Document and Entity Information
Document and Entity Information - shares shares in Millions | 6 Months Ended | |
Aug. 04, 2018 | Sep. 05, 2018 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Aug. 4, 2018 | |
Document Fiscal Year Focus | 2,019 | |
Document Fiscal Period Focus | Q2 | |
Trading Symbol | MRVL | |
Entity Registrant Name | MARVELL TECHNOLOGY GROUP LTD | |
Entity Central Index Key | 1,058,057 | |
Current Fiscal Year End Date | --02-02 | |
Entity File Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 658.4 |
UNAUDITED CONDENSED CONSOLIDATE
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Aug. 04, 2018 | Feb. 03, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 498,659 | $ 888,482 |
Short-term investments | 25,000 | 952,790 |
Accounts receivable, net | 443,276 | 280,395 |
Inventories | 473,429 | 170,039 |
Prepaid expenses and other current assets | 72,388 | 41,482 |
Assets held for sale | 31,182 | 30,767 |
Total current assets | 1,543,934 | 2,363,955 |
Property and equipment, net | 327,645 | 202,222 |
Goodwill | 5,497,608 | 1,993,310 |
Acquired intangible assets, net | 2,718,061 | 0 |
Other non-current assets | 275,598 | 148,800 |
Total assets | 10,362,846 | 4,708,287 |
Current liabilities: | ||
Accounts payable | 196,297 | 145,236 |
Accrued liabilities | 277,098 | 86,958 |
Accrued employee compensation | 127,381 | 127,711 |
Deferred income | 3,511 | 61,237 |
Liabilities held for sale | 3,935 | 0 |
Total current liabilities | 608,222 | 421,142 |
Long-term debt | 1,878,617 | 0 |
Non-current income taxes payable | 52,438 | 56,976 |
Deferred tax liabilities | 114,312 | 52,204 |
Other non-current liabilities | 44,191 | 36,552 |
Total liabilities | 2,697,780 | 566,874 |
Commitments and contingencies (Note 12) | ||
Shareholders’ equity: | ||
Common shares, $0.002 par value | 1,316 | 991 |
Additional paid-in capital | 6,153,890 | 2,733,292 |
Accumulated other comprehensive loss | 0 | (2,322) |
Retained earnings | 1,509,860 | 1,409,452 |
Total shareholders’ equity | 7,665,066 | 4,141,413 |
Total liabilities and shareholders’ equity | $ 10,362,846 | $ 4,708,287 |
UNAUDITED CONDENSED CONSOLIDAT3
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Aug. 04, 2018 | Feb. 03, 2018 |
Statement of Financial Position [Abstract] | ||
Common shares, par value (in usd per share) | $ 0.002 | $ 0.002 |
UNAUDITED CONDENSED CONSOLIDAT4
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Aug. 04, 2018 | Jul. 29, 2017 | Aug. 04, 2018 | Jul. 29, 2017 | |
Income Statement [Abstract] | ||||
Net revenue | $ 665,310 | $ 604,750 | $ 1,269,941 | $ 1,177,459 |
Cost of goods sold | 288,200 | 239,572 | 517,138 | 466,770 |
Gross profit | 377,110 | 365,178 | 752,803 | 710,689 |
Operating expenses: | ||||
Research and development | 216,285 | 180,871 | 393,019 | 368,967 |
Selling, general and administrative | 133,701 | 55,659 | 206,014 | 110,763 |
Restructuring related charges | 35,415 | 4,285 | 36,982 | 5,171 |
Total operating expenses | 385,401 | 240,815 | 636,015 | 484,901 |
Operating income (loss) from continuing operations | (8,291) | 124,363 | 116,788 | 225,788 |
Interest income | 3,575 | 3,830 | 9,644 | 7,342 |
Interest expense | (15,795) | (80) | (16,039) | (131) |
Other income (loss), net | (2,701) | 3,438 | (1,230) | 3,310 |
Interest and other income (loss), net | (14,921) | 7,188 | (7,625) | 10,521 |
Income (loss) from continuing operations before income taxes | (23,212) | 131,551 | 109,163 | 236,309 |
Provision (benefit) for income taxes | (29,971) | (3,899) | (26,208) | 1,267 |
Income from continuing operations, net of tax | 6,759 | 135,450 | 135,371 | 235,042 |
Income from discontinued operations, net of tax | 0 | 29,809 | 0 | 36,838 |
Net income | $ 6,759 | $ 165,259 | $ 135,371 | $ 271,880 |
Net income per share - Basic: | ||||
Continuing operations (in usd per share) | $ 0.01 | $ 0.27 | $ 0.26 | $ 0.47 |
Discontinued operations (in usd per share) | 0 | 0.06 | 0 | 0.07 |
Net income per share - Basic (in usd per share) | 0.01 | 0.33 | 0.26 | 0.54 |
Net income per share - Diluted: | ||||
Continuing operations (in usd per share) | 0.01 | 0.26 | 0.25 | 0.46 |
Discontinued operations (in usd per share) | 0 | 0.06 | 0 | 0.07 |
Net income per share - Diluted (in usd per share) | $ 0.01 | $ 0.32 | $ 0.25 | $ 0.53 |
Weighted average shares: | ||||
Basic (in shares) | 552,238 | 500,817 | 524,787 | 502,303 |
Diluted (in shares) | 562,149 | 510,309 | 535,433 | 513,951 |
Cash dividends declared per share (in usd per share) | $ 0.06 | $ 0.06 | $ 0.12 | $ 0.12 |
UNAUDITED CONDENSED CONSOLIDAT5
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Aug. 04, 2018 | Jul. 29, 2017 | Aug. 04, 2018 | Jul. 29, 2017 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 6,759 | $ 165,259 | $ 135,371 | $ 271,880 |
Other comprehensive income (loss), net of tax: | ||||
Net change in unrealized gain (loss) on marketable securities | 2,404 | 556 | 2,322 | (117) |
Net change in unrealized gain (loss) on cash flow hedges | 0 | (765) | 0 | 993 |
Net change in pension liability | 0 | 1,272 | 0 | 0 |
Other comprehensive income, net of tax | 2,404 | 1,063 | 2,322 | 876 |
Comprehensive income, net of tax | $ 9,163 | $ 166,322 | $ 137,693 | $ 272,756 |
UNAUDITED CONDENSED CONSOLIDAT6
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 6 Months Ended | |
Aug. 04, 2018 | Jul. 29, 2017 | |
Cash flows from operating activities: | ||
Net income | $ 135,371 | $ 271,880 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 47,097 | 41,186 |
Share-based compensation | 83,244 | 46,439 |
Amortization and write-off of acquired intangible assets | 25,939 | 2,136 |
Amortization of inventory fair value adjustment associated with acquisition of Cavium | 22,933 | 0 |
Amortization of deferred debt issuance costs and debt discounts | 7,073 | 0 |
Restructuring related impairment charges (gain) | 1,993 | (446) |
Gain from investment in privately-held company | (1,100) | (750) |
Amortization of premium/discount on available-for-sale securities | 624 | 803 |
Other non-cash expense (income), net | 4,227 | (1,423) |
Deferred income taxes | (21,414) | 2,791 |
Gain on sale of property and equipment | (120) | (283) |
Gain on sale of discontinued operations | 0 | (42,187) |
Gain on sale of business | 0 | (5,254) |
Changes in assets and liabilities: | ||
Accounts receivable | (48,749) | (36,313) |
Inventories | 6,866 | (14,712) |
Prepaid expenses and other assets | (19,504) | 7,854 |
Accounts payable | (271) | 3,968 |
Accrued liabilities and other non-current liabilities | (11,232) | (33,418) |
Accrued employee compensation | (41,539) | (8,375) |
Deferred income | (729) | 1,284 |
Net cash provided by operating activities | 190,709 | 235,180 |
Cash flows from investing activities: | ||
Purchases of available-for-sale securities | (14,956) | (376,227) |
Sales of available-for-sale securities | 623,896 | 116,700 |
Maturities of available-for-sale securities | 187,985 | 169,612 |
Return of investment from privately-held companies | 0 | 2,388 |
Purchases of time deposits | (25,000) | (150,000) |
Maturities of time deposits | 150,000 | 150,000 |
Purchases of technology licenses | (1,263) | (1,701) |
Purchases of property and equipment | (34,389) | (14,544) |
Proceeds from sales of property and equipment | 223 | 1,739 |
Cash payment for acquisition of Cavium, net of cash and cash equivalents acquired | (2,649,465) | 0 |
Net proceeds from sale of discontinued operations | 0 | 72,205 |
Net proceeds from sale of business | 1,250 | 0 |
Other | (5,000) | 0 |
Net cash used in investing activities | (1,766,719) | (29,828) |
Cash flows from financing activities: | ||
Repurchases of common stock | 0 | (387,558) |
Proceeds from employee stock plans | 44,580 | 97,811 |
Minimum tax withholding paid on behalf of employees for net share settlement | (36,776) | (24,814) |
Dividend payments to shareholders | (69,181) | (60,086) |
Payments on technology license obligations | (29,478) | (14,296) |
Proceeds from issuance of debt | 1,892,605 | 0 |
Principal payments of debt | (606,128) | 0 |
Payment of equity and debt financing costs | (9,435) | 0 |
Net cash provided by (used in) financing activities | 1,186,187 | (388,943) |
Net decrease in cash and cash equivalents | (389,823) | (183,591) |
Cash and cash equivalents at beginning of period | 888,482 | 814,092 |
Cash and cash equivalents at end of period | $ 498,659 | $ 630,501 |
Basis of Presentation
Basis of Presentation | 6 Months Ended |
Aug. 04, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The unaudited condensed consolidated financial statements of Marvell Technology Group Ltd., a Bermuda exempted company, and its wholly owned subsidiaries (the “Company”), as of and for the three and six months ended August 4, 2018 , have been prepared as required by the U.S. Securities and Exchange Commission (the “SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) have been condensed or omitted as permitted by the SEC. These unaudited condensed consolidated financial statements and related notes should be read in conjunction with the Company's fiscal year 2018 audited financial statements included in the Company's Annual Report on Form 10-K for the fiscal year ended February 3, 2018 . In the opinion of management, the financial statements include all adjustments, including normal recurring adjustments and other adjustments, that are considered necessary for fair presentation of the Company’s financial position and results of operations. All inter-company accounts and transactions have been eliminated. Operating results for the periods presented herein are not necessarily indicative of the results that may be expected for the entire year. Certain prior year amounts have been reclassified to conform to current year presentation. These amounts were not material to any of the periods presented. These financial statements should also be read in conjunction with the Company’s critical accounting policies included in the Company’s Annual Report on Form 10-K for the year ended February 3, 2018 and those included in this Form 10-Q below. The Company’s fiscal year is the 52- or 53-week period ending on the Saturday closest to January 31. Accordingly, every fifth or sixth fiscal year will have a 53-week period. The additional week in a 53-week year is added to the fourth quarter, making such quarter consist of 14 weeks. Fiscal 2018 had a 53-week year. Fiscal 2019 is a 52-week year. On July 6, 2018, the Company completed its acquisition of Cavium, Inc. (“Cavium”). Cavium is a provider of highly integrated semiconductor processors that enable intelligent processing for wired and wireless infrastructure and cloud for networking, communications, storage and security applications. Cavium designs, develops and markets semiconductor processors for intelligent and secure networks. The consolidated financial statements include the operating results of Cavium for the period from the date of acquisition to the Company's second quarter ended August 4, 2018. See “Note 3 - Business Combination” for more information. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 6 Months Ended |
Aug. 04, 2018 | |
Accounting Changes and Error Corrections [Abstract] | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Accounting Pronouncements Recently Adopted In May 2014, the FASB issued a new accounting standard on the recognition of revenue from contracts with customers that superseded nearly all existing revenue recognition guidance under GAAP. The new standard requires an entity to recognize revenue from the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance addresses, in particular, contracts with more than one performance obligation, as well as the accounting for certain costs to obtain or fulfill a contract with a customer, and provides for additional disclosures with respect to revenue and cash flows arising from contracts with customers. Public entities are required to apply the amendments on either a full or modified retrospective basis for annual periods beginning after December 15, 2017 and for interim periods within those annual periods. The Company adopted the standard on a modified retrospective basis in the first quarter of fiscal year 2019, with the cumulative effect recognized in retained earnings at the date of adoption. See "Note 5 - Revenue" for additional information on the impact of the adoption of the new standard on the Company’s consolidated financial statements. In January 2016, the FASB issued an accounting standard update that changes the accounting for equity investments, financial liabilities under the fair value option, and the presentation and disclosure requirements for financial instruments. The Company adopted the standard in the first quarter of fiscal 2019. The adoption of this guidance did not have a significant impact on the Company's consolidated financial statements. In August 2016, the FASB issued an accounting standards update to add or clarify guidance on the classification of certain cash receipts and cash payments in the statement of cash flows. The amendments in the update provide guidance on eight specific cash flow issues. The amendments to the guidance should be applied using a retrospective transition method for each period presented and, if it is impracticable to apply all of the amendments retrospectively for some of the issues, the amendments for those issues would be applied prospectively as of the earliest date practicable. The Company adopted the standard in the first quarter of fiscal 2019. The adoption of this guidance did not have an impact on the Company's consolidated financial statements. In October 2016, the FASB issued new guidance that simplifies the accounting for the income tax effects of intra-entity transfers and will require companies to recognize the income tax effects of intra-entity transfers of assets other than inventory when the transfer occurs. Previous guidance required companies to defer the income tax effects of intra-entity transfers of assets until the asset had been sold to an outside party or otherwise recognized. The Company adopted the standard in the first quarter of fiscal 2019. The adoption of this guidance did not have an impact on the Company's consolidated financial statements. In November 2016, the FASB issued new guidance that requires entities to include in their cash and cash-equivalent balances in the statement of cash flows those amounts that are deemed to be restricted cash and restricted cash equivalents. As a result, companies will no longer present transfers between cash and cash equivalents and restricted cash and restricted cash equivalents in the statement of cash flows. The Company adopted the standard in the first quarter of fiscal 2019. The adoption of this guidance did not have a significant impact on the Company's consolidated financial statements. In January 2017, the FASB issued an accounting standards update that revises the definition of a business. The amendments provide a more robust framework for determining when a set of assets and activities is a business. The update is intended to help companies evaluate whether transactions should be accounted for as acquisitions or disposals of assets or businesses. The Company adopted the standard in the first quarter of fiscal 2019. The adoption of this guidance did not have an impact on the Company's consolidated financial statements. In May 2017, the FASB issued an accounting standards update that provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting. Unless the changes in terms or conditions meet all three criteria outlined in the guidance, modification accounting should be applied. The three criteria relate to changes in the terms and conditions that affect the fair value, vesting conditions, or classification of a share-based payment award. The guidance is required to be applied prospectively to an award modified on or after the adoption date. The Company adopted the standard in the first quarter of fiscal 2019. The adoption of this guidance did not have an impact on the Company's consolidated financial statements. In June 2018, the Financial Accounting Standards Board (“FASB”) issued an accounting standards update that substantially aligns the accounting for shared-based payments to non-employees and employees. The standard is required to be applied through a cumulative-effect adjustment to retained earnings as of the beginning of the fiscal year of adoption. This guidance is effective for fiscal years beginning after December 15, 2018, including interim periods within that fiscal year. Early adoption is permitted. The Company early adopted the standard in the second quarter of fiscal 2019. The adoption of this guidance did not have a significant impact on the Company's consolidated financial statements. Accounting Pronouncements Not Yet Effective In February 2016, the FASB issued a new standard on the accounting for leases, which requires a lessee to record a right-of-use asset and a corresponding lease liability on the balance sheet for all leases with terms longer than twelve months. The standard also expands the required quantitative and qualitative disclosures for lease arrangements. The standard is effective for the Company beginning in the first quarter of fiscal year 2020. The Company is currently evaluating the effect this new guidance will have on its consolidated financial statements. In June 2016, the FASB issued a new standard requiring financial assets measured at amortized cost be presented at the net amount expected to be collected, through an allowance for credit losses that is deducted from the amortized cost basis. The standard eliminates the threshold for initial recognition in current GAAP and reflects an entity’s current estimate of all expected credit losses. The measurement of expected credit losses is based on historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the financial assets. The standard is effective for the Company beginning in the first quarter of fiscal year 2020. The Company does not expect the adoption of this guidance will have a material effect on its consolidated financial statements. In August 2017, the FASB issued an accounting standards update that simplifies the application and administration of hedge accounting. The guidance amends the presentation and disclosure requirements and changes how companies assess effectiveness. The guidance is intended to more closely align hedge accounting with companies' risk management strategies, simplify the application of hedge accounting, and increase transparency as to the scope and results of hedging programs. The guidance is effective for the Company beginning in the first quarter of fiscal year 2021. Early adoption is permitted. The guidance will be applied to cash flow and net investment hedge relationships that exist on the date of adoption using a modified retrospective approach. The presentation and disclosure requirements will be applied prospectively. The Company is evaluating the effect this new guidance will have on its consolidated financial statements. In August 2018, the FASB issued an accounting standard update to align the requirements for capitalizing implementation costs incurred in a software hosting arrangement that is a service contract and costs to develop or obtain internal-use software. The guidance is effective for the Company beginning in the first quarter of fiscal year 2021, with early adoption permitted. The Company is evaluating the effect this new guidance will have on its consolidated financial statements. |
Business Combination
Business Combination | 6 Months Ended |
Aug. 04, 2018 | |
Business Combinations [Abstract] | |
