Cover Page
Cover Page - USD ($) $ in Billions | 12 Months Ended | ||
Feb. 03, 2023 | Mar. 21, 2023 | Jul. 29, 2022 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Feb. 03, 2023 | ||
Current Fiscal Year End Date | --02-03 | ||
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 Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | true | ||
Entity Shell Company | false | ||
Entity Public Float | $ 24.5 | ||
Entity Common Stock, Shares Outstanding | 428,483,378 | ||
Documents Incorporated by Reference | DOCUMENTS INCORPORATED BY REFERENCE Information required in response to Part III of Form 10-K (Items 10, 11, 12, 13 and 14) is hereby incorporated by reference to portions of the registrant’s Proxy Statement for the Annual Meeting of Stockholders to be held in 2023. The Proxy Statement will be filed by the registrant with the Securities and Exchange Commission no later than 120 days after the end of the registrant’s fiscal year ended February 3, 2023. | ||
Entity Central Index Key | 0001124610 | ||
Document Fiscal Year Focus | 2023 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false |
Audit Information
Audit Information | 12 Months Ended |
Feb. 03, 2023 | |
Audit Information [Abstract] | |
Auditor Name | PricewaterhouseCoopers LLP |
Auditor Location | San Jose, California |
Auditor Firm ID | 238 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Thousands, $ in Millions | 12 Months Ended | |||
Feb. 03, 2023 | Jan. 28, 2022 | Jan. 29, 2021 | ||
Revenue: | ||||
Revenue | [1] | $ 13,350 | $ 12,851 | $ 11,767 |
Operating expenses: | ||||
Research and development | [2] | 3,317 | 3,057 | 2,816 |
Sales and marketing | [2] | 4,391 | 4,067 | 3,711 |
General and administrative | [2] | 1,130 | 1,068 | 767 |
Realignment | [2] | 8 | 1 | 42 |
Operating income | 2,022 | 2,387 | 2,388 | |
Investment income | 65 | 2 | 7 | |
Interest expense | (304) | (252) | (204) | |
Other income (expense), net | 9 | (52) | 191 | |
Income before income tax | 1,792 | 2,085 | 2,382 | |
Income tax provision | 478 | 265 | 324 | |
Net income, basic | 1,314 | 1,820 | 2,058 | |
Net income, diluted | $ 1,314 | $ 1,820 | $ 2,058 | |
Net income per weighted-average share, basic (in USD per share) | $ 3.11 | $ 4.34 | $ 4.90 | |
Net income per weighted-average share, diluted (in USD per share) | $ 3.09 | $ 4.31 | $ 4.86 | |
Weighted-average shares, basic (in shares) | 423,150 | 419,504 | 419,841 | |
Weighted-average shares, diluted (in shares) | 425,860 | 422,394 | 423,240 | |
License | ||||
Revenue: | ||||
Revenue | [1] | $ 2,835 | $ 3,128 | $ 3,033 |
Operating expenses: | ||||
Cost of revenue | [2] | 154 | 152 | 163 |
Subscription and SaaS | ||||
Revenue: | ||||
Revenue | [1] | 4,012 | 3,205 | 2,587 |
Operating expenses: | ||||
Cost of revenue | [2] | 788 | 690 | 588 |
Services | ||||
Revenue: | ||||
Revenue | [1] | 6,503 | 6,518 | 6,147 |
Operating expenses: | ||||
Cost of revenue | [2] | $ 1,540 | $ 1,429 | $ 1,292 |
[1]Includes related party revenue as follows (refer to Note C): License $ 1,395 $ 1,530 $ 1,598 Subscription and SaaS 1,132 820 524 Services 2,566 2,470 1,994 Cost of license revenue $ 1 $ 1 $ 1 Cost of subscription and SaaS revenue 25 21 19 Cost of services revenue 106 92 99 Research and development 616 528 524 Sales and marketing 376 302 322 General and administrative 166 131 157 |
CONSOLIDATED STATEMENTS OF IN_2
CONSOLIDATED STATEMENTS OF INCOME (Parenthetical) $ in Millions | 12 Months Ended | |||
Feb. 03, 2023 USD ($) | Jan. 28, 2022 USD ($) | Jan. 29, 2021 USD ($) | ||
Revenue | [1] | $ 13,350 | $ 12,851 | $ 11,767 |
Stock-based compensation | 1,290 | 1,075 | 1,122 | |
Cost of license revenue | ||||
Stock-based compensation | 1 | 1 | 1 | |
Cost of subscription and SaaS revenue | ||||
Stock-based compensation | 25 | 21 | 19 | |
Cost of services revenue | ||||
Stock-based compensation | 106 | 92 | 99 | |
Research and development | ||||
Stock-based compensation | 616 | 528 | 524 | |
Sales and marketing | ||||
Stock-based compensation | 376 | 302 | 322 | |
General and administrative | ||||
Stock-based compensation | 166 | 131 | 157 | |
License | ||||
Revenue | [1] | 2,835 | 3,128 | 3,033 |
License | Dell | ||||
Revenue | 1,395 | 1,530 | 1,598 | |
Subscription and SaaS | ||||
Revenue | [1] | 4,012 | 3,205 | 2,587 |
Subscription and SaaS | Dell | ||||
Revenue | 1,132 | 820 | 524 | |
Services | ||||
Revenue | [1] | 6,503 | 6,518 | 6,147 |
Services | Dell | ||||
Revenue | $ 2,566 | $ 2,470 | $ 1,994 | |
[1]Includes related party revenue as follows (refer to Note C): License $ 1,395 $ 1,530 $ 1,598 Subscription and SaaS 1,132 820 524 Services 2,566 2,470 1,994 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Millions | 12 Months Ended | ||
Feb. 03, 2023 | Jan. 28, 2022 | Jan. 29, 2021 | |
Statement of Comprehensive Income [Abstract] | |||
Net income | $ 1,314 | $ 1,820 | $ 2,058 |
Changes in fair value of effective foreign currency forward contracts: | |||
Unrealized gains (losses), net of tax provision (benefit) of $— for all periods | 0 | (1) | (1) |
Reclassification of (gains) losses realized during the period, net of tax (provision) benefit of $— for all periods | 1 | 1 | 0 |
Net change in fair value of effective foreign currency forward contracts | 1 | 0 | (1) |
Total other comprehensive income (loss) | 1 | 0 | (1) |
Comprehensive income, net of taxes | $ 1,315 | $ 1,820 | $ 2,057 |
CONSOLIDATED STATEMENTS OF CO_2
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parentheticals) - USD ($) $ in Millions | 12 Months Ended | ||
Feb. 03, 2023 | Jan. 28, 2022 | Jan. 29, 2021 | |
Statement of Comprehensive Income [Abstract] | |||
Tax provision (benefit) on unrealized gains (losses) on derivatives | $ 0 | $ 0 | $ 0 |
Tax (provision) benefit on reclassification of gains (losses) realized on derivatives | $ 0 | $ 0 | $ 0 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Feb. 03, 2023 | Jan. 28, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 5,100 | $ 3,614 |
Short-term investments | 0 | 19 |
Accounts receivable, net of allowance of $9 and $10 | 2,510 | 2,297 |
Due from related parties | 2,078 | 1,438 |
Other current assets | 543 | 598 |
Total current assets | 10,231 | 7,966 |
Property and equipment, net | 1,623 | 1,461 |
Deferred tax assets | 6,157 | 5,906 |
Intangible assets, net | 478 | 714 |
Goodwill | 9,598 | 9,598 |
Due from related parties | 208 | 199 |
Other assets | 2,942 | 2,832 |
Total assets | 31,237 | 28,676 |
Current liabilities: | ||
Accounts payable | 267 | 234 |
Accrued expenses and other | 2,568 | 2,336 |
Customer deposits | 1,087 | 470 |
Current portion of long-term debt | 1,000 | 0 |
Unearned revenue | 7,079 | 6,479 |
Due to related parties | 390 | 132 |
Total current liabilities | 12,391 | 9,651 |
Long-term debt | 9,440 | 12,671 |
Unearned revenue | 5,664 | 4,743 |
Income tax payable | 287 | 242 |
Operating lease liabilities | 845 | 927 |
Due to related parties | 648 | 909 |
Other liabilities | 428 | 409 |
Total liabilities | 29,703 | 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 426,741 and 418,808 shares | 4 | 4 |
Additional paid-in capital | 1,095 | 0 |
Accumulated other comprehensive loss | (4) | (5) |
Retained earnings (accumulated deficit) | 439 | (875) |
Total stockholders’ equity (deficit) | 1,534 | (876) |
Total liabilities and stockholders’ equity (deficit) | $ 31,237 | $ 28,676 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parentheticals) - USD ($) $ in Millions | Feb. 03, 2023 | Jan. 28, 2022 |
Statement of Financial Position [Abstract] | ||
Allowance for credit loss | $ 9 | $ 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) | 426,741,000 | 418,808,000 |
Common stock, shares outstanding (in shares) | 426,741,000 | 418,808,000 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 12 Months Ended | ||
Feb. 03, 2023 | Jan. 28, 2022 | Jan. 29, 2021 | |
Operating activities: | |||
Net income | $ 1,314 | $ 1,820 | $ 2,058 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 1,234 | 1,110 | 1,025 |
Stock-based compensation | 1,290 | 1,075 | 1,122 |
Deferred income taxes, net | (218) | (80) | (152) |
(Gain) loss on equity securities and disposition of assets, net | (6) | 33 | (148) |
Loss on extinguishment of debt | 2 | 21 | 8 |
Other | 5 | 10 | (1) |
Changes in assets and liabilities, net of acquisitions: | |||
Accounts receivable | (218) | (379) | (37) |
Other current assets and other assets | (792) | (852) | (879) |
Due from related parties | (647) | 95 | 19 |
Accounts payable | 38 | 98 | (69) |
Accrued expenses, customer deposits and other liabilities | 499 | 487 | 518 |
Income taxes payable | 283 | 28 | (68) |
Unearned revenue | 1,520 | 908 | 1,013 |
Due to related parties | (4) | (17) | 0 |
Net cash provided by operating activities | 4,300 | 4,357 | 4,409 |
Investing activities: | |||
Additions to property and equipment | (450) | (386) | (329) |
Sales of investments in equity securities | 20 | 77 | 26 |
Purchases of strategic investments | (11) | (11) | (29) |
Proceeds from disposition of assets | 91 | 14 | 28 |
Business combinations, net of cash acquired, and purchases of intangible assets | (17) | (23) | (409) |
Net cash used in investing activities | (367) | (329) | (713) |
Financing activities: | |||
Proceeds from issuance of common stock | 250 | 270 | 273 |
Proceeds from issuance of senior notes, net of issuance costs | 0 | 5,944 | 1,979 |
Borrowings under term loan, net of issuance costs | 0 | 3,998 | 0 |
Repayment of term loan | (2,250) | (500) | (1,500) |
Repayment of current portion of senior notes | 0 | (1,519) | (1,257) |
Repayment of note payable to Dell | 0 | (270) | 0 |
Repurchase of common stock | (89) | (1,169) | (945) |
Shares repurchased for tax withholdings on vesting of restricted stock | (375) | (385) | (412) |
Payment for Special Dividend | 0 | (11,499) | 0 |
Payment to acquire non-controlling interests | 0 | 0 | (91) |
Principal payments on finance lease obligations | (5) | (5) | (4) |
Net cash used in financing activities | (2,469) | (5,135) | (1,957) |
Net increase (decrease) in cash, cash equivalents and restricted cash | 1,464 | (1,107) | 1,739 |
Cash, cash equivalents and restricted cash at beginning of the period | 3,663 | 4,770 | 3,031 |
Cash, cash equivalents and restricted cash at end of the period | 5,127 | 3,663 | 4,770 |
Supplemental disclosures of cash flow information: | |||
Cash paid for interest | 292 | 200 | 200 |
Cash paid for taxes, net | 383 | 331 | 543 |
Non-cash items: | |||
Changes in capital additions, accrued but not paid | (1) | 4 | (10) |
Changes in tax withholdings on vesting of restricted stock, accrued but not paid | $ 11 | $ (7) | $ 1 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT) - USD ($) shares in Thousands, $ in Millions | Total | Class A 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. 31, 2020 | 110,000 | 307,000 | |||||
Beginning balance at Jan. 31, 2020 | $ 7,009 | $ 1 | $ 3 | $ 2,000 | $ 5,009 | $ (4) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Proceeds from issuance of common stock (in shares) | 3,000 | ||||||
Proceeds from issuance of common stock | 273 | 273 | |||||
Repurchase and retirement of common stock (in shares) | (6,944) | (7,000) | |||||
Repurchase and retirement of common stock | (945) | $ (945) | (945) | ||||
Issuance of restricted stock (in shares) | 9,000 | ||||||
Shares withheld for tax withholdings on vesting of restricted stock (in shares) | (3,000) | (3,000) | |||||
Shares withheld for tax withholdings on vesting of restricted stock | (413) | $ (413) | (413) | ||||
Stock-based compensation | 1,116 | 1,116 | |||||
Amount due from tax sharing arrangement | (46) | (46) | |||||
Total other comprehensive income (loss) | (1) | (1) | |||||
Net income | 2,058 | 2,058 | |||||
Ending balance (in shares) at Jan. 29, 2021 | 112,000 | 307,000 | |||||
Ending 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 | 270 | 270 | |||||
Repurchase and retirement of common stock (in shares) | (8,197) | (8,000) | |||||
Repurchase and retirement of common stock | (1,169) | $ (1,169) | (983) | (186) | |||
Issuance of restricted stock (in shares) | 8,000 | ||||||
Shares withheld for tax withholdings on vesting of restricted stock (in shares) | (2,600) | (3,000) | |||||
Shares withheld for tax withholdings on vesting of restricted stock | (378) | $ (378) | (378) | ||||
Stock-based compensation | 1,096 | 1,096 | |||||
Amount due from tax sharing arrangement | (67) | (67) | |||||
Conversion of Class B convertible common stock to Class A common stock (in shares) | 307,000 | (307,000) | |||||
Conversion of Class B convertible common stock to Class A common stock | $ 3 | $ (3) | |||||
Special Dividend | (11,499) | (1,923) | (9,576) | ||||
Total other comprehensive income (loss) | 0 | ||||||
Net income | $ 1,820 | 1,820 | |||||
Ending balance (in shares) at Jan. 28, 2022 | 418,808 | 419,000 | 0 | ||||
Ending balance at Jan. 28, 2022 | $ (876) | $ 4 | $ 0 | 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 | 250 | 250 | |||||
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) | 9,000 | ||||||
Shares withheld for tax withholdings on vesting of restricted stock (in shares) | (3,300) | (3,000) | |||||
Shares withheld for tax withholdings on vesting of restricted stock | (386) | $ (386) | (386) | ||||
Stock-based compensation | 1,320 | 1,320 | |||||
Total other comprehensive income (loss) | 1 | 1 | |||||
Net income | $ 1,314 | 1,314 | |||||
Ending balance (in shares) at Feb. 03, 2023 | 426,741 | 427,000 | 0 | ||||
Ending balance at Feb. 03, 2023 | $ 1,534 | $ 4 | $ 0 | $ 1,095 | $ 439 | $ (4) |
Overview and Basis of Presentat
Overview and Basis of Presentation | 12 Months Ended |
Feb. 03, 2023 | |
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 Pre sentation The consolidated financial statements and accompanying notes are prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for annual financial reporting. On November 1, 2021, VMware’s spin-off from Dell Technologies Inc. (“Dell”) was completed (the “Spin-Off”), and, in accordance with the Separation and Distribution Agreement, effective as of April 14, 2021 (the “Separation Agreement”), upon the satisfaction of all conditions and immediately prior to the Spin-Off, VMware paid an $11.5 billion cash dividend, pro rata, to each of the holders of Class A common stock (“Class A Stock”) and Class B convertible common stock (“Class B Stock”), including Dell (the “Special Dividend”) as of October 29, 2021 (the “Record Date”). VMware funded the Special Dividend in part through the $10.0 billion of indebtedness incurred during fiscal 2022, including $6.0 billion in the senior notes that VMware issued in August 2021 and $4.0 billion in aggregate drawdowns on its senior unsecured term loan facilities on November 1, 2021. Automatically as a result of the Spin-Off, each share of Class B Stock converted into one fully paid and non-assessable share of Class A Stock. 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 39.7% and 9.9%, respectively, of VMware’s outstanding stock, based on the shares outstanding as of February 3, 2023. 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. The fiscal year for VMware is the 52 or 53 weeks ending on the Friday nearest to January 31 of each year. The Company refers to its fiscal years ended February 3, 2023, January 28, 2022 and January 29, 2021 as “fiscal 2023,” “fiscal 2022,” and “fiscal 2021,” respectively. Fiscal 2023 was a 53-week fiscal year, while fiscal 2022 and fiscal 2021 were each 52-week fiscal years. Management believes the assumptions underlying the 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 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 Stock, par value $0.01 per share, of the Company issued and outstanding immediately prior to the effective time of the transaction will be converted into the right to receive, at the election of the holder of such share of Class A 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 Class A Stock entitled to receive the Cash Consideration and the total number of shares of Class A Stock entitled to receive the Stock Consideration will, in each case, be equal to 50% of the aggregate number of shares of Class A Stock issued and outstanding immediately prior to the consummation of the transaction. Holders of Class A 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. On February 17, 2023, in accordance with the Merger Agreement, the Company and Broadcom each delivered to the other a mutual notice to extend the Outside Date (as defined in the Merger Agreement) to May 26, 2023. If the Closing Effective Date (as defined in the Merger Agreement) has not occurred, similar three-month extensions could be noticed by either party (or mutually) five business days prior to each of May 26 and August 26, 2023. 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 Class A 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 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 consolidated statements of cash flows based upon the nature of the underlying transaction. 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. Revenue Recognition VMware derives revenue from licensing software under perpetual, term-based and consumption-based contracts and related software maintenance and support, subscriptions, hosted services, training and consulting services. VMware accounts for a contract with a customer if all criteria defined by ASC 606, Revenue from Contracts with Customers are met, including that collectability of the consideration is probable. At inception of a contract with a customer, the Company evaluates whether the promised products and services represent distinct performance obligations within the context of the contract. Performance obligations that are both capable of being distinct on their own and distinct within the context of the contract are recognized on their own as distinct performance obligations. Performance obligations under which both of these two criteria are not met are recognized as a combined, single performance obligation. Determining whether the Company’s licenses, subscriptions and services are considered distinct performance obligations that should be accounted for separately or together often involves assumptions and significant judgments that can have a significant impact on the timing and amount of revenue recognized. Revenue is recognized upon transfer of control of licenses, subscriptions or services to the customer in an amount that reflects the consideration VMware expects to receive in exchange for those licenses, services or subscriptions. Control of a promised license, subscription or service may be transferred to a customer either at a point in time or over time, which affects the timing of revenue recognition. VMware’s contracts with customers may include a combination of licenses, subscriptions, software-as-a-service (“SaaS”) and services that are accounted for as distinct performance obligations. Licenses that represent distinct performance obligations are recognized at a point in time when the software license keys have been made available to the customer. Licenses sold as part of the Company’s subscriptions that do not represent distinct performance obligations are recognized over time along with the associated services that form a combined performance obligation with the software. Management assesses relevant contractual terms in contracts with customers and applies significant judgment in identifying and accounting for all terms and conditions in certain contracts. Certain contracts include third-party offerings and revenue that may be recognized net of the third-party costs, based upon an assessment as to whether VMware had control of the underlying third-party offering before it is transferred to the customer. Revenue is recognized net of any taxes invoiced to customers, which are subsequently remitted to governmental authorities. From time to time, VMware may enter into revenue and purchase contracts with the same customer within a short period of time. VMware evaluates the underlying economics and fair value of the consideration payable to the customer to determine if any portion of the consideration payable to the customer exceeds the fair value of the goods and services received and should be accounted for as a reduction of the transaction price of the revenue contract. License Revenue VMware generally sells its license software through distributors, resellers, system vendors, systems integrators and its direct sales force. Performance obligations related to license revenue, including the license portion of term licenses, represent functional intellectual property under which a customer has the legal right to the on-premises license. The license provides significant standalone functionality and is a separate performance obligation from the maintenance and support and professional services sold by VMware. On-premises license revenue is recognized at a point in time, upon delivery and transfer of control of the underlying license to the customer. License revenue from software licenses sold to original equipment manufacturers (“OEMs”) is recognized when the sale to the end user occurs. Revenue is recognized upon reporting by the OEMs of their sales, and for the period where information of the underlying sales has not been made available, revenue is recognized based upon estimated sales. Subscription and SaaS Revenue VMware’s subscription and SaaS revenue consists of hosted services, consumption based licensing under VMware Cloud Provider Program (“VCPP”) offerings and certain license sales of its software platform with open source licenses or offerings under which licenses and services are accounted for as combined performance obligations. VMware’s hosted services consist of certain software offerings sold as a service-based technology without the customer’s ability to take possession of the software over the subscription term. Hosted services are recognized as SaaS revenue over time as customers consume the services or ratably over the contract term, commencing upon provisioning of the service. VCPP partners license on-premises software from VMware on a monthly basis under a usage-based model. Generally, contracts with VCPP partners include cancellation rights. Revenue recognition is based on fees associated with reported license consumption by the VCPP partners and includes estimates for the period when consumption information has not been made available. Additionally, VCPP partners also purchase hosted services and revenue is recognized over time as the Company’s partners consume the services or ratably over the contract term, commencing upon provisioning of the service. Subscription sales of the Company’s software platform offering provides customers with a license to its platform over a period of time, which includes, among other items, open-source software, support, enhancements, upgrades and compatibility to certified systems, all of which are offered on an if-and-when available basis. Subscription revenue is recognized ratably over the contract term beginning on the date that the Company’s platform is made available to the customer. Subscription sales also include offerings with licenses that provide customers with access to and the right to utilize the threat intelligence capabilities and ongoing support over a period of time. VMware considers the software license and access to critical threat intelligence capabilities to be a single performance obligation. Subscription revenue is recognized ratably over the contract term beginning on the date the software is delivered to the customer. Subscription and SaaS offerings generally have a duration of one month, one-year, or three-years and are invoiced to the customers either upfront, annually, quarterly or monthly. During the second half of fiscal 2023, VMware introduced termination for convenience (“TFC”) clauses with respect to term-based license offerings in certain enterprise agreements (“EAs”). Revenue from such term-based license offerings subject to TFC clauses is recognized ratably as subscription and SaaS revenue, rather than as license revenue, due to the requirement to refund any unused, pre-paid fees upon termination. Services Revenue VMware’s services revenue generally consists of software maintenance and support and professional services. Software maintenance and support offerings entitle customers to receive major and minor product upgrades, on a when-and-if-available basis, and technical support. Maintenance and support services are comprised of multiple performance obligations including updates, upgrades to licenses and technical support. While separate performance obligations are identified within maintenance and support services, the underlying performance obligations generally have a consistent continuous pattern of transfer to a customer during the term of a contract and therefore, maintenance and support services revenue is recognized ratably over the contract duration. Professional services include design, implementation, training and consulting services. Professional services performed by VMware represent distinct performance obligations as they do not modify or customize licenses sold. These services are not highly interdependent or highly interrelated to licenses sold such that a customer would not be able to use the licenses without the professional services. Revenue from fixed fee professional services engagements is recognized based on progress made toward the total project effort, which can be reasonably estimated. As a practical expedient, VMware recognizes revenue from professional services engagements invoiced on a time and materials basis as the hours are incurred based on VMware’s right to invoice amounts for performance completed to date. Contracts with Multiple Performance Obligations VMware enters into revenue contracts with multiple performance obligations in which a customer may purchase combinations of licenses, maintenance and support, subscriptions, hosted services, training, consulting services and rights to future products and services. For contracts with multiple performance obligations, VMware allocates total transaction value to the identified underlying performance obligations based on relative standalone selling price (“SSP”). VMware typically estimates SSP of performance obligations based on observable transactions when the obligations are sold on a standalone basis and those prices fall within a reasonable range. VMware utilizes the residual approach to estimate SSP primarily for offerings when sold to customers at highly variable pricing. Rebates and Marketing Development Funds Rebates, which are offered to certain channel partners and represent a form of variable consideration, are accounted for as a reduction to the transaction price on eligible contracts. Rebates are determined based on eligible sales during the quarter or based on actual achievement to quarterly target sales. The reduction of the aggregate transaction price against eligible contracts is allocated to the applicable performance obligations. The difference between the estimated rebates recognized and the actual amounts paid has not been material to date. Certain channel partners are also reimbursed for direct costs related to marketing or other services that are defined under