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Operating Segments and Geographic Information | 12 Months Ended
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Jun. 29, 2024
Segment Reporting [Abstract] |
Operating Segments and Geographic Information | Note 19. Operating Segments and Geographic Information The Company evaluates its reportable segments in accordance with the authoritative guidance on segment reporting. The Company’s CODM uses operating segment financial information to evaluate segment performance and to allocate resources. The Company’s reportable segments are: (i) Network Enablement: NE provides an integrated portfolio of testing solutions that access the network to perform build-out and maintenance tasks. These solutions include instruments, software and services to design, build, turn-up, certify, troubleshoot and optimize networks. NE also offers a range of product support and professional services such as repair, calibration, software support and technical assistance for its products. NE’s avionics products provide test and measuring solutions for aviation, aerospace, government, defense, communications and public safety. (ii) Service Enablement: SE provides embedded systems and enterprise performance management solutions that give global communications service providers, enterprises and cloud operators visibility into network, service and application data. These solutions—including instruments, microprobes and software—monitor, collect and analyze network data to reveal the actual customer experience and to identify opportunities for new revenue streams and network optimization. (iii) Optical Security and Performance Products: OSP leverages its core optical coating technologies and volume manufacturing capability to design, manufacture, and sell technologies for the anti-counterfeiting, consumer electronics, industrial, government and automotive markets. Segment Reporting The CODM manages the Company in two broad business categories: NSE and OSP. The CODM evaluates segment performance of the NSE business based on the combined segment gross and operating margins. Operating expenses associated with the NSE business are not allocated to the individual segments within NSE, as they are managed centrally at the business unit level. The CODM evaluates segment performance of the OSP business based on segment operating margin. The Company allocates corporate-level operating expenses to its segment results, except for certain non-core operating and non-operating activities as discussed below. The Company does not allocate stock-based compensation, acquisition-related charges, amortization of intangibles, restructuring, impairment of goodwill, non-operating income and expenses, changes in fair value of contingent consideration liabilities, or other charges unrelated to core operating performance to its segments because management does not include this information in its measurement of the performance of the operating segments. These items are presented as “Other Items” in the table below. Additionally, the Company does not specifically identify and allocate all assets by operating segment. Information on the Company’s reportable segments is as follows (in millions):
| Year Ended June 29, 2024
| Network and Service Enablement |  |  |  |  |  |  |  |  |  |
| Network Enablement |  | Service Enablement |  | Network and Service Enablement |  | Optical Security and Performance Products |  |  |  | Other Items(1) |  | Consolidated GAAP Measures
Product revenue | $ | 499.1 |  |  | $ | 37.3 |  |  | $ | 536.4 |  |  | $ | 298.4 |  |  |  |  | $ | — |  |  | $ | 834.8 |
Service revenue | 116.6 |  |  | 49.0 |  |  | 165.6 |  |  | — |  |  |  |  | — |  |  | 165.6 |
Net revenue | $ | 615.7 |  |  | $ | 86.3 |  |  | $ | 702.0 |  |  | $ | 298.4 |  |  |  |  | $ | — |  |  | $ | 1,000.4 |
Gross profit | $ | 382.3 |  |  | $ | 57.3 |  |  | $ | 439.6 |  |  | $ | 154.9 |  |  |  |  | $ | (18.6) |  |  | $ | 575.9 |