Business Combination | Business Combination On July 6, 2018, the Company completed the acquisition of Cavium (the “Cavium acquisition”). Cavium is a provider of highly integrated semiconductor processors that enable intelligent processing for wired and wireless infrastructure and cloud for networking, communications, storage and security applications. The Cavium acquisition was primarily intended to create an opportunity for the combined company to emerge as a leader in infrastructure solutions. In accordance with the terms of the Agreement and Plan of Merger, dated as of November 19, 2017, by and among the Company and Cavium (the “Cavium merger agreement”), the Company acquired all outstanding shares of common stock of Cavium (the “Cavium shares”) for $40.00 per share in cash and 2.1757 shares of the Company’s common stock exchanged for each share of Cavium stock. The Company also made cash payments for the fractional shares that resulted from conversion as specified in the Cavium merger agreement. The merger consideration was funded with a combination of cash on hand, new debt financing and issuance of the Company’s common shares. See “Note 4 - Debt” for discussion of the debt financing. The following table summarizes the total merger consideration (in thousands, except share and per share data): Cash consideration to Cavium common stockholders $ 2,819,812 Common stock (153,376,408 shares of the Company's common 3,273,053 Cash consideration for intrinsic value of vested director stock options and employee accelerated awards attributable to pre-acquisition service 10,642 Stock consideration for employee accelerated awards attributable to pre-acquisition service 7,804 Fair value of the replacement equity awards attributable to 50,485 Total merger consideration $ 6,161,796 Pursuant to the Cavium merger agreement, the Company assumed the outstanding employee equity awards originally granted by Cavium and converted such shares into the Company’s equivalent awards. The outstanding vested options held by directors of Cavium were settled in cash as specified in the Cavium merger agreement. The portion of the fair value of partially vested awards associated with pre-acquisition service of Cavium employees represented a component of the total consideration, as presented above. The merger consideration allocation set forth herein is preliminary and may be revised as additional information becomes available during the measurement period which could be up to 12 months from the closing date of the acquisition. Any such revisions or changes may be material. In accordance with US GAAP requirements for business combinations, the Company allocated the fair value of the purchase consideration to the tangible assets, liabilities and intangible assets acquired, including in-process research and development, or IPR&D, generally based on their estimated fair values. The excess purchase price over those fair values is recorded as goodwill. Goodwill of $3.5 billion recorded for the Cavium acquisition is not expected to be deductible for tax purposes. IPR&D is initially capitalized at fair value as an intangible asset with an indefinite life and assessed for impairment thereafter. When an IPR&D project is completed, the IPR&D is reclassified as an amortizable purchased intangible asset and amortized over the asset’s estimated useful life. The Company’s valuation assumptions of acquired assets and assumed liabilities require significant estimates, especially with respect to intangible assets. Acquisition-related costs are expensed in the periods in which the costs are incurred. The purchase price allocation is as follows (in thousands): Cash and cash equivalents $ 180,989 Accounts receivable 112,270 Inventories 330,778 Prepaid expense and other current assets 19,890 Assets held for sale 483 Property and equipment 115,428 Acquired intangible assets 2,744,000 Other non-current assets 89,139 Goodwill 3,504,302 Accounts payable (52,383 ) Accrued liabilities (127,837 ) Accrued employee compensation (34,813 ) Deferred income (2,466 ) Current portion of long-term debt (6,123 ) Liabilities held for sale (3,032 ) Long-term debt (600,005 ) Non-current income taxes payable (8,365 ) Deferred tax liabilities (84,360 ) Other non-current liabilities (16,099 ) Total merger consideration $ 6,161,796 The valuation of identifiable intangible assets and their estimated useful lives are as follows: Asset Fair Value Weighted (in thousands, except for useful life) Developed technology $ 1,743,000 7.59 In process research and development ("IPR&D") 513,000 n/a Customer contracts and related relationships 465,000 8.92 Trade names 23,000 4.32 $ 2,744,000 The intangible assets are amortized on a straight-line basis over the estimated useful lives, except for customer contracts and related relationships, which are amortized using an accelerated method of amortization over the expected customer lives, which more accurately reflects the pattern of realization of economic benefits expected to be obtained. The IPR&D will be accounted for as an indefinite-lived intangible asset and will not be amortized until the underlying projects reach technological feasibility and commercial production or are abandoned at which point the IPR&D will be amortized over the estimated useful life. Useful lives for these IPR&D projects are expected to range between 4 to 9 years . During the three and six months ended August 4, 2018, the Company incurred $28.2 million and $43.5 million , respectively, in acquisition related costs which were recorded in selling, general and administrative expense in the condensed consolidated statements of operations. The Company also incurred $22.8 million of debt financing costs. As of August 4, 2018, $0.4 million associated with the Revolving Credit Facility was classified in prepaid expenses and other current assets, $1.5 million associated with the Revolving Credit Facility was classified in other non-current assets, and $14.1 million associated with the term loan and senior notes was classified in long-term debt in the condensed consolidated balance sheet. See “Note 4. Debt” for additional information. Additionally, the Company incurred $2.9 million of equity issuance costs, which were recorded in additional paid-in capital in the condensed consolidated balance sheet. Since the date of the acquisition, Cavium contributed $41.3 million of the consolidated net revenue for the three and six months ended August 4, 2018. Cavium net loss incurred in the period ended August 4, 2018 was $120.6 million , which included restructuring costs of $22.3 million . Supplemental Pro Forma Information The supplemental pro forma financial information presented below is for illustrative purposes only and is not necessarily indicative of the financial position or results of operations that would have been realized if the acquisition had been completed on the date indicated, does not reflect synergies that might have been achieved, nor is it indicative of future operating results or financial position. The pro forma adjustments are based upon currently available information and certain assumptions the Company believe are reasonable under the circumstances. The following supplemental pro forma information presents the combined results of operations for each of the periods presented, as if Cavium had been acquired as of the beginning of fiscal year 2018. The supplemental pro forma information includes adjustments to amortization and depreciation for acquired intangible assets and property and equipment, adjustments to share-based compensation expense, the purchase accounting effect on inventories acquired, interest expense, and transaction costs. For fiscal year 2018, nonrecurring pro forma adjustments directly attributable to the Merger included (i) share-based compensation expense of $37.8 million , (ii) the purchase accounting effect of inventories acquired of $199.7 million , (iii) interest expense of $6.1 million and (iv) transaction costs of $114.6 million . The supplemental pro forma information presented below is for informational purposes only and is not necessarily indicative of our consolidated results of operations of the combined business had the Merger actually occurred at the beginning of fiscal year 2018 or of the results of our future operations of the combined business. The supplemental pro forma financial information for the periods presented is as follows: Six months ended August 4, 2018 July 29, 2017 (in thousands, except per share data) Pro forma net revenue $ 1,612,873 $ 1,649,129 Pro forma net income (loss) 57,453 (204,632 ) Pro forma net income (loss) per share, basic $ 0.09 $ (0.31 ) Pro forma net income (loss) per share, diluted 0.09 (0.31 ) |
Debt
Debt | 6 Months Ended |
Aug. 04, 2018 | |
Debt Disclosure [Abstract] | |
Debt | Debt On July 6, 2018, the Company completed its acquisition of Cavium. In connection with the acquisition (see "Note 3 - Business Combination"), the Company executed debt agreements in June 2018 to obtain a $900 million term loan, a $500 million revolving credit facility and $1.0 billion of senior unsecured notes. Upon completion of the offering of the senior unsecured notes in June 2018, the Company terminated an $850 million bridge loan commitment. This bridge loan commitment was provided by the underwriting bankers at the time of the Merger Agreement executed in November 2017. The bridge loan was never drawn upon. Term Loan and Revolving Credit Facility On June 13, 2018, the Company entered into a credit agreement (“Credit Agreement”) with certain lenders and Goldman Sachs Bank USA, as the general administrative agent and the term facility agent, and Bank of America, N.A., as the revolving facility agent. The Credit Agreement provides for borrowings of: (i) up to $500.0 million in the form of a revolving line of credit (“Revolving Credit Facility”) and (ii) $900.0 million in the form of a term loan (“Term Loan”). The proceeds of the Term Loan were used to fund a portion of the cash consideration for the Cavium acquisition, repay Cavium’s debt, and pay transaction expenses in connection with the Cavium acquisition. The proceeds of the Revolving Credit Facility is intended for general corporate purposes of the Company and its subsidiaries, which may include, among other things, the financing of acquisitions, the refinancing of other indebtedness and the payment of transaction expenses related to the foregoing. As of August 4, 2018, the Revolving Credit Facility has not been drawn upon. Following is further detail of the terms of the various debt agreements. The Term Loan has a three year term which matures on June 13, 2021 and has a stated floating interest rate which equates to reserve-adjusted LIBOR + 137.5 bps as of August 4, 2018. The effective interest rate for the Term Loan was 3.912% as of August 4, 2018. As of August 4, 2018, the entire principal balance of $900.0 million Term Loan was outstanding. The Term Loan does not require any scheduled principal payments prior to final maturity. The Revolving Credit Facility has a five year term and has a stated floating interest rate which equates to reserve-adjusted LIBOR + 150.0 bps. As of August 4, 2018, the full amount of the Revolving Credit Facility of $500 million was undrawn and will be available for draw down through June 13, 2023. An unused commitment fee is payable quarterly based on unused balances at a rate that is based on the ratings of the Company's senior unsecured long-term indebtedness. This rate was initially 0.175% per year. The Credit Agreement requires that the Company and its subsidiaries comply, subject to certain exceptions, with covenants relating to customary matters such as creating or permitting certain liens, entering into sale and leaseback transactions, consolidating, merging, liquidating or dissolving, and entering into restrictive agreements. It also prohibits subsidiaries of the Company from incurring additional indebtedness, and requires the Company to comply with a leverage ratio financial covenant not to exceed 3 to 1 as of the end of any fiscal quarter. As of August 4, 2018, the Company was in compliance with all of its debt covenants. Senior Unsecured Notes On June 22, 2018, the Company completed a public offering of (i) $500.0 million aggregate principal amount of the Company's 4.200% Senior Notes due 2023 (the “2023 Notes”) and (ii) $500.0 million aggregate principal amount of the Company's 4.875% Senior Notes due 2028 ("the “2028 Notes” and, together with the 2023 Notes, “the Senior Notes”). The 2023 Notes mature on June 22, 2023 and the 2028 Notes mature on June 22, 2028. The stated and effective interest rates for the 2023 Notes are 4.200% and 4.423% , respectively. The stated and effective interest rates for the 2028 Notes are 4.875% and 5.012% , respectively. The Company may redeem the Senior Notes, in whole or in part, at any time prior to their maturity at the redemption prices set forth in Senior Notes. In addition, upon the occurrence of a change of control repurchase event (which involves the occurrence of both a change of control and a ratings event involving the Senior Notes being rated below investment grade), the Company will be required to make an offer to repurchase the Senior Notes at a price equal to 101% of the principal amount of the notes, plus accrued and unpaid interest to, but excluding, the repurchase date. The indenture governing the Senior Notes also contains certain limited covenants restricting the Company’s ability to incur certain liens, enter into certain sale and leaseback transactions and merge or consolidate with any other entity or convey, transfer or lease all or substantially all of the Company’s properties or assets to another person, which, in each case, are subject to certain qualifications and exceptions. Summary of Borrowings and Outstanding Debt The following table summarizes the Company's outstanding debt at August 4, 2018 (in thousands): August 4, 2018 Face Value Outstanding: Term Loan $ 900,000 2023 Notes 500,000 2028 Notes 500,000 Total borrowings $ 1,900,000 Less: Unamortized debt discount and issuance cost (21,383 ) Net carrying amount of debt $ 1,878,617 Less: Current portion $ — Non-current portion $ 1,878,617 During the three and six months ended August 4, 2018, the Company recognized $9.1 million interest expense in its consolidated statements of operations related to interest, amortization of debt issuance costs and accretion of discount associated with the outstanding Term Loan and Senior Notes, respectively. As of August 4, 2018, the aggregate future contractual maturities of the Company's outstanding debt, at face value, were as follows (in thousands): Fiscal year Amount 2019 $ — 2020 — 2021 — 2022 900,000 2023 — Thereafter $ 1,000,000 Repayment of Debt and Termination of Credit Facility of Cavium On July 6, 2018, concurrent with completing the acquisition of Cavium as further described in “Note 3 - Business Combination,” the Company assumed and paid all of Cavium's outstanding debt and accrued interest of $606.6 million . Cavium's debt was governed under a credit agreement dated August 16, 2016, which was terminated following the repayment. |
Revenue
Revenue | 6 Months Ended |
Aug. 04, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | Revenue Effect of the Adoption of the New Revenue Standard At the beginning of fiscal year 2019, the Company adopted the new revenue recognition standard on a modified retrospective basis, with the cumulative effect recognized in retained earnings at the date of adoption. The Company elected to apply the new revenue standard retrospectively to all contracts that are not completed contracts at the date of the initial adoption. Based on the Company’s assessment of this new accounting standard, a change in revenue recognition timing on its component sales made to distributors was made in the first quarter of fiscal year 2019 and the Company started to recognize revenue when the Company transfers control to the distributor rather than deferring recognition until the distributor sells the components. In addition, the Company established accruals for the variable consideration aspect of sales, estimated based on historical experience, which include estimates for price discounts, price protection, rebates, returns and stock rotation programs. On the date of initial adoption, the Company removed the deferred income on component sales made to distributors and recorded estimates of the accruals for variable consideration through a cumulative adjustment to retained earnings. The net impact to the opening balance of retained earnings related to the adoption of the new standard was an increase of $34.2 million . The following table summarizes the effects of adopting the new revenue standard on the Company's financial statements for the fiscal year beginning February 4, 2018 as an adjustment to the opening balance. Such adjustments were of a non-cash nature. (In thousands) Balance as of February 3, 2018 Adjustments Opening Balance as of February 4, 2018 Consolidated balance sheet: Assets Accounts receivable, net $ 280,395 $ 1,862 $ 282,257 Inventory 170,039 2,016 172,055 Other non-current assets 148,800 42,116 190,916 Liabilities and shareholders' equity: Accrued liabilities 86,958 70,336 157,294 Deferred income 61,237 (58,560 ) 2,677 Retained earnings $ 1,409,452 $ 34,218 $ 1,443,670 The following tables summarize financial statement line items that are affected in the current reporting period by the application of the new revenue recognition policy as compared with the previous revenue recognition policy which was in effect in prior periods in accordance with ASC 605, Revenue Recognition: August 4, 2018 (In thousands) As currently reported Adjustments Balances without adoption of new revenue standard Consolidated balance sheet: Assets Accounts receivable, net $ 443,276 $ — $ 443,276 Inventory 473,429 (1,478 ) 471,951 Other non-current assets 275,598 (59,174 ) 216,424 Liabilities and shareholders' equity: Accrued liabilities 277,098 (92,890 ) 184,208 Deferred income 3,511 78,492 82,003 Retained earnings $ 1,509,860 $ (46,254 ) $ 1,463,606 Three Months Ended August 4, 2018 Six Months Ended August 4, 2018 (In thousands, except per share amounts) As currently reported Adjustments Balances without adoption of new revenue standard As currently reported Adjustments Balances without adoption of new revenue standard Consolidated statement of operation: Net revenue $ 665,310 $ (2,002 ) $ 663,308 $ 1,269,941 $ (17,531 ) $ 1,252,410 Cost of goods sold 288,200 (2,099 ) 286,101 517,138 (5,495 ) 511,643 Net income (loss) 6,759 97 6,856 135,371 (12,036 ) 123,335 Net income (loss) per share - Basic 0.01 — 0.01 0.26 (0.02 ) 0.24 Net income (loss) per share - Diluted $ 0.01 $ — $ 0.01 $ 0.25 $ (0.02 ) $ 0.23 Adoption of the new revenue standard had no impact to cash from or used in operating, financing, or investing activities on the condensed consolidated statements of cash flow. New Revenue Recognition Policy Including Significant Judgments and Estimates Through the fiscal year ended February 3, 2018, in accordance with ASC 605, Revenue Recognition, the Company recognized revenue when there was persuasive evidence of an arrangement, delivery had occurred, the fee was fixed or determinable, and collection was reasonably assured. If the Company granted extended payment terms greater than its standard terms for a customer such that collectability was not assured, the revenue was deferred upon shipment and would be recognized when the payment became due provided all other revenue recognition criteria had been satisfied. Product revenue was generally recognized upon shipment of product to customers, net of accruals for estimated sales returns and rebates. However, some of the Company’s sales were made through distributors under agreements allowing for price protection and limited rights of stock rotation on products unsold by the distributors. Product revenue on sales made through distributors were deferred until the distributors sold the product to end customers. Deferred revenue less the related cost of the inventories was reported as deferred income. The Company did not believe that there was any significant exposure related to impairment of deferred cost of sales, as its historical returns had been minimal and inventory turnover for its distributors generally ranged from 60 to 90 days . The Company’s sales to direct customers were made primarily pursuant to standard purchase orders for delivery of products. As a result of the adoption of the new revenue standard on February 4, 2018, at the beginning of the first quarter of fiscal year 2019, the Company revised its revenue recognition policy. The Company now recognizes revenue upon transfer of control of promised products or services to customers in an amount that reflects the consideration the Company expects to receive in exchange for those products or services. Under the new revenue recognition standard, the Company applies the following five step approach: (1) identify the contract with a customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract, and (5) recognize revenue when a performance obligation is satisfied. The Company enters into contracts that may include various combinations of products and services that are capable of being distinct and accounted for as separate performance obligations. To date, the majority of the revenue has been generated by sales associated with storage and networking products. Revenue from services has been insignificant. Performance obligations associated with product sales transactions are generally satisfied when control passes to customers upon shipment. Accordingly, product revenue is recognized at a point in time when control of the asset is transferred to the customer. The Company recognizes revenue when it satisfies a performance obligation by transferring control of a product to a customer in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. For product revenue, the performance obligation is deemed to be the delivery of the product and therefore, the revenue is generally recognized upon shipment to customers, net of accruals for estimated sales returns and rebates. These estimates are based on historical returns, analysis of credit memo data and other known factors. Actual returns could differ from these estimates. The Company accounts for rebates by recording reductions to revenue for rebates in the same period that the related revenue is recorded. The amount of these reductions is based upon the terms agreed to with the customer. Some of the Company’s sales are made to distributors under agreements allowing for price protection, price discounts and limited rights of stock rotation on products unsold by the distributors. Control passes to the distributor upon shipment, and terms and payment by the Company’s distributors is not contingent on resale of the product. Product revenue on sales made to distributors with price protection and stock rotation rights is recognized upon shipment to distributors, with an accrual for the variable consideration aspect of sales to distributors, estimated based on historical experience, including estimates for price discounts, price protection, rebates, and stock rotation programs. The Company’s products are generally subject to warranty, which provides for the estimated future costs of replacement upon shipment of the product. The Company’s products carry a standard one-year warranty, with certain exceptions in which the warranty period can extend to more than one year based on contractual agreements. The warranty accrual is estimated primarily based on historical claims compared to historical revenues and assumes that the Company will have to replace products subject to a claim. From time to time, the Company becomes aware of specific warranty situations, and it records specific accruals to cover these exposures. Warranty expenses were not material for the periods presented. Disaggregation of Revenue The majority of the Company's revenue is generated from sales of the Company’s products. The following table summarizes net revenue disaggregated by product group (in thousands, except percentages): Three Months Ended Six Months Ended August 4, 2018 % of Total August 4, 2018 % of Total Net revenue by product group: Storage (1) $ 335,764 50 % 652,833 51 % Networking (2) 283,330 43 % 527,558 42 % Other (3) 46,216 7 % 89,550 7 % $ 665,310 $ 1,269,941 1) Storage products are comprised primarily of HDD, SSD Controllers, Fibre Channel Adapters and Data Center Storage Solutions. 