 30, 2022
		(in millions)





Revenue by End Market
Cloud		$	872	$	1,829
Client		1,147		1,229
Consumer		731		678
Total Revenue		$	2,750	$	3,736

Revenue by Geography
Asia		$	1,551	$	1,686
Americas		662		1,423
Europe, Middle East and Africa		537		627
Total Revenue		$	2,750	$	3,736

The Company’s top 10 customers accounted for 44% and 52% of its net revenue for the three months ended September 29, 2023 and September 30, 2022, respectively. For the three months ended September 29, 2023 and September 30, 2022, no single customer accounted for 10% or more of the Company’s net revenue.

Goodwill

Goodwill is not amortized. Instead, it is tested for impairment annually as of the beginning of the Company’s fourth quarter, or more frequently if events or changes in circumstances indicate that goodwill may be impaired. Management performed a goodwill impairment assessment for each segment and concluded there were no impairment indicators as of either the beginning or end of the three months ended September 29, 2023. The following table provides a summary of goodwill activity for the period:


	Flash		HDD		Total
	(in millions)
Balance at June 30, 2023	$	5,716	$	4,321	$	10,037

Foreign currency translation adjustment	(1)		(1)		(2)

Balance at September 29, 2023	$	5,715	$	4,320	$	10,035