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Operating Segments and Geographic Information | 6 Months Ended
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Dec. 30, 2023
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): 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. The Company 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): 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): 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 segments (NE and SE) 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. The following tables present information on the Company’s reportable segments for the three months ended December 30, 2023 and December 31, 2022 (in millions):
| Three Months Ended December 30, 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 | $ | 125.2 |  |  | $ | 10.8 |  |  | $ | 136.0 |  |  | $ | 74.9 |  |  |  |  | $ | — |  |  | $ | 210.9 |
Service revenue | 30.3 |  |  | 13.3 |  |  | 43.6 |  |  | — |  |  |  |  | — |  |  | 43.6 |
Net revenue | $ | 155.5 |  |  | $ | 24.1 |  |  | $ | 179.6 |  |  | $ | 74.9 |  |  |  |  | $ | — |  |  | $ | 254.5 |
Gross profit | $ | 97.2 |  |  | $ | 16.6 |  |  | $ | 113.8 |  |  | $ | 39.0 |  |  |  |  | $ | (4.8) |  |  | $ | 148.0 |
Gross margin | 62.5 | % |  | 68.9 | % |  | 63.4 | % |  | 52.1 | % |  |  |  |  |  | 58.2 | %
Operating income |  |  |  |  | $ | 6.4 |  |  | $ | 27.3 |  |  |  |  | $ | (11.3) |  |  | $ | 22.4 |
Operating margin |  |  |  |  | 3.6 | % |  | 36.4 | % |  |  |  |  |  | 8.8 | %
| Three Months Ended December 31, 2022
| Network and Service Enablement |  |  |  |  |  |  |  |  |  |
| Network Enablement (2) |  | Service Enablement (2) |  | Network and Service Enablement |  | Optical Security and Performance Products |  |  |  | Other Items (1) |  | Consolidated GAAP Measures
Product revenue (2) | $ | 152.6 |  |  | $ | 11.5 |  |  | $ | 164.1 |  |  | $ | 77.4 |  |  |  |  | $ | — |  |  | $ | 241.5 |
Service revenue (2) | 30.7 |  |  | 12.3 |  |  | 43.0 |  |  | — |  |  |  |  | — |  |  | 43.0 |
Net revenue | $ | 183.3 |  |  | $ | 23.8 |  |  | $ | 207.1 |  |  | $ | 77.4 |  |  |  |  | $ | — |  |  | $ | 284.5 |
Gross profit | $ | 118.1 |  |  | $ | 15.3 |  |  | $ | 133.4 |  |  | $ | 40.5 |  |  |  |  | $ | (6.9) |  |  | $ | 167.0 |
Gross margin | 64.4 | % |  | 64.3 | % |  | 64.4 | % |  | 52.3 | % |  |  |  |  |  | 58.7 | %
Operating income |  |  |  |  | $ | 18.5 |  |  | $ | 27.5 |  |  |  |  | $ | (23.1) |  |  | $ | 22.9 |
Operating margin |  |  |  |  | 8.9 | % |  | 35.5 | % |  |  |  |  |  | 8.0 | %
(1)Other items include charges (benefits) unrelated to core operating performance primarily consisting of stock-based compensation, amortization of acquisition-related intangibles, restructuring, changes in fair value of contingent consideration liabilities and other charges unrelated to core operating performance. (2)Effective for the first quarter of fiscal 2024, management of certain products moved from the SE segment to the NE segment to better align with operational and go-to-market strategies. As a result, prior period balances have been recast to reflect the impact to net revenue, gross profit and gross margin.
| Three Months Ended
| December 30, 2023 |  | December 31, 2022
Corporate reconciling items impacting gross profit: |  |  |
Total segment gross profit | $ | 152.8 |  |  | $ | 173.9 |
Stock-based compensation | (1.2) |  |  | (1.2) |
Amortization of intangibles | (3.4) |  |  | (5.7) |
Other charges unrelated to core operating performance (1) | (0.2) |  |  | — |
GAAP gross profit | $ | 148.0 |  |  | $ | 167.0 |
Corporate reconciling items impacting operating income: |  |  |
Total segment operating income | $ | 33.7 |  |  | $ | 46.0 |
Stock-based compensation | (12.5) |  |  | (13.0) |
Amortization of intangibles | (4.8) |  |  | (7.9) |
Change in fair value of contingent liability | 7.0 |  |  | (1.3) |
Other charges unrelated to core operating performance (1) | (1.1) |  |  | (0.9) |
Restructuring and related benefits | 0.1 |  |  | — |
GAAP operating income from continuing operations | $ | 22.4 |  |  | $ | 22.9 |
(1) During the three months ended December 30, 2023 and December 31, 2022, other charges unrelated to core operating performance primarily consisting of certain acquisition and integration related charges, accretion of debt discount and loss on disposal of long-lived assets.
