This Annual Report on Form 10-K contains forward-looking statements. All statements other than statements of historical fact could be deemed forward-looking statements and words such as “expect,” “anticipate,” “target,” “goal,” “project,” “intent,” “plan,” “believe,” “momentum,” “seek,” “estimate,” “continue,” “potential,” “future,” “endeavor,” “will,” “may,” “should,” “could,” “depend,” “predict,” and variations or the negative expression of such words and similar expressions are intended to identify forward-looking statements. Forward-looking statements in this report include, but are not limited to, statements relating to expected industry trends and conditions; future financial performance, trends or plans; anticipated impacts of developments in accounting rules and tax laws and rates; VMware’sour expectations regarding the timing of tax payments and the impacts of changes in VMware’sour corporate structure and alignment; plans for and anticipated benefits of VMware products, services and solutions and partner and alliance relationships; plans for, timing of and anticipated impacts and benefits of corporate transactions, capital-raising activities, acquisitions, stock repurchases and investment activities; the outcome or impact of pending litigation, claims or disputes; our ESG-related programs including the objectives of our 2030 Agenda and our programs to further diversity, equity and inclusion; the continuing impact of the COVID-19 pandemic on the global economy as well as any related effects on our business operations, financial performance, results of operations and stock price; future plansour commercial relationship with respect to Dell’s ownership interest in us, including any possible spin-offDell following completion of its ownership to Dell stockholders and any potential related transactions, such as a special cash dividend to be paid by usthe Spin-Off and the related payment of the Special Dividend; our plans to repay our outstanding indebtedness, including the indebtedness incurred to pay a portion of the Special Dividend; our commitment and ability to maintain an investment-grade credit rating; the sufficiency of our cash sources of funding for any such special cash dividend;to fund our operations; and any statements of assumptions underlying any of the foregoing. These statements are based on current expectations about the industries in which VMware operates and the beliefs and assumptions of management. These forward-looking statements involve risks and uncertainties and the cautionary statements set forth above and those contained in the section of this report entitled “Risk Factors” identify important factors that could cause actual results to differ materially from those predicted in any such forward-looking statements. All forward-looking statements in this document are made as of the date hereof, based on information available to us as of the date hereof. We assume no obligation to and do not currently intend to, update these forward-looking statements.

VMware is subject to various risks as set forth in Part I, Item 1A of this Annual Report on Form 10-K, including:

VMware, Inc. (“VMware”) originally pioneered the development and application of virtualization technologies with x86 server-based computing, separating application software from the underlying hardware.hardware, and then evolved to become the private cloud and mobility management leader. Building upon that leadership, VMware is focused on becoming the multi-cloud leader. Information technology (“IT”) driven innovation continues to disrupt markets and industries. Technologies emerge faster than organizations can absorb, creating increasingly complex environments. Organizations’ IT isdepartments and corporate divisions are working at an accelerated pace to harness new technologies, platforms and cloud models, ultimately guiding businesses and their product teams through a digital transformation. To take on these challenges, we are working withhelping customers indrive their multi-cloud strategy by providing the areas of hybridmulti-cloud platform for all applications, enabling digital innovation and enterprise control.

Our multi-cloud virtualportfolio, spanning application modernization, cloud management, cloud infrastructure, networking, digitalsecurity and anywhere workspaces, modern applications and intrinsic security. Our software providesforms a flexible, consistent digital foundation to enableon which customers incan build, run, manage, connect and protect their digital transformation.

We incorporated in Delaware in 1998 and were acquired by EMC Corporation (“EMC”) in 2004 and2004. In August 2007, we conducted ouran initial public offering of our Class A common stock in August 2007.(“Class A Stock”), but remained majority-owned by EMC, the sole stockholder of our Class B common stock (“Class B Stock”). In September 2016, Dell Technologies Inc. (“Dell”) acquired EMC. As a result, EMC became a wholly owned subsidiary of Dell, and we became an indirectly held,a majority-owned subsidiary of Dell. On November 1, 2021, our spin-off from Dell was completed, each share of Class B Stock converted into one fully paid and non-assessable share of Class A Stock and we became a standalone company (the “Spin-Off”). In December 2019,connection with the Spin-Off, we acquired Pivotal Software, Inc., a subsidiary of Dell. We are considered a “controlled company” under the rulespaid an $11.5 billion cash dividend, pro rata, to each of the New York Stock Exchange (“NYSE”). As of January 29, 2021, Dell controlled approximately 80.6% of our outstanding common stock, including 31 million sharesholders of our Class A common stockStock and all of our Class B common stock.Stock as of the close of business on October 29, 2021 (the “Special Dividend”).

Our fiscal year is the 52 or 53 weeks ending on the Friday nearest to January 31 of each year. We refer to our fiscal year ending February 3, 2023 and fiscal years ended January 28, 2022 and January 29, 2021 and January 31, 2020 as “fiscal 2023,” “fiscal 2022,” “fiscal 2021” and “fiscal 2020,2021,” respectively. Fiscal 2023 is a 53-week fiscal year, while fiscal 2022 and fiscal 2021 were each 52-week fiscal years.

