Cover Page
Cover Page - shares | 9 Months Ended | |
Oct. 28, 2022 | Nov. 25, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Oct. 28, 2022 | |
Document Transition Report | false | |
Entity File Number | 001-33622 | |
Entity Registrant Name | VMWARE, INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 94-3292913 | |
Entity Address, Address Line One | 3401 Hillview Avenue | |
Entity Address, City or Town | Palo Alto, | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 94304 | |
City Area Code | 650 | |
Local Phone Number | 427-5000 | |
Title of 12(b) Security | Class A common stock | |
Trading Symbol | VMW | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 425,426,524 | |
Entity Central Index Key | 0001124610 | |
Current Fiscal Year End Date | --02-03 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Thousands, $ in Millions | 3 Months Ended | 9 Months Ended | |||
Oct. 28, 2022 | Oct. 29, 2021 | Oct. 28, 2022 | Oct. 29, 2021 | ||
Revenue: | |||||
Revenue | [1] | $ 3,211 | $ 3,188 | $ 9,635 | $ 9,320 |
Operating expenses: | |||||
Research and development | [2] | 832 | 768 | 2,409 | 2,251 |
Sales and marketing | [2] | 1,081 | 1,011 | 3,216 | 2,993 |
General and administrative | [2] | 289 | 316 | 815 | 808 |
Realignment | [2] | 0 | 0 | 7 | 1 |
Operating income | 390 | 519 | 1,364 | 1,603 | |
Investment income | 20 | 0 | 28 | 1 | |
Interest expense | (77) | (74) | (222) | (173) | |
Other income (expense), net | (14) | 12 | (44) | (7) | |
Income before income tax | 319 | 457 | 1,126 | 1,424 | |
Income tax provision | 88 | 59 | 306 | 190 | |
Net income, basic | 231 | 398 | 820 | 1,234 | |
Net income, diluted | $ 231 | $ 398 | $ 820 | $ 1,234 | |
Net income per weighted-average share, basic (in USD per share) | $ 0.55 | $ 0.95 | $ 1.94 | $ 2.94 | |
Net income per weighted-average share, diluted (in USD per share) | $ 0.54 | $ 0.94 | $ 1.93 | $ 2.92 | |
Weighted-average shares, basic (in shares) | 423,993 | 419,456 | 422,194 | 419,309 | |
Weighted-average shares, diluted (in shares) | 426,328 | 421,763 | 424,490 | 422,201 | |
License | |||||
Revenue: | |||||
Revenue | [1] | $ 621 | $ 710 | $ 1,990 | $ 2,093 |
Operating expenses: | |||||
Cost of revenue | [2] | 39 | 37 | 113 | 111 |
Subscription and SaaS | |||||
Revenue: | |||||
Revenue | [1] | 988 | 820 | 2,830 | 2,336 |
Operating expenses: | |||||
Cost of revenue | [2] | 196 | 175 | 583 | 502 |
Services | |||||
Revenue: | |||||
Revenue | [1] | 1,602 | 1,658 | 4,815 | 4,891 |
Operating expenses: | |||||
Cost of revenue | [2] | $ 384 | $ 362 | $ 1,128 | $ 1,051 |
[1]Includes related party revenue as follows (refer to Note D): License $ 436 $ 374 $ 690 $ 661 Subscription and SaaS 259 195 514 368 Services 633 606 1,274 1,194 Cost of license revenue $ — $ — $ 1 $ 1 Cost of subscription and SaaS revenue 6 5 11 11 Cost of services revenue 25 24 48 49 Research and development 146 150 278 277 Sales and marketing 93 81 174 153 General and administrative 41 33 81 64 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Oct. 28, 2022 | Oct. 29, 2021 | Oct. 28, 2022 | Oct. 29, 2021 | ||
Revenue | [1] | $ 3,211 | $ 3,188 | $ 9,635 | $ 9,320 |
Cost of license revenue | |||||
Stock-based compensation | 0 | 0 | 1 | 1 | |
Cost of subscription and SaaS revenue | |||||
Stock-based compensation | 7 | 5 | 18 | 16 | |
Cost of services revenue | |||||
Stock-based compensation | 31 | 21 | 79 | 70 | |
Research and development | |||||
Stock-based compensation | 163 | 125 | 441 | 402 | |
Sales and marketing | |||||
Stock-based compensation | 104 | 74 | 278 | 227 | |
General and administrative | |||||
Stock-based compensation | 43 | 33 | 124 | 97 | |
License | |||||
Revenue | [1] | 621 | 710 | 1,990 | 2,093 |
License | Dell | |||||
Revenue | 287 | 335 | 977 | 996 | |
Subscription and SaaS | |||||
Revenue | [1] | 988 | 820 | 2,830 | 2,336 |
Subscription and SaaS | Dell | |||||
Revenue | 283 | 221 | 797 | 589 | |
Services | |||||
Revenue | [1] | 1,602 | 1,658 | 4,815 | 4,891 |
Services | Dell | |||||
Revenue | $ 627 | $ 644 | $ 1,901 | $ 1,838 | |
[1]Includes related party revenue as follows (refer to Note D): License $ 436 $ 374 $ 690 $ 661 Subscription and SaaS 259 195 514 368 Services 633 606 1,274 1,194 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Oct. 28, 2022 | Oct. 29, 2021 | Oct. 28, 2022 | Oct. 29, 2021 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 231 | $ 398 | $ 820 | $ 1,234 |
Changes in fair value of effective foreign currency forward contracts: | ||||
Unrealized gains (losses), net of tax provision (benefit) of $(1), $—, $(1) and $— | (4) | 1 | (9) | 1 |
Reclassification of (gains) losses realized during the period, net of tax (provision) benefit of $1, $—, $— and $— | 4 | (1) | 1 | 1 |
Total other comprehensive income (loss) | 0 | 0 | (8) | 2 |
Comprehensive income, net of taxes | $ 231 | $ 398 | $ 812 | $ 1,236 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parentheticals) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Oct. 28, 2022 | Oct. 29, 2021 | Oct. 28, 2022 | Oct. 29, 2021 | |
Statement of Comprehensive Income [Abstract] | ||||
Tax provision (benefit) on unrealized gains (losses) on derivatives | $ (1) | $ 0 | $ (1) | $ 0 |
Tax (provision) benefit on reclassification of gains (losses) realized on derivatives | $ 1 | $ 0 | $ 0 | $ 0 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Oct. 28, 2022 | Jan. 28, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 3,972 | $ 3,614 |
Short-term investments | 0 | 19 |
Accounts receivable, net of allowance of $10 and $10 | 1,909 | 2,297 |
Due from related parties | 821 | 1,438 |
Other current assets | 616 | 598 |
Total current assets | 7,318 | 7,966 |
Property and equipment, net | 1,597 | 1,461 |
Deferred tax assets | 6,090 | 5,906 |
Intangible assets, net | 526 | 714 |
Goodwill | 9,598 | 9,598 |
Due from related parties | 189 | 199 |
Other assets | 2,808 | 2,832 |
Total assets | 28,126 | 28,676 |
Current liabilities: | ||
Accounts payable | 297 | 234 |
Accrued expenses and other | 2,566 | 2,806 |
Current portion of long-term debt | 1,000 | 0 |
Unearned revenue | 6,339 | 6,479 |
Due to related parties | 201 | 132 |
Total current liabilities | 10,403 | 9,651 |
Long-term debt | 9,686 | 12,671 |
Unearned revenue | 4,878 | 4,743 |
Income tax payable | 260 | 242 |
Operating lease liabilities | 849 | 927 |
Due to related parties | 804 | 909 |
Other liabilities | 440 | 409 |
Total liabilities | 27,320 | 29,552 |
Contingencies (refer to Note D) | ||
Stockholders’ equity (deficit): | ||
Class A common stock, par value $0.01; authorized 2,500,000 shares; issued and outstanding 424,613 and 418,808 shares | 4 | 4 |
Additional paid-in capital | 870 | 0 |
Accumulated other comprehensive loss | (13) | (5) |
Accumulated deficit | (55) | (875) |
Total stockholders’ equity (deficit) | 806 | (876) |
Total liabilities and stockholders’ equity (deficit) | $ 28,126 | $ 28,676 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parentheticals) - USD ($) $ in Millions | Oct. 28, 2022 | Jan. 28, 2022 |
Statement of Financial Position [Abstract] | ||
Allowance for credit loss | $ 10 | $ 10 |
Common stock, par value (in USD per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 2,500,000,000 | 2,500,000,000 |
Common stock, shares issued (in shares) | 424,613,000 | 418,808,000 |
Common stock, shares outstanding (in shares) | 424,613,000 | 418,808,000 |
CONDENSED CONSOLIDATED STATEM_5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 9 Months Ended | |
Oct. 28, 2022 | Oct. 29, 2021 | |
Operating activities: | ||
Net income | $ 820 | $ 1,234 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 906 | 825 |
Stock-based compensation | 941 | 813 |
Deferred income taxes, net | (181) | (92) |
(Gain) loss on equity securities and disposition of assets, net | (11) | 29 |
Other | 6 | 6 |
Changes in assets and liabilities, net of acquisitions: | ||
Accounts receivable | 384 | 247 |
Other current assets and other assets | (512) | (467) |
Due from related parties | 627 | 777 |
Accounts payable | 48 | 87 |
Accrued expenses and other liabilities | (527) | (181) |
Income taxes payable | 208 | 24 |
Unearned revenue | (6) | (82) |
Due to related parties | (36) | 0 |
Net cash provided by operating activities | 2,667 | 3,220 |
Investing activities: | ||
Additions to property and equipment | (327) | (263) |
Sales of investments in equity securities | 20 | 68 |
Purchases of strategic investments | (11) | (7) |
Proceeds from disposition of assets | 91 | 5 |
Business combinations, net of cash acquired, and purchases of intangible assets | (4) | (15) |
Net cash used in investing activities | (231) | (212) |
Financing activities: | ||
Proceeds from issuance of common stock | 248 | 267 |
Proceeds from issuance of senior notes, net of issuance costs | 0 | 5,944 |
Repayment of term loan | (2,000) | 0 |
Repayment of note payable to Dell | 0 | (270) |
Repurchase of common stock | (89) | (872) |
Shares repurchased for tax withholdings on vesting of restricted stock | (253) | (291) |
Principal payments on finance lease obligations | (4) | (3) |
Net cash provided by (used in) financing activities | (2,098) | 4,775 |
Net increase in cash, cash equivalents and restricted cash | 338 | 7,783 |
Cash, cash equivalents and restricted cash at beginning of the period | 3,663 | 4,770 |
Cash, cash equivalents and restricted cash at end of the period | 4,001 | 12,553 |
Supplemental disclosures of cash flow information: | ||
Cash paid for interest | 226 | 146 |
Cash paid for taxes, net | 278 | 276 |
Non-cash items: | ||
Changes in capital additions, accrued but not paid | $ 23 | $ 9 |
CONDENSED CONSOLIDATED STATEM_6
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT) - USD ($) shares in Thousands, $ in Millions | Total | Common Stock | Common Stock Class A Common Stock | Common Stock Class B Convertible Common Stock | Additional Paid-in Capital | Retained Earnings (Accumulated Deficit) | Accumulated Other Comprehensive Loss |
Beginning balance (in shares) at Jan. 29, 2021 | 112,000 | 307,000 | |||||
Beginning balance at Jan. 29, 2021 | $ 9,051 | $ 1 | $ 3 | $ 1,985 | $ 7,067 | $ (5) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Proceeds from issuance of common stock (in shares) | 3,000 | ||||||
Proceeds from issuance of common stock | 267 | 267 | |||||
Repurchase and retirement of common stock (in shares) | (5,699) | (6,000) | |||||
Repurchase and retirement of common stock | (872) | $ (872) | (872) | ||||
Issuance of restricted stock (in shares) | 5,000 | ||||||
Shares withheld for tax withholdings on vesting of restricted stock (in shares) | (2,000) | ||||||
Shares withheld for tax withholdings on vesting of restricted stock | (284) | (284) | |||||
Stock-based compensation | 827 | 827 | |||||
Total other comprehensive income (loss) | 2 | 2 | |||||
Net income | 1,234 | 1,234 | |||||
Ending balance (in shares) at Oct. 29, 2021 | 112,000 | 307,000 | |||||
Ending balance at Oct. 29, 2021 | 10,225 | $ 1 | $ 3 | 1,923 | 8,301 | (3) | |
Beginning balance (in shares) at Jul. 30, 2021 | 112,000 | 307,000 | |||||
Beginning balance at Jul. 30, 2021 | 9,620 | $ 1 | $ 3 | 1,716 | 7,903 | (3) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Proceeds from issuance of common stock (in shares) | 1,000 | ||||||
Proceeds from issuance of common stock | 128 | 128 | |||||
Repurchase and retirement of common stock (in shares) | (956) | (1,000) | |||||
Repurchase and retirement of common stock | (143) | $ (143) | (143) | ||||
Issuance of restricted stock (in shares) | 1,000 | ||||||
Shares withheld for tax withholdings on vesting of restricted stock (in shares) | (1,000) | ||||||
Shares withheld for tax withholdings on vesting of restricted stock | (42) | (42) | |||||
Stock-based compensation | 264 | 264 | |||||
Total other comprehensive income (loss) | 0 | ||||||
Net income | 398 | 398 | |||||
Ending balance (in shares) at Oct. 29, 2021 | 112,000 | 307,000 | |||||
Ending balance at Oct. 29, 2021 | $ 10,225 | $ 1 | $ 3 | 1,923 | 8,301 | (3) | |
Beginning balance (in shares) at Jan. 28, 2022 | 418,808 | 419,000 | |||||
Beginning balance at Jan. 28, 2022 | $ (876) | $ 4 | 0 | (875) | (5) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Proceeds from issuance of common stock (in shares) | 3,000 | ||||||
Proceeds from issuance of common stock | 248 | 248 | |||||
Repurchase and retirement of common stock (in shares) | (803) | (1,000) | |||||
Repurchase and retirement of common stock | (89) | $ (89) | (89) | ||||
Issuance of restricted stock (in shares) | 6,000 | ||||||
Shares withheld for tax withholdings on vesting of restricted stock (in shares) | (2,000) | ||||||
Shares withheld for tax withholdings on vesting of restricted stock | (252) | (252) | |||||
Stock-based compensation | 963 | 963 | |||||
Total other comprehensive income (loss) | (8) | (8) | |||||
Net income | $ 820 | 820 | |||||
Ending balance (in shares) at Oct. 28, 2022 | 424,613 | 425,000 | |||||
Ending balance at Oct. 28, 2022 | $ 806 | $ 4 | 870 | (55) | (13) | ||
Beginning balance (in shares) at Jul. 29, 2022 | 423,000 | ||||||
Beginning balance at Jul. 29, 2022 | 140 | $ 4 | 435 | (286) | (13) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Proceeds from issuance of common stock (in shares) | 1,000 | ||||||
Proceeds from issuance of common stock | 124 | 124 | |||||
Repurchase and retirement of common stock (in shares) | 0 | ||||||
Repurchase and retirement of common stock | $ 0 | ||||||
Issuance of restricted stock (in shares) | 1,000 | ||||||
Shares withheld for tax withholdings on vesting of restricted stock (in shares) | 0 | ||||||
Shares withheld for tax withholdings on vesting of restricted stock | (44) | (44) | |||||
Stock-based compensation | 355 | 355 | |||||
Total other comprehensive income (loss) | 0 | ||||||
Net income | $ 231 | 231 | |||||
Ending balance (in shares) at Oct. 28, 2022 | 424,613 | 425,000 | |||||
Ending balance at Oct. 28, 2022 | $ 806 | $ 4 | $ 870 | $ (55) | $ (13) |
Overview and Basis of Presentat
Overview and Basis of Presentation | 9 Months Ended |
Oct. 28, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Overview and Basis of Presentation | Overview and Basis of Presentation Company and Background VMware, Inc. (“VMware” or the “Company”) originally pioneered the development and application of virtualization technologies with x86 server-based computing, separating application software from the underlying hardware, and then evolved to become the private cloud and mobility management leader. Building upon that leadership, VMware is focused on becoming the multi-cloud leader. Information technology (“IT”) driven innovation continues to disrupt markets and industries. Technologies emerge faster than organizations can absorb, creating increasingly complex environments. Organizations’ IT departments and corporate divisions are working at an accelerated pace to harness new technologies, platforms and cloud models, ultimately guiding businesses and their product teams through a digital transformation. To take on these challenges, the Company is helping customers drive their multi-cloud strategy by providing the multi-cloud platform for all applications, enabling digital innovation and enterprise control. Basis of Presentation The financial statements and accompanying notes are prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The fiscal year for VMware is the 52 or 53 weeks ending on the Friday nearest to January 31 of each year. Fiscal 2023 is a 53-week fiscal year, in which the first three quarters each has 13 weeks while the fourth quarter has 14 weeks. Fiscal 2022 was a 52-week fiscal year. The accompanying unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) for interim financial reporting. In the opinion of management, these unaudited condensed consolidated financial statements include all adjustments, consisting of normal recurring adjustments and accruals, for a fair statement of VMware’s condensed consolidated results of operations, financial position and cash flows for the periods presented. Results of operations are not necessarily indicative of the results that may be expected for the full fiscal year 2023. Certain information and footnote disclosures typically included in annual consolidated financial statements have been condensed or omitted. Accordingly, these unaudited interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes included in VMware’s Annual Report on Form 10-K filed on March 24, 2022. On November 1, 2021, VMware’s spin-off from Dell Technologies Inc. (“Dell”) was completed (the “Spin-Off”). As a result of the Spin-Off, VMware became a standalone company and entities affiliated with Michael Dell (the “MSD Stockholders”), who serves as VMware’s Chairman of the Board and chairman and chief executive officer of Dell, and entities affiliated with Silver Lake Partners (the “SLP Stockholders”), of which Egon Durban, a VMware director, is a managing partner, became owners of direct interests in VMware representing 39.9% and 9.9%, respectively, of VMware’s outstanding stock, based on the shares outstanding as of October 28, 2022. Due to the MSD Stockholders’ and SLP Stockholders’ direct ownership in both VMware and Dell, as well as Mr. Dell’s executive