| Six Months Ended December 30, 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 | $ | 245.6 |  |  | $ | 18.5 |  |  | $ | 264.1 |  |  | $ | 152.4 |  |  |  |  | $ | — |  |  | $ | 416.5 |
Service revenue | 59.9 |  |  | 26.0 |  |  | 85.9 |  |  | — |  |  |  |  | — |  |  | 85.9 |
Net revenue | $ | 305.5 |  |  | $ | 44.5 |  |  | $ | 350.0 |  |  | $ | 152.4 |  |  |  |  | $ | — |  |  | $ | 502.4 |
Gross profit | $ | 191.8 |  |  | $ | 30.3 |  |  | $ | 222.1 |  |  | $ | 79.7 |  |  |  |  | $ | (9.4) |  |  | $ | 292.4 |
Gross margin | 62.8 | % |  | 68.1 | % |  | 63.5 | % |  | 52.3 | % |  |  |  |  |  | 58.2 | %
Operating income |  |  |  |  | $ | 7.9 |  |  | $ | 56.6 |  |  |  |  | $ | (26.1) |  |  | $ | 38.4 |
Operating margin |  |  |  |  | 2.3 | % |  | 37.1 | % |  |  |  |  |  | 7.6 | %
| Six Months Ended December 31, 2022
| Network and Service Enablement |  |  |  |  |  |  |  |  |  |
| Network Enablement (2) |  | Service Enablement (2) |  | Network and Service Enablement |  | Optical Security and Performance Products |  |  |  | Other Items (1) |  | Consolidated GAAP Measures
Product revenue (2) | $ | 318.9 |  |  | $ | 21.7 |  |  | $ | 340.6 |  |  | $ | 168.6 |  |  |  |  | $ | — |  |  | $ | 509.2 |
Service revenue (2) | 60.9 |  |  | 24.5 |  |  | 85.4 |  |  | 0.1 |  |  |  |  | — |  |  | 85.5 |
Net revenue | $ | 379.8 |  |  | $ | 46.2 |  |  | $ | 426.0 |  |  | $ | 168.7 |  |  |  |  | $ | — |  |  | $ | 594.7 |
Gross profit | $ | 244.9 |  |  | $ | 30.1 |  |  | $ | 275.0 |  |  | $ | 92.3 |  |  |  |  | $ | (15.5) |  |  | $ | 351.8 |
Gross margin | 64.5 | % |  | 65.2 | % |  | 64.6 | % |  | 54.7 | % |  |  |  |  |  | 59.2 | %
Operating income |  |  |  |  | $ | 47.3 |  |  | $ | 66.1 |  |  |  |  | $ | (40.7) |  |  | $ | 72.7 |
Operating margin |  |  |  |  | 11.1 | % |  | 39.2 | % |  |  |  |  |  | 12.2 | %
(1)Other items include charges (benefits) unrelated to core operating performance primarily consisting of stock-based compensation, amortization of acquisition-related intangibles, restructuring, changes in fair value of contingent consideration liabilities and other charges unrelated to core operating performance. (2)Effective for the first quarter of fiscal 2024, management of certain products moved from the SE segment to the NE segment to better align with operational and go-to-market strategies. As a result, prior period balances have been recast to reflect the impact to net revenue, gross profit and gross margin.