Total revenue in fiscal 20212022 increased 9% to $11.8$12.9 billion. Total revenue is comprised of license revenue of $3.0$3.1 billion, subscription and SaaSsoftware-as-a-service (“SaaS”) revenue of $2.6$3.2 billion and services revenue of $6.1$6.5 billion. As customers shift from our on-premises offerings to our cloud-basedsubscription and SaaS offerings, license revenue and software maintenance revenue may be lower and subject to greater fluctuation in the future, driven byresulting from a higher percentageproportion of cloud-based offerings being sold.our sales occurring through our subscription and SaaS offerings.

Our corporate headquarters are located at 3401 Hillview Avenue, Palo Alto, California and we have 127111 offices worldwide.

Our multi-cloud, virtual cloud networking, digital workspace, application modernizationportfolio supports and intrinsic security solutions form a flexible, consistent digital foundation on which to build, run, manage, connect and protectaddresses our customers’ key priorities, including modernizing their applications, anywhere.

VMware Tanzu, a familyportfolio of products and services for modernizing applications and infrastructure, enables customers to deliver better software to production, continuously. The portfolio enables customers to build, run and manage modern applications on any cloud and simplifies the use of Kubernetes, an open sourceopen-source platform for managing containers, in a multi-cloud environment. The modern or cloud nativecloud-native applications allow businesses to bring new ideas to market faster and respond sooner to customer demands. VMware Tanzu uses cloud native patterns to build applications with microservices and APIs,application programming interfaces and utilizinguses Kubernetes to simplify how these applications are deployed, observed and managed across on-premises, public clouds and edge. VMwareedge environments. Tanzu includes technologies acquired as part of our Pivotal, Bitnami, Heptio and Wavefront acquisitions.

Key offeringsproducts within application modernizationour Application Modernization portfolio include:

We makeoffer a complete portfolio of Layer 2-7 virtual networking and security intrinsic by leveraging the infrastructure to provide visibilitysolutions that deliver innovative software-based capabilities for apps, usersswitching, routing, firewalling, intrusion prevention and devices, and combining that with leading threatintrusion detection systems, network detection and response, capabilitiesload balancing, service mesh and SD-WAN for enterprise and Telco environments. These networking solutions enable customers to deliverconnect and protect all workloads running on bare metal, in containers, on virtual machines and across data

Today’s modern, distributed enterprise requires security that is both built-in and built differently. We leverage the unique power of virtualization to put security everywhere, helping our customers to secure any cloud, any application and anywhere workspaces. VMware Carbon Black Cloud, a SaaS-delivered cloud native endpoint, workload and container protection platform, is at the center of the VMware security portfolio. VMware Carbon Black Cloud is a SaaS-delivered cloud native endpoint and workload protection platform.

Key products within our Security portfolio include:

We have more than 9001,100 technology partners with whom we bring offerings to the marketplace and over 4,500 active cloud, hyperscaler and managed service provider partners. We classify our partners as follows:

In addition to our base of active partnerships with cloud providers, we have a strategic alliance with AWS to build and deliver an integrated hybrid offering, VMware Cloud on AWS, that enables customers to run applications across vSphere-based private, public and multi-cloud environments.

Our Technology Alliance Partner (“TAP”) program facilitates collaborative solution creation and coordinated go-to-market activities for our ecosystem of more than 9001,100 technology partner ecosystem.partners. Created exclusively for IHV and ISV partners, the TAP program

Our ISVs and other alliance partners, developers and additional VMware community members continue to distribute software applications as virtual appliances. We invest significant capital in testing and certificationcertifications of infrastructure to rigorously ensure our software is compatible with major hardware and software products.

We have made, and expect to continue to make, significant investments in research and development (“R&D”). We have assembled an experienced group of developers with expertise in software-defined data centers, hybrid and multiple public clouds, thewithin application modernization, migration andcloud management, of applications,cloud infrastructure, networking, security, anywhere workspaces, software-as-a-service, open source and digital workspaces.edge solutions. We also have strong ties to leading academic institutions around the world and we invest in joint research with academia.

We prioritize our product development efforts through a combination of engineering-driven innovation and customer- and market-driven feedback. Our R&D culture places a high value on innovation, quality and open collaboration with our partners. We currently participate in numerous standards groups and our employees hold a variety of leadership positions with standards organization leadership positions.organizations.

We continue to invest in our key growth areas while also investing in areas that we expect to be significant growth drivers in future periods.

We have a highly leveragedOur go-to-market strategy that includesefforts include a direct sales force, including a specialized sales force for our key growth offerings, and our channel and cloud partners.

We generally do not have long-term contracts or minimum-purchase commitments with our distributors, resellers, system vendors and systems integrators and our contracts with these channel partners do not prohibit them from offering products or services that compete with ours.

