
	(in millions)





Balance at June 28, 2024	$	7,207
Divestiture (1)	(382)
Impairment charges	(1,830)
Foreign currency translation adjustment	4
Balance at June 27, 2025	$	4,999

(1) On September 28, 2024, the Company sold its majority interest in a subsidiary. See Note 10, Related Parties and Related Commitments and Contingencies for additional disclosures.

The Company determined that its single operating segment was also its single reporting unit. 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. The Company uses qualitative factors to determine whether goodwill is more-likely-than-not impaired and whether a quantitative test for impairment is considered necessary. If the Company concludes from the qualitative assessment that goodwill is more-likely-than-not impaired, the Company is required to perform a quantitative assessment to determine the amount of impairment.

The Company is required to use judgment when assessing goodwill for impairment, including evaluating the impact of industry and macroeconomic conditions and the determination of the fair value of the reporting unit. In addition, the estimates and assumptions used to determine the fair value as well as the actual carrying value may change based on future changes in the Company’s results of operations, macroeconomic conditions, or other factors. Changes in these estimates and assumptions could materially affect the Company’s assessment of the fair value and goodwill impairment. In addition, if negative macroeconomic conditions continue or worsen, goodwill could become impaired, which could result in an impairment charge and materially adversely affect the Company’s financial condition and results of operations.

Subsequent to the completion of the separation, the Company identified potential impairment indicators related to macroeconomic indicators, industry developments, the trading price of the Company’s common stock and resulting market capitalization that warranted a quantitative impairment analysis of long-lived assets and goodwill.

The Company performed a recoverability test at the asset group level, which was determined to be equivalent to its reporting unit, to assess potential impairment of long-lived assets. The results of the recoverability test showed that the estimated undiscounted net cash flows to be generated from the use and eventual disposition of the Company’s long-lived assets exceeded its net carrying value. As a result, no write-down of long-lived assets was recognized as of June 27, 2025.

Next, the Company performed a quantitative test by measuring the fair value of its reporting unit based on a weighing of two valuation methodologies: an income approach and a market approach.

The income approach valued the projected discounted cash flows that are expected to be generated by the Company’s reporting unit and required judgments and estimates surrounding general economic conditions and company-specific performance inputs such as revenue growth rates, gross margins, operating costs, capital expenditures, assumed tax rates and other assumptions deemed reasonable by management.

The market approach valued the reporting unit based on financial performance and market multiples of comparable public companies, including consideration of a control premium representing the estimated amount a market participant would pay to obtain a controlling interest in the Company.

The results of the quantitative test indicated that the carrying value of the Company’s reporting unit exceeded its estimated fair value, resulting in the recognition of a $1.8 billion impairment charge during the third quarter of the year ended June 27, 2025 which was recorded in the accompanying Consolidated Statements of Operations.

The Company’s policy is to perform an annual impairment test on the first day of the fourth fiscal quarter. The Company performed a qualitative analysis, which did not indicate that goodwill was more-likely-than-not impaired. As a result, no additional quantitative analysis was required and no additional impairment charge was recorded during the fiscal year ended June 27, 2025.

For the year ended June 28, 2024, there were no impairment charges recorded. For the year ended June 30, 2023, the Company recorded an impairment charge of $671 million.

Prior to the separation, from time to time and in connection with factoring agreements, WDC sold certain of the Company’s trade accounts receivable without recourse to third-party purchasers in exchange for cash.

During the year ended June 27, 2025, there were no trade accounts receivable sold by WDC or the Company. In 2024 and 2023, WDC sold trade accounts receivable of the Company and received cash proceeds of $339 million and $370 million, respectively. The discounts on the trade accounts receivable sold during the period were not material and were recorded in Other expense, net, in the Consolidated Statements of Operations. There were no factored receivables outstanding as of June 27, 2025 and June 28, 2024.


	2025		2024
	(in millions)
Inventories:
Raw materials and component parts	$	1,517	$	1,398
Work-in-process	262		237
Finished goods	300		320
Total inventories	$	2,079	$	1,955


	2025		2024
	(in millions)
Property, plant and equipment:
Land	$	10	$	10
Machinery and equipment	1,480		2,340
Buildings and improvements	390		397
Computer equipment and software	176		123
Furniture and fixtures	18		16
Construction-in-process	51		108
Property, plant and equipment, gross	2,125		2,994
Accumulated depreciation	(1,506)		(2,203)
Property, plant and equipment, net	$	619	$	791

Intangibles are amortized over the estimated useful life based on the pattern in which the economic benefits are expected to be received. As of June 27, 2025 and June 28, 2024, all finite-lived intangible assets were fully amortized. During 2023, the Company recognized intangible amortization charges of $133 million.


	2025		2024		2023
	(in millions)
Warranty accrual, beginning of period	$	48	$	42	$	52
Charges to operations	27		28		30
Utilization	(35)		(34)		(26)
Changes in estimate related to pre-existing warranties	4		12		(14)
Warranty accrual, end of period	$	44	$	48	$	42


	2025		2024
	(in millions)
Other liabilities:
Non-current lease liability	$	193	$	171
Non-current net tax payable	131		56
Tax indemnification liability	110		—
Other non-current liabilities	62		59
Total other liabilities	$	496	$	286

In connection with the separation, the Company recorded an initial $112 million liability to indemnify WDC as a result of the Tax Matters Agreement entered into between the parties. The indemnification pertains to certain WDC tax positions where the underlying issues are determined to be related to the Company’s business before the spin-off. As WDC receives tax assessments, settles with tax authorities, or when the statute of limitation lapses, the indemnification liabilities will be reassessed and adjusted accordingly. This liability was subsequently reduced by approximately $2 million reflecting the outstanding balance as of June 27, 2025.

Accumulated other comprehensive loss (“AOCL”), net of tax, refers to expenses, gains, and losses that are recorded as an element of equity but are excluded from net income. The components of AOCL were as follows:


	Foreign Currency Translation Adjustment		Unrealized Income (Losses) on Derivative Contracts		Total Accumulated Comprehensive Loss
	(in millions)
Balance at June 30, 2023	$	(165)	$	(178)	$	(343)
Other comprehensive loss	(43)		(87)		(130)

Income tax benefit related to items of other comprehensive loss	—		21		21
Net current-period other comprehensive loss	(43)		(66)		(109)
Balance at June 28, 2024	$	(208)	$	(244)	$	(452)
Other comprehensive income	10		222		232
Income tax expense related to items of other comprehensive income	—		(19)		(19)
Net current-period other comprehensive income	10		203		213
Net transfer to Western Digital Corporation	(4)		(6)		(10)
Balance at June 27, 2025	$	(202)	$	(47)	$	(249)

During the years ended June 27, 2025 and June 28, 2024 the amounts reclassified out of AOCL included losses of $189 million and $215 million related to foreign exchange contracts. The losses related to foreign contracts were substantially all charged to Cost of revenue in the Consolidated Statements of Operations.

As of June 27, 2025, substantially all existing net losses related to cash flow hedges recorded in AOCL are expected to be reclassified to earnings within the next twelve months.