Broadcom Inc
For the period ended Aug 4, 2024. Filed Sep 11, 2024.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Aug 4, 2024 · Filed Sep 11, 2024
AVGO$293.69+0.7%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-05-05; filed 2024-06-13.
0001730168-24-000080
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-08-04; filed 2024-09-11.
0001730168-24-000099
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 75 previous paragraphs and 77 current paragraphs.
33 unchanged; 34 reworded; 10 added; 8 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 9 previous and 9 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (10)
Current report
•We paid $2,452 million in cash dividends.
Current report
•We sold the end-user computing(“EUC”)business to KKR & Co. Inc. for $3.5 billion.
Current report
•We completed a ten-for-one forward stock split of our common stock. All share, equity award and per share amounts have been retroactively adjusted to reflect the stock split.
Current report
Acquisitions and Divestitures
Current report
Acquisition of VMware and Divestiture of EUC
Current report
On July 1, 2024, we sold the EUC business to KKR & Co. Inc. for cash consideration of$3.5 billion, after working capital adjustments.
Current report
Provision for income taxes. The provision for income taxes was $4,238 million and $4,190 million for the fiscal quarter and three fiscal quarters ended August 4, 2024, respectively, and $271 million and $572 million for the fiscal quarter and three fiscal quarters ended July 30, 2023, respectively. The increases were primarily due to the impact of the intra-group transfer of certain IP rights to the United States as a result of supply chain realignment and the resulting shift in the jurisdictional mix of income.
Current report
•Other current assets decreased primarily due to the sale of the EUC business, offset in part by an increase in contract assets.
Current report
•Accounts payable increased primarily due to the timing of payments and an increase in purchases.
Current report
•Other current liabilities decreased due to the sale of the EUC business as well as a decrease in contract liabilities as software revenue was recognized.
Removed paragraphs (8)
Previous report
•We paid $2,443 million in cash dividends.
Previous report
Acquisitions
Previous report
Acquisition of VMware
Previous report
Provision for (benefit from) income taxes. The benefit from income taxes was $116 million and $48 million for the fiscal quarter and two fiscal quarters ended May 5, 2024, respectively. The benefit from income taxes was primarily due to excess tax benefits from stock-based awards and a shift in the jurisdictional mix of income and expense, partially offset by income tax expense on operations. The provision for income taxes was $235 million and $301 million for the fiscal quarter and two fiscal quarters ended April 30, 2023, respectively. The provision for income taxes was primarily driven by income before income taxes, partially offset by excess tax benefits from stock-based awards and the recognition of uncertain tax benefits as a result of lapses of statutes of limitations.
Previous report
•Other current assets increased primarily due to higher prepaid income taxes.
Previous report
•Employee compensation and benefits decreased primarily due to the timing of annual employee bonus plan payments.
Previous report
•Liabilities held-for-sale decreased due to software revenue recognized in discontinued operations.
Previous report
•Other current liabilities decreased as software revenue recognized resulted in lower contract liabilities, offset in part by an increase in liabilities related to restructuring activities associated with the VMware Merger.
Reworded paragraphs (34)
Previous wording
The following discussion and analysis of the financial condition and results of operations should be read in conjunction with the unaudited condensed consolidated financial statements and the related notes thereto included elsewhere in this Quarterly Report on Form 10-Q (“Form 10-Q”) and the audited consolidated financial statements and notes thereto and management’s discussion and analysis of financial condition and results of operations for the fiscal year ended October 29, 2023 (“fiscal year 2023”) included in our Annual Report on Form 10-K for fiscal year 2023 (“2023 Annual Report on Form 10-K”). References to “Broadcom,” “we,” “our,” and “us” are to Broadcom Inc. and its consolidated subsidiaries, unless otherwise specified or the context otherwise requires. This Form 10-Q may contain predictions, estimates and other forward-looking statements that involve a number of risks and uncertainties, which are made under the safe harbor provisions of Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These forward-looking statements may include projections of financial information; statements about historical results that may suggest trends for our business; statements of the plans, strategies and objectives of management for future operations; and statements of expectation or belief regarding future events (including any acquisitions we may make), technology developments, our products, product sales, expenses, liquidity, cash flow and growth rates, customer concentration and relationships, or enforceability of our intellectual property (“IP”) rights. Such statements are based on current expectations, estimates, forecasts and projections of our industry performance and macroeconomic conditions, based on management’s judgment, beliefs, current trends and market conditions, and involve risks and uncertainties that may cause actual results to differ materially from those contained in the forward-looking statements. We derive most of our forward-looking statements from our operating budgets and forecasts, which are based upon many detailed assumptions. While we believe that our assumptions are reasonable, we caution that it is very difficult to predict the impact of known factors, and it is impossible for us to anticipate all factors that could affect our actual results. Accordingly, undue reliance should not be placed on these statements. Important factors that could cause actual results to differ materially from our expectations are disclosed under “Risk Factors” in Part II, Item 1A of this Form 10-Q, and in other documents we file from time to time with the Securities and Exchange Commission (the “SEC”). All of the forward-looking statements in this Form 10-Q are qualified in their entirety by reference to the factors listed above and those discussed under the heading “Risk Factors” below. We undertake no intent or obligation to publicly update or revise any forward-looking statement, whether as a result of new infor…
Excerpt shortened here; the source contains the full paragraph.
