Revenue and Customer Contract Liabilities |
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Sep. 03, 2026 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| Revenue and Customer Contract Liabilities | Revenue and Customer Contract Liabilities Revenue by Technology
See Note 20. Segment and Other Information for disclosure of disaggregated revenue by market segment. Revenue is primarily recognized at a point in time when control of the promised goods is transferred to our customers at an amount that reflects the consideration we expect to be entitled to in exchange for those goods. Contracts with certain of our customers are short-term in duration. We also have strategic customer agreements structured as take-or-pay agreements, with binding commitments for specific contractually enforceable volumes over the multi-year contract terms. Pricing for our contracts is either fixed or periodically negotiated, with the majority of the strategic customer agreements having pricing that is subject to minimum and maximum bands. As of September 3, 2026, the transaction price allocated to our remaining performance obligations was approximately $134 billion, of which $13 billion has been recognized as contract liabilities. Contract liabilities primarily consisted of customer deposits associated with strategic customer agreements. Nearly all of the deposits are scheduled to be repaid between 2029 and 2031. Approximately one-fourth of the remaining performance obligations as of September 3, 2026 are expected to be recognized as revenue over the next twelve months. The remaining performance obligations are expected to be fully recognized within the next five years. As of August 28, 2025, our remaining performance obligations were not material. Our remaining performance obligations are based on expected purchases to satisfy committed volumes and minimum pricing and are not expected to be indicative of future revenue under these contracts. We have excluded agreements from our remaining performance obligations that do not have either fixed pricing or price bands as the related consideration is variable at contract inception. As a practical expedient, we have excluded contracts that have an original term of one year or less from remaining performance obligations. Certain strategic customer agreements also include terms requiring our customers to maintain letters of credit with third-party financial institutions. Our right to access letters of credit is contingent upon the occurrence of specified events of default or breach by our customers. Letters of credit are not recognized as revenue unless an event of default or breach has occurred. The aggregate amount of letters of credit issued, or contractually committed to be issued, by third-party financial institutions was $7 billion as of September 3, 2026, which represented the maximum potential proceeds available to us in the event of customer default or breach. In the event of customer default or breach, our contractual recovery rights may include proceeds from letters of credit, rights to decrement customer deposits and other contractual remedies. As of September 3, 2026 and August 28, 2025, other current liabilities included $4.32 billion and $1.19 billion, respectively, for estimates of consideration payable to customers, including pricing adjustments and returns.
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