End users can purchase the full breadth of our subscription, SaaS, perpetual license and services portfolio through discrete purchases to meet their immediate needs or through the adoption of enterprise agreements (“EAs”). Both, both of which provide access to a range of flexible purchasing programs. EAs are comprehensive offerings that maysold to our direct customers and through channel partners and can include our license, multi-year maintenance and support, subscription and SaaS offered both directly by us and through certain channel partners that also provide for multi-year maintenance and support.offerings. EAs enable us to build long-term relationships with our customers as they commit to our virtual infrastructure solutions. Our sales cycle can vary greatlyvaries depending on numerous factors, including the size and complexity of the proposed offering and a customer’s infrastructure footprint.

In establishing list prices for our products,solutions, we take into account, among other numerous factors, the value our products and solutions deliver and the cost of alternative virtualization, end-user computing, hardware and hardwaresecurity solutions.

Our marketing efforts focus on communicating the benefits of our solutions and educating our customers and users, distributors, resellers, system vendors, systems integrators, the media and analysts about the advantages of our innovative offerings. We raise awareness of our company and brands, market our products and generate sales leads through VMware and industry events, public relations efforts, marketing materials, advertising, direct marketing, social media initiatives, free downloads and trials and our website. We have invested in multiple online communities that enable customers and partners to share and discuss sales and development resources, best practices implementation and industry trends among other topics. Our annual user conferences, VMworld, vForum Connect and SpringOne are held globally.global events. We also offer management presentations, seminars and webinars on our solutions and services. We believe the combination of these activities strengthens our brand and enhances our leading positionsleadership in the industries in which we compete.

WeOn November 1, 2021, in connection with the Spin-Off, we and Dell entered into the Commercial Framework Agreement to provide a framework under which we and Dell will continue joint marketing, sales, brandingour strategic commercial relationship, particularly with respect to projects mutually agreed by the parties as having the potential to accelerate the growth of an industry, product, service or platform that may provide the parties with a strategic market opportunity. The Commercial Framework Agreement has an initial term of five years, with automatic one-year renewals occurring annually thereafter, subject to certain terms and product development efforts with Dell and other Dell companies to enhance the collective value we deliver to our mutual customers. Our collective business with Dell continued to create synergies that benefited our sales during fiscal 2021.conditions. Bookings through Dell sales channels have grown more rapidly than through non-Dell resellers and distributors, and Dell sales channels in aggregate comprise the largest route-to-market for our sales.

We also have strategic partnerships with AWS, Google, IBM and Microsoft to jointly provide the expertise, solutions and

Our business is subject to seasonality inand the salesales of our products and services.services are subject to seasonality. For example, our fourth quarter revenue is affected by a number of seasonal factors, including year-end spending trends, whichthat impact the timing of renewals of our EAs and support and maintenance contracts.

Remaining performance obligations represent the aggregate amount of the transaction price in contracts allocated to performance obligations not delivered, or partially undelivered, as of the end of the reporting period. Remaining performance obligations include unearned revenue, multi-year contracts with future installment payments and certain unfulfilled orders against accepted customer contracts at the end of any given period.

As of January 29, 2021,28, 2022, the aggregate transaction price allocated to remaining performance obligations was $11.3$12.0 billion, of which approximately 55%57% is expected to be recognized as revenue over the next twelve months and the remainder thereafter.

As of January 31, 2020,29, 2021, the aggregate transaction price allocated to remaining performance obligations was $10.3$11.3 billion, of which approximately 54%55% was expected to be recognized as revenue during fiscal 2021,2022 and the remainder thereafter.

Backlog is comprised of unfulfilled purchase orders or unfulfilled executed agreements at the end of a given period and is net of related estimated rebates and marketing development funds. Backlog consists of licenses, subscription and SaaS and services. As of January 28, 2022, our total backlog was $88 million and our backlog related to licenses was $14 million. For our backlog related to licenses, we generally expect to deliver and recognize revenue during the following quarter. Backlog totaling $36 million as of January 28, 2022 was excluded from the remaining performance obligations because such contracts are subject to cancellation until the performance obligation is fulfilled.

As of January 29, 2021, our total backlog was $93 million and our backlog related to licenses was $23 million. For our backlog related to licenses, we generally expect to deliver and recognize as revenue during the following quarter. Backlog totaling $18 million as of January 29, 2021 was excluded from the remaining performance obligations because such contracts are subject to cancellation until fulfillment of the performance obligation occurs.

The amount and composition of backlog will fluctuate period to period and backlog is managed based upon multiple considerations, including product and geography. We do not believe that the amount of backlog is indicative of future sales or revenue or that the mix of backlog at the end of any given period correlates with actual sales performance of a particular geography or particular products or services.

Our product offerings allow customers to manage IT resources across private clouds and complex multi-cloud, multi-device environments. Customer deployments range in size from a single virtualized server for small businesses to thousands of virtual machines and managed devices for our largest enterprise customers.