2) Networking products are comprised primarily of Ethernet Switches, Ethernet Transceivers, Ethernet NICs, Embedded Communications and Infrastructure Processors, Automotive Ethernet, Security Adapters and Processors as well as Connectivity products. In addition, this grouping includes a few legacy product lines in which the Company no longer invests, but will generate revenue for several years. 3) Other products are comprised of primarily Printer Solutions, Application Processors and others. The following table summarizes net revenue disaggregated by primary geographical market (in thousands, except percentages): Three Months Ended Six Months Ended August 4, 2018 % of Total August 4, 2018 % of Total Net revenue based on destination of shipment: China $ 292,033 44 % $ 566,542 45 % Malaysia 96,127 14 % 186,750 15 % Philippines 55,416 8 % 113,183 9 % Thailand 39,256 6 % 80,790 6 % United States 16,563 2 % 32,592 3 % Other 165,915 26 % 290,084 22 % $ 665,310 $ 1,269,941 The following table summarizes net revenue disaggregated by customer type (in thousands, except percentages): Three Months Ended Six Months Ended August 4, 2018 % of Total August 4, 2018 % of Total Net revenue by customer type: Direct customers $ 532,351 80 % 1,002,827 79 % Distributors 132,959 20 % 267,114 21 % $ 665,310 $ 1,269,941 Contract Liabilities Contract liabilities consist of the Company’s obligation to transfer goods or services to a customer for which the Company has received consideration or the amount is due from the customer. As of August 4, 2018, contract liability balances are comprised of variable consideration estimated based on a portfolio basis using the expected value methodology based on analysis of historical data, current economic conditions, and contractual terms. Variable consideration estimates consist of the estimated returns, price discounts, price protection, rebates, and stock rotation programs. As of the end of a reporting period, some of the performance obligations associated with contracts will have been unsatisfied or only partially satisfied. In accordance with the practical expedients available in the guidance, the Company does not disclose the value of unsatisfied performance obligations for contracts with an original expected duration of one year or less. Contract liabilities are included in accrued liabilities in the condensed consolidated balance sheets. The opening balance of contract liabilities at the beginning of the first quarter of fiscal year 2019 was $79.6 million . During the six months ended August 4, 2018, contract liabilities increased by $363.3 million associated with variable consideration estimates for additional shipments in the quarter, offset by $336.7 million decrease in such reserves primarily due to credit memos issued to customers. The ending balance of contract liabilities as of the second quarter ended in fiscal year 2019 was $106.2 million . Sales Commissions Sales commissions are generally earned by the salespersons based on shipments to customers. The Company has elected to apply the practical expedient to expense these costs when incurred as the amortization period is typically one year or less. These costs are recorded in selling, general and administrative expenses in the condensed consolidated statements of operations. |
Goodwill and Acquired Intangibl
Goodwill and Acquired Intangible Assets, Net | 6 Months Ended |
Aug. 04, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Acquired Intangible Assets, Net | Goodwill and Acquired Intangible Assets, Net Goodwill Goodwill represents the excess of the purchase price over the fair value of the net tangible and identifiable intangible assets acquired in a business combination. The carrying value of goodwill as of August 4, 2018 and February 3, 2018 is $5.5 billion and $2.0 billion , respectively. The change in the carrying value of goodwill from February 3, 2018 to August 4, 2018 was due to the Cavium acquisition. See “Note 3 - Business Combination” for further discussion of the acquisition. Acquired Intangible Assets, Net There had been no new acquired intangible assets in fiscal year 2018, and as of February 3, 2018, the gross value of acquired intangible assets was fully amortized. In connection with the Cavium acquisition on July 6, 2018, the Company acquired $2.7 billion of intangible assets. As of the second quarter ended August 4, 2018, net carrying amounts are as follows (in thousands, except for weighted average remaining amortization period): August 4, 2018 Gross Carrying Amounts Accumulated Amortization Net Carrying Amounts Weighted average remaining amortization period (years) Developed technologies $ 1,743,000 $ (18,984 ) $ 1,724,016 7.59 Customer contracts and related relationships 465,000 (6,501 ) 458,499 8.92 Trade names 23,000 (454 ) 22,546 4.32 Total acquired amortizable intangible assets $ 2,231,000 $ (25,939 ) $ 2,205,061 7.83 IPR&D 513,000 — 513,000 Total acquired intangible assets $ 2,744,000 $ (25,939 ) $ 2,718,061 Amortization expense from acquired intangible assets for the three and six months ended August 4, 2018 was $25.9 million . The following table presents the estimated future amortization expense of acquired amortizable intangible assets as of August 4, 2018 (in thousands): Fiscal Year Amount Remainder of 2019 $ 157,380 2020 309,701 2021 301,580 2022 293,024 2023 285,596 Thereafter 857,780 $ 2,205,061 |
Restructuring and Other Related
Restructuring and Other Related Charges | 6 Months Ended |
Aug. 04, 2018 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Other Related Charges | Restructuring and Other Related Charges The Company continuously evaluates its existing operations to increase operational efficiency, decrease costs and increase profitability. In connection with the Cavium acquisition, the Company recorded restructuring and other related charges of $35.4 million for the three months ended August 4, 2018. These restructuring costs consist of approximately $22.3 million in severance and related costs, $11.0 million in facilities and related costs, and $2.1 million in other exit-related costs. The Company expects to complete these restructuring actions by the end of fiscal 2020. The following table sets forth a reconciliation of the beginning and ending restructuring liability balances by each major type of cost associated with the restructuring charges (in thousands): Severance and related costs Facilities and related costs Other exit-related costs Total Balance at February 3, 2018 $ 654 $ 462 $ 555 $ 1,671 Restructuring charges - continuing operations 24,057 11,057 262 35,376 Net cash payments (3,617 ) (1,743 ) (541 ) (5,901 ) Release of reserves (307 ) — — (307 ) Exchange rate adjustment (91 ) — — (91 ) Balance at August 4, 2018 $ 20,696 $ 9,776 $ 276 $ 30,748 Less: non-current portion $ — $ 5,878 $ — $ 5,878 Current portion $ 20,696 $ 3,898 $ 276 $ 24,870 The remaining accrued severance and related costs and the other exit-related costs are expected to be paid in fiscal 2019. The remaining accrued facility and related costs includes remaining payments under lease obligations related to vacated space that are expected to be paid through fiscal 2028, net of estimated sub-lease income. |
Supplemental Financial Informat
Supplemental Financial Information | 6 Months Ended |
Aug. 04, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Supplemental Financial Information | Supplemental Financial Information (in thousands) Consolidated Balance Sheets August 4, February 3, Inventories: Work-in-process $ 257,906 $ 103,711 Finished goods 215,523 66,328 Total inventories $ 473,429 $ 170,039 The inventory balance at August 4, 2018 includes $200.4 million related to the inventory step-up adjustment from the Cavium acquisition. August 4, February 3, Property and equipment, net: Machinery and equipment $ 609,376 $ 535,416 Land, buildings, and leasehold improvements 279,880 247,675 Computer software 102,943 98,253 Furniture and fixtures 27,235 21,139 1,019,434 902,483 Less: Accumulated depreciation and amortization (691,789 ) (700,261 ) Total property and equipment, net $ 327,645 $ 202,222 Current accrued liabilities are comprised of the following at August 4, 2018 and February 3, 2018 , respectively: August 4, February 3, Accrued liabilities: Contract liabilities $ 106,191 $ — Technology license obligations 76,050 28,488 Accrued royalties 18,003 11,860 Accrued rebates (1) — 9,292 Accrued legal related expenses 14,664 13,050 Unsettled investment trades (2) — 4,497 Restructuring liabilities 24,870 1,612 Accrued income tax payable 9,735 959 Other 27,585 17,200 Total accrued liabilities $ 277,098 $ 86,958 (1) Accrued rebates are classified as part of contract liabilities beginning in fiscal year 2019 upon adoption of the new revenue recognition standard. (2) Unsettled investment trades represent amounts owed to third parties for investment purchases for which cash settlement has not yet occurred. Accumulated Other Comprehensive Income (Loss) The changes in accumulated other comprehensive income (loss) by components are presented in the following tables: Unrealized Gain (Loss) on Marketable Securities (1) Balance at February 3, 2018 $ (2,322 ) Other comprehensive loss before reclassifications (733 ) Amounts reclassified from accumulated other comprehensive gain 3,055 Net current-period other comprehensive gain, net of tax 2,322 Balance at August 4, 2018 $ — Unrealized Gain (Loss) on Marketable Securities (1) Unrealized Gain (Loss) on Cash Flow Hedges (2) Total Balance at January 28, 2017 $ (801 ) $ 824 $ 23 Other comprehensive income (loss) before reclassifications (146 ) 2,341 2,195 Amounts reclassified from accumulated other comprehensive income (loss) 29 (1,348 ) (1,319 ) Net current-period other comprehensive income (loss), net of tax (117 ) 993 876 Balance at July 29, 2017 $ (918 ) $ 1,817 $ 899 (1) The amounts of gains (losses) associated with the Company's marketable securities reclassified from accumulated other comprehensive income (loss) are recorded in interest and other income, net. (2) The amounts of gains (losses) associated with the Company's derivative financial instruments reclassified from accumulated other comprehensive income (loss) are recorded in operating expenses. See "Note 10- Derivative Financial Instruments" for additional information on the affected line items in the condensed consolidated statements of operations. Consolidated Statements of Cash Flows The noncash consideration paid for the acquisition of Cavium was $3.3 billion for the three and six months ended August 4, 2018. |
Investments
Investments | 6 Months Ended |
Aug. 04, 2018 | |
Investments, Debt and Equity Securities [Abstract] | |
Investments | Investments As of August 4, 2018, the Company has $25.0 million time deposits on hand. As of February 3, 2018, the following table summarizes the Company’s investments (in thousands): February 3, 2018 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Short-term investments: Available-for-sale: U.S. government and agency debt $ 248,336 $ 49 $ (644 ) $ 247,741 Foreign government and agency debt 7,004 — (17 ) 6,987 Municipal debt securities 2,734 — (6 ) 2,728 Corporate debt securities 504,609 469 (1,999 ) 503,079 Asset backed securities 42,429 3 (177 ) 42,255 Held-to-maturity: Time deposits 150,000 — — 150,000 Total short-term investments 955,112 521 (2,843 ) 952,790 Total investments $ 955,112 $ 521 $ (2,843 ) $ 952,790 Short-term, highly liquid investments of $78.5 million and $267.6 million as of August 4, 2018 and February 3, 2018, respectively, included in cash and cash equivalents on the accompanying consolidated balance sheets are not included in the table above because the gross unrealized gains and losses were immaterial as the carrying values approximate fair value due to the short term maturity of such investments. Gross realized gains and gross realized losses on sales of available-for-sale securities are presented in the following tables (in thousands): Three Months Ended Six Months Ended August 4, July 29, August 4, July 29, Gross realized gains $ 369 $ 16 $ 371 $ 85 Gross realized losses (2,575 ) (69 ) (3,437 ) (113 ) Total net realized gains (losses) $ (2,206 ) $ (53 ) $ (3,066 ) $ (28 ) The contractual maturities of available-for-sale and held-to-maturity securities are presented in the following tables (in thousands): August 4, 2018 February 3, 2018 Amortized Cost Estimated Fair Value Amortized Cost Estimated Fair Value Due in one year or less $ 25,000 $ 25,000 $ 554,247 $ 553,866 Due between one and five years — — 400,866 398,924 Due over five years — — — — $ 25,000 $ 25,000 $ 955,113 $ 952,790 There are no securities on hand at August 4, 2018 that have been in a continuous unrealized loss position. Such securities are presented as follows for the fiscal year ended February 3, 2018: February 3, 2018 Less than 12 months 12 months or more Total Fair Value Unrealized Loss Fair Unrealized Fair Unrealized U.S. government and agency debt $ 148,538 $ (298 ) $ 51,332 $ (346 ) $ 199,870 $ (644 ) Foreign government and agency debt 3,993 (1 ) 2,994 (16 ) 6,987 (17 ) Municipal debt securities 1,969 (6 ) — — 1,969 (6 ) Corporate debt securities 253,380 (1,514 ) 46,805 (485 ) 300,185 (1,999 ) Asset backed securities 37,636 (145 ) 2,167 (32 ) 39,803 (177 ) Total securities $ 445,516 $ (1,964 ) $ 103,298 $ (879 ) $ 548,814 $ (2,843 ) |
Derivative Financial Instrument
Derivative Financial Instruments | 6 Months Ended |
Aug. 04, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Financial Instruments | Derivative Financial Instruments The Company manages some of its foreign currency exchange rate risk through the purchase of foreign currency exchange contracts that hedge against the short-term effect of currency fluctuations. The Company’s policy is to enter into foreign currency forward contracts with maturities less than 12 months which mitigates the effect of rate fluctuations on certain local currency denominated operating expenses. All derivative instruments are recorded at fair value in either prepaid expenses and other current assets or accrued liabilities. The Company reports cash flows from derivative instruments in cash flows from operating activities. The Company uses quoted prices to value its derivative instruments. There were no outstanding forward contracts at August 4, 2018 and February 3, 2018 . Cash Flow Hedges. The Company designates and documents its foreign currency forward exchange contracts as cash flow hedges for certain operating expenses. The Company evaluates and calculates the effectiveness of each hedge at least quarterly. The effective change is recorded in accumulated other comprehensive income and is subsequently reclassified to operating expense when the hedged expense is recognized. Ineffectiveness is recorded in interest and other income, net. For the three and six months ended August 4, 2018, the Company did not have any derivative financial instruments. The following table provides information about gains (losses) associated with the Company’s derivative financial instruments for the three and six months ended July 29, 2017 (in thousands): Amount of Gains (Losses) in Statements of Operations Three Months Ended Six Months Ended Location of Gains (Losses) in Statements of Operations July 29, July 29, Derivatives designated as cash flow hedges: Forward contracts: Research and development $ 1,251 $ 1,726 Selling, general and administrative 331 394 $ 1,582 $ 2,120 The amounts of gains (losses) associated with the Company's derivative financial instruments reclassified from accumulated other comprehensive loss for the three and six months ended July 29, 2017 are presented in the following table (in thousands): Three Months Ended Six Months Ended Affected Line Item in the Statements of Operations: July 29, July 29, Operating costs and expenses: Cash flow hedges: Research and development $ 1,003 $ 1,074 Selling, general and administrative 265 274 Total $ 1,268 $ 1,348 The portion of gains (losses) excluded from the assessment of hedge effectiveness is included in interest and other income, net. These amounts were not material in the three and six months ended July 29, 2017 . The Company did no t have hedge ineffectiveness from derivative financial instruments in the three and six months ended August 4, 2018 and July 29, 2017 . No cash flow hedges were terminated as a result of forecasted transactions that did not occur. |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Aug. 04, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements Fair value is an exit price representing the amount that would be received in the sale of an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or a liability. As a basis for considering such assumptions, the accounting guidance establishes a three-tier value hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value: Level 1—Observable inputs that reflect quoted prices for identical assets or liabilities in active markets. Level 2—Other inputs that are directly or indirectly observable in the marketplace. Level 3—Unobservable inputs that are supported by little or no market activity. The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The Company’s Level 1 assets include institutional money-market funds that are classified as cash equivalents and marketable investments in U.S. government and agency debt, which are valued primarily using quoted market prices. The Company’s Level 2 assets include its marketable investments in time deposits, foreign government and agency debt, municipal debt securities, corporate debt securities and asset backed securities as the market inputs used to value these instruments consist of market yields, reported trades and broker/dealer quotes, which are corroborated with observable market data. In addition, the severance pay fund is classified as Level 2 assets as the valuation inputs are based on quoted prices and market observable data of similar instruments. The tables below set forth, by level, the Company’s assets and liabilities that are measured at fair value on a recurring basis. The tables do not include assets and liabilities that are measured at historical cost or any basis other than fair value (in thousands): Fair Value Measurements at August 4, 2018 Level 1 Level 2 Level 3 Total Items measured at fair value on a recurring basis: Assets Cash equivalents: Money market funds $ 17,759 $ — $ — $ 17,759 Time deposits — 60,730 — 60,730 Short-term investments: Time deposits — 25,000 — 25,000 Other non-current assets: Severance pay fund — 869 — 869 Total assets $ 17,759 $ 86,599 $ — $ 104,358 Fair Value Measurements at February 3, 2018 Level 1 Level 2 Level 3 Total Items measured at fair value on a recurring basis: Assets Cash equivalents: Money market funds $ 18,503 $ — $ — $ 18,503 Time deposits — 65,117 — 65,117 U.S. government and agency debt 51,589 — — 51,589 Municipal debt securities — 5,290 — 5,290 Corporate debt securities — 127,076 — 127,076 Short-term investments: Time deposits — 150,000 — 150,000 U.S. government and agency debt 247,741 — — 247,741 Foreign government and agency debt — 6,987 — 6,987 Municipal debt securities — 2,728 — 2,728 Corporate debt securities — 503,079 — 503,079 Asset backed securities — 42,255 — 42,255 Other non-current assets: Severance pay fund — 896 — 896 Total assets $ 317,833 $ 903,428 $ — $ 1,221,261 Fair Value of Debt The Company classified the Term Loan, the 2023 Notes and 2028 Notes under Level 2 of the fair value measurement hierarchy. The carrying value of the Term Loan approximates its fair value as the Term Loan is carried at a market observable interest rate that resets periodically. At August 4, 2018, the estimated aggregate fair value of the 2023 Notes and 2028 Notes was $1.0 billion and were classified as Level 2 as there are quoted prices from less active markets for the notes. