Broadcom Inc

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, 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…

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Current wording

This Management’s Discussion and Analysis of 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 November 3, 2024 (“fiscal year 2024”) included in our Annual Report on Form 10-K for fiscal year 2024 (“2024 Annual Report on Form 10-K”). This Form 10-Q contains forward-looking statements within the meaning of federal securities laws. These statements are indicated by words or phrases such as “anticipate,” “expect,” “estimate,” “seek,” “plan,” “believe,” “could,” “intend,” “will,” and similar words or phrases. Forward-looking statements provide current expectations of future events based on certain assumptions and include any statement that does not directly relate to any historical or current fact. These forward-looking statements may include our projected financial results or expectations regarding acquisitions, developments in technology, products and seasonality of our business. 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, we caution you not to place undue reliance on these statements. Material factors that could cause actual results to differ materially from our expectations include, but are not limited to, those 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”). We undertake no intent or obligation to publicly update or revise any forward-looking statements for any reason, except as required by law.

Previous wording

We are a global technology leader that designs, develops and supplies a broad range of semiconductor and infrastructure software solutions. We develop semiconductor devices with a focus on complex digital and mixed signal complementary metal oxide semiconductor based devices and analog III-V based products. We have a history of innovation in the semiconductor industry and offer thousands of products that are used in end products such as enterprise and data center networking, home connectivity, set-top boxes, broadband access, telecommunication equipment, smartphones and base stations, data center servers and storage systems, factory automation, power generation and alternative energy systems, and electronic displays. Our infrastructure software solutions enable customers to plan, develop, deliver, automate, manage and secure applications across mainframe, distributed, edge, mobile, and private and hybrid cloud platforms. Our portfolio of industry-leading infrastructure and security software is designed to modernize, optimize, and secure the most complex private and hybrid cloud environments, enabling scalability, agility, automation, insights, resiliency and security. We also offer mission critical fibre channel storage area networking (“FC SAN”) products and related software in the form of modules, switches and subsystems incorporating multiple semiconductor products.

Current wording

We are a global technology leader that designs, develops and supplies a broad range of semiconductor and infrastructure software solutions. We develop semiconductor devices with a focus on complex digital and mixed signal complementary metal oxide semiconductor based devices and analog III-V based products. We offer thousands of products that are used in end products such as enterprise and data center networking, including artificial intelligence (“AI”) networking and connectivity, home connectivity, set-top boxes, broadband access, telecommunication equipment, smartphones and base stations, data center servers and storage systems, factory automation, power generation and alternative energy systems, and electronic displays. Our infrastructure software solutions help enterprises simplify their information technology environments so they can increase business velocity and flexibility, and enable customers to plan, develop, deliver, automate, manage and secure applications across mainframe, distributed, edge, mobile, and private and hybrid cloud platforms. Our portfolio of infrastructure and security software is designed to modernize, optimize, and secure the most complex private and hybrid cloud environments, enabling scalability, agility, automation, insights, resiliency and security making it easy for customers to run their mission-critical workloads. We also offer mission-critical fibre channel storage area networking (“FC SAN”) products and related software in the form of modules, switches and subsystems incorporating multiple semiconductor products.

Previous wording

We have two reportable segments: semiconductor solutions and infrastructure software. Our semiconductor solutions segment includes all of our product lines and IP licensing. Our infrastructure software segment includes our application development and delivery, application networking and security, mainframe, distributed, software-defined edge, private and hybrid cloud and cyber security solutions, and our FC SAN business.

Current wording

We have two reportable segments: semiconductor solutions and infrastructure software. Our semiconductor solutions segment includes all of our product lines and intellectual property (“IP”) licensing. Our infrastructure software segment includes our private and hybrid cloud, application development and delivery, software-defined edge, application networking and security, mainframe, distributed and cybersecurity solutions, and our FC SAN business.

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 three fiscal quarters of fiscal year 2024, compared to the corresponding prior year fiscal periods.

Current wording

Our fiscal year ending November 2, 2025 (“fiscal year 2025”), is a 52-week fiscal year, with our first fiscal quarter ended February 2, 2025 containing 13 weeks compared to 14 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 of fiscal year 2024, compared to the corresponding current year fiscal period.

Previous wording

•We generated $4,963 million of cash from operations.

Current wording

•We generated $6,113 million of cash from operations.

Previous 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.