Current wording
The following discussion and analysis of the financial condition and results of operations should be read in conjunction with the unaudited condensed consolidated financial statements and the related notes thereto included elsewhere in this Quarterly Report on Form 10-Q (“Form 10-Q”) and the audited consolidated financial statements and notes thereto and management’s discussion and analysis of financial condition and results of operations for the fiscal year ended October 29, 2023 (“fiscal year 2023”) included in our Annual Report on Form 10-K for fiscal year 2023 (“2023 Annual Report on Form 10-K”). References to “Broadcom,” “we,” “our,” and “us” are to Broadcom Inc. and its consolidated subsidiaries, unless otherwise specified or the context otherwise requires. This Form 10-Q may contain predictions, estimates and other forward-looking statements that involve a number of risks and uncertainties, which are made under the safe harbor provisions of Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These forward-looking statements may include projections of financial information; statements about historical results that may suggest trends for our business; statements of the plans, strategies and objectives of management for future operations; and statements of expectation or belief regarding future events (including any acquisitions we may make), technology developments, emerging markets, our products, product sales, expenses, liquidity, cash flow and growth rates, customer concentration and relationships, or enforceability of our intellectual property (“IP”) rights. Such statements are based on current expectations, estimates, forecasts and projections of our industry performance and macroeconomic conditions, based on management’s judgment, beliefs, current trends and market conditions, and involve risks and uncertainties that may cause actual results to differ materially from those contained in the forward-looking statements. We derive most of our forward-looking statements from our operating budgets and forecasts, which are based upon many detailed assumptions. While we believe that our assumptions are reasonable, we caution that it is very difficult to predict the impact of known factors, and it is impossible for us to anticipate all factors that could affect our actual results. Accordingly, undue reliance should not be placed on these statements. Important factors that could cause actual results to differ materially from our expectations are disclosed under “Risk Factors” in Part II, Item 1A of this Form 10-Q, and in other documents we file from time to time with the Securities and Exchange Commission (the “SEC”). All of the forward-looking statements in this Form 10-Q are qualified in their entirety by reference to the factors listed above and those discussed under the heading “Risk Factors” below. We undertake no intent or obligation to publicly update or revise any forward-looking statement, whether as a r…
Excerpt shortened here; the source contains the full paragraph.
Previous wording
Our fiscal year ending November 3, 2024 (“fiscal year 2024”), is a 53-week fiscal year, with our first fiscal quarter ended February 4, 2024 containing 14 weeks compared to 13 weeks in the prior year fiscal period. The additional week resulted in higher net revenue, gross margin dollars, research and development expense, and selling general and administrative expense in the first fiscal quarter and first two fiscal quarters of fiscal year 2024, compared to the corresponding prior year fiscal periods.
Current wording
Our fiscal year ending November 3, 2024 (“fiscal year 2024”), is a 53-week fiscal year, with our first fiscal quarter ended February 4, 2024 containing 14 weeks compared to 13 weeks in the prior year fiscal period. The additional week resulted in higher net revenue, gross margin dollars, research and development expense, and selling general and administrative expense in the first fiscal quarter and first three fiscal quarters of fiscal year 2024, compared to the corresponding prior year fiscal periods.