position with Dell, transactions with Dell continue to be considered related party transactions following the Spin-Off. Management believes the assumptions underlying the condensed consolidated financial statements are reasonable. However, the amounts recorded for VMware’s related party transactions with Dell and its consolidated subsidiaries may not be considered arm’s length with an unrelated third party. Therefore, the condensed consolidated financial statements included herein may not necessarily reflect the results of operations, financial position and cash flows had VMware engaged in such transactions with an unrelated third party during all periods presented. Accordingly, VMware’s historical financial information is not necessarily indicative of what the Company’s results of operations, financial position and cash flows will be in the future, if and when VMware contracts at arm’s length with unrelated third parties for products and services the Company receives from and provides to Dell. Broadcom Merger Agreement On May 26, 2022, VMware entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Broadcom Inc. (“Broadcom”). Under the terms of the Merger Agreement, each share of Class A common stock, par value $0.01 per share, of the Company (“Common Stock”) issued and outstanding immediately prior to the effective time of the transaction will be indirectly converted into the right to receive, at the election of the holder of such share of Common Stock, and subject to proration in accordance with the Merger Agreement as described below: (i) $142.50 per share in cash, without interest (the “Cash Consideration”), or (ii) 0.25200 (the “Exchange Ratio”) shares of common stock, par value $0.001 per share, of Broadcom (“Broadcom Common Stock”, and such consideration, the “Stock Consideration”). The stockholder election will be subject to a proration mechanism, such that the total number of shares of Common Stock entitled to receive the Cash Consideration and the total number of shares of Common Stock entitled to receive the Stock Consideration will, in each case, be equal to 50% of the aggregate number of shares of Common Stock issued and outstanding immediately prior to the consummation of the transaction. Holders of Common Stock that do not make an election will be treated as having elected to receive the Cash Consideration or the Stock Consideration in accordance with the proration methodology in the Merger Agreement. The Merger Agreement contains customary representations, warranties and covenants. The Merger Agreement also contains termination rights for either or each of Broadcom and the Company. If the consummation of the transaction does not occur on or before February 26, 2023 by either party, subject to three extensions of three months each (at either Broadcom’s or the Company’s election) if on such date all of the closing conditions except those relating to regulatory approvals have been satisfied or waived, Broadcom would be required to pay the Company a termination fee of $1.5 billion. Upon termination of the Merger Agreement under certain specified circumstances, including by the Company to enter into a definitive agreement with respect to a superior proposal in accordance with the terms of the Merger Agreement, the Company would be required to pay Broadcom a termination fee in the amount of $1.5 billion. The transaction, which is expected to be consummated in Broadcom’s fiscal year 2023, was approved by VMware shareholders at a special meeting held on November 4, 2022 but remains subject to the receipt of regulatory approvals and other customary closing conditions. If the transaction is consummated, the Common Stock will be delisted from the New York Stock Exchange and deregistered under the Securities Exchange Act of 1934, as amended. Principles of Consolidation The unaudited condensed consolidated financial statements include the accounts of VMware and subsidiaries in which VMware has a controlling financial interest. All intercompany transactions and account balances between VMware and its subsidiaries have been eliminated in consolidation. Transactions with Dell and its consolidated subsidiaries are generally settled in cash and are classified on the condensed consolidated statements of cash flows based upon the nature of the underlying transaction. Amounts included in the current portion of due from related parties on the condensed consolidated balance sheets that are unrelated to Dell Financial Services and tax obligations are generally settled in cash within 60 days of each quarter-end. Use of Accounting Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the reported amounts of revenue and expenses during the reporting periods, and the disclosure of contingent liabilities at the date of the financial statements. Estimates are used for, but not limited to, trade receivable valuation, marketing development funds, expected period of benefit for deferred commissions, useful lives assigned to fixed assets and intangible assets, valuation of goodwill and definite-lived intangibles, income taxes, stock-based compensation and contingencies. Actual results could differ from those estimates. To the extent the Company’s actual results differ materially from those estimates and assumptions, VMware’s future financial statements could be affected. New Accounting Pronouncement |
Revenue, Unearned Revenue and R
Revenue, Unearned Revenue and Remaining Performance Obligations | 9 Months Ended |
Oct. 28, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Revenue, Unearned Revenue and Remaining Performance Obligations | Revenue, Unearned Revenue and Remaining Performance Obligations Revenue Contract Assets A contract asset is recognized when a conditional right to consideration exists and transfer of control has occurred. Contract assets include fixed-fee professional services where transfer of services has occurred in advance of the Company’s right to invoice. Contract assets are classified as accounts receivables upon invoicing. Contract assets are included in other current assets on the condensed consolidated balance sheets. Contract assets were $40 million and $36 million as of October 28, 2022 and January 28, 2022, respectively. Contract asset balances will fluctuate based upon the timing of the transfer of services, billings and customers’ acceptance of contractual milestones. Contract Liabilities Contract liabilities consist of unearned revenue, which is generally recorded when VMware has the right to invoice or payments have been received for undelivered products or services. Customer Deposits Purchased credits eligible for redemption of VMware’s hosted services (“cloud credits”) are included in customer deposits until the cloud credit is consumed or is contractually committed to a specific hosted service. Cloud credits are redeemable by the customer for the gross value of the hosted offering. Upon contractual commitment for a hosted service, the net value of the cloud credits that are expected to be recognized as revenue when the obligation is fulfilled will be classified as unearned revenue. Customer deposits also include prepayments from customers related to amounts received for contracts that include certain cancellation rights, such as termination for convenience clauses. As of October 28, 2022, customer deposits related to customer prepayments and cloud credits of $558 million were included in accrued expenses and other, and $208 million were included in other liabilities on the condensed consolidated balance sheets. As of January 28, 2022, customer deposits related to customer prepayments and cloud credits of $470 million were included in accrued expenses and other, and $166 million were included in other liabilities on the condensed consolidated balance sheets. Deferred Commissions Deferred commissions are classified as current or non-current based on the duration of the expected period of benefit. Deferred commissions, including the employer portion of payroll taxes, included in other current assets as of October 28, 2022 and January 28, 2022 were $20 million and $17 million, respectively. Deferred commissions included in other assets were $1.3 billion and $1.2 billion as of October 28, 2022 and January 28, 2022, respectively. Amortization expense for deferred commissions was included in sales and marketing on the condensed consolidated statements of income and was $168 million and $469 million during the three and nine months ended October 28, 2022, respectively, and $130 million and $383 million during the three and nine months ended October 29, 2021, respectively. Unearned Revenue Unearned revenue as of the periods presented consisted of the following (table in millions): October 28, January 28, 2022 2022 Unearned license revenue $ 28 $ 19 Unearned subscription and software-as-a-service (“SaaS”) revenue 3,197 2,669 Unearned software maintenance revenue 6,636 7,208 Unearned professional services revenue 1,356 1,326 Total unearned revenue $ 11,217 $ 11,222 Unearned subscription and SaaS revenue is generally recognized over time as customers consume the services or ratably over the term of the subscription, commencing upon provisioning of the service. Unearned software maintenance revenue is attributable to VMware’s maintenance contracts and is generally recognized ratably over the contract duration. The weighted-average remaining contractual term as of October 28, 2022 was approximately two years. Unearned professional services revenue results primarily from prepaid professional services and is generally recognized as the services are performed. Total billings and revenue recognized during the three months ended October 28, 2022 were each $2.2 billion and did not include amounts for performance obligations that were fully satisfied upon delivery, such as on-premises licenses. Total billings and revenue recognized during the nine months ended October 28, 2022 were $6.5 billion and $6.6 billion, respectively, and did not include amounts for performance obligations that were fully satisfied upon delivery, such as on-premises licenses. Revenue recognized during the three and nine months ended October 29, 2021 was $2.1 billion and $6.1 billion, respectively, and did not include amounts for performance obligations that were fully satisfied upon delivery, such as on-premises licenses. Remaining Performance Obligations Remaining performance obligations represent the aggregate amount of the transaction price in contracts allocated to performance obligations not delivered, or partially undelivered, as of the end of the reporting period. Remaining performance obligations include unearned revenue, multi-year contracts with future installment payments and certain unfulfilled orders against accepted non-cancellable customer contracts at the end of any given period. As of October 28, 2022, the aggregate transaction price allocated to remaining performance obligations was $11.9 billion, of which approximately 56% is expected to be recognized as revenue over the next twelve months and the remainder thereafter. As of January 28, 2022, the aggregate transaction price allocated to remaining performance obligations was $12.0 billion, of which approximately 57% was expected to be recognized as revenue during fiscal 2023 and the remainder thereafter. |
Related Parties
Related Parties | 9 Months Ended |
Oct. 28, 2022 | |
Related Party Transactions [Abstract] | |
Related Parties | Related Parties Transactions with Dell continue to be considered related party transactions following the Spin-Off due to the MSD Stockholders’ and SLP Stockholders’ direct ownership in both VMware and Dell, as well as Mr. Dell’s executive position with Dell. On November 1, 2021, in connection with the Spin-Off, VMware and Dell entered into the Commercial Framework Agreement to provide a framework under which the Company and Dell will continue their strategic commercial relationship, particularly with respect to projects mutually agreed by the parties as having the potential to accelerate the growth of an industry, product, service or platform that may provide the parties with a strategic opportunity. The Commercial Framework Agreement has an initial term of five years, with automatic one-year renewals occurring annually thereafter, subject to certain terms and conditions. The information provided below includes a summary of transactions with Dell. Transactions with Dell VMware and Dell engaged in the following ongoing related party transactions, which resulted in revenue and receipts, and unearned revenue for VMware: • Pursuant to original equipment manufacturer (“OEM”) and reseller arrangements, Dell integrates or bundles VMware’s products and services with Dell’s products and sells them to end users. Dell also acts as a distributor, purchasing VMware’s standalone products and services for resale to end-user customers through VMware-authorized resellers. Revenue under these arrangements is presented net of related marketing development funds and rebates paid to Dell. In addition, VMware provides professional services to end users based upon contractual agreements with Dell. • Dell purchases products and services from VMware for its internal use. • From time to time, VMware and Dell enter into agreements to collaborate on technology projects, in connection with which Dell pays VMware for services or reimburses VMware for costs incurred by VMware. During the three and nine months ended October 28, 2022, revenue from Dell accounted for 37% and 38% of VMware’s consolidated revenue, respectively. During the three and nine months ended October 28, 2022, revenue recognized on transactions where Dell acted as an OEM accounted for 15% and 14% of total revenue from Dell, and 6% and 5% of VMware’s consolidated revenue. During the three and nine months ended October 29, 2021, revenue from Dell accounted for 38% and 37% of VMware’s consolidated revenue, respectively. During each of the three and nine months ended October 29, 2021, revenue recognized on transactions where Dell acted as an OEM accounted for 13% of total revenue from Dell, and 5% of VMware’s consolidated revenue. Dell purchases VMware products and services directly from VMware, as well as through VMware’s channel partners. Information about VMware’s revenue and receipts, and unearned revenue from such arrangements, for the periods presented consisted of the following (table in millions): Revenue and Receipts Unearned Revenue Three Months Ended Nine Months Ended As of October 28, October 29, October 28, October 29, October 28, January 28, 2022 2021 2022 2021 2022 2022 Reseller revenue $ 1,184 $ 1,183 $ 3,634 $ 3,380 $ 5,448 $ 5,550 Internal-use revenue 13 17 41 43 24 39 Customer deposits resulting from transactions with Dell were $303 million and $298 million as of October 28, 2022 and January 28, 2022, respectively. VMware and Dell engaged in the following ongoing related party transactions, which resulted in costs to VMware: • VMware purchases and leases products and purchases services from Dell. • From time to time, VMware and Dell enter into agreements to collaborate on technology projects, in connection with which VMware pays Dell for services provided to VMware by Dell. • In certain geographic regions where VMware does not have an established legal entity, VMware contracts with Dell subsidiaries for support services and support from Dell personnel who are managed by VMware. The costs incurred by Dell on VMware’s behalf related to these employees are charged to VMware with a mark-up intended to approximate costs that would have been incurred had VMware contracted for such services with an unrelated third party. These costs are included as expenses on VMw are’s condensed consolidated statements of income and primarily include salaries, benefits, travel and occupancy expenses. • Prior to the Spin-Off, in certain geographic regions, Dell filed a consolidated indirect tax return, which inclu ded value added taxes and other indirect taxes collected by VMware from its customers. VMware remitted the indirect taxes to Dell, and Dell remitted the tax payment to the foreign governments on VMware’s behalf. • From time to time, VMware enters into agency arrangements with Dell that enable VMware to sell its subscriptions and services, leveraging the Dell enterprise relationships and end customer contracts. Information about VMware’s payments for such arrangements during the periods presented consisted of the following (table in millions): Three Months Ended Nine Months Ended October 28, October 29, October 28, October 29, 2022 2021 2022 2021 Purchases and leases of products and purchases of services (1) $ 52 $ 57 $ 147 $ 164 Dell subsidiary support and administrative costs 1 8 6 32 (1) Amount includes indirect taxes that were remitted to Dell prior to the Spin-Off. VMware also purchases Dell products through Dell’s channel partners, however such amounts were not material during the periods presented. From time to time, VMware and Dell also enter into joint marketing, sales, branding and product development arrangements, for which both parties may incur costs. Dell Financial Services (“DFS”) DFS provides financing