the terms of the marketing development programs. Estimated reimbursements for marketing development funds are accounted for as consideration payable to a customer, reducing the transaction price of the underlying contracts. The most likely amount method is used to estimate the marketing fund reimbursements at the end of the quarter and the reduction of transaction price is allocated to the applicable performance obligations. The difference between the estimated reimbursement and the actual amount paid to channel partners has not been material to date. Returns Reserves With limited exceptions, VMware’s return policy does not allow product returns for a refund. VMware estimates and records reserves for product returns at the time of sale based on historical return rates. Amounts are recorded as a reduction of revenue or unearned revenue. Returns reserves were not material for all periods presented. Deferred Commissions Sales commissions, including the employer portion of payroll taxes, earned by VMware’s sales force are considered incremental and recoverable costs of obtaining a contract and are deferred and generally amortized on a straight-line basis over the expected period of benefit. The expected period of benefit is generally determined using the contract term or underlying technology life, if renewals are expected and the renewal commissions are not commensurate with the initial commissions. Sales commissions related to software maintenance and support renewals are deferred and amortized on a straight-line basis over the contractual renewal period. Foreign Currency Remeasurement and Translation The United States (“U.S.”) dollar was the functional currency of VMware’s foreign subsidiaries during the years ended February 3, 2023 and January 28, 2022. During the year ended January 29, 2021, the U.S. dollar was the functional currency for the majority of VMware’s foreign subsidiaries, except for certain foreign subsidiaries associated with the acquisition of Pivotal Software, Inc. (“Pivotal”) during fiscal 2020, many of which were wound down during fiscal 2021. Assets and liabilities are translated into U.S. dollars at exchange rates in effect at the balance sheet date. VMware records net gains and losses resulting from foreign exchange transactions as a component of foreign currency exchange gains and losses in other income (expense), net on the consolidated statements of income. These gains and losses are net of those recognized on foreign currency forward contracts (“forward contracts”) not designated as hedges that VMware enters into to partially mitigate its exposure to foreign currency fluctuations. Cash and Cash Equivalents and Restricted Cash Cash equivalents consist of money market funds and time deposits with maturities of 90 days or less from date of purchase. Cash balances that are restricted pursuant to the terms of various agreements are classified as restricted cash and included in other current assets and other assets in the accompanying consolidated balance sheets. Refer to Note H for more information. Investments in Equity Securities VMware holds equity securities in privately held companies. VMware elected to measure securities in privately held companies 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. All gains and losses on these securities, whether realized or unrealized, are recognized in other income (expense), net on the consolidated statements of income. Allowance for Credit Losses VMware maintains an allowance for credit losses for estimated losses on uncollectible accounts receivable. VMware determines the allowance based on various factors such as historical experience, the age of the receivable and current economic conditions that may affect customers’ ability to pay. The allowance for credit losses was not significant as of February 3, 2023 and January 28, 2022. Property and Equipment, Net Property and equipment, net is recorded at cost. Depreciation commences upon placing the asset in service and is recognized on a straight-line basis over the estimated useful life of the assets, as follows: Buildings Term of underlying land lease Land improvements 15 years Furniture and fixtures 7 years Equipment 3 to 6 years Software 3 to 8 years Leasehold improvements 20 years, not to exceed the shorter of the estimated useful life or remaining lease term Upon retirement or disposition, the asset cost and related accumulated depreciation are removed with any gain or loss recognized on the consolidated statements of income. Repair and maintenance costs that do not extend the economic life of the underlying assets are expensed as incurred. Capitalized Software Development Costs Costs associated with internal-use software, including those used to provide hosted services, during the application development stage are capitalized. Capitalization of costs begins when the preliminary project stage is completed, management has committed to funding the project, and it is probable that the project will be completed and the software will be used to perform the function intended. Capitalization ceases, and depreciation begins, at the point when the project is substantially complete and is ready for its intended purpose. The capitalized amounts are included in property and equipment, net on the consolidated balance sheets. Development costs of software to be sold, leased, or otherwise marketed are subject to capitalization beginning when technological feasibility for the product has been established and ending when the product is available for general release. During the years presented, software development costs incurred for products during the time period between reaching technological feasibility and general release were not material and accordingly were expensed as incurred. Business Combinations For business combinations, VMware recognizes the identifiable assets acquired, the liabilities assumed and any non-controlling interests in an acquiree, which are measured based on the acquisition date fair value. Goodwill is measured as the excess of consideration transferred over the net amounts of the identifiable tangible and intangible assets acquired and the liabilities assumed at the acquisition date. VMware uses significant estimates and assumptions to determine the fair value of assets acquired and liabilities assumed and the related useful lives of the acquired assets, when applicable, as of the acquisition date. When those estimates are provisional, VMware refines them as necessary during the measurement period. The measurement period is the period after the acquisition date, not to exceed one year, in which VMware may gather and analyze the necessary information about facts and circumstances that existed as of the acquisition date to adjust the provisional amounts recognized. Measurement period adjustments are recorded during the period in which the adjustment amount is determined. All other adjustments are recorded to the consolidated statements of income. Costs to effect an acquisition are recorded in general and administrative expenses on the consolidated statements of income as the expenses are incurred. Purchased Intangible Assets and Goodwill Goodwill is evaluated for impairment during the third quarter of each fiscal year or more frequently if events or changes in circumstances indicate that the carrying value of the asset may not be recoverable. VMware elected to perform a quantitative assessment of goodwill with respect to its one reporting unit. In doing so, VMware compared the enterprise fair value to the carrying amount of the reporting unit, including goodwill. VMware concluded that, to date, there have been no impairments of goodwill. Purchased intangible assets with finite lives are generally amortized over their estimated useful lives using the straight-line method. VMware reviews intangible assets for impairment whenever events or changes in business circumstances indicate that the carrying amounts of the assets may not be fully recoverable or that the useful lives of these assets are no longer appropriate. Derivative Instruments and Hedging Activities Derivative instruments are measured at fair value and reported as current assets and current liabilities on the consolidated balance sheets, as applicable. To manage VMware’s exposure to foreign currency fluctuations, VMware enters into forward contracts to hedge a portion of VMware’s net outstanding monetary asset or liability positions. These forward contracts are generally entered into on a monthly basis, with a typical contractual term of one month. These forward contracts are not designated as hedging instruments under applicable accounting guidance and therefore are adjusted to fair value through other income (expense), net on the consolidated statements of income. Additionally, VMware enters into forward contracts, which it designates as cash flow hedges to manage the volatility of cash flows that relate to operating expenses denominated in certain foreign currencies. These forward contracts have maturities of fourteen months or less, and are adjusted to fair value through accumulated other comprehensive loss, net of tax, on the consolidated balance sheets. When the underlying expense transaction occurs, the gains or losses on the forward contract are subsequently reclassified from accumulated other comprehensive loss to the related operating expense line item on the consolidated statements of income. The Company does not, and does not intend to, use derivative financial instruments for trading or speculative purposes. Employee Benefit Plans The Company has a defined contribution program for U.S. employees that complies with Section 401(k) of the Internal Revenue Code. In addition, the Company offers defined contribution plans to employees in certain countries outside the U.S. During the years ended February 3, 2023, January 28, 2022 and January 29, 2021, the Company contributed $237 million, $227 million and $176 million, respectively, to its defined contribution plans. Advertising Advertising costs are expensed as incurred. Advertising expense was $24 million, $35 million and $33 million during the years ended February 3, 2023, January 28, 2022 and January 29, 2021, respectively. Income Taxes Prior to the Spin-Off, although VMware’s financial results were included in the Dell consolidated tax return for U.S. federal income tax purposes, VMware’s income tax provision or benefit was calculated primarily as though the Company was a separate taxpayer, with certain transactions between the Company and Dell being assessed using consolidated tax return rules. 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. income tax will be reported separately from that of the Dell consolidated tax group. Deferred tax assets and liabilities are determined based on the difference between the tax basis of assets and liabilities and their reported amounts using enacted tax rates in effect for the year in which the differences are expected to reverse. Tax credits are generally recognized as reductions of income tax provisions in the year in which the credits arise. The measurement of deferred tax assets is reduced by a valuation allowance if, based upon available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. The U.S. Tax Cuts and Jobs Act enacted on December 22, 2017 (the “2017 Tax Act”) introduced significant changes to U.S. income tax law. The Global Intangible Low-Taxed Income (“GILTI”) provisions of the 2017 Tax Act require VMware to include in its U.S. income tax return foreign subsidiary earnings in excess of an allowable return on the foreign subsidiary’s tangible assets. GAAP allows the Company to choose between an accounting policy that treats the U.S. tax under GILTI provisions as either a current expense, as incurred, or as a component of the Company’s measurement of deferred taxes. VMware has elected to record impacts of GILTI as period costs. Net Income Per Share Basic net income per share is calculated using the weighted-average number of shares of VMware’s common stock outstanding during the period. Diluted net income per share is calculated using the weighted-average number of shares of common stock, including the dilutive effect of equity awards using the treasury stock method. Prior to the Spin-Off, VMware used the two-class method to calculate net income per share. Since both classes shared the same rights in dividends, basic and diluted earnings per share were the same for both Class A Stock and Class B Stock. Automatically as a result of the Spin-Off, each share of Class B Stock converted into one share of Class A Stock and Class A Stock became, and remains, the sole outstanding class of VMware common stock, and, as a result, the two-class method is no longer applicable to the Company’s calculation of net income per share. Concentrations of Risks Financial instruments, which potentially subject VMware to concentrations of credit risk, consist principally of cash and cash equivalents, short-term investments and accounts receivable. Cash on deposit with banks may exceed the amount of insurance provided on such deposits. These deposits may be redeemed upon demand. To manage VMware’s credit risk, the Company monitors the diversity and concentration of its portfolio and limits the amount of investments from any issuer or fund. VMware manages counterparty risk through necessary diversification of the investment portfolio among various financial institutions and by entering into derivative contracts with financial institutions that are of high credit quality. VMware provides credit to its customers, including distributors, OEMs, resellers and end-user customers, in the normal course of business. To reduce credit risk, VMware performs periodic credit evaluations, which consider the customer’s payment history and financial stability. One distrib |
Revenue, Unearned Revenue and R
Revenue, Unearned Revenue and Remaining Performance Obligations | 12 Months Ended |
Feb. 03, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Revenue, Unearned Revenue and Remaining Performance Obligations | Revenue, Unearned Revenue and Remaining Performance Obligations Revenue Receivables VMware records a receivable when an unconditional right to consideration exists and transfer of control has occurred, such that only the passage of time is required before payment of consideration is due. Timing of revenue recognition may differ from the timing of invoicing to customers. Payment terms and conditions vary based on contract type and payment is generally required within 30 to 45 days from date of invoicing. Certain performance obligations may require payment before delivery of the license or service to the customer. 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 consolidated balance sheets. Contract assets were $33 million and $36 million as of February 3, 2023 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 Customer deposits include prepayments from customers related to amounts received for contracts that include certain cancellation rights, such as termination for convenience. If customers do not exercise their cancellation rights, amounts in customer deposits will be recognized as revenue over time, in accordance with the performance obligations of the contracts and transfer of control of these obligations. Unredeemed, prepaid credits eligible for consumption of VMware’s hosted services (“cloud credits”) are also included in customer deposits. Upon customers’ redemption of cloud credits, the net value of the consumed credits is classified as unearned revenue and recognized as revenue over time, in accordance with the Company’s transfer of control of the hosted services. As of February 3, 2023, customer deposits of $1.1 billion were included in current liabilities on the consolidated balance sheets and primarily consisted of customer prepayments received for contracts that include certain cancellation rights, such as termination for convenience, of $681 million and cloud credits of $405 million. In addition, customer deposits of $182 million were included in other liabilities on the consolidated balance sheets and primarily consisted of cloud credits. As of January 28, 2022, customer deposits related to customer prepayments and cloud credits of $470 million were included in current liabilities, and $166 million were included in other liabilities on the 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 February 3, 2023 and January 28, 2022 were not material and $17 million, respectively. Deferred commissions included in other assets were $1.5 billion and $1.2 billion as of February 3, 2023 and January 28, 2022, respectively. Amortization expense for deferred commissions was included in sales and marketing on the consolidated statements of income and was $642 million, $517 million and $437 million during the years ended February 3, 2023, January 28, 2022 and January 29, 2021, respectively. Unearned Revenue Unearned revenue as of the periods presented consisted of the following (table in millions): February 3, January 28, 2023 2022 Unearned license revenue $ 21 $ 19 Unearned subscription and SaaS revenue 4,401 2,669 Unearned software maintenance revenue 6,805 7,208 Unearned professional services revenue 1,516 1,326 Total unearned revenue $ 12,743 $ 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 February 3, 2023 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 year ended February 3, 2023 were $10.5 billion and $9.0 billion, respectively, 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 year ended January 28, 2022 were $9.1 billion and $8.2 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 year ended January 29, 2021 was $7.4 billion, 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 February 3, 2023, the aggregate transaction price allocated to remaining performance obligations was $13.6 billion, of which approximately 54% 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 | 12 Months Ended |
Feb. 03, 2023 | |
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 market opportunity. The Commercial Framework Agreement has an initial term of five years, with automatic one-year renewals occurring annually thereafter, subject to certain terms and conditions. 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 years ended February 3, 2023, January 28, 2022 and January 29, 2021, revenue from Dell accounted for 38%, 38% and 35% of VMware’s consolidated revenue, respectively. During the years ended February 3, 2023, January 28, 2022 and January 29, 2021, revenue recognized on transactions where Dell acted as an OEM accounted for 14%, 13% and 12% of total revenue from Dell, respectively, and 5%, 5% and 4% of VMware’s consolidated revenue, respectively. 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 For the Year Ended As of February 3, January 28, January 29, February 3, January 28, 2023 2022 2021 2023 2022 Reseller revenue $ 5,039 $ 4,764 $ 4,053 $ 6,145 $ 5,550 Internal-use revenue 54 56 63 19 39 Receipts from Dell for collaborative technology projects were not material during the periods presented. Customer deposits resulting from transactions with Dell were $766 million and $298 million as of February 3, 2023 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. • Through the end of fiscal 2023, in certain geographic regions where VMware did not have an established legal entity, VMware contracted with Dell subsidiaries for support services and support from Dell personnel who were managed by VMware. The costs incurred by Dell on VMware’s behalf related to these employees were 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 were included as expenses on VMw are’s 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. • VMware has 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): For the Year Ended February 3, January 28, January 29, 2023 2022 2021 Purchases and leases of products and purchases of services (1) $ 186 $ 228 $ 206 Dell subsidiary support and administrative costs 6 38 74 (1) Amount includes indirect taxes that were remitted to Dell during the periods presented . 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 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 $33 million, $29 million and $60 million during the years ended February 3, 2023, January 28, 2022 and January 29, 2021, respectively. Due To/From Related Parties Amounts in the current and non-current portions of due from related parties and due to related parties on the consolidated balance sheets as of February 3, 2023 and January 28, 2022 included amounts due to Dell pursuant to the Tax Matters Agreement, effective April 14, 2021 (the “Tax Matters Agreement”). Refer to Note O for more information. Amounts included in the current portion of due from related parties , with the exception of DFS and tax obligati ons, are settled in cash within 60 days of each quarter-end. Special Dividend On November 1, 2021, VMware paid an $11.5 billion Special Dividend, pro rata, to each of the holders of Class A Stock and Class B Stock, including Dell, as of the Record Date. Based upon the number of shares of common stock held by Dell as of the Record Date, approximately $9.3 billion in cash was paid to Dell. Refer to Note A for more information regarding the Spin-Off. Notes Payable to Dell During the third quarter of fiscal 2022, VMware repaid the outstanding promissory note payable to Dell of $270 million. During each of the years ended January 28, 2022 and January 29, 2021, interest expense on the note payable to Dell was not significant. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Feb. 03, 2023 | |
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 consolidated balance sheet, with a corresponding asset recorded to other current assets for the amount to be paid by insurance. During the third quarter of fiscal 2023, a portion of the settlement for the Lopez Action was paid directly by the insurance provider. As the Company substantially satisfied all of its obligations associated with the settlement, the remaining loss accrual, along with the corresponding asset, were derecognized as of February 3, 2023. A trial for the Appraisal Action took place in July 2022. A post-trial hearing was held on December 13, 2022, and the parties are awaiting the Court’s decision. 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. Each party has filed dispositive motions, a pre-trial conference is scheduled for April 6, 2023 and the trial is scheduled to begin on April 24, 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 was found invalid via a post-grant review (which remains subject to appeal). 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 members 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 and on February 21, 2023 trial began for the remaining three patents, with WSOU seeking certain damages. On the first day of trial, the court granted summary judgment of non-infringement as to two patents, leaving one patent to continue with at trial. At the conclusion of the Plaintiff’s case, the Court granted VMware’s motion for a directed verdict. The Court’s rulings are subject to appeal. In the event of an appeal, 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 February 3, 2023, 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. Contractual Commitments VMware’s minimum contractual commitments as of February 3, 2023 were as follows (table in millions): Purchase Obligations Asset Retirement Obligations Total 2024 $ 180 $ 1 $ 181 2025 50 4 54 2026 7 2 9 2027 1 10 11 2028 1 — 1 Thereafter — 5 5 Total $ 239 $ 22 $ 261 VMware’s contractual commitments also include principal payments on the unsecured senior notes and senior unsecured term loan facilities, leased office facilities and equipment under various lease arrangements and tax obligations. Refer to Note I for more information on VMware’s debt commitments, Note M for more information on VMware’s lease commitments and Note O for more information on VMware’s tax obligations. Guarantees and Indemnification Obligations VMware enters into agreements in the ordinary course of business with, among others, customers, distributors, resellers, system vendors and systems integrators. Most of these agreements require VMware to indemnify the other party against third-party claims alleging that a VMware product infringes or misappropriates a patent, copyright, trademark, trade secret or other intellectual property right. Certain of these agreements require VMware to indemnify the other party against certain claims relating to property damage, personal injury, or the acts or omissions of VMware, its employees, agents, or representatives. Additionally, following the Spin-Off, 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. Refer to Note O for more information. VMware has agreements with certain vendors, financial institutions, lessors and service providers pursuant to which VMware has agreed to indemnify the other party for specified matters, such as acts and omissions of VMware, its employees, agents, or representatives. VMware has procurement or license agreements with respect to technology that it has obtained the right to use in VMware’s products and agreements. Under some of these agreements, VMware has agreed to indemnify the supplier for certain claims that may be brought against such party with respect to VMware’s acts or omissions relating to the supplied products or technologies. VMware has agreed to indemnify the directors and executive officers of VMware, to the extent legally permissible, against all liabilities reasonably incurred in connection with any action in which such individual may be involved by reason of such individual being or having been a director or executive officer. VMware’s by-laws and charter also provide for indemnification of directors and officers of VMware and VMware subsidiaries to the extent legally permissible, against all liabilities reasonably incurred in connection with any action in which such individual may be involved by reason of such individual being or having been a director or executive officer. VMware also indemnifies certain employees who provide services with respect to employee benefits plans, including, for example, the members of the Administrative Committee of the VMware 401(k) Plan and employees who serve as directors or officers of VMware’s subsidiaries. In connection with certain acquisitions, VMware has agreed to indemnify the former directors and officers of the acquired company in accordance with the acquired company’s by-laws and charter in effect immediately prior to the acquisition or in accordance with indemnification or similar agreements entered into by the acquired company and such persons. VMware typically purchases a “tail” directors and officers insurance policy, which should enable VMware to recover a portion of any future indemnification obligations related to the former officers and directors of an acquired company. It is not possible to determine the maximum potential amount under these indemnification agreements due to the relatively small number of prior indemnification claims and the unique facts and circumstances involved in each particular situation. Historically, payments made by the Company under these agreements have not had a material effect on the Company’s consolidated results of operations, financial position, or cash flows. |