Previous wording
•We generated $4,580 million of cash from operations.
Current wording
•We generated $4,963 million of cash from operations.
Previous wording
•We repaid $2.0 billion on our unsecured term A-2 facility.
Current wording
•We issued $5.0 billion of senior unsecured notes (the “July 2024 Senior Notes”) and used the net proceeds, as well as the net proceeds from the sale of the EUC business and cash on hand, to repay the outstanding balance of $9,195 million of our unsecured term A-2 facility.
Previous wording
On November 22, 2023, we acquired VMware, Inc. (“VMware”) in a cash-and-stock transaction (the “VMware Merger”). The VMware stockholders received approximately $30,788 million in cash and 54.4 million shares of Broadcom common stock with a fair value of $53,398 million. In addition, we assumed all outstanding VMware restricted stock unit (“RSU”) awards and performance stock unit awards held by continuing employees. The assumed awards were converted into RSU awards for shares of Broadcom common stock. All outstanding RSU awards held by non-employee directors and in-the-money VMware stock options were accelerated and converted into the right to receive cash and shares of Broadcom common stock, in equal parts.
Current wording
On November 22, 2023, we acquired VMware, Inc. (“VMware”) in a cash-and-stock transaction (the “VMware Merger”). The VMware stockholders received approximately $30,788 million in cash and 544 million shares of Broadcom common stock with a fair value of $53,398 million. In addition, we assumed all outstanding VMware restricted stock unit (“RSU”) awards and performance stock unit awards held by continuing employees. The assumed awards were converted into RSU awards for shares of Broadcom common stock. All outstanding RSU awards held by non-employee directors and in-the-money VMware stock options were accelerated and converted into the right to receive cash and shares of Broadcom common stock, in equal parts.
Previous wording
There were no significant changes in our critical accounting estimates during the two fiscal quarters ended May 5, 2024 compared to those previously disclosed in “Critical Accounting Estimates” in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in the 2023 Annual Report on Form 10-K.
Current wording
There were no significant changes in our critical accounting estimates during the three fiscal quarters ended August 4, 2024 compared to those previously disclosed in “Critical Accounting Estimates” in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in the 2023 Annual Report on Form 10-K.
Previous wording
Fiscal Quarter and Two Fiscal Quarters Ended May 5, 2024 Compared to Fiscal Quarter and Two Fiscal Quarters Ended April 30, 2023
Current wording
Fiscal Quarter and Three Fiscal Quarters Ended August 4, 2024 Compared to Fiscal Quarter and Three Fiscal Quarters Ended July 30, 2023
Previous wording
A relatively small number of customers account for a significant portion of our net revenue. Direct sales to one customer, which is a distributor, accounted for 29% and 28% of our net revenue for the fiscal quarter and two fiscal quarters ended May 5, 2024, respectively, and 17% and 19% of our net revenue for the fiscal quarter and two fiscal quarters ended April 30, 2023, respectively.
Current wording
A relatively small number of customers account for a significant portion of our net revenue. Direct sales to one customer, which is a distributor, accounted for 26% and 27% of our net revenue for the fiscal quarter and three fiscal quarters ended August 4, 2024, respectively, and 21% and 20% of our net revenue for the fiscal quarter and three fiscal quarters ended July 30, 2023, respectively.
Previous wording
We believe aggregate sales to our top five end customers, through all channels, accounted for approximately 40% of our net revenue for each of the fiscal quarter and two fiscal quarters ended May 5, 2024, and approximately 35% of our net revenue for each of the fiscal quarter and two fiscal quarters ended April 30, 2023. We expect to continue to experience significant customer concentration in future periods. The loss of, or significant decrease in demand from, any of our top five end customers could have a material adverse effect on our business, results of operations and financial condition.
Current wording
We believe aggregate sales to our top five end customers, through all channels, accounted for approximately 35% and 40% of our net revenue for the fiscal quarter and three fiscal quarters ended August 4, 2024, respectively, and approximately 35% for each of the fiscal quarter and three fiscal quarters ended July 30, 2023. We expect to continue to experience significant customer concentration in future periods. The loss of, or significant decrease in demand from, any of our top five end customers could have a material adverse effect on our business, results of operations and financial condition.
