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Operating Segments and Geographic Information
 12 Months Ended
Jun. 29, 2024
Segment Reporting [Abstract]  
Operating Segments and Geographic Information
Note 17. Operating Segments and Geographic Information
Prior to fiscal year 2024, we operated in two reportable segments consisting of Optical Communications (“OpComms”) and Commercial Lasers (“Lasers”). During the fiscal first quarter of 2024, our chief operating decision maker (“CODM”) implemented changes in how he organizes the business, allocates resources, and assesses performance. We changed our organizational structure to better align with trends in our markets and our customer and product mix. Our new operating segments are Cloud & Networking and Industrial Tech. The Cloud & Networking segment includes the Telecom & Datacom product lines that were previously part of the OpComms segment. The Industrial Tech segment includes previous Lasers segment and the Industrial & Consumer product lines that were previously part of the OpComms segment. The two operating segments were primarily determined based on how the CODM views and evaluates our operations. The CODM regularly reviews operating results to make decisions about resources to be allocated to the segments and to assess their performance.
In conjunction with this change, our CODM now evaluates each segment’s performance and allocates resources based on segment revenue and segment profit, instead of gross profit, as our CODM believes segment profit is a more comprehensive profitability measure for each operating segment. Segment profit includes operating expenses directly managed by operating segments, including research and development, and direct sales and marketing expenses. Segment profit does not include stock-based compensation, acquisition or integration related costs, amortization and impairment of acquisition-related intangible assets, restructuring and related charges, and certain other charges. Additionally, we do not allocate corporate marketing and strategic marketing expenses and general and administrative expenses, as these expenses are not directly attributable to our operating segments.
Comparative prior period segment information has been recast to conform to the new segment structure and segment profitability measure. The change in our operating segments had no impact on our previously reported consolidated results of operations, financial condition, or cash flows.
We do not track all of our property, plant and equipment by operating segments. The geographic identification of these assets is set forth below.
Cloud & Networking
Our Cloud & Networking products include comprehensive portfolio of optical and photonic components, modules, and subsystems supplied to network operator and network equipment manufacturer customers building cloud data center infrastructure, including products for AI/ML and DCI applications, and communications service provider networks, including products for access (local), metro (intracity), long-haul (city-to-city and worldwide) and submarine (undersea) network infrastructure. Our Cloud & Networking products also support network equipment manufacturers building enterprise network infrastructure, including SANs, LANs, and WANs. These products enable the transmission and transport of data, video, and audio over high-capacity fiber-optic cables. We maintain leading positions in these fast-growing cloud & networking markets through our extensive product portfolio, including high-speed transceivers, reconfigurable optical add/drop multiplexers (“ROADMs”), coherent dense wavelength division multiplexing (“DWDM”) pluggable transceivers, and tunable small form-factor pluggable transceivers. We also sell laser chips for use in manufacturing of high-speed optical transceivers for use primarily inside data centers. Demand for our Cloud & Networking products is driven by the continual growth in network capacity required for cloud computing and services, including for AI/ML, streaming video and video conferencing, wireless and mobile services, and IoT.
Industrial Tech
Our Industrial Tech products include solid-state lasers, kilowatt-class fiber lasers, ultrafast lasers, diode lasers, and gas lasers, which address applications in numerous end-markets. In the consumer end-market, our laser light sources are integrated into our customers’ 3D sensing cameras, which are used in mobile devices, payment kiosks, and other consumer electronics devices to enable applications including biometric identification, computational photography and virtual and augmented reality. In the automotive end-market, our lasers are used in our customers’ LiDAR and other optical sensor devices, which are increasingly being used in advanced driver assistance systems (“ADAS”) and in-cabin driver and occupant monitoring systems. In the industrial manufacturing end-market, our lasers are incorporated into our customers’ manufacturing machine tools used for the precision processing of materials in a range of industries including semiconductor device and microelectronics fabrication, electric vehicle and battery production, metal cutting and welding, and advanced manufacturing. Our products can also be used in the industrial end-market in imaging and sensing systems for process feedback and control, quality assurance, and waste reduction. Adoption of our products in the industrial end-market is driven by the needs of customers to advance semiconductor and microelectronics industry roadmaps, and by Industry 4.0/5.0 trends, including increasing manufacturing precision and flexibility and reducing waste and environmental impact. Demand for our products in the industrial end-market is
driven by end-customer investments in manufacturing capacity. Our lasers also address certain semiconductor inspection and life-science applications.