Business Combinations, Definite
Business Combinations, Definite-Lived Intangible Assets, Net and Goodwill | 12 Months Ended |
Feb. 03, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Business Combinations, Definite-Lived Intangible Assets, Net and Goodwill | Business Combinations, Definite-Lived Intangible Assets, Net and Goodwill Business Combinations Fiscal 2021 Acquisition of SaltStack, Inc. During the third quarter of fiscal 2021, VMware completed the acquisition of SaltStack, Inc., a developer of intelligent, event-driven automation software, to broaden VMware’s Cloud Management capabilities from infrastructure to applications. The total purchase price, net of cash acquired, was $51 million. Acquisition of Datrium, Inc. During the second quarter of fiscal 2021, VMware completed the acquisition of Datrium, Inc., a provider of cloud-native disaster recovery solutions, to broaden the VMware Site Recovery Disaster Recovery as a Service offerings. The total purchase price, net of cash acquired, was $137 million. Acquisition of Lastline, Inc. During the second quarter of fiscal 2021, VMware completed the acquisition of Lastline, Inc., a provider of network-based security breach detection products and services, to enhance capabilities for network detection and threat analysis on VMware NSX and SD-WAN offerings. The total purchase price, net of cash acquired, was $114 million. Acquisition of Nyansa, Inc. During the first quarter of fiscal 2021, VMware completed the acquisition of Nyansa, Inc., a developer of artificial intelligence-based network analytics, to accelerate the delivery of end-to-end monitoring and troubleshooting capacities within VMware SD-WAN by VeloCloud. The total purchase price, net of cash acquired, was $38 million. Other Fiscal 2021 Acquisitions During the year ended January 29, 2021, VMware completed five other acquisitions, which were not material, individually or in aggregate, to the consolidated financial statements. VMware expected these acquisitions to primarily enhance its product features and capabilities for its VMware Carbon Black Cloud and VMware Aria Operations offerings. The aggregate purchase price for these five acquisitions, net of cash acquired, was $62 million. The pro forma financial information assuming these fiscal 2021 acquisitions had occurred as of the beginning of the fiscal year prior to the fiscal year of acquisition, as well as the revenue and earnings generated during the current fiscal year, were not material for disclosure purposes. Definite-Lived Intangible Assets, Net The following table summarizes the changes in the carrying amount of definite-lived intangible assets during the periods presented (table in millions): February 3, January 28, 2023 2022 Balance, beginning of the year $ 714 $ 993 Additions related to business combinations and purchases of intangible assets 18 24 Amortization expense (254) (303) Balance, end of the year $ 478 $ 714 As of the periods presented, definite-lived intangible assets consisted of the following (amounts in tables in millions): February 3, 2023 Weighted-Average Gross Carrying Accumulated Net Book Purchased technology 5.3 $ 819 $ (623) $ 196 Customer relationships and customer lists 11.9 632 (371) 261 Trademarks and tradenames 6.8 69 (48) 21 Total definite-lived intangible assets $ 1,520 $ (1,042) $ 478 January 28, 2022 Weighted-Average Gross Carrying Accumulated Net Book 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 $254 million, $303 million and $328 million during the years ended February 3, 2023, January 28, 2022 and January 29, 2021, respectively. Based on intangible assets recorded as of February 3, 2023 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): 2024 $ 205 2025 112 2026 72 2027 42 2028 14 Thereafter 33 Total $ 478 Goodwill The following table summarizes the changes in the carrying amount of goodwill during the periods presented (table in millions): February 3, January 28, 2023 2022 Balance, beginning of the year $ 9,598 $ 9,599 Change in goodwill due to business combinations and related adjustments — (1) Balance, end of the year $ 9,598 $ 9,598 |
Net Income Per Share
Net Income Per Share | 12 Months Ended |
Feb. 03, 2023 | |
Earnings Per Share [Abstract] | |
Net Income Per Share | Net Income Per ShareBasic 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, using the treasury stock method. Potentially dilutive securities primarily include unvested restricted stock, which includes restricted stock units (“RSU”) and 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): For the Year Ended February 3, January 28, January 29, 2023 2022 2021 Net income $ 1,314 $ 1,820 $ 2,058 Weighted-average shares of common stock, basic 423,150 419,504 419,841 Effect of other dilutive securities 2,710 2,890 3,399 Weighted-average shares of common stock, diluted 425,860 422,394 423,240 Net income per weighted-average share of common stock, basic $ 3.11 $ 4.34 $ 4.90 Net income per weighted-average share of common stock, diluted $ 3.09 $ 4.31 $ 4.86 The following table sets forth the weighted-average common share equivalents of Class A 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): For the Year Ended February 3, January 28, January 29, 2023 2022 2021 Anti-dilutive securities: Employee stock options 65 57 150 RSUs 535 463 5,038 Total 600 520 5,188 |
Realignment
Realignment | 12 Months Ended |
Feb. 03, 2023 | |
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 consolidated statements of income during the year ended February 3, 2023 were not significant and primarily included severance-related costs. Actions associated with this plan were substantially complete by the end of fiscal 2023. During the third quarter of fiscal 2021, VMware approved a plan to streamline its operations and better align resources with its business priorities. As a result of this action, during the year ended January 29, 2021, approximately 280 positions were eliminated and $42 million of severance-related realignment expenses were recognized on the consolidated statements of income. Actions associated with this plan were substantially complete by the end of fiscal 2021. During the fourth quarter of fiscal 2020, VMware approved a plan to streamline its operations, with plans to better align business priorities and shift positions to lower cost locations. As a result of these actions, during the year ended January 31, 2020, approximately 1,100 positions were eliminated and $79 million of severance-related realignment expenses were recognized on the consolidated statements of income. Actions associated with this plan were completed during fiscal 2021. The following tables summarize the activity for the accrued realignment expenses during the year ended January 29, 2021 (table in millions): For the Year Ended January 29, 2021 Balance as of Realignment Expense Utilization Balance as of Severance-related costs $ 74 $ 42 $ (113) $ 3 |
Cash, Cash Equivalents, Restric
Cash, Cash Equivalents, Restricted Cash and Short-Term Investments | 12 Months Ended |
Feb. 03, 2023 | |
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 $5.1 billion and $3.6 billion as of February 3, 2023 and January 28, 2022, respectively. Cash equivalents were $4.3 billion as of February 3, 2023 and consisted of money-market funds of $4.2 billion and time deposits of $19 million. 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 consolidated balance sheets that sum to the total cash, cash equivalents and restricted cash as of the periods presented (table in millions): February 3, January 28, 2023 2022 Cash and cash equivalents $ 5,100 $ 3,614 Restricted cash within other current assets 24 43 Restricted cash within other assets 3 6 Total cash, cash equivalents and restricted cash $ 5,127 $ 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 first quarter of fiscal 2023. Refer to Note J for more infor mation regarding the Company’s marketable equity securities. |
Debt
Debt | 12 Months Ended |
Feb. 03, 2023 | |
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 debt discount of $11 million and debt issuance costs of $47 million. The proceeds from the 2021 Senior Notes were used to fund a portion of the Special Dividend in connection with the Spin-Off. 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): February 3, January 28, Effective Interest Rate 2023 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 (12) (15) Less: unamortized debt issuance costs (46) (61) Net carrying amount $ 9,192 $ 9,174 Current portion of long-term debt $ 1,000 $ — Long-term debt 8,192 9,174 On January 18, 2022, VMware exercised a make-whole call and redeemed the $1.5 billion unsecured senior note due August 21, 2022 at a premium. The loss on extinguishment of debt was $21 million during the year ended January 28, 2022 and was recognized in other income (expense), net on the consolidated statements of income. On May 11, 2020, VMware exercised a make-whole call and redeemed the $1.3 billion unsecured senior note due August 21, 2020 at a premium. The loss on extinguishment of debt was not material during the year ended January 29, 2021 and was recognized in other income (expense), net on the consolidated statements of income. 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 $247 million, $240 million and $183 million during the years ended February 3, 2023, January 28, 2022 and January 29, 2021, respectively. Interest expense, which included amortization of discount and issuance costs, was recognized on the 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 next five fiscal years and thereafter for the Senior Notes as of February 3, 2023 were as follows (amounts in millions): 2024 $ 1,000 2025 1,250 2026 750 2027 1,500 2028 1,750 Thereafter 3,000 Total $ 9,250 Refer to Note C for disclosure regarding the note payable to Dell. 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”). On November 1, 2021, the Company drew down an aggregate of $4.0 billion, which was used to fund a portion of the Special Dividend in connection with the Spin-Off. During the years ended February 3, 2023 and January 28, 2022, the Company repaid $2.3 billion and $500 million, respectively. As of February 3, 2023 and January 28, 2022, the outstanding balance on the 2021 Term Loan of $1.2 billion and $3.5 billion, respectively, net of unamortized debt issuance cost, was included in long-term debt on the consolidated balance sheets. As of February 3, 2023, the weighted-average interest rate on the outstanding 2021 Term Loan was 5.34%. On September 26, 2019, VMware entered into a senior unsecured term loan facility (the “2019 Term Loan”) with a syndicate of lenders that provided the Company with a borrowing capacity of up to $2.0 billion through February 7, 2020 for general corporate purposes. During the year ended January 31, 2020, the Company drew down an aggregate of $3.4 billion and repaid an aggregate of $1.9 billion. During the year ended January 29, 2021, VMware repaid the outstanding balance of $1.5 billion on the 2019 Term Loan. The 2021 Term Loan, together with the 2019 Term Loan (the “Term Loan”) contain certain representations, warranties and covenants. Interest expense for the Term Loan, including amortization of issuance costs, was $57 million and $17 million during the years ended February 3, 2023 and January 29, 2021, respectively, and was not significant during the year ended January 28, 2022. 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 February 3, 2023 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 the years ended February 3, 2023 and January 28, 2022. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Feb. 03, 2023 | |
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): February 3, 2023 Level 1 Level 2 Total Cash equivalents: Money-market funds $ 4,250 $ — $ 4,250 Time deposits (1) — 19 19 Total cash equivalents $ 4,250 $ 19 $ 4,269 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 $8.5 billion and $9.3 billion as of February 3, 2023 and January 28, 2022, respectively. The fair value of the 2021 Term Loan approximated its carrying value as of February 3, 2023 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 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 $166 million and $162 million as of February 3, 2023 and January 28, 2022, respectively, and were included in other assets on the consolidated balance sheets. Liabilities associated with the NQDC Program included in accrued expenses and other on the consolidated balance sheets were $16 million a s of February 3, 2023 and January 28, 2022. Liabilities associated with the NQDC Program included in other liabilities on the consolidated balance sheets were $150 million and $146 million a s of February 3, 2023 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 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 investments sold during the years ended February 3, 2023, January 28, 2022 and January 29, 2021 was $19 million, $83 million and $26 million, respectively. The gain or loss recognized on the investments sold during the year ended February 3, 2023 was not significant. A loss of $37 million and a gain of $23 million were recognized on the investments sold during the years ended January 28, 2022 and January 29, 2021, respectively. An unrealized loss of $29 million and an unrealized gain of $140 million were recognized during the years ended January 28, 2022 and January 29, 2021, respectively, on the investment still held as of January 28, 2022 and January 29, 2021. All gains and losses on these securities, whether realized or unrealized, are recognized in other income (expense), net on the 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. As of February 3, 2023 and January 28, 2022, investments in privately held companies, which consisted primarily of equity securities, had a carrying value of $87 million and $163 million, respectively, and were included in other assets on the consolidated balance sheets. During the year ended February 3, 2023, 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 year ended January 28, 2022, for securities still held as of January 28, 2022, gross upward adjustments were $29 million. During the year ended January 29, 2021, gross downward adjustments of $14 million were recognized on securities still held as of January 29, 2021. Gross upward and downward adjustments for all other periods presented were not significant. |
Derivatives and Hedging Activit
Derivatives and Hedging Activities | 12 Months Ended |
Feb. 03, 2023 | |
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 consolidated balance sheets and is subsequently reclassified to the related operating expense line item on the consolidated statements of income in the same period that the underlying expenses are incurred. During the years ended February 3, 2023, January 28, 2022 and January 29, 2021, the effective portion of gains or losses reclassified to the consolidated statements of income were 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 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 February 3, 2023 and January 28, 2022, outstanding forward contracts had a total notional value of $677 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 February 3, 2023 and January 28, 2022. During the years ended February 3, 2023, January 28, 2022 and January 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 consolidated statements of income. These forward contracts generally have a maturity of one month, and as of February 3, 2023 and January 28, 2022, outstanding forward contracts had a total notional value of $1.7 billion 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 February 3, 2023 and January 28, 2022. Gains related to the settlement of forward contracts were $23 million and $57 million during the years ended February 3, 2023 and January 28, 2022 , respectively. The loss related to the settlement of forward contracts was $63 million during the year ended January 29, 2021. Gains and losses are recorded in other income (expense), net on the 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 gains of $15 million and $31 million during the years ended February 3, 2023 and January 29, 2021, respectively. The combined gains and losses related to the settlement of forward contracts and the underlying foreign currency denominated assets and liabilities were not significant during the year January 28, 2022 . Net gains and losses are recorded in other income (expense), net on the consolidated statements of income. |
Property and Equipment, Net
Property and Equipment, Net | 12 Months Ended |
Feb. 03, 2023 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, Net | Property and Equipment, Net Property and equipment, net, as of the periods presented consisted of the following (table in millions): February 3, January 28, 2023 2022 Equipment and software $ 2,062 $ 1,729 Buildings and improvements 1,235 1,170 Furniture and fixtures 145 134 Capital in progress 195 179 Total property and equipment 3,637 3,212 Accumulated depreciation (2,014) (1,751) Total property and equipment, net $ 1,623 $ 1,461 Capital in progress primarily consisted of capitalized costs associated with the development of internal-use software and various building and site improvements that had not yet been placed into service. Depreciation expense was $319 million, $276 million and $253 million during the years ended February 3, 2023, January 28, 2022 and January 29, 2021, respectively. |
Leases
Leases | 12 Months Ended |
Feb. 03, 2023 | |
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 23 years. The components of lease expense during the periods presented were as follows (table in millions): For the Year Ended February 3, January 28, January 29, 2023 2022 2021 Operating lease expense $ 199 $ 192 $ 190 Finance lease expense: Amortization of ROU assets 7 6 6 Interest on lease liabilities 1 1 2 Total finance lease expense 8 7 8 Short-term lease expense 1 1 3 Variable lease expense 34 31 29 Total lease expense $ 242 $ 231 $ 230 Lease expense incurred for arrangements with Dell was not significant during the periods presented. The Company subleases certain leased office space to third parties when it determines there is excess leased capacity. Sublease income was $15 million during the year ended February 3, 2023 and $20 million during each of the years ended January 28, 2022 and January 29, 2021. Supplemental cash flow information related to operating and finance leases during the periods presented was as follows (table in millions): For the Year Ended February 3, January 28, January 29, 2023 2022 2021 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 177 $ 173 $ 174 Operating cash flows from finance leases 1 1 1 Financing cash flows from finance leases 5 5 4 ROU assets obtained in exchange for lease liabilities: Operating leases $ 81 $ 225 $ 275 Finance leases 8 — 1 Supplemental balance sheet information related to operating and finance leases as of the periods presented was as follows (table in millions): February 3, 2023 Operating Leases Finance Leases ROU assets, non-current (1) $ 974 $ 47 Lease liabilities, current (2) $ 144 $ 9 Lease liabilities, non-current (3) 845 39 Total lease liabilities $ 989 $ 48 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 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: February 3, January 28, 2023 2022 Weighted-average remaining lease term (in years) Operating leases 11.8 11.9 Finance leases 5.7 7.3 Weighted-average discount rate Operating leases 3.5 % 3.2 % Finance leases 3.2 % 2.9 % The following represents VMware’s future minimum lease payments under non-cancellable operating and finance leases as of February 3, 2023 (table in millions): Operating Leases Finance Leases 2024 $ 175 $ 10 2025 135 9 2026 126 9 2027 111 7 2028 98 7 Thereafter 605 10 Total future minimum lease payments 1,250 52 Less: Imputed interest (261) (4) Total lease liabilities (1) $ 989 $ 48 (1) Total lease liabilities as of February 3, 2023 excluded legally binding lease payments for leases signed but not yet commenced of $19 million. The amount of the future operating lease commitments after fiscal 2028 is primarily for 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 23 years. The components of lease expense during the periods presented were as follows (table in millions): For the Year Ended February 3, January 28, January 29, 2023 2022 2021 Operating lease expense $ 199 $ 192 $ 190 Finance lease expense: Amortization of ROU assets 7 6 6 Interest on lease liabilities 1 1 2 Total finance lease expense 8 7 8 Short-term lease expense 1 1 3 Variable lease expense 34 31 29 Total lease expense $ 242 $ 231 $ 230 Lease expense incurred for arrangements with Dell was not significant during the periods presented. The Company subleases certain leased office space to third parties when it determines there is excess leased capacity. Sublease income was $15 million during the year ended February 3, 2023 and $20 million during each of the years ended January 28, 2022 and January 29, 2021. Supplemental cash flow information related to operating and finance leases during the periods presented was as follows (table in millions): For the Year Ended February 3, January 28, January 29, 2023 2022 2021 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 177 $ 173 $ 174 Operating cash flows from finance leases 1 1 1 Financing cash flows from finance leases 5 5 4 ROU assets obtained in exchange for lease liabilities: Operating leases $ 81 $ 225 $ 275 Finance leases 8 — 1 Supplemental balance sheet information related to operating and finance leases as of the periods presented was as follows (table in millions): February 3, 2023 Operating Leases Finance Leases ROU assets, non-current (1) $ 974 $ 47 Lease liabilities, current (2) $ 144 $ 9 Lease liabilities, non-current (3) 845 39 Total lease liabilities $ 989 $ 48 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 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: February 3, January 28, 2023 2022 Weighted-average remaining lease term (in years) Operating leases 11.8 11.9 Finance leases 5.7 7.3 Weighted-average discount rate Operating leases 3.5 % 3.2 % Finance leases 3.2 % 2.9 % The following represents VMware’s future minimum lease payments under non-cancellable operating and finance leases as of February 3, 2023 (table in millions): Operating Leases Finance Leases 2024 $ 175 $ 10 2025 135 9 2026 126 9 2027 111 7 2028 98 7 Thereafter 605 10 Total future minimum lease payments 1,250 52 Less: Imputed interest (261) (4) Total lease liabilities (1) $ 989 $ 48 (1) Total lease liabilities as of February 3, 2023 excluded legally binding lease payments for leases signed but not yet commenced of $19 million. The amount of the future operating lease commitments after fiscal 2028 is primarily for 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. |
Accrued Expenses and Other
Accrued Expenses and Other | 12 Months Ended |
Feb. 03, 2023 | |
Payables and Accruals [Abstract] | |
Accrued Expenses and Other | Accrued Expenses and Other Accrued expenses and other as of the periods presented consisted of the following (table in millions): February 3, January 28, 2023 2022 Accrued employee related expenses $ 1,435 $ 1,412 Accrued partner liabilities 194 212 Lease liabilities 153 150 Income tax (1) 305 29 Other (2) 481 533 Total $ 2,568 $ 2,336 (1) Income tax primarily consists of the current portion of income taxes payable to federal tax authorities. Refer to Note O for more information regarding VMware’s income taxes. (2) Other primarily consists of interest accrual on outstanding debt, litigation accrual, and indirect tax accrual. Accrued partner liabilities primarily relate to rebates and marketing development fund accruals for channel partners, system vendors and systems integrators. Accrued partner liabilities also include accruals for professional service arrangements for which VMware intends to leverage channel partners to directly fulfill the obligation to its customers. |
Income Taxes
Income Taxes | 12 Months Ended |
