Leases and Other Commitments

3 Months Ended

Oct. 03, 2025

Leases

The Company leases certain domestic and international facilities and datacenter space under long-term, non-cancelable operating leases that expire at various dates through fiscal year 2039. In connection with and subsequent to the separation, the Company entered into various sublease agreements with WDC under long-term, non-cancelable operating leases that expire at various dates through fiscal year 2031.

These leases include no material variable or contingent lease payments. Operating lease assets and liabilities are recognized based on the present value of the remaining lease payments discounted using the Company’s incremental borrowing rate. Operating lease assets also include prepaid lease payments minus any lease incentives. Extension or termination options present in the Company’s lease agreements are included in determining the right-of-use asset and lease liability when it is reasonably certain the Company will exercise those options. Lease expense is recognized on a straight-line basis over the lease term.

The following table presents right-of-use lease assets and lease liabilities included in the Company’s Condensed Consolidated Balance Sheets:


	October 3, 2025		June 27, 2025
	(in millions)
Operating lease right-of-use assets (included in other non-current assets)	$	207	$	214

Operating lease liabilities:
Current portion of long-term operating lease liabilities (included in accrued expenses)	24		26
Long-term operating lease liabilities (included in other liabilities)	188		193
Total operating lease liabilities	$	212	$	219

The following table summarizes supplemental disclosures of operating cost and cash flow information related to operating leases:


	Three Months Ended
	October 3, 2025		September 27, 2024
	(in millions)
Cost of operating leases	$	11	$	7
Cash paid for operating leases	10		7
Operating lease assets obtained in exchange for operating lease liabilities	2		—

The weighted average remaining lease term and discount rate for the Company’s operating leases were as follows:


	October 3, 2025		September 27, 2024
Weighted average remaining lease term in years	10.9		13.6
Weighted average discount rate	7.3	%	7.5	%

As of October 3, 2025, minimum lease payments were as follows:


	Lease Amounts
	(in millions)
Minimum lease payments by fiscal year:
Remaining nine months of 2026	$	29
2027	36
2028	28
2029	24
2030	20
Thereafter	182
Total future minimum lease payments	319
Less: Imputed interest	107
Present value of lease liabilities	$	212

Purchase Agreements and Other Commitments

In the normal course of business, the Company enters into purchase orders with suppliers for the purchase of components used to manufacture its products. These purchase orders generally cover forecasted component supplies needed for production during the coming months, are recorded as a liability upon receipt of the components, and generally may be changed or canceled at any time prior to shipment of the components. The Company also enters into long-term agreements with suppliers that contain fixed future commitments, which are contingent upon certain conditions such as performance, quality and technology of the vendor’s components. As of October 3, 2025, the Company had the following minimum long-term commitments:


	Long-term commitments
	(in millions)
Fiscal year:
Remaining nine months of 2026	$	98
2027	583
2028	570
2029	570
2030	570
Thereafter	90
Total	$	2,481