Revenues

9 Months Ended

Apr. 02, 2021

Revenue from Contract with Customer [Abstract]

Revenues

Revenues

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 April 2, 2021 or July 3, 2020.

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. Other 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 April 2, 2021 and July 3, 2020 as well as the related amortization for the three and nine months ended April 2, 2021 and April 3, 2020 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 April 2, 2021 and July 3, 2020, 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 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 April 2, 2021 was $81 million, which is mainly attributable to the functional IP license and service arrangements. The Company expects to recognize this amount as revenue as follows: $10 million during the remainder of fiscal 2021, $40 million in fiscal 2022, and $31 million in fiscal 2023 and thereafter.

The Company’s disaggregated revenue information is as follows:

	Three Months Ended				Nine Months Ended
	April 2, 2021		April 3, 2020		April 2, 2021		April 3, 2020
	(in millions)
Revenue by Product
HDD	$	1,962	$	2,114	$	5,715	$	6,918
Flash-based	2,175		2,061		6,287		5,531
Total Revenue	$	4,137	$	4,175	$	12,002	$	12,449
Revenue by End Market
Client Devices	$	2,012	$	1,831	$	6,089	$	5,244
Data Center Devices & Solutions	1,237		1,523		3,173		4,544
Client Solutions	888		821		2,740		2,661
Total Revenue	$	4,137	$	4,175	$	12,002	$	12,449
Revenue by Geography
Americas	$	1,009	$	1,325	$	3,033	$	3,934
Europe, Middle East and Africa	913		770		2,267		2,360
Asia	2,215		2,080		6,702		6,155
Total Revenue	$	4,137	$	4,175	$	12,002	$	12,449

The Company’s top 10 customers accounted for 42% and 40% of its net revenue for the three and nine months ended April 2, 2021, respectively, and 44% of its net revenue for both the three and nine months ended April 3, 2020. For the three and nine months ended April 2, 2021 and April 3, 2020, no single customer accounted for 10% or more of the Company’s net revenue.