Previous wording
From time to time, some of our key semiconductor customers place large orders or delay orders, causing our quarterly net revenue to fluctuate significantly. This is particularly true of our wireless products as fluctuations may be magnified by the timing of launches, and seasonal variations in sales, of mobile devices. In addition, the macroeconomic environment remains uncertain and may cause our net revenue to fluctuate significantly and impact our results of operations.
Current wording
From time to time, some of our key semiconductor customers place large orders or delay orders, causing our quarterly net revenue to fluctuate significantly. This is particularly true of our AI and wireless products as fluctuations may be magnified by the timing of customer deployments and product launches, and seasonal variations in sales. In addition, the macroeconomic environment remains uncertain and may cause our net revenue to fluctuate significantly and impact our results of operations.
Previous wording
Net revenue from oursemiconductor solutions segment increased in the fiscal quarter andtwo fiscal quarters ended May 5, 2024 compared to the prior year fiscal periods due to strong product demand for our networking products, including products in AI networking, partially offset by lower demand for our broadband and server storage products. Net revenue from our infrastructure software segment increasedin the fiscal quarter andtwo fiscal quarters ended May 5, 2024 compared to the prior year fiscal periods primarily due to contributions from VMware.
Current wording
Net revenue from oursemiconductor solutions segment increased in the fiscal quarter andthree fiscal quarters ended August 4, 2024 compared to the prior year fiscal periods due to strong product demand for our networking products, primarily AI networking products, partially offset by lower demand for our broadband and server storage products. Net revenue from our infrastructure software segment increasedin the fiscal quarter andthree fiscal quarters ended August 4, 2024 compared to the prior year fiscal periods primarily due to contributions from VMware.
Previous wording
Gross margin was $7,776 million for the fiscal quarter ended May 5, 2024 compared to $6,115 million for the fiscal quarter ended April 30, 2023, and $15,151 million for the two fiscal quarters ended May 5, 2024 compared to $12,119 million for the two fiscal quarters ended April 30, 2023. The increases were primarily due to contributions from VMware, partially offset by higher amortization of acquisition-related intangible assets from the VMware Merger.
Current wording
Gross margin was $8,356 million for the fiscal quarter ended August 4, 2024 compared to $6,164 million for the fiscal quarter ended July 30, 2023, and $23,507 million for the three fiscal quarters ended August 4, 2024 compared to $18,283 million for the three fiscal quarters ended July 30, 2023. The increases were primarily due to contributions from VMware, partially offset by higher amortization of acquisition-related intangible assets from the VMware Merger.
Previous wording
As a percentage of net revenue, gross margin was 62% of net revenue for each of the fiscal quarter and two fiscal quarters ended May 5, 2024, and 70% and 69% for the fiscal quarter and two fiscal quarters ended April 30, 2023, respectively. The decreases were primarily due to higher amortization of acquisition-related intangible assets from the VMware Merger. In addition, gross margin contributions from our infrastructure software segment were partially offset by less favorable margin within the semiconductor solutions segment driven by product mix.
Current wording
As a percentage of net revenue, gross margin was 64% and 63% of net revenue for the fiscal quarter and three fiscal quarters ended August 4, 2024, respectively, and 69% for each of the fiscal quarter and three fiscal quarters ended July 30, 2023. The decreases were primarily due to higher amortization of acquisition-related intangible assets from the VMware Merger. In addition, gross margin contributions from our infrastructure software segment were partially offset by less favorable margin within the semiconductor solutions segment driven by product mix.
Previous wording
Research and development expense increased $1,103 million, or 84%, and $2,216 million, or 88%, for the fiscal quarter and two fiscal quarters ended May 5, 2024, respectively, compared to the prior year fiscal periods. The increases were primarily due to higher compensation, including higher stock-based compensation, as a result of an increase in headcount from the VMware Merger. The increases in stock-based compensation expense were also due toannual employee equity awards granted at higher grant-date fair values.
Current wording
Research and development expense increased $995 million, or 73%, and $3,211 million, or 83%, for the fiscal quarter and three fiscal quarters ended August 4, 2024, respectively, compared to the prior year fiscal periods. The increases were primarily due to higher compensation, including higher stock-based compensation, as a result of an increase in headcount from the VMware Merger. The increases in stock-based compensation expense were also due toannual employee equity awards granted at higher grant-date fair values.
