Business Segments, Geographic Information, and Concentrations of Risk

6 Months Ended

Dec. 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						Six Months Ended
	December 27, 2024			December 29, 2023			December 27, 2024			December 29, 2023
	(in millions, except percentages)
Net revenue:
HDD	$	2,409		$	1,367		$	4,620		$	2,561
Flash	1,876			1,665			3,760			3,221
Total net revenue	$	4,285		$	3,032		$	8,380		$	5,782
Gross profit:
HDD	$	929		$	339		$	1,772		$	612
Flash	609			131			1,341			(30)
Total gross profit for segments	1,538			470			3,113			582
Unallocated corporate items:
Stock-based compensation expense	(12)			(13)			(26)			(26)
Amortization of licenses related to a litigation matter	(10)			—			(19)			—
Amortization of acquired intangible assets	—			(1)			(1)			(1)
Recovery from contamination incident	—			36			—			36



Total unallocated corporate items	(22)			22			(46)			9
Consolidated gross profit	$	1,516		$	492		$	3,067		$	591
Gross margin:
HDD	38.6		%	24.8		%	38.4		%	23.9		%
Flash	32.5		%	7.9		%	35.7		%	(0.9)		%

Consolidated gross margin	35.4		%	16.2		%	36.6		%	10.2		%

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				Six Months Ended
	December 27, 2024		December 29, 2023		December 27, 2024		December 29, 2023
	(in millions)





Revenue by end market
Cloud	$	2,346	$	1,071	$	4,554	$	1,943
Client	1,168		1,122		2,377		2,269
Consumer	771		839		1,449		1,570
Total revenue	$	4,285	$	3,032	$	8,380	$	5,782

Revenue by geography
Asia	$	1,995	$	1,699	$	3,832	$	3,250
Americas	1,428		804		3,118		1,466
Europe, Middle East and Africa	862		529		1,430		1,066
Total revenue	$	4,285	$	3,032	$	8,380	$	5,782

The Company’s top 10 customers accounted for 51% and 50% of its net revenue for the three and six months ended December 27, 2024, respectively, and 39% of its net revenue for both the three and six months ended December 29, 2023. For the three and six months ended December 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 and six months ended December 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 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


Divestiture (1)	—		(303)		(303)
Balance at December 27, 2024	$	4,319	$	5,410	$	9,729

(1) On September 28, 2024, the Company sold a majority interest in a subsidiary. See further discussion in Note 9, Related Parties and Related Commitments and Contingencies.