Gross margin | 62.1 | % |  | 66.4 | % |  | 62.6 | % |  | 51.9 | % |  |  |  |  |  | 57.6 | %
Operating income |  |  |  |  | $ | 8.0 |  |  | $ | 107.0 |  |  |  |  | $ | (94.2) |  |  | $ | 20.8 |
Operating margin |  |  |  |  | 1.1 | % |  | 35.9 | % |  |  |  |  |  | 2.1 | %
| Year Ended July 1, 2023
| Network and Service Enablement |  |  |  |  |  |  |  |  |  |
| Network Enablement |  | Service Enablement |  | Network and Service Enablement |  | Optical Security and Performance Products |  |  |  | Other Items(1) |  | Consolidated GAAP Measures
Product revenue | $ | 588.1 |  |  | $ | 43.2 |  |  | $ | 631.3 |  |  | $ | 304.8 |  |  |  |  | $ | — |  |  | $ | 936.1 |
Service revenue | 119.1 |  |  | 50.8 |  |  | 169.9 |  |  | 0.1 |  |  |  |  | — |  |  | 170.0 |
Net revenue | $ | 707.2 |  |  | $ | 94.0 |  |  | $ | 801.2 |  |  | $ | 304.9 |  |  |  |  | $ | — |  |  | $ | 1,106.1 |
Gross profit | $ | 447.6 |  |  | $ | 62.6 |  |  | $ | 510.2 |  |  | $ | 158.6 |  |  |  |  | $ | (30.0) |  |  | $ | 638.8 |
Gross margin | 63.3 | % |  | 66.6 | % |  | 63.7 | % |  | 52.0 | % |  |  |  |  |  | 57.8 | %
Operating income |  |  |  |  | $ | 61.2 |  |  | $ | 111.3 |  |  |  |  | $ | (90.1) |  |  | $ | 82.4 |
Operating margin |  |  |  |  | 7.6 | % |  | 36.5 | % |  |  |  |  |  | 7.4 | %
| Year Ended July 2, 2022
| Network and Service Enablement |  |  |  |  |  |  |  |  |  |
| Network Enablement |  | Service Enablement |  | Network and Service Enablement |  | Optical Security and Performance Products |  |  |  | Other Items(1) |  | Consolidated GAAP Measures
Product revenue | $ | 745.1 |  |  | $ | 47.6 |  |  | $ | 792.7 |  |  | $ | 342.8 |  |  |  |  | $ | — |  |  | $ | 1,135.5 |
Service revenue | 110.6 |  |  | 45.8 |  |  | 156.4 |  |  | 0.5 |  |  |  |  | — |  |  | 156.9 |
Net revenue | $ | 855.7 |  |  | $ | 93.4 |  |  | $ | 949.1 |  |  | $ | 343.3 |  |  |  |  | $ | — |  |  | $ | 1,292.4 |
Gross profit | $ | 550.8 |  |  | $ | 64.3 |  |  | $ | 615.1 |  |  | $ | 193.6 |  |  |  |  | $ | (35.2) |  |  | $ | 773.5 |
Gross margin | 64.4 | % |  | 68.8 | % |  | 64.8 | % |  | 56.4 | % |  |  |  |  |  | 59.8 | %
Operating income |  |  |  |  | $ | 147.8 |  |  | $ | 139.0 |  |  |  |  | $ | (101.8) |  |  | $ | 185.0 |
Operating margin |  |  |  |  | 15.6 | % |  | 40.5 | % |  |  |  |  |  | 14.3 | %
(1) See below tables for details of reconciling items impacting gross profit and operating income.
| Years Ended
| June 29, 2024 |  | July 1, 2023 |  | July 2, 2022
Corporate reconciling items impacting gross profit: |  |  |  |  |
Total segment gross profit | $ | 594.5 |  |  | $ | 668.8 |  |  | $ | 808.7 |
Stock-based compensation | (4.9) |  |  | (4.8) |  |  | (5.2) |
Amortization of intangibles | (13.8) |  |  | (24.6) |  |  | (30.0) |
Other benefits (charges) unrelated to core operating performance(1) | 0.1 |  |  | (0.6) |  |  | — |
Total reconciling items | (18.6) |  |  | (30.0) |  |  | (35.2) |
GAAP gross profit | $ | 575.9 |  |  | $ | 638.8 |  |  | $ | 773.5 |
Corporate reconciling items impacting operating income: |  |  |  |  |
Total segment operating income | $ | 115.0 |  |  | $ | 172.5 |  |  | $ | 286.8 |
Stock-based compensation | (49.4) |  |  | (51.2) |  |  | (52.3) |
Amortization of intangibles | (20.1) |  |  | (33.3) |  |  | (39.7) |
Change in fair value of contingent liability | 9.5 |  |  | 4.6 |  |  | (0.3) |
Other (charges) benefits unrelated to core operating performance(1) | (20.6) |  |  | 1.9 |  |  | (9.6) |
Restructuring and related (charges) benefits | (13.6) |  |  | (12.1) |  |  | 0.1 |
Total reconciling items | (94.2) |  |  | (90.1) |  |  | (101.8) |
GAAP operating income | $ | 20.8 |  |  | $ | 82.4 |  |  | $ | 185.0 |