Previous wording
Selling, general and administrative expense increased $839 million, or 192%, and $2,063 million, or 262%, for the fiscal quarter and two fiscal quarters ended May 5, 2024, respectively, compared to the prior year fiscal periods. The increases were primarily due to higher compensation, including higher stock-based compensation, as a result of an increase in headcount from the VMware Merger. The increases in stock-based compensation expense were also due toannual employee equity awards granted at higher grant-date fair values.
Current wording
Selling, general and administrative expense increased $712 million, or 184%, and $2,775 million, or 236%, for the fiscal quarter and three fiscal quarters ended August 4, 2024, respectively, compared to the prior year fiscal periods. The increases were primarily due to higher compensation, including higher stock-based compensation, as a result of an increase in headcount from the VMware Merger. The increases in stock-based compensation expense were also due toannual employee equity awards granted at higher grant-date fair values.
Previous wording
Amortization of acquisition-related intangible assets recognized in operating expenses increased $479 million, or 138%, and $923 million, or 133%, for the fiscal quarter and two fiscal quarters ended May 5, 2024, respectively, compared to the prior year fiscal periods primarily due to higher amortization of customer-related intangible assets from the VMware Merger.
Current wording
Amortization of acquisition-related intangible assets recognized in operating expenses increased $462 million, or 132%, and $1,385 million, or 132%, for the fiscal quarter and three fiscal quarters ended August 4, 2024, respectively, compared to the prior year fiscal periods primarily due to higher amortization of customer-related intangible assets from the VMware Merger.
Previous wording
Restructuring and other charges recognized in operating expenses were $292 million and $912 million for the fiscal quarter and two fiscal quarters ended May 5, 2024, respectively, primarily due to employee termination costs associated with the VMware Merger. We expect to incur additional restructuring and other charges in future periods as a result of the VMware Merger.
Current wording
Restructuring and other charges recognized in operating expenses were $303 million and $1,215 million for the fiscal quarter and three fiscal quarters ended August 4, 2024, respectively, primarily due to employee termination costs associated with the VMware Merger. We expect to incur additional restructuring and other charges in future periods as a result of the VMware Merger. Restructuring and other charges recognized in operating expenses were $212 million and $231 million for the fiscal quarter and three fiscal quarters ended July 30, 2023, respectively, primarily due to non-recurring charges related to IP litigation.
Previous wording
Total stock-based compensation expense was $1,403 million and $2,975 million for the fiscal quarter and two fiscal quarters ended May 5, 2024, respectively, and $513 million and $904 million for the fiscal quarter and two fiscal quarters ended April 30, 2023, respectively. The increases were primarily due to equity awards assumed and granted in connection with the VMware Merger andannual employee equity awards granted at higher grant-date fair values. Stock-based compensation expense for the two fiscal quarters ended May 5, 2024 also included a one-time impact from aligning the vesting dates of certain assumed awards with our RSU vesting dates, as well as accelerated vesting of certain assumed awards held by employees terminated in connection with the VMware Merger.
Current wording
Total stock-based compensation expense was $1,381 million and $4,356 million for the fiscal quarter and three fiscal quarters ended August 4, 2024, respectively, and $629 million and $1,533 million for the fiscal quarter and three fiscal quarters ended July 30, 2023, respectively. The increases were primarily due to equity awards assumed and granted in connection with the VMware Merger andannual employee equity awards granted at higher grant-date fair values.
Previous wording
The following table sets forth the total unrecognized compensation cost related to unvested stock-based awards outstanding and expected to vest as of May 5, 2024. The remaining weighted-average service period was 3.3 years.
Current wording
The following table sets forth the total unrecognized compensation cost related to unvested stock-based awards outstanding and expected to vest as of August 4, 2024. The remaining weighted-average service period was 3.2 years.
Previous wording
Operating income from our semiconductor solutions segment was relatively flat for the fiscal quarter ended May 5, 2024 compared to the prior year fiscal period. Higher engineering project costs and lower gross margins driven by product mix were partially offset by higher revenue from networking products. Operating income from our semiconductor solutions segment was also relatively flat for the two fiscal quarters ended May 5, 2024 compared to the prior year fiscal period. Higher compensation expense as a result of an additional week in the current year fiscal quarter and lower gross margins driven by product mix were offset by higher revenue from networking products. Higher operating income from our infrastructure software segmentin the fiscal quarter andtwo fiscal quarters ended May 5, 2024 compared to the prior year fiscal periods was primarily due to contributions from VMware.