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Aug. 04, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Lease Commitments The Company leases some of its facilities, equipment and computer aided design software under non-cancelable operating leases. Further, the Company assumed operating leases following the acquisition of Cavium. The Company also purchases certain intellectual property under technology license obligations and assumed similar liability from the acquisition of Cavium. Technology license obligations include the liabilities under agreements for technology licenses between the Company and various vendors. Future minimum lease payments, net of estimated sublease income, and payments under technology license obligations as of August 4, 2018 are presented in the following table (in thousands): Fiscal Year Technology License Obligations Operating Leases Total Remainder of 2019 $ 22,934 $ 31,994 $ 54,928 2020 30,522 40,812 71,334 2021 7,800 28,299 36,099 2022 — 26,005 26,005 2023 — 19,215 19,215 Thereafter — 28,569 28,569 Total future minimum lease payments $ 61,256 $ 174,894 $ 236,150 Less: Amount representing interest (986 ) Present value of future minimum payments $ 60,270 Less: Current portion (35,352 ) Non-current portion $ 24,918 Purchase Commitments Under the Company’s manufacturing relationships with its foundry partners, cancellation of outstanding purchase orders is allowed but requires payment of all costs and expenses incurred through the date of cancellation. As of August 4, 2018 , these foundries had incurred approximately $160.8 million of manufacturing costs and expenses relating to the Company’s outstanding purchase orders. Intellectual Property Indemnification The Company has agreed to indemnify certain customers for claims made against the Company’s products where such claims allege infringement or misappropriation of third-party intellectual property rights, including, but not limited to, patents, registered trademarks, copyrights and/or trade secrets. Under the aforementioned indemnification clauses, the Company may be obligated to defend customers and pay for the damages awarded against the customer under an infringement or misappropriation claim, as well as customers' attorneys’ fees and costs. The Company’s indemnification obligations generally do not expire after termination or expiration of the agreement containing the indemnification obligation. However, there are typically limits on and exceptions to the Company’s potential liability for indemnification. Although historically the Company has not made significant payments under these indemnification obligations, the Company cannot estimate the amount of potential future payments, if any, that it might be required to make as a result of these agreements. The maximum potential amount of any future payments that the Company could be required to make under these indemnification obligations could be significant. Contingencies and Legal Proceedings The Company and certain of its subsidiaries are engaged in legal proceedings and claims which arise in the ordinary course of its business. The Company is currently unable to predict the final outcome of these matters and, therefore, cannot determine the likelihood of loss or estimate a range of possible loss, except with respect to amounts where it has determined a loss is both probable and estimable and where it has made an accrual. Litigation is subject to inherent uncertainties and unfavorable rulings could occur. An unfavorable ruling in litigation, particularly patent litigation, could require the Company to pay damages, one-time license fees or ongoing royalty payments, and could prevent the Company from manufacturing or selling some of its products or limit or restrict the type of work that employees involved in such litigation may perform for the Company, any of which could adversely affect financial results in future periods. There can be no assurance that these matters will be resolved in a manner that is not adverse to the Company’s business, financial condition, results of operations or cash flows. Indemnities, Commitments and Guarantees During its normal course of business, the Company has made certain indemnities, commitments and guarantees under which it may be required to make payments in relation to certain transactions. These indemnities may include intellectual property indemnities to the Company’s customers in connection with the sales of its products, indemnities for liabilities associated with the infringement of other parties’ technology based upon the Company’s products, indemnities for general commercial obligations, indemnities to various lessors in connection with facility leases for certain claims arising from such facility or lease, and indemnities to directors and officers of the Company to the maximum extent permitted under the laws of Bermuda. In addition, the Company has contractual commitments to various customers that could require the Company to incur costs to repair an epidemic defect with respect to its products outside of the normal warranty period if such defect were to occur. The duration of these indemnities, commitments and guarantees varies and, in certain cases, is indefinite. Some of these indemnities, commitments and guarantees do not provide for any limitation of the maximum potential future payments that the Company could be obligated to make. In general, the Company does not record any liability for these indemnities, commitments and guarantees in the accompanying consolidated balance sheets as the amounts cannot be reasonably estimated and are not considered probable. The Company does, however, accrue for losses for any known contingent liability, including those that may arise from indemnification provisions, when the loss is both estimable and probable. |
Shareholder's Equity
Shareholder's Equity | 6 Months Ended |
Aug. 04, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Shareholder's Equity | Shareholder's Equity Following the Cavium acquisition and in accordance with the Cavium merger agreement, certain outstanding options to purchase shares of Cavium common stock and certain restricted stock units with respect to Cavium common stock, each granted under Cavium 2016 Equity Incentive Plan (“Cavium 2016 EIP”), Cavium 2007 Equity Incentive Plan (“Cavium 2007 EIP”) and QLogic 2005 Performance Incentive Plan, as assumed by Cavium effective August 16, 2016 (“QLogic 2005 Plan”), (and collectively, with the Cavium 2016 EIP and the Cavium 2007 EIP, the “Cavium Plans”), were assumed by the Company and converted into options to purchase common shares of the Company and restricted stock units with respect to common shares of the Company, respectively. The Company filed a registration statement on July 6, 2018 to register 15,824,555 common shares of the Company, issuable under the Cavium Plans, comprised of 2,535,940 common shares issuable pursuant to outstanding but unexercised options under the Cavium Plans and 13,288,615 common shares issuable pursuant to outstanding unvested restricted stock units under the Cavium Plans. Cavium 2016 EIP The Cavium 2016 EIP was adopted by Cavium on June 15, 2016 and was intended as the successor to and continuation of Cavium 2007 EIP. The Cavium 2016 EIP provided for the grant of incentive stock options, non-statutory stock options, stock appreciation rights, restricted stock awards, restricted stock unit awards, performance stock awards, performance cash awards and other stock awards, which may be granted to employees, directors and consultants. Awards under the Cavium 2016 EIP generally vest over four years and expire seven to ten years from the date of grant. Following the effective date, no additional awards were granted under the Cavium 2007 EIP. Cavium 2007 EIP Cavium adopted the Cavium 2017 EIP in May 2017 upon completion of its initial public offering. The Cavium 2007 EIP provided for the grant of incentive stock options, non-statutory stock options, restricted stock awards, restricted stock unit awards, stock appreciation rights, performance stock awards, and other forms of equity compensation and performance cash awards, all of which may be granted to employees (including officers), directors, and consultants or affiliates. Awards granted under the Cavium 2007 EIP vest at the rate specified by the plan administrator, for stock options, typically with 1/8th of the shares vesting six months after the date of grant and 1/48th of the shares vesting monthly thereafter over the next three and one half years and for restricted stock unit awards typically with quarterly vesting over four years . Awards expire seven to ten years from the date of grant. QLogic 2005 Plan The QLogic 2005 Plan was assumed and registered by Cavium upon its completion of acquisition of QLogic Corporation on August 16, 2016. The QLogic 2005 Plan provided for the issuance of restricted stock unit awards, incentive and non-qualified stock options, and other stock-based incentive awards. Restricted stock unit awards granted pursuant to the QLogic 2005 Plan to employees subject to a service condition generally vest over four years from the date of grant. Stock options granted pursuant to the QLogic 2005 Plan to employees have ten -year terms and generally vest over four years from the date of grant. Cavium Acquisition-related Equity Awards The awards under the Cavium Plans assumed by the Company in the Cavium acquisition were measured at the acquisition date based on the estimated fair value of $357.1 million . A portion of that fair value, $68.9 million , which represented the pre-acquisition service provided by employees to Cavium, was included in the total consideration transferred as part of the acquisition. As of the acquisition date, the remaining portion of the fair value of those awards was $288.2 million , representing post-acquisition share-based compensation expense that will be recognized as these employees provide service over the remaining vesting periods. During the three months ended August 4, 2018, the Company recognized $47.1 million of share-based compensation expense in connection with the acquisition of Cavium, of which $37.8 million was due to the accelerated vesting of outstanding equity awards of certain Cavium employees. Summary of Share-based Compensation Expense The following table summarizes share-based compensation expense (in thousands): Three Months Ended Six Months Ended August 4, July 29, August 4, July 29, Continuing operations: Cost of goods sold $ 4,748 $ 1,810 $ 6,653 $ 3,236 Research and development 26,859 12,371 41,144 26,361 Selling, general and administrative 41,816 7,186 49,478 13,509 Share-based compensation - continuing operations $ 73,423 $ 21,367 $ 97,275 $ 43,106 Discontinued operations: Cost of goods sold — — — — Research and development — 954 — 3,098 Selling, general and administrative — 101 — 235 Share-based compensation - discontinued operations — 1,055 — 3,333 Total share-based compensation $ 73,423 $ 22,422 $ 97,275 $ 46,439 Share-based compensation capitalized in inventory was $2.3 million at August 4, 2018 and $1.3 million at February 3, 2018 . |
Income Tax
Income Tax | 6 Months Ended |
Aug. 04, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Tax | Income Tax The Company’s tax provision for interim periods is determined using an estimate of its annual effective tax rate, adjusted for discrete items, if any, that arise during the period. Each quarter, the Company updates its estimate of the annual effective tax rate, and if the estimated annual effective tax rate changes, the Company makes a cumulative adjustment in such period. The Company’s quarterly tax provision, and estimate of its annual effective tax rate, is subject to variation due to several factors, including variability in accurately predicting our pre-tax income or loss and the mix of jurisdictions to which they relate, intercompany transactions, the applicability of special tax regimes, changes in how we do business, and acquisitions, as well as the integration of such acquisitions. The Company’s estimated effective tax rate for the year differs from the U.S. statutory rate of 21% primarily due to the benefit of a substantial portion of its earnings being taxed at rates lower than the U.S. statutory rate. The Company estimates that its effective tax rate could be adversely affected by pre-tax losses incurred in certain non-U.S. jurisdictions subject to tax rates lower than 21% for which it does not realize a tax benefit. These losses reduce the Company's pre-tax income without a corresponding reduction in its tax expense, and therefore increase its effective tax rate. On July 6, 2018, the Company completed the acquisition of Cavium, Inc. (“Cavium”). With this acquisition, the Company is projecting significant amounts of pre-tax losses in the U.S. in the current fiscal year for which an income tax benefit is realized at the U.S. statutory rate of 21%. This income tax benefit is in excess of the Company's projected income taxes from other jurisdictions. As a result, the Company's estimated annual effective tax rate reflects a consolidated income tax benefit. It is possible that significant negative evidence may become available to reach a conclusion that a valuation allowance will be needed, and as such, the Company may recognize a valuation allowance in the next 12 months. The income tax benefit of $30.0 million and $26.2 million , respectively, for the three and six months ended August 4, 2018 , included a tax benefit from a net reduction in unrecognized tax benefits of $7.5 million and $7.2 million , respectively, and a tax benefit related to other discrete items recorded in the three and six month period of $2.8 million and $2.4 million , respectively. The Tax Cuts and Jobs Act (“2017 Tax Act”) was signed into law on December 22, 2017. The 2017 Tax Act significantly revises the U.S. corporate income tax by, among other things, lowering the statutory corporate tax rate from 35% to 21%, eliminating certain deductions, imposing a mandatory one-time tax on accumulated earnings of foreign subsidiaries, introducing new tax regimes, and changing how foreign earnings are subject to U.S. tax. The 2017 Tax Act also enhanced and extended through 2026 the option to claim accelerated depreciation deductions on qualified property. The Company has not completed its determination of the accounting implications of the 2017 Tax Act on its tax accruals. However, the Company reasonably estimated the effects of the 2017 Tax Act and recorded provisional amounts in its financial statements as of February 3, 2018. There were no additional adjustments made to these amounts in the three or six month period ended August 4, 2018. As the Company continues its analysis of the 2017 Tax Act, collects and prepares necessary data, and interprets any additional guidance issued by the U.S. Treasury Department, the Internal Revenue Service (“I.R.S.”), and other standard-setting bodies, the Company may make adjustments to the provisional amounts. Those adjustments may materially impact the Company's provision for income taxes in the period in which the adjustments are made. The Company's gross unrecognized tax benefits were $177.5 million and $23.2 million on August 4, 2018 and February 3, 2018, respectively. The net increase to the Company's gross unrecognized tax benefits of $154.3 million is primarily the result of certain unrecognized tax benefits recorded in the Company's accounting for the acquisition of Cavium. If the gross unrecognized tax benefits as of August 4, 2018 were realized in a subsequent period, the Company would record a tax benefit of $148.5 million within its provision of income taxes at such time. The amount of interest and penalties accrued as of August 4, 2018 and February 3, 2018 was $13.9 million and $17.2 million , respectively. It is reasonably possible that the amount of unrecognized tax benefits could increase or decrease significantly due to changes in tax law in various jurisdictions, new tax audits and changes in the U.S. dollar as compared to foreign currencies within the next 12 months. Excluding these factors, uncertain tax positions may decrease by as much as $13.5 million from the expiration of statutes of limitations in various jurisdictions during the next 12 months. Government tax authorities from several non-U.S. jurisdictions are also examining the Company’s tax returns. The Company believes that it has adequately provided for any reasonably foreseeable outcomes related to its tax audits and that any settlement will not have a material effect on its results at this time. The Company operates under tax incentives in certain countries that may be extended if certain additional requirements are satisfied. The tax incentives are conditional upon meeting certain employment and investment thresholds. The impact of these tax incentives decreased foreign taxes by $0.5 million and $1.2 million for the three and six months ended August 4, 2018 respectively, and $0.8 million and $1.5 million for the three and six months ended July 29, 2017 , respectively. The benefit of these tax incentives on net income per share was less than $0.01 per share for both the three and six months ended August 4, 2018 and July 29, 2017 . The Company’s principal source of liquidity as of August 4, 2018 consisted of approximately $520 million of cash, cash equivalents and short-term investments, of which approximately $510 million was held by subsidiaries outside of Bermuda. The Company has not recognized a deferred tax liability on $432 million of the excess financial reporting basis over the tax basis of investments in foreign subsidiaries outside of Bermuda that is indefinitely reinvested. The Company plans to use such amounts to fund various activities outside of Bermuda, including working capital requirements, capital expenditures for expansion, funding of future acquisitions or other financing activities. If such amounts were no longer considered indefinitely reinvested, the Company would incur a tax expense of approximately $113 million . |
Net Income Per Share
Net Income Per Share | 6 Months Ended |
Aug. 04, 2018 | |
Earnings Per Share [Abstract] | |