to certain of VMware’s end users at the end users’ discretion. Upon acceptance of the financing arrangement by both VMware’s end users and DFS, amounts classified as trade accounts receivable are reclassified to the current portion of due from related parties on th e condensed consolidated balance sheets . Revenue recognized on transactions financed through DFS was recorded net of financing fees. Financing fees on arrangements accepted by both parties were $25 million and $20 million during the nine months ended October 28, 2022 and October 29, 2021, respectively, and were not material during each of the three months ended October 28, 2022 and October 29, 2021. Tax Agreements with Dell Pursuant to the Tax Matters Agreement, effective April 14, 2021 (the “Tax Matters Agreement”), VMware and Dell agreed to terminate the former tax sharing agreement as amended on December 30, 2019 (the “Tax Sharing Agreement”, together with the Tax Matters Agreement and the Letter Agreement (as defined below), the “Tax Agreements”). The Tax Matters Agreement governs the Company’s and Dell’s respective rights and obligations, both for pre- and post-Spin-Off periods, regarding income and other taxes, and related matters, including tax liabilities and benefits, attributes and returns. As a result of the Spin-Off, VMware is no longer a member of the Dell consolidated tax group, and the Company’s U.S. federal income tax will be reported separately from that of the Dell consolidated tax group. VMware and Dell have agreed to indemnify one another, pursuant to the Tax Matters Agreement, for certain tax liabilities or tax benefits relating to periods prior to the Spin-Off. Certain adjustments to these amounts that will be recognized in future periods will be recorded with an offset to other income (expense), net on the condensed consolidated statements of income. The actual amount that VMware may receive from or pay to Dell could vary depending on the outcome of tax matters arising from Dell’s future tax audits, which may not be resolved for several years. As of the periods presented, amounts due to and due from Dell pursuant to the Tax Matters Agreement consisted of the following (table in millions): October 28, January 28, 2022 2022 Due from related parties: Current $ — $ 6 Non-current 189 199 Due to related parties: Current $ 115 $ 61 Non-current 804 909 Amounts due to Dell pursuant to the Tax Matters Agreement primarily related to VMware’s estimated tax obligation resulting from the mandatory, one-time transition tax on accumulated earnings of foreign subsidiaries (“Transition Tax”) of $445 million and $504 million as of October 28, 2022 and January 28, 2022, respectively. The U.S. Tax Cuts and Jobs Act enacted on December 22, 2017 (the “2017 Tax Act”) included a deferral election for an eight-year installment payment method on the Transition Tax. The Company expects to pay the remainder of its Transition Tax as of October 28, 2022 over a period of three years. In addition, amounts due to Dell included uncertain tax positions of $282 million and $276 million as of October 28, 2022 and January 28, 2022, respectively. During the three months ended October 28, 2022, no payments were received from nor made to Dell pursuant to the Tax Agreements. During the nine months ended October 28, 2022 payments received from Dell pursuant to the Tax Agreements were not material, and payments made to Dell were $59 million. Payments made to Dell pursuant to the Tax Agreements were $10 million and $96 million during the three and nine months ended October 29, 2021, respectively. Payments received from Dell pursuant to the Tax Agreements were $45 million during the nine months ended October 29, 2021. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Oct. 28, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Litigation On March 5, 2020, two purported Pivotal stockholders filed a petition for appraisal in the Delaware Court of Chancery (the “Court”) seeking a judicial determination of the fair value of an aggregate total of 10,000,100 Pivotal shares (the “Appraisal Action”). Separately, on June 4, 2020, purported Pivotal stockholder Kenia Lopez filed a lawsuit in the Court against Dell, VMware, Michael Dell, Robert Mee and Cynthia Gaylor (the “Lopez Action”), which alleges breach of fiduciary duty and aiding and abetting, all tied to VMware’s acquisition of Pivotal. On July 16, 2020, purported Pivotal stockholder Stephanie Howarth filed a similar lawsuit against the same defendants asserting similar claims (the “Howarth Action”). On August 14, 2020, the Court entered an order consolidating the Appraisal Action, the Lopez Action and the Howarth Action into a single action (the “Consolidated Action”) for all purposes including pretrial discovery and trial. On June 23, 2020, the Company made a payment of $91 million to the petitioners in the Appraisal Action, which reduces the Company’s exposure to accumulating interest. On May 2, 2022, parties in the Lopez Action agreed to a settlement term sheet, which includes a $43 million settlement payment that will be fully funded by insurance. Accordingly, as of April 29, 2022, an estimated loss accrual of $43 million was recorded to accrued expenses and other on the condensed consolidated balance sheet, with a corresponding asset recorded to other current assets for the amount to be paid by insurance. During the three months ended October 28, 2022, a portion of the settlement for the Lopez Action was paid directly by the insurance provider, and the remaining balances included in other current assets and accrued expenses and other were each $31 million as of October 28, 2022. A trial for the Appraisal Action took place July 6 through July 12, 2022. A post-trial hearing is currently set for December 13, 2022. The Company is unable at this time to assess whether or to what extent it may be found liable in the Appraisal Action and, if found liable, what the damages may be and believes a loss is not probable and not reasonably estimable. The Company intends to vigorously defend itself in connection with this matter. On April 25, 2019, Cirba Inc. and Cirba IP, Inc. (collectively, “Cirba”) sued VMware in the United States District Court for the District of Delaware (the “Delaware Court”) for allegedly infringing two patents and three trademarks. On October 22, 2019, VMware filed a separate lawsuit against Cirba Inc. in the United States District Court for the Eastern District of Virginia for infringing four additional VMware patents, and Cirba filed a counterclaim alleging infringement of an additional Cirba patent. On January 24, 2020, a jury returned a verdict that VMware had willfully infringed Cirba’s two patents and awarded approximately $237 million in damages. VMware accrued a total of $237 million as of January 31, 2020, which reflected the estimated losses that were considered both probable and reasonably estimable at that time. The amount accrued for this matter was included in accrued expenses and other on the consolidated balance sheet as of January 31, 2020 and the charge was included in general and administrative expense on the consolidated statements of income during the year ended January 31, 2020. On December 21, 2020, the Delaware Court granted VMware’s request for a new trial and set aside the verdict and damages award (“Post-Trial Order”). Thereafter, all claims and counterclaims were consolidated into a single action for all purposes. The parties are entering the summary judgment and pre-trial preparation phase of the litigation, with trial currently set for April 2023. Separately, VMware filed challenges with the U.S. Patent and Trademark Office against each of the four patents that are the subject of Cirba’s allegations. All of the challenges were granted and the status of the reviews are as follows: (i) one patent survived the ex parte reexam with all challenged claims remaining valid; (ii) one patent remains under ex parte reexam review following an initial office action wherein the examiner found all claims invalid; (iii) one patent was found invalid via an inter partes review via a Final Written Decision (which remains subject to appeal) issued by the Patent Trial and Appeal Board; and (iv) one patent is undergoing a post-grant review. As of January 29, 2021, the Company reassessed its estimated loss accrual based on the Post-Trial Order and determined that a loss was not probable and not reasonably estimable with respect to the consolidated action. Accordingly, the estimated loss accrual of $237 million recorded on the consolidated balance sheets was derecognized, with the credit included in general and administrative expense on the consolidated statements of income during the year ended January 29, 2021. The Company is unable at this time to assess whether, or to what extent, it may be found liable and, if found liable, what the damages may be. The Company intends to vigorously defend against this matter. In December 2019, the staff of the Enforcement Division of the SEC requested documents and information related to VMware’s backlog and associated accounting and disclosures. On September 12, 2022, the Company announced that it reached a settlement with the SEC to resolve a previously disclosed investigation related to the Company’s backlog disclosures in public filings for its 2019 and 2020 fiscal years, which ran from February 3, 2018 through January 31, 2020. Under the terms of the settlement, the Company agreed to pay an immaterial civil monetary penalty without admitting or denying the SEC’s findings, which relate to the Company's disclosures. The SEC Staff has confirmed that it does not intend to recommend enforcement action against any current or former VMware officers or other member of management in connection with the investigation, and this settlement concludes the matter. As a result of the settlement, until September 2025 the Company (i) no longer qualifies as a well-known seasoned issuer, (ii) is ineligible for certain private offering exemptions under the Securities Act and (iii) is unable to rely on the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. On June 2, 2020, WSOU Investments LLC (doing business as Brazos Licensing & Development) (“WSOU”) filed four patent infringement lawsuits against VMware (also naming Dell and EMC) in the United States District Court for the Western District of Texas (the “Texas Court”), asserting one patent in each lawsuit. The Texas Court consolidated the four lawsuits for all purposes. During the course of the lawsuit, WSOU dropped one of the asserted patents, leaving three asserted patents. The parties are entering the summary judgment and pre-trial preparation stage of the case, with a jury trial currently scheduled to begin in February 2023. The Company is unable at this time to assess whether, or to what extent, it may be found liable and, if found liable, what the damages may be, and believes a loss is not probable and not reasonably estimable. The Company intends to vigorously defend against this matter. While VMware believes that it has valid defenses against each of the above legal matters, given the unpredictable nature of legal proceedings, an unfavorable resolution of one or more legal proceedings, claims, or investigations could have a material adverse effect on VMware’s consolidated financial statements. VMware accrues for a liability when a determination has been made that a loss is both probable and the amount of the loss can be reasonably estimated. If only a range can be estimated and no amount within the range is a better estimate than any other amount, an accrual is recorded for the minimum amount in the range. Significant judgment is required in both the determination that the occurrence of a loss is probable and is reasonably estimable. In making such judgments, VMware considers the impact of negotiations, settlements, rulings, advice of legal counsel and other information and events pertaining to a particular matter. Legal costs are generally recognized as expense when incurred. VMware is also subject to other legal, administrative and regulatory proceedings, claims, demands and investigations in the ordinary course of business or in connection with business mergers and acquisitions, including claims with respect to commercial, contracting and sales practices, product liability, intellectual property, employment, corporate and securities law, class action, whistleblower and other matters. From time to time, VMware also receives inquiries from and has discussions with government entities and stockholders on various matters. As of October 28, 2022, amounts accrued relating to these other matters arising as part of the ordinary course of business were considered not material. VMware does not believe that any liability from any reasonably possible disposition of such claims and litigation, individually or in the aggregate, would have a material adverse effect on its consolidated financial statements. |
Definite-Lived Intangible Asset
Definite-Lived Intangible Assets, Net | 9 Months Ended |
Oct. 28, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Definite-Lived Intangible Assets, Net | Definite-Lived Intangible Assets, Net As of the periods presented, definite-lived intangible assets consisted of the following (amounts in tables in millions): October 28, 2022 Weighted-Average Useful Lives Gross Carrying Amount Accumulated Amortization Net Book Value Purchased technology 5.3 $ 806 $ (586) $ 220 Customer relationships and customer lists 11.9 641 (359) 282 Trademarks and tradenames 6.8 69 (45) 24 Total definite-lived intangible assets $ 1,516 $ (990) $ 526 January 28, 2022 Weighted-Average Useful Lives Gross Carrying Amount Accumulated Amortization Net Book Value Purchased technology 5.3 $ 836 $ (501) $ 335 Customer relationships and customer lists 11.5 721 (376) 345 Trademarks and tradenames 7.7 131 (97) 34 Total definite-lived intangible assets $ 1,688 $ (974) $ 714 Amortization expense on definite-lived intangible assets was $62 million and $192 million during the three and nine months ended October 28, 2022, respectively, and $75 million and $228 million during the three and nine months ended October 29, 2021, respectively. Based on intangible assets recorded as of October 28, 2022, and assuming no subsequent additions, dispositions or impairment of underlying assets, the remaining estimated annual amortization expense over the next five fiscal years and thereafter is expected to be as follows (table in millions): Remainder of 2023 $ 62 2024 202 2025 109 2026 69 2027 39 Thereafter 45 Total $ 526 |
Net Income Per Share
Net Income Per Share | 9 Months Ended |
Oct. 28, 2022 | |
Earnings Per Share [Abstract] | |
Net Income Per Share | Net Income Per Share Basic net income per share is computed by dividing net income by the weighted-average number of shares of common stock outstanding during the period. Diluted net income per share is computed by dividing net income by the weighted-average number of shares of common stock outstanding and potentially dilutive securities outstanding during the period, as calculated using the treasury stock method. Potentially dilutive securities primarily include unvested restricted stock, which includes restricted stock unit (“RSU”) and performance stock unit (“PSU”) awards, and stock options, including purchase options under VMware’s employee stock purchase plan. Securities are excluded from the computation of diluted net income per share if their effect would be anti-dilutive. The following table sets forth the computations of basic and diluted net income per share during the periods presented (table in millions, except per share amounts and shares in thousands): Three Months Ended Nine Months Ended October 28, October 29, October 28, October 29, 2022 2021 2022 2021 Net income $ 231 $ 398 $ 820 $ 1,234 Weighted-average shares, basic 423,993 419,456 422,194 419,309 Effect of other dilutive securities 2,335 2,307 2,296 2,892 Weighted-average shares, diluted 426,328 421,763 424,490 422,201 Net income per weighted-average share, basic $ 0.55 $ 0.95 $ 1.94 $ 2.94 Net income per weighted-average share, diluted $ 0.54 $ 0.94 $ 1.93 $ 2.92 The following table sets forth the weighted-average common share equivalents of Common Stock that were excluded from the diluted net income per share calculations during the periods presented because their effect would have been anti-dilutive (shares in thousands): Three Months Ended Nine Months Ended October 28, October 29, October 28, October 29, 2022 2021 2022 2021 Anti-dilutive securities: Employee stock options 6 9 86 17 RSUs 601 181 653 311 Total 607 190 739 328 |
Realignment
Realignment | 9 Months Ended |
Oct. 28, 2022 | |
Restructuring and Related Activities [Abstract] | |
Realignment | Realignment During the second quarter of fiscal 2023, in response to Russian military actions in Ukraine, VMware approved a plan to cease business operations in Russia. As a result of this action, approximately 80 positions were eliminated during the second quarter of fiscal 2023. Related realignment expenses recognized on the condensed consolidated statements of income during the three and nine months ended October 28, 2022 were not significant and primarily included severance-related costs. Actions associated with this plan are expected to be substantially complete by the end of fiscal 2023. |