Current wording
Operating income from our semiconductor solutions segment decreased for the fiscal quarter and three fiscal quarters ended August 4, 2024 compared to the prior year fiscal periods primarily due to higher variable compensation expenses and lower gross margins driven by product mix, partially offset by higher revenue from networking products, primarily AI networking products. Higher operating income from our infrastructure software segmentin the fiscal quarter andthree fiscal quarters ended August 4, 2024 compared to the prior year fiscal periods was primarily due to contributions from VMware.
Previous wording
Unallocated expenses include amortization of acquisition-related intangible assets; stock-based compensation expense; restructuring and other charges; acquisition-related costs; and other costs that are not used in evaluating the results of, or in allocating resources to, our segments. Unallocated expenses increased 198% and 227% for the fiscal quarter and two fiscal quarters ended May 5, 2024, respectively, compared to the prior year fiscal periods primarily due to higher amortization of acquisition-related intangible assets, stock-based compensation expense and restructuring and other charges. These increases were primarily due to the VMware Merger. The increase in stock-based compensation expense was also due toannual employee equity awards granted at higher grant-date fair values.
Current wording
Unallocated expenses include amortization of acquisition-related intangible assets; stock-based compensation expense; restructuring and other charges; acquisition-related costs; and other costs that are not used in evaluating the results of, or in allocating resources to, our segments. Unallocated expenses increased 148% and 197% for the fiscal quarter and three fiscal quarters ended August 4, 2024, respectively, compared to the prior year fiscal periods primarily due to higher amortization of acquisition-related intangible assets, stock-based compensation expense and restructuring and other charges. These increases were primarily due to the VMware Merger. The increase in stock-based compensation expense was also due toannual employee equity awards granted at higher grant-date fair values.
Previous wording
Interest expense. Interest expense was $1,047 million and $1,973 million for the fiscal quarter and two fiscal quarters ended May 5, 2024, respectively, and $405 million and $811 million for the fiscal quarter and two fiscal quarters ended April 30, 2023, respectively. The increases were primarily due to interest on debt incurred for the VMware Merger.
Current wording
Interest expense. Interest expense was $1,064 million and $3,037 million for the fiscal quarter and three fiscal quarters ended August 4, 2024, respectively, and $406 million and $1,217 million for the fiscal quarter and three fiscal quarters ended July 30, 2023, respectively. The increases were primarily due to interest on debt incurred for the VMware Merger.
Previous wording
Other income, net. Other income, net includes interest income, gains or losses on investments, foreign currency remeasurement and other miscellaneous items. Other income, net, was $87 million and $113 million for the fiscal quarters ended May 5, 2024 and April 30, 2023, respectively. The decrease was primarily due to lower interest income as a result of a lower invested balance, partially offset by higher interest rates. Other income, net, was $272 million and $256 million for the two fiscal quarters ended May 5, 2024 and April 30, 2023, respectively. The increase was primarily due to higher interest income as a result of higher interest rates, partially offset by a lower invested balance.
Current wording
Other income, net. Other income, net includes interest income, gains or losses on investments, foreign currency remeasurement and other miscellaneous items. Other income, net, was $82 million and $124 million for the fiscal quarters ended August 4, 2024 and July 30, 2023, respectively. The decrease was primarily due to lower interest income as a result of a lower invested balance. Other income, net, was $354 million and $380 million for the three fiscal quarters ended August 4, 2024 and July 30, 2023, respectively. The decrease was primarily due to lower gains on investments.
Previous wording
Our primary sources of liquidity as of May 5, 2024 consisted of: (i) $9,809 million in cash and cash equivalents, (ii) cash we expect to generate from operations and (iii) available capacity under our $7.5 billion unsecured revolving credit facility. In addition, we may also generate cash from the sale of assets and debt or equity financings from time to time. In February 2024, we signed a definitive agreement to sell VMware’s end-user computing business for approximately$3.8 billion, before working capital adjustments and estimated selling costs. The sale is expected to close in calendar year 2024, subject to customary closing conditions.
