Revenues

3 Months Ended

Oct. 04, 2019

Revenue from Contract with Customer [Abstract]

Contract assets represent the Company’s rights to consideration where performance obligations are completed but the customer payments are not due until another performance obligation is satisfied. The Company did not have any contract assets as of either October 4, 2019 or June 28, 2019.

The Company incurs sales commissions and other direct incremental costs to obtain sales contracts. The Company has applied the practical expedient to recognize the direct incremental costs of obtaining contracts as an expense when incurred if the amortization period is expected to be one year or less or the amount is not material, with these costs charged to selling, general and administrative expenses. Direct incremental costs to obtain contracts that have an expected benefit of greater than one year are amortized over the period of expected cash flows from the related contracts, and the amortization expense is recorded as a reduction to revenue. Total capitalized contract costs as of October 4, 2019 and June 28, 2019 as well as the related amortization for the three months ended October 4, 2019 and September 28, 2018 were not material.

Contract liabilities relate to customers’ payments in advance of performance under the contract and primarily relate to remaining performance obligations under support and maintenance contracts. As of October 4, 2019 and June 28, 2019, contract liabilities were not material.

The Company applies the practical expedients and does not disclose transaction price allocated to the remaining performance obligations for (i) arrangements that have an original expected duration of one year or less, which mainly consist of the support and maintenance contracts, and (ii) variable consideration amounts for sale-based or usage-based royalties for IP license arrangements, which typically range longer than one year. Remaining performance obligations are mainly attributed to right-to-access patent license arrangements and customer support and service contracts which will be recognized over the remaining contract period. The transaction price allocated to the remaining performance obligations as of October 4, 2019 was $182 million, which is mainly attributable to the functional IP license and service arrangements. The Company expects to recognize this amount as revenue as follows: $50 million during the remainder of fiscal 2020, $50 million in fiscal 2021, $45 million in fiscal 2022 and $37 million thereafter.

The Company’s disaggregated revenue information is as follows:



	Three Months Ended
	October 4, 2019		September 28, 2018
	(in millions, except percentages)
Revenue by Product
Hard disk drives (“HDD”)	$	2,408	$	2,494
Flash-based	1,632		2,534
Total Revenue	$	4,040	$	5,028

Revenue by End Market
Client Devices	$	1,616	$	2,650
Data Center Devices & Solutions	1,532		1,446
Client Solutions	892		932
Total Revenue	$	4,040	$	5,028

Revenue by Geography
Americas	$	1,313	$	1,281
Europe, Middle East and Africa	779		884
Asia	1,948		2,863
Total Revenue	$	4,040	$	5,028

For the three months ended October 4, 2019, one customer accounted for 11% of the Company’s net revenue and for the three months ended September 28, 2018, two customers accounted for 11% and 10%, respectively, of the Company’s net revenue. For the three months ended October 4, 2019 and September 28, 2018, the Company’s top 10 customers accounted for 43% and 48% of its net revenue, respectively.