Business Segments, Geographic Information, and Concentrations of Risk

6 Months Ended

Dec. 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						Six Months Ended
	December 29, 2023			December 30, 2022			December 29, 2023			December 30, 2022
	$ in millions
Net revenue:
Flash	$	1,665		$	1,657		$	3,221		$	3,379
HDD	1,367			1,450			2,561			3,464
Total net revenue	$	3,032		$	3,107		$	5,782		$	6,843
Gross profit:
Flash	$	131		$	240		$	(30)		$	662
HDD	339			300			612			874
Total gross profit for segments	470			540			582			1,536
Unallocated corporate items:
Stock-based compensation expense	(13)			(12)			(26)			(26)
Amortization of acquired intangible assets	(1)			—			(1)			(1)
Recovery from contamination incident	36			—			36			—



Total unallocated corporate items	22			(12)			9			(27)
Consolidated gross profit	$	492		$	528		$	591		$	1,509
Gross margin:
Flash	7.9		%	14.5		%	(0.9)		%	19.6		%
HDD	24.8		%	20.7		%	23.9		%	25.2		%

Consolidated gross margin	16.2		%	17.0		%	10.2		%	22.1		%

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. 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				Six Months Ended
	December 29, 2023		December 30, 2022		December 29, 2023		December 30, 2022
	(in millions)





Revenue by End Market
Cloud	$	1,071	$	1,224	$	1,943	$	3,053
Client	1,122		1,089		2,269		2,318
Consumer	839		794		1,570		1,472
Total Revenue	$	3,032	$	3,107	$	5,782	$	6,843

Revenue by Geography
Asia	$	1,699	$	1,494	$	3,250	$	3,180
Americas	804		1,090		1,466		2,513
Europe, Middle East and Africa	529		523		1,066		1,150
Total Revenue	$	3,032	$	3,107	$	5,782	$	6,843

The Company’s top 10 customers accounted for 39% of its net revenue for each of the three and six months ended December 29, 2023 and 47% and 48% of its net revenue for the three and six months ended December 30, 2022, respectively. For the three and six months ended December 29, 2023 and December 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 goodwill impairment assessments for each segment and concluded that there were no indications of impairment for the periods presented. 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)		—

Balance at December 29, 2023	$	5,717	$	4,320	$	10,037