Current wording
Our primary sources of liquidity as of August 4, 2024 consisted of: (i) $9,952 million in cash and cash equivalents, (ii) cash we expect to generate from operations and (iii) available capacity under our $7.5 billion unsecured revolving credit facility. In addition, we may also generate cash from the sale of assets and debt or equity financings from time to time.
Previous wording
Our short-term and long-term liquidity requirements primarily arise from: (i) business acquisitions and investments we may make from time to time, (ii) working capital requirements, (iii) research and development and capital expenditure needs, (iv) cash dividend payments (if and when declared by our Board of Directors), (v) interest and principal payments related to our $76,521 million of outstanding indebtedness and (vi) payment of income taxes. Our ability to fund these requirements will depend, in part, on our future cash flows, which are determined by our future operating performance and, therefore, subject to prevailing global macroeconomic conditions and financial, business and other factors, some of which are beyond our control. Our debt and liquidity needs increased in fiscal year 2024 as a result of completing the VMware Merger. We funded the cash portion of the consideration with net proceeds from the issuance of $30,390 million in term loans (the “2023 Term Loans”), as well as cash on hand. We also assumed $8,250 million of VMware’s outstanding senior unsecured notes. During the fiscal quarter ended May 5, 2024, we made a partial repayment of $2.0 billion on our 2023 Term Loans. We also expect capital expenditures to be higher in fiscal year 2024 as compared to fiscal year 2023.
Current wording
Our short-term and long-term liquidity requirements primarily arise from: (i) business acquisitions and investments we may make from time to time, (ii) working capital requirements, (iii) research and development and capital expenditure needs, (iv) cash dividend payments (if and when declared by our Board of Directors), (v) interest and principal payments related to our $72,319 million of outstanding indebtedness and (vi) payment of income taxes. Our ability to fund these requirements will depend, in part, on our future cash flows, which are determined by our future operating performance and, therefore, subject to prevailing global macroeconomic conditions and financial, business and other factors, some of which are beyond our control. Our debt and liquidity needs increased in fiscal year 2024 as a result of completing the VMware Merger. We funded the cash portion of the consideration with net proceeds from the issuance of $30,390 million in term loans (the “2023 Term Loans”), as well as cash on hand. We also assumed $8,250 million of VMware’s outstanding senior unsecured notes. During the fiscal quarter ended August 4, 2024, we repaid the remaining outstanding balance of the term A-2 facility. We also expect capital expenditures to be higher in fiscal year 2024 as compared to fiscal year 2023.
Previous wording
On November 22, 2023, we completed the VMware Merger. The following table presents the changes in selected balance sheet captions other than assets acquired and liabilities assumed from the VMware Merger during the two fiscal quarters ended May 5, 2024.
Current wording
On November 22, 2023, we completed the VMware Merger. The following table presents the changes in selected balance sheet captions other than assets acquired and liabilities assumed from the VMware Merger during the three fiscal quarters ended August 4, 2024.
Previous wording
•Cash and cash equivalents decreased primarily due to $32,058 million paid for the VMware Merger, $7,176 million of common stock repurchases, $4,878 million of dividend payments and $2,662 million of employee withholding tax payments related to net settled equity awards, offset in part by $27,076 million in net proceeds from borrowings and $9,395 million in net cash provided by operating activities.
Current wording
•Cash and cash equivalents decreased primarily due to $32,058 million paid for the VMware Merger, $7,330 million of dividend payments, $7,176 million of common stock repurchases and $4,012 million of employee withholding tax payments related to net settled equity awards, offset in part by $22,849 million in net proceeds from borrowings, $14,358 million in net cash provided by operating activities, and $3,485 million proceeds from the sale of the EUC business.
Previous wording
•Trade accounts receivable, net decreased primarily due to strong collections.
Current wording
•Trade accounts receivable, net decreased primarily due to strong collections and additional receivables sold through factoring arrangements.
Previous wording
•Current portion of long-term debt decreased due to $934 million of repayments, offset in part by $495 million becoming due within the next twelve months.
Current wording
•Current portion of long-term debt increased due to $1,245 million becoming due within the next twelve months, offset in part by $941 million of repayments.