Net Income Per Share | Net Income Per Share The Company reports both basic net income per share, which is based on the weighted average number of common shares outstanding during the period, and diluted net income per share, which is based on the weighted average number of common shares outstanding and potentially dilutive shares outstanding during the period. In connection with the Cavium acquisition, the Company issued 153.4 million shares of the Company's common stock at $21.34 per share in exchange for Cavium shares on a 2.1757 to 1 basis as a part of the merger consideration. The Company also issued 1.1 million shares of the Company's common stock at $21.34 per share in exchange for Cavium employee accelerated awards on a 2.1757 to 1 basis as a part of the merger consideration. See “Note 3 - Business Combination” for more information. The equity related merger consideration resulted in increasing basic and diluted weighted average shares by 50.9 million weighted average shares for the three months ended August 4, 2018 and by 25.5 million weighted average shares for the six months ended August 4, 2018. The computations of basic and diluted net income per share are presented in the following table (in thousands, except per share amounts): Three Months Ended Six Months Ended August 4, July 29, August 4, July 29, Numerator: Income from continuing operations, net of tax $ 6,759 $ 135,450 $ 135,371 $ 235,042 Income from discontinued operations, net of tax — 29,809 — 36,838 Net income $ 6,759 $ 165,259 $ 135,371 $ 271,880 Denominator: Weighted average shares — basic 552,238 500,817 524,787 502,303 Effect of dilutive securities: Share-based awards 9,911 9,492 10,646 11,648 Weighted average shares — diluted 562,149 510,309 535,433 513,951 Income from continuing operations per share: Basic $ 0.01 $ 0.27 $ 0.26 $ 0.47 Diluted $ 0.01 $ 0.26 $ 0.25 $ 0.46 Income from discontinued operations per share: Basic $ — $ 0.06 $ — $ 0.07 Diluted $ — $ 0.06 $ — $ 0.07 Net income per share: Basic $ 0.01 $ 0.33 $ 0.26 $ 0.54 Diluted $ 0.01 $ 0.32 $ 0.25 $ 0.53 Potential dilutive securities include dilutive common shares from share-based awards attributable to the assumed exercise of stock options, restricted stock units and employee stock purchase plan shares using the treasury stock method. Under the treasury stock method, potential common shares outstanding are not included in the computation of diluted net income per share if their effect is anti-dilutive. Anti-dilutive potential shares are presented in the following table (in thousands): Three Months Ended Six Months Ended August 4, July 29, August 4, July 29, Weighted average shares outstanding: Share-based awards 5,718 2,770 5,604 7,301 Anti-dilutive potential shares from share-based awards are excluded from the calculation of diluted earnings per share for all periods reported above because either their exercise price exceeded the average market price during the period or the share-based awards were determined to be anti-dilutive based on applying the treasury stock method. |
Segment and Geographic Informat
Segment and Geographic Information | 6 Months Ended |
Aug. 04, 2018 | |
Segment Reporting [Abstract] | |
Segment and Geographic Information | Segment and Geographic Information The Company operates in one reportable segment — the design, development and sale of integrated circuits. Refer to “Note 5 - Revenue” for net revenue information based on geographic region. The following table presents long-lived asset information based on geographic region. Long-lived assets are based on the physical location of the assets (in thousands) August 4, February 3, Property and equipment, net: United States $ 241,586 $ 156,053 Others 86,059 46,169 Total property and equipment, net $ 327,645 $ 202,222 |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 6 Months Ended |
Aug. 04, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Fiscal Period | The Company’s fiscal year is the 52- or 53-week period ending on the Saturday closest to January 31. Accordingly, every fifth or sixth fiscal year will have a 53-week period. The additional week in a 53-week year is added to the fourth quarter, making such quarter consist of 14 weeks. Fiscal 2018 had a 53-week year. Fiscal 2019 is a 52-week year. |
Accounting Pronouncements Recently Adopted and Accounting Pronouncements Not Yet Effective | Accounting Pronouncements Recently Adopted In May 2014, the FASB issued a new accounting standard on the recognition of revenue from contracts with customers that superseded nearly all existing revenue recognition guidance under GAAP. The new standard requires an entity to recognize revenue from the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance addresses, in particular, contracts with more than one performance obligation, as well as the accounting for certain costs to obtain or fulfill a contract with a customer, and provides for additional disclosures with respect to revenue and cash flows arising from contracts with customers. Public entities are required to apply the amendments on either a full or modified retrospective basis for annual periods beginning after December 15, 2017 and for interim periods within those annual periods. The Company adopted the standard on a modified retrospective basis in the first quarter of fiscal year 2019, with the cumulative effect recognized in retained earnings at the date of adoption. See "Note 5 - Revenue" for additional information on the impact of the adoption of the new standard on the Company’s consolidated financial statements. In January 2016, the FASB issued an accounting standard update that changes the accounting for equity investments, financial liabilities under the fair value option, and the presentation and disclosure requirements for financial instruments. The Company adopted the standard in the first quarter of fiscal 2019. The adoption of this guidance did not have a significant impact on the Company's consolidated financial statements. In August 2016, the FASB issued an accounting standards update to add or clarify guidance on the classification of certain cash receipts and cash payments in the statement of cash flows. The amendments in the update provide guidance on eight specific cash flow issues. The amendments to the guidance should be applied using a retrospective transition method for each period presented and, if it is impracticable to apply all of the amendments retrospectively for some of the issues, the amendments for those issues would be applied prospectively as of the earliest date practicable. The Company adopted the standard in the first quarter of fiscal 2019. The adoption of this guidance did not have an impact on the Company's consolidated financial statements. In October 2016, the FASB issued new guidance that simplifies the accounting for the income tax effects of intra-entity transfers and will require companies to recognize the income tax effects of intra-entity transfers of assets other than inventory when the transfer occurs. Previous guidance required companies to defer the income tax effects of intra-entity transfers of assets until the asset had been sold to an outside party or otherwise recognized. The Company adopted the standard in the first quarter of fiscal 2019. The adoption of this guidance did not have an impact on the Company's consolidated financial statements. In November 2016, the FASB issued new guidance that requires entities to include in their cash and cash-equivalent balances in the statement of cash flows those amounts that are deemed to be restricted cash and restricted cash equivalents. As a result, companies will no longer present transfers between cash and cash equivalents and restricted cash and restricted cash equivalents in the statement of cash flows. The Company adopted the standard in the first quarter of fiscal 2019. The adoption of this guidance did not have a significant impact on the Company's consolidated financial statements. In January 2017, the FASB issued an accounting standards update that revises the definition of a business. The amendments provide a more robust framework for determining when a set of assets and activities is a business. The update is intended to help companies evaluate whether transactions should be accounted for as acquisitions or disposals of assets or businesses. The Company adopted the standard in the first quarter of fiscal 2019. The adoption of this guidance did not have an impact on the Company's consolidated financial statements. In May 2017, the FASB issued an accounting standards update that provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting. Unless the changes in terms or conditions meet all three criteria outlined in the guidance, modification accounting should be applied. The three criteria relate to changes in the terms and conditions that affect the fair value, vesting conditions, or classification of a share-based payment award. The guidance is required to be applied prospectively to an award modified on or after the adoption date. The Company adopted the standard in the first quarter of fiscal 2019. The adoption of this guidance did not have an impact on the Company's consolidated financial statements. In June 2018, the Financial Accounting Standards Board (“FASB”) issued an accounting standards update that substantially aligns the accounting for shared-based payments to non-employees and employees. The standard is required to be applied through a cumulative-effect adjustment to retained earnings as of the beginning of the fiscal year of adoption. This guidance is effective for fiscal years beginning after December 15, 2018, including interim periods within that fiscal year. Early adoption is permitted. The Company early adopted the standard in the second quarter of fiscal 2019. The adoption of this guidance did not have a significant impact on the Company's consolidated financial statements. Accounting Pronouncements Not Yet Effective In February 2016, the FASB issued a new standard on the accounting for leases, which requires a lessee to record a right-of-use asset and a corresponding lease liability on the balance sheet for all leases with terms longer than twelve months. The standard also expands the required quantitative and qualitative disclosures for lease arrangements. The standard is effective for the Company beginning in the first quarter of fiscal year 2020. The Company is currently evaluating the effect this new guidance will have on its consolidated financial statements. In June 2016, the FASB issued a new standard requiring financial assets measured at amortized cost be presented at the net amount expected to be collected, through an allowance for credit losses that is deducted from the amortized cost basis. The standard eliminates the threshold for initial recognition in current GAAP and reflects an entity’s current estimate of all expected credit losses. The measurement of expected credit losses is based on historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the financial assets. The standard is effective for the Company beginning in the first quarter of fiscal year 2020. The Company does not expect the adoption of this guidance will have a material effect on its consolidated financial statements. In August 2017, the FASB issued an accounting standards update that simplifies the application and administration of hedge accounting. The guidance amends the presentation and disclosure requirements and changes how companies assess effectiveness. The guidance is intended to more closely align hedge accounting with companies' risk management strategies, simplify the application of hedge accounting, and increase transparency as to the scope and results of hedging programs. The guidance is effective for the Company beginning in the first quarter of fiscal year 2021. Early adoption is permitted. The guidance will be applied to cash flow and net investment hedge relationships that exist on the date of adoption using a modified retrospective approach. The presentation and disclosure requirements will be applied prospectively. The Company is evaluating the effect this new guidance will have on its consolidated financial statements. In August 2018, the FASB issued an accounting standard update to align the requirements for capitalizing implementation costs incurred in a software hosting arrangement that is a service contract and costs to develop or obtain internal-use software. The guidance is effective for the Company beginning in the first quarter of fiscal year 2021, with early adoption permitted. The Company is evaluating the effect this new guidance will have on its consolidated financial statements. |
Business Combination (Tables)
Business Combination (Tables) | 6 Months Ended |
Aug. 04, 2018 | |
Business Combinations [Abstract] | |
Summary of Total Merger Consideration | The following table summarizes the total merger consideration (in thousands, except share and per share data): Cash consideration to Cavium common stockholders $ 2,819,812 Common stock (153,376,408 shares of the Company's common 3,273,053 Cash consideration for intrinsic value of vested director stock options and employee accelerated awards attributable to pre-acquisition service 10,642 Stock consideration for employee accelerated awards attributable to pre-acquisition service 7,804 Fair value of the replacement equity awards attributable to 50,485 Total merger consideration $ 6,161,796 |
Purchase Price Allocation | The purchase price allocation is as follows (in thousands): Cash and cash equivalents $ 180,989 Accounts receivable 112,270 Inventories 330,778 Prepaid expense and other current assets 19,890 Assets held for sale 483 Property and equipment 115,428 Acquired intangible assets 2,744,000 Other non-current assets 89,139 Goodwill 3,504,302 Accounts payable (52,383 ) Accrued liabilities (127,837 ) Accrued employee compensation (34,813 ) Deferred income (2,466 ) Current portion of long-term debt (6,123 ) Liabilities held for sale (3,032 ) Long-term debt (600,005 ) Non-current income taxes payable (8,365 ) Deferred tax liabilities (84,360 ) Other non-current liabilities (16,099 ) Total merger consideration $ 6,161,796 |
Schedule of Identifiable Intangible Assets and Estimated Useful Lives | The valuation of identifiable intangible assets and their estimated useful lives are as follows: Asset Fair Value Weighted (in thousands, except for useful life) Developed technology $ 1,743,000 7.59 In process research and development ("IPR&D") 513,000 n/a Customer contracts and related relationships 465,000 8.92 Trade names 23,000 4.32 $ 2,744,000 |
Supplemental Pro Forma Financial Information | The supplemental pro forma financial information for the periods presented is as follows: Six months ended August 4, 2018 July 29, 2017 (in thousands, except per share data) Pro forma net revenue $ 1,612,873 $ 1,649,129 Pro forma net income (loss) 57,453 (204,632 ) Pro forma net income (loss) per share, basic $ 0.09 $ (0.31 ) Pro forma net income (loss) per share, diluted 0.09 (0.31 ) |
Debt (Tables)
Debt (Tables) | 6 Months Ended |
Aug. 04, 2018 | |
Debt Disclosure [Abstract] | |
Summary of Outstanding Debt | The following table summarizes the Company's outstanding debt at August 4, 2018 (in thousands): August 4, 2018 Face Value Outstanding: Term Loan $ 900,000 2023 Notes 500,000 2028 Notes 500,000 Total borrowings $ 1,900,000 Less: Unamortized debt discount and issuance cost (21,383 ) Net carrying amount of debt $ 1,878,617 Less: Current portion $ — Non-current portion $ 1,878,617 |
Aggregate Future Contractual Maturities of Debt | As of August 4, 2018, the aggregate future contractual maturities of the Company's outstanding debt, at face value, were as follows (in thousands): Fiscal year Amount 2019 $ — 2020 — 2021 — 2022 900,000 2023 — Thereafter $ 1,000,000 |
Revenue (Tables)
Revenue (Tables) | 6 Months Ended |
Aug. 04, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Summary of Effect of Adoption of New Revenue Standard | The following table summarizes the effects of adopting the new revenue standard on the Company's financial statements for the fiscal year beginning February 4, 2018 as an adjustment to the opening balance. Such adjustments were of a non-cash nature. (In thousands) Balance as of February 3, 2018 Adjustments Opening Balance as of February 4, 2018 Consolidated balance sheet: Assets Accounts receivable, net $ 280,395 $ 1,862 $ 282,257 Inventory 170,039 2,016 172,055 Other non-current assets 148,800 42,116 190,916 Liabilities and shareholders' equity: Accrued liabilities 86,958 70,336 157,294 Deferred income 61,237 (58,560 ) 2,677 Retained earnings $ 1,409,452 $ 34,218 $ 1,443,670 The following tables summarize financial statement line items that are affected in the current reporting period by the application of the new revenue recognition policy as compared with the previous revenue recognition policy which was in effect in prior periods in accordance with ASC 605, Revenue Recognition: August 4, 2018 (In thousands) As currently reported Adjustments Balances without adoption of new revenue standard Consolidated balance sheet: Assets Accounts receivable, net $ 443,276 $ — $ 443,276 Inventory 473,429 (1,478 ) 471,951 Other non-current assets 275,598 (59,174 ) 216,424 Liabilities and shareholders' equity: Accrued liabilities 277,098 (92,890 ) 184,208 Deferred income 3,511 78,492 82,003 Retained earnings $ 1,509,860 $ (46,254 ) $ 1,463,606 Three Months Ended August 4, 2018 Six Months Ended August 4, 2018 (In thousands, except per share amounts) As currently reported Adjustments Balances without adoption of new revenue standard As currently reported Adjustments Balances without adoption of new revenue standard Consolidated statement of operation: Net revenue $ 665,310 $ (2,002 ) $ 663,308 $ 1,269,941 $ (17,531 ) $ 1,252,410 Cost of goods sold 288,200 (2,099 ) 286,101 517,138 (5,495 ) 511,643 Net income (loss) 6,759 97 6,856 135,371 (12,036 ) 123,335 Net income (loss) per share - Basic 0.01 — 0.01 0.26 (0.02 ) 0.24 Net income (loss) per share - Diluted $ 0.01 $ — $ 0.01 $ 0.25 $ (0.02 ) $ 0.23 |
Disaggregation of Revenue | The following table summarizes net revenue disaggregated by product group (in thousands, except percentages): Three Months Ended Six Months Ended August 4, 2018 % of Total August 4, 2018 % of Total Net revenue by product group: Storage (1) $ 335,764 50 % 652,833 51 % Networking (2) 283,330 43 % 527,558 42 % Other (3) 46,216 7 % 89,550 7 % $ 665,310 $ 1,269,941 1) Storage products are comprised primarily of HDD, SSD Controllers, Fibre Channel Adapters and Data Center Storage Solutions. 2) Networking products are comprised primarily of Ethernet Switches, Ethernet Transceivers, Ethernet NICs, Embedded Communications and Infrastructure Processors, Automotive Ethernet, Security Adapters and Processors as well as Connectivity products. In addition, this grouping includes a few legacy product lines in which the Company no longer invests, but will generate revenue for several years. 3) Other products are comprised of primarily Printer Solutions, Application Processors and others. The following table summarizes net revenue disaggregated by primary geographical market (in thousands, except percentages): Three Months Ended Six Months Ended August 4, 2018 % of Total August 4, 2018 % of Total Net revenue based on destination of shipment: China $ 292,033 44 % $ 566,542 45 % Malaysia 96,127 14 % 186,750 15 % Philippines 55,416 8 % 113,183 9 % Thailand 39,256 6 % 80,790 6 % United States 16,563 2 % 32,592 3 % Other 165,915 26 % 290,084 22 % $ 665,310 $ 1,269,941 The following table summarizes net revenue disaggregated by customer type (in thousands, except percentages): Three Months Ended Six Months Ended August 4, 2018 % of Total August 4, 2018 % of Total Net revenue by customer type: Direct customers $ 532,351 80 % 1,002,827 79 % Distributors 132,959 20 % 267,114 21 % $ 665,310 $ 1,269,941 |
Goodwill and Acquired Intangi27
Goodwill and Acquired Intangible Assets, Net (Tables) | 6 Months Ended |
Aug. 04, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Finite-Lived Intangible Assets by Major Class | As of the second quarter ended August 4, 2018, net carrying amounts are as follows (in thousands, except for weighted average remaining amortization period): August 4, 2018 Gross Carrying Amounts Accumulated Amortization Net Carrying Amounts Weighted average remaining amortization period (years) Developed technologies $ 1,743,000 $ (18,984 ) $ 1,724,016 7.59 Customer contracts and related relationships 465,000 (6,501 ) 458,499 8.92 Trade names 23,000 (454 ) 22,546 4.32 Total acquired amortizable intangible assets $ 2,231,000 $ (25,939 ) $ 2,205,061 7.83 IPR&D 513,000 — 513,000 Total acquired intangible assets $ 2,744,000 $ (25,939 ) $ 2,718,061 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | The following table presents the estimated future amortization expense of acquired amortizable intangible assets as of August 4, 2018 (in thousands): Fiscal Year Amount Remainder of 2019 $ 157,380 2020 309,701 2021 301,580 2022 293,024 2023 285,596 Thereafter 857,780 $ 2,205,061 |