Feb. 03, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The domestic and foreign components of income before income tax for the periods presented were as follows (table in millions): For the Year Ended February 3, January 28, January 29, 2023 2022 2021 Domestic $ 561 $ 633 $ 932 Foreign 1,231 1,452 1,450 Total income before income tax $ 1,792 $ 2,085 $ 2,382 VMware’s income tax provision for the periods presented consisted of the following (table in millions): For the Year Ended February 3, January 28, January 29, 2023 2022 2021 Federal: Current $ 352 $ 16 $ 157 Deferred (89) 64 (19) 263 80 138 State: Current 94 50 73 Deferred (43) (13) (14) 51 37 59 Foreign: Current 250 279 246 Deferred (86) (131) (119) 164 148 127 Total income tax provision $ 478 $ 265 $ 324 Provision for income taxes increased during the year ended February 3, 2023 compared to January 28, 2022, primarily driven by increase in GILTI from the impacts of Internal Revenue Code Section 174 research and development expense capitalization (“Section 174”), which was part of the 2017 Tax Act and became effective beginning in fiscal 2023. As the Company records impacts of GILTI as a period cost, the capitalization of foreign research and experimental costs in GILTI increases the Company’s provision for income taxes. The increase in the Company’s effective income tax rate was also driven by a decrease in FTC benefit due to disallowance of credit for certain foreign tax expenses as a result of the final FTC regulations effective beginning in fiscal 2023. Provision for income taxes decreased during the year ended January 28, 2022 compared to January 29, 2021, primarily driven by $31 million discrete tax benefit related to the book and tax basis difference on the Company’s investment in equity securities recognized during the year ended January 28, 2022 as compared to a discrete tax expense of $52 million during the year ended January 29, 2021. The decrease was partially offset by a discrete tax benefit of $59 million due to an intra-group transfer of Pivotal’s intellectual property rights to the Company’s Irish subsidiary during the year ended January 29, 2021. A reconciliation of VMware’s effective tax rate to the statutory federal tax rate for the periods presented was as follows: For the Year Ended February 3, January 28, January 29, 2023 2022 2021 Statutory federal tax rate 21 % 21 % 21 % State taxes, net of federal benefit 2 % 1 % 2 % Tax rate differential for non-U.S. jurisdictions (9) % (10) % (8) % Research and development tax credit (7) % (4) % (3) % (Excess tax benefits) tax deficiencies from stock-based compensation 1 % (1) % (1) % Discrete tax benefit due to IP Transfer (1) — % — % (2) % U.S. tax on foreign earnings, including GILTI 14 % 1 % 2 % Permanent items 5 % 5 % 3 % Effective tax rate 27 % 13 % 14 % (1) A discrete tax benefit of $59 million was recognized with a deferred tax asset during the year ended January 29, 2021. This deferred tax asset was recognized as a result of intra-group transfer of Pivotal’s IP rights to an Irish subsidiary. Deferred tax assets and liabilities are recognized for future tax consequences resulting from differences between the carrying amounts of assets and liabilities and their respective tax basis using enacted tax rates in effect for the year in which the differences are expected to be reversed. Significant deferred tax assets and liabilities as of the periods presented consisted of the following (table in millions): February 3, January 28, 2023 2022 Deferred tax assets: Accruals and other $ 285 $ 280 Lease liabilities 180 179 Unearned revenue 567 538 Stock-based compensation 76 76 Tax credit and net operating loss carryforwards 536 710 Other assets, net 265 135 Intangible and other non-current assets 4,874 4,916 Capitalized research and development 386 — Gross deferred tax assets 7,169 6,834 Valuation allowance (495) (471) Total deferred tax assets 6,674 6,363 Deferred tax liabilities: Deferred commissions (207) (177) ROU Assets (152) (151) Property, plant and equipment, net (165) (134) Total deferred tax liabilities (524) (462) Net deferred tax assets $ 6,150 $ 5,901 The increase in net deferred tax assets from January 28, 2022 to February 3, 2023 was primarily driven by the increase in Section 174 of $386 million which became effective in fiscal 2023. VMware had federal and state net operating loss carryforwards of $120 million, $356 million, as of February 3, 2023, respectively. Foreign net operating loss carryforwards as of February 3, 2023 were not significant. VMware had federal, state and foreign net operating loss carryforwards of $269 million, $521 million and $9 million as of January 28, 2022, respectively. The federal and state net operating loss carryforwards will start to expire in fiscal 2024, if not utilized. These net operating losses have various carryforward periods, including certain portions that can be carried forward indefinitely. The majority of the Company’s foreign net operating loss carryforwards can be carried forward indefinitely. VMware had federal research and development (“R&D”) tax credit carryforwards, which were not significant as of February 3, 2023, and were $164 million as of January 28, 2022. The federal R&D tax credit will start to expire in fiscal 2027, if not utilized. VMware also had California and other state R&D credit carryforwards for income tax purposes of $459 million and $397 million as of February 3, 2023 and January 28, 2022, respectively. The California R&D tax credit carryforwards can be carried forward indefinitely and the other state R&D tax credit carryforwards will start to expire in fiscal 2024, if not utilized. In addition, VMware had federal foreign tax credit carryforwards of $21 million and $49 million as of February 3, 2023 and January 28, 2022, respectively. VMware also had non-U.S. foreign tax credit carryforwards of $17 million as of February 3, 2023. Non-U.S. foreign tax credit carryforwards were not significant as of January 28, 2022. The federal foreign tax credit will start to expire in fiscal 2027, if not utilized. The non-U.S. foreign tax credit can be carried forward indefinitely. VMware also had non-U.S. capital loss carryforwards of $22 million and $23 million as of February 3, 2023 and January 28, 2022, respectively, which can be carried forward indefinitely. VMware determined that the realization of deferred tax assets relating to portions of the state R&D tax credits and certain federal and non-U.S. foreign tax credit carryforwards did not meet the more-likely-than-not threshold. Accordingly, a valuation allowance of $495 million and $471 million was recorded as of February 3, 2023 and January 28, 2022, respectively. If, in the future, new evidence supports the realization of the deferred tax assets related to these items, the valuation allowance will be reversed and a tax benefit will be recorded accordingly. VMware believes it is more-likely-than-not that the net deferred tax assets as of February 3, 2023 and January 28, 2022, will be realized in the foreseeable future as VMware believes that it will generate sufficient taxable income in future years. VMware's ability to generate sufficient taxable income in future years in appropriate tax jurisdictions will determine the amount of net deferred tax asset balances to be realized in future periods. During the year ended February 3, 2023, the total change in the valuation allowance was $24 million, which was primarily due to California R&D credits generated in the current year, partially offset by utilization of the federal foreign tax credit. For the periods presented, VMware’s rate of taxation in non-U.S. jurisdictions was lower than the U.S. tax rate. VMware’s non-U.S. earnings are primarily earned by its subsidiary organized in Ireland, where the statutory rate is 12.5%. Under the 2017 Tax Act, all foreign earnings are subject to U.S. taxation. As a result, the Company repatriated, and expects to continue to repatriate, a substantial portion of its foreign earnings over time, to the extent that the foreign earnings are not restricted by local laws or result in significant incremental costs associated with repatriating the foreign earnings. As of February 3, 2023, the amount of deferred tax liability related to the potential repatriation of foreign earnings was not significant. Further developments in non-U.S. tax jurisdictions and unfavorable changes in non-U.S. tax laws and regulations, such as foreign tax laws enacted in response to the 2017 Tax Act, could result in adverse changes to global taxation and materially affect VMware’s financial position, results of operations, or annual effective tax rate. Tax Agreements with Dell Pursuant to 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. 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. Amounts due to and due from Dell under the Tax Matters Agreement are included in current and non-current portions of due to related parties and due from related parties, respectively, on the consolidated balance sheets as of the periods presented. 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 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. Amounts due to and due from Dell pursuant to the Tax Matters Agreement as of the periods presented consisted of the following (table in millions): February 3, January 28, 2023 2022 Due from related parties: Current $ 1 $ 6 Non-current 208 199 Due to related parties: Current $ 306 $ 61 Non-current 648 909 As of February 3, 2023 and January 28, 2022, amounts due to Dell pursuant to the Tax Matters Agreement primarily related to the Transition Tax of $445 million and $504 million, respectively, and uncertain tax positions of $285 million and $276 million, respectively. 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 February 3, 2023 over a period of three years. VMware has made payments to Dell pursuant to the Tax Agreements. The following table summarizes the payments made during the periods presented (table in millions): For the Year Ended February 3, January 28, January 29, 2023 2022 2021 Payments from VMware to Dell, net (1) $ 49 $ 36 $ 307 (1) Included refunds received from Dell, which were not significant during the year ended February 3, 2023 and $60 million during the year ended January 28, 2022. Payments from VMware to Dell under the Tax Agreements relate to VMware’s portion of federal income taxes on Dell’s consolidated tax return, state tax payments for combined states and estimated tax obligation resulting from the Transition Tax. The timing of the tax payments due to and from Dell is governed by the Tax Agreements. VMware’s portion of the Transition Tax is governed by a letter agreement between Dell, EMC and VMware executed on April 1, 2019 (the “Letter Agreement”). Prior to the Spin-Off, VMware’s portion of federal income taxes on Dell’s consolidated tax return differed from the amounts VMware owed on a separate tax return basis and VMware’s payments to Dell generally were capped at the amount that VMware would have paid on a separate tax return basis. The difference between the amount of tax calculated on a separate tax return basis and the amount of tax calculated pursuant to the Tax Agreements was recorded as a decrease in additional paid-in capital of $67 million and $46 million, respectively, during the years ended January 28, 2022 and January 29, 2021. Unrecognized Tax Benefits A reconciliation of the beginning and ending amount of gross unrecognized tax benefits, excluding interest and penalties associated with unrecognized tax benefits, for the periods presented was as follows (table in millions): For the Year Ended February 3, January 28, January 29, 2023 2022 2021 Balance, beginning of the year $ 527 $ 508 $ 479 Tax positions related to current year: Additions 70 68 65 Tax positions related to prior years: Additions 20 2 12 Reductions (7) (10) (25) Settlements (4) (25) (14) Reductions resulting from a lapse of the statute of limitations (23) (10) (14) Foreign currency effects (8) (6) 5 Balance, end of the year $ 575 $ 527 $ 508 Of the net unrecognized tax benefits, including interest and penalties, $287 million and $242 million were included in income tax payable on the consolidated balance sheets as of February 3, 2023 and January 28, 2022, respectively. Unrecognized tax benefits that VMware and Dell have agreed to indemnify one another for, pursuant to the Tax Matters Agreement as a result of the Spin-Off, are recorded in the non-current portion of due to related parties on the consolidated balance sheets and were $285 million and $276 million as of February 3, 2023 and January 28, 2022, respectively. Approximately $440 million and $397 million, respectively, would, if recognized, benefit VMware's annual effective income tax rate. VMware includes interest expense and penalties related to income tax matters in the income tax provision. VMware had accrued $75 million and $60 million of interest and penalties associated with unrecognized tax benefits as of February 3, 2023 and January 28, 2022, respectively. Interest and penalties associated with uncertain tax positions included in income tax expense (benefit) were not significant during each of the year ended February 3, 2023, January 28, 2022 and January 29, 2021. The Dell consolidated group is routinely under audit by the IRS, including for years during which VMware was a part of the Dell-owned EMC consolidated group. All U.S. federal income tax matters have been concluded for years through fiscal 2016 while VMware was part of the Dell-owned EMC consolidated group. The IRS has started its examination of fiscal years 2015 through 2019 for the Dell consolidated group, of which VMware was part beginning with fiscal 2017. In addition, VMware is under corporate income tax audits in various states and non-U.S. jurisdictions. Pursuant to the Tax Agreements, when VMware becomes subject to federal tax audits for periods during which it was a member of Dell’s consolidated group, Dell has the authority to control the audit and represent Dell’s and VMware’s interests to the IRS. Open tax years subject to examinations for larger non-U.S. jurisdictions vary beginning in 2008. Audit outcomes and the timing of audit settlements are subject to significant uncertainty. When considering the outcomes and the timing of tax examinations, the expiration of statutes of limitations for specific jurisdictions, or the timing and result of ruling requests from taxing authorities, it is reasonably possible that total unrecognized tax benefits could be potentially reduced by approximately $15 million within the next 12 months. |
Stockholders_ Equity (Deficit)
Stockholders’ Equity (Deficit) | 12 Months Ended |
Feb. 03, 2023 | |
Stockholders' Equity Note [Abstract] | |
Stockholders’ Equity (Deficit) | Stockholders’ Equity (Deficit) Special Dividend On November 1, 2021, VMware paid an $11.5 billion Special Dividend, pro rata, to each of the holders of Class A Stock and Class B Stock as of the Record Date. The Special Dividend was recorded as a reduction to retained earnings and then to additional paid-in capital until each of the respective balances were reduced to zero. The remaining amount was recorded to accumulated deficit. Automatically as a result of the Spin-Off, each share of Class B Stock converted into one fully paid and non-assessable share of Class A Stock and Class A Stock became, and remains, the sole outstanding class of VMware’s common stock. Refer to Note A for more information regarding the Spin-Off. Equity awards that were outstanding at the time of the Special Dividend were adjusted pursuant to existing anti-dilution provisions in the Company’s stock plan documents that provide for equitable adjustments to be determined by VMware’s Compensation Committee in the event of an extraordinary cash dividend. A conversion ratio based on the per share dividend amount and VMware’s closing stock price on November 1, 2021 was used to adjust the equity awards outstanding at the time of the Special Dividend. The anti-dilution adjustments to awards proportionately increased the number of outstanding restricted stock units and stock options and reduced the exercise prices of outstanding stock options by a conversion ratio of 1.2191, resulting in an increase of 4.2 million restricted stock units and stock options. The adjustments did not result in incremental stock-based compensation expense as the anti-dilutive adjustments were required by the Company’s equity incentive plan. VMware Equity Plan In June 2007, VMware adopted its 2007 Equity and Incentive Plan (the “2007 Plan”). On July 23, 2021, VMware amended its 2007 Plan to increase the number of shares available for issuance by 15.0 million shares of Class A Stock. As of February 3, 2023, 183.7 million shares have been authorized for issuance or substituted in the course of business combinations pursuant to the terms of the 2007 Plan since its inception, including 16.6 million shares that were automatically added pursuant to the anti-dilution provisions of the 2007 Plan triggered by payments of the special dividend during fiscal 2019 and fiscal 2022 (the “Anti-Dilution Adjustment”). Awards under the 2007 Plan may be in the form of stock-based awards, such as restricted stock, or stock options. VMware’s Compensation Committee determines the vesting schedule for all equity awards. Generally, restricted stock grants made under the 2007 Plan have a three-year to four-year period over which they vest and vest 25% the first year and semi-annually thereafter. The per share exercise price for a stock option awarded under the 2007 Plan shall not be less than 100% of the per share fair market value of Class A Stock on the date of grant. Options granted under the 2007 Plan vest 25% after the first year and monthly thereafter over the following three years and expire between six 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. As of February 3, 2023, 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 authorizations approved by VMware’s board of directors, which were open or completed during the years ended February 3, 2023, January 28, 2022 and January 29, 2021 (amounts in table in millions): Announcement Date Amount Authorized Expiration Date Status October 7, 2021 (1) $ 2,000 February 2, 2024 Suspended July 15, 2020 1,000 January 28, 2022 Terminated (2) May 29, 2019 1,500 January 28, 2022 (3) Completed in fiscal 2022 (1) The October 2021 authorization was effective as of November 1, 2021. (2) The July 2020 authorization, under which $183 million remained unpurchased, was terminated on November 1, 2021. (3) In July 2020, VMware’s Board of Directors extended its authorization of the existing stock repurchase program through January 28, 2022. The following table summarizes stock repurchase activity during the periods presented (aggregate purchase price in millions, shares in thousands): For the Year Ended February 3, January 28, January 29, 2023 2022 2021 Aggregate purchase price (1) $ 89 $ 1,169 $ 945 Class A Stock repurchased 803 8,197 6,944 Weighted-average price per share $ 111.33 $ 142.61 $ 136.13 (1) The aggregate purchase price of repurchased shares is classified as a reduction to additional paid-in capital until the balance is reduced to zero and the excess is recorded as a reduction to retained earnings (accumulated deficit). VMware Restricted Stock 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 Class A Stock. Restricted stock also includes PSU awards granted to certain VMware executives and employees. PSU awards have performance conditions and a service-based vesting component. Upon vesting, PSU awards convert into Class A Stock at various ratios ranging from 0.1 to 2.0 shares per PSU, depending upon the degree of achievement of the performance-based targets designated by each award. If minimum performance thresholds are not achieved, then no shares are issued. The following table summarizes restricted stock activity for the periods presented (units in thousands): Number of Units Weighted-Average Grant Date Fair Value Outstanding, January 31, 2020 17,474 $ 128.38 Granted 11,201 149.63 Vested (8,296) 114.59 Forfeited (2,589) 137.55 Outstanding, January 29, 2021 17,790 147.46 Granted 12,400 141.46 Special Dividend adjustment 4,068 n/a Vested (7,593) 134.00 Forfeited (3,663) 146.13 Outstanding, January 28, 2022 23,002 123.06 Granted 13,916 114.79 Vested (9,327) 124.33 Forfeited (4,069) 122.66 Outstanding, February 3, 2023 23,522 117.73 As of February 3, 2023, the 23.5 million units outstanding included 22.5 million of RSUs and 1.0 million of PSUs. The above table includes RSUs issued for outstanding unvested RSUs in connection with business combinations. Restricted stock that was expected to vest as of February 3, 2023 was as follows (units in thousands, aggregate intrinsic value in millions): Number of Units Weighted-Average Remaining Contractual Term Aggregate Intrinsic Value (1) Expected to vest 20,561 1.11 $ 2,504 (1) The aggregate intrinsic value represented the total pre-tax intrinsic values based on VMware's closing stock price of $121.77 as of February 3, 2023, which would have been received by the restricted stock holders had the restricted stock been issued as of February 3, 2023. The aggregate vesting date fair value of restricted stock that vested was $1.1 billion during each of the years ended February 3, 2023, January 28, 2022 and January 29, 2021. As of February 3, 2023, restricted stock representing 23.5 million shares of Class A Stock were outstanding, with an aggregate intrinsic value of $2.9 billion based on VMware’s closing stock price as of February 3, 2023. VMware Employee Stock Purchase Plan In June 2007, VMware adopted its 2007 Employee Stock Purchase Plan (the “ESPP”), which is intended to be qualified under Section 423 of the Internal Revenue Code. On June 25, 2019 and July 23, 2021, VMware amended its ESPP to increase the number of shares authorized for issuance by 9.0 million shares and 5.0 million shares of Class A Stock, respectively. As of February 3, 2023, the number of authorized shares under the ESPP was 37.3 million shares. Under the ESPP, eligible VMware employees are granted options to purchase shares at the lower of 85% of the fair market value of the stock at the time of grant or 85% of the fair market value at the time of exercise. The option period is generally twelve months and includes two embedded six-month option periods. Options are exercised at the end of each embedded option period. If the fair market value of the stock is lower on the first day of the second embedded option period than it was at the time of grant, then the twelve-month option period expires and each participant is granted a new twelve-month option. As of February 3, 2023, 12.8 million shares of Class A Stock were available for issuance under the ESPP. In connection with its entry into the Merger Agreement, VMware suspended its 2007 Employee Stock Purchase Plan effective September 1, 2022. The following table summarizes ESPP activity for VMware during the periods presented (cash proceeds in millions, shares in thousands): For the Year Ended February 3, January 28, January 29, 2023 2022 2021 Cash proceeds $ 240 $ 236 $ 207 Class A Stock purchased 2,418 2,116 2,025 Weighted-average price per share $ 99.10 $ 111.31 $ 102.44 As of January 28, 2022, $112 million of ESPP withholdings were recorded as a liability in accrued expenses and other on the consolidated balance sheets for the purchase that occurred on February 28, 2022. VMware Stock Options The following table summarizes stock option activity for VMware during the periods presented (shares in thousands): Number of Shares Weighted-Average Exercise Price Outstanding, January 31, 2020 2,615 $ 56.58 Granted 31 43.20 Forfeited (156) 70.75 Exercised (1,247) 52.34 Outstanding, January 29, 2021 1,243 58.68 Granted 4 97.91 Special Dividend adjustment 147 n/a Forfeited (104) 63.73 Exercised (604) 57.19 Outstanding, January 28, 2022 686 46.95 Granted — — Forfeited (28) 50.66 Exercised (241) 42.21 Outstanding, February 3, 2023 417 49.43 Options granted during the periods presented relate to unvested stock options assumed in business combinations, and as a result, the weighted-average exercise price per share may vary from the VMware stock price at time of grant. The stock options outstanding as of February 3, 2023 had an aggregate intrinsic value of $30 million based on VMware’s closing stock price as of February 3, 2023. Options outstanding that were exercisable and that had vested and were expected to vest as of February 3, 2023 was as follows (outstanding options in thousands, aggregate intrinsic value in millions): Outstanding Options Weighted- Average Exercise Price Weighted- Average Remaining Contractual Term Aggregate Intrinsic Value (1) Exercisable 413 $ 49.26 4.44 $ 30 Vested and expected to vest 417 49.43 4.46 30 (1) The aggregate intrinsic values represented the total pre-tax intrinsic values based on VMware's closing stock price of $121.77 as of February 3, 2023, which would have been received by the option holders had all in-the-money options been exercised as of that date. The total grant date fair value of stock options that vested during the years ended February 3, 2023, January 28, 2022 and January 29, 2021 was not significant, $26 million and $92 million, respectively. The stock options exercised during the years ended February 3, 2023, January 28, 2022 and January 29, 2021 had a pre-tax intrinsic value of $18 million, $55 million and $111 million, respectively. VMware Shares Repurchased for Tax Withholdings During the years ended February 3, 2023, January 28, 2022 and January 29, 2021, VMware repurchased 3.3 million, 2.6 million and 3.0 million, respectively, of Class A Stock, for $386 million, $378 million and $413 million, respectively, to cover tax withholding obligations in connection with such equity awards. These amounts may differ from the amounts of cash remitted for tax withholding obligations on the consolidated statements of cash flows due to the timing of payments. Pursuant to the respective award agreements, these shares were withheld in conjunction with the net share settlement upon the vesting of RSUs and PSUs during the period. The value of the withheld shares was classified as a reduction to additional paid-in capital. Net Excess Tax Benefits (Tax Deficiencies) Net excess tax benefits or tax deficiencies recognized in connection with stock-based awards are included in income tax provision on the consolidated statements of income. Net tax deficiencies recognized were not material during the year ended February 3, 2023. Net excess tax benefits recognized were $17 million and $41 million during the years ended January 28, 2022 and January 29, 2021, respectively. Stock-Based Compensation The following table summarizes the components of total stock-based compensation included in VMware’s consolidated statements of income during the periods presented (table in millions): For the Year Ended February 3, January 28, January 29, 2023 2022 2021 Cost of license revenue $ 1 $ 1 $ 1 Cost of subscription and SaaS revenue 25 21 19 Cost of services revenue 106 92 99 Research and development 616 528 524 Sales and marketing 376 302 322 General and administrative 166 131 157 Stock-based compensation 1,290 1,075 1,122 Income tax benefit (213) (202) (231) Total stock-based compensation, net of tax $ 1,077 $ 873 $ 891 As of February 3, 2023, the total unrecognized compensation cost for stock options and restricted stock was $1.9 billion and will be recognized through fiscal 2028 with a weighted-average remaining period of 1.3 years. Stock-based compensation related to equity awards held by VMware employees is recognized on VMware’s consolidated statements of income over the awards’ requisite service periods. Fair Value of VMware Stock Options The fair value of each option to acquire Class A Stock granted during the periods presented was estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted-average assumptions: For the Year Ended February 3, January 28, January 29, Stock Options 2023 2022 2021 Dividend yield n/a None None Expected volatility n/a 35.0 % 38.8 % Risk-free interest rate n/a 0.3 % 0.4 % Expected term (in years) n/a 2.9 2.6 Weighted-average fair value at grant date n/a $ 62.99 $ 102.55 Employee Stock Purchase Plan Dividend yield None None None Expected volatility 29.7 % 36.5 % 36.1 % Risk-free interest rate 0.7 % 0.1 % 1.0 % Expected term (in years) 0.7 0.7 0.7 Weighted-average fair value at grant date $ 28.68 $ 37.95 $ 33.60 The weighted-average grant date fair value of stock options can fluctuate from period to period primarily due to higher valued options through business combinations with exercise prices lower than the fair market value of VMware’s stock on the date of grant. |
Segment Information
Segment Information | 12 Months Ended |
Feb. 03, 2023 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information VMware operates in one reportable operating segment; thus, all required financial segment information is included in the consolidated financial statements. An operating segment is defined as the component 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): For the Year Ended February 3, January 28, January 29, 2023 2022 2021 Revenue: License $ 2,835 $ 3,128 $ 3,033 Subscription and SaaS 4,012 3,205 2,587 Total license and subscription and SaaS 6,847 6,333 5,620 Services: Software maintenance 5,281 5,356 5,105 Professional services 1,222 1,162 1,042 Total services 6,503 6,518 6,147 Total revenue $ 13,350 $ 12,851 $ 11,767 Revenue by geographic area during the periods presented was as follows (table in millions): For the Year Ended February 3, January 28, January 29, 2023 2022 2021 United States $ 6,528 $ 6,232 $ 5,878 International 6,822 6,619 5,889 Total $ 13,350 $ 12,851 $ 11,767 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 each of the years ended February 3, 2023, January 28, 2022 and January 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): February 3, January 28, 2023 2022 United States $ 840 $ 882 International 261 241 Total $ 1,101 $ 1,123 As of February 3, 2023, the U.S. and India each accounted for more than 10% of these assets, with India accounting for 13% of these assets. No individual country other than the U.S. accounted for 10% or more of these assets as of January 28, 2022. VMware’s product and service solutions are helping customers in the following areas: • Application Modernization • Cloud Management • Cloud Infrastructure • Networking • Security • Anywhere Workspace VMware develops and markets product and service offerings within each of these areas. Additionally, synergies are leveraged across these areas. VMware’s products and services from each area may also be bundled as part of an enterprise agreement arrangement or packaged together and sold as a solution. Accordingly, it is not practicable to determine revenue by each of the areas described above. |