(1) For the year ended June 29, 2024, Other charges (benefits) unrelated to core operating performance consisted of $18.1 million of certain acquisition and integration related charges and $2.5 million of net losses primarily related to long-lived assets. For the year ended July 1, 2023, Other charges (benefits) unrelated to core operating performance consisted of a $6.7 million gain on litigation settlement, offset by $2.5 million of certain acquisition and integration related charges and $2.3 million of net losses primarily related to long-lived assets. For the year ended July 2, 2022, Other charges (benefits) unrelated to core operating performance consisted of $5.1 million of certain acquisition and integration related charges and $4.5 million of net losses primarily related to long-lived assets. The Company operates primarily in three geographic regions: Americas, Asia-Pacific, and Europe, Middle East and Africa (EMEA). Net revenue is assigned to the geographic region and country where the Company’s product is initially shipped. For example, certain customers may request shipment of the Company’s product to a contract manufacturer in one country, which may differ from the location of their end customers. The following table presents net revenue by the three geographic regions in which the Company operates and net revenue from countries that exceeded 10% of the Company’s total net revenue for the years ended June 29, 2024, July 1, 2023 and July 2, 2022 (in millions):
| Years Ended
| June 29, 2024 |  | July 1, 2023 |  | July 2, 2022
| Product Revenue |  | Service Revenue |  | Total |  | Product Revenue |  | Service Revenue |  | Total |  | Product Revenue |  | Service Revenue |  | Total
Americas: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
United States | $ | 265.0 |  |  | $ | 60.4 |  |  | $ | 325.4 |  |  | $ | 303.5 |  |  | $ | 59.4 |  |  | $ | 362.9 |  |  | $ | 332.5 |  |  | $ | 56.4 |  |  | $ | 388.9 |
Other Americas | 50.3 |  |  | 15.0 |  |  | 65.3 |  |  | 60.3 |  |  | 14.9 |  |  | 75.2 |  |  | 82.2 |  |  | 14.6 |  |  | 96.8 |
Total Americas | $ | 315.3 |  |  | $ | 75.4 |  |  | $ | 390.7 |  |  | $ | 363.8 |  |  | $ | 74.3 |  |  | $ | 438.1 |  |  | $ | 414.7 |  |  | $ | 71.0 |  |  | $ | 485.7 |
Asia-Pacific: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Greater China | $ | 188.1 |  |  | $ | 5.9 |  |  | $ | 194.0 |  |  | $ | 203.5 |  |  | $ | 7.4 |  |  | $ | 210.9 |  |  | $ | 247.5 |  |  | $ | 8.9 |  |  | $ | 256.4 |
Other Asia | 126.5 |  |  | 26.0 |  |  | 152.5 |  |  | 140.2 |  |  | 26.4 |  |  | 166.6 |  |  | 185.2 |  |  | 20.1 |  |  | 205.3 |
Total Asia-Pacific | $ | 314.6 |  |  | $ | 31.9 |  |  | $ | 346.5 |  |  | $ | 343.7 |  |  | $ | 33.8 |  |  | $ | 377.5 |  |  | $ | 432.7 |  |  | $ | 29.0 |  |  | $ | 461.7 |
EMEA: | $ | 204.9 |  |  | $ | 58.3 |  |  | $ | 263.2 |  |  | $ | 228.6 |  |  | $ | 61.9 |  |  | $ | 290.5 |  |  | $ | 288.1 |  |  | $ | 56.9 |  |  | $ | 345.0 |
Total net revenue | $ | 834.8 |  |  | $ | 165.6 |  |  | $ | 1,000.4 |  |  | $ | 936.1 |  |  | $ | 170.0 |  |  | $ | 1,106.1 |  |  | $ | 1,135.5 |  |  | $ | 156.9 |  |  | $ | 1,292.4 |
One customer of the Company generated $154.1 million, $157.7 million and $178.4 million of net revenue, which represented more than 10% of total net revenue, during fiscal 2024, 2023 and 2022, respectively. Property, plant and equipment, net was identified based on the operations in the corresponding geographic areas (in millions):
| Years Ended
| June 29, 2024 |  | July 1, 2023
United States | $ | 165.0 |  |  | $ | 166.9 |
Other Americas | 1.1 |  |  | 1.3 |
China | 24.1 |  |  | 33.6 |
Other Asia-Pacific | 5.1 |  |  | 4.0 |
United Kingdom | 20.3 |  |  | 24.6 |
Other EMEA | 12.6 |  |  | 12.6 |
Total property, plant and equipment, net | $ | 228.2 |  |  | $ | 243.0 |

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://www.xbrl.org/2003/role/exampleRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 55 -Paragraph 48 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482785/280-10-55-48 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards 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