Current wording

•We issued $4.0 billion of commercial paper and $3.0 billion of senior unsecured notes and used the net proceeds, as well as cash on hand, to repay $7,595 million of our unsecured term loans.

Previous wording

The preparation of financial statements in accordance with generally accepted accounting principles in the United States (“GAAP”) requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. We base our estimates and assumptions on current facts, historical experience and various other factors that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. Our actual financial results may differ materially and adversely from our estimates. Our critical accounting estimates are those that affect our historical financial statements materially and involve difficult, subjective or complex judgments by management. Those estimates include revenue recognition, valuation of goodwill and long-lived assets, and income taxes.

Current wording

The preparation of financial statements in accordance with generally accepted accounting principles in the United States requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. We base our estimates and assumptions on current facts, historical experience and various other factors that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. Our actual financial results may differ materially and adversely from our estimates. Our critical accounting policies are those that affect our historical financial statements materially and involve difficult, subjective or complex judgments by management. Those policies include revenue recognition, business combinations, valuation of goodwill and long-lived assets, and income taxes.

Previous 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.

Current wording

There were no significant changes in our critical accounting estimates during the fiscal quarter ended February 2, 2025 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 2024 Annual Report on Form 10-K.

Previous wording

Fiscal Quarter and Three Fiscal Quarters Ended August 4, 2024 Compared to Fiscal Quarter and Three Fiscal Quarters Ended July 30, 2023

Current wording

Fiscal Quarter Ended February 2, 2025 Compared to Fiscal Quarter Ended February 4, 2024

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 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.

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 29% and 27% of our net revenue for the fiscal quarters ended February 2, 2025, and February 4, 2024, respectively.

Previous 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.

Current 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 quarters ended February 2, 2025 and February 4, 2024. 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 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.

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 products used in AI and wireless applications as fluctuations may be magnified by the timing of customer deployments, as well as product launches and seasonal variations for wireless applications. For infrastructure software, the transition to subscription licenses, as well as whether or not a customer has the right to terminate, could cause variations in revenue recognized in each period.

Previous 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.

Current wording

Net revenue from oursemiconductor solutions segment increased in thefiscal quarter ended February 2, 2025 compared to the prior year fiscal period due to strong demand for our networking products, primarily AI networking solutions, partially offset by lower demand for our non-AI solutions, primarily broadband products. Net revenue from our infrastructure software segment increasedin thefiscal quarter ended February 2, 2025 compared to the prior year fiscal period primarily due to strong demand for our VMware Cloud Foundation (“VCF”) product, additional license revenue recognized on contracts where customers do not have the right to terminate, and the transition to a subscription license model.

Previous 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.

Current wording

Amortization of acquisition-related intangible assets recognized in operating expenses decreased $281 million, or 35% for the fiscal quarter ended February 2, 2025 compared to the prior year fiscal period primarily due to full amortization of customer-related intangible assets from previous software acquisitions other than VMware.

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 August 4, 2024. The remaining weighted-average service period was 3.2 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 February 2, 2025. The remaining weighted-average service period was 2.9 years.

Previous 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.

Current wording

Operating income from our semiconductor solutions segment increased for the fiscal quarter ended February 2, 2025 compared to the prior year fiscal period due to strong demand for our networking products, primarily AI networking solutions, partially offset by lower demand for our non-AI solutions, primarily broadband products. Higher operating income from our infrastructure software segment in the fiscal quarter ended February 2, 2025 compared to the prior year fiscal period was primarily due to strong demand for our VCF product, additional license revenue recognized on contracts where customers do not have the right to terminate, and the transition to a subscription license model.

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 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.

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 decreased 25% for the fiscal quarter ended February 2, 2025 compared to the prior year fiscal period due to lower restructuring and other charges, stock-based compensation expense, acquisition-related costs, and amortization of acquisition-related intangible assets.

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 $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.

Current wording

Other income, net. Other income, net includes interest income, gains and losses on investments, foreign currency remeasurement and other miscellaneous items. Other income, net, was $103 million and $185 million for the fiscal quarters ended February 2, 2025 and February 4, 2024, respectively. The decrease was primarily due to lower interest income as a result of a lower invested balance.

Previous 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.

Current wording

Our primary sources of liquidity as of February 2, 2025 consisted of: (i) $9,307 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 $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.

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 $68,757 million of outstanding indebtedness with $5,650 million principal amounts payable within 12 months 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.