| Six Months Ended
| December 30, 2023 |  | December 31, 2022
Corporate reconciling items impacting gross profit: |  |  |
Total segment gross profit | $ | 301.8 |  |  | $ | 367.3 |
Stock-based compensation | (2.4) |  |  | (2.4) |
Amortization of intangibles | (6.9) |  |  | (12.8) |
Other charges unrelated to core operating performance (1) | (0.1) |  |  | (0.3) |
GAAP gross profit | $ | 292.4 |  |  | $ | 351.8 |
Corporate reconciling items impacting operating income: |  |  |
Total segment operating income | $ | 64.5 |  |  | $ | 113.4 |
Stock-based compensation | (23.7) |  |  | (26.0) |
Amortization of intangibles | (10.4) |  |  | (17.2) |
Change in fair value of contingent liability | 8.4 |  |  | (1.8) |
Other (charges) benefits unrelated to core operating performance (1) | (1.3) |  |  | 4.3 |
Restructuring and related benefits | 0.9 |  |  | — |
GAAP operating income from continuing operations | $ | 38.4 |  |  | $ | 72.7 |
(1) During the six months ended December 30, 2023 and December 31, 2022, other (charges) benefits unrelated to core operating performance primarily consisting of certain acquisition and integration related charges, legal settlement, accretion of debt discount and losses on disposal of 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 three and six months ended December 30, 2023 and December 31, 2022 (in millions):
| Three Months Ended
| December 30, 2023 |  | December 31, 2022
| Product Revenue |  | Service Revenue |  | Total |  | Product Revenue |  | Service Revenue |  | Total
Americas: |  |  |  |  |  |  |  |  |  |  |
United States | $ | 68.6 |  |  | $ | 16.1 |  |  | $ | 84.7 |  |  | $ | 77.5 |  |  | $ | 15.0 |  |  | $ | 92.5 |
Other Americas | 14.6 |  |  | 3.8 |  |  | 18.4 |  |  | 10.3 |  |  | 3.5 |  |  | 13.8 |
Total Americas | $ | 83.2 |  |  | $ | 19.9 |  |  | $ | 103.1 |  |  | $ | 87.8 |  |  | $ | 18.5 |  |  | $ | 106.3 |
Asia-Pacific: |  |  |  |  |  |  |  |  |  |  |
Greater China | $ | 45.9 |  |  | $ | 1.5 |  |  | $ | 47.4 |  |  | $ | 58.9 |  |  | $ | 1.8 |  |  | $ | 60.7 |
Other Asia-Pacific | 24.9 |  |  | 7.2 |  |  | 32.1 |  |  | 36.7 |  |  | 7.7 |  |  | 44.4 |
Total Asia-Pacific | $ | 70.8 |  |  | $ | 8.7 |  |  | $ | 79.5 |  |  | $ | 95.6 |  |  | $ | 9.5 |  |  | $ | 105.1 |
EMEA: | $ | 56.9 |  |  | $ | 15.0 |  |  | $ | 71.9 |  |  | $ | 58.1 |  |  | $ | 15.0 |  |  | $ | 73.1 |
Total net revenue | $ | 210.9 |  |  | $ | 43.6 |  |  | $ | 254.5 |  |  | $ | 241.5 |  |  | $ | 43.0 |  |  | $ | 284.5 |
| Six Months Ended
| December 30, 2023 |  | December 31, 2022
| Product Revenue |  | Service Revenue |  | Total |  | Product Revenue |  | Service Revenue |  | Total
Americas: |  |  |  |  |  |  |  |  |  |  |
United States | $ | 136.2 |  |  | $ | 31.3 |  |  | $ | 167.5 |  |  | $ | 158.5 |  |  | $ | 30.6 |  |  | $ | 189.1 |
Other Americas | 28.3 |  |  | 7.8 |  |  | 36.1 |  |  | 33.4 |  |  | 6.8 |  |  | 40.2 |
Total Americas | $ | 164.5 |  |  | $ | 39.1 |  |  | $ | 203.6 |  |  | $ | 191.9 |  |  | $ | 37.4 |  |  | $ | 229.3 |
Asia-Pacific: |  |  |  |  |  |  |  |  |  |  |
Greater China | $ | 95.3 |  |  | $ | 3.2 |  |  | $ | 98.5 |  |  | $ | 122.4 |  |  | $ | 3.9 |  |  | $ | 126.3 |
Other Asia | 53.2 |  |  | 13.7 |  |  | 66.9 |  |  | 76.7 |  |  | 13.7 |  |  | 90.4 |
Total Asia-Pacific | $ | 148.5 |  |  | $ | 16.9 |  |  | $ | 165.4 |  |  | $ | 199.1 |  |  | $ | 17.6 |  |  | $ | 216.7 |
EMEA: | $ | 103.5 |  |  | $ | 29.9 |  |  | $ | 133.4 |  |  | $ | 118.2 |  |  | $ | 30.5 |  |  | $ | 148.7 |
Total net revenue | $ | 416.5 |  |  | $ | 85.9 |  |  | $ | 502.4 |  |  | $ | 509.2 |  |  | $ | 85.5 |  |  | $ | 594.7 |

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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/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 22 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-22 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 15 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-15 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 31 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-31 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 32 -Subparagraph (d) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-32 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 42 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-42 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 32 -Subparagraph (f) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-32 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 40 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-40 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//280/tableOfContent Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 26 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-26 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 34 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-34 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 41 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-41 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 21 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-21 Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 21 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-21 Reference 14: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 32 -Subparagraph (e) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-32 + Details
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