Previous wording
During each of the two fiscal quarters ended May 5, 2024 and April 30, 2023, we repurchased and retired approximately 7 million shares of our common stock for $7,176 million and $3,994 million, respectively. All $20 billion under our previously authorized stock repurchase programs was utilized prior to expiration on December 31, 2023.
Current wording
During the three fiscal quarters ended August 4, 2024 and July 30, 2023, we repurchased and retired approximately 67 million and 90 million shares of our common stock for $7,176 million and $5,701 million, respectively. All $20 billion under our previously authorized stock repurchase programs was utilized prior to expiration on December 31, 2023.
Previous wording
During the two fiscal quarters ended May 5, 2024 and April 30, 2023, we paid approximately $2,662 million and $947 million, respectively, in employee withholding taxes due upon the vesting of net settled equity awards. We withheld approximately 2 million shares of common stock from employees in connection with such net share settlements during each of the two fiscal quarters ended May 5, 2024 and April 30, 2023.
Current wording
During the three fiscal quarters ended August 4, 2024 and July 30, 2023, we paid approximately $4,012 million and $1,407 million, respectively, in employee withholding taxes due upon the vesting of net settled equity awards. We withheld approximately 30 million and 21 million shares of common stock from employees in connection with such net share settlements during the three fiscal quarters ended August 4, 2024 and July 30, 2023, respectively.
Previous wording
Cash flows from operating activities consisted of net income adjusted for certain non-cash and other items and changes in assets and liabilities. The $857 million increase in cash provided by operations during the two fiscal quarters ended May 5, 2024 compared to the prior year fiscal period was primarily due to contributions from VMware. The $3,809 million decrease in net income was largely driven by $5,427 million of higher non-cash adjustments including amortization of intangible assets and stock-based compensation.
Current wording
Cash flows from operating activities consisted of net income adjusted for certain non-cash and other items and changes in assets and liabilities. The $1,101 million increase in cash provided by operations during the three fiscal quarters ended August 4, 2024 compared to the prior year fiscal period was primarily due to contributions from VMware. The $8,987 million decrease in net income was largely driven by $11,990 million of higher non-cash adjustments including amortization of intangible assets, deferred taxes and other non-cash taxes, and stock-based compensation related to the VMware Merger.
Previous wording
Cash flows from investing activities primarily consisted of cash used for acquisitions, capital expenditures and proceeds and payments related to investments. The $25,762 million increase in cash used in investing activities during the two fiscal quarters ended May 5, 2024 compared to the prior year fiscal period was primarily due to $25,976 million cash paid in connection with the VMware Merger and the acquisition of Seagate’s SoC operations, net of cash acquired.
Current wording
Cash flows from investing activities primarily consisted of cash used for acquisitions, proceeds from the sale of a business, capital expenditures and proceeds and payments related to investments. The $22,373 million increase in cash used in investing activities during the three fiscal quarters ended August 4, 2024 compared to the prior year fiscal period was primarily due to a $25,961 million increase in cash used for acquisitions due to the VMware Merger and the acquisition of Seagate’s SoC operations, net of cash acquired, offset in part by $3,485 million proceeds from the sale of the EUC business.
Previous wording
Cash flows from financing activities primarily consisted of proceeds and payments related to our long-term borrowings, stock repurchases, dividend payments and employee withholding tax payments related to net settled equity awards. The $21,388 million increase in cash flows from financing activities during the two fiscal quarters ended May 5, 2024 compared to the prior year fiscal period was primarily due to $30,010 million of net proceeds from the 2023 Term Loans, partially offset by a $3,182 million increase in stock repurchases, a $2,674 million increase in payments of debt obligations, a $1,715 million increase in employee withholding tax payments related to net settled equity awards and a $1,038 million increase in dividend payments.
Current wording
Cash flows from financing activities primarily consisted of proceeds and payments related to our long-term borrowings, dividend payments, stock repurchases and employee withholding tax payments related to net settled equity awards. The $17,396 million increase in cash flows from financing activities during the three fiscal quarters ended August 4, 2024 compared to the prior year fiscal period was primarily due to $34,985 million of net proceeds from the 2023 Term Loans and the July 2024 Senior Notes, partially offset by an $11,876 million increase in payments of debt obligations, a $2,605 million increase in employee withholding tax payments related to net settled equity awards, a $1,589 million increase in dividend payments, and a $1,475 million increase in stock repurchases.