During fiscal 2021,2022, revenue from Dell, including purchases of products and services directly from us, as well as through our channel partners, accounted for 35%38% of our consolidated revenue. These purchases included Dell selling joint solutions as an OEM, which accounted for 12%13% of total revenue from Dell, or 4%5% of our consolidated revenue. The remaining revenue from Dell consisted of Dell acting as a distributor to other non-Dell resellers, reselling products and services as a reseller or purchasing products and services for its own internal use. On certain transactions, Dell Financial Services also provided financing to our end users at our end users’ discretion.

During fiscal 2021, another distributor, Arrow Electronics, Inc., who purchased software licenses and software support from us for resale to end-user customers directly or via resellers,Other than Dell, none of our distributors accounted for 11%more than 10% of our consolidated revenue.revenue during fiscal 2022. Our distribution agreements are typically terminable at will by either party upon 30 to 90 days’ prior written notice to the other party and neither party has any obligation to purchase or sell any products under the agreement.

We face intense competition across all markets for our products and services. We believe that the key factors in our ability to successfully compete include the level of reliability, interoperability and new functionality of our product and service offerings; the ability of our product offerings to support multiple hardware platforms, operating systems, applications frameworks and public cloud platforms; our ability to anticipate customer needs in rapidly evolving markets for IT resources; the pricing of our product and service offerings; the ability to integrate open source technologies that are critical in private and public cloud computing architectures; the ability to attract and retain key employees; and the ability to maintain and expand our ecosystem of technology partners, service providers and sales channel partners. While we believe that we are a technology leader in virtualization and cloud infrastructure solutions and have a strong, favorable image with our customers, many of our

We face competition from, among others:

ThisThese various forms of competition could result in increased pricing pressure and sales and marketing expenses, thereby materially reducing our operating margins and could also prevent our new products and services from gaining market acceptance, thereby harming our ability to increase, or causing us to lose, market share.

We have federal trademark registrations in the U.S. for “VMWARE,” “VMWORLD,” “VSPHERE,” “VCLOUD,” “VCENTER SERVER,” “VMOTION,” “HORIZON,” “AIRWATCH,” “VREALIZE,” “VCLOUD,” “WORKSPACE ONE,” “ESX,” “VMWARE NSX,” “VMWARE CLOUD FOUNDATION,” “VELOCLOUD,” “CARBON BLACK,” “BITNAMI” and “PIVOTAL” and numerous other trademarks. We also have trademarks registered in several foreign countries.

We rely on a combination of patent, trademark, copyright and trade secret laws in the U.S. and other jurisdictions, as well as confidentiality procedures and contractual provisions to protect our intellectual property rights and our brand.

We enforce our intellectual property rights in the U.S. and several foreign countries. Despite our efforts, the steps we have taken to protect our proprietary rights may not be adequate to preclude misappropriation of our proprietary information or infringement of our intellectual property rights, and our ability to police such misappropriation or infringement is uncertain, particularly in countries outside of the U.S. patent filings are intended to provide the holder with a right to exclude others from making, using, offering to sell, selling or importing into the U.S. products covered by the claims of granted patents.

At VMware, we believe technology can have a positive impact on society and the planet. In December 2020, we announced our 2030 Agenda, which represents our ESG Strategystrategy focused on three business outcomes: Trust,Sustainability, Equity and Sustainability.Trust. Our 2030 Agenda is designed for the benefit of all VMware stakeholders: stockholders,shareholders, customers, employees, partners, suppliers and communities.

To promote long-term stakeholder value creation, we created an ESG governance structure comprised of internal leadership and members of our executive staff to guide strategy, measure performance measurement and engage with our Board of Directors to review ESG matters. The Nominating, Governance and Related Persons Transactions Committee of our Board of Directors meets with our ESG strategy.leadership team on a regular cadence throughout the year to review ESG objectives and their integration into VMware’s strategic objectives and to monitor progress against the goals set in our 2030 Agenda.

VMware is committed to operatingachieving net zero carbon emissions for our operations and supply chain by 2030 as part of our ESG strategy. Our net zero goal builds on validated science-based targets as well as our achievements of continuing to operate as a certified CarbonNeutral® company in accordance with Thethe CarbonNeutral Protocol and procuring 100% renewable energy for our operations, in accordance with RE100’s technical guidance, duringguidance. In fiscal 2021,2022, we received validation oflaunched our science-based targets from the Science Based Targets Initiative organization (“SBTi”)Responsible Sourcing program to address climate change. This year,drive sustainability, diversity and accessibility across our supply chain.

During fiscal 2022, we utilizedcontinued to utilize concepts from the Financial Stability Board’s (“FSB”) Taskforce for Climate-Related Financial Disclosures (“TCFD”) framework and expanded our climate change risk assessment to model multiple climate change scenarios and their potential impacts on our global operations. We will use the risk assessment process to inform future risk mitigation strategies. In addition to TCFD, VMware’s ESG self-assessments and goals are informed by ESG frameworks including Sustainability Accounting Standards Board, Global Reporting Initiative and the United Nations’ Global Compact.