Reportable Segments
The two operating segments, Cloud & Networking and Industrial Tech, also represent our two reportable segments. Our CODM allocates resources and evaluates segment performance based on segment revenue and segment profit. The following table summarizes segment profit and a reconciliation to the consolidated income (loss) before income taxes for the periods presented (in millions). Comparative prior period segment information has been recast to conform to the new segment structure.
Information on reportable segments utilized by our CODM is as follows (in millions):
Years Ended
June 29, 2024July 1, 2023July 2, 2022
Net revenue:
Cloud & Networking$1,084.9 $1,322.5 $1,008.7 
Industrial Tech274.3 444.5 703.9 
Net revenue
$1,359.2 $1,767.0 $1,712.6 
Segment profit:
Cloud & Networking$124.5 $313.2 $266.9 
Industrial Tech25.1 152.7 373.5 
Total segment profit149.6 465.9 640.4 
Unallocated corporate items:
Selling, general and administrative (1)
(111.8)(126.7)(113.4)
Stock-based compensation
(128.8)(136.5)(103.1)
Stock-based compensation - acquisition related— (11.9)— 
Amortization of acquired intangibles
(150.6)(127.7)(85.5)
Amortization of acquired inventory fair value adjustments(8.3)(17.8)— 
           Acquisition related costs (13.3)(11.5)— 
Integration related costs
(37.1)(28.6)— 
Restructuring and related charges(72.6)(28.1)1.1 
Abnormal excess capacity (2)
(20.7)— — 
Litigation matters— (7.8)— 
Intangible asset write-off— (21.3)— 
Other charges, net (3)
(40.4)(63.7)(36.2)
Interest expense(33.8)(35.5)(80.2)
Other income, net (4)
62.1 48.8 12.0 
Consolidated Income (loss) before income taxes$(405.7)$(102.4)$235.1 
(1) We do not allocate selling, general and administrative expenses that are not directly attributable to our operating segments.
(2) Abnormal excess capacity for the twelve months ended June 29, 2024 represents excess capacity attributable to a near-term reduction in our manufacturing production, primarily driven by our non-recurring inventory reduction effort following the disruptions in the supply chain due to the COVID-19 pandemic and factory consolidation efforts.
(3) Other charges, net for the year ended June 29, 2024 primarily relate to $11.2 million of net excess and obsolete inventory, $12.4 million of non-recurring legal and tax related fees, $4.9 million of incremental costs of sales related to components previously acquired from various brokers to satisfy customer demand and $3.4 million of one-time charge as a result of contract termination with one of our vendors due to a change in our manufacturing strategy, offset by various miscellaneous gains. The excess and obsolete inventory charges relate to charges that are not attributable to our operating segments due to their unusual nature, primarily those charges driven by U.S. trade restrictions whereby we are no longer able to sell certain products to one of our customers.
Other charges, net for the year ended July 1, 2023 primarily relate to $32.5 million of incremental costs of sales related to components previously acquired from various brokers to satisfy customer demand, $12.5 million of non-recurring legal and professional fees, $5.4 million of excess and obsolete inventory charges primarily driven by synergies as a result of the NeoPhotonics integration and $2.7 million of excess and obsolete inventory charges driven by U.S. trade restrictions and the related decline in demand from Huawei.
