Broadcom Inc.
For the period ended Aug 3, 2025. Filed Sep 10, 2025.
View on SEC.govAbout this filing
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 3, 2025 · Filed Sep 10, 2025
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 2025-05-04; filed 2025-06-11.
0001730168-25-000064
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-08-03; filed 2025-09-10.
0001730168-25-000098
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 80 previous paragraphs and 75 current paragraphs.
35 unchanged; 37 reworded; 3 added; 7 removed; 1 previous and 0 current paragraphs rearranged.
Tables are not compared: 8 previous and 8 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 (3)
Current report
•We issued $6,000 million of senior unsecured notes and used the net proceeds to repay the outstanding balance of our floating rate unsecured term loan.
Current report
Provision for income taxes. On July 4, 2025, the United States enacted the One Big Beautiful Bill Act, which allows for the immediate expensing of domestic research and development costs, certain capital expenditures, and changes to the United States taxation of profits derived from foreign operations. As a result, it is no longer more-likely-than-not that we are able to utilize our federal corporate alternative minimum tax (“CAMT”) credits, and we established a $1,058 million valuation allowance against our CAMT credit carryforwards and CAMT credits generated in the current fiscal year. Our policy is to not consider the impact of future years’ CAMT in our valuation allowance assessment for regular deferred tax assets. Most of the provisions are effective beginning in our fiscal years ending November 1, 2026 or October 31, 2027, with immediate expensing of qualifying property being effective in fiscal year 2025. We will continue to evaluate the full impact of these legislative changes as more guidance becomes available.
Current report
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 was primarily due to an intra-group transfer of certain IP rights during the fiscal quarter ended August 4, 2024 to the United States as a result of supply chain realignment and the resulting shift in the jurisdictional mix of income, partially offset by excess tax benefits from stock-based awards.
Removed paragraphs (7)
Previous report
Our fiscal year ending November 2, 2025 (“fiscal year 2025”), is a 52-week fiscal year, with our first fiscal quarter 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 two fiscal quarters of fiscal year 2024, compared to the corresponding current year fiscal period.
Previous report
We acquired VMware, Inc. (“VMware”) on November 22, 2023, resulting in a partial quarter of operations from activities related to VMware in the first quarter of fiscal year 2024 compared to a full quarter of operations in the first quarter of fiscal year 2025.
Previous report
Total stock-based compensation expense was $3,051 million and $2,975 million for the two fiscal quarters ended May 4, 2025 and May 5, 2024, respectively. The increase was due to the Two-Year Equity Awards granted at higher grant-date fair values and a full quarter of expense for the annual employee equity awards granted on March 15, 2024. The increase was substantially offset by a one-time impact from aligning the vesting dates of certain equity awards assumed from the acquisition of VMware with our equity award vesting dates and the accelerated vesting of certain equity awards held by employees terminated in connection with the acquisition of VMware in the prior year fiscal periods.
Previous report
•Short-term debt increased to $5,531 million at May 4, 2025 from $1,271 million at November 3, 2024 primarily due to the net issuance of $3,900 million of commercial paper and $900 million of senior notes becoming due within the next twelve months, offset in part by a $495 million repayment.
Previous report
•Other current liabilities increased to $12,503 million at May 4, 2025 from $11,793 million at November 3, 2024 primarily from higher contract liabilities.
Previous report
These decreases in working capital were offset in part by the following:
Previous report
•Employee compensation and benefits decreased to $1,266 million at May 4, 2025 from $1,971 million at November 3, 2024 primarily due to the timing of annual employee bonus plan payments.
Reworded paragraphs (37)
Previous 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.
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 many 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 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.
Current wording
We are a global technology leader that designs, develops and supplies a broad range of semiconductor and infrastructure software solutions. Our semiconductor solutions include a broad portfolio of complex digital and mixed signal complementary metal oxide semiconductor based devices, analog III-V based products, network interface cards and other modules, switches, subsystems and, in some cases, racks that are used in a wide array of environments, end products and applications such as artificial intelligence (“AI”) and enterprise data centers, servers, networking and connectivity equipment, storage systems, home connectivity devices, set-top boxes, broadband access, telecommunication equipment, smartphones and base stations, 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 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.
Current wording
We have two reportable segments: semiconductor solutions and infrastructure software. Our semiconductor solutions segment includes all of our semiconductor-based 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
•We generated $6,555 million of cash from operations.
Current wording
•We generated $7,166 million of cash from operations.
Previous wording
•We paid $2,785 million in cash dividends.
Current wording
•We paid $2,786 million in cash dividends.
Previous wording
There were no significant changes in our critical accounting estimates during the two fiscal quarters ended May 4, 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.