Our commitment to ESG was recognized for the second consecutive year by being included in our reporting processes. Additionally, we were recognized on CDP’s Climate A List (formerly known as Carbon Disclosure Project) and added to the 2020 Dow Jones Sustainability Indices (“DJSI”).Indices. More details on our ESG programs, goals and commitments can be found in our annual ESG Report on our website. Information on our website is not deemed to be incorporated by reference into this filing on Form 10-K.

As of January 29, 2021,28, 2022, we employed approximately 34,00037,500 employees located in 60 countries, approximately 15,00015,700 of which work in the U.S.

We use contractors from time to time for temporary assignments and in locations in which we do not currently have operating subsidiaries.subsidiaries or branches. In the event that these contractor resources were not available, we do not believe that this would have a material adverse effect on our operations. As of January 29, 2021, less than 5% of our employees were contracted through Dell. None of our employees are represented by labor unions and we consider current employee relations to be good.

The VMware culture is based on a set of shared values best expressed through the acronym EPIC2: Execution, Passion, Integrity, Customers and Community. Each year, we honor extraordinary employees through our EPIC2 Achievement Awards program. Individuals are recognized for their ability to regularly go above and beyond the Company’s high standardsstandards. We have quarterly EPIC2 days off and for demonstrating a remarkable qualityan EPIC2 shutdown at the end of character. Their dedicationthe year, which enable our people to projects,focus on their wellbeing and rejuvenate.

During fiscal 2022, we continued our programs initiated in response to the COVID-19 pandemic in order to address the safety of our employees while continuing to support the business continuity needs of our customers and fellowpartners. We have enabled employees to choose to work in the office or remotely consistent with local health regulations and operational requirements. We have continued to implement flexible work and customer outreach experiences that allow our teams to remain connected with each other and with our customers while maintaining and enhancing productivity, operational excellence and innovation. We continued additional benefits to employees including a wellbeing allowance, home equipment allowance for all new employees, coverage of COVID-19 testing and treatment, as well as additional personal paid time off days.

During fiscal 2022, we continued to build and expand a dynamic, global workforce of the future that empowers our people to work from any location, consistent with business requirements, that accelerates their productivity to deliver innovative solutions and operational excellence for our customers worldwide. We believe our approach to employee choice and flexibility is enabling the Company to successfully compete to hire and retain skilled and talented team members represents great leadership—people who can inspirefrom many new locations globally and motivate, especially during times of transformationcontribute to meeting our diversity, equity and change.

DEI is a business priority at VMware. Our DEI initiative, VMinclusion, is a business-led effort to attract, develop and engageretain the multinational, multicultural talent critical to our globally connected business. We are committed to creating a flexible, inclusive environment where everyone is respected and has equal opportunity to succeed. Specifically, we are focused on driving a culture that is inclusive of all forms of diversity: from demographic factors such as race, ethnicity, national origin, gender identity, sexual orientation, disability, veteran status to other critical factors such as function, office location, personality, age and life experience. During fiscal 2021,2022, all Senior Directors and above were assigned responsibility for achievement of company-wide DEI goals tied to bonus compensation. We carefullyare continuing to expand our programs and monitor the impact of our practices on the hiring and retention of talent from underrepresented communities including women, people with disabilities, veterans and those that identifyself-identify as being part of LGBTQLGBTQ+ communities. In fiscal 2021 we focused on our Black colleagues and their communities through executive level engagement to drive positive change that is systemic and long term.

We have been recognized for our achievements including Forbes 20202021 The Best Employers for Diversity, Forbes 20202021 The Best Employers for Women and the 20202022 Human Rights Campaign Foundation Best Places to Work for LGBTQ Equality.Equality as well as 2021 DEI Best Places to Work for Disability Inclusion.

As of the end of fiscal 2021,2022, women represented 27.1%29% of our global employees and underrepresented minorities represented 10.4%12% of our U.S. employees.

We continue to invest in our key growth areas while also investing in areas that we expect to be significant growth drivers in future periods.

On November 1, 2021, in connection with the Spin-Off, we and Dell entered into the Commercial Framework Agreement to provide a framework under which we and Dell will continue our strategic commercial relationship, particularly with respect to projects mutually agreed by the parties as having the potential to accelerate the growth of an industry, product, service or platform that may postprovide the parties with a strategic market opportunity. The Commercial Framework Agreement has an initial term of five years, with automatic one-year renewals occurring annually thereafter, subject to certain terms and conditions. Bookings through Dell sales channels in aggregate comprise the largest route-to-market for our sales.

We use contractors from time to time for temporary assignments and in locations in which we do not currently have operating subsidiaries or branches. In the event that investors might find usefulthese contractor resources were not available, we do not believe that this would have a material adverse effect on our operations. None of our employees are represented by labor unions and we consider current employee relations to be good.