Schedule II - Valuation and Qua
Schedule II - Valuation and Qualifying Accounts | 12 Months Ended |
Feb. 03, 2023 | |
SEC Schedule, 12-09, Valuation and Qualifying Accounts [Abstract] | |
Schedule II - Valuation and Qualifying Accounts | SCHEDULE II—VALUATION AND QUALIFYING ACCOUNTS (in millions) Tax Valuation Allowance Balance at Beginning of Period Tax Valuation Allowance Charged to Income Tax Provision Tax Valuation Allowance Credited to Other Accounts Tax Valuation Allowance Credited to Income Tax Provision Balance at End of Period Year ended February 3, 2023 income tax valuation allowance $ 471 $ 79 $ — $ (55) $ 495 Year ended January 28, 2022 income tax valuation allowance 366 70 57 (22) 471 Year ended January 29, 2021 income tax valuation allowance 332 58 (1) (23) 366 |
Overview and Basis of Present_2
Overview and Basis of Presentation (Policies) | 12 Months Ended |
Feb. 03, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Pre sentation The consolidated financial statements and accompanying notes are prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for annual financial reporting. On November 1, 2021, VMware’s spin-off from Dell Technologies Inc. (“Dell”) was completed (the “Spin-Off”), and, in accordance with the Separation and Distribution Agreement, effective as of April 14, 2021 (the “Separation Agreement”), upon the satisfaction of all conditions and immediately prior to the Spin-Off, VMware paid an $11.5 billion cash dividend, pro rata, to each of the holders of Class A common stock (“Class A Stock”) and Class B convertible common stock (“Class B Stock”), including Dell (the “Special Dividend”) as of October 29, 2021 (the “Record Date”). VMware funded the Special Dividend in part through the $10.0 billion of indebtedness incurred during fiscal 2022, including $6.0 billion in the senior notes that VMware issued in August 2021 and $4.0 billion in aggregate drawdowns on its senior unsecured term loan facilities on November 1, 2021. Automatically as a result of the Spin-Off, each share of Class B Stock converted into one fully paid and non-assessable share of Class A Stock. 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 39.7% and 9.9%, respectively, of VMware’s outstanding stock, based on the shares outstanding as of February 3, 2023. 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. The fiscal year for VMware is the 52 or 53 weeks ending on the Friday nearest to January 31 of each year. The Company refers to its fiscal years ended February 3, 2023, January 28, 2022 and January 29, 2021 as “fiscal 2023,” “fiscal 2022,” and “fiscal 2021,” respectively. Fiscal 2023 was a 53-week fiscal year, while fiscal 2022 and fiscal 2021 were each 52-week fiscal years. Management believes the assumptions underlying the 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 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 Stock, par value $0.01 per share, of the Company issued and outstanding immediately prior to the effective time of the transaction will be converted into the right to receive, at the election of the holder of such share of Class A 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 Class A Stock entitled to receive the Cash Consideration and the total number of shares of Class A Stock entitled to receive the Stock Consideration will, in each case, be equal to 50% of the aggregate number of shares of Class A Stock issued and outstanding immediately prior to the consummation of the transaction. Holders of Class A 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. On February 17, 2023, in accordance with the Merger Agreement, the Company and Broadcom each delivered to the other a mutual notice to extend the Outside Date (as defined in the Merger Agreement) to May 26, 2023. If the Closing Effective Date (as defined in the Merger Agreement) has not occurred, similar three-month extensions could be noticed by either party (or mutually) five business days prior to each of May 26 and August 26, 2023. |
Principles of Consolidation | Principles of Consolidation The 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 consolidated statements of cash flows based upon the nature of the underlying transaction. |
Use of Accounting Estimates | 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. |
Revenue Recognition | Revenue Recognition VMware derives revenue from licensing software under perpetual, term-based and consumption-based contracts and related software maintenance and support, subscriptions, hosted services, training and consulting services. VMware accounts for a contract with a customer if all criteria defined by ASC 606, Revenue from Contracts with Customers are met, including that collectability of the consideration is probable. At inception of a contract with a customer, the Company evaluates whether the promised products and services represent distinct performance obligations within the context of the contract. Performance obligations that are both capable of being distinct on their own and distinct within the context of the contract are recognized on their own as distinct performance obligations. Performance obligations under which both of these two criteria are not met are recognized as a combined, single performance obligation. Determining whether the Company’s licenses, subscriptions and services are considered distinct performance obligations that should be accounted for separately or together often involves assumptions and significant judgments that can have a significant impact on the timing and amount of revenue recognized. Revenue is recognized upon transfer of control of licenses, subscriptions or services to the customer in an amount that reflects the consideration VMware expects to receive in exchange for those licenses, services or subscriptions. Control of a promised license, subscription or service may be transferred to a customer either at a point in time or over time, which affects the timing of revenue recognition. VMware’s contracts with customers may include a combination of licenses, subscriptions, software-as-a-service (“SaaS”) and services that are accounted for as distinct performance obligations. Licenses that represent distinct performance obligations are recognized at a point in time when the software license keys have been made available to the customer. Licenses sold as part of the Company’s subscriptions that do not represent distinct performance obligations are recognized over time along with the associated services that form a combined performance obligation with the software. Management assesses relevant contractual terms in contracts with customers and applies significant judgment in identifying and accounting for all terms and conditions in certain contracts. Certain contracts include third-party offerings and revenue that may be recognized net of the third-party costs, based upon an assessment as to whether VMware had control of the underlying third-party offering before it is transferred to the customer. Revenue is recognized net of any taxes invoiced to customers, which are subsequently remitted to governmental authorities. From time to time, VMware may enter into revenue and purchase contracts with the same customer within a short period of time. VMware evaluates the underlying economics and fair value of the consideration payable to the customer to determine if any portion of the consideration payable to the customer exceeds the fair value of the goods and services received and should be accounted for as a reduction of the transaction price of the revenue contract. License Revenue VMware generally sells its license software through distributors, resellers, system vendors, systems integrators and its direct sales force. Performance obligations related to license revenue, including the license portion of term licenses, represent functional intellectual property under which a customer has the legal right to the on-premises license. The license provides significant standalone functionality and is a separate performance obligation from the maintenance and support and professional services sold by VMware. On-premises license revenue is recognized at a point in time, upon delivery and transfer of control of the underlying license to the customer. License revenue from software licenses sold to original equipment manufacturers (“OEMs”) is recognized when the sale to the end user occurs. Revenue is recognized upon reporting by the OEMs of their sales, and for the period where information of the underlying sales has not been made available, revenue is recognized based upon estimated sales. Subscription and SaaS Revenue VMware’s subscription and SaaS revenue consists of hosted services, consumption based licensing under VMware Cloud Provider Program (“VCPP”) offerings and certain license sales of its software platform with open source licenses or offerings under which licenses and services are accounted for as combined performance obligations. VMware’s hosted services consist of certain software offerings sold as a service-based technology without the customer’s ability to take possession of the software over the subscription term. Hosted services are recognized as SaaS revenue over time as customers consume the services or ratably over the contract term, commencing upon provisioning of the service. VCPP partners license on-premises software from VMware on a monthly basis under a usage-based model. Generally, contracts with VCPP partners include cancellation rights. Revenue recognition is based on fees associated with reported license consumption by the VCPP partners and includes estimates for the period when consumption information has not been made available. Additionally, VCPP partners also purchase hosted services and revenue is recognized over time as the Company’s partners consume the services or ratably over the contract term, commencing upon provisioning of the service. Subscription sales of the Company’s software platform offering provides customers with a license to its platform over a period of time, which includes, among other items, open-source software, support, enhancements, upgrades and compatibility to certified systems, all of which are offered on an if-and-when available basis. Subscription revenue is recognized ratably over the contract term beginning on the date that the Company’s platform is made available to the customer. Subscription sales also include offerings with licenses that provide customers with access to and the right to utilize the threat intelligence capabilities and ongoing support over a period of time. VMware considers the software license and access to critical threat intelligence capabilities to be a single performance obligation. Subscription revenue is recognized ratably over the contract term beginning on the date the software is delivered to the customer. Subscription and SaaS offerings generally have a duration of one month, one-year, or three-years and are invoiced to the customers either upfront, annually, quarterly or monthly. During the second half of fiscal 2023, VMware introduced termination for convenience (“TFC”) clauses with respect to term-based license offerings in certain enterprise agreements (“EAs”). Revenue from such term-based license offerings subject to TFC clauses is recognized ratably as subscription and SaaS revenue, rather than as license revenue, due to the requirement to refund any unused, pre-paid fees upon termination. Services Revenue VMware’s services revenue generally consists of software maintenance and support and professional services. Software maintenance and support offerings entitle customers to receive major and minor product upgrades, on a when-and-if-available basis, and technical support. Maintenance and support services are comprised of multiple performance obligations including updates, upgrades to licenses and technical support. While separate performance obligations are identified within maintenance and support services, the underlying performance obligations generally have a consistent continuous pattern of transfer to a customer during the term of a contract and therefore, maintenance and support services revenue is recognized ratably over the contract duration. Professional services include design, implementation, training and consulting services. Professional services performed by VMware represent distinct performance obligations as they do not modify or customize licenses sold. These services are not highly interdependent or highly interrelated to licenses sold such that a customer would not be able to use the licenses without the professional services. Revenue from fixed fee professional services engagements is recognized based on progress made toward the total project effort, which can be reasonably estimated. As a practical expedient, VMware recognizes revenue from professional services engagements invoiced on a time and materials basis as the hours are incurred based on VMware’s right to invoice amounts for performance completed to date. Contracts with Multiple Performance Obligations VMware enters into revenue contracts with multiple performance obligations in which a customer may purchase combinations of licenses, maintenance and support, subscriptions, hosted services, training, consulting services and rights to future products and services. For contracts with multiple performance obligations, VMware allocates total transaction value to the identified underlying performance obligations based on relative standalone selling price (“SSP”). VMware typically estimates SSP of performance obligations based on observable transactions when the obligations are sold on a standalone basis and those prices fall within a reasonable range. VMware utilizes the residual approach to estimate SSP primarily for offerings when sold to customers at highly variable pricing. Rebates and Marketing Development Funds Rebates, which are offered to certain channel partners and represent a form of variable consideration, are accounted for as a reduction to the transaction price on eligible contracts. Rebates are determined based on eligible sales during the quarter or based on actual achievement to quarterly target sales. The reduction of the aggregate transaction price against eligible contracts is allocated to the applicable performance obligations. The difference between the estimated rebates recognized and the actual amounts paid has not been material to date. Certain channel partners are also reimbursed for direct costs related to marketing or other services that are defined under the terms of the marketing development programs. Estimated reimbursements for marketing development funds are accounted for as consideration payable to a customer, reducing the transaction price of the underlying contracts. The most likely amount method is used to estimate the marketing fund reimbursements at the end of the quarter and the reduction of transaction price is allocated to the applicable performance obligations. The difference between the estimated reimbursement and the actual amount paid to channel partners has not been material to date. Returns Reserves With limited exceptions, VMware’s return policy does not allow product returns for a refund. VMware estimates and records reserves for product returns at the time of sale based on historical return rates. Amounts are recorded as a reduction of revenue or unearned revenue. Returns reserves were not material for all periods presented. Deferred Commissions Sales commissions, including the employer portion of payroll taxes, earned by VMware’s sales force are considered incremental and recoverable costs of obtaining a contract and are deferred and generally amortized on a straight-line basis over the expected period of benefit. The expected period of benefit is generally determined using the contract term or underlying technology life, if renewals are expected and the renewal commissions are not commensurate with the initial commissions. Sales commissions related to software maintenance and support renewals are deferred and amortized on a straight-line basis over the contractual renewal period. |
Foreign Currency Remeasurement and Translation | Foreign Currency Remeasurement and Translation The United States (“U.S.”) dollar was the functional currency of VMware’s foreign subsidiaries during the years ended February 3, 2023 and January 28, 2022. During the year ended January 29, 2021, the U.S. dollar was the functional currency for the majority of VMware’s foreign subsidiaries, except for certain foreign subsidiaries associated with the acquisition of Pivotal Software, Inc. (“Pivotal”) during fiscal 2020, many of which were wound down during fiscal 2021. Assets and liabilities are translated into U.S. dollars at exchange rates in effect at the balance sheet date. VMware records net gains and losses resulting from foreign exchange transactions as a component of foreign currency exchange gains and losses in other income (expense), net on the consolidated statements of income. These gains and losses are net of those recognized on foreign currency forward |
Cash, Cash Equivalents and Restricted Cash | Cash and Cash Equivalents and Restricted Cash Cash equivalents consist of money market funds and time deposits with maturities of 90 days or less from date of purchase. |
Investments in Equity Securities | Investments in Equity Securities VMware holds equity securities in privately held companies. VMware elected to measure securities in privately held companies 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. All gains and losses on these securities, whether realized or unrealized, are recognized in other income (expense), net on the consolidated statements of income. |
Allowance for Credit Losses | Allowance for Credit LossesVMware maintains an allowance for credit losses for estimated losses on uncollectible accounts receivable. VMware determines the allowance based on various factors such as historical experience, the age of the receivable and current economic conditions that may affect customers’ ability to pay. |
Property and Equipment, Net | Property and Equipment, Net Property and equipment, net is recorded at cost. Depreciation commences upon placing the asset in service and is recognized on a straight-line basis over the estimated useful life of the assets, as follows: Buildings Term of underlying land lease Land improvements 15 years Furniture and fixtures 7 years Equipment 3 to 6 years Software 3 to 8 years Leasehold improvements 20 years, not to exceed the shorter of the estimated useful life or remaining lease term Upon retirement or disposition, the asset cost and related accumulated depreciation are removed with any gain or loss recognized on the consolidated statements of income. Repair and maintenance costs that do not extend the economic life of the underlying assets are expensed as incurred. |
Capitalized Software Development Costs | Capitalized Software Development Costs Costs associated with internal-use software, including those used to provide hosted services, during the application development stage are capitalized. Capitalization of costs begins when the preliminary project stage is completed, management has committed to funding the project, and it is probable that the project will be completed and the software will be used to perform the function intended. Capitalization ceases, and depreciation begins, at the point when the project is substantially complete and is ready for its intended purpose. The capitalized amounts are included in property and equipment, net on the consolidated balance sheets. Development costs of software to be sold, leased, or otherwise marketed are subject to capitalization beginning when technological feasibility for the product has been established and ending when the product is available for general release. During the years presented, software development costs incurred for products during the time period between reaching technological feasibility and general release were not material and accordingly were expensed as incurred. |
Business Combinations | Business Combinations For business combinations, VMware recognizes the identifiable assets acquired, the liabilities assumed and any non-controlling interests in an acquiree, which are measured based on the acquisition date fair value. Goodwill is measured as the excess of consideration transferred over the net amounts of the identifiable tangible and intangible assets acquired and the liabilities assumed at the acquisition date. VMware uses significant estimates and assumptions to determine the fair value of assets acquired and liabilities assumed and the related useful lives of the acquired assets, when applicable, as of the acquisition date. When those estimates are provisional, VMware refines them as necessary during the measurement period. The measurement period is the period after the acquisition date, not to exceed one year, in which VMware may gather and analyze the necessary information about facts and circumstances that existed as of the acquisition date to adjust the provisional amounts recognized. Measurement period adjustments are recorded during the period in which the adjustment amount is determined. All other adjustments are recorded to the consolidated statements of income. |
Purchased Intangible Assets and Goodwill | Purchased Intangible Assets and Goodwill Goodwill is evaluated for impairment during the third quarter of each fiscal year or more frequently if events or changes in circumstances indicate that the carrying value of the asset may not be recoverable. VMware elected to perform a quantitative assessment of goodwill with respect to its one reporting unit. In doing so, VMware compared the enterprise fair value to the carrying amount of the reporting unit, including goodwill. VMware concluded that, to date, there have been no impairments of goodwill. Purchased intangible assets with finite lives are generally amortized over their estimated useful lives using the straight-line method. VMware reviews intangible assets for impairment whenever events or changes in business circumstances indicate that the carrying amounts of the assets may not be fully recoverable or that the useful lives of these assets are no longer appropriate. |
Derivative Instruments and Hedging Activities | Derivative Instruments and Hedging Activities Derivative instruments are measured at fair value and reported as current assets and current liabilities on the consolidated balance sheets, as applicable. To manage VMware’s exposure to foreign currency fluctuations, VMware enters into forward contracts to hedge a portion of VMware’s net outstanding monetary asset or liability positions. These forward contracts are generally entered into on a monthly basis, with a typical contractual term of one month. These forward contracts are not designated as hedging instruments under applicable accounting guidance and therefore are adjusted to fair value through other income (expense), net on the consolidated statements of income. Additionally, VMware enters into forward contracts, which it designates as cash flow hedges to manage the volatility of cash flows that relate to operating expenses denominated in certain foreign currencies. These forward contracts have maturities of fourteen months or less, and are adjusted to fair value through accumulated other comprehensive loss, net of tax, on the consolidated balance sheets. When the underlying expense transaction occurs, the gains or losses on the forward contract are subsequently reclassified from accumulated other comprehensive loss to the related operating expense line item on the consolidated statements of income. The Company does not, and does not intend to, use derivative financial instruments for trading or speculative purposes. |
Employee Benefit Plans | Employee Benefit PlansThe Company has a defined contribution program for U.S. employees that complies with Section 401(k) of the Internal Revenue Code. In addition, the Company offers defined contribution plans to employees in certain countries outside the U.S. |
Advertising | AdvertisingAdvertising costs are expensed as incurred. |
Income Taxes | Income Taxes Prior to the Spin-Off, although VMware’s financial results were included in the Dell consolidated tax return for U.S. federal income tax purposes, VMware’s income tax provision or benefit was calculated primarily as though the Company was a separate taxpayer, with certain transactions between the Company and Dell being assessed using consolidated tax return rules. 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. income tax will be reported separately from that of the Dell consolidated tax group. Deferred tax assets and liabilities are determined based on the difference between the tax basis of assets and liabilities and their reported amounts using enacted tax rates in effect for the year in which the differences are expected to reverse. Tax credits are generally recognized as reductions of income tax provisions in the year in which the credits arise. The measurement of deferred tax assets is reduced by a valuation allowance if, based upon available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. The U.S. Tax Cuts and Jobs Act enacted on December 22, 2017 (the “2017 Tax Act”) introduced significant changes to U.S. income tax law. The Global Intangible Low-Taxed Income (“GILTI”) provisions of the 2017 Tax Act require VMware to include in its U.S. income tax return foreign subsidiary earnings in excess of an allowable return on the foreign subsidiary’s tangible assets. GAAP allows the Company to choose between an accounting policy that treats the U.S. tax under GILTI provisions as either a current expense, as incurred, or as a component of the Company’s measurement of deferred taxes. VMware has elected to record impacts of GILTI as period costs. |
Net Income Per Share | Net Income Per ShareBasic net income per share is calculated using the weighted-average number of shares of VMware’s common stock outstanding during the period. Diluted net income per share is calculated using the weighted-average number of shares of common stock, including the dilutive effect of equity awards using the treasury stock method. Prior to the Spin-Off, VMware used the two-class method to calculate net income per share. Since both classes shared the same rights in dividends, basic and diluted earnings per share were the same for both Class A Stock and Class B Stock. Automatically as a result of the Spin-Off, each share of Class B Stock converted into one share of Class A Stock and Class A Stock became, and remains, the sole outstanding class of VMware common stock, and, as a result, the two-class method is no longer applicable to the Company’s calculation of net income per share. |