Current wording
There were no significant changes in our critical accounting estimates during the three fiscal quarters ended August 3, 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 Two Fiscal Quarters Ended May 4, 2025 Compared to Fiscal Quarter and Two Fiscal Quarters Ended May 5, 2024
Current wording
Fiscal Quarter and Three Fiscal Quarters Ended August 3, 2025 Compared to Fiscal Quarter and Three Fiscal Quarters Ended August 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 29% of our net revenue for each of the fiscal quarter and two fiscal quarters ended May 4, 2025, and 29% and 28% of our net revenue for the fiscal quarter and two fiscal quarters ended May 5, 2024, respectively.
Current wording
A relatively small number of customers account for a significant portion of our net revenue. Direct sales to one semiconductor solutions customer, which is a distributor, accounted for 32% and 30% of our net revenue for the fiscal quarter and three fiscal quarters ended August 3, 2025, respectively, and 26% and 27% of our net revenue for the fiscal quarter and three fiscal quarters ended August 4, 2024, 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 quarters and two fiscal quarters ended May 4, 2025 and May 5, 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.
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 quarter and three fiscal quarters ended August 3, 2025, and 35% and 40% of our net revenue for the fiscal quarter and three fiscal quarters ended August 4, 2024, respectively. 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 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.
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, causes variations in revenue recognized in each period.
Previous wording
Net revenue from oursemiconductor solutions segment increased in the fiscal quarter andtwo fiscal quarters ended May 4, 2025 compared to the prior year fiscal periods due to strong demand for our networking products, primarily AI networking solutions. The increase in thetwo fiscal quarters ended May 4, 2025 was partially offset bylower demand for our non-AI solutions, primarily broadband products.
Current wording
Net revenue from oursemiconductor solutions segment increased in the fiscal quarter andthree fiscal quarters ended August 3, 2025 compared to the prior year fiscal periods due to strong demand for our networking products, primarily custom AI accelerators and AI networking solutions.
Previous wording
Net revenue from our infrastructure software segment increasedin the fiscal quarter andtwo fiscal quarters ended May 4, 2025 compared to the prior year fiscal periods primarily due to strong demand for our VMware Cloud Foundation (“VCF”) product, including additional license revenue recognized on contracts where customers do not have the right to terminate and the transition to a subscription license model.
Current wording
Net revenue from our infrastructure software segment increasedin the fiscal quarter andthree fiscal quarters ended August 3, 2025 compared to the prior year fiscal periods primarily due to strong demand for our VMware Cloud Foundation (“VCF”) product, including 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
Gross margin was $10,197 million for the fiscal quarter ended May 4, 2025 compared to $7,776 million for the fiscal quarter ended May 5, 2024, and $20,342 million for the two fiscal quarters ended May 4, 2025 compared to $15,151 million for the two fiscal quarters ended May 5, 2024. The increases were primarily due to higher software revenue and strong product demand for our AI-related semiconductor solutions.
Current wording
Gross margin was $10,703 million for the fiscal quarter ended August 3, 2025 compared to $8,356 million for the fiscal quarter ended August 4, 2024, and $31,045 million for the three fiscal quarters ended August 3, 2025 compared to $23,507 million for the three fiscal quarters ended August 4, 2024. The increases were primarily due to higher software revenue and strong product demand for our AI-related semiconductor solutions.
Previous wording
As a percentage of net revenue, gross margin was 68% of net revenue for each of the fiscal quarter and two fiscal quarters ended May 4, 2025 and 62% for each of the fiscal quarter and two fiscal quarters ended May 5, 2024. The increases were primarily due to higher software revenue mix and lower amortization of acquisition-related intangible assets as a percentage of revenue.
Current wording
As a percentage of net revenue, gross margin was 67% and 68% of net revenue for the fiscal quarter and three fiscal quarters ended August 3, 2025, respectively, and 64% and 63% for the fiscal quarter and three fiscal quarters ended August 4, 2024, respectively. The increases were primarily due to higher software revenue mix and lower amortization of acquisition-related intangible assets as a percentage of revenue.
Previous wording
Research and development expense increased $278 million, or 12%, and $223 million, or 5%, for the fiscal quarter and two fiscal quarters ended May 4, 2025, respectively, compared to the prior year fiscal periods. The increases were primarily due to higher stock-based compensation.
Current wording
Research and development expense increased $697 million, or 30%, and $920 million, or 13%, for the fiscal quarter and three fiscal quarters ended August 3, 2025, respectively, compared to the prior year fiscal periods. The increases were primarily due to higher stock-based compensation.
Previous wording
Selling, general and administrative expense decreased $817 million, or 29%, for the two fiscal quarters ended May 4, 2025 compared to the prior year fiscal period. The decrease was primarily due to lower compensation resulting from a decrease in headcount and lower stock-based compensation. In addition, in the two fiscal quarters ended May 5, 2024, we incurred higher VMware acquisition-related costs.