During fiscal 2022, we continued our programs initiated in response to the COVID-19 pandemic in order to address the safety of our employees while continuing to support the business continuity needs of our customers and partners. We have enabled employees to choose to work in the office or interesting;remotely consistent with local health regulations and operational requirements. We have continued to implement flexible work and customer outreach experiences that allow our teams to remain connected with each other and with our customers while maintaining and enhancing productivity, operational excellence and innovation. We continued additional benefits to employees including a wellbeing allowance, home equipment allowance for all new employees, coverage of COVID-19 testing and treatment, as well as additional personal paid time off days.

We tailor our compensation programs including base pay strategy, variable compensation programs and health, wellbeing and retirement programs to sign up for email alertsmeet the needs of our employees. Equity awards are a key compensation component that enables us to recruit and RSS feedsretain top talent. The Compensation Committee of our Board of Directors oversees the utilization of stock-based compensation to have information pushed in real time.appropriately balance competitive needs against the dilutive impact on our stockholders. These components of

The trading price of our Class A common stock has fluctuated significantly in the past and could fluctuate substantially in the future, due toand stockholders’ investments in our stock could lose some or all of their value. The stock market in general and technology companies in particular have often experienced extreme price and volume fluctuations. Neither the factors discussed in this Risk Factors section and elsewhere in this Annual Report on Form 10-K.

In addition, to direct value lost, volatility or declines in our stock price may adversely affect our ability to retain key employees, most of whom are compensated, in part, based on the performance of our stock price. In the past, following periods of volatility in the overall market and the market price of a company’s securities, securities class action litigation has often been instituted, including against us, and, if not resolved swiftly, can result in substantial costs and a diversion of management’s attention and resources.

As our controlling stockholder, Dell has the ability to prevent a change in control of VMware. ProvisionsCertain provisions in our certificate of incorporation and bylaws may also have the effect of delaying or preventing a change of control or changes in our management. These provisions include the following:

In addition, we have elected to apply the provisions of Section 203 of the Delaware General Corporation Law. These provisionsLaw may prohibitdiscourage, delay or prevent a change in control of our company and could reduce the price that investors may be willing to pay for shares of our common stock. Section 203 imposes certain restrictions on merger, business combinations and other transactions between us and large stockholders, in particular those owning 15% or more of our outstanding voting stock, from mergingstock.

While the Delaware courts have determined that exclusive forum provisions are facially valid, a stockholder may nevertheless seek to bring a claim in a venue other than the one we have designated. In such instance, we would expect to vigorously assert the validity and enforceability of the exclusive forum provision of our bylaws, which may require significant expenditures of resources, and, ultimately, there can be no assurance that the provisions would be enforced by a court in those other jurisdictions. This exclusive forum provision may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us. These provisionsus or our directors, officers, or other employees and may discourage these types of lawsuits. If a court were to find the exclusive forum provision contained in our certificate of incorporation and bylaws and under Delaware law could discourage potential takeover attempts and could reduce the price that investors mightto be willinginapplicable or unenforceable in an action, we may incur additional costs to pay for shares of our common stock.resolve such action in other jurisdictions.

We conduct a meaningful portion of our business in currencies other than the U.S. dollar, but report our operating results in U.S. dollars. Accordingly, our operating results are subject to fluctuations in currency exchange rates. The realized gain or loss on foreign currency transactions is dependent upon the types of foreign currency transactions into which we enter, the exchange rates associated with these transactions and changes in those rates, the net realized gain or loss on our foreign currency forward contracts, among other factors. Although we hedge a portion of our foreign currency exposure, significant fluctuations in exchange rates between the U.S. dollar and foreign currencies have adversely affected, and may adversely affect in the future, our operating results. For example, the economic uncertainty introduced by Brexit resulted in significant volatility in the value of the British pound and other currencies, and the COVID-19 pandemic may make it more difficult for us to accurately forecast future transactions in foreign currencies and cause us to have to modify hedging positions, thereby adversely impacting the efficacy of our foreign currency hedging strategy and our operating results. Any future weakening of foreign currency exchange rates against the U.S. dollar would likely result in additional adverse impacts on our revenue.

We may not realize all the economic benefit from our business acquisitions, which could result in an impairment of goodwill or intangibles. As of January 29, 2021,28, 2022, goodwill and amortizable intangible assets were $9.6 billion and $993$714 million,

We prepare our consolidated financial statements in accordance with accounting principles generally accepted in the U.S. These principles are subject to interpretation by the Securities and Exchange Commission and various bodies formed to create and interpret appropriate accounting principles and guidance. A change in these principles or guidance, or in their interpretations, may have a material effect on our reported results, as well as our processes and related controls, and may retroactively affect previously reported results.