Concentrations of Risks | Concentrations of Risks Financial instruments, which potentially subject VMware to concentrations of credit risk, consist principally of cash and cash equivalents, short-term investments and accounts receivable. Cash on deposit with banks may exceed the amount of insurance provided on such deposits. These deposits may be redeemed upon demand. To manage VMware’s credit risk, the Company monitors the diversity and concentration of its portfolio and limits the amount of investments from any issuer or fund. VMware manages counterparty risk through necessary diversification of the investment portfolio among various financial institutions and by entering into derivative contracts with financial institutions that are of high credit quality. VMware provides credit to its customers, including distributors, OEMs, resellers and end-user customers, in the normal course of business. To reduce credit risk, VMware performs periodic credit evaluations, which consider the customer’s payment history and financial stability. |
Accounting for Stock-Based Compensation | Accounting for Stock-Based Compensation Stock-based compensation is measured at fair value on the grant date and recognized as expense, net of estimated forfeitures, over the requisite service period. Forfeitures are estimated using historical information and revised in subsequent periods if actual forfeitures differ from those estimates. VMware restricted stock, including performance stock unit (“PSU”) awards, are valued based on the Company’s stock price on the date of grant. For those awards that have a graded vesting schedule and only contain a service-based vesting condition, compensation cost is recognized, net of estimated forfeitures, on a straight-line basis over the requisite service period of the entire award. PSU awards vest if a service-based vesting condition and a performance-based vesting condition are met. If minimum VMware-designated performance targets are achieved and the requisite service is rendered, each PSU award will convert into VMware’s Class A Stock at a defined ratio depending on the degree of achievement of the performance target designated by each individual award. If minimum performance targets are not achieved, then no shares will be issued. Based upon the probable outcome of the performance condition and the expected level of achievement, compensation cost is recognized, net of estimated forfeitures, on a straight-line basis over the award’s requisite service period. The expected level of achievement is reassessed over the performance period and, to the extent that the expected level of achievement changes, compensation cost is adjusted and recorded on the consolidated statements of income. The remaining unrecognized compensation cost is recognized over the remaining requisite service period. The Black-Scholes option-pricing model is used to determine the fair value of VMware’s stock options and Employee Stock Purchase Plan shares. The Black-Scholes model includes assumptions regarding dividend yields, expected volatility, expected term and risk-free interest rates. These assumptions reflect the Company’s best estimates, but these items involve uncertainties based on market and other conditions outside of the Company’s control. |
Leases | Leases VMware determines if an arrangement contains a lease at inception by evaluating whether the arrangement conveys the right to use an identified asset and whether the Company obtains substantially all economic benefits from and has the ability to direct the use of the asset. Right-of-use (“ROU”) assets resulting from operating leases are included in other assets, and operating lease liabilities are included in accrued expenses and other and operating lease liabilities on the consolidated balance sheets. ROU assets resulting from finance leases are included in property and equipment, net, and finance lease liabilities are included in accrued expenses and other and other liabilities on the consolidated balance sheets. Lease assets and liabilities are measured at the present value of the future minimum lease payments over the lease term at commencement date using the incremental borrowing rate. The incremental borrowing rate is generally determined using factors such as the Treasury yields, the Company’s credit rating and interest rates of similar debt instruments with comparable credit ratings, among others. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that VMware will exercise that option. Lease expense resulting from the minimum lease payments is amortized on a straight-line basis over the remaining lease term. VMware elected the practical expedient to exclude leasing arrangements with a duration of less than twelve months. The Company’s lease agreements generally do not contain any material residual value guarantees or material restrictive covenants. Certain lease agreements may contain lease and non-lease components, such as common-area maintenance costs. The Company elected to account for these components as a single lease component in determining the lease liability. Variable lease payments, which are primarily comprised of common-area maintenance, utilities and real estate taxes that are passed on from the lessor in proportion to the space leased by the Company, are recognized in operating expenses in the period in which the obligation for those payments are incurred. |
New Accounting Pronouncement | Recently Adopted Accounting Standards In November 2021, the Financial Accounting Standards Board issued 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. VMware adopted this standard during the fourth quarter of fiscal 2023 on a prospective basis. The standard did not have a material impact on the Company’s consolidated financial statements during the year ended February 3, 2023. |
Overview and Basis of Present_3
Overview and Basis of Presentation (Tables) | 12 Months Ended |
Feb. 03, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Property and Equipment, Net | Property and equipment, net is recorded at cost. Depreciation commences upon placing the asset in service and is recognized on a straight-line basis over the estimated useful life of the assets, as follows: Buildings Term of underlying land lease Land improvements 15 years Furniture and fixtures 7 years Equipment 3 to 6 years Software 3 to 8 years Leasehold improvements 20 years, not to exceed the shorter of the estimated useful life or remaining lease term Property and equipment, net, as of the periods presented consisted of the following (table in millions): February 3, January 28, 2023 2022 Equipment and software $ 2,062 $ 1,729 Buildings and improvements 1,235 1,170 Furniture and fixtures 145 134 Capital in progress 195 179 Total property and equipment 3,637 3,212 Accumulated depreciation (2,014) (1,751) Total property and equipment, net $ 1,623 $ 1,461 |
Revenue, Unearned Revenue and_2
Revenue, Unearned Revenue and Remaining Performance Obligations (Tables) | 12 Months Ended |
Feb. 03, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Unearned Revenue | Unearned revenue as of the periods presented consisted of the following (table in millions): February 3, January 28, 2023 2022 Unearned license revenue $ 21 $ 19 Unearned subscription and SaaS revenue 4,401 2,669 Unearned software maintenance revenue 6,805 7,208 Unearned professional services revenue 1,516 1,326 Total unearned revenue $ 12,743 $ 11,222 |
Related Parties (Tables)
Related Parties (Tables) | 12 Months Ended |
Feb. 03, 2023 | |
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 For the Year Ended As of February 3, January 28, January 29, February 3, January 28, 2023 2022 2021 2023 2022 Reseller revenue $ 5,039 $ 4,764 $ 4,053 $ 6,145 $ 5,550 Internal-use revenue 54 56 63 19 39 Information about VMware’s payments for such arrangements during the periods presented consisted of the following (table in millions): For the Year Ended February 3, January 28, January 29, 2023 2022 2021 Purchases and leases of products and purchases of services (1) $ 186 $ 228 $ 206 Dell subsidiary support and administrative costs 6 38 74 (1) Amount includes indirect taxes that were remitted to Dell during the periods presented . Amounts due to and due from Dell pursuant to the Tax Matters Agreement as of the periods presented consisted of the following (table in millions): February 3, January 28, 2023 2022 Due from related parties: Current $ 1 $ 6 Non-current 208 199 Due to related parties: Current $ 306 $ 61 Non-current 648 909 For the Year Ended February 3, January 28, January 29, 2023 2022 2021 Payments from VMware to Dell, net (1) $ 49 $ 36 $ 307 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Feb. 03, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Minimum Contractual Commitments | VMware’s minimum contractual commitments as of February 3, 2023 were as follows (table in millions): Purchase Obligations Asset Retirement Obligations Total 2024 $ 180 $ 1 $ 181 2025 50 4 54 2026 7 2 9 2027 1 10 11 2028 1 — 1 Thereafter — 5 5 Total $ 239 $ 22 $ 261 |
Business Combinations, Defini_2
Business Combinations, Definite-Lived Intangible Assets, Net and Goodwill (Tables) | 12 Months Ended |
Feb. 03, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Finite-Lived Intangible Assets | The following table summarizes the changes in the carrying amount of definite-lived intangible assets during the periods presented (table in millions): February 3, January 28, 2023 2022 Balance, beginning of the year $ 714 $ 993 Additions related to business combinations and purchases of intangible assets 18 24 Amortization expense (254) (303) Balance, end of the year $ 478 $ 714 As of the periods presented, definite-lived intangible assets consisted of the following (amounts in tables in millions): February 3, 2023 Weighted-Average Gross Carrying Accumulated Net Book Purchased technology 5.3 $ 819 $ (623) $ 196 Customer relationships and customer lists 11.9 632 (371) 261 Trademarks and tradenames 6.8 69 (48) 21 Total definite-lived intangible assets $ 1,520 $ (1,042) $ 478 January 28, 2022 Weighted-Average Gross Carrying Accumulated Net Book 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 February 3, 2023 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): 2024 $ 205 2025 112 2026 72 2027 42 2028 14 Thereafter 33 Total $ 478 |
Schedule of Goodwill | The following table summarizes the changes in the carrying amount of goodwill during the periods presented (table in millions): February 3, January 28, 2023 2022 Balance, beginning of the year $ 9,598 $ 9,599 Change in goodwill due to business combinations and related adjustments — (1) Balance, end of the year $ 9,598 $ 9,598 |
Net Income Per Share (Tables)
Net Income Per Share (Tables) | 12 Months Ended |
Feb. 03, 2023 | |
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): For the Year Ended February 3, January 28, January 29, 2023 2022 2021 Net income $ 1,314 $ 1,820 $ 2,058 Weighted-average shares of common stock, basic 423,150 419,504 419,841 Effect of other dilutive securities 2,710 2,890 3,399 Weighted-average shares of common stock, diluted 425,860 422,394 423,240 Net income per weighted-average share of common stock, basic $ 3.11 $ 4.34 $ 4.90 Net income per weighted-average share of common stock, diluted $ 3.09 $ 4.31 $ 4.86 |
Schedule of Antidilutive Securities Excluded from Computation of Net Income per Share | The following table sets forth the weighted-average common share equivalents of Class A 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): For the Year Ended February 3, January 28, January 29, 2023 2022 2021 Anti-dilutive securities: Employee stock options 65 57 150 RSUs 535 463 5,038 Total 600 520 5,188 |
Realignment (Tables)
Realignment (Tables) | 12 Months Ended |
Feb. 03, 2023 | |
Restructuring and Related Activities [Abstract] | |
Summary of Accrued Realignment Charges | The following tables summarize the activity for the accrued realignment expenses during the year ended January 29, 2021 (table in millions): For the Year Ended January 29, 2021 Balance as of Realignment Expense Utilization Balance as of Severance-related costs $ 74 $ 42 $ (113) $ 3 |
Cash, Cash Equivalents, Restr_2
Cash, Cash Equivalents, Restricted Cash and Short-Term Investments (Tables) | 12 Months Ended |
Feb. 03, 2023 | |
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 consolidated balance sheets that sum to the total cash, cash equivalents and restricted cash as of the periods presented (table in millions): February 3, January 28, 2023 2022 Cash and cash equivalents $ 5,100 $ 3,614 Restricted cash within other current assets 24 43 Restricted cash within other assets 3 6 Total cash, cash equivalents and restricted cash $ 5,127 $ 3,663 |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Feb. 03, 2023 | |
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): February 3, January 28, Effective Interest Rate 2023 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 (12) (15) Less: unamortized debt issuance costs (46) (61) Net carrying amount $ 9,192 $ 9,174 Current portion of long-term debt $ 1,000 $ — Long-term debt 8,192 9,174 |
Schedule of Maturities of Long-term Debt | The future principal payments for the next five fiscal years and thereafter for the Senior Notes as of February 3, 2023 were as follows (amounts in millions): 2024 $ 1,000 2025 1,250 2026 750 2027 1,500 2028 1,750 Thereafter 3,000 Total $ 9,250 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Feb. 03, 2023 | |
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): February 3, 2023 Level 1 Level 2 Total Cash equivalents: Money-market funds $ 4,250 $ — $ 4,250 Time deposits (1) — 19 19 Total cash equivalents $ 4,250 $ 19 $ 4,269 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) |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 12 Months Ended |
Feb. 03, 2023 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, Net | Property and equipment, net is recorded at cost. Depreciation commences upon placing the asset in service and is recognized on a straight-line basis over the estimated useful life of the assets, as follows: Buildings Term of underlying land lease Land improvements 15 years Furniture and fixtures 7 years Equipment 3 to 6 years Software 3 to 8 years Leasehold improvements 20 years, not to exceed the shorter of the estimated useful life or remaining lease term Property and equipment, net, as of the periods presented consisted of the following (table in millions): February 3, January 28, 2023 2022 Equipment and software $ 2,062 $ 1,729 Buildings and improvements 1,235 1,170 Furniture and fixtures 145 134 Capital in progress 195 179 Total property and equipment 3,637 3,212 Accumulated depreciation (2,014) (1,751) Total property and equipment, net $ 1,623 $ 1,461 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Feb. 03, 2023 | |
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): For the Year Ended February 3, January 28, January 29, 2023 2022 2021 Operating lease expense $ 199 $ 192 $ 190 Finance lease expense: Amortization of ROU assets 7 6 6 Interest on lease liabilities 1 1 2 Total finance lease expense 8 7 8 Short-term lease expense 1 1 3 Variable lease expense 34 31 29 Total lease expense $ 242 $ 231 $ 230 Supplemental cash flow information related to operating and finance leases during the periods presented was as follows (table in millions): For the Year Ended February 3, January 28, January 29, 2023 2022 2021 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 177 $ 173 $ 174 Operating cash flows from finance leases 1 1 1 Financing cash flows from finance leases 5 5 4 ROU assets obtained in exchange for lease liabilities: Operating leases $ 81 $ 225 $ 275 Finance leases 8 — 1 Lease term and discount rate related to operating and finance leases as of the periods presented were as follows: February 3, January 28, 2023 2022 Weighted-average remaining lease term (in years) Operating leases 11.8 11.9 Finance leases 5.7 7.3 Weighted-average discount rate Operating leases 3.5 % 3.2 % Finance leases 3.2 % 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): February 3, 2023 Operating Leases Finance Leases ROU assets, non-current (1) $ 974 $ 47 Lease liabilities, current (2) $ 144 $ 9 Lease liabilities, non-current (3) 845 39 Total lease liabilities $ 989 $ 48 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 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 February 3, 2023 (table in millions): Operating Leases Finance Leases 2024 $ 175 $ 10 2025 135 9 2026 126 9 2027 111 7 2028 98 7 Thereafter 605 10 Total future minimum lease payments 1,250 52 Less: Imputed interest (261) (4) Total lease liabilities (1) $ 989 $ 48 (1) Total lease liabilities as of February 3, 2023 excluded legally binding lease payments for leases signed but not yet commenced of $19 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 February 3, 2023 (table in millions): Operating Leases Finance Leases 2024 $ 175 $ 10 2025 135 9 2026 126 9 2027 111 7 2028 98 7 Thereafter 605 10 Total future minimum lease payments 1,250 52 Less: Imputed interest (261) (4) Total lease liabilities (1) $ 989 $ 48 (1) Total lease liabilities as of February 3, 2023 excluded legally binding lease payments for leases signed but not yet commenced of $19 million. |
Accrued Expenses and Other (Tab
Accrued Expenses and Other (Tables) | 12 Months Ended |
Feb. 03, 2023 | |
Payables and Accruals [Abstract] | |
Components of Accrued Expenses | Accrued expenses and other as of the periods presented consisted of the following (table in millions): February 3, January 28, 2023 2022 Accrued employee related expenses $ 1,435 $ 1,412 Accrued partner liabilities 194 212 Lease liabilities 153 150 Income tax (1) 305 29 Other (2) 481 533 Total $ 2,568 $ 2,336 (1) Income tax primarily consists of the current portion of income taxes payable to federal tax authorities. Refer to Note O for more information regarding VMware’s income taxes. (2) Other primarily consists of interest accrual on outstanding debt, litigation accrual, and indirect tax accrual. |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Feb. 03, 2023 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income Before Income Tax | The domestic and foreign components of income before income tax for the periods presented were as follows (table in millions): For the Year Ended February 3, January 28, January 29, 2023 2022 2021 Domestic $ 561 $ 633 $ 932 Foreign 1,231 1,452 1,450 Total income before income tax $ 1,792 $ 2,085 $ 2,382 |
Schedule of Components of Income Tax Provision | VMware’s income tax provision for the periods presented consisted of the following (table in millions): For the Year Ended February 3, January 28, January 29, 2023 2022 2021 Federal: Current $ 352 $ 16 $ 157 Deferred (89) 64 (19) 263 80 138 State: Current 94 50 73 Deferred (43) (13) (14) 51 37 59 Foreign: Current 250 279 246 Deferred (86) (131) (119) 164 148 127 Total income tax provision $ 478 $ 265 $ 324 |
Schedule of Effective Income Tax Rate Reconciliation | A reconciliation of VMware’s effective tax rate to the statutory federal tax rate for the periods presented was as follows: For the Year Ended February 3, January 28, January 29, 2023 2022 2021 Statutory federal tax rate 21 % 21 % 21 % State taxes, net of federal benefit 2 % 1 % 2 % Tax rate differential for non-U.S. jurisdictions (9) % (10) % (8) % Research and development tax credit (7) % (4) % (3) % (Excess tax benefits) tax deficiencies from stock-based compensation 1 % (1) % (1) % Discrete tax benefit due to IP Transfer (1) — % — % (2) % U.S. tax on foreign earnings, including GILTI 14 % 1 % 2 % Permanent items 5 % 5 % 3 % Effective tax rate 27 % 13 % 14 % (1) A discrete tax benefit of $59 million was recognized with a deferred tax asset during the year ended January 29, 2021. This deferred tax asset was recognized as a result of intra-group transfer of Pivotal’s IP rights to an Irish subsidiary. |
Schedule of Deferred Tax Assets and Liabilities | Significant deferred tax assets and liabilities as of the periods presented consisted of the following (table in millions): February 3, January 28, 2023 2022 Deferred tax assets: Accruals and other $ 285 $ 280 Lease liabilities 180 179 Unearned revenue 567 538 Stock-based compensation 76 76 Tax credit and net operating loss carryforwards 536 710 Other assets, net 265 135 Intangible and other non-current assets 4,874 4,916 Capitalized research and development 386 — Gross deferred tax assets 7,169 6,834 Valuation allowance (495) (471) Total deferred tax assets 6,674 6,363 Deferred tax liabilities: Deferred commissions (207) (177) ROU Assets (152) (151) Property, plant and equipment, net (165) (134) Total deferred tax liabilities (524) (462) Net deferred tax assets $ 6,150 $ 5,901 |
Schedule of Amount Due To and From Dell and Payments Under the Income Tax Sharing Agreement | 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 For the Year Ended As of February 3, January 28, January 29, February 3, January 28, 2023 2022 2021 2023 2022 Reseller revenue $ 5,039 $ 4,764 $ 4,053 $ 6,145 $ 5,550 Internal-use revenue 54 56 63 19 39 Information about VMware’s payments for such arrangements during the periods presented consisted of the following (table in millions): For the Year Ended February 3, January 28, January 29, 2023 2022 2021 Purchases and leases of products and purchases of services (1) $ 186 $ 228 $ 206 Dell subsidiary support and administrative costs 6 38 74 (1) Amount includes indirect taxes that were remitted to Dell during the periods presented . Amounts due to and due from Dell pursuant to the Tax Matters Agreement as of the periods presented consisted of the following (table in millions): February 3, January 28, 2023 2022 Due from related parties: Current $ 1 $ 6 Non-current 208 199 Due to related parties: Current $ 306 $ 61 Non-current 648 909 For the Year Ended February 3, January 28, January 29, 2023 2022 2021 Payments from VMware to Dell, net (1) $ 49 $ 36 $ 307 |
Summary of Unrecognized Tax Benefits | A reconciliation of the beginning and ending amount of gross unrecognized tax benefits, excluding interest and penalties associated with unrecognized tax benefits, for the periods presented was as follows (table in millions): For the Year Ended February 3, January 28, January 29, 2023 2022 2021 Balance, beginning of the year $ 527 $ 508 $ 479 Tax positions related to current year: Additions 70 68 65 Tax positions related to prior years: Additions 20 2 12 Reductions (7) (10) (25) Settlements (4) (25) (14) Reductions resulting from a lapse of the statute of limitations (23) (10) (14) Foreign currency effects (8) (6) 5 Balance, end of the year $ 575 $ 527 $ 508 |
Stockholders_ Equity (Deficit)
Stockholders’ Equity (Deficit) (Tables) | 12 Months Ended |
Feb. 03, 2023 | |
Stockholders' Equity Note [Abstract] | |
Schedule of Stock Repurchase Program | The following table summarizes stock repurchase authorizations approved by VMware’s board of directors, which were open or completed during the years ended February 3, 2023, January 28, 2022 and January 29, 2021 (amounts in table in millions): Announcement Date Amount Authorized Expiration Date Status October 7, 2021 (1) $ 2,000 February 2, 2024 Suspended July 15, 2020 1,000 January 28, 2022 Terminated (2) May 29, 2019 1,500 January 28, 2022 (3) Completed in fiscal 2022 (1) The October 2021 authorization was effective as of November 1, 2021. (2) The July 2020 authorization, under which $183 million remained unpurchased, was terminated on November 1, 2021. (3) In July 2020, VMware’s Board of Directors extended its authorization of the existing stock repurchase program through January 28, 2022. The following table summarizes stock repurchase activity during the periods presented (aggregate purchase price in millions, shares in thousands): For the Year Ended February 3, January 28, January 29, 2023 2022 2021 Aggregate purchase price (1) $ 89 $ 1,169 $ 945 Class A Stock repurchased 803 8,197 6,944 Weighted-average price per share $ 111.33 $ 142.61 $ 136.13 (1) The aggregate purchase price of repurchased shares is classified as a reduction to additional paid-in capital until the balance is reduced to zero and the excess is recorded as a reduction to retained earnings (accumulated deficit). |
Schedule of Restricted Stock Activity | The following table summarizes restricted stock activity for the periods presented (units in thousands): Number of Units Weighted-Average Grant Date Fair Value Outstanding, January 31, 2020 17,474 $ 128.38 Granted 11,201 149.63 Vested (8,296) 114.59 Forfeited (2,589) 137.55 Outstanding, January 29, 2021 17,790 147.46 Granted 12,400 141.46 Special Dividend adjustment 4,068 n/a Vested (7,593) 134.00 Forfeited (3,663) 146.13 Outstanding, January 28, 2022 23,002 123.06 Granted 13,916 114.79 Vested (9,327) 124.33 Forfeited (4,069) 122.66 Outstanding, February 3, 2023 23,522 117.73 |
Summary of Restricted Stock Expected to Vest | Restricted stock that was expected to vest as of February 3, 2023 was as follows (units in thousands, aggregate intrinsic value in millions): Number of Units Weighted-Average Remaining Contractual Term Aggregate Intrinsic Value (1) Expected to vest 20,561 1.11 $ 2,504 (1) The aggregate intrinsic value represented the total pre-tax intrinsic values based on VMware's closing stock price of $121.77 as of February 3, 2023, which would have been received by the restricted stock holders had the restricted stock been issued as of February 3, 2023. |
Summary of Employee Stock Purchase Plan Activity | The following table summarizes ESPP activity for VMware during the periods presented (cash proceeds in millions, shares in thousands): For the Year Ended February 3, January 28, January 29, 2023 2022 2021 Cash proceeds $ 240 $ 236 $ 207 Class A Stock purchased 2,418 2,116 2,025 Weighted-average price per share $ 99.10 $ 111.31 $ 102.44 |
Summary of Stock Option Activity | The following table summarizes stock option activity for VMware during the periods presented (shares in thousands): Number of Shares Weighted-Average Exercise Price Outstanding, January 31, 2020 2,615 $ 56.58 Granted 31 43.20 Forfeited (156) 70.75 Exercised (1,247) 52.34 Outstanding, January 29, 2021 1,243 58.68 Granted 4 97.91 Special Dividend adjustment 147 n/a Forfeited (104) 63.73 Exercised (604) 57.19 Outstanding, January 28, 2022 686 46.95 Granted — — Forfeited (28) 50.66 Exercised (241) 42.21 Outstanding, February 3, 2023 417 49.43 Options outstanding that were exercisable and that had vested and were expected to vest as of February 3, 2023 was as follows (outstanding options in thousands, aggregate intrinsic value in millions): Outstanding Options Weighted- Average Exercise Price Weighted- Average Remaining Contractual Term Aggregate Intrinsic Value (1) Exercisable 413 $ 49.26 4.44 $ 30 Vested and expected to vest 417 49.43 4.46 30 (1) The aggregate intrinsic values represented the total pre-tax intrinsic values based on VMware's closing stock price of $121.77 as of February 3, 2023, which would have been received by the option holders had all in-the-money options been exercised as of that date. |