Other charges, net for the year ended July 2, 2022 primarily relate to $14.0 million of incremental costs of sales related to components previously acquired from various brokers to satisfy customer demand, $8.4 million of transaction costs related to the acquisition of NeoPhotonics and $9.4 million of professional service fees related to optimizing our international legal structure, offset by a $5.9 million gain from selling equipment that was no longer needed after we transferred certain product lines to new production facilities in fiscal 2021.
(4) Other income, net for the year ended June 29, 2024 includes interest and investment income of $61.3 million, and foreign exchange gains, net of $0.8 million.
Other income, net for the year ended July 1, 2023 includes interest and investment income of $40.8 million, foreign exchange gains, net of $7.0 million and other income, net of $1.0 million.
Other income, net for the year ended July 2, 2022 includes interest and investment income of $6.1 million, foreign exchange gains, net of $6.1 million, offset by other expense, net of $0.2 million.
Concentrations

We operate in three geographic regions: Americas, Asia-Pacific, and EMEA (Europe, Middle East, and Africa). Net revenue is assigned to the geographic region and country where our product is initially shipped to. For example, certain customers may request shipment of our 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 we operate in and net revenue from countries that represented 10% or more of our total net revenue (in millions, except percentage data):
 Years Ended
 June 29, 2024July 1, 2023July 2, 2022
Amount% to TotalAmount% to TotalAmount% to Total
Net revenue:
Americas:
United States
$356.1 26.2 %$241.3 13.7 %$173.9 10.2 %
Mexico91.7 6.7 180.0 10.2 160.9 9.4 
Other Americas
3.4 0.3 9.3 0.5 12.1 0.7 
Total Americas
$451.2 33.2 %$430.6 24.4 %$346.9 20.3 %
Asia-Pacific:
Thailand$183.8 13.5 %$269.0 15.2 %$102.3 5.9 %
Hong Kong
261.9 19.3 246.7 14.0 458.2 26.7 
South Korea
75.2 5.5 170.2 9.6 265.2 15.5 
Japan
84.6 6.2 179.5 10.2 181.2 10.6 
Other Asia-Pacific
174.3 12.9 276.3 15.6 242.4 14.2 
Total Asia-Pacific
$779.8 57.4 %$1,141.7 64.6 %$1,249.3 72.9 %
EMEA$128.2 9.4 %$194.7 11.0 %$116.4 6.8 %
Total net revenue
$1,359.2 100.0 %$1,767.0 100.0 %$1,712.6 100.0 %
During the years ended June 29, 2024, July 1, 2023, and July 2, 2022, net revenue generated from a single customer which represented 10% or greater of total net revenue is summarized as follows:
Years Ended
June 29, 2024July 1, 2023July 2, 2022
Customer A18.9 %**
Customer B*12.1 %28.7 %
Customer C11.4 %15.3 %12.6 %
Customer D*10.5 %*
*Represents less than 10% of total net revenue
The following table sets forth accounts receivable from a single customer that represented 10% or greater of the total accounts receivable for the periods presented:
June 29, 2024July 1, 2023
Customer 112.9 %*
Customer 2*14.3 %
Customer 3*11.9 %
Customer 4*11.9 %
*Represents less than 10% of total accounts receivable
Long-lived assets, namely property, plant and equipment, net, were identified based on the physical location of the assets in the corresponding geographic areas as of the periods indicated (in millions):
June 29, 2024July 1, 2023
Property, plant and equipment, net
United States
$131.0 $134.7 
Thailand
141.0 132.0 
Japan75.7 93.0 
United Kingdom83.8 38.2 
China85.7 42.1 
Other countries
55.3 49.5 
Total property, plant and equipment, net$572.5 $489.5 
We purchase a portion of our inventory from contract manufacturers and vendors located primarily in Thailand, Taiwan and Malaysia. The following table sets forth inventory purchase from a single contract manufacturer that represented 10% or greater of our total net inventory purchases for the periods presented:
June 29, 2024July 1, 2023
Contract Manufacturer A30.3 %42.5%