Cash, Cash Equivalents, Restric
Cash, Cash Equivalents, Restricted Cash and Short-Term Investments | 9 Months Ended |
Oct. 28, 2022 | |
Investments, Debt and Equity Securities [Abstract] | |
Cash, Cash Equivalents, Restricted Cash and Short-Term Investments | Cash, Cash Equivalents, Restricted Cash and Short-Term Investments Cash and Cash Equivalents Cash and cash equivalents totaled $4.0 billion and $3.6 billion as of October 28, 2022 and January 28, 2022, respectively. Cash equivalents were $3.3 billion as of October 28, 2022 and primarily consisted of money-market funds. Cash equivalents were $3.0 billion as of January 28, 2022 and consisted of money-market funds of $3.0 billion and time deposits of $34 million. Restricted Cash The following table provides a reconciliation of the Company’s cash and cash equivalents, and current and non-current portion of restricted cash reported on the condensed consolidated balance sheets that sum to the total cash, cash equivalents and restricted cash as of the periods presented (table in millions): October 28, January 28, 2022 2022 Cash and cash equivalents $ 3,972 $ 3,614 Restricted cash within other current assets 26 43 Restricted cash within other assets 3 6 Total cash, cash equivalents and restricted cash $ 4,001 $ 3,663 Amounts included in restricted cash primarily relate to certain employee-related benefits, as well as amounts related to installment payments to certain employees as part of acquisitions, subject to the achievement of specified future employment conditions. Short-Term Investments As of January 28, 2022, short-term investments totaled $19 million and consisted of marketable equity securities. These short-term investments were sold during the three months ended April 29, 2022. Refer to Note J for more infor mation regarding the Company’s marketable equity securities. |
Debt
Debt | 9 Months Ended |
Oct. 28, 2022 | |
Debt Disclosure [Abstract] | |
Debt | Debt Unsecured Senior Notes On August 2, 2021, VMware issued five series of unsecured senior notes pursuant to a public debt offering (the “2021 Senior Notes”). The proceeds from the 2021 Senior Notes were $5.9 billion, net of the debt discount of $11 million and debt issuance costs of $47 million. VMware also issued unsecured senior notes on April 7, 2020 (the “2020 Senior Notes”) and on August 21, 2017 (the “2017 Senior Notes”, collectively with the 2020 Senior Notes and 2021 Senior Notes, the “Senior Notes”). The carrying value of the Senior Notes as of the periods presented was as follows (amounts in millions): October 28, January 28, Effective Interest Rate 2022 2022 2017 Senior Notes: 3.90% Senior Note Due August 21, 2027 $ 1,250 $ 1,250 4.05% 2020 Senior Notes: 4.50% Senior Note Due May 15, 2025 750 750 4.70% 4.65% Senior Note Due May 15, 2027 500 500 4.80% 4.70% Senior Note Due May 15, 2030 750 750 4.86% 2021 Senior Notes: 0.60% Senior Note Due August 15, 2023 1,000 1,000 0.95% 1.00% Senior Note Due August 15, 2024 1,250 1,250 1.23% 1.40% Senior Note Due August 15, 2026 1,500 1,500 1.61% 1.80% Senior Note Due August 15, 2028 750 750 2.01% 2.20% Senior Note Due August 15, 2031 1,500 1,500 2.32% Total principal amount 9,250 9,250 Less: unamortized discount (13) (15) Less: unamortized debt issuance costs (50) (61) Net carrying amount $ 9,187 $ 9,174 Current portion of long-term debt $ 1,000 $ — Long-term debt 8,187 9,174 Beginning on February 15, 2022, interest on the 2021 Senior Notes became payable semiannually in arrears, on February 15 and August 15 of each year. Beginning on November 15, 2020, interest on the 2020 Senior Notes became payable semiannually in arrears, on May 15 and November 15 of each year. The interest rate on the 2020 Senior Notes is subject to adjustment based on certain rating events. Beginning on February 21, 2018, interest on the 2017 Senior Notes became payable semiannually in arrears, on February 21 and August 21 of each year. Interest expense was $60 million and $183 million during the three and nine months ended October 28, 2022, respectively, and $72 million and $169 million during the three and nine months ended October 29, 2021, respectively. Interest expense, which included amortization of discount and issuance costs, was recognized on the condensed consolidated statements of income. The discount and issuance costs are amortized over the term of the Senior Notes on a straight-line basis, which approximates the effective interest method. The Senior Notes are redeemable in whole at any time or in part from time to time at VMware’s option and may be subject to a make-whole premium. In addition, upon the occurrence of certain change-of-control triggering events and certain downgrades of the ratings on the Senior Notes, VMware may be required to repurchase the notes at a repurchase price equal to 101% of the aggregate principal plus any accrued and unpaid interest on the date of repurchase. The Senior Notes rank equally in right of payment with VMware’s other unsecured and unsubordinated indebtedness and contain restrictive covenants that, in certain circumstances, limit VMware’s ability to create certain liens, to enter into certain sale and leaseback transactions and to consolidate, merge, sell or otherwise dispose of all or substantially all of VMware’s assets. The future principal payments for the Senior Notes as of October 28, 2022 were as follows (amounts in millions): Remainder of 2023 $ — 2024 1,000 2025 1,250 2026 750 2027 1,500 Thereafter 4,750 Total $ 9,250 Senior Unsecured Term Loan Facility On September 2, 2021, VMware received commitments from financial institutions for a three-year senior unsecured term loan facility and a five-year senior unsecured term loan facility that provided the Company with a one-time aggregate borrowing capacity of up to $4.0 billion (the “2021 Term Loan”). The Company drew down an aggregate of $4.0 billion on November 1, 2021 and has since repaid $500 million on October 11, 2022, $750 million on July 6, 2022, $750 million on April 4, 2022 and $500 million on January 25, 2022. As of October 28, 2022 and January 28, 2022, the outstanding balance on the 2021 Term Loan of $1.5 billion and $3.5 billion, net of unamortized debt issuance costs, respectively, was included in long-term debt on the condensed consolidated balance sheets. As of October 28, 2022, the weighted-average interest rate on the outstanding 2021 Term Loan was 4.19%. The 2021 Term Loan contains certain representations, warranties and covenants. Interest expense for the 2021 Term Loan, including amortization of issuance costs, was $17 million and $39 million during the three and nine months ended October 28, 2022, respectively. Revolving Credit Facility On September 2, 2021, VMware entered into an unsecured credit agreement establishing a revolving credit facility with a syndicate of lenders that provides the Company with a borrowing capacity of up to $1.5 billion for general corporate purposes (the “2021 Revolving Credit Facility”). Commitments under the 2021 Revolving Credit Facility are available for a period of five years , which may be extended, subject to the satisfaction of certain conditions, by up to two one-year periods. A s of October 28, 2022 and January 28, 2022, there was no outstanding borrowing under the 2021 Revolving Credit Facility. The 2021 Revolving Credit Facility contains certain representations, warranties and covenants. Commitment fees, interest rates and other terms of borrowing under the 2021 Revolving Credit Facility may vary based on VMware’s external credit ratings. The amount incurred in connection with the ongoing commitment fee, which is payable quarterly in arrears, was not significant duri ng each of the three and nine months ended October 28, 2022 and October 29, 2021, respectively . |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Oct. 28, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements Assets and Liabilities Measured and Recorded at Fair Value on a Recurring Basis Certain financial assets and liabilities are measured at fair value on a recurring basis. VMware determines fair value using the following hierarchy: • Level 1 - Quoted prices in active markets for identical assets or liabilities; • Level 2 - Inputs other than Level 1 inputs that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and • Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. VMware did not have any significant assets or liabilities that were classified as Level 3 of the fair value hierarchy for the periods presented, and there have been no transfers between fair value measurement levels during the periods presented. The following tables set forth the fair value hierarchy of VMware’s cash equivalents and short-term investments that were required to be measured at fair value as of the periods presented (tables in millions): October 28, 2022 Level 1 Level 2 Total Cash equivalents: Money-market funds $ 3,283 $ — $ 3,283 Time deposits (1) — 13 13 Total cash equivalents $ 3,283 $ 13 $ 3,296 January 28, 2022 Level 1 Level 2 Total Cash equivalents: Money-market funds $ 2,998 $ — $ 2,998 Time deposits (1) — 34 34 Total cash equivalents $ 2,998 $ 34 $ 3,032 Short-term investments: Marketable equity securities $ 19 $ — $ 19 Total short-term investments $ 19 $ — $ 19 (1) Time deposits were valued at amortized cost, which approximated fair value. The Senior Notes and the 2021 Term Loan were not recorded at fair value. The fair value of the Senior Notes was approximately $8.1 billion and $9.3 billion as of October 28, 2022 and January 28, 2022, respectively. The fair value of the 2021 Term Loan approximated its carrying value as of October 28, 2022 and January 28, 2022. Fair value for each of the Senior Notes and the 2021 Term Loan was estimated primarily based on observable market interest rates (Level 2 inputs). VMware offers a non-qualified deferred compensation plan (the “NQDC Program”) for eligible employees, which allows participants to defer payment of part or all of their compensation. There is no net impact to the condensed consolidated statements of income under the NQDC Program since changes in the fair value of the assets offset changes in the fair value of the liabilities. As such, assets and liabilities associated with the NQDC Program have not been included in the above tables. Assets associated with the NQDC Program were the same as the liabilities at $156 million and $162 million as of October 28, 2022 and January 28, 2022, respectively, and were included in other assets on the condensed consolidated balance sheets. Liabilities associated with the NQDC Program included in accrued expenses and other on the condensed consolidated balance sheets were not material and $16 million a s of October 28, 2022 and January 28, 2022, respectively. Liabilities associated with the NQDC Program included in other liabilities on the condensed consolidated balance sheets were $142 million and $146 million a s of October 28, 2022 and January 28, 2022, respectively. Equity Securities With a Readily Determinable Fair Value VMware’s equity securities included an investment in a company that completed its initial public offering during the third quarter of fiscal 2021. The fair value of the investment was based on quoted prices for identical assets in an active market (Level 1). As of January 28, 2022, the fair value of the investment was $19 million and was included in short-term investments on the condensed consolidated balance sheets. During the three months ended April 29, 2022, VMware sold the entire investment which had a carrying value of $19 million at the time of sale. The carrying value at the time of sale for the investment sold during the three and nine months ended October 29, 2021 was $38 million and $75 million, respectively. The gain or loss recognized on the investments sold during the three months ended October 29, 2021, as well as the nine months ended October 28, 2022 and October 29, 2021, was not significant. During the three and nine months ended October 29, 2021, VMware recognized unrealized losses of $11 million and $30 million, respectively, on the investment still held as of October 29, 2021. All gains and losses on the investment, whether realized or unrealized, are recognized in other income (expense), net on the condensed consolidated statements of income. Equity Securities Without a Readily Determinable Fair Value VMware’s equity securities also include investments in privately held companies, which do not have a readily determinable fair value. The carrying value of investments in privately held companies is measured at cost, less impairment, if any, adjusted upward or downward for observable price changes in orderly transactions for the identical or a similar security of the same issuer. As of October 28, 2022 and January 28, 2022, investments in privately held companies, which consisted primarily of equity securities, had a carrying value of $92 million and $163 million, respectively, and were included in other assets on the condensed consolidated balance sheets. During the nine months ended October 28, 2022, VMware sold certain investments in privately held companies which had an aggregate carrying value at the time of sale of $88 million and the loss recognized on these investments was not significant. During the three and nine months ended October 28, 2022, for securities still held as of October 28, 2022, gross upward and downward adjustments were not significant. During the three and nine months ended October 29, 2021, for securities still held as of October 29, 2021, gross upward adjustments were $21 million and $32 million, respectively, and gross downward adjustments were not significant. |
Derivatives and Hedging Activit
Derivatives and Hedging Activities | 9 Months Ended |
Oct. 28, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivatives and Hedging Activities | Derivatives and Hedging Activities VMware conducts business on a global basis in multiple foreign currencies, subjecting the Company to foreign currency risk. To mitigate a portion of this risk, VMware utilizes hedging contracts as described below, which potentially expose the Company to credit risk to the extent that the counterparties may be unable to meet the terms of the agreements. VMware manages counterparty risk by seeking counterparties of high credit quality and by monitoring credit ratings, credit spreads and other relevant public information about its counterparties. VMware does not, and does not intend to, use derivative instruments for trading or speculative purposes. Cash Flow Hedges To mitigate its exposure to foreign currency fluctuations resulting from certain operating expenses denominated in certain foreign currencies, VMware enters into forward contracts that are designated as cash flow hedging instruments as the accounting criteria for such designation are met. Therefore, the effective portion of gains or losses resulting from changes in the fair value of these instruments is initially reported in accumulated other comprehensive loss on the condensed consolidated balance sheets and is subsequently reclassified to the related operating expense line item on the condensed consolidated statements of income in the same period that the underlying expenses are incurred. During the three and nine months ended October 28, 2022 and October 29, 2021 , the effective portion of gains or losses reclassified to the condensed consolidated statements of income was not significant to each of the individual functional line items, as well as in aggregate. Interest charges or forward points on VMware’s forward contracts were excluded from the assessment of hedge effectiveness and were recorded to the related operating expense line item on the condensed consolidated statements of income in the same period that the interest charges are incurred. These forward contracts have maturities of fourteen months or less, and as of October 28, 2022 and January 28, 2022, outstanding forward contracts had a total notional value of $176 million and $642 million, respectively. The notional value represents the gross amount of foreign currency that will be bought or sold upon maturity of the forward contract. The fair value of these forward contracts was not significant as of October 28, 2022 and January 28, 2022. During the three and nine months ended October 28, 2022 and October 29, 2021 , all cash flow hedges were considered effective. Forward Contracts Not Designated as Hedges VMware has established a program that utilizes forward contracts to offset the foreign currency risk associated with net outstanding monetary asset and liability positions. These forward contracts are not designated as hedging instruments under applicable accounting guidance, and therefore, all changes in the fair value of the forward contracts are reported in other income (expense), net on the condensed consolidated statements of income. These forward contracts generally have a maturity of one month, and as of October 28, 2022 and January 28, 2022, outstanding forward contracts had a total notional value of $862 million and $1.5 billion, respectively. The notional value represents the gross amount of foreign currency that will be bought or sold upon maturity of the forward contract. The fair value of these forward contracts was not significant as of October 28, 2022 and January 28, 2022. Gains related to the settlement of forward contracts were $37 million and $93 million during the three and nine months ended October 28, 2022, respectively. Gains related to the settlement of forward contracts were $11 million and $27 million during the three and nine months ended October 29, 2021, respectively . Gains and losses are recorded in other income (expense), net on the condensed consolidated statements of income. The combined gains and losses related to the settlement of forward contracts and the underlying foreign currency denominated assets and liabilities resulted in net losses that were not significant and $29 million during the three and nine months ended October 28, 2022, respectively, and were not significant during the three and nine months ended October 29, 2021 . Net gains and losses are recorded in other income (expense), net on the condensed consolidated statements of income. |