Summary of Components of Stock-Based Compensation | The following table summarizes the components of total stock-based compensation included in VMware’s consolidated statements of income during the periods presented (table in millions): For the Year Ended February 3, January 28, January 29, 2023 2022 2021 Cost of license revenue $ 1 $ 1 $ 1 Cost of subscription and SaaS revenue 25 21 19 Cost of services revenue 106 92 99 Research and development 616 528 524 Sales and marketing 376 302 322 General and administrative 166 131 157 Stock-based compensation 1,290 1,075 1,122 Income tax benefit (213) (202) (231) Total stock-based compensation, net of tax $ 1,077 $ 873 $ 891 |
Summary of Share-Based Compensation Valuation Assumptions | The fair value of each option to acquire Class A Stock granted during the periods presented was estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted-average assumptions: For the Year Ended February 3, January 28, January 29, Stock Options 2023 2022 2021 Dividend yield n/a None None Expected volatility n/a 35.0 % 38.8 % Risk-free interest rate n/a 0.3 % 0.4 % Expected term (in years) n/a 2.9 2.6 Weighted-average fair value at grant date n/a $ 62.99 $ 102.55 Employee Stock Purchase Plan Dividend yield None None None Expected volatility 29.7 % 36.5 % 36.1 % Risk-free interest rate 0.7 % 0.1 % 1.0 % Expected term (in years) 0.7 0.7 0.7 Weighted-average fair value at grant date $ 28.68 $ 37.95 $ 33.60 |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Feb. 03, 2023 | |
Segment Reporting [Abstract] | |
Schedule of Revenue by Type | Revenue by type during the periods presented was as follows (table in millions): For the Year Ended February 3, January 28, January 29, 2023 2022 2021 Revenue: License $ 2,835 $ 3,128 $ 3,033 Subscription and SaaS 4,012 3,205 2,587 Total license and subscription and SaaS 6,847 6,333 5,620 Services: Software maintenance 5,281 5,356 5,105 Professional services 1,222 1,162 1,042 Total services 6,503 6,518 6,147 Total revenue $ 13,350 $ 12,851 $ 11,767 |
Schedule of Revenue by Geographic Area | Revenue by geographic area during the periods presented was as follows (table in millions): For the Year Ended February 3, January 28, January 29, 2023 2022 2021 United States $ 6,528 $ 6,232 $ 5,878 International 6,822 6,619 5,889 Total $ 13,350 $ 12,851 $ 11,767 |
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): February 3, January 28, 2023 2022 United States $ 840 $ 882 International 261 241 Total $ 1,101 $ 1,123 |
Overview and Basis of Present_4
Overview and Basis of Presentation - Basis of Presentation (Details) $ in Millions | 12 Months Ended | ||||
Nov. 01, 2021 USD ($) | Feb. 03, 2023 USD ($) | Jan. 28, 2022 USD ($) | Jan. 29, 2021 USD ($) | Aug. 02, 2021 USD ($) | |
Overview and Basis of Presentation [Line Items] | |||||
Payment for special dividend | $ 11,500 | $ 0 | $ 11,499 | $ 0 | |
Long-term debt | 10,000 | ||||
Stock, conversion ratio | 1 | ||||
Director | SLP Stockholders | |||||
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 | 39.70% | ||||
VMW Term Loan | |||||
Overview and Basis of Presentation [Line Items] | |||||
Long-term debt | $ 4,000 | ||||
Senior Notes | |||||
Overview and Basis of Presentation [Line Items] | |||||
Long-term debt | $ 9,250 | $ 9,250 | |||
Senior Notes | 2021 Senior Notes | |||||
Overview and Basis of Presentation [Line Items] | |||||
Long-term debt | $ 6,000 |
Overview and Basis of Present_5
Overview and Basis of Presentation - Broadcom Merger Agreement (Details) | May 26, 2022 $ / shares | Feb. 03, 2023 $ / shares | Jan. 28, 2022 $ / shares |
Business Acquisition [Line Items] | |||
Common stock, par value (in USD per share) | $ 0.01 | $ 0.01 | |
VMware, Inc. | |||
Business Acquisition [Line Items] | |||
Duration of each of the extensions (in months) | 3 months | ||
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. | Class A Common Stock | |||
Business Acquisition [Line Items] | |||
Common stock, par value (in USD per share) | $ 0.01 |
Overview and Basis of Present_6
Overview and Basis of Presentation (Revenue Recognition) (Details) - Subscription and SaaS | 12 Months Ended |
Feb. 03, 2023 | |
Period One | |
Revenue from External Customer [Line Items] | |
Revenue contract term | 1 month |
Period Two | |
Revenue from External Customer [Line Items] | |
Revenue contract term | 1 year |
Period Three | |
Revenue from External Customer [Line Items] | |
Revenue contract term | 3 years |
Overview and Basis of Present_7
Overview and Basis of Presentation (Property and Equipment, Net) (Details) | 12 Months Ended |
Feb. 03, 2023 | |
Land improvements | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, useful life | 15 years |
Furniture and fixtures | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, useful life | 7 years |
Equipment | Minimum | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, useful life | 3 years |
Equipment | Maximum | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, useful life | 6 years |
Software | Minimum | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, useful life | 3 years |
Software | Maximum | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, useful life | 8 years |
Leasehold improvements | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, useful life | 20 years |
Overview and Basis of Present_8
Overview and Basis of Presentation (Purchased Intangible Assets, Goodwill, and Derivative Instruments) (Details) | 12 Months Ended | |
Feb. 03, 2023 USD ($) unit | Jan. 28, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Number of reporting units | unit | 1 | |
Goodwill impairment | $ | $ 0 | |
Maximum | Foreign Exchange Forward | Cash Flow Hedging | Designated As Hedging Instrument | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Forward contract maturity | 14 months | 14 months |
Overview and Basis of Present_9
Overview and Basis of Presentation (Employee Benefit Plans) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Feb. 03, 2023 | Jan. 28, 2022 | Jan. 29, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Company contributions | $ 237 | $ 227 | $ 176 |
Overview and Basis of Presen_10
Overview and Basis of Presentation (Advertising) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Feb. 03, 2023 | Jan. 28, 2022 | Jan. 29, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Advertising expense | $ 24 | $ 35 | $ 33 |
Overview and Basis of Presen_11
Overview and Basis of Presentation (Net Income Per Share) (Details) | Nov. 01, 2021 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Stock, conversion ratio | 1 |
Overview and Basis of Presen_12
Overview and Basis of Presentation (Concentrations of Risks) (Details) - Customer Concentration Risk | 12 Months Ended | ||
Feb. 03, 2023 | Jan. 28, 2022 | Jan. 29, 2021 | |
Accounts Receivable | Distributor One | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage (more than 10%) | 10% | 12% | |
Accounts Receivable | Distributor Two | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage (more than 10%) | 10% | 11% | |
Accounts Receivable | Distributor Three | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage (more than 10%) | 12% | 11% | |
Sales | Distributor One | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage (more than 10%) | 11% | ||
Sales | Dell | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage (more than 10%) | 38% | 38% | 35% |
Revenue, Unearned Revenue and_3
Revenue, Unearned Revenue and Remaining Performance Obligations - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Feb. 03, 2023 | Jan. 28, 2022 | Jan. 29, 2021 | |
Disaggregation of Revenue [Line Items] | |||
Contract assets | $ 33 | $ 36 | |
Customer deposits included in accrued expenses and other | 1,087 | 470 | |
Customer deposits, certain cancellation rights | 681 | ||
Customer deposits, cloud credits | 405 | ||
Customer deposits included in other liabilities | 182 | 166 | |
Deferred commissions, current | 0 | 17 | |
Deferred commissions, non-current | 1,500 | 1,200 | |
Amortization of deferred commissions | $ 642 | 517 | $ 437 |
Remaining weighted average contractual duration | 2 years | ||
Current period billings | $ 10,500 | 9,100 | |
Revenue recognized from amounts previously classified as unearned revenue | $ 9,000 | $ 8,200 | $ 7,400 |
Minimum | |||
Disaggregation of Revenue [Line Items] | |||
Payment terms | 30 days | ||
Maximum | |||
Disaggregation of Revenue [Line Items] | |||
Payment terms | 45 days |
Revenue, Unearned Revenue and_4
Revenue, Unearned Revenue and Remaining Performance Obligations - Summary of Unearned Revenue (Details) - USD ($) $ in Millions | Feb. 03, 2023 | Jan. 28, 2022 |
Disaggregation of Revenue [Line Items] | ||
Total unearned revenue | $ 12,743 | $ 11,222 |
Unearned license revenue | ||
Disaggregation of Revenue [Line Items] | ||
Total unearned revenue | 21 | 19 |
Unearned subscription and Software as a Service (“SaaS”) revenue | ||
Disaggregation of Revenue [Line Items] | ||
Total unearned revenue | 4,401 | 2,669 |
Unearned software maintenance revenue | ||
Disaggregation of Revenue [Line Items] | ||
Total unearned revenue | 6,805 | 7,208 |
Unearned professional services revenue | ||
Disaggregation of Revenue [Line Items] | ||
Total unearned revenue | $ 1,516 | $ 1,326 |
Revenue, Unearned Revenue and_5
Revenue, Unearned Revenue and Remaining Performance Obligations - Remaining Performance Obligations (Details) - USD ($) $ in Billions | Feb. 03, 2023 | Jan. 28, 2022 |
Revenue from Contract with Customer [Abstract] | ||
Remaining performance obligation | $ 13.6 | $ 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]: 2023-02-04 | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Remaining performance obligation percentage | 54% | |
Remaining performance obligation period | 12 months | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-02-04 | ||
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 | 12 Months Ended | |||
Nov. 01, 2021 | Feb. 03, 2023 | Jan. 28, 2022 | Jan. 29, 2021 | |
Related Party Transaction [Line Items] | ||||
Commercial framework agreement, term | 5 years | |||
Commercial framework agreement, renewal term | 1 year | |||
Dell | ||||
Related Party Transaction [Line Items] | ||||
Customer deposits | $ 766 | $ 298 | ||
Customer Concentration Risk | Dell acting as OEM | ||||
Related Party Transaction [Line Items] | ||||
Percentage of revenues | 5% | 4% | ||
Customer Concentration Risk | Dell | Dell acting as OEM | ||||
Related Party Transaction [Line Items] | ||||
Percentage of revenues | 5% | |||
Customer Concentration Risk | OEM Revenue | Dell | ||||
Related Party Transaction [Line Items] | ||||
Percentage of revenues | 14% | 13% | 12% | |
Revenue Benchmark | Customer Concentration Risk | Dell | Dell | ||||
Related Party Transaction [Line Items] | ||||
Concentration risk, percentage (more than 10%) | 38% | 38% | 35% |
Related Parties - Schedule of R
Related Parties - Schedule of Related Party Transactions (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Feb. 03, 2023 | Jan. 28, 2022 | Jan. 29, 2021 | |
Related Party Transaction [Line Items] | |||
Unearned Revenue | $ 12,743 | $ 11,222 | |
Dell | Reseller revenue | |||
Related Party Transaction [Line Items] | |||
Revenue and Receipts | 5,039 | 4,764 | $ 4,053 |
Unearned Revenue | 6,145 | 5,550 | |
Dell | Internal-use revenue | |||
Related Party Transaction [Line Items] | |||
Revenue and Receipts | 54 | 56 | 63 |
Unearned Revenue | 19 | 39 | |
Dell | Purchases and leases of products and purchases of services | |||
Related Party Transaction [Line Items] | |||
Related party costs | 186 | 228 | 206 |
Dell | Dell subsidiary support and administrative costs | |||
Related Party Transaction [Line Items] | |||
Related party costs | $ 6 | $ 38 | $ 74 |
Related Parties - Dell Financia
Related Parties - Dell Financial Services (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Feb. 03, 2023 | Jan. 28, 2022 | Jan. 29, 2021 | |
Financial Services | Dell | |||
Related Party Transaction [Line Items] | |||
Financing fees | $ 33 | $ 29 | $ 60 |
Related Parties - Due To_From R
Related Parties - Due To/From Related Parties (Details) | 12 Months Ended |
Feb. 03, 2023 | |
Related Party Transactions [Abstract] | |
Cash settlement period | 60 days |
Related Parties (Special Divide
Related Parties (Special Dividend) (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Nov. 01, 2021 | Feb. 03, 2023 | Jan. 28, 2022 | Jan. 29, 2021 | |
Related Party Transaction [Line Items] | ||||
Payment for special dividend | $ 11,500 | $ 0 | $ 11,499 | $ 0 |
Dell | ||||
Related Party Transaction [Line Items] | ||||
Payment for special dividend | $ 9,300 |
Related Parties (Note Payable t
Related Parties (Note Payable to Dell) (Details) $ in Millions | 3 Months Ended |
Oct. 29, 2021 USD ($) | |
Dell | Note, December 2022 | Notes payable | |
Related Party Transaction [Line Items] | |
Repayment of note payable to Dell | $ 270 |
Commitments and Contingencies -
Commitments and Contingencies - Narrative (Details) $ in Millions | 12 Months Ended | |||||||||||
Feb. 21, 2023 patent | May 02, 2022 USD ($) | Jun. 23, 2020 USD ($) | Jun. 02, 2020 lawsuit patent | Mar. 05, 2020 stockholder shares | Jan. 24, 2020 USD ($) Patent | Oct. 22, 2019 Patent | Apr. 25, 2019 trademark Patent | Jan. 29, 2021 USD ($) | 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 | |||||||||||
Insurance settlement receivable, current | $ | $ 43 | |||||||||||
Accrued loss contingency | $ | $ 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 | |||||||||||
WSOU Investments LLC vs VMware | Subsequent Event | ||||||||||||
Loss Contingencies [Line Items] | ||||||||||||
Asserted patents remaining | patent | 1 | |||||||||||
Patents found not infringed | patent | 2 |
Commitments and Contingencies_2
Commitments and Contingencies (Minimum Contractual Commitments) (Details) $ in Millions | Feb. 03, 2023 USD ($) |
Purchase Obligations | |
2024 | $ 180 |
2025 | 50 |
2026 | 7 |
2027 | 1 |
2028 | 1 |
Thereafter | 0 |
Total | 239 |
Asset Retirement Obligations | |
2024 | 1 |
2025 | 4 |
2026 | 2 |
2027 | 10 |
2028 | 0 |
Thereafter | 5 |
Total | 22 |
Total | |
2024 | 181 |
2025 | 54 |
2026 | 9 |
2027 | 11 |
2028 | 1 |
Thereafter | 5 |
Total | $ 261 |
Business Combinations, Defini_3
Business Combinations, Definite-Lived Intangible Assets, Net and Goodwill (Narrative) (Details) $ in Millions | 3 Months Ended | 12 Months Ended | ||||
Oct. 30, 2020 USD ($) | Jul. 31, 2020 USD ($) | May 01, 2020 USD ($) | Feb. 03, 2023 USD ($) | Jan. 28, 2022 USD ($) | Jan. 29, 2021 USD ($) acquistion | |
Business Acquisition [Line Items] | ||||||
Amortization expense | $ 254 | $ 303 | $ 328 | |||
SaltStack, Inc. | ||||||
Business Acquisition [Line Items] | ||||||
Total purchase price | $ 51 | |||||
Datrium, Inc. | ||||||
Business Acquisition [Line Items] | ||||||
Total purchase price | $ 137 | |||||
Lastline, Inc. | ||||||
Business Acquisition [Line Items] | ||||||
Total purchase price | $ 114 | |||||
Nyansa, Inc. | ||||||
Business Acquisition [Line Items] | ||||||
Total purchase price | $ 38 | |||||
Other Acquisitions | ||||||
Business Acquisition [Line Items] | ||||||
Total purchase price | $ 62 | |||||
Number of other acquisitions | acquistion | 5 |
Business Combinations, Defini_4
Business Combinations, Definite-Lived Intangible Assets, Net and Goodwill (Roll-forward of Intangible Assets) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Feb. 03, 2023 | Jan. 28, 2022 | Jan. 29, 2021 | |
Finite-lived Intangible Assets [Roll Forward] | |||
Balance, beginning of the year | $ 714 | $ 993 | |
Additions related to business combinations and purchases of intangible assets | 18 | 24 | |
Amortization expense | (254) | (303) | $ (328) |
Balance, end of the year | $ 478 | $ 714 | $ 993 |
Business Combinations, Defini_5
Business Combinations, Definite-Lived Intangible Assets, Net and Goodwill - Intangible Assets (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Feb. 03, 2023 | Jan. 28, 2022 | Jan. 29, 2021 | |
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Amount | $ 1,520 | $ 1,688 | |
Accumulated Amortization | (1,042) | (974) | |
Net Book Value | 478 | 714 | $ 993 |
Purchased technology | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Amount | 819 | 836 | |
Accumulated Amortization | (623) | (501) | |
Net Book Value | $ 196 | $ 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 | $ 632 | $ 721 | |
Accumulated Amortization | (371) | (376) | |
Net Book Value | $ 261 | $ 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 | $ 131 | |
Accumulated Amortization | (48) | (97) | |
Net Book Value | $ 21 | $ 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 |
Business Combinations, Defini_6
Business Combinations, Definite-Lived Intangible Assets, Net and Goodwill - Amortization of Intangible Assets (Details) - USD ($) $ in Millions | Feb. 03, 2023 | Jan. 28, 2022 | Jan. 29, 2021 |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
2024 | $ 205 | ||
2025 | 112 | ||
2026 | 72 | ||
2027 | 42 | ||
2028 | 14 | ||
Thereafter | 33 | ||
Net Book Value | $ 478 | $ 714 | $ 993 |
Business Combinations, Defini_7
Business Combinations, Definite-Lived Intangible Assets, Net and Goodwill (Changes in Carrying Amount of Goodwill) (Details) - USD ($) $ in Millions | 12 Months Ended | |
Feb. 03, 2023 | Jan. 28, 2022 | |
Goodwill [Roll Forward] | ||
Balance, beginning of the year | $ 9,598 | $ 9,599 |
Change in goodwill due to business combinations and related adjustments | 0 | (1) |
Balance, end of the year | $ 9,598 | $ 9,598 |
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 | 12 Months Ended | ||
Feb. 03, 2023 | Jan. 28, 2022 | Jan. 29, 2021 | |
Earnings Per Share [Abstract] | |||
Net income, basic | $ 1,314 | $ 1,820 | $ 2,058 |
Net income, diluted | $ 1,314 | $ 1,820 | $ 2,058 |
Weighted-average shares of common stock, basic (in shares) | 423,150 | 419,504 | 419,841 |
Effect of other dilutive securities (in shares) | 2,710 | 2,890 | 3,399 |
Weighted-average shares of common stock, diluted (in shares) | 425,860 | 422,394 | 423,240 |
Net income per weighted-average share of common stock, basic (in USD per share) | $ 3.11 | $ 4.34 | $ 4.90 |
Net income per weighted-average share of common stock, basic (in USD per share) | $ 3.09 | $ 4.31 | $ 4.86 |
Net Income Per Share - Anti-Dil
Net Income Per Share - Anti-Dilutive Shares Excluded From Net Income (Details) - Common Stock - shares shares in Thousands | 12 Months Ended | ||
Feb. 03, 2023 | Jan. 28, 2022 | Jan. 29, 2021 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Anti-dilutive securities, amount (in shares) | 600 | 520 | 5,188 |
Employee stock options | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Anti-dilutive securities, amount (in shares) | 65 | 57 | 150 |
RSUs | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Anti-dilutive securities, amount (in shares) | 535 | 463 | 5,038 |
Realignment (Narrative) (Detail
Realignment (Narrative) (Details) $ in Millions | 3 Months Ended | 12 Months Ended | ||||
Jul. 29, 2022 position | Feb. 03, 2023 USD ($) | Jan. 28, 2022 USD ($) | Jan. 29, 2021 USD ($) position | Jan. 31, 2020 USD ($) position | ||
Restructuring Cost and Reserve [Line Items] | ||||||
Number of positions eliminated | position | 80 | 280 | 1,100 | |||
Realignment | [1] | $ 8 | $ 1 | $ 42 | ||
Severance-related costs | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Realignment | $ 42 | $ 79 | ||||
[1]Includes stock-based compensation as follows: Cost of license revenue $ 1 $ 1 $ 1 Cost of subscription and SaaS revenue 25 21 19 Cost of services revenue 106 92 99 Research and development 616 528 524 Sales and marketing 376 302 322 General and administrative 166 131 157 |
Realignment (Schedule of Realig
Realignment (Schedule of Realignment Expenses) (Details) - USD ($) $ in Millions | 12 Months Ended | ||||
Feb. 03, 2023 | Jan. 28, 2022 | Jan. 29, 2021 | Jan. 31, 2020 | ||
Restructuring Reserve [Roll Forward] | |||||
Realignment Expense | [1] | $ 8 | $ 1 | $ 42 | |
Severance-related costs | |||||
Restructuring Reserve [Roll Forward] | |||||
Balance as of beginning of period | $ 3 | 74 | |||
Realignment Expense | 42 | $ 79 | |||
Utilization | (113) | ||||
Balance as of end of period | $ 3 | $ 74 | |||
[1]Includes stock-based compensation as follows: Cost of license revenue $ 1 $ 1 $ 1 Cost of subscription and SaaS revenue 25 21 19 Cost of services revenue 106 92 99 Research and development 616 528 524 Sales and marketing 376 302 322 General and administrative 166 131 157 |
Cash, Cash Equivalents, Restr_3
Cash, Cash Equivalents, Restricted Cash and Short-Term Investments - Cash and Cash Equivalents (Details) - USD ($) $ in Millions | Feb. 03, 2023 | Jan. 28, 2022 |
Schedule of Investments [Line Items] | ||
Cash and cash equivalents | $ 5,100 | $ 3,614 |
Cash equivalents | 4,300 | 3,000 |
Money-market funds | ||
Schedule of Investments [Line Items] | ||
Cash equivalents | 4,200 | 3,000 |
Time deposits | ||
Schedule of Investments [Line Items] | ||
Cash equivalents | $ 19 | $ 34 |
Cash, Cash Equivalents, Restr_4
Cash, Cash Equivalents, Restricted Cash and Short-Term Investments - Restricted Cash (Details) - USD ($) $ in Millions | Feb. 03, 2023 | Jan. 28, 2022 | Jan. 29, 2021 | Jan. 31, 2020 |
Investments, Debt and Equity Securities [Abstract] | ||||
Cash and cash equivalents | $ 5,100 | $ 3,614 | ||
Restricted cash within other current assets | 24 | 43 | ||
Restricted cash within other assets | 3 | 6 | ||
Total cash, cash equivalents and restricted cash | $ 5,127 | $ 3,663 | $ 4,770 | $ 3,031 |
Cash, Cash Equivalents, Restr_5
Cash, Cash Equivalents, Restricted Cash and Short-Term Investments - Short-Term Investments (Details) - USD ($) $ in Millions | Feb. 03, 2023 | 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 | 12 Months Ended | |||||
Jan. 18, 2022 USD ($) | Aug. 02, 2021 USD ($) debt_instrument | May 11, 2020 USD ($) | Feb. 03, 2023 USD ($) | Jan. 28, 2022 USD ($) | Jan. 29, 2021 USD ($) | |
Debt Instrument [Line Items] | ||||||
Proceeds from issuance of senior notes, net of issuance costs | $ 0 | $ 5,944 | $ 1,979 | |||
Loss on extinguishment of debt | 2 | 21 | 8 | |||
Interest expense | 304 | 252 | 204 | |||
Senior Notes | ||||||
Debt Instrument [Line Items] | ||||||
Debt discount | 12 | 15 | ||||
Interest expense | $ 247 | 240 | $ 183 | |||
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 | |||||
Senior Notes | 2.95% Senior Note Due August 21, 2022 | ||||||
Debt Instrument [Line Items] | ||||||
Redemption of debt | $ 1,500 | |||||
Loss on extinguishment of debt | $ 21 | |||||
Senior Notes | Unsecured Senior Notes Due August 21, 2020 | ||||||
Debt Instrument [Line Items] | ||||||
Repayment of debt | $ 1,300 |
Debt - Carrying Value of Senior
Debt - Carrying Value of Senior Notes (Details) - USD ($) $ in Millions | Feb. 03, 2023 | Jan. 28, 2022 |
Debt Instrument [Line Items] | ||
Long-term debt | $ 10,000 | |
Net carrying amount | $ 9,440 | 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 | (12) | (15) |
Less: unamortized debt issuance costs | (46) | (61) |
Net carrying amount | 9,192 | 9,174 |
Current portion of long-term debt | 1,000 | 0 |
Long-term debt | $ 8,192 | $ 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) - USD ($) $ in Millions | Feb. 03, 2023 | Jan. 28, 2022 |
Debt Instrument [Line Items] | ||
Total | $ 10,000 | |
Senior Notes | ||
Debt Instrument [Line Items] | ||
2024 | $ 1,000 | |
2025 | 1,250 | |
2026 | 750 | |
2027 | 1,500 | |
2028 | 1,750 | |
Thereafter | 3,000 | |
Total | $ 9,250 | $ 9,250 |
Debt - Senior Unsecured Term Lo
Debt - Senior Unsecured Term Loan Facility (Details) - USD ($) $ in Millions | 12 Months Ended | ||||||
Nov. 01, 2021 | Sep. 02, 2021 | Feb. 03, 2023 | Jan. 28, 2022 | Jan. 29, 2021 | Jan. 31, 2020 | Sep. 26, 2019 | |
Debt Instrument [Line Items] | |||||||
Repayment of term loan | $ 2,250 | $ 500 | $ 1,500 | ||||
Long-term debt | 9,440 | 12,671 | |||||
Interest expense | 304 | 252 | 204 | ||||
VMW Term Loan | Senior Unsecured Term Loan Facility | |||||||
Debt Instrument [Line Items] | |||||||
Repayment of term loan | 1,500 | $ 1,900 | |||||
VMW Term Loan | Senior Unsecured Term Loan Facility | |||||||
Debt Instrument [Line Items] | |||||||
Term loan maximum borrowing capacity | $ 2,000 | ||||||
Borrowings, net of issuance costs | $ 3,400 | ||||||
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 | 2,300 | 500 | |||||
Long-term debt | $ 1,200 | 3,500 | |||||
Weighted average interest rate | 5.34% | ||||||
Interest expense | $ 57 | $ 0 | $ 17 | ||||
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 ($) extension | Feb. 03, 2023 USD ($) | Jan. 28, 2022 USD ($) |
Line of Credit Facility [Line Items] | |||
Long-term debt | $ 9,440,000,000 | $ 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 | Feb. 03, 2023 | 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 Equivalents | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash equivalents | $ 4,269 | 3,032 |
Cash equivalents | Level 1 | Cash Equivalents | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash equivalents | 4,250 | 2,998 |
Cash equivalents | Level 2 | Cash Equivalents | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash equivalents | 19 | 34 |
Money-market funds | Cash Equivalents | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash equivalents | 4,250 | 2,998 |
Money-market funds | Level 1 | Cash Equivalents | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash equivalents | 4,250 | 2,998 |
Money-market funds | Level 2 | Cash Equivalents | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash equivalents | 0 | 0 |
Time deposits | Cash Equivalents | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash equivalents | 19 | 34 |
Time deposits | Level 1 | Cash Equivalents | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash equivalents | 0 | 0 |
Time deposits | Level 2 | Cash Equivalents | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash equivalents | $ 19 | $ 34 |
Fair Value Measurements - Narra
Fair Value Measurements - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||
Apr. 29, 2022 | Feb. 03, 2023 | Jan. 28, 2022 | Jan. 29, 2021 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Deferred compensation plan assets | $ 166 | $ 162 | ||
Plan liabilities in accrued expenses and other | 16 | 16 | ||
Plan liabilities in other liabilities | 150 | 146 | ||
Investment in equity securities sold | 19 | 83 | $ 26 | |
Realized loss from equity securities sold | 37 | |||
Realized gain from equity securities sold | 23 | |||
Unrealized loss on investments | (29) | |||
Unrealized gain on adjustment of investments to fair value | 140 | |||
Securities without readily determinable fair value | 87 | 163 | ||
Securities without readily determinable fair value, amount sold | 88 | |||
Gross upward adjustments | 29 | |||
Gross downward adjustments | 14 | |||
Unrealized gain on equity securities without a readily determinable fair value | 0 | 25 | ||
Unrealized loss on equity securities without a readily determinable fair value | $ 12 | |||
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 | $ 8,500 | $ 9,300 |
Derivatives and Hedging Activ_2
Derivatives and Hedging Activities (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Feb. 03, 2023 | Jan. 28, 2022 | Jan. 29, 2021 | |
Derivative [Line Items] | |||