A significant natural disaster, such as an earthquake, fire, flood or other act of God, catastrophic event or pandemic, abrupt political change, terrorist activity and armed conflict, and any similar disruption, as well as any derivative disruption, such as those to services provided through localized physical infrastructure, including utility or telecommunication outages, or any to the continuity of our, our partners’ and our customers’ workforce, could have a material adverse impact on our business and operating results. Our worldwide operations are dependent on our network infrastructure, internal technology systems and website, as well as our intellectual property and personnel, significant portions of which, including our corporate headquarters, are located in California, a region known for seismic activity, fires and floods. Disruption to these dependencies may negatively impact our ability to respond to customer requests, process orders, provide services and maintain local and global business continuity. Delays or cancellations of customer orders or the deployment or availability of our products and services, for example, could materially impact our revenue. Furthermore, some of our newer product initiatives, offerings and business functions are hosted or carried out by third parties that may be vulnerable to these same types of disruptions, the response to or resolution of which may be beyond our control. Additionally, any such disruption could cause us to incur significant costs to repair damages to our facilities, equipment, infrastructure and business relationships.

Risks related to rapid climate change, such as extreme weather conditions, sea-level rise, drought, flooding and wildfires, may have an increasingly adverse impact on our business and those of our customers, partners and vendors in the longer term. While we seek to mitigate the business risks associated with climate change for our operations, there are inherent climate-related risks wherever business is conducted. Access to clean water and reliable energy in the communities where we conduct our business, whether for our offices, data centers, vendors, customers or other stakeholders, is a priority. Any of our primary locations may be vulnerable to the adverse effects of climate change and the impacts of extreme weather events, which have caused regional short-term systemic failures in the U.S. and elsewhere. For example, our California headquarters are projected to be vulnerable to future water scarcity due to climate change.change, and unanticipated extreme cold weather has resulted in electrical grid outages in Texas where many of our U.S. employees are located. While this danger currently has a low-assessed risk of disrupting normal business operations in the near term, it has the potential to impact employees’ abilities to commute to work or to work from home and stay connected effectively. Climate-related events, including the increasing frequency of extreme weather events, their impact on critical infrastructure in the U.S. and internationally and their potential to increase political instability in regions where we, our customers, partners and our vendors do business, have the potential to disrupt our business, our third-party suppliers, or the business of our customers and partners, and may cause us to experience higher attrition losses and additional costs to maintain or resume operations. Climate change and environmental regulations may result in changes in the supply, demand or available sources of energy or other resources that could adversely impact the availability or cost of goods and services, including natural resources necessary to run our business. Additionally, changes in climate in the locations where we operate may increase the costs of powering and cooling the computer hardware we use to develop software and deliver our subscription and SaaS-based offerings as well as the costs of carbon offsets that we may procure from time to time as we pursue our carbon-neutral objectives.

None.

As of January 29, 2021,28, 2022, we owned or leased the facilities described below:

We believe that our current facilities will support our employee headcount through fiscal 20222023 while working in a distributed manner that empowers our people to work from any location, consistent with business requirements. We review our real estate on an ongoing basis to support our growing employee base and operational excellence.

Refer to Note E to the consolidated financial statements in Part II, Item 8 of this Annual Report on Form 10-K for a description of legal proceedings. See also the risk factor entitled “We are involved in litigation, investigations and regulatory inquiries and proceedings that could negatively affect us” in Part I, Item 1A of this Annual Report on Form 10-K for a discussion of potential risks to our results of operations and financial condition that may arise from legal proceedings.

Not applicable.

Our Class A common stock, par value $0.01 per share (“Class A Stock”), trades on the New York Stock Exchange under the symbol VMW.

On November 1, 2021, our spin-off from Dell Technologies Inc. (“Dell”) (the “Spin-Off”) was completed. Automatically as a result of the Spin-Off, each share of our Class B convertible common Stock (“Class B Stock”) converted into one fully paid and non-assessable share of Class A Stock. As of March 16, 2021,15, 2022, we had 263,809 holders of record of our Class A common stock and three holders of record of our Class B common stock, EMC Corporation (“EMC”), VMW Holdco LLC and EMC Equity Assets LLC, each of which is an indirect wholly owned subsidiary of Dell Technologies Inc. (“Dell”).Stock.

Subsequent to our initial public offering in August 2007, we have not declared or paid regular cash dividends on our common stock. On July 1, 2018, we declared a conditional special dividend of $11.0 billion, which was paid on December 28, 2018, with a per share dividend amount of $26.81.

Issuer purchases of Class A common stock during the three months ended January 29, 202128, 2022 were as follows:

The following management’s discussion and analysis is provided in addition to the accompanying consolidated financial statements and notes to assist in understanding our results of operations and financial condition.