Restructuring and Other Relat28
Restructuring and Other Related Charges (Tables) | 6 Months Ended |
Aug. 04, 2018 | |
Restructuring and Related Activities [Abstract] | |
Reconciliation of Beginning and Ending Restructuring Liability Balances by Major Type of Costs | The following table sets forth a reconciliation of the beginning and ending restructuring liability balances by each major type of cost associated with the restructuring charges (in thousands): Severance and related costs Facilities and related costs Other exit-related costs Total Balance at February 3, 2018 $ 654 $ 462 $ 555 $ 1,671 Restructuring charges - continuing operations 24,057 11,057 262 35,376 Net cash payments (3,617 ) (1,743 ) (541 ) (5,901 ) Release of reserves (307 ) — — (307 ) Exchange rate adjustment (91 ) — — (91 ) Balance at August 4, 2018 $ 20,696 $ 9,776 $ 276 $ 30,748 Less: non-current portion $ — $ 5,878 $ — $ 5,878 Current portion $ 20,696 $ 3,898 $ 276 $ 24,870 |
Supplemental Financial Inform29
Supplemental Financial Information (Tables) | 6 Months Ended |
Aug. 04, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Inventories | August 4, February 3, Inventories: Work-in-process $ 257,906 $ 103,711 Finished goods 215,523 66,328 Total inventories $ 473,429 $ 170,039 |
Schedule of Property and Equipment, Net | August 4, February 3, Property and equipment, net: Machinery and equipment $ 609,376 $ 535,416 Land, buildings, and leasehold improvements 279,880 247,675 Computer software 102,943 98,253 Furniture and fixtures 27,235 21,139 1,019,434 902,483 Less: Accumulated depreciation and amortization (691,789 ) (700,261 ) Total property and equipment, net $ 327,645 $ 202,222 |
Schedule of Current Accrued Liabilities | Current accrued liabilities are comprised of the following at August 4, 2018 and February 3, 2018 , respectively: August 4, February 3, Accrued liabilities: Contract liabilities $ 106,191 $ — Technology license obligations 76,050 28,488 Accrued royalties 18,003 11,860 Accrued rebates (1) — 9,292 Accrued legal related expenses 14,664 13,050 Unsettled investment trades (2) — 4,497 Restructuring liabilities 24,870 1,612 Accrued income tax payable 9,735 959 Other 27,585 17,200 Total accrued liabilities $ 277,098 $ 86,958 (1) Accrued rebates are classified as part of contract liabilities beginning in fiscal year 2019 upon adoption of the new revenue recognition standard. (2) Unsettled investment trades represent amounts owed to third parties for investment purchases for which cash settlement has not yet occurred. |
Changes in Accumulated Other Comprehensive Income (Loss) by Components | The changes in accumulated other comprehensive income (loss) by components are presented in the following tables: Unrealized Gain (Loss) on Marketable Securities (1) Balance at February 3, 2018 $ (2,322 ) Other comprehensive loss before reclassifications (733 ) Amounts reclassified from accumulated other comprehensive gain 3,055 Net current-period other comprehensive gain, net of tax 2,322 Balance at August 4, 2018 $ — Unrealized Gain (Loss) on Marketable Securities (1) Unrealized Gain (Loss) on Cash Flow Hedges (2) Total Balance at January 28, 2017 $ (801 ) $ 824 $ 23 Other comprehensive income (loss) before reclassifications (146 ) 2,341 2,195 Amounts reclassified from accumulated other comprehensive income (loss) 29 (1,348 ) (1,319 ) Net current-period other comprehensive income (loss), net of tax (117 ) 993 876 Balance at July 29, 2017 $ (918 ) $ 1,817 $ 899 (1) The amounts of gains (losses) associated with the Company's marketable securities reclassified from accumulated other comprehensive income (loss) are recorded in interest and other income, net. (2) The amounts of gains (losses) associated with the Company's derivative financial instruments reclassified from accumulated other comprehensive income (loss) are recorded in operating expenses. See "Note 10- Derivative Financial Instruments" for additional information on the affected line items in the condensed consolidated statements of operations. |
Investments (Tables)
Investments (Tables) | 6 Months Ended |
Aug. 04, 2018 | |
Investments, Debt and Equity Securities [Abstract] | |
Summary of Investments | As of February 3, 2018, the following table summarizes the Company’s investments (in thousands): February 3, 2018 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Short-term investments: Available-for-sale: U.S. government and agency debt $ 248,336 $ 49 $ (644 ) $ 247,741 Foreign government and agency debt 7,004 — (17 ) 6,987 Municipal debt securities 2,734 — (6 ) 2,728 Corporate debt securities 504,609 469 (1,999 ) 503,079 Asset backed securities 42,429 3 (177 ) 42,255 Held-to-maturity: Time deposits 150,000 — — 150,000 Total short-term investments 955,112 521 (2,843 ) 952,790 Total investments $ 955,112 $ 521 $ (2,843 ) $ 952,790 |
Gross Realized Gains and Losses on Sales of Available-for-Sale Securities | Gross realized gains and gross realized losses on sales of available-for-sale securities are presented in the following tables (in thousands): Three Months Ended Six Months Ended August 4, July 29, August 4, July 29, Gross realized gains $ 369 $ 16 $ 371 $ 85 Gross realized losses (2,575 ) (69 ) (3,437 ) (113 ) Total net realized gains (losses) $ (2,206 ) $ (53 ) $ (3,066 ) $ (28 ) |
Available-for-sale Securities Classified by Contractual Maturities | The contractual maturities of available-for-sale and held-to-maturity securities are presented in the following tables (in thousands): August 4, 2018 February 3, 2018 Amortized Cost Estimated Fair Value Amortized Cost Estimated Fair Value Due in one year or less $ 25,000 $ 25,000 $ 554,247 $ 553,866 Due between one and five years — — 400,866 398,924 Due over five years — — — — $ 25,000 $ 25,000 $ 955,113 $ 952,790 |
Unrealized Loss Position Investments | Such securities are presented as follows for the fiscal year ended February 3, 2018: February 3, 2018 Less than 12 months 12 months or more Total Fair Value Unrealized Loss Fair Unrealized Fair Unrealized U.S. government and agency debt $ 148,538 $ (298 ) $ 51,332 $ (346 ) $ 199,870 $ (644 ) Foreign government and agency debt 3,993 (1 ) 2,994 (16 ) 6,987 (17 ) Municipal debt securities 1,969 (6 ) — — 1,969 (6 ) Corporate debt securities 253,380 (1,514 ) 46,805 (485 ) 300,185 (1,999 ) Asset backed securities 37,636 (145 ) 2,167 (32 ) 39,803 (177 ) Total securities $ 445,516 $ (1,964 ) $ 103,298 $ (879 ) $ 548,814 $ (2,843 ) |
Derivative Financial Instrume31
Derivative Financial Instruments (Tables) | 6 Months Ended |
Aug. 04, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Information about Gains (Losses) Associated with Derivative Financial Instruments | The following table provides information about gains (losses) associated with the Company’s derivative financial instruments for the three and six months ended July 29, 2017 (in thousands): Amount of Gains (Losses) in Statements of Operations Three Months Ended Six Months Ended Location of Gains (Losses) in Statements of Operations July 29, July 29, Derivatives designated as cash flow hedges: Forward contracts: Research and development $ 1,251 $ 1,726 Selling, general and administrative 331 394 $ 1,582 $ 2,120 |
Gains (Losses) Reclassified from Accumulated Other Comprehensive Income (Loss) | The amounts of gains (losses) associated with the Company's derivative financial instruments reclassified from accumulated other comprehensive loss for the three and six months ended July 29, 2017 are presented in the following table (in thousands): Three Months Ended Six Months Ended Affected Line Item in the Statements of Operations: July 29, July 29, Operating costs and expenses: Cash flow hedges: Research and development $ 1,003 $ 1,074 Selling, general and administrative 265 274 Total $ 1,268 $ 1,348 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Aug. 04, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value, Assets and Liabilities Measured on Recurring Basis | The tables below set forth, by level, the Company’s assets and liabilities that are measured at fair value on a recurring basis. The tables do not include assets and liabilities that are measured at historical cost or any basis other than fair value (in thousands): Fair Value Measurements at August 4, 2018 Level 1 Level 2 Level 3 Total Items measured at fair value on a recurring basis: Assets Cash equivalents: Money market funds $ 17,759 $ — $ — $ 17,759 Time deposits — 60,730 — 60,730 Short-term investments: Time deposits — 25,000 — 25,000 Other non-current assets: Severance pay fund — 869 — 869 Total assets $ 17,759 $ 86,599 $ — $ 104,358 Fair Value Measurements at February 3, 2018 Level 1 Level 2 Level 3 Total Items measured at fair value on a recurring basis: Assets Cash equivalents: Money market funds $ 18,503 $ — $ — $ 18,503 Time deposits — 65,117 — 65,117 U.S. government and agency debt 51,589 — — 51,589 Municipal debt securities — 5,290 — 5,290 Corporate debt securities — 127,076 — 127,076 Short-term investments: Time deposits — 150,000 — 150,000 U.S. government and agency debt 247,741 — — 247,741 Foreign government and agency debt — 6,987 — 6,987 Municipal debt securities — 2,728 — 2,728 Corporate debt securities — 503,079 — 503,079 Asset backed securities — 42,255 — 42,255 Other non-current assets: Severance pay fund — 896 — 896 Total assets $ 317,833 $ 903,428 $ — $ 1,221,261 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 6 Months Ended |
Aug. 04, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Future Minimum Lease Payments, Net of Estimated Sublease Income Under Operating Leases | Future minimum lease payments, net of estimated sublease income, and payments under technology license obligations as of August 4, 2018 are presented in the following table (in thousands): Fiscal Year Technology License Obligations Operating Leases Total Remainder of 2019 $ 22,934 $ 31,994 $ 54,928 2020 30,522 40,812 71,334 2021 7,800 28,299 36,099 2022 — 26,005 26,005 2023 — 19,215 19,215 Thereafter — 28,569 28,569 Total future minimum lease payments $ 61,256 $ 174,894 $ 236,150 Less: Amount representing interest (986 ) Present value of future minimum payments $ 60,270 Less: Current portion (35,352 ) Non-current portion $ 24,918 |
Future Minimum Payments Under Technology License Obligations | Future minimum lease payments, net of estimated sublease income, and payments under technology license obligations as of August 4, 2018 are presented in the following table (in thousands): Fiscal Year Technology License Obligations Operating Leases Total Remainder of 2019 $ 22,934 $ 31,994 $ 54,928 2020 30,522 40,812 71,334 2021 7,800 28,299 36,099 2022 — 26,005 26,005 2023 — 19,215 19,215 Thereafter — 28,569 28,569 Total future minimum lease payments $ 61,256 $ 174,894 $ 236,150 Less: Amount representing interest (986 ) Present value of future minimum payments $ 60,270 Less: Current portion (35,352 ) Non-current portion $ 24,918 |
Shareholder's Equity (Tables)
Shareholder's Equity (Tables) | 6 Months Ended |
Aug. 04, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Summary of Share-based Compensation Expense | The following table summarizes share-based compensation expense (in thousands): Three Months Ended Six Months Ended August 4, July 29, August 4, July 29, Continuing operations: Cost of goods sold $ 4,748 $ 1,810 $ 6,653 $ 3,236 Research and development 26,859 12,371 41,144 26,361 Selling, general and administrative 41,816 7,186 49,478 13,509 Share-based compensation - continuing operations $ 73,423 $ 21,367 $ 97,275 $ 43,106 Discontinued operations: Cost of goods sold — — — — Research and development — 954 — 3,098 Selling, general and administrative — 101 — 235 Share-based compensation - discontinued operations — 1,055 — 3,333 Total share-based compensation $ 73,423 $ 22,422 $ 97,275 $ 46,439 |
Net Income Per Share (Tables)
Net Income Per Share (Tables) | 6 Months Ended |
Aug. 04, 2018 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The computations of basic and diluted net income per share are presented in the following table (in thousands, except per share amounts): Three Months Ended Six Months Ended August 4, July 29, August 4, July 29, Numerator: Income from continuing operations, net of tax $ 6,759 $ 135,450 $ 135,371 $ 235,042 Income from discontinued operations, net of tax — 29,809 — 36,838 Net income $ 6,759 $ 165,259 $ 135,371 $ 271,880 Denominator: Weighted average shares — basic 552,238 500,817 524,787 502,303 Effect of dilutive securities: Share-based awards 9,911 9,492 10,646 11,648 Weighted average shares — diluted 562,149 510,309 535,433 513,951 Income from continuing operations per share: Basic $ 0.01 $ 0.27 $ 0.26 $ 0.47 Diluted $ 0.01 $ 0.26 $ 0.25 $ 0.46 Income from discontinued operations per share: Basic $ — $ 0.06 $ — $ 0.07 Diluted $ — $ 0.06 $ — $ 0.07 Net income per share: Basic $ 0.01 $ 0.33 $ 0.26 $ 0.54 Diluted $ 0.01 $ 0.32 $ 0.25 $ 0.53 |
Schedule of Anti-dilutive Potential Shares | Anti-dilutive potential shares are presented in the following table (in thousands): Three Months Ended Six Months Ended August 4, July 29, August 4, July 29, Weighted average shares outstanding: Share-based awards 5,718 2,770 5,604 7,301 |
Segment and Geographic Inform36
Segment and Geographic Information (Tables) | 6 Months Ended |
Aug. 04, 2018 | |
Segment Reporting [Abstract] | |
Long-lived Assets by Physical Location | Long-lived assets are based on the physical location of the assets (in thousands) August 4, February 3, Property and equipment, net: United States $ 241,586 $ 156,053 Others 86,059 46,169 Total property and equipment, net $ 327,645 $ 202,222 |
Business Combination - Addition
Business Combination - Additional Information (Details) $ / shares in Units, $ in Thousands | Jul. 06, 2018USD ($)$ / shares | Aug. 04, 2018USD ($) | Aug. 04, 2018USD ($) | Feb. 03, 2018USD ($) |
Business Acquisition [Line Items] | ||||
Goodwill | $ 5,497,608 | $ 5,497,608 | $ 1,993,310 | |
Weighted average remaining amortization period (years) | 7 years 9 months 29 days | |||
Cavium | ||||
Business Acquisition [Line Items] | ||||
Cash consideration (in usd per share) | $ / shares | $ 40 | |||
Number of common shares per Cavium share | 2.1757 | |||
Goodwill | $ 3,504,302 | |||
Acquisition related costs | $ 114,600 | |||
Debt financing costs | 22,800 | 22,800 | ||
Equity issuance costs | 2,900 | |||
Consolidated net revenue contributed by Cavium | 41,300 | 41,300 | ||
Net loss incurred in the period | 120,600 | |||
Restructuring costs | 22,300 | |||
Cavium | Prepaid Expenses and Other Current Assets | ||||
Business Acquisition [Line Items] | ||||
Debt financing costs | 400 | 400 | ||
Cavium | Other Non-current Assets | ||||
Business Acquisition [Line Items] | ||||
Debt financing costs | 1,500 | 1,500 | ||
Cavium | Long-term Debt | ||||
Business Acquisition [Line Items] | ||||
Debt financing costs | 14,100 | 14,100 | ||
Cavium | Selling, general and administrative | ||||
Business Acquisition [Line Items] | ||||
Acquisition related costs | $ 28,200 | $ 43,500 | ||
IPR&D | Minimum | ||||
Business Acquisition [Line Items] | ||||
Weighted average remaining amortization period (years) | 4 years | |||
IPR&D | Maximum | ||||
Business Acquisition [Line Items] | ||||
Weighted average remaining amortization period (years) | 9 years |
Business Combination - Summary
Business Combination - Summary of Merger Consideration (Details) - Cavium $ / shares in Units, $ in Thousands | Jul. 06, 2018USD ($)$ / sharesshares |
Business Acquisition [Line Items] | |
Cash consideration to Cavium common stockholders | $ 2,819,812 |
Common stock (153,376,408 shares of the Company's common stock at $21.34 per share) | 3,273,053 |
Cash consideration for intrinsic value of vested director stock options and employee accelerated awards attributable to pre-acquisition service | 10,642 |
Stock consideration for employee accelerated awards attributable to pre-acquisition service | 7,804 |
Fair value of the replacement equity awards attributable to pre-acquisition service | 50,485 |
Total merger consideration | $ 6,161,796 |
Number of shares issued in acquisition | shares | 153,376,408 |
Acquisition share price (in usd per share) | $ / shares | $ 21.34 |
Business Combination - Purchase
Business Combination - Purchase Price Allocation (Details) - USD ($) $ in Thousands | Aug. 04, 2018 | Jul. 06, 2018 | Feb. 03, 2018 |
Business Acquisition [Line Items] | |||
Goodwill | $ 5,497,608 | $ 1,993,310 | |
Cavium | |||
Business Acquisition [Line Items] | |||
Cash and cash equivalents | $ 180,989 | ||
Accounts receivable | 112,270 | ||
Inventories | 330,778 | ||
Prepaid expense and other current assets | 19,890 | ||
Assets held for sale | 483 | ||
Property and equipment | 115,428 | ||
Acquired intangible assets | 2,744,000 | ||
Other non-current assets | 89,139 | ||
Goodwill | 3,504,302 | ||
Accounts payable | (52,383) | ||
Accrued liabilities | (127,837) | ||
Accrued employee compensation | (34,813) | ||
Deferred income | (2,466) | ||
Current portion of long-term debt | (6,123) | ||
Liabilities held for sale | (3,032) | ||
Long-term debt | (600,005) | ||
Non-current income taxes payable | (8,365) | ||
Deferred tax liabilities | (84,360) | ||
Other non-current liabilities | (16,099) | ||
Total merger consideration | $ 6,161,796 |
Business Combination - Identifi
Business Combination - Identifiable Intangible Assets (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Aug. 04, 2018 | Jul. 06, 2018 | |
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Weighted Average Useful Life (Years) | 7 years 9 months 29 days | |
Developed technology | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Weighted Average Useful Life (Years) | 7 years 7 months 2 days | |
Customer contracts and related relationships | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Weighted Average Useful Life (Years) | 8 years 11 months 1 day | |
Trade names | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Weighted Average Useful Life (Years) | 4 years 3 months 26 days | |
Cavium | ||
Acquired Indefinite-lived Intangible Assets [Line Items] | ||
Asset Fair Value | $ 2,744,000 | |
Cavium | In process research and development (IPR&D) | ||
Acquired Indefinite-lived Intangible Assets [Line Items] | ||
Asset Fair Value, Indefinite-lived intangibles | 513,000 | |
Cavium | Developed technology | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Asset Fair Value, Finite-lived intangibles | 1,743,000 | |
Weighted Average Useful Life (Years) | 7 years 7 months 2 days | |
Cavium | Customer contracts and related relationships | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Asset Fair Value, Finite-lived intangibles | 465,000 | |
Weighted Average Useful Life (Years) | 8 years 11 months 1 day | |
Cavium | Trade names | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Asset Fair Value, Finite-lived intangibles | $ 23,000 | |
Weighted Average Useful Life (Years) | 4 years 3 months 26 days |
Business Combination - Suppleme
Business Combination - Supplemental Pro Forma Information (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Aug. 04, 2018 | Jul. 29, 2017 | Aug. 04, 2018 | Jul. 29, 2017 | |
Business Acquisition [Line Items] | ||||
Share-based compensation expense | $ 73,423 | $ 22,422 | $ 97,275 | $ 46,439 |
Interest expense | 15,795 | $ 80 | 16,039 | 131 |
Cavium | ||||
Business Acquisition [Line Items] | ||||
Share-based compensation expense | $ 47,100 | 37,800 | ||
Adjustment to inventories | 199,700 | |||
Interest expense | 6,100 | |||
Acquisition related costs | 114,600 | |||
Pro forma net revenue | 1,612,873 | 1,649,129 | ||
Pro forma net income (loss) | $ 57,453 | $ (204,632) | ||
Pro forma net income (loss) per share, basic (in usd per share) | $ 0.09 | $ (0.31) | ||
Pro forma net income (loss) per share, diluted (in usd per share) | $ 0.09 | $ (0.31) |
Debt - Additional Information (
Debt - Additional Information (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Aug. 04, 2018 | Aug. 04, 2018 | Jun. 22, 2018 | Jun. 13, 2018 | |
Debt Instrument [Line Items] | ||||
Interest expense | $ 9,100,000 | $ 9,100,000 | ||
Term Loan | ||||
Debt Instrument [Line Items] | ||||