Leases
Leases | 9 Months Ended |
Oct. 28, 2022 | |
Leases [Abstract] | |
Leases | Leases VMware has operating and finance leases primarily related to office facilities and equipment, which have remaining lease terms of one month to 24 years. The components of lease expense during the periods presented were as follows (table in millions): Three Months Ended Nine Months Ended October 28, October 29, October 28, October 29, 2022 2021 2022 2021 Operating lease expense $ 48 $ 48 $ 147 $ 144 Finance lease expense: Amortization of right-of-use (“ROU”) assets 2 2 5 5 Interest on lease liabilities — — 1 1 Total finance lease expense 2 2 6 6 Short-term lease expense — — — 1 Variable lease expense 8 8 24 23 Total lease expense $ 58 $ 58 $ 177 $ 174 Lease expense incurred for arrangements with Dell was not significant during the periods presented. The Company subleases certain of its leased office space to third parties when it determines there is excess leased capacity. Sublease income was not significant during each of the three months ended October 28, 2022 and October 29, 2021, and was not significant and $16 million during the nine months ended October 28, 2022 and October 29, 2021, respectively. Supplemental cash flow information related to operating and finance leases during the periods presented was as follows (table in millions): Nine Months Ended October 28, October 29, 2022 2021 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 130 $ 129 Operating cash flows from finance leases 1 1 Financing cash flows from finance leases 4 3 ROU assets obtained in exchange for lease liabilities: Operating leases $ 58 $ 124 Finance leases 1 — Supplemental balance sheet information related to operating and finance leases as of the periods presented was as follows (table in millions): October 28, 2022 Operating Leases Finance Leases ROU assets, non-current (1) $ 998 $ 43 Lease liabilities, current (2) $ 140 $ 6 Lease liabilities, non-current (3) 849 36 Total lease liabilities $ 989 $ 42 January 28, 2022 Operating Leases Finance Leases ROU assets, non-current (1) $ 1,062 $ 46 Lease liabilities, current (2) $ 145 $ 5 Lease liabilities, non-current (3) 927 43 Total lease liabilities $ 1,072 $ 48 (1) ROU assets for operating leases are included in other assets, property and equipment, net, (2) Current lease liabilities are included primarily in accrued expenses and other (3) Non-current operating lease liabilities are presented as operating lease liabilities on the condensed consolidated balance sheets. Non-current finance lease liabilities are included in other liabilities Lease term and discount rate related to operating and finance leases as of the periods presented were as follows: October 28, January 28, 2022 2022 Weighted-average remaining lease term (in years) Operating leases 11.9 11.9 Finance leases 6.4 7.3 Weighted-average discount rate Operating leases 3.4 % 3.2 % Finance leases 2.9 % 2.9 % The following represents VMware’s future minimum lease payments under non-cancellable operating and finance leases as of October 28, 2022 (table in millions): Operating Leases Finance Leases Remainder of 2023 $ 46 $ 2 2024 166 7 2025 125 6 2026 123 7 2027 105 7 Thereafter 685 17 Total future minimum lease payments 1,250 46 Less: Imputed interest (261) (4) Total lease liabilities (1) $ 989 $ 42 (1) Total lease liabilities as of October 28, 2022 excluded legally binding lease payments for leases signed but not yet commenced of $53 million. The amount of the future operating lease commitments after fiscal 2027 primarily consists of the ground leases on VMware’s Palo Alto, California headquarter facilities, which expire in fiscal 2047. As several of VMware’s operating leases are payable in foreign currencies, the operating lease payments may fluctuate in response to changes in the exchange rate between the U.S. dollar and the foreign currencies in which the commitments are payable. |
Leases | Leases VMware has operating and finance leases primarily related to office facilities and equipment, which have remaining lease terms of one month to 24 years. The components of lease expense during the periods presented were as follows (table in millions): Three Months Ended Nine Months Ended October 28, October 29, October 28, October 29, 2022 2021 2022 2021 Operating lease expense $ 48 $ 48 $ 147 $ 144 Finance lease expense: Amortization of right-of-use (“ROU”) assets 2 2 5 5 Interest on lease liabilities — — 1 1 Total finance lease expense 2 2 6 6 Short-term lease expense — — — 1 Variable lease expense 8 8 24 23 Total lease expense $ 58 $ 58 $ 177 $ 174 Lease expense incurred for arrangements with Dell was not significant during the periods presented. The Company subleases certain of its leased office space to third parties when it determines there is excess leased capacity. Sublease income was not significant during each of the three months ended October 28, 2022 and October 29, 2021, and was not significant and $16 million during the nine months ended October 28, 2022 and October 29, 2021, respectively. Supplemental cash flow information related to operating and finance leases during the periods presented was as follows (table in millions): Nine Months Ended October 28, October 29, 2022 2021 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 130 $ 129 Operating cash flows from finance leases 1 1 Financing cash flows from finance leases 4 3 ROU assets obtained in exchange for lease liabilities: Operating leases $ 58 $ 124 Finance leases 1 — Supplemental balance sheet information related to operating and finance leases as of the periods presented was as follows (table in millions): October 28, 2022 Operating Leases Finance Leases ROU assets, non-current (1) $ 998 $ 43 Lease liabilities, current (2) $ 140 $ 6 Lease liabilities, non-current (3) 849 36 Total lease liabilities $ 989 $ 42 January 28, 2022 Operating Leases Finance Leases ROU assets, non-current (1) $ 1,062 $ 46 Lease liabilities, current (2) $ 145 $ 5 Lease liabilities, non-current (3) 927 43 Total lease liabilities $ 1,072 $ 48 (1) ROU assets for operating leases are included in other assets, property and equipment, net, (2) Current lease liabilities are included primarily in accrued expenses and other (3) Non-current operating lease liabilities are presented as operating lease liabilities on the condensed consolidated balance sheets. Non-current finance lease liabilities are included in other liabilities Lease term and discount rate related to operating and finance leases as of the periods presented were as follows: October 28, January 28, 2022 2022 Weighted-average remaining lease term (in years) Operating leases 11.9 11.9 Finance leases 6.4 7.3 Weighted-average discount rate Operating leases 3.4 % 3.2 % Finance leases 2.9 % 2.9 % The following represents VMware’s future minimum lease payments under non-cancellable operating and finance leases as of October 28, 2022 (table in millions): Operating Leases Finance Leases Remainder of 2023 $ 46 $ 2 2024 166 7 2025 125 6 2026 123 7 2027 105 7 Thereafter 685 17 Total future minimum lease payments 1,250 46 Less: Imputed interest (261) (4) Total lease liabilities (1) $ 989 $ 42 (1) Total lease liabilities as of October 28, 2022 excluded legally binding lease payments for leases signed but not yet commenced of $53 million. The amount of the future operating lease commitments after fiscal 2027 primarily consists of the ground leases on VMware’s Palo Alto, California headquarter facilities, which expire in fiscal 2047. As several of VMware’s operating leases are payable in foreign currencies, the operating lease payments may fluctuate in response to changes in the exchange rate between the U.S. dollar and the foreign currencies in which the commitments are payable. |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Oct. 28, 2022 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity | Stockholders’ Equity VMware Stock Repurchases VMware purchases stock from time to time in open market transactions, subject to market conditions. The timing of any repurchases and the actual number of shares repurchased will depend on a variety of factors, including VMware’s stock price, cash requirements for operations and business combinations, corporate, legal and regulatory requirements and other market and economic conditions. VMware is not obligated to purchase any shares under its stock repurchase programs. Purchases may be discontinued at any time VMware believes additional purchases are not warranted. All shares repurchased under VMware’s stock repurchase programs are retired. On October 7, 2021, VMware authorized a new repurchase program of up to $2.0 billion of Common Stock through the end of fiscal 2024, effective on November 1, 2021. As of October 28, 2022, the cumulative authorized amount remaining for stock repurchases was $1.6 billion. In connection with its entry into the Merger Agreement, VMware suspended its stock repurchase program during the second quarter of fiscal 2023. The following table summarizes stock repurchase activity during the periods presented (aggregate purchase price in millions, shares in thousands): Three Months Ended Nine Months Ended October 28, October 29, October 28, October 29, 2022 2021 2022 2021 Aggregate purchase price $ — $ 143 $ 89 $ 872 Common Stock repurchased — 956 803 5,699 Weighted-average price per share $ — $ 149.61 $ 111.33 $ 153.07 VMware Restricted Stock VMware’s restricted stock primarily consists of RSU awards granted to employees. The value of an RSU grant is based on VMware’s stock price on the date of the grant. The shares underlying the RSU awards are not issued until the RSUs vest. Upon vesting, each RSU converts into one share of VMware’s Common Stock. VMware’s restricted stock also includes PSU awards granted to certain VMware executives and employees. PSU awards have performance conditions and, in certain cases, a time- or market-based vesting component. Upon vesting, PSU awards convert into VMware’s Common Stock at various ratios ranging from 0.1 to 2.0 shares per PSU, depending upon the degree of achievement of the performance- or market-based target designated by each award. If minimum performance thresholds are not achieved, then no shares are issued. The following table summarizes restricted stock activity since January 28, 2022 (units in thousands): Number of Units Weighted-Average Grant Date Fair Value Outstanding, January 28, 2022 23,002 $ 123.06 Granted 11,011 114.68 Vested (6,108) 123.86 Forfeited (3,184) 123.18 Outstanding, October 28, 2022 24,721 119.12 The aggregate vesting date fair value of VMware’s restricted stock that vested during the nine months ended October 28, 2022 was $724 million. As of October 28, 2022, restricted stock representing 24.7 million shares of VMware’s Common Stock were outstanding, with an aggregate intrinsic value of $2.8 billion based on VMware’s closing stock price as of October 28, 2022. VMware Employee Stock Purchase Plan In connection with its entry into the Merger Agreement, VMware suspended its 2007 Employee Stock Purchase Plan effective September 1, 2022. Net Excess Tax Benefits and Tax Deficiencies Net excess tax benefits and tax deficiencies recognized in connection with stock-based awards are included in income tax provision on the condensed consolidated statements of income. Net tax deficiencies recognized during the three and nine months ended October 28, 2022 were not significant. During the three and nine months ended October 29, 2021, net excess tax benefits were not material and $19 million, respectively. |
Segment Information
Segment Information | 9 Months Ended |
Oct. 28, 2022 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information VMware operates in one reportable operating segment; thus, all required financial segment information is included in the condensed consolidated financial statements. An operating segment is defined as the components of an enterprise for which separate financial information is evaluated regularly by the chief operating decision maker in order to allocate resources and assess performance. VMware’s chief operating decision maker allocates resources and assesses performance based upon discrete financial information at the consolidated level. Revenue by type during the periods presented was as follows (table in millions): Three Months Ended Nine Months Ended October 28, October 29, October 28, October 29, 2022 2021 2022 2021 Revenue: License $ 621 $ 710 $ 1,990 $ 2,093 Subscription and SaaS 988 820 2,830 2,336 Total license and subscription and SaaS 1,609 1,530 4,820 4,429 Services: Software maintenance 1,298 1,354 3,907 4,011 Professional services 304 304 908 880 Total services 1,602 1,658 4,815 4,891 Total revenue $ 3,211 $ 3,188 $ 9,635 $ 9,320 Revenue by geographic area during the periods presented was as follows (table in millions): Three Months Ended Nine Months Ended October 28, October 29, October 28, October 29, 2022 2021 2022 2021 United States $ 1,614 $ 1,582 $ 4,780 $ 4,587 International 1,597 1,606 4,855 4,733 Total $ 3,211 $ 3,188 $ 9,635 $ 9,320 Revenue by geographic area is based on the ship-to addresses of VMware’s customers. No individual country other than the U.S. accounted for 10% or more of revenue during the three and nine months ended October 28, 2022 and October 29, 2021. Long-lived assets by geographic area, which primarily include property and equipment, net, as of the periods presented were as follows (table in millions): October 28, January 28, 2022 2022 United States $ 859 $ 882 International 260 241 Total $ 1,119 $ 1,123 |
Overview and Basis of Present_2
Overview and Basis of Presentation (Policies) | 9 Months Ended |
Oct. 28, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The financial statements and accompanying notes are prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The fiscal year for VMware is the 52 or 53 weeks ending on the Friday nearest to January 31 of each year. Fiscal 2023 is a 53-week fiscal year, in which the first three quarters each has 13 weeks while the fourth quarter has 14 weeks. Fiscal 2022 was a 52-week fiscal year. The accompanying unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) for interim financial reporting. In the opinion of management, these unaudited condensed consolidated financial statements include all adjustments, consisting of normal recurring adjustments and accruals, for a fair statement of VMware’s condensed consolidated results of operations, financial position and cash flows for the periods presented. Results of operations are not necessarily indicative of the results that may be expected for the full fiscal year 2023. Certain information and footnote disclosures typically included in annual consolidated financial statements have been condensed or omitted. Accordingly, these unaudited interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes included in VMware’s Annual Report on Form 10-K filed on March 24, 2022. On November 1, 2021, VMware’s spin-off from Dell Technologies Inc. (“Dell”) was completed (the “Spin-Off”). As a result of the Spin-Off, VMware became a standalone company and entities affiliated with Michael Dell (the “MSD Stockholders”), who serves as VMware’s Chairman of the Board and chairman and chief executive officer of Dell, and entities affiliated with Silver Lake Partners (the “SLP Stockholders”), of which Egon Durban, a VMware director, is a managing partner, became owners of direct interests in VMware representing 39.9% and 9.9%, respectively, of VMware’s outstanding stock, based on the shares outstanding as of October 28, 2022. Due to the MSD Stockholders’ and SLP Stockholders’ direct ownership in both VMware and Dell, as well as Mr. Dell’s executive position with Dell, transactions with Dell continue to be considered related party transactions following the Spin-Off. Management believes the assumptions underlying the condensed consolidated financial statements are reasonable. However, the amounts recorded for VMware’s related party transactions with Dell and its consolidated subsidiaries may not be considered arm’s length with an unrelated third party. Therefore, the condensed consolidated financial statements included herein may not necessarily reflect the results of operations, financial position and cash flows had VMware engaged in such transactions with an unrelated third party during all periods presented. Accordingly, VMware’s historical financial information is not necessarily indicative of what the Company’s results of operations, financial position and cash flows will be in the future, if and when VMware contracts at arm’s length with unrelated third parties for products and services the Company receives from and provides to Dell. |