In December 2019, VMware completedOur fiscal year is the acquisition52 or 53 weeks ending on the Friday nearest to January 31 of Pivotal Software, Inc. (“Pivotal”), which was, at the time,each year. We refer to our fiscal year ending February 3, 2023 and fiscal years ended January 28, 2022, January 29, 2021 and January 31, 2020 as “fiscal 2023,” “fiscal 2022,” “fiscal 2021,” and “fiscal 2020,” respectively. Fiscal 2023 is a subsidiary of VMware’s parent company, Dell Technologies Inc. (“Dell”). The purchase of the controlling interest in Pivotal from Dell was accounted for as a transaction between entities under common control in accordance with Accounting Standards Codification 805-50, Business Combination - Related Issues, which requires retrospective combination of entities for all periods presented, as if the combination had been in effect since the inception of common control. As such, prior period

Period-over-period changes are calculated based upon the respective underlying non-rounded data. We refer to our fiscal years ended January 29, 2021, January 31, 2020 and February 1, 2019 as “fiscal 2021,” “fiscal 2020,” and “fiscal 2019,” respectively. Unless the context requires otherwise, we are referring to VMware, Inc. and its consolidated subsidiaries when we use the terms “VMware,” the “Company,” “we,” “our” or “us.”

Discussion regarding our financial condition and results of operations for fiscal 20202021 as compared to fiscal 20192020 that are not included in this Form 10-K can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended January 31, 2020,29, 2021, filed with the SEC on March 26, 2020.2021.

We originally pioneered the development and application of virtualization technologies with x86 server-based computing, separating application software from the underlying hardware.hardware, and then evolved to become the private cloud and mobility management leader. Building upon that leadership, we are focused on becoming the multi-cloud leader. Information technology (“IT”) driven innovation continues to disrupt markets and industries. Technologies emerge faster than organizations can absorb, creating increasingly complex environments. Organizations’ IT isdepartments and corporate divisions are working at an accelerated pace to harness new technologies, platforms and cloud models, ultimately guiding businesses and their product teams through a digital transformation. To take on these challenges, we are working withhelping customers indrive their multi-cloud strategy by providing the areas of hybridmulti-cloud platform for all applications, enabling digital innovation and multi-cloud, modern applications, networking, security and digital workspaces. Our software provides a flexible digital foundation to enable customers in their digital transformations.enterprise control.

Our portfolio supports and addresses theour customers’ key priorities, of our customers including modernizing their applications, managing multi-cloud environments, accelerating their cloud journey, migratingmodernizing the network using commodity hardware, embracing zero-trust security and modernizing their applications, empowering digital workspaces, transforming networking and embracing intrinsic security.anywhere workspaces. We enable customers to digitally transform their operations as they ready theirdigital transformation of customers’ applications, infrastructure and employeesoperations for their constantly evolving business and employee needs.

We sellEnd users can purchase the full breadth of our solutions usingsubscription, SaaS, license and services portfolio through discrete purchases or through enterprise agreements (“EAs”) or as part of our non-EA, or transactional, business.. EAs are comprehensive offerings that maysold to our direct customers and through channel partners and can include our license, multi-year maintenance and support, subscription and SaaS offered both directly by us and through certain channel partners that also provide for multi-year maintenance and support.offerings. We continue to experience strong renewals resulting in additional license sales of both our existing and newer products and solutions.

In response to Russian military actions in Ukraine occurring subsequent to fiscal 2022, we suspended business operations in Russia and Belarus, including suspension of sales, brandingsupport on existing contracts and product development efforts with Dellprofessional services in both countries. Furthermore, the U.S. and other Dell companies to enhancecountries have imposed sanctions on Russia that could impact the collective value we deliverfulfillment of our existing orders and our future revenue streams from impacted customers. The impact to our mutual customers. During fiscal 2021, revenue from Dell, including purchases2022 financial statements was not material, and we are unable to estimate the financial impact of

The worldwide spread of COVID-19 has resulted in and may continue to cause, a global slowdown of economic activity while also disrupting sales channels and marketing activities for an unknown period of time until the disease is contained. Whileand the COVID-19 pandemic has not had a material adverse financial impact on our operations to date, themay cause economic disruption and market volatility in future course of the pandemic, any resulting economic impact and the degree and rate of economic recovery remain highly uncertain and continue to rapidly evolve.periods. Although the pandemic has not had the level of financial impact on our business in fiscal 2021 we initially expected, we did experience negative impacts on our sales and certain of our financial results and there continues to be uncertainty regarding the magnitude and duration of the economic effects of the COVID-19 pandemic and the extent to which it will have a negative impact on our sales and our financial results into fiscal 2022. For example, license revenue decreased during fiscal 2021 due in part to the effects of COVID-19 as a number of our customers’ business plans were impacted by the pandemic. We also expect our operating margin to benefit into fiscal 2022 from some of the short-term COVID-19 impacts on our operating expenses, including travel-, employee- and facilities-related costs.

Approximately 70% of our sales are denominated in the United States (“U.S.”) dollar. In certain countries, however, we also invoice and collect in various foreign currencies, principally euro, British pound, Japanese yen, Australian dollar and Chinese renminbi. In addition, we incur and pay operating expenses in currencies other than the U.S. dollar. As a result, our financial statements, including our revenue, operating expenses, unearned revenue and the resulting cash flows derived from the U.S. dollar equivalent of foreign currency transactions, are affected by foreign exchange fluctuations.