Borrowing capacity | $ 900,000,000 | |||
Line of Credit | Revolving Credit Facility | ||||
Debt Instrument [Line Items] | ||||
Borrowing capacity | $ 500,000,000 | |||
Senior Notes | ||||
Debt Instrument [Line Items] | ||||
Aggregate principal amount | $ 1,000,000,000 |
Debt - Term Loan and Revolving
Debt - Term Loan and Revolving Credit Facility (Details) | Jun. 13, 2018USD ($) | Aug. 04, 2018USD ($) |
Line of Credit Facility [Line Items] | ||
Long-term debt | $ 1,900,000,000 | |
Unused commitment fee percentage | 0.175% | |
Leverage ratio | 3 | |
Line of Credit | Revolving Credit Facility | ||
Line of Credit Facility [Line Items] | ||
Borrowing capacity | $ 500,000,000 | |
Debt term | 5 years | |
Amount available for draw | $ 500,000,000 | |
Line of Credit | Revolving Credit Facility | LIBOR | ||
Line of Credit Facility [Line Items] | ||
Basis spread on variable rate (as a percent) | 1.50% | |
Term Loan | ||
Line of Credit Facility [Line Items] | ||
Borrowing capacity | $ 900,000,000 | |
Debt term | 3 years | |
Effective interest rate | 3.912% | |
Long-term debt | $ 900,000,000 | |
Term Loan | LIBOR | ||
Line of Credit Facility [Line Items] | ||
Basis spread on variable rate (as a percent) | 1.375% |
Debt - Senior Unsecured Notes (
Debt - Senior Unsecured Notes (Details) - Senior Notes | Jun. 22, 2018USD ($) |
Debt Instrument [Line Items] | |
Aggregate principal amount | $ 1,000,000,000 |
Redemption price percentage | 101.00% |
2023 Notes | |
Debt Instrument [Line Items] | |
Aggregate principal amount | $ 500,000,000 |
Stated interest rate | 4.20% |
Effective interest rate | 4.423% |
2028 Notes | |
Debt Instrument [Line Items] | |
Aggregate principal amount | $ 500,000,000 |
Stated interest rate | 4.875% |
Effective interest rate | 5.012% |
Debt - Summary of Outstanding D
Debt - Summary of Outstanding Debt (Details) - USD ($) $ in Thousands | Aug. 04, 2018 | Feb. 03, 2018 |
Debt Instrument [Line Items] | ||
Total borrowings | $ 1,900,000 | |
Less: Unamortized debt discount and issuance cost | (21,383) | |
Net carrying amount of debt | 1,878,617 | |
Less: Current portion | 0 | |
Non-current portion | 1,878,617 | $ 0 |
Term Loan | ||
Debt Instrument [Line Items] | ||
Total borrowings | 900,000 | |
Notes | 2023 Notes | ||
Debt Instrument [Line Items] | ||
Total borrowings | 500,000 | |
Notes | 2028 Notes | ||
Debt Instrument [Line Items] | ||
Total borrowings | $ 500,000 |
Debt - Future Maturities (Detai
Debt - Future Maturities (Details) $ in Thousands | Aug. 04, 2018USD ($) |
Fiscal year | |
2,019 | $ 0 |
2,020 | 0 |
2,021 | 0 |
2,022 | 900,000 |
2,023 | 0 |
Thereafter | $ 1,000,000 |
Debt - Repayment of Debt and Te
Debt - Repayment of Debt and Termination of Credit Facility of Cavium (Details) $ in Millions | 6 Months Ended |
Aug. 04, 2018USD ($) | |
Cavium | |
Debt Instrument [Line Items] | |
Payment of debt and interest | $ 606.6 |
Revenue - Effect of the Adoptio
Revenue - Effect of the Adoption of the New Revenue Standard, Additional Information (Details) - USD ($) $ in Thousands | Aug. 04, 2018 | Feb. 03, 2018 |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Retained earnings | $ 1,509,860 | $ 1,409,452 |
Accounting Standards Update 2014-09 | Difference between Revenue Guidance in Effect before and after Topic 606 | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Retained earnings | $ (46,254) | $ 34,218 |
Revenue - Summary of Impact of
Revenue - Summary of Impact of Adoption of New Revenue Standard (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Aug. 04, 2018 | Jul. 29, 2017 | Aug. 04, 2018 | Jul. 29, 2017 | Feb. 03, 2018 | |
Assets | |||||
Accounts receivable, net | $ 443,276 | $ 443,276 | $ 280,395 | ||
Inventory | 473,429 | 473,429 | 170,039 | ||
Other non-current assets | 275,598 | 275,598 | 148,800 | ||
Liabilities and shareholders' equity: | |||||
Accrued liabilities | 277,098 | 277,098 | 86,958 | ||
Deferred income | 3,511 | 3,511 | 61,237 | ||
Retained earnings | 1,509,860 | 1,509,860 | 1,409,452 | ||
Consolidated statement of operation: | |||||
Net revenue | 665,310 | $ 604,750 | 1,269,941 | $ 1,177,459 | |
Cost of goods sold | 288,200 | 239,572 | 517,138 | 466,770 | |
Net income (loss) | $ 6,759 | $ 165,259 | $ 135,371 | $ 271,880 | |
Net income (loss) per share - Basic (in usd per share) | $ 0.01 | $ 0.33 | $ 0.26 | $ 0.54 | |
Net income (loss) per share - Diluted (in usd per share) | $ 0.01 | $ 0.32 | $ 0.25 | $ 0.53 | |
Adjustments | Accounting Standards Update 2014-09 | |||||
Assets | |||||
Accounts receivable, net | $ 0 | $ 0 | 1,862 | ||
Inventory | (1,478) | (1,478) | 2,016 | ||
Other non-current assets | (59,174) | (59,174) | 42,116 | ||
Liabilities and shareholders' equity: | |||||
Accrued liabilities | (92,890) | (92,890) | 70,336 | ||
Deferred income | 78,492 | 78,492 | (58,560) | ||
Retained earnings | (46,254) | (46,254) | 34,218 | ||
Consolidated statement of operation: | |||||
Net revenue | (2,002) | (17,531) | |||
Cost of goods sold | (2,099) | (5,495) | |||
Net income (loss) | $ 97 | $ (12,036) | |||
Net income (loss) per share - Basic (in usd per share) | $ 0 | $ (0.02) | |||
Net income (loss) per share - Diluted (in usd per share) | $ 0 | $ (0.02) | |||
Balances without adoption of new revenue standard | |||||
Assets | |||||
Accounts receivable, net | $ 443,276 | $ 443,276 | 282,257 | ||
Inventory | 471,951 | 471,951 | 172,055 | ||
Other non-current assets | 216,424 | 216,424 | 190,916 | ||
Liabilities and shareholders' equity: | |||||
Accrued liabilities | 184,208 | 184,208 | 157,294 | ||
Deferred income | 82,003 | 82,003 | 2,677 | ||
Retained earnings | 1,463,606 | 1,463,606 | $ 1,443,670 | ||
Consolidated statement of operation: | |||||
Net revenue | 663,308 | 1,252,410 | |||
Cost of goods sold | 286,101 | 511,643 | |||
Net income (loss) | $ 6,856 | $ 123,335 | |||
Net income (loss) per share - Basic (in usd per share) | $ 0.01 | $ 0.24 | |||
Net income (loss) per share - Diluted (in usd per share) | $ 0.01 | $ 0.23 |
Revenue - New Revenue Recogniti
Revenue - New Revenue Recognition Policy Including Significant Judgments and Estimates (Details) | 6 Months Ended |
Aug. 04, 2018 | |
Minimum | |
Inventory [Line Items] | |
Inventory turnover period | 60 days |
Maximum | |
Inventory [Line Items] | |
Inventory turnover period | 90 days |
Revenue - Net Revenue by Produc
Revenue - Net Revenue by Product Group (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended |
Aug. 04, 2018 | Aug. 04, 2018 | |
Disaggregation of Revenue [Line Items] | ||
Net revenue | $ 665,310 | $ 1,269,941 |
Storage | ||
Disaggregation of Revenue [Line Items] | ||
Net revenue | $ 335,764 | $ 652,833 |
Storage | Net revenue | ||
Disaggregation of Revenue [Line Items] | ||
% of Total | 50.00% | 51.00% |
Networking | ||
Disaggregation of Revenue [Line Items] | ||
Net revenue | $ 283,330 | $ 527,558 |
Networking | Net revenue | ||
Disaggregation of Revenue [Line Items] | ||
% of Total | 43.00% | 42.00% |
Other | ||
Disaggregation of Revenue [Line Items] | ||
Net revenue | $ 46,216 | $ 89,550 |
Other | Net revenue | ||
Disaggregation of Revenue [Line Items] | ||
% of Total | 7.00% | 7.00% |
Revenue - Net Revenue Based on
Revenue - Net Revenue Based on Destination of Shipment (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended |
Aug. 04, 2018 | Aug. 04, 2018 | |
Disaggregation of Revenue [Line Items] | ||
Net revenue | $ 665,310 | $ 1,269,941 |
China | ||
Disaggregation of Revenue [Line Items] | ||
Net revenue | $ 292,033 | $ 566,542 |
China | Net revenue | ||
Disaggregation of Revenue [Line Items] | ||
% of Total | 44.00% | 45.00% |
Malaysia | ||
Disaggregation of Revenue [Line Items] | ||
Net revenue | $ 96,127 | $ 186,750 |
Malaysia | Net revenue | ||
Disaggregation of Revenue [Line Items] | ||
% of Total | 14.00% | 15.00% |
Philippines | ||
Disaggregation of Revenue [Line Items] | ||
Net revenue | $ 55,416 | $ 113,183 |
Philippines | Net revenue | ||
Disaggregation of Revenue [Line Items] | ||
% of Total | 8.00% | 9.00% |
Thailand | ||
Disaggregation of Revenue [Line Items] | ||
Net revenue | $ 39,256 | $ 80,790 |
Thailand | Net revenue | ||
Disaggregation of Revenue [Line Items] | ||
% of Total | 6.00% | 6.00% |
United States | ||
Disaggregation of Revenue [Line Items] | ||
Net revenue | $ 16,563 | $ 32,592 |
United States | Net revenue | ||
Disaggregation of Revenue [Line Items] | ||
% of Total | 2.00% | 3.00% |
Other | ||
Disaggregation of Revenue [Line Items] | ||
Net revenue | $ 165,915 | $ 290,084 |
Other | Net revenue | ||
Disaggregation of Revenue [Line Items] | ||
% of Total | 26.00% | 22.00% |
Revenue - Net Revenue by Custom
Revenue - Net Revenue by Customer Type (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended |
Aug. 04, 2018 | Aug. 04, 2018 | |
Disaggregation of Revenue [Line Items] | ||
Net revenue | $ 665,310 | $ 1,269,941 |
Direct customers | ||
Disaggregation of Revenue [Line Items] | ||
Net revenue | $ 532,351 | $ 1,002,827 |
Direct customers | Net revenue | ||
Disaggregation of Revenue [Line Items] | ||
% of Total | 80.00% | 79.00% |
Distributors | ||
Disaggregation of Revenue [Line Items] | ||
Net revenue | $ 132,959 | $ 267,114 |
Distributors | Net revenue | ||
Disaggregation of Revenue [Line Items] | ||
% of Total | 20.00% | 21.00% |
Revenue - Contract Liabilities
Revenue - Contract Liabilities (Details) $ in Millions | 6 Months Ended |
Aug. 04, 2018USD ($) | |
Change in Contract with Customer, Asset and Liability [Abstract] | |
Beginning balance | $ 79.6 |
Estimates for additional shipments | 363.3 |
Credit memos issued | 336.7 |
Ending balance | $ 106.2 |
Goodwill and Acquired Intangi55
Goodwill and Acquired Intangible Assets, Net - Goodwill (Details) - USD ($) $ in Thousands | Aug. 04, 2018 | Feb. 03, 2018 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Goodwill | $ 5,497,608 | $ 1,993,310 |
Goodwill and Acquired Intangi56
Goodwill and Acquired Intangible Assets, Net - Acquired Intangible Assets, Net - Additional Information (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Aug. 04, 2018 | Aug. 04, 2018 | Jul. 29, 2017 | Jul. 06, 2018 | |
Finite-Lived Intangible Assets [Line Items] | ||||
Intangibles acquired | $ 0 | |||
Amortization expense of acquired intangible assets | $ 25,900,000 | $ 25,939,000 | $ 2,136,000 | |
Cavium | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Acquired intangible assets | $ 2,744,000,000 |
Goodwill and Acquired Intangi57
Goodwill and Acquired Intangible Assets, Net - Net Carrying Amounts and Weighted Average Amortization Period (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Aug. 04, 2018 | Feb. 03, 2018 | |
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amounts | $ 2,231,000 | |
Accumulated Amortization | (25,939) | |
Net Carrying Amounts | $ 2,205,061 | |
Weighted average remaining amortization period (years) | 7 years 9 months 29 days | |
Gross Carrying Amounts, Total acquired intangible assets | $ 2,744,000 | |
Accumulated Amortization | (25,939) | |
Net Carrying Amounts, Total acquired intangible assets | 2,718,061 | $ 0 |
IPR&D | ||
Acquired Indefinite-lived Intangible Assets [Line Items] | ||
IPR&D | 513,000 | |
Developed technologies | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amounts | 1,743,000 | |
Accumulated Amortization | (18,984) | |
Net Carrying Amounts | $ 1,724,016 | |
Weighted average remaining amortization period (years) | 7 years 7 months 2 days | |
Accumulated Amortization | $ (18,984) | |
Customer contracts and related relationships | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amounts | 465,000 | |
Accumulated Amortization | (6,501) | |
Net Carrying Amounts | $ 458,499 | |
Weighted average remaining amortization period (years) | 8 years 11 months 1 day | |
Accumulated Amortization | $ (6,501) | |
Trade names | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amounts | 23,000 | |
Accumulated Amortization | (454) | |
Net Carrying Amounts | $ 22,546 | |
Weighted average remaining amortization period (years) | 4 years 3 months 26 days | |
Accumulated Amortization | $ (454) |
Goodwill and Acquired Intangi58
Goodwill and Acquired Intangible Assets, Net - Future Amortization (Details) $ in Thousands | Aug. 04, 2018USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Remainder of 2019 | $ 157,380 |
2,020 | 309,701 |
2,021 | 301,580 |
2,022 | 293,024 |
2,023 | 285,596 |
Thereafter | 857,780 |
Net Carrying Amounts | $ 2,205,061 |
Restructuring and Other Relat59
Restructuring and Other Related Charges - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Aug. 04, 2018 | Jul. 29, 2017 | Aug. 04, 2018 | Jul. 29, 2017 | |
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring and other related charges | $ 35,415 | $ 4,285 | $ 36,982 | $ 5,171 |
Cavium | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring and other related charges | 35,400 | 35,400 | ||
Restructuring charges | 22,300 | |||
Cavium | Severance and related costs | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges | 22,300 | 22,300 | ||
Cavium | Facilities and related costs | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges | 11,000 | 11,000 | ||
Cavium | Other exit-related costs | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges | $ 2,100 | $ 2,100 |
Restructuring and Other Relat60
Restructuring and Other Related Charges - Reconciliation of Beginning and Ending Restructuring Liability Balances by Major Type of Costs (Details) $ in Thousands | 6 Months Ended | |
Aug. 04, 2018USD ($) | Feb. 03, 2018USD ($) | |
Restructuring Reserve [Roll Forward] | ||
Balance at beginning of period | $ 1,671 | |
Net cash payments | (5,901) | |
Release of reserves | (307) | |
Exchange rate adjustment | (91) | |
Balance at end of period | 30,748 | |
Less: non-current portion | 5,878 | |
Current portion | 24,870 | $ 1,612 |
Continuing operations | ||
Restructuring Reserve [Roll Forward] | ||
Restructuring charges | 35,376 | |
Severance and related costs | ||
Restructuring Reserve [Roll Forward] | ||
Balance at beginning of period | 654 | |
Net cash payments | (3,617) | |
Release of reserves | (307) | |
Exchange rate adjustment | (91) | |
Balance at end of period | 20,696 | |
Less: non-current portion | 0 | |
Current portion | 20,696 | |
Severance and related costs | Continuing operations | ||
Restructuring Reserve [Roll Forward] | ||
Restructuring charges | 24,057 | |
Facilities and related costs | ||
Restructuring Reserve [Roll Forward] | ||
Balance at beginning of period | 462 | |
Net cash payments | (1,743) | |
Release of reserves | 0 | |
Exchange rate adjustment | 0 | |
Balance at end of period | 9,776 | |
Less: non-current portion | 5,878 | |
Current portion | 3,898 | |
Facilities and related costs | Continuing operations | ||
Restructuring Reserve [Roll Forward] | ||
Restructuring charges | 11,057 | |
Other exit-related costs | ||
Restructuring Reserve [Roll Forward] | ||
Balance at beginning of period | 555 | |
Net cash payments | (541) | |
Release of reserves | 0 | |
Exchange rate adjustment | 0 | |
Balance at end of period | 276 | |
Less: non-current portion | 0 | |
Current portion | 276 | |
Other exit-related costs | Continuing operations | ||
Restructuring Reserve [Roll Forward] | ||
Restructuring charges | $ 262 |
Supplemental Financial Inform61
Supplemental Financial Information - Inventories (Details) - USD ($) $ in Thousands | Aug. 04, 2018 | Feb. 03, 2018 |
Inventories: | ||
Work-in-process | $ 257,906 | $ 103,711 |
Finished goods | 215,523 | 66,328 |
Total inventories | 473,429 | $ 170,039 |
Cavium | ||
Inventories: | ||
Inventory step-up adjustment | $ 200,400 |
Supplemental Financial Inform62
Supplemental Financial Information - Property and Equipment, Net (Details) - USD ($) $ in Thousands | Aug. 04, 2018 | Feb. 03, 2018 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 1,019,434 | $ 902,483 |
Less: Accumulated depreciation and amortization | (691,789) | (700,261) |
Total property and equipment, net | 327,645 | 202,222 |
Machinery and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 609,376 | 535,416 |
Land, buildings, and leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 279,880 | 247,675 |
Computer software | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 102,943 | 98,253 |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 27,235 | $ 21,139 |
Supplemental Financial Inform63
Supplemental Financial Information - Accrued Liabilities (Details) - USD ($) $ in Thousands | Aug. 04, 2018 | Feb. 03, 2018 |
Accrued liabilities: | ||
Contract liabilities | $ 106,191 | $ 0 |
Technology license obligations | 76,050 | 28,488 |
Accrued royalties | 18,003 | 11,860 |
Accrued rebates | 0 | 9,292 |
Accrued legal related expenses | 14,664 | 13,050 |
Unsettled investment trades | 0 | 4,497 |
Restructuring liabilities | 24,870 | 1,612 |
Accrued income tax payable | 9,735 | 959 |
Other | 27,585 | 17,200 |
Total accrued liabilities | $ 277,098 | $ 86,958 |
Supplemental Financial Inform64
Supplemental Financial Information - Changes in Accumulated Other Comprehensive Income (Loss) by Components (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Aug. 04, 2018 | Jul. 29, 2017 | Aug. 04, 2018 | Jul. 29, 2017 | |
Increase (Decrease) in AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance | $ 4,141,413 | |||
Other comprehensive income (loss) before reclassifications | $ 2,195 | |||
Amounts reclassified from accumulated other comprehensive income (loss) | (1,319) | |||
Other comprehensive income, net of tax | $ 2,404 | $ 1,063 | 2,322 | 876 |
Ending balance | 7,665,066 | 7,665,066 | ||
Unrealized Gain (Loss) on Marketable Securities | ||||
Increase (Decrease) in AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance | (2,322) | (801) | ||
Other comprehensive income (loss) before reclassifications | (733) | (146) | ||
Amounts reclassified from accumulated other comprehensive income (loss) | 3,055 | 29 | ||
Other comprehensive income, net of tax | 2,322 | (117) | ||
Ending balance | $ 0 | (918) | $ 0 | (918) |
Unrealized Gain (Loss) on Cash Flow Hedges | ||||
Increase (Decrease) in AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance | 824 | |||
Other comprehensive income (loss) before reclassifications | 2,341 | |||
Amounts reclassified from accumulated other comprehensive income (loss) | (1,348) | |||
Other comprehensive income, net of tax | 993 | |||
Ending balance | 1,817 | 1,817 | ||
Total | ||||
Increase (Decrease) in AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance | 23 | |||
Ending balance | $ 899 | $ 899 |
Supplemental Financial Inform65
Supplemental Financial Information - Consolidated Statements of Cash Flows (Details) - shares shares in Billions | 3 Months Ended | 6 Months Ended |
Aug. 04, 2018 | Aug. 04, 2018 | |
Cavium | ||
Business Acquisition [Line Items] | ||
Noncash consideration paid for the acquisition | 3.3 | 3.3 |
Investments - Summary of Invest
Investments - Summary of Investments (Details) - USD ($) $ in Thousands | Aug. 04, 2018 | Feb. 03, 2018 |
Investments, Debt and Equity Securities [Abstract] | ||
Time deposits on hand | $ 25,000 | |
Short-term, highly liquid investments | $ 78,500 | $ 267,600 |
Held-to-maturity: | ||
Amortized Cost | 955,112 | |
Gross Unrealized Gains | 521 | |
Gross Unrealized Losses | (2,843) | |
Estimated Fair Value | 952,790 | |
Total short-term investments | ||
Held-to-maturity: | ||
Amortized Cost | 955,112 | |
Gross Unrealized Gains | 521 | |
Gross Unrealized Losses | (2,843) | |
Estimated Fair Value | 952,790 | |
Time deposits | ||
Held-to-maturity: | ||
Amortized Cost | 150,000 | |
Gross Unrealized Gains | 0 | |
Gross Unrealized Losses | 0 | |
Estimated Fair Value | 150,000 | |
U.S. government and agency debt | ||
Available-for-sale: | ||
Amortized Cost | 248,336 | |
Gross Unrealized Gains | 49 | |
Gross Unrealized Losses | (644) | |
Estimated Fair Value | 247,741 | |
Foreign government and agency debt | ||
Available-for-sale: | ||
Amortized Cost | 7,004 | |
Gross Unrealized Gains | 0 | |
Gross Unrealized Losses | (17) | |
Estimated Fair Value | 6,987 | |
Municipal debt securities | ||
Available-for-sale: | ||
Amortized Cost | 2,734 | |
Gross Unrealized Gains | 0 | |
Gross Unrealized Losses | (6) | |
Estimated Fair Value | 2,728 | |
Corporate debt securities | ||
Available-for-sale: | ||
Amortized Cost | 504,609 | |
Gross Unrealized Gains | 469 | |
Gross Unrealized Losses | (1,999) | |
Estimated Fair Value | 503,079 | |
Asset backed securities | ||
Available-for-sale: | ||
Amortized Cost | 42,429 | |
Gross Unrealized Gains | 3 | |
Gross Unrealized Losses | (177) | |
Estimated Fair Value | $ 42,255 |
Investments - Gross Realized Ga