Previous wording

From time to time, we engage in discussions with third parties regarding potential acquisitions of, or investments in, businesses, technologies and product lines. Any such transaction, or evaluation of potential transactions, could require significant use of our cash and cash equivalents, or require us to increase our borrowings to fund such transactions. If we do not have sufficient cash to fund our operations or finance growth opportunities, including acquisitions, or unanticipated capital expenditures, our business and financial condition could suffer. In such circumstances, we may seek to obtain new debt or equity financing. However, we cannot assure you that such additional financing will be available on terms acceptable to us or at all. Our ability to service our senior unsecured notes, the 2023 Term Loans and any other indebtedness we may incur will depend on our ability to generate cash in the future. We may also elect to sell additional debt or equity securities for reasons other than those specified above.

Current wording

From time to time, we engage in discussions with third parties regarding potential acquisitions of, or investments in, businesses, technologies and product lines. Any such transaction, or evaluation of potential transactions, could require significant use of our cash and cash equivalents, or require us to increase our borrowings to fund such transactions. If we do not have sufficient cash to fund our operations or finance growth opportunities, including acquisitions, or unanticipated capital expenditures, our business and financial condition could suffer. In such circumstances, we may seek to obtain new debt or equity financing. However, we cannot assure you that such additional financing will be available on terms acceptable to us or at all. Our ability to service our outstanding indebtedness and any other indebtedness we may incur will depend on our ability to generate cash in the future. We may also elect to sell additional debt or equity securities for reasons other than those specified above.

Previous wording

In addition, we may, at any time and from time to time, seek to retire or purchase our outstanding debt through cash tenders and/or exchanges for equity or debt, in open-market purchases, privately negotiated transactions or otherwise. Such tenders, exchanges or purchases, if any, will be upon such terms and at such prices as we may determine, and will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors. We may also make additional prepayments of the 2023 Term Loans. The amounts involved may be material.

Current wording

In addition, we may, at any time and from time to time, seek to retire or purchase our outstanding debt through cash tenders and/or exchanges for equity or debt, in open-market purchases, privately negotiated transactions or otherwise. Such tenders, exchanges or purchases, if any, will be upon such terms and at such prices as we may determine, and will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors. We may also make additional prepayments of our outstanding term loans. The amounts involved may be material.

Previous wording

•Accounts payable increased primarily due to the timing of payments and an increase in purchases.

Current wording

•Accounts payable increased to $1,905 million at February 2, 2025 from $1,662 million at November 3, 2024 primarily due to the timing of payments.

Previous 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.

Current wording

During the fiscal quarters ended February 2, 2025 and February 4, 2024, we paid approximately $2,036 million and $1,114 million, respectively, in employee withholding taxes due upon the vesting of net settled equity awards. We withheld approximately 8 million and 10 million shares of common stock from employees in connection with such net share settlements during the fiscal quarters ended February 2, 2025 and February 4, 2024, 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 $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.

Current wording

Cash flows from operating activities consist of net income adjusted for certain non-cash and other items and changes in assets and liabilities. The $1,298 million increase in cash provided by operations during the fiscal quarter ended February 2, 2025 compared to the prior year fiscal period was primarily due to $4,178 million higher net income, offset in part by $2,068 million from changes in operating assets and liabilities. The lower net income in the prior year fiscal period was partially driven by higher non-cash adjustments including deferred taxes and other non-cash taxes, stock-based compensation, and amortization of intangible assets.

Previous 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.

Current wording

Cash flows from investing activities primarily consist of cash related to acquisitions and divestitures, capital expenditures and proceeds and payments related to investments. The $25,303 million decrease in cash used in investing activities during the fiscal quarter ended February 2, 2025 compared to the prior year fiscal period was primarily due to $25,416 million cash paid in connection with the acquisition of VMware, net of cash acquired, in the prior year fiscal period.

Previous 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.

Current wording

Cash flows from financing activities primarily consist of proceeds and payments related to our borrowings, dividend payments, employee withholding tax payments related to net settled equity awards and authorized stock repurchases. The $24,317 million decrease in cash flows from financing activities during the fiscal quarter ended February 2, 2025 compared to the prior year fiscal period was primarily due to a $23,044 million decrease in net proceeds from borrowings, a $7,156 million increase in payments on debt obligations, a $922 million increase in employee withholding tax payments related to net settled equity awards, and a $339 million increase in dividend payments, offset in part by $7,176 million in stock repurchases in the prior year fiscal period.