Principles of Consolidation | Principles of Consolidation The unaudited condensed consolidated financial statements include the accounts of VMware and subsidiaries in which VMware has a controlling financial interest. All intercompany transactions and account balances between VMware and its subsidiaries have been eliminated in consolidation. Transactions with Dell and its consolidated subsidiaries are generally settled in cash and are classified on the condensed consolidated statements of cash flows based upon the nature of the underlying transaction. Amounts included in the current portion of due from related parties on the condensed consolidated balance sheets that are unrelated to Dell Financial Services and tax obligations are generally settled in cash within 60 days of each quarter-end. |
Use of Accounting Estimates | Use of Accounting EstimatesThe preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the reported amounts of revenue and expenses during the reporting periods, and the disclosure of contingent liabilities at the date of the financial statements. Estimates are used for, but not limited to, trade receivable valuation, marketing development funds, expected period of benefit for deferred commissions, useful lives assigned to fixed assets and intangible assets, valuation of goodwill and definite-lived intangibles, income taxes, stock-based compensation and contingencies. Actual results could differ from those estimates. To the extent the Company’s actual results differ materially from those estimates and assumptions, VMware’s future financial statements could be affected. |
New Accounting Pronouncement | New Accounting PronouncementIn November 2021, the Financial Accounting Standards Board issued an accounting standards update (“ASU”) 2021-10, Government Assistance (Topic 832), requiring annual disclosures about transactions with a government that are accounted for by applying a grant or contribution accounting model by analogy. The new standard is effective for annual periods beginning after December 15, 2021 but may be early adopted. The Company does not expect the adoption of the ASU to have a material impact on the Company’s condensed consolidated financial statements and plans to adopt the standard during fiscal 2023 on a prospective basis. |
Derivative Instruments and Hedging Activities | VMware conducts business on a global basis in multiple foreign currencies, subjecting the Company to foreign currency risk. To mitigate a portion of this risk, VMware utilizes hedging contracts as described below, which potentially expose the Company to credit risk to the extent that the counterparties may be unable to meet the terms of the agreements. VMware manages counterparty risk by seeking counterparties of high credit quality and by monitoring credit ratings, credit spreads and other relevant public information about its counterparties. VMware does not, and does not intend to, use derivative instruments for trading or speculative purposes. |
Revenue, Unearned Revenue and_2
Revenue, Unearned Revenue and Remaining Performance Obligations (Tables) | 9 Months Ended |
Oct. 28, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Unearned Revenue | Unearned revenue as of the periods presented consisted of the following (table in millions): October 28, January 28, 2022 2022 Unearned license revenue $ 28 $ 19 Unearned subscription and software-as-a-service (“SaaS”) revenue 3,197 2,669 Unearned software maintenance revenue 6,636 7,208 Unearned professional services revenue 1,356 1,326 Total unearned revenue $ 11,217 $ 11,222 |
Related Parties (Tables)
Related Parties (Tables) | 9 Months Ended |
Oct. 28, 2022 | |
Related Party Transactions [Abstract] | |
Schedule of Related Party Transactions | Information about VMware’s revenue and receipts, and unearned revenue from such arrangements, for the periods presented consisted of the following (table in millions): Revenue and Receipts Unearned Revenue Three Months Ended Nine Months Ended As of October 28, October 29, October 28, October 29, October 28, January 28, 2022 2021 2022 2021 2022 2022 Reseller revenue $ 1,184 $ 1,183 $ 3,634 $ 3,380 $ 5,448 $ 5,550 Internal-use revenue 13 17 41 43 24 39 Information about VMware’s payments for such arrangements during the periods presented consisted of the following (table in millions): Three Months Ended Nine Months Ended October 28, October 29, October 28, October 29, 2022 2021 2022 2021 Purchases and leases of products and purchases of services (1) $ 52 $ 57 $ 147 $ 164 Dell subsidiary support and administrative costs 1 8 6 32 (1) Amount includes indirect taxes that were remitted to Dell prior to the Spin-Off. As of the periods presented, amounts due to and due from Dell pursuant to the Tax Matters Agreement consisted of the following (table in millions): October 28, January 28, 2022 2022 Due from related parties: Current $ — $ 6 Non-current 189 199 Due to related parties: Current $ 115 $ 61 Non-current 804 909 |
Definite-Lived Intangible Ass_2
Definite-Lived Intangible Assets, Net (Tables) | 9 Months Ended |
Oct. 28, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Finite-Lived Intangible Assets | As of the periods presented, definite-lived intangible assets consisted of the following (amounts in tables in millions): October 28, 2022 Weighted-Average Useful Lives Gross Carrying Amount Accumulated Amortization Net Book Value Purchased technology 5.3 $ 806 $ (586) $ 220 Customer relationships and customer lists 11.9 641 (359) 282 Trademarks and tradenames 6.8 69 (45) 24 Total definite-lived intangible assets $ 1,516 $ (990) $ 526 January 28, 2022 Weighted-Average Useful Lives Gross Carrying Amount Accumulated Amortization Net Book Value Purchased technology 5.3 $ 836 $ (501) $ 335 Customer relationships and customer lists 11.5 721 (376) 345 Trademarks and tradenames 7.7 131 (97) 34 Total definite-lived intangible assets $ 1,688 $ (974) $ 714 |
Schedule of Future Amortization Expense | Based on intangible assets recorded as of October 28, 2022, and assuming no subsequent additions, dispositions or impairment of underlying assets, the remaining estimated annual amortization expense over the next five fiscal years and thereafter is expected to be as follows (table in millions): Remainder of 2023 $ 62 2024 202 2025 109 2026 69 2027 39 Thereafter 45 Total $ 526 |
Net Income Per Share (Tables)
Net Income Per Share (Tables) | 9 Months Ended |
Oct. 28, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of Computations of Basic and Diluted Net Income per Share | The following table sets forth the computations of basic and diluted net income per share during the periods presented (table in millions, except per share amounts and shares in thousands): Three Months Ended Nine Months Ended October 28, October 29, October 28, October 29, 2022 2021 2022 2021 Net income $ 231 $ 398 $ 820 $ 1,234 Weighted-average shares, basic 423,993 419,456 422,194 419,309 Effect of other dilutive securities 2,335 2,307 2,296 2,892 Weighted-average shares, diluted 426,328 421,763 424,490 422,201 Net income per weighted-average share, basic $ 0.55 $ 0.95 $ 1.94 $ 2.94 Net income per weighted-average share, diluted $ 0.54 $ 0.94 $ 1.93 $ 2.92 |
Schedule of Antidilutive Securities Excluded from Computation of Net Income per Share | The following table sets forth the weighted-average common share equivalents of Common Stock that were excluded from the diluted net income per share calculations during the periods presented because their effect would have been anti-dilutive (shares in thousands): Three Months Ended Nine Months Ended October 28, October 29, October 28, October 29, 2022 2021 2022 2021 Anti-dilutive securities: Employee stock options 6 9 86 17 RSUs 601 181 653 311 Total 607 190 739 328 |
Cash, Cash Equivalents, Restr_2
Cash, Cash Equivalents, Restricted Cash and Short-Term Investments (Tables) | 9 Months Ended |
Oct. 28, 2022 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of Cash and Cash Equivalents, Restricted Cash | The following table provides a reconciliation of the Company’s cash and cash equivalents, and current and non-current portion of restricted cash reported on the condensed consolidated balance sheets that sum to the total cash, cash equivalents and restricted cash as of the periods presented (table in millions): October 28, January 28, 2022 2022 Cash and cash equivalents $ 3,972 $ 3,614 Restricted cash within other current assets 26 43 Restricted cash within other assets 3 6 Total cash, cash equivalents and restricted cash $ 4,001 $ 3,663 |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Oct. 28, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Carrying Value of Senior Notes | The carrying value of the Senior Notes as of the periods presented was as follows (amounts in millions): October 28, January 28, Effective Interest Rate 2022 2022 2017 Senior Notes: 3.90% Senior Note Due August 21, 2027 $ 1,250 $ 1,250 4.05% 2020 Senior Notes: 4.50% Senior Note Due May 15, 2025 750 750 4.70% 4.65% Senior Note Due May 15, 2027 500 500 4.80% 4.70% Senior Note Due May 15, 2030 750 750 4.86% 2021 Senior Notes: 0.60% Senior Note Due August 15, 2023 1,000 1,000 0.95% 1.00% Senior Note Due August 15, 2024 1,250 1,250 1.23% 1.40% Senior Note Due August 15, 2026 1,500 1,500 1.61% 1.80% Senior Note Due August 15, 2028 750 750 2.01% 2.20% Senior Note Due August 15, 2031 1,500 1,500 2.32% Total principal amount 9,250 9,250 Less: unamortized discount (13) (15) Less: unamortized debt issuance costs (50) (61) Net carrying amount $ 9,187 $ 9,174 Current portion of long-term debt $ 1,000 $ — Long-term debt 8,187 9,174 |
Schedule of Maturities of Long-term Debt | The future principal payments for the Senior Notes as of October 28, 2022 were as follows (amounts in millions): Remainder of 2023 $ — 2024 1,000 2025 1,250 2026 750 2027 1,500 Thereafter 4,750 Total $ 9,250 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Oct. 28, 2022 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value Hierarchy | The following tables set forth the fair value hierarchy of VMware’s cash equivalents and short-term investments that were required to be measured at fair value as of the periods presented (tables in millions): October 28, 2022 Level 1 Level 2 Total Cash equivalents: Money-market funds $ 3,283 $ — $ 3,283 Time deposits (1) — 13 13 Total cash equivalents $ 3,283 $ 13 $ 3,296 January 28, 2022 Level 1 Level 2 Total Cash equivalents: Money-market funds $ 2,998 $ — $ 2,998 Time deposits (1) — 34 34 Total cash equivalents $ 2,998 $ 34 $ 3,032 Short-term investments: Marketable equity securities $ 19 $ — $ 19 Total short-term investments $ 19 $ — $ 19 (1) |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Oct. 28, 2022 | |
Leases [Abstract] | |
Schedule of Lease Cost, Cash Flow, Term and Discount Rate | The components of lease expense during the periods presented were as follows (table in millions): Three Months Ended Nine Months Ended October 28, October 29, October 28, October 29, 2022 2021 2022 2021 Operating lease expense $ 48 $ 48 $ 147 $ 144 Finance lease expense: Amortization of right-of-use (“ROU”) assets 2 2 5 5 Interest on lease liabilities — — 1 1 Total finance lease expense 2 2 6 6 Short-term lease expense — — — 1 Variable lease expense 8 8 24 23 Total lease expense $ 58 $ 58 $ 177 $ 174 Supplemental cash flow information related to operating and finance leases during the periods presented was as follows (table in millions): Nine Months Ended October 28, October 29, 2022 2021 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 130 $ 129 Operating cash flows from finance leases 1 1 Financing cash flows from finance leases 4 3 ROU assets obtained in exchange for lease liabilities: Operating leases $ 58 $ 124 Finance leases 1 — Lease term and discount rate related to operating and finance leases as of the periods presented were as follows: October 28, January 28, 2022 2022 Weighted-average remaining lease term (in years) Operating leases 11.9 11.9 Finance leases 6.4 7.3 Weighted-average discount rate Operating leases 3.4 % 3.2 % Finance leases 2.9 % 2.9 % |
Schedule of Lease Assets and Liabilities | Supplemental balance sheet information related to operating and finance leases as of the periods presented was as follows (table in millions): October 28, 2022 Operating Leases Finance Leases ROU assets, non-current (1) $ 998 $ 43 Lease liabilities, current (2) $ 140 $ 6 Lease liabilities, non-current (3) 849 36 Total lease liabilities $ 989 $ 42 January 28, 2022 Operating Leases Finance Leases ROU assets, non-current (1) $ 1,062 $ 46 Lease liabilities, current (2) $ 145 $ 5 Lease liabilities, non-current (3) 927 43 Total lease liabilities $ 1,072 $ 48 (1) ROU assets for operating leases are included in other assets, property and equipment, net, (2) Current lease liabilities are included primarily in accrued expenses and other (3) Non-current operating lease liabilities are presented as operating lease liabilities on the condensed consolidated balance sheets. Non-current finance lease liabilities are included in other liabilities |
Schedule of Operating Lease Liability Maturity | The following represents VMware’s future minimum lease payments under non-cancellable operating and finance leases as of October 28, 2022 (table in millions): Operating Leases Finance Leases Remainder of 2023 $ 46 $ 2 2024 166 7 2025 125 6 2026 123 7 2027 105 7 Thereafter 685 17 Total future minimum lease payments 1,250 46 Less: Imputed interest (261) (4) Total lease liabilities (1) $ 989 $ 42 (1) Total lease liabilities as of October 28, 2022 excluded legally binding lease payments for leases signed but not yet commenced of $53 million. |
Schedule of Finance Lease Liability Maturity | The following represents VMware’s future minimum lease payments under non-cancellable operating and finance leases as of October 28, 2022 (table in millions): Operating Leases Finance Leases Remainder of 2023 $ 46 $ 2 2024 166 7 2025 125 6 2026 123 7 2027 105 7 Thereafter 685 17 Total future minimum lease payments 1,250 46 Less: Imputed interest (261) (4) Total lease liabilities (1) $ 989 $ 42 (1) Total lease liabilities as of October 28, 2022 excluded legally binding lease payments for leases signed but not yet commenced of $53 million. |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 9 Months Ended |
Oct. 28, 2022 | |
Stockholders' Equity Note [Abstract] | |
Schedule of Stock Repurchase Program | The following table summarizes stock repurchase activity during the periods presented (aggregate purchase price in millions, shares in thousands): Three Months Ended Nine Months Ended October 28, October 29, October 28, October 29, 2022 2021 2022 2021 Aggregate purchase price $ — $ 143 $ 89 $ 872 Common Stock repurchased — 956 803 5,699 Weighted-average price per share $ — $ 149.61 $ 111.33 $ 153.07 |
Schedule of Restricted Stock Activity | The following table summarizes restricted stock activity since January 28, 2022 (units in thousands): Number of Units Weighted-Average Grant Date Fair Value Outstanding, January 28, 2022 23,002 $ 123.06 Granted 11,011 114.68 Vested (6,108) 123.86 Forfeited (3,184) 123.18 Outstanding, October 28, 2022 24,721 119.12 |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Oct. 28, 2022 | |
Segment Reporting [Abstract] | |
Schedule of Revenue by Type | Revenue by type during the periods presented was as follows (table in millions): Three Months Ended Nine Months Ended October 28, October 29, October 28, October 29, 2022 2021 2022 2021 Revenue: License $ 621 $ 710 $ 1,990 $ 2,093 Subscription and SaaS 988 820 2,830 2,336 Total license and subscription and SaaS 1,609 1,530 4,820 4,429 Services: Software maintenance 1,298 1,354 3,907 4,011 Professional services 304 304 908 880 Total services 1,602 1,658 4,815 4,891 Total revenue $ 3,211 $ 3,188 $ 9,635 $ 9,320 |
Schedule of Revenue by Geographic Area | Revenue by geographic area during the periods presented was as follows (table in millions): Three Months Ended Nine Months Ended October 28, October 29, October 28, October 29, 2022 2021 2022 2021 United States $ 1,614 $ 1,582 $ 4,780 $ 4,587 International 1,597 1,606 4,855 4,733 Total $ 3,211 $ 3,188 $ 9,635 $ 9,320 |
