Segment Information

12 Months Ended

Jun. 30, 2024

Segment Reporting [Abstract]

Segment Information

Segment Information

We have two operating segments, which are the Sleep and Respiratory Care segment and the SaaS segment. We evaluate the performance of our segments based on net sales and income from operations. The accounting policies of the segments are the same as those described in Note 2 – Summary of Significant Accounting Policies. Segment net sales and segment income from operations do not include inter-segment profits and revenue is allocated to a geographic area based on where the products are shipped to or where the services are performed.

Certain items are maintained at the corporate level and are not allocated to the segments. The non-allocated items include corporate headquarters costs, stock-based compensation, amortization expense from acquired intangibles, restructuring expenses, field safety notification expenses, acquisition related expenses, net interest expense (income), gains and losses attributable to equity method investments, gains and losses on equity investments, and other, net. We neither discretely allocate assets to our operating segments, nor does our Chief Operating Decision Maker evaluate the operating segments using discrete asset information.

Additionally, effective in the third quarter of fiscal year 2024, we updated the method of attribution of certain costs that are principally managed at the segment level as part of our evaluation of segment operating performance. As a result, certain costs relating to quality and regulatory assurance, commercial legal, operations, sales and marketing, customer service, information technology, and other administrative costs, which were previously included in Corporate costs within our reconciliation of segment operating profit to income before income taxes, are now reported in segment operating results. The financial information presented herein reflects the impact of the preceding reporting change for all periods presented.

The table below presents a reconciliation of net revenues, depreciation and amortization and net operating profit by reportable segments for the years ended June 30, 2024, 2023 and 2022 (in thousands):

	2024		2023		2022
Net revenue by segment
Sleep and Respiratory Care	$	4,101,172	$	3,725,017	$	3,177,298
Software as a Service	584,125		497,976		400,829
Total	$	4,685,297	$	4,222,993	$	3,578,127
Depreciation and amortization by segment
Sleep and Respiratory Care	$	86,070	$	82,544	$	79,367
Software as a Service	10,241		9,119		7,315
Amortization of acquired intangible assets and corporate assets	80,559		73,493		72,927
Total	$	176,870	$	165,156	$	159,609
Net operating profit by segment
Sleep and Respiratory Care	$	1,681,354	$	1,447,120	$	1,279,591
Software as a Service (1)	154,450		115,655		93,756
Total	$	1,835,804	$	1,562,775	$	1,373,347
Reconciling items
Corporate costs	$	357,937	$	338,362	$	300,469
Amortization of acquired intangible assets	79,484		72,416		70,728
Restructuring expenses	64,228		9,177		—
Masks with magnets field safety notification expenses (2)	6,351		—		—
Astral field safety notification expenses (3)	7,911		—		—
Acquisition related expenses	—		10,949		1,864
Interest expense (income), net	45,708		47,379		22,312
Loss attributable to equity method investments	1,848		7,265		8,486
(Gain) loss on equity investments	4,045		(9,922)		12,202
Gain on insurance recoveries	—		(20,227)		—
Other, net	3,494		5,712		(3,197)
Income before income taxes	$	1,264,798	$	1,101,664	$	960,483

(1)    During the fiscal year ended June 30, 2024, we recorded $4.1 million of operating lease right-of-use asset impairments within our SaaS segment. The impairments related to leases for office space and were recorded within net operating profit.

(2)    The masks with magnets field safety notification expenses relate to estimated costs to provide alternative masks to patients in response to updated contraindications for use of masks that incorporate magnets.

(3)    The Astral field safety notification expenses relate to estimated costs associated with the replacement of a certain component in some of our Astral ventilation devices that were manufactured between 2013 to 2019.

The following table summarizes our net revenue disaggregated by segment, product and region for the years ended June 30, 2024, 2023 and 2022 (in thousands):

	2024		2023		2022
U.S., Canada and Latin America
Devices	$	1,522,758	$	1,444,361	$	1,070,420
Masks and other	1,199,798		1,039,026		911,387
Total U.S., Canada and Latin America	$	2,722,556	$	2,483,387	$	1,981,807
Combined Europe, Asia and other markets
Devices	$	921,253	$	826,341	$	796,488
Masks and other	457,363		415,289		399,003
Total Combined Europe, Asia and other markets	$	1,378,616	$	1,241,630	$	1,195,491
Global revenue
Devices	$	2,444,011	$	2,270,702	$	1,866,908
Masks and other	1,657,161		1,454,315		1,310,390
Total Sleep and Respiratory Care	$	4,101,172	$	3,725,017	$	3,177,298
Software as a Service	584,125		497,976		400,829
Total	$	4,685,297	$	4,222,993	$	3,578,127

Revenue information by geographic area for the years ended June 30, 2024, 2023 and 2022 is summarized below (in thousands):

	2024		2023		2022
United States	$	2,980,053	$	2,719,923	$	2,249,381
Rest of the World	1,705,244		1,503,070		1,328,746
Total	$	4,685,297	$	4,222,993	$	3,578,127

Long-lived assets of geographic areas are those assets used in our operations in each geographical area, and excludes goodwill, other intangible assets, and deferred tax assets. Long-lived assets by geographic area as of June 30, 2024 and 2023 is summarized below (in thousands):

	2024		2023
Australia	$	197,017	$	200,752
United States	160,606		164,448
Singapore	89,679		83,711
Rest of the World	100,723		88,945
Total	$	548,025	$	537,856