Business Segments, Geographic Information, and Concentrations of Risk

3 Months Ended

Sep. 27, 2024

Business Segments, Geographic Information, and Concentrations of Risk

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


	Three Months Ended
	September 27, 2024			September 29, 2023
	(in millions, except percentages)
Net revenue:
HDD	$	2,211		$	1,194
Flash	1,884			1,556
Total net revenue	$	4,095		$	2,750
Gross profit:
HDD	$	843		$	273
Flash	732			(161)
Total gross profit for segments	1,575			112
Unallocated corporate items:
Stock-based compensation expense	(14)			(13)
Amortization of acquired intangible assets	(1)			—




Amortization of licenses related to a litigation matter	(9)			—
Total unallocated corporate items	(24)			(13)
Consolidated gross profit	$	1,551		$	99
Gross margin:
HDD	38.1		%	22.9		%
Flash	38.9		%	(10.3)		%

Consolidated gross margin	37.9		%	3.6		%

Disaggregated Revenue

The Company’s broad portfolio of technology and products addresses 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 HDD and Flash 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 was as follows:



	Three Months Ended
	September 27, 2024		September 29, 2023
	(in millions)





Revenue by end market
Cloud	$	2,208	$	872
Client	1,209		1,147
Consumer	678		731
Total revenue	$	4,095	$	2,750

Revenue by geography
Asia	$	1,837	$	1,551
Americas	1,690		662
Europe, Middle East and Africa	568		537
Total revenue	$	4,095	$	2,750

The Company’s top 10 customers accounted for 51% and 44% of its net revenue for the three months ended September 27, 2024 and September 29, 2023, respectively. For the three months ended September 27, 2024, one customer accounted for 14% of the Company’s net revenue. No customer accounted for 10% or more of the Company’s net revenue for the three months ended September 29, 2023.

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:


	HDD		Flash		Total
	(in millions)
Balance at June 28, 2024	$	4,319	$	5,713	$	10,032

Foreign currency translation adjustment	2		3		5
Goodwill reclassified to assets held for sale (1)	—		(225)		(225)
Balance at September 27, 2024	$	4,321	$	5,491	$	9,812

(1) As of September 27, 2024, $225 million of Goodwill was reclassified to assets held for sale due to the sale of a majority interest in a subsidiary. See further discussion in Note 4, Supplemental Financial Statement Data.