Schedule of Long-Lived Assets by Geographic Area | Long-lived assets by geographic area, which primarily include property and equipment, net, as of the periods presented were as follows (table in millions): October 28, January 28, 2022 2022 United States $ 859 $ 882 International 260 241 Total $ 1,119 $ 1,123 |
Overview and Basis of Present_3
Overview and Basis of Presentation - Basis of Presentation (Details) | Oct. 28, 2022 |
SLP Stockholders | Director | |
Overview and Basis of Presentation [Line Items] | |
Ownership percentage | 9.90% |
MSD Stockholders | Board of Directors Chairman | |
Overview and Basis of Presentation [Line Items] | |
Ownership percentage | 39.90% |
Overview and Basis of Present_4
Overview and Basis of Presentation - Broadcom Merger Agreement (Details) $ / shares in Units, $ in Billions | Feb. 26, 2023 USD ($) extension | Oct. 28, 2022 $ / shares | May 26, 2022 $ / shares | Jan. 28, 2022 $ / shares |
Business Acquisition [Line Items] | ||||
Common stock, par value (in USD per share) | $ 0.01 | $ 0.01 | ||
VMware, Inc. | Maximum | Forecast | ||||
Business Acquisition [Line Items] | ||||
Merger termination fee | $ | $ 1.5 | |||
VMware, Inc. | Broadcom Inc. | ||||
Business Acquisition [Line Items] | ||||
Common stock, par value (in USD per share) | $ 0.001 | |||
Blended price per share (in USD per share) | $ 142.50 | |||
Business merger, exchange ratio | 0.25200 | |||
Percentage of aggregate number of shares issued and outstanding to be received, term of merger arrangement (percent) | 0.50 | |||
VMware, Inc. | Broadcom Inc. | Forecast | ||||
Business Acquisition [Line Items] | ||||
Number of extensions | extension | 3 | |||
Duration of each of the extensions (in months) | 3 months | |||
VMware, Inc. | Broadcom Inc. | Maximum | Forecast | ||||
Business Acquisition [Line Items] | ||||
Merger termination fee | $ | $ 1.5 | |||
VMware, Inc. | Class A Common Stock | ||||
Business Acquisition [Line Items] | ||||
Common stock, par value (in USD per share) | $ 0.01 |
Revenue, Unearned Revenue and_3
Revenue, Unearned Revenue and Remaining Performance Obligations - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Oct. 28, 2022 | Oct. 29, 2021 | Oct. 28, 2022 | Oct. 29, 2021 | Jan. 28, 2022 | |
Revenue from Contract with Customer [Abstract] | |||||
Contract assets | $ 40 | $ 40 | $ 36 | ||
Customer deposits included in accrued expenses and other | 558 | 558 | 470 | ||
Customer deposits included in other liabilities | 208 | 208 | 166 | ||
Deferred commissions, current | 20 | 20 | 17 | ||
Deferred commissions, non-current | 1,300 | 1,300 | $ 1,200 | ||
Amortization of deferred commissions | 168 | $ 130 | $ 469 | $ 383 | |
Remaining weighted average contractual duration | 2 years | ||||
Current period billings | 2,200 | $ 6,500 | |||
Revenue recognized from amounts previously classified as unearned revenue | $ 2,200 | $ 2,100 | $ 6,600 | $ 6,100 |
Revenue, Unearned Revenue and_4
Revenue, Unearned Revenue and Remaining Performance Obligations - Summary of Unearned Revenue (Details) - USD ($) $ in Millions | Oct. 28, 2022 | Jan. 28, 2022 |
Disaggregation of Revenue [Line Items] | ||
Total unearned revenue | $ 11,217 | $ 11,222 |
Unearned license revenue | ||
Disaggregation of Revenue [Line Items] | ||
Total unearned revenue | 28 | 19 |
Unearned subscription and Software as a Service (“SaaS”) revenue | ||
Disaggregation of Revenue [Line Items] | ||
Total unearned revenue | 3,197 | 2,669 |
Unearned software maintenance revenue | ||
Disaggregation of Revenue [Line Items] | ||
Total unearned revenue | 6,636 | 7,208 |
Unearned professional services revenue | ||
Disaggregation of Revenue [Line Items] | ||
Total unearned revenue | $ 1,356 | $ 1,326 |
Revenue, Unearned Revenue and_5
Revenue, Unearned Revenue and Remaining Performance Obligations - Remaining Performance Obligations (Details) - USD ($) $ in Billions | Oct. 28, 2022 | Jan. 28, 2022 |
Revenue from Contract with Customer [Abstract] | ||
Remaining performance obligation | $ 11.9 | $ 12 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-01-29 | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Remaining performance obligation percentage | 57% | |
Remaining performance obligation period | 12 months | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-10-29 | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Remaining performance obligation percentage | 56% | |
Remaining performance obligation period | 12 months | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-29 | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Remaining performance obligation period | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-10-29 | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Remaining performance obligation period |
Related Parties - Transactions
Related Parties - Transactions with Dell (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||||
Nov. 01, 2021 | Oct. 28, 2022 | Oct. 29, 2021 | Oct. 28, 2022 | Oct. 29, 2021 | Jan. 28, 2022 | |
Customer Concentration Risk | OEM Revenue | Dell | ||||||
Related Party Transaction [Line Items] | ||||||
Percentage of revenues | 15% | 13% | 14% | 13% | ||
Dell | ||||||
Related Party Transaction [Line Items] | ||||||
Commercial framework agreement, term | 5 years | |||||
Commercial framework agreement, renewal term | 1 year | |||||
Customer deposits | $ 303 | $ 303 | $ 298 | |||
Dell | Customer Concentration Risk | Dell acting as OEM | ||||||
Related Party Transaction [Line Items] | ||||||
Percentage of revenues | 6% | 5% | 5% | 5% | ||
Dell | Revenue Benchmark | Customer Concentration Risk | ||||||
Related Party Transaction [Line Items] | ||||||
Concentration risk, percentage (more than 10%) | 37% | 38% | 38% | 37% |
Related Parties - Schedule of R
Related Parties - Schedule of Related Party Transactions (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Oct. 28, 2022 | Oct. 29, 2021 | Oct. 28, 2022 | Oct. 29, 2021 | Jan. 28, 2022 | |
Related Party Transaction [Line Items] | |||||
Unearned Revenue | $ 11,217 | $ 11,217 | $ 11,222 | ||
Dell | Reseller revenue | |||||
Related Party Transaction [Line Items] | |||||
Revenue and Receipts | 1,184 | $ 1,183 | 3,634 | $ 3,380 | |
Unearned Revenue | 5,448 | 5,448 | 5,550 | ||
Dell | Internal-use revenue | |||||
Related Party Transaction [Line Items] | |||||
Revenue and Receipts | 13 | 17 | 41 | 43 | |
Unearned Revenue | 24 | 24 | $ 39 | ||
Dell | Purchases and leases of products and purchases of services | |||||
Related Party Transaction [Line Items] | |||||
Related party costs | 52 | 57 | 147 | 164 | |
Dell | Dell subsidiary support and administrative costs | |||||
Related Party Transaction [Line Items] | |||||
Related party costs | $ 1 | $ 8 | $ 6 | $ 32 |
Related Parties - Dell Financia
Related Parties - Dell Financial Services (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Oct. 28, 2022 | Oct. 29, 2021 | Oct. 28, 2022 | Oct. 29, 2021 | |
Financial Services | Dell | ||||
Related Party Transaction [Line Items] | ||||
Financing fees | $ 0 | $ 0 | $ 25 | $ 20 |
Related Parties - Tax Agreement
Related Parties - Tax Agreements with Dell (Details) - USD ($) $ in Millions | Oct. 28, 2022 | Jan. 28, 2022 |
Related Party Transaction [Line Items] | ||
Due from related parties, current | $ 821 | $ 1,438 |
Due from related parties, non-current | 189 | 199 |
Due to related parties, current | 201 | 132 |
Due to related parties, non-current | 804 | 909 |
Tax Matters Agreement | Dell | ||
Related Party Transaction [Line Items] | ||
Due from related parties, current | 0 | 6 |
Due from related parties, non-current | 189 | 199 |
Due to related parties, current | 115 | 61 |
Due to related parties, non-current | $ 804 | $ 909 |
Related Parties - Tax Agreeme_2
Related Parties - Tax Agreement with Dell (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Oct. 28, 2022 | Oct. 29, 2021 | Oct. 28, 2022 | Oct. 29, 2021 | Jan. 28, 2022 | |
Related Party Transaction [Line Items] | |||||
Transition tax, payment period | 3 years | ||||
Tax Matters Agreement | Dell | |||||
Related Party Transaction [Line Items] | |||||
Transition tax | $ 445 | $ 445 | $ 504 | ||
Uncertain tax positions | 282 | 282 | $ 276 | ||
Payments made to Dell | 0 | $ 10 | 59 | $ 96 | |
Cash paid for taxes, net | $ 0 | $ 0 | $ 45 |
Commitments and Contingencies -
Commitments and Contingencies - Narrative (Details) $ in Millions | 12 Months Ended | |||||||||||
May 02, 2022 USD ($) | Jun. 23, 2020 USD ($) | Jun. 02, 2020 lawsuit patent | Mar. 05, 2020 stockholder shares | Jan. 24, 2020 USD ($) Patent | Oct. 22, 2019 Patent | Apr. 25, 2019 trademark Patent | Jan. 29, 2021 USD ($) | Oct. 28, 2022 USD ($) | Apr. 29, 2022 USD ($) | Dec. 21, 2020 Patent | Jan. 31, 2020 USD ($) | |
Appraisal Action | ||||||||||||
Loss Contingencies [Line Items] | ||||||||||||
Number of petitioners | stockholder | 2 | |||||||||||
Aggregate number of shares seeking a judicial determination of fair value (in shares) | shares | 10,000,100 | |||||||||||
Payments to dissenting stockholders | $ | $ 91 | |||||||||||
Settlement amount awarded, to be funded by insurance | $ | $ 43 | |||||||||||
Accrued loss contingency | $ | $ 31 | $ 43 | ||||||||||
Insurance settlement receivable, current | $ | $ 31 | $ 43 | ||||||||||
Cirba Inc. Vs. VMware | ||||||||||||
Loss Contingencies [Line Items] | ||||||||||||
Accrued loss contingency | $ | $ 237 | |||||||||||
Patent infringement claims | Patent | 2 | |||||||||||
Trademark infringement claims | trademark | 3 | |||||||||||
Number of patents allegedly infringed upon | Patent | 4 | |||||||||||
Number of patents willfully infringed upon | Patent | 2 | |||||||||||
Damages awarded | $ | $ 237 | |||||||||||
Number of patents that survived reexamination | Patent | 1 | |||||||||||
Number of patents granted with reexamination | Patent | 1 | |||||||||||
Number of patents found invalid through an inter partes review | Patent | 1 | |||||||||||
Number of patents undergoing a post-grant review | Patent | 1 | |||||||||||
Derecognition of estimated loss accrual | $ | $ 237 | |||||||||||
WSOU Investments LLC vs VMware | ||||||||||||
Loss Contingencies [Line Items] | ||||||||||||
Number of lawsuits | lawsuit | 4 | |||||||||||
Asserted patents dropped | patent | 1 | |||||||||||
Asserted patents remaining | patent | 3 |
Definite-Lived Intangible Ass_3
Definite-Lived Intangible Assets, Net - Intangible Assets (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Oct. 28, 2022 | Oct. 29, 2021 | Oct. 28, 2022 | Oct. 29, 2021 | Jan. 28, 2022 | |
Finite-Lived Intangible Assets [Line Items] | |||||
Gross Carrying Amount | $ 1,516 | $ 1,516 | $ 1,688 | ||
Accumulated Amortization | (990) | (990) | (974) | ||
Net Book Value | 526 | 526 | 714 | ||
Amortization expense | 62 | $ 75 | 192 | $ 228 | |
Purchased technology | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Gross Carrying Amount | 806 | 806 | 836 | ||
Accumulated Amortization | (586) | (586) | (501) | ||
Net Book Value | 220 | $ 220 | $ 335 | ||
Purchased technology | Weighted Average | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Weighted-Average Useful Lives (in years) | 5 years 3 months 18 days | 5 years 3 months 18 days | |||
Customer relationships and customer lists | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Gross Carrying Amount | 641 | $ 641 | $ 721 | ||
Accumulated Amortization | (359) | (359) | (376) | ||
Net Book Value | 282 | $ 282 | $ 345 | ||
Customer relationships and customer lists | Weighted Average | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Weighted-Average Useful Lives (in years) | 11 years 10 months 24 days | 11 years 6 months | |||
Trademarks and tradenames | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Gross Carrying Amount | 69 | $ 69 | $ 131 | ||
Accumulated Amortization | (45) | (45) | (97) | ||
Net Book Value | $ 24 | $ 24 | $ 34 | ||
Trademarks and tradenames | Weighted Average | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Weighted-Average Useful Lives (in years) | 6 years 9 months 18 days | 7 years 8 months 12 days |
Definite-Lived Intangible Ass_4
Definite-Lived Intangible Assets, Net - Amortization of Intangible Assets (Details) - USD ($) $ in Millions | Oct. 28, 2022 | Jan. 28, 2022 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Remainder of 2023 | $ 62 | |
2024 | 202 | |
2025 | 109 | |
2026 | 69 | |
2027 | 39 | |
Thereafter | 45 | |
Net Book Value | $ 526 | $ 714 |
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 Millions | 3 Months Ended | 9 Months Ended | ||
Oct. 28, 2022 | Oct. 29, 2021 | Oct. 28, 2022 | Oct. 29, 2021 | |
Earnings Per Share [Abstract] | ||||
Net income, basic | $ 231 | $ 398 | $ 820 | $ 1,234 |
Net income, diluted | $ 231 | $ 398 | $ 820 | $ 1,234 |
Weighted-average shares, basic (in shares) | 423,993 | 419,456 | 422,194 | 419,309 |
Effect of other dilutive securities (in shares) | 2,335 | 2,307 | 2,296 | 2,892 |
Weighted-average shares, diluted (in shares) | 426,328 | 421,763 | 424,490 | 422,201 |
Net income per weighted-average share, basic (in USD per share) | $ 0.55 | $ 0.95 | $ 1.94 | $ 2.94 |
Net income per weighted-average share, diluted (in USD per share) | $ 0.54 | $ 0.94 | $ 1.93 | $ 2.92 |
Net Income Per Share - Anti-Dil
Net Income Per Share - Anti-Dilutive Shares Excluded From Net Income (Details) - Common Stock - shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 28, 2022 | Oct. 29, 2021 | Oct. 28, 2022 | Oct. 29, 2021 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Anti-dilutive securities, amount (in shares) | 607 | 190 | 739 | 328 |
Employee stock options | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Anti-dilutive securities, amount (in shares) | 6 | 9 | 86 | 17 |
Restricted stock units | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Anti-dilutive securities, amount (in shares) | 601 | 181 | 653 | 311 |
Realignment (Narrative) (Detail
Realignment (Narrative) (Details) | 3 Months Ended |
Jul. 29, 2022 position | |
Restructuring and Related Activities [Abstract] | |
Number of positions eliminated | 80 |
Cash, Cash Equivalents, Restr_3
Cash, Cash Equivalents, Restricted Cash and Short-Term Investments - Cash and Cash Equivalents (Details) - USD ($) $ in Millions | Oct. 28, 2022 | Jan. 28, 2022 |
Schedule of Investments [Line Items] | ||
Cash and cash equivalents | $ 3,972 | $ 3,614 |
Cash equivalents | $ 3,300 | 3,000 |
Money-market funds | ||
Schedule of Investments [Line Items] | ||
Cash equivalents | 3,000 | |
Time deposits | ||
Schedule of Investments [Line Items] | ||
Cash equivalents | $ 34 |
Cash, Cash Equivalents, Restr_4
Cash, Cash Equivalents, Restricted Cash and Short-Term Investments - Restricted Cash (Details) - USD ($) $ in Millions | Oct. 28, 2022 | Jan. 28, 2022 | Oct. 29, 2021 | Jan. 29, 2021 |
Investments, Debt and Equity Securities [Abstract] | ||||
Cash and cash equivalents | $ 3,972 | $ 3,614 | ||
Restricted cash within other current assets | 26 | 43 | ||
Restricted cash within other assets | 3 | 6 | ||
Total cash, cash equivalents and restricted cash | $ 4,001 | $ 3,663 | $ 12,553 | $ 4,770 |
Cash, Cash Equivalents, Restr_5
Cash, Cash Equivalents, Restricted Cash and Short-Term Investments - Short-Term Investments (Details) - USD ($) $ in Millions | Oct. 28, 2022 | Jan. 28, 2022 |
Investments, Debt and Equity Securities [Abstract] | ||
Short-term investments | $ 0 | $ 19 |
Debt - Unsecured Senior Notes (
Debt - Unsecured Senior Notes (Details) $ in Millions | 3 Months Ended | 9 Months Ended | ||||
Aug. 02, 2021 USD ($) debt_instrument | Oct. 28, 2022 USD ($) | Oct. 29, 2021 USD ($) | Oct. 28, 2022 USD ($) | Oct. 29, 2021 USD ($) | Jan. 28, 2022 USD ($) | |
Debt Instrument [Line Items] | ||||||
Proceeds from issuance of senior notes, net of issuance costs | $ 0 | $ 5,944 | ||||
Interest expense | $ 77 | $ 74 | 222 | 173 | ||
Senior Notes | ||||||
Debt Instrument [Line Items] | ||||||
Debt discount | 13 | 13 | $ 15 | |||
Interest expense | $ 60 | $ 72 | $ 183 | $ 169 | ||
Repurchase price as percent of principal | 101% | |||||
Senior Notes | 2021 Senior Notes | ||||||
Debt Instrument [Line Items] | ||||||
Number of debt instruments | debt_instrument | 5 | |||||
Proceeds from issuance of senior notes, net of issuance costs | $ 5,900 | |||||
Debt discount | 11 | |||||
Debt issuance costs | $ 47 |
Debt - Carrying Value of Senior
Debt - Carrying Value of Senior Notes (Details) - USD ($) $ in Millions | Oct. 28, 2022 | Jan. 28, 2022 |
Debt Instrument [Line Items] | ||
Net carrying amount | $ 9,686 | $ 12,671 |
Current portion of long-term debt | 1,000 | 0 |
Senior Notes | ||
Debt Instrument [Line Items] | ||
Long-term debt | 9,250 | 9,250 |
Less: unamortized discount | (13) | (15) |
Less: unamortized debt issuance costs | (50) | (61) |
Net carrying amount | 9,187 | 9,174 |
Current portion of long-term debt | 1,000 | 0 |
Long-term debt | $ 8,187 | $ 9,174 |
Senior Notes | 3.90% Senior Note Due August 21, 2027 | ||
Debt Instrument [Line Items] | ||
Interest rate | 3.90% | 3.90% |
Long-term debt | $ 1,250 | $ 1,250 |
Effective Interest Rate | 4.05% | |
Senior Notes | 4.50% Senior Note Due May 15, 2025 | ||
Debt Instrument [Line Items] | ||
Interest rate | 4.50% | 4.50% |
Long-term debt | $ 750 | $ 750 |
Effective Interest Rate | 4.70% | |
Senior Notes | 4.65% Senior Note Due May 15, 2027 | ||
Debt Instrument [Line Items] | ||
Interest rate | 4.65% | 4.65% |