Investments - Gross Realized Gains and Losses on Sales of Available-for-Sale Securities (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Aug. 04, 2018 | Jul. 29, 2017 | Aug. 04, 2018 | Jul. 29, 2017 | |
Investments, Debt and Equity Securities [Abstract] | ||||
Gross realized gains | $ 369 | $ 16 | $ 371 | $ 85 |
Gross realized losses | (2,575) | (69) | (3,437) | (113) |
Total net realized gains (losses) | $ (2,206) | $ (53) | $ (3,066) | $ (28) |
Investments - Contractual Matur
Investments - Contractual Maturities of Available for Sale Securities (Details) - USD ($) $ in Thousands | Aug. 04, 2018 | Feb. 03, 2018 |
Amortized Cost | ||
Due in one year or less | $ 25,000 | $ 554,247 |
Due between one and five years | 0 | 400,866 |
Due over five years | 0 | 0 |
Amortized Cost | 25,000 | 955,113 |
Estimated Fair Value | ||
Due in one year or less | 25,000 | 553,866 |
Due between one and five years | 0 | 398,924 |
Due over five years | 0 | 0 |
Estimated Fair Value | $ 25,000 | $ 952,790 |
Investments - Summary of Inve69
Investments - Summary of Investments Gross Unrealized Losses and Fair Value (Details) $ in Thousands | Feb. 03, 2018USD ($) |
Fair Value | |
Less than 12 months | $ 445,516 |
12 months or more | 103,298 |
Total | 548,814 |
Unrealized Loss | |
Less than 12 months | (1,964) |
12 months or more | (879) |
Total | (2,843) |
U.S. government and agency debt | |
Fair Value | |
Less than 12 months | 148,538 |
12 months or more | 51,332 |
Total | 199,870 |
Unrealized Loss | |
Less than 12 months | (298) |
12 months or more | (346) |
Total | (644) |
Foreign government and agency debt | |
Fair Value | |
Less than 12 months | 3,993 |
12 months or more | 2,994 |
Total | 6,987 |
Unrealized Loss | |
Less than 12 months | (1) |
12 months or more | (16) |
Total | (17) |
Municipal debt securities | |
Fair Value | |
Less than 12 months | 1,969 |
12 months or more | 0 |
Total | 1,969 |
Unrealized Loss | |
Less than 12 months | (6) |
12 months or more | 0 |
Total | (6) |
Corporate debt securities | |
Fair Value | |
Less than 12 months | 253,380 |
12 months or more | 46,805 |
Total | 300,185 |
Unrealized Loss | |
Less than 12 months | (1,514) |
12 months or more | (485) |
Total | (1,999) |
Asset backed securities | |
Fair Value | |
Less than 12 months | 37,636 |
12 months or more | 2,167 |
Total | 39,803 |
Unrealized Loss | |
Less than 12 months | (145) |
12 months or more | (32) |
Total | $ (177) |
Derivative Financial Instrume70
Derivative Financial Instruments - Additional Information (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Aug. 04, 2018 | Jul. 29, 2017 | Aug. 04, 2018 | Jul. 29, 2017 | Feb. 03, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||
Derivative, notional amount | $ 0 | $ 0 | $ 0 | ||
Hedge ineffectiveness from derivative financial instruments | 0 | $ 0 | 0 | $ 0 | |
Cash flow hedges were terminated as a result of forecasted transactions that did not occur | $ 0 | $ 0 | $ 0 | $ 0 |
Derivative Financial Instrume71
Derivative Financial Instruments - Information about Gains (Losses) Associated with Derivative Financial Instruments (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended |
Jul. 29, 2017 | Jul. 29, 2017 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount of Gains (Losses) in Statements of Operations | $ 1,582 | $ 2,120 |
Cash flow hedges | Forward contracts | Research and development | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount of Gains (Losses) in Statements of Operations | 1,251 | 1,726 |
Cash flow hedges | Forward contracts | Selling, general and administrative | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount of Gains (Losses) in Statements of Operations | $ 331 | $ 394 |
Derivative Financial Instrume72
Derivative Financial Instruments - Gains (Losses) Reclassified from Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Aug. 04, 2018 | Jul. 29, 2017 | Aug. 04, 2018 | Jul. 29, 2017 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Research and development | $ 216,285 | $ 180,871 | $ 393,019 | $ 368,967 |
Selling, general and administrative | $ 133,701 | 55,659 | $ 206,014 | 110,763 |
Reclassification out of accumulated other comprehensive income (loss) | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Operating costs and expenses | 1,268 | 1,348 | ||
Reclassification out of accumulated other comprehensive income (loss) | Cash flow hedges | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Research and development | 1,003 | 1,074 | ||
Selling, general and administrative | $ 265 | $ 274 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Thousands | Aug. 04, 2018 | Feb. 03, 2018 |
Assets | ||
Short-term Investments | $ 952,790 | |
Fair Value | ||
Assets | ||
Total assets | $ 104,358 | 1,221,261 |
Fair Value | Other non-current assets | Severance pay fund | ||
Assets | ||
Other non-current assets | 869 | 896 |
Fair Value | Money market funds | ||
Assets | ||
Cash equivalents | 17,759 | 18,503 |
Fair Value | Time deposits | ||
Assets | ||
Cash equivalents | 60,730 | 65,117 |
Fair Value | Time deposits | Short-term investments | ||
Assets | ||
Short-term Investments | 25,000 | 150,000 |
Fair Value | U.S. government and agency debt | ||
Assets | ||
Cash equivalents | 51,589 | |
Fair Value | U.S. government and agency debt | Short-term investments | ||
Assets | ||
Short-term Investments | 247,741 | |
Fair Value | Foreign government and agency debt | Short-term investments | ||
Assets | ||
Short-term Investments | 6,987 | |
Fair Value | Municipal debt securities | ||
Assets | ||
Cash equivalents | 5,290 | |
Fair Value | Municipal debt securities | Short-term investments | ||
Assets | ||
Short-term Investments | 2,728 | |
Fair Value | Corporate debt securities | ||
Assets | ||
Cash equivalents | 127,076 | |
Fair Value | Corporate debt securities | Short-term investments | ||
Assets | ||
Short-term Investments | 503,079 | |
Fair Value | Asset backed securities | Short-term investments | ||
Assets | ||
Short-term Investments | 42,255 | |
Fair Value | Level 1 | ||
Assets | ||
Total assets | 17,759 | 317,833 |
Fair Value | Level 1 | Other non-current assets | Severance pay fund | ||
Assets | ||
Other non-current assets | 0 | 0 |
Fair Value | Level 1 | Money market funds | ||
Assets | ||
Cash equivalents | 17,759 | 18,503 |
Fair Value | Level 1 | Time deposits | ||
Assets | ||
Cash equivalents | 0 | 0 |
Fair Value | Level 1 | Time deposits | Short-term investments | ||
Assets | ||
Short-term Investments | 0 | 0 |
Fair Value | Level 1 | U.S. government and agency debt | ||
Assets | ||
Cash equivalents | 51,589 | |
Fair Value | Level 1 | U.S. government and agency debt | Short-term investments | ||
Assets | ||
Short-term Investments | 247,741 | |
Fair Value | Level 1 | Foreign government and agency debt | Short-term investments | ||
Assets | ||
Short-term Investments | 0 | |
Fair Value | Level 1 | Municipal debt securities | ||
Assets | ||
Cash equivalents | 0 | |
Fair Value | Level 1 | Municipal debt securities | Short-term investments | ||
Assets | ||
Short-term Investments | 0 | |
Fair Value | Level 1 | Corporate debt securities | ||
Assets | ||
Cash equivalents | 0 | |
Fair Value | Level 1 | Corporate debt securities | Short-term investments | ||
Assets | ||
Short-term Investments | 0 | |
Fair Value | Level 1 | Asset backed securities | Short-term investments | ||
Assets | ||
Short-term Investments | 0 | |
Fair Value | Level 2 | ||
Assets | ||
Total assets | 86,599 | 903,428 |
Fair Value | Level 2 | Notes | ||
Assets | ||
Estimated aggregate fair value of debt | 1,000,000 | |
Fair Value | Level 2 | Other non-current assets | Severance pay fund | ||
Assets | ||
Other non-current assets | 869 | 896 |
Fair Value | Level 2 | Money market funds | ||
Assets | ||
Cash equivalents | 0 | 0 |
Fair Value | Level 2 | Time deposits | ||
Assets | ||
Cash equivalents | 60,730 | 65,117 |
Fair Value | Level 2 | Time deposits | Short-term investments | ||
Assets | ||
Short-term Investments | 25,000 | 150,000 |
Fair Value | Level 2 | U.S. government and agency debt | ||
Assets | ||
Cash equivalents | 0 | |
Fair Value | Level 2 | U.S. government and agency debt | Short-term investments | ||
Assets | ||
Short-term Investments | 0 | |
Fair Value | Level 2 | Foreign government and agency debt | Short-term investments | ||
Assets | ||
Short-term Investments | 6,987 | |
Fair Value | Level 2 | Municipal debt securities | ||
Assets | ||
Cash equivalents | 5,290 | |
Fair Value | Level 2 | Municipal debt securities | Short-term investments | ||
Assets | ||
Short-term Investments | 2,728 | |
Fair Value | Level 2 | Corporate debt securities | ||
Assets | ||
Cash equivalents | 127,076 | |
Fair Value | Level 2 | Corporate debt securities | Short-term investments | ||
Assets | ||
Short-term Investments | 503,079 | |
Fair Value | Level 2 | Asset backed securities | Short-term investments | ||
Assets | ||
Short-term Investments | 42,255 | |
Fair Value | Level 3 | ||
Assets | ||
Total assets | 0 | 0 |
Fair Value | Level 3 | Other non-current assets | Severance pay fund | ||
Assets | ||
Other non-current assets | 0 | 0 |
Fair Value | Level 3 | Money market funds | ||
Assets | ||
Cash equivalents | 0 | 0 |
Fair Value | Level 3 | Time deposits | ||
Assets | ||
Cash equivalents | 0 | 0 |
Fair Value | Level 3 | Time deposits | Short-term investments | ||
Assets | ||
Short-term Investments | $ 0 | 0 |
Fair Value | Level 3 | U.S. government and agency debt | ||
Assets | ||
Cash equivalents | 0 | |
Fair Value | Level 3 | U.S. government and agency debt | Short-term investments | ||
Assets | ||
Short-term Investments | 0 | |
Fair Value | Level 3 | Foreign government and agency debt | Short-term investments | ||
Assets | ||
Short-term Investments | 0 | |
Fair Value | Level 3 | Municipal debt securities | ||
Assets | ||
Cash equivalents | 0 | |
Fair Value | Level 3 | Municipal debt securities | Short-term investments | ||
Assets | ||
Short-term Investments | 0 | |
Fair Value | Level 3 | Corporate debt securities | ||
Assets | ||
Cash equivalents | 0 | |
Fair Value | Level 3 | Corporate debt securities | Short-term investments | ||
Assets | ||
Short-term Investments | 0 | |
Fair Value | Level 3 | Asset backed securities | Short-term investments | ||
Assets | ||
Short-term Investments | $ 0 |
Commitments and Contingencies -
Commitments and Contingencies - Future Minimum Payments (Details) - USD ($) $ in Thousands | Aug. 04, 2018 | Feb. 03, 2018 |
Operating Leases | ||
Remainder of 2019 | $ 31,994 | |
2,020 | 40,812 | |
2,021 | 28,299 | |
2,022 | 26,005 | |
2,023 | 19,215 | |
Thereafter | 28,569 | |
Total future minimum lease payments | 174,894 | |
Technology License Obligations | ||
Less: Current portion | (76,050) | $ (28,488) |
Remainder of 2019 | 54,928 | |
2,020 | 71,334 | |
2,021 | 36,099 | |
2,022 | 26,005 | |
2,023 | 19,215 | |
Thereafter | 28,569 | |
Total future minimum lease payments | 236,150 | |
Technology License Obligations | ||
Technology License Obligations | ||
Remainder of 2019 | 22,934 | |
2,020 | 30,522 | |
2,021 | 7,800 | |
2,022 | 0 | |
2,023 | 0 | |
Thereafter | 0 | |
Total future minimum lease payments | 61,256 | |
Less: Amount representing interest | (986) | |
Present value of future minimum payments | 60,270 | |
Less: Current portion | (35,352) | |
Non-current portion | $ 24,918 |
Commitments and Contingencies75
Commitments and Contingencies - Purchase Commitments (Details) $ in Millions | Aug. 04, 2018USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
Outstanding purchase orders | $ 160.8 |
Shareholder's Equity - Addition
Shareholder's Equity - Additional Information (Details) - Cavium Plans | Jul. 06, 2018shares |
Class of Stock [Line Items] | |
Number of common stock issuable | 15,824,555 |
Stock Options | |
Class of Stock [Line Items] | |
Number of common stock issuable | 2,535,940 |
Restricted Stock Unit | |
Class of Stock [Line Items] | |
Number of common stock issuable | 13,288,615 |
Shareholder's Equity - Cavium 2
Shareholder's Equity - Cavium 2016 EIP (Details) - Cavium 2016 EIP | 6 Months Ended |
Aug. 04, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Award vesting period | 4 years |
Minimum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Award expiration period | 7 years |
Maximum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Award expiration period | 10 years |
Shareholder's Equity - Cavium78
Shareholder's Equity - Cavium 2007 EIP (Details) - Cavium 2007 EIP | 6 Months Ended |
Aug. 04, 2018 | |
Stock Options | Tranche One | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Vesting percentage | 12.50% |
Award vesting period | 6 months |
Stock Options | Tranche Two | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Vesting percentage | 2.08% |
Award vesting period | 3 years 6 months |
Restricted Stock Unit | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Award vesting period | 4 years |
Restricted Stock Unit | Minimum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Award expiration period | 7 years |
Restricted Stock Unit | Maximum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Award expiration period | 10 years |
Shareholder's Equity - QLogic 2
Shareholder's Equity - QLogic 2005 Plan (Details) - QLogic 2005 Plan | 6 Months Ended |
Aug. 04, 2018 | |
Restricted Stock Unit | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Award vesting period | 4 years |
Stock Options | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Award vesting period | 4 years |
Award term | 10 years |
Shareholder's Equity - Cavium A
Shareholder's Equity - Cavium Acquisition-related Equity Awards (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Aug. 04, 2018 | Jul. 29, 2017 | Aug. 04, 2018 | Jul. 29, 2017 | Jul. 06, 2018 | Jul. 05, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Share-based compensation expense | $ 73,423 | $ 22,422 | $ 97,275 | $ 46,439 | ||
Cavium | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Share-based compensation expense | 47,100 | $ 37,800 | ||||
Accelerated vesting of equity awards | $ 37,800 | |||||
Cavium | Cavium Plans | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Fair value of awards assumed in acquisition | $ 357,100 | |||||
Share-based compensation expense to be recognized | $ 288,200 | $ 68,900 |
Shareholder's Equity - Share-ba
Shareholder's Equity - Share-based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Aug. 04, 2018 | Jul. 29, 2017 | Aug. 04, 2018 | Jul. 29, 2017 | Feb. 03, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||||
Total share-based compensation | $ 73,423 | $ 22,422 | $ 97,275 | $ 46,439 | |
Share-based compensation capitalized | 2,300 | $ 1,300 | |||
Continuing operations | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||||
Total share-based compensation | 73,423 | 21,367 | 97,275 | 43,106 | |
Continuing operations | Cost of goods sold | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||||
Total share-based compensation | 4,748 | 1,810 | 6,653 | 3,236 | |
Continuing operations | Research and development | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||||
Total share-based compensation | 26,859 | 12,371 | 41,144 | 26,361 | |
Continuing operations | Selling, general and administrative | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||||
Total share-based compensation | 41,816 | 7,186 | 49,478 | 13,509 | |
Discontinued operations | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||||
Total share-based compensation | 0 | 1,055 | 0 | 3,333 | |
Discontinued operations | Cost of goods sold | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||||
Total share-based compensation | 0 | 0 | 0 | 0 | |
Discontinued operations | Research and development | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||||
Total share-based compensation | 0 | 954 | 0 | 3,098 | |
Discontinued operations | Selling, general and administrative | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||||
Total share-based compensation | $ 0 | $ 101 | $ 0 | $ 235 |
Income Tax (Details)
Income Tax (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 6 Months Ended | |||
Aug. 04, 2018 | Jul. 29, 2017 | Aug. 04, 2018 | Jul. 29, 2017 | Feb. 03, 2018 | |
Income Tax Disclosure [Abstract] | |||||
Current income tax expense (benefit) | $ (30) | $ (26.2) | |||
Unrecognized tax benefits, increase (decrease) | (7.5) | (7.2) | |||
Expense (benefit) related to other discrete items | (2.8) | (2.4) | |||
Gross unrecognized tax benefits | 177.5 | 177.5 | $ 23.2 | ||
Increase in gross unrecognized tax benefits resulting from acquisition | 154.3 | ||||
Tax benefit if unrecognized tax benefit is realized subsequently | 148.5 | 148.5 | |||
Interest and penalties accrued on unrecognized tax benefits | 13.9 | 13.9 | $ 17.2 | ||
Uncertain tax positions, decrease from the lapse of statutes of limitation in various jurisdictions during next 12 months | 13.5 | 13.5 | |||
Tax incentives, decrease in foreign taxes | $ 0.5 | $ 0.8 | $ 1.2 | $ 1.5 | |
Tax incentives, effect on net income per share (less than) (in usd per share) | $ 0.01 | $ 0.01 | $ 0.01 | $ 0.01 | |
Undistributed earnings of foreign subsidiaries | $ 432 | $ 432 | |||
Income Taxes [Line Items] | |||||
Cash, cash equivalents and short-term investments | 524 | 524 | |||
Foreign Subsidiaries | |||||
Income Taxes [Line Items] | |||||
Cash, cash equivalents and short-term investments | $ 510 | 510 | |||
Increase in tax expense in the event of undistributed earnings needed by parent company or no longer considered indefinitely reinvested outside of Bermuda | $ 113 |
Net Income Per Share - Addition
Net Income Per Share - Additional Information (Details) | Jul. 06, 2018$ / sharesshares | Aug. 04, 2018shares | Jul. 29, 2017shares | Aug. 04, 2018shares | Jul. 29, 2017shares |
Business Acquisition [Line Items] | |||||
Weighted average shares — basic (in shares) | 552,238,000 | 500,817,000 | 524,787,000 | 502,303,000 | |
Weighted average shares — diluted (in shares) | 562,149,000 | 510,309,000 | 535,433,000 | 513,951,000 | |
Cavium | |||||
Business Acquisition [Line Items] | |||||
Number of shares issued in acquisition | 153,376,408 | ||||
Acquisition share price (in usd per share) | $ / shares | $ 21.34 | ||||
Number of common shares per Cavium share | 2.1757 | ||||
Number of shares issued in exchange of employee accelerated awards | 1,100,000 | ||||
Weighted average shares — basic (in shares) | 50,900,000 | 25,500,000 | |||
Weighted average shares — diluted (in shares) | 50,900,000 | 25,500,000 |
Net Income Per Share - Computat
Net Income Per Share - Computations of Basic and Diluted Net Income Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Aug. 04, 2018 | Jul. 29, 2017 | Aug. 04, 2018 | Jul. 29, 2017 | |
Numerator: | ||||
Income from continuing operations, net of tax | $ 6,759 | $ 135,450 | $ 135,371 | $ 235,042 |
Income from discontinued operations, net of tax | 0 | 29,809 | 0 | 36,838 |
Net income | $ 6,759 | $ 165,259 | $ 135,371 | $ 271,880 |
Denominator: | ||||
Weighted average shares — basic (in shares) | 552,238 | 500,817 | 524,787 | 502,303 |
Effect of dilutive securities: | ||||
Share-based awards (in shares) | 9,911 | 9,492 | 10,646 | 11,648 |
Weighted average shares — diluted (in shares) | 562,149 | 510,309 | 535,433 | 513,951 |
Income from continuing operations per share: | ||||
Basic (in usd per share) | $ 0.01 | $ 0.27 | $ 0.26 | $ 0.47 |
Diluted (in usd per share) | 0.01 | 0.26 | 0.25 | 0.46 |
Income from discontinued operations per share: | ||||
Basic (in usd per share) | 0 | 0.06 | 0 | 0.07 |
Diluted (in usd per share) | 0 | 0.06 | 0 | 0.07 |
Net income per share: | ||||
Net income per share - Basic (in usd per share) | 0.01 | 0.33 | 0.26 | 0.54 |
Net income per share - Diluted (in usd per share) | $ 0.01 | $ 0.32 | $ 0.25 | $ 0.53 |
Net Income Per Share - Anti-dil
Net Income Per Share - Anti-dilutive Potential Shares (Details) - shares shares in Thousands | 3 Months Ended | 6 Months Ended | ||
Aug. 04, 2018 | Jul. 29, 2017 | Aug. 04, 2018 | Jul. 29, 2017 | |
Earnings Per Share [Abstract] | ||||
Share-based awards | 5,718 | 2,770 | 5,604 | 7,301 |
Segment and Geographic Inform86
Segment and Geographic Information (Details) $ in Thousands | 6 Months Ended | |
Aug. 04, 2018USD ($)segment | Feb. 03, 2018USD ($) | |
Segment Reporting [Abstract] | ||
Number of reportable segments | segment | 1 | |
Segment Reporting Information [Line Items] | ||
Total property and equipment, net | $ 327,645 | $ 202,222 |
United States | ||
Segment Reporting Information [Line Items] | ||
Total property and equipment, net | 241,586 | 156,053 |
Others | ||
Segment Reporting Information [Line Items] | ||
Total property and equipment, net | $ 86,059 | $ 46,169 |