Gain on forward contracts not designated as hedging instruments | $ 23 | $ 57 | $ (63) |
Combined loss on settlement of forward contracts and the underlying foreign currency denominated assets and liabilities | $ (15) | $ 0 | $ (31) |
Foreign Exchange Forward | Not Designated As Hedging Instrument | |||
Derivative [Line Items] | |||
Forward contract maturity | 1 month | 1 month | |
Notional amount | $ 1,700 | $ 1,500 | |
Foreign Exchange Forward | Cash Flow Hedging | Designated As Hedging Instrument | |||
Derivative [Line Items] | |||
Notional amount | $ 677 | $ 642 | |
Maximum | Foreign Exchange Forward | Cash Flow Hedging | Designated As Hedging Instrument | |||
Derivative [Line Items] | |||
Forward contract maturity | 14 months | 14 months |
Property and Equipment, Net (Co
Property and Equipment, Net (Components of Property and Equipment) (Details) - USD ($) $ in Millions | Feb. 03, 2023 | Jan. 28, 2022 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment | $ 3,637 | $ 3,212 |
Accumulated depreciation | (2,014) | (1,751) |
Total property and equipment, net | 1,623 | 1,461 |
Equipment and software | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | 2,062 | 1,729 |
Buildings and improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | 1,235 | 1,170 |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | 145 | 134 |
Capital in progress | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | $ 195 | $ 179 |
Property and Equipment, Net (Na
Property and Equipment, Net (Narrative) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Feb. 03, 2023 | Jan. 28, 2022 | Jan. 29, 2021 | |
Property, Plant and Equipment [Abstract] | |||
Depreciation | $ 319 | $ 276 | $ 253 |
Leases - Narrative (Details)
Leases - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Feb. 03, 2023 | Jan. 28, 2022 | Jan. 29, 2021 | |
Lessee, Lease, Description [Line Items] | |||
Sublease income | $ 15 | $ 20 | $ 20 |
Minimum | |||
Lessee, Lease, Description [Line Items] | |||
Term of lease contract | 1 month | ||
Maximum | |||
Lessee, Lease, Description [Line Items] | |||
Term of lease contract | 23 years |
Leases - Lease Cost (Details)
Leases - Lease Cost (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Feb. 03, 2023 | Jan. 28, 2022 | Jan. 29, 2021 | |
Leases [Abstract] | |||
Operating lease expense | $ 199 | $ 192 | $ 190 |
Finance lease expense: | |||
Amortization of ROU assets | 7 | 6 | 6 |
Interest on lease liabilities | 1 | 1 | 2 |
Total finance lease expense | 8 | 7 | 8 |
Short-term lease expense | 1 | 1 | 3 |
Variable lease expense | 34 | 31 | 29 |
Total lease expense | $ 242 | $ 231 | $ 230 |
Leases - Lease Cash Flow (Detai
Leases - Lease Cash Flow (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Feb. 03, 2023 | Jan. 28, 2022 | Jan. 29, 2021 | |
Cash paid for amounts included in the measurement of lease liabilities: | |||
Operating cash flows from operating leases | $ 177 | $ 173 | $ 174 |
Operating cash flows from finance leases | 1 | 1 | 1 |
Financing cash flows from finance leases | 5 | 5 | 4 |
ROU assets obtained in exchange for lease liabilities: | |||
Operating leases | 81 | 225 | 275 |
Finance leases | $ 8 | $ 0 | $ 1 |
Leases - Lease Assets and Liabi
Leases - Lease Assets and Liabilities (Details) - USD ($) $ in Millions | Feb. 03, 2023 | Jan. 28, 2022 |
Operating Leases | ||
ROU assets, non-current | $ 974 | $ 1,062 |
Lease liabilities, current | 144 | 145 |
Lease liabilities, non-current | 845 | 927 |
Total lease liabilities | 989 | 1,072 |
Finance Leases | ||
ROU assets, non-current | 47 | 46 |
Lease liabilities, current | 9 | 5 |
Lease liabilities, non-current | 39 | 43 |
Total lease liabilities | $ 48 | $ 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) | Feb. 03, 2023 | Jan. 28, 2022 |
Weighted-average remaining lease term (in years) | ||
Operating leases | 11 years 9 months 18 days | 11 years 10 months 24 days |
Finance leases | 5 years 8 months 12 days | 7 years 3 months 18 days |
Weighted-average discount rate | ||
Operating leases | 3.50% | 3.20% |
Finance leases | 3.20% | 2.90% |
Leases - Lease Liability Maturi
Leases - Lease Liability Maturity (Details) - USD ($) $ in Millions | Feb. 03, 2023 | Jan. 28, 2022 |
Operating Leases | ||
2024 | $ 175 | |
2025 | 135 | |
2026 | 126 | |
2027 | 111 | |
2028 | 98 | |
Thereafter | 605 | |
Total future minimum lease payments | 1,250 | |
Less: Imputed interest | (261) | |
Total lease liabilities | 989 | $ 1,072 |
Finance Leases | ||
2024 | 10 | |
2025 | 9 | |
2026 | 9 | |
2027 | 7 | |
2028 | 7 | |
Thereafter | 10 | |
Total future minimum lease payments | 52 | |
Less: Imputed interest | (4) | |
Total lease liabilities | 48 | $ 48 |
Legally binding minimum lease payments for leases signed but not yet commenced | $ 19 |
Accrued Expenses and Other (Det
Accrued Expenses and Other (Details) - USD ($) $ in Millions | Feb. 03, 2023 | Jan. 28, 2022 |
Payables and Accruals [Abstract] | ||
Accrued employee related expenses | $ 1,435 | $ 1,412 |
Accrued partner liabilities | 194 | 212 |
Lease liabilities | 153 | 150 |
Income tax | 305 | 29 |
Other | 481 | 533 |
Total | $ 2,568 | $ 2,336 |
Income Taxes (Income Before Inc
Income Taxes (Income Before Income Tax) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Feb. 03, 2023 | Jan. 28, 2022 | Jan. 29, 2021 | |
Income Tax Disclosure [Abstract] | |||
Domestic | $ 561 | $ 633 | $ 932 |
Foreign | 1,231 | 1,452 | 1,450 |
Income before income tax | $ 1,792 | $ 2,085 | $ 2,382 |
Income Taxes (Tax Provision (Be
Income Taxes (Tax Provision (Benefit) by Jurisdiction) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Feb. 03, 2023 | Jan. 28, 2022 | Jan. 29, 2021 | |
Federal: | |||
Current | $ 352 | $ 16 | $ 157 |
Deferred | (89) | 64 | (19) |
Total | 263 | 80 | 138 |
State: | |||
Current | 94 | 50 | 73 |
Deferred | (43) | (13) | (14) |
Total | 51 | 37 | 59 |
Foreign: | |||
Current | 250 | 279 | 246 |
Deferred | (86) | (131) | (119) |
Total | 164 | 148 | 127 |
Total income tax provision | $ 478 | $ 265 | $ 324 |
Income Taxes (Narrative) (Detai
Income Taxes (Narrative) (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Feb. 03, 2023 | Jan. 28, 2022 | Jan. 29, 2021 | Jan. 31, 2020 | |
Schedule of Income Taxes [Line Items] | ||||
Discrete tax benefit (expense) on investment in equity securities | $ 31 | $ (52) | ||
Discrete tax benefit on intra-group transfer of intellectual property rights | 59 | |||
Capitalized research and development | 386 | 0 | ||
Valuation allowance | 495 | 471 | ||
Increase (decrease) in valuation allowance | 24 | |||
Uncertain tax positions | $ 575 | 527 | $ 508 | $ 479 |
Transition tax, payment period | 3 years | |||
Increase (decrease) to stockholders' equity from tax sharing agreement | (67) | $ (46) | ||
Net unrecognized tax benefits, including interest and penalties | $ 287 | 242 | ||
Unrecognized tax benefits that would impact effective tax rate | 440 | 397 | ||
Unrecognized tax benefits, interest and penalties on income taxes accrued | 75 | 60 | ||
Reduction in total unrecognized tax benefits reasonably possible within next 12 months, minimum | 15 | |||
Dell | Tax matters agreement | ||||
Schedule of Income Taxes [Line Items] | ||||
Transition tax | 445 | 504 | ||
Uncertain tax positions | 285 | 276 | ||
State R&D Tax Credits And Foreign Capital Loss Carryforwards | ||||
Schedule of Income Taxes [Line Items] | ||||
Valuation allowance | 495 | 471 | ||
Research Tax Credit Carryforward | ||||
Schedule of Income Taxes [Line Items] | ||||
Tax carryforward | 0 | 164 | ||
Federal | ||||
Schedule of Income Taxes [Line Items] | ||||
Operating loss carryforwards | 120 | 269 | ||
Federal | Foreign Tax Credit | ||||
Schedule of Income Taxes [Line Items] | ||||
Tax carryforward | 21 | 49 | ||
State and Local Jurisdiction | ||||
Schedule of Income Taxes [Line Items] | ||||
Operating loss carryforwards | 356 | 521 | ||
State and Local Jurisdiction | Research Tax Credit Carryforward | California | ||||
Schedule of Income Taxes [Line Items] | ||||
Tax carryforward | $ 459 | 397 | ||
Foreign | ||||
Schedule of Income Taxes [Line Items] | ||||
Operating loss carryforwards | 9 | |||
Foreign | Ireland | ||||
Schedule of Income Taxes [Line Items] | ||||
Foreign statutory income tax rate, Ireland | 12.50% | |||
Foreign | Capital Loss Carryforward | ||||
Schedule of Income Taxes [Line Items] | ||||
Tax carryforward | $ 22 | 23 | ||
Foreign | Foreign Tax Credit | ||||
Schedule of Income Taxes [Line Items] | ||||
Tax carryforward | $ 17 | $ 0 |
Income Taxes (Effective Income
Income Taxes (Effective Income Tax Rate Reconciliation) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Feb. 03, 2023 | Jan. 28, 2022 | Jan. 29, 2021 | |
Income Tax Disclosure [Abstract] | |||
Statutory federal tax rate | 21% | 21% | 21% |
State taxes, net of federal benefit | 2% | 1% | 2% |
Tax rate differential for non-U.S. jurisdictions | (9.00%) | (10.00%) | (8.00%) |
Research and development tax credit | (7.00%) | (4.00%) | (3.00%) |
(Excess tax benefits) tax deficiencies from stock-based compensation | 1% | (1.00%) | (1.00%) |
Discrete tax benefit due to IP Transfer | 0% | 0% | (2.00%) |
U.S. tax on foreign earnings, including GILTI | 14% | 1% | 2% |
Permanent items | 5% | 5% | 3% |
Effective tax rate | 27% | 13% | 14% |
Deferred tax asset, intra-entity transfer other than inventory | $ 59 |
Income Taxes (Deferred Tax Asse
Income Taxes (Deferred Tax Assets and Liabilities) (Details) - USD ($) $ in Millions | Feb. 03, 2023 | Jan. 28, 2022 |
Deferred tax assets: | ||
Accruals and other | $ 285 | $ 280 |
Lease liabilities | 180 | 179 |
Unearned revenue | 567 | 538 |
Stock-based compensation | 76 | 76 |
Tax credit and net operating loss carryforwards | 536 | 710 |
Other assets, net | 265 | 135 |
Intangible and other non-current assets | 4,874 | 4,916 |
Capitalized research and development | 386 | 0 |
Gross deferred tax assets | 7,169 | 6,834 |
Valuation allowance | (495) | (471) |
Total deferred tax assets | 6,674 | 6,363 |
Deferred tax liabilities: | ||
Deferred commissions | (207) | (177) |
ROU Assets | (152) | (151) |
Property, plant and equipment, net | (165) | (134) |
Total deferred tax liabilities | (524) | (462) |
Net deferred tax assets | $ 6,150 | $ 5,901 |
Income Taxes (Tax Matters Agree
Income Taxes (Tax Matters Agreement) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Feb. 03, 2023 | Jan. 28, 2022 | Jan. 29, 2021 | |
Related Party Transaction [Line Items] | |||
Payments from VMware to Dell, net | $ 383 | $ 331 | $ 543 |
Dell | Tax matters agreement | |||
Related Party Transaction [Line Items] | |||
Due from related parties, current | 1 | 6 | |
Due from related parties, non-current | 208 | 199 | |
Due to related parties, current | 306 | 61 | |
Due to related parties, non-current | 648 | 909 | |
Payments from VMware to Dell, net | 49 | 36 | $ 307 |
Proceeds from tax refunds | $ 0 | $ 60 |
Income Taxes (Unrecognized Tax
Income Taxes (Unrecognized Tax Benefits) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Feb. 03, 2023 | Jan. 28, 2022 | Jan. 29, 2021 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Balance, beginning of the year | $ 527 | $ 508 | $ 479 |
Tax positions related to current year: | |||
Additions | 70 | 68 | 65 |
Tax positions related to prior years: | |||
Additions | 20 | 2 | 12 |
Reductions | (7) | (10) | (25) |
Settlements | (4) | (25) | (14) |
Reductions resulting from a lapse of the statute of limitations | (23) | (10) | (14) |
Foreign currency effects | (8) | (6) | |
Foreign currency effects | 5 | ||
Balance, end of the year | $ 575 | $ 527 | $ 508 |
Stockholders_ Equity (Deficit_2
Stockholders’ Equity (Deficit) (Special Dividend) (Details) shares in Millions, $ in Millions | 12 Months Ended | |||
Nov. 01, 2021 USD ($) shares | Feb. 03, 2023 USD ($) | Jan. 28, 2022 USD ($) | Jan. 29, 2021 USD ($) | |
Text Block [Abstract] | ||||
Payment for special dividend | $ | $ 11,500 | $ 0 | $ 11,499 | $ 0 |
Stock, conversion ratio | 1 | |||
Conversion ratio | 1.2191 | |||
Number of shares authorized, anti-dilution adjustment (in shares) | shares | 4.2 |
Stockholders_ Equity (Deficit_3
Stockholders’ Equity (Deficit) (Equity Plans) (Details) - shares shares in Millions | 12 Months Ended | ||
Jul. 23, 2021 | Feb. 03, 2023 | Nov. 01, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of shares authorized, anti-dilution adjustment (in shares) | 4.2 | ||
Class A Common Stock | VMware 2007 Equity and Incentive Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of additional shares authorized from business acquisitions | 15 | ||
Number of shares authorized | 183.7 | ||
Number of shares authorized, anti-dilution adjustment (in shares) | 16.6 | ||
Number of shares available for grant | 29.3 | ||
Number of shares available for grant, anti-dilution adjustment | 9.5 | ||
Class A Common Stock | VMware 2007 Equity and Incentive Plan | Restricted stock | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Conversion ratio upon vesting | 25% | ||
Class A Common Stock | VMware 2007 Equity and Incentive Plan | Employee stock options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award vesting period | 3 years | ||
Options minimum exercise price as percentage of fair value on grant date | 100% | ||
Class A Common Stock | VMware 2007 Equity and Incentive Plan | Employee stock options | Vesting at the end of first year | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Conversion ratio upon vesting | 25% | ||
Class A Common Stock | VMware 2007 Equity and Incentive Plan | Minimum | Restricted stock | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award vesting period | 3 years | ||
Class A Common Stock | VMware 2007 Equity and Incentive Plan | Minimum | Employee stock options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expiration period | 6 years | ||
Class A Common Stock | VMware 2007 Equity and Incentive Plan | Maximum | Restricted stock | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award vesting period | 4 years | ||
Class A Common Stock | VMware 2007 Equity and Incentive Plan | Maximum | Employee stock options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expiration period | 7 years |
Stockholders_ Equity (Deficit_4
Stockholders’ Equity (Deficit) (VMware Stock Repurchases) (Details) - USD ($) $ in Millions | Feb. 03, 2023 | Nov. 01, 2021 |
Class A Common Stock | ||
Class of Stock [Line Items] | ||
Remaining authorized repurchase amount | $ 1,600 | $ 183 |
Stockholders_ Equity (Deficit_5
Stockholders’ Equity (Deficit) (Stock Repurchase Program) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 12 Months Ended | ||||||
Feb. 03, 2023 | Jan. 28, 2022 | Jan. 29, 2021 | Nov. 01, 2021 | Oct. 07, 2021 | Jul. 15, 2020 | May 29, 2019 | |
Class of Stock [Line Items] | |||||||
Aggregate purchase price | $ 89 | $ 1,169 | $ 945 | ||||
Class A Common Stock | |||||||
Class of Stock [Line Items] | |||||||
Authorized repurchase amount under stock repurchase program | $ 2,000 | $ 1,000 | $ 1,500 | ||||
Remaining authorized repurchase amount | 1,600 | $ 183 | |||||
Aggregate purchase price | $ 89 | $ 1,169 | $ 945 | ||||
Class A Stock repurchased (in shares) | 803 | 8,197 | 6,944 | ||||
Weighted-average price per share (in USD per share) | $ 111.33 | $ 142.61 | $ 136.13 |
Stockholders_ Equity (Deficit_6
Stockholders’ Equity (Deficit) (Summary of Restricted Stock Activity) (Details) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Feb. 03, 2023 USD ($) $ / shares shares | Jan. 28, 2022 USD ($) $ / shares shares | Jan. 29, 2021 USD ($) $ / shares shares | |
Weighted-Average Grant Date Fair Value (per unit) | |||
Number of Units (in shares) | 20,561,000 | ||
Weighted-Average Remaining Contractual Term (in years) | 1 year 1 month 9 days | ||
Aggregate Intrinsic Value | $ | $ 2,504 | ||
RSUs | |||
Number of Units | |||
Outstanding. Ending balance (in shares) | 22,500,000 | ||
PSU | |||
Number of Units | |||
Outstanding. Ending balance (in shares) | 1,000,000 | ||
Class A Common Stock | RSUs | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Restricted stock unit conversion into common stock (in shares) | 1 | ||
Class A Common Stock | PSU | Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Conversion ratio | 0.1 | ||
Class A Common Stock | PSU | Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Conversion ratio | 2 | ||
Class A Common Stock | Restricted Stock | |||
Number of Units | |||
Outstanding. Ending balance (in shares) | 23,500,000 | ||
Weighted-Average Grant Date Fair Value (per unit) | |||
Fair value of restricted stock-based awards, vested | $ | $ 1,100 | $ 1,100 | $ 1,100 |
Aggregate intrinsic value, nonvested | $ | $ 2,900 | ||
Class A Common Stock | Restricted Stock | VMware RSUs | |||
Number of Units | |||
Outstanding, Beginning balance (in shares) | 23,002,000 | 17,790,000 | 17,474,000 |
Granted (in shares) | 13,916,000 | 12,400,000 | 11,201,000 |
Special Dividend adjustment (in shares) | 4,068,000 | ||
Vested (in shares) | (9,327,000) | (7,593,000) | (8,296,000) |
Forfeited (in shares) | (4,069,000) | (3,663,000) | (2,589,000) |
Outstanding. Ending balance (in shares) | 23,522,000 | 23,002,000 | 17,790,000 |
Weighted-Average Grant Date Fair Value (per unit) | |||
Outstanding, Beginning balance (in USD per share) | $ / shares | $ 123.06 | $ 147.46 | $ 128.38 |
Granted (in USD per share) | $ / shares | 114.79 | 141.46 | 149.63 |
Vested (in USD per share) | $ / shares | 124.33 | 134 | 114.59 |
Forfeited (in USD per share) | $ / shares | 122.66 | 146.13 | 137.55 |
Outstanding, Ending balance (in USD per share) | $ / shares | $ 117.73 | $ 123.06 | $ 147.46 |
Stockholders_ Equity (Deficit_7
Stockholders’ Equity (Deficit) (Employee Stock Purchase Plan) (Details) - ESPP - Employee Stock - Class A Common Stock - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 12 Months Ended | ||||
Jul. 23, 2021 | Jun. 25, 2019 | Feb. 03, 2023 | Jan. 28, 2022 | Jan. 29, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of additional shares authorized | 5,000 | 9,000 | |||
Number of shares authorized | 37,300 | ||||
Fair market value at grant purchase price, percentage | 85% | ||||
Fair market value at grant exercise price, percentage | 85% | ||||
Number of shares reserved for future issuance | 12,800 | ||||
Cash proceeds | $ 240 | $ 236 | $ 207 | ||
Class A common shares purchased (in shares) | 2,418 | 2,116 | 2,025 | ||
Weighted-average price per share (in USD per share) | $ 99.10 | $ 111.31 | $ 102.44 | ||
ESPP withholdings | $ 112 |
Stockholders_ Equity (Deficit_8
Stockholders’ Equity (Deficit) (Summary of Stock Option Activity) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 12 Months Ended | ||
Feb. 03, 2023 | Jan. 28, 2022 | Jan. 29, 2021 | |
Class A Common Stock | |||
Weighted-Average Exercise Price (per share) | |||
Share price (in USD per share) | $ 121.77 | ||
Fair value vested in period | $ 0 | $ 26 | $ 92 |
Options, exercisable, aggregate intrinsic value | $ 18 | $ 55 | $ 111 |
VMware Stock Options | |||
Weighted-Average Exercise Price (per share) | |||
Outstanding Options, Exercisable (in shares) | 413 | ||
Options, Exercisable, Weighted-Average Exercise Price (in USD per share) | $ 49.26 | ||
Options, Exercisable, Weighted-Average Remaining Contractual Term (in years) | 4 years 5 months 8 days | ||
Options, Exercisable, Aggregate Intrinsic Value | $ 30 | ||
Outstanding Options, Vested and expected to vest (in shares) | 417 | ||
Options, Vested and expected to vest, Weighted-Average Exercise Price (in USD per share) | $ 49.43 | ||
Options, Vested and expected to vest, Weighted-Average Remaining Contractual Term (in years) | 4 years 5 months 15 days | ||
Options, Vested and expected to vest, Aggregate Intrinsic Value | $ 30 | ||
VMware Stock Options | Class A Common Stock | |||
Number of Shares | |||
Outstanding, Beginning balance (in shares) | 686 | 1,243 | 2,615 |
Granted (in shares) | 0 | 4 | 31 |
Special Dividend adjustment (in shares) | 147 | ||
Forfeited (in shares) | (28) | (104) | (156) |
Exercised (in shares) | (241) | (604) | (1,247) |
Outstanding, Ending balance (in shares) | 417 | 686 | 1,243 |
Weighted-Average Exercise Price (per share) | |||
Outstanding, Beginning balance (in USD per share) | $ 46.95 | $ 58.68 | $ 56.58 |
Granted (in USD per share) | 0 | 97.91 | 43.20 |
Forfeited (in USD per share) | 50.66 | 63.73 | 70.75 |
Exercised (in USD per share) | 42.21 | 57.19 | 52.34 |
Outstanding, Ending balance (in USD per share) | $ 49.43 | $ 46.95 | $ 58.68 |
Intrinsic value of stock options outstanding | $ 30 |
Stockholders_ Equity (Deficit_9
Stockholders’ Equity (Deficit) (Shares Repurchased for Tax Withholdings) (Details) - USD ($) shares in Millions, $ in Millions | 12 Months Ended | ||
Feb. 03, 2023 | Jan. 28, 2022 | Jan. 29, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Shares withheld for tax withholdings on vesting of restricted stock | $ 386 | $ 378 | $ 413 |
Class A Common Stock | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Shares withheld for tax withholdings on vesting of restricted stock (in shares) | 3.3 | 2.6 | 3 |
Shares withheld for tax withholdings on vesting of restricted stock | $ 386 | $ 378 | $ 413 |
Stockholders_ Equity (Defici_10
Stockholders’ Equity (Deficit) (Net Excess Tax Benefits and Tax Deficiencies) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Feb. 03, 2023 | Jan. 28, 2022 | Jan. 29, 2021 | |
Stockholders' Equity Note [Abstract] | |||
Net excess tax benefits | $ 0 | $ 17 | $ 41 |
Stockholders_ Equity (Defici_11
Stockholders’ Equity (Deficit) (Stock-Based Compensation) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Feb. 03, 2023 | Jan. 28, 2022 | Jan. 29, 2021 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Stock-based compensation | $ 1,290 | $ 1,075 | $ 1,122 |
Income tax benefit | (213) | (202) | (231) |
Total stock-based compensation, net of tax | 1,077 | 873 | 891 |
Unrecognized compensation cost for stock options and restricted stock | $ 1,900 | ||
Weighted-average remaining recognition period | 1 year 3 months 18 days | ||
Cost of license revenue | |||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Stock-based compensation | $ 1 | 1 | 1 |
Cost of subscription and SaaS revenue | |||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Stock-based compensation | 25 | 21 | 19 |
Cost of services revenue | |||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Stock-based compensation | 106 | 92 | 99 |
Research and development | |||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Stock-based compensation | 616 | 528 | 524 |
Sales and marketing | |||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Stock-based compensation | 376 | 302 | 322 |
General and administrative | |||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Stock-based compensation | $ 166 | $ 131 | $ 157 |
Stockholders_ Equity (Defici_12
Stockholders’ Equity (Deficit) (Valuation Assumptions) (Details) - $ / shares | 12 Months Ended | ||
Feb. 03, 2023 | Jan. 28, 2022 | Jan. 29, 2021 | |
Stock options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Dividend yield | 0% | 0% | 0% |
Expected volatility | 35% | 38.80% | |
Risk-free interest rate | 0.30% | 0.40% | |
Expected term (in years) | 2 years 10 months 24 days | 2 years 7 months 6 days | |
Weighted-average fair value at grant date (in USD per share) | $ 62.99 | $ 102.55 | |
Employee stock purchase plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Dividend yield | 0% | 0% | 0% |
Expected volatility | 29.70% | 36.50% | 36.10% |
Risk-free interest rate | 0.70% | 0.10% | 1% |
Expected term (in years) | 8 months 12 days | 8 months 12 days | 8 months 12 days |
Weighted-average fair value at grant date (in USD per share) | $ 28.68 | $ 37.95 | $ 33.60 |
Segment Information - Narrative
Segment Information - Narrative (Details) - segment | 12 Months Ended | ||
Feb. 03, 2023 | Jan. 28, 2022 | Jan. 29, 2021 | |
Segment Reporting [Abstract] | |||
Number of reportable segments | 1 | ||
United States | Sales | Geographic Concentration Risk | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage (more than 10%) | 10% | 10% | 10% |
United States | Assets Benchmark | Geographic Concentration Risk | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage (more than 10%) | 10% | 10% | |
India | Assets Benchmark | Geographic Concentration Risk | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage (more than 10%) | 13% |
Segment Information - Schedule
Segment Information - Schedule of Revenue by Type (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Feb. 03, 2023 | Jan. 28, 2022 | Jan. 29, 2021 | ||
Disaggregation of Revenue [Line Items] | ||||
Revenue | [1] | $ 13,350 | $ 12,851 | $ 11,767 |
Total license and subscription and SaaS | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 6,847 | 6,333 | 5,620 | |
License | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | [1] | 2,835 | 3,128 | 3,033 |
Subscription and SaaS | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | [1] | 4,012 | 3,205 | 2,587 |
Total services | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | [1] | 6,503 | 6,518 | 6,147 |
Software maintenance | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 5,281 | 5,356 | 5,105 | |
Professional services | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 1,222 | $ 1,162 | $ 1,042 | |
[1]Includes related party revenue as follows (refer to Note C): License $ 1,395 $ 1,530 $ 1,598 Subscription and SaaS 1,132 820 524 Services 2,566 2,470 1,994 |
Segment Information - Schedul_2
Segment Information - Schedule of Revenue by Geographic Area (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Feb. 03, 2023 | Jan. 28, 2022 | Jan. 29, 2021 | ||
Revenues From External Customers And Long-Lived Assets [Line Items] | ||||
Revenue | [1] | $ 13,350 | $ 12,851 | $ 11,767 |
United States | ||||
Revenues From External Customers And Long-Lived Assets [Line Items] | ||||
Revenue | 6,528 | 6,232 | 5,878 | |
International | ||||
Revenues From External Customers And Long-Lived Assets [Line Items] | ||||
Revenue | $ 6,822 | $ 6,619 | $ 5,889 | |
[1]Includes related party revenue as follows (refer to Note C): License $ 1,395 $ 1,530 $ 1,598 Subscription and SaaS 1,132 820 524 Services 2,566 2,470 1,994 |
Segment Information - Schedul_3
Segment Information - Schedule of Long-Lived Assets by Geographic Area (Details) - USD ($) $ in Millions | Feb. 03, 2023 | Jan. 28, 2022 |
Revenues From External Customers And Long-Lived Assets [Line Items] | ||
Long-lived assets by geographic area | $ 1,101 | $ 1,123 |
United States | ||
Revenues From External Customers And Long-Lived Assets [Line Items] | ||
Long-lived assets by geographic area | 840 | 882 |
International | ||
Revenues From External Customers And Long-Lived Assets [Line Items] | ||
Long-lived assets by geographic area | $ 261 | $ 241 |
Schedule II - Valuation and Q_2
Schedule II - Valuation and Qualifying Accounts (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Feb. 03, 2023 | Jan. 28, 2022 | Jan. 29, 2021 | |
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance at Beginning of Period | $ 471 | $ 366 | $ 332 |
Tax Valuation Allowance Charged to Income Tax Provision | 79 | 70 | 58 |
Tax Valuation Allowance Credited to Other Accounts | 0 | 57 | (1) |
Tax Valuation Allowance Credited to Income Tax Provision | (55) | (22) | (23) |
Balance at End of Period | $ 495 | $ 471 | $ 366 |