Long-term debt | $ 500 | $ 500 |
Effective Interest Rate | 4.80% | |
Senior Notes | 4.70% Senior Note Due May 15, 2030 | ||
Debt Instrument [Line Items] | ||
Interest rate | 4.70% | 4.70% |
Long-term debt | $ 750 | $ 750 |
Effective Interest Rate | 4.86% | |
Senior Notes | 0.60% Senior Note Due August 15, 2023 | ||
Debt Instrument [Line Items] | ||
Interest rate | 0.60% | 0.60% |
Long-term debt | $ 1,000 | $ 1,000 |
Effective Interest Rate | 0.95% | |
Senior Notes | 1.00% Senior Note Due August 15, 2024 | ||
Debt Instrument [Line Items] | ||
Interest rate | 1% | 1% |
Long-term debt | $ 1,250 | $ 1,250 |
Effective Interest Rate | 1.23% | |
Senior Notes | 1.40% Senior Note Due August 15, 2026 | ||
Debt Instrument [Line Items] | ||
Interest rate | 1.40% | 1.40% |
Long-term debt | $ 1,500 | $ 1,500 |
Effective Interest Rate | 1.61% | |
Senior Notes | 1.80% Senior Note Due August 15, 2028 | ||
Debt Instrument [Line Items] | ||
Interest rate | 1.80% | 1.80% |
Long-term debt | $ 750 | $ 750 |
Effective Interest Rate | 2.01% | |
Senior Notes | 2.20% Senior Note Due August 15, 2031 | ||
Debt Instrument [Line Items] | ||
Interest rate | 2.20% | 2.20% |
Long-term debt | $ 1,500 | $ 1,500 |
Effective Interest Rate | 2.32% |
Debt - Future Principal Payment
Debt - Future Principal Payments (Details) - Senior Notes - USD ($) $ in Millions | Oct. 28, 2022 | Jan. 28, 2022 |
Debt Instrument [Line Items] | ||
Remainder of 2023 | $ 0 | |
2024 | 1,000 | |
2025 | 1,250 | |
2026 | 750 | |
2027 | 1,500 | |
Thereafter | 4,750 | |
Total | $ 9,250 | $ 9,250 |
Debt - Senior Unsecured Term Lo
Debt - Senior Unsecured Term Loan Facility (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||||||||
Oct. 11, 2022 | Jul. 06, 2022 | Apr. 04, 2022 | Jan. 25, 2022 | Nov. 01, 2021 | Sep. 02, 2021 | Oct. 28, 2022 | Oct. 29, 2021 | Oct. 28, 2022 | Oct. 29, 2021 | Jan. 28, 2022 | |
Debt Instrument [Line Items] | |||||||||||
Repayment of term loan | $ 2,000 | $ 0 | |||||||||
Long-term debt | $ 9,686 | 9,686 | $ 12,671 | ||||||||
Interest expense | 77 | $ 74 | 222 | $ 173 | |||||||
VMW Term Loan | Senior Unsecured Term Loan Facility | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Term loan maximum borrowing capacity | $ 4,000 | ||||||||||
Proceeds from debt issuance | $ 4,000 | ||||||||||
Repayment of term loan | $ 500 | $ 750 | $ 750 | $ 500 | |||||||
Long-term debt | $ 1,500 | $ 1,500 | $ 3,500 | ||||||||
Weighted average interest rate | 4.19% | 4.19% | |||||||||
Interest expense | $ 17 | $ 39 | |||||||||
VMW Term Loan | 3-Year Senior Unsecured Term Loan Facility | Senior Unsecured Term Loan Facility | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt term | 3 years | ||||||||||
VMW Term Loan | 5-Year Senior Unsecured Term Loan Facility | Senior Unsecured Term Loan Facility | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt term | 5 years |
Debt - Revolving Credit Facilit
Debt - Revolving Credit Facility (Details) | Sep. 02, 2021 USD ($) extension | Oct. 28, 2022 USD ($) | Jan. 28, 2022 USD ($) |
Line of Credit Facility [Line Items] | |||
Long-term debt | $ 9,686,000,000 | $ 12,671,000,000 | |
Revolving Credit Facility | Line of Credit | |||
Line of Credit Facility [Line Items] | |||
Credit facility, maximum borrowing capacity | $ 1,500,000,000 | ||
Debt term | 5 years | ||
Number of extensions | extension | 2 | ||
Extension period | 1 year | ||
Long-term debt | $ 0 | $ 0 |
Fair Value Measurements - Fair
Fair Value Measurements - Fair Value Hierarchy (Details) - USD ($) $ in Millions | Oct. 28, 2022 | Jan. 28, 2022 |
Short-term Investments | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Short-term investments | $ 19 | |
Level 1 | Short-term Investments | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Short-term investments | 19 | |
Level 2 | Short-term Investments | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Short-term investments | 0 | |
Cash equivalents | Cash and Cash Equivalents | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash equivalents | $ 3,296 | 3,032 |
Cash equivalents | Level 1 | Cash and Cash Equivalents | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash equivalents | 3,283 | 2,998 |
Cash equivalents | Level 2 | Cash and Cash Equivalents | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash equivalents | 13 | 34 |
Money-market funds | Cash and Cash Equivalents | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash equivalents | 3,283 | 2,998 |
Money-market funds | Level 1 | Cash and Cash Equivalents | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash equivalents | 3,283 | 2,998 |
Money-market funds | Level 2 | Cash and Cash Equivalents | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash equivalents | 0 | 0 |
Time deposits | Cash and Cash Equivalents | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash equivalents | 13 | 34 |
Time deposits | Level 1 | Cash and Cash Equivalents | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash equivalents | 0 | 0 |
Time deposits | Level 2 | Cash and Cash Equivalents | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash equivalents | $ 13 | $ 34 |
Fair Value Measurements - Narra
Fair Value Measurements - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||||
Oct. 28, 2022 | Apr. 29, 2022 | Oct. 29, 2021 | Oct. 28, 2022 | Oct. 29, 2021 | Jan. 28, 2022 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Deferred compensation plan assets | $ 156 | $ 156 | $ 162 | |||
Plan liabilities in accrued expenses and other | 0 | 0 | 16 | |||
Plan liabilities in other liabilities | 142 | 142 | 146 | |||
Investment in equity securities sold | $ 38 | 88 | $ 75 | |||
Unrealized loss on investments | (11) | (30) | ||||
Securities without readily determinable fair value | 92 | 92 | 163 | |||
Gross upward adjustments | 0 | $ 21 | 0 | $ 32 | ||
Short-term Investments | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Investment at fair value included in short-term investments | 19 | |||||
Investment in equity securities sold | $ 19 | |||||
Level 2 | Short-term Investments | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Investment at fair value included in short-term investments | 0 | |||||
Level 2 | Senior Notes | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Fair value of debt | $ 8,100 | $ 8,100 | $ 9,300 |
Derivatives and Hedging Activ_2
Derivatives and Hedging Activities (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Oct. 28, 2022 | Oct. 29, 2021 | Oct. 28, 2022 | Oct. 29, 2021 | Jan. 28, 2022 | |
Derivative [Line Items] | |||||
Gain on forward contracts not designated as hedging instruments | $ 37 | $ 11 | $ 93 | $ 27 | |
Combined loss on settlement of forward contracts and the underlying foreign currency denominated assets and liabilities | 0 | $ 0 | $ 29 | $ 0 | |
Foreign Exchange Forward | Not Designated As Hedging Instrument | |||||
Derivative [Line Items] | |||||
Forward contract maturity | 1 month | 1 month | |||
Notional amount | 862 | $ 862 | $ 1,500 | ||
Foreign Exchange Forward | Cash Flow Hedging | Designated As Hedging Instrument | |||||
Derivative [Line Items] | |||||
Notional amount | $ 176 | $ 176 | $ 642 | ||
Maximum | Foreign Exchange Forward | Cash Flow Hedging | Designated As Hedging Instrument | |||||
Derivative [Line Items] | |||||
Forward contract maturity | 14 months | 14 months |
Leases - Narrative (Details)
Leases - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Oct. 28, 2022 | Oct. 29, 2021 | Oct. 28, 2022 | Oct. 29, 2021 | |
Lessee, Lease, Description [Line Items] | ||||
Sublease income | $ 0 | $ 0 | $ 0 | $ 16 |
Minimum | ||||
Lessee, Lease, Description [Line Items] | ||||
Term of lease contract | 1 month | |||
Maximum | ||||
Lessee, Lease, Description [Line Items] | ||||
Term of lease contract | 24 years |
Leases - Lease Cost (Details)
Leases - Lease Cost (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Oct. 28, 2022 | Oct. 29, 2021 | Oct. 28, 2022 | Oct. 29, 2021 | |
Leases [Abstract] | ||||
Operating lease expense | $ 48 | $ 48 | $ 147 | $ 144 |
Finance lease expense: | ||||
Amortization of ROU assets | 2 | 2 | 5 | 5 |
Interest on lease liabilities | 0 | 0 | 1 | 1 |
Total finance lease expense | 2 | 2 | 6 | 6 |
Short-term lease expense | 0 | 0 | 0 | 1 |
Variable lease expense | 8 | 8 | 24 | 23 |
Total lease expense | $ 58 | $ 58 | $ 177 | $ 174 |
Leases - Lease Cash Flow (Detai
Leases - Lease Cash Flow (Details) - USD ($) $ in Millions | 9 Months Ended | |
Oct. 28, 2022 | Oct. 29, 2021 | |
Cash paid for amounts included in the measurement of lease liabilities: | ||
Operating cash flows from operating leases | $ 130 | $ 129 |
Operating cash flows from finance leases | 1 | 1 |
Financing cash flows from finance leases | 4 | 3 |
ROU assets obtained in exchange for lease liabilities: | ||
Operating leases | 58 | 124 |
Finance leases | $ 1 | $ 0 |
Leases - Lease Assets and Liabi
Leases - Lease Assets and Liabilities (Details) - USD ($) $ in Millions | Oct. 28, 2022 | Jan. 28, 2022 |
Operating Leases | ||
ROU assets, non-current | $ 998 | $ 1,062 |
Lease liabilities, current | 140 | 145 |
Lease liabilities, non-current | 849 | 927 |
Total lease liabilities | 989 | 1,072 |
Finance Leases | ||
ROU assets, non-current | 43 | 46 |
Lease liabilities, current | 6 | 5 |
Lease liabilities, non-current | 36 | 43 |
Total lease liabilities | $ 42 | $ 48 |
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | Other assets | Other assets |
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | Property, Plant, and Equipment and Finance Lease Right-of-Use Asset, after Accumulated Depreciation and Amortization | Property, Plant, and Equipment and Finance Lease Right-of-Use Asset, after Accumulated Depreciation and Amortization |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | Accrued expenses and other | Accrued expenses and other |
Finance Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration] | Accrued expenses and other | Accrued expenses and other |
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | Other liabilities | Other liabilities |
Leases - Lease Term and Discoun
Leases - Lease Term and Discount Rate (Details) | Oct. 28, 2022 | Jan. 28, 2022 |
Weighted-average remaining lease term (in years) | ||
Operating leases | 11 years 10 months 24 days | 11 years 10 months 24 days |
Finance leases | 6 years 4 months 24 days | 7 years 3 months 18 days |
Weighted-average discount rate | ||
Operating leases | 3.40% | 3.20% |
Finance leases | 2.90% | 2.90% |
Leases - Lease Liability Maturi
Leases - Lease Liability Maturity (Details) - USD ($) $ in Millions | Oct. 28, 2022 | Jan. 28, 2022 |
Operating Leases | ||
Remainder of 2023 | $ 46 | |
2024 | 166 | |
2025 | 125 | |
2026 | 123 | |
2027 | 105 | |
Thereafter | 685 | |
Total future minimum lease payments | 1,250 | |
Less: Imputed interest | (261) | |
Total lease liabilities | 989 | $ 1,072 |
Finance Leases | ||
Remainder of 2023 | 2 | |
2024 | 7 | |
2025 | 6 | |
2026 | 7 | |
2027 | 7 | |
Thereafter | 17 | |
Total future minimum lease payments | 46 | |
Less: Imputed interest | (4) | |
Total lease liabilities | 42 | $ 48 |
Legally binding minimum lease payments for leases signed but not yet commenced | $ 53 |
Stockholders' Equity - Stock Re
Stockholders' Equity - Stock Repurchase Program (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 3 Months Ended | 9 Months Ended | |||
Oct. 28, 2022 | Oct. 29, 2021 | Oct. 28, 2022 | Oct. 29, 2021 | Oct. 07, 2021 | |
Class of Stock [Line Items] | |||||
Aggregate purchase price | $ 143 | $ 89 | $ 872 | ||
Common Stock | |||||
Class of Stock [Line Items] | |||||
Authorized repurchase amount under stock repurchase program | $ 2,000 | ||||
Remaining authorized repurchase amount | $ 1,600 | 1,600 | |||
Aggregate purchase price | $ 0 | $ 143 | $ 89 | $ 872 | |
Class A common stock repurchased (in shares) | 0 | 956 | 803 | 5,699 | |
Weighted-average price per share (in USD per share) | $ 0 | $ 149.61 | $ 111.33 | $ 153.07 |
Stockholders' Equity - Summary
Stockholders' Equity - Summary of Restricted Stock Activity (Details) - Common Stock $ / shares in Units, $ in Millions | 9 Months Ended |
Oct. 28, 2022 USD ($) $ / shares shares | |
Restricted stock units | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Restricted stock unit conversion into common stock (in shares) | 1 |
PSU | Minimum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Conversion ratio | 0.1 |
PSU | Maximum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Conversion ratio | 2 |
Restricted Stock | |
Number of Units | |
Outstanding. Ending balance (in shares) | 24,700,000 |
Weighted-Average Grant Date Fair Value (per unit) | |
Fair value of restricted stock-based awards, vested | $ | $ 724 |
Aggregate intrinsic value, nonvested | $ | $ 2,800 |
Restricted Stock | VMware RSUs | |
Number of Units | |
Outstanding, Beginning balance (in shares) | 23,002,000 |
Granted (in shares) | 11,011,000 |
Vested (in shares) | (6,108,000) |
Forfeited (in shares) | (3,184,000) |
Outstanding. Ending balance (in shares) | 24,721,000 |
Weighted-Average Grant Date Fair Value (per unit) | |
Outstanding, Beginning balance (in USD per share) | $ / shares | $ 123.06 |
Granted (in USD per share) | $ / shares | 114.68 |
Vested (in USD per share) | $ / shares | 123.86 |
Forfeited (in USD per share) | $ / shares | 123.18 |
Outstanding, Ending balance (in USD per share) | $ / shares | $ 119.12 |
Stockholders' Equity - Net Exce
Stockholders' Equity - Net Excess Tax Benefits and Tax Deficiencies (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Oct. 28, 2022 | Oct. 29, 2021 | Oct. 28, 2022 | Oct. 29, 2021 | |
Stockholders' Equity Note [Abstract] | ||||
Net excess tax benefits | $ 0 | $ 0 | $ 0 | $ 19 |
Segment Information - Narrative
Segment Information - Narrative (Details) - segment | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Oct. 28, 2022 | Oct. 29, 2021 | Oct. 28, 2022 | Oct. 29, 2021 | Jan. 28, 2022 | |
Revenues From External Customers And Long-Lived Assets [Line Items] | |||||
Number of reportable segments | 1 | ||||
United States | Geographic Concentration Risk | Revenue Benchmark | |||||
Revenues From External Customers And Long-Lived Assets [Line Items] | |||||
Concentration risk, percentage (more than 10%) | 10% | 10% | 10% | 10% | |
United States | Geographic Concentration Risk | Assets Benchmark | |||||
Revenues From External Customers And Long-Lived Assets [Line Items] | |||||
Concentration risk, percentage (more than 10%) | 10% | 10% | |||
India | Geographic Concentration Risk | Assets Benchmark | |||||
Revenues From External Customers And Long-Lived Assets [Line Items] | |||||
Concentration risk, percentage (more than 10%) | 13% |
Segment Information - Schedule
Segment Information - Schedule of Revenue by Type (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Oct. 28, 2022 | Oct. 29, 2021 | Oct. 28, 2022 | Oct. 29, 2021 | ||
Disaggregation of Revenue [Line Items] | |||||
Revenue | [1] | $ 3,211 | $ 3,188 | $ 9,635 | $ 9,320 |
Total license and subscription and SaaS | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue | 1,609 | 1,530 | 4,820 | 4,429 | |
License | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue | [1] | 621 | 710 | 1,990 | 2,093 |
Subscription and SaaS | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue | [1] | 988 | 820 | 2,830 | 2,336 |
Total services | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue | [1] | 1,602 | 1,658 | 4,815 | 4,891 |
Software maintenance | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue | 1,298 | 1,354 | 3,907 | 4,011 | |
Professional services | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue | $ 304 | $ 304 | $ 908 | $ 880 | |
[1]Includes related party revenue as follows (refer to Note D): License $ 436 $ 374 $ 690 $ 661 Subscription and SaaS 259 195 514 368 Services 633 606 1,274 1,194 |
Segment Information - Schedul_2
Segment Information - Schedule of Revenue by Geographic Area (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Oct. 28, 2022 | Oct. 29, 2021 | Oct. 28, 2022 | Oct. 29, 2021 | ||
Revenues From External Customers And Long-Lived Assets [Line Items] | |||||
Revenue | [1] | $ 3,211 | $ 3,188 | $ 9,635 | $ 9,320 |
United States | |||||
Revenues From External Customers And Long-Lived Assets [Line Items] | |||||
Revenue | 1,614 | 1,582 | 4,780 | 4,587 | |
International | |||||
Revenues From External Customers And Long-Lived Assets [Line Items] | |||||
Revenue | $ 1,597 | $ 1,606 | $ 4,855 | $ 4,733 | |
[1]Includes related party revenue as follows (refer to Note D): License $ 436 $ 374 $ 690 $ 661 Subscription and SaaS 259 195 514 368 Services 633 606 1,274 1,194 |
Segment Information - Schedul_3
Segment Information - Schedule of Long-Lived Assets by Geographic Area (Details) - USD ($) $ in Millions | Oct. 28, 2022 | Jan. 28, 2022 |
Revenues From External Customers And Long-Lived Assets [Line Items] | ||
Long-lived assets by geographic area | $ 1,119 | $ 1,123 |
United States | ||
Revenues From External Customers And Long-Lived Assets [Line Items] | ||
Long-lived assets by geographic area | 859 | 882 |
International | ||
Revenues From External Customers And Long-Lived Assets [Line Items] | ||
Long-lived assets by geographic area | $ 260 | $ 241 |