Current wording
Selling, general and administrative expense decreased $28 million, or 3%, and $845 million, or 21%, for the fiscal quarter and three fiscal quarters ended August 3, 2025, respectively, compared to the prior year fiscal periods. The decreases were primarily due to lower compensation resulting from a decrease in headcount and lower VMware acquisition-related costs. The decrease in the fiscal quarter ended August 3, 2025 compared to the prior year fiscal period was partially offset by higher stock-based compensation.
Previous wording
Amortization of acquisition-related intangible assets recognized in operating expenses decreased $321 million, or 39%, and $602 million, or 37%, for the fiscal quarter and two fiscal quarters ended May 4, 2025, respectively, compared to the prior year fiscal periods primarily due to full amortization of customer-related intangible assets from previous software acquisitions other than VMware.
Current wording
Amortization of acquisition-related intangible assets recognized in operating expenses decreased $305 million, or 38%, and $907 million, or 37%, for the fiscal quarter and three fiscal quarters ended August 3, 2025, respectively, compared to the prior year fiscal periods primarily due to full amortization of customer-related intangible assets from previous software acquisitions other than VMware.
Previous wording
Restructuring and other charges recognized in operating expenses decreased $206 million, or 71%, and $654 million, or 72%, for the fiscal quarter and two fiscal quarters ended May 4, 2025, respectively, compared to the prior year fiscal periods primarily due to lower employee termination costs associated with the integration of the VMware business.
Current wording
Restructuring and other charges recognized in operating expenses decreased $116 million, or 38%, and $770 million, or 63%, for the fiscal quarter and three fiscal quarters ended August 3, 2025, respectively, compared to the prior year fiscal periods primarily due to lower employee termination costs associated with the integration of the VMware business.
Previous wording
Total stock-based compensation expense was $1,771 million and $1,403 million for the fiscal quarters ended May 4, 2025 and May 5, 2024, respectively. The increase was due to the Two-Year Equity Awards granted at higher grant-date fair values and a full quarter of expense for the annual employee equity awards granted on March 15, 2024.
Current wording
Total stock-based compensation expense was $2,322 million and $1,381 million for the fiscal quarters ended August 3, 2025 and August 4, 2024, respectively, and $5,373 million and $4,356 million for the three fiscal quarters ended August 3, 2025 and August 4, 2024, respectively. The increases were due to the Two-Year Equity Awards granted at higher grant-date fair values, partially offset by the full vesting and forfeitures of certain equity awards assumed in the VMware acquisition.
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 4, 2025. The remaining weighted-average service period was 3.8 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 3, 2025. The remaining weighted-average service period was 3.6 years.
Previous wording
Operating income from our semiconductor solutions segment increased for the fiscal quarter and two fiscal quarters ended May 4, 2025 compared to the prior year fiscal periods due to strong demand for our networking products, primarily AI networking solutions. The increase in the two fiscal quarters ended May 4, 2025 was partially offset by lower demand for our non-AI solutions, primarily broadband products.
Current wording
Operating income from our semiconductor solutions segment increased for the fiscal quarter and three fiscal quarters ended August 3, 2025 compared to the prior year fiscal periods due to strong demand for our networking products, primarily custom AI accelerators and AI networking solutions.
Previous wording
Higher operating income from our infrastructure software segment in the fiscal quarter and two fiscal quarters ended May 4, 2025 compared to the prior year fiscal periods was primarily due to strong demand for our VCF product, including additional license revenue recognized on contracts where customers do not have the right to terminate and the transition to a subscription license model.
Current wording
Higher operating income from our infrastructure software segment in the fiscal quarter and three fiscal quarters ended August 3, 2025 compared to the prior year fiscal periods was primarily due to strong demand for our VCF product, including 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, which are not used in evaluating the results of, or in allocating resources to, our segments. Unallocated expenses decreased 5% for the fiscal quarter ended May 4, 2025 compared to the prior year fiscal period due to lower amortization of acquisition-related intangible assets and restructuring and other charges, partially offset by higher stock-based compensation expense. Unallocated expenses decreased 16% for the two fiscal quarters ended May 4, 2025 compared to the prior year fiscal period due to lower restructuring and other charges, amortization of acquisition-related intangible assets, and acquisition-related costs.
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, which are not used in evaluating the results of, or in allocating resources to, our segments. Unallocated expenses increased 10% for the fiscal quarter ended August 3, 2025 compared to the prior year fiscal period primarily due to higher stock-based compensation expense, partially offset by lower amortization of acquisition-related intangible assets, and decreased 8% for the three fiscal quarters ended August 3, 2025 compared to the prior year fiscal period primarily due to lower restructuring and other charges and lower amortization of acquisition-related intangible assets, partially offset by higher stock-based compensation expense.
Previous wording
Interest expense. Interest expense was $769 million and $1,642 million for the fiscal quarter and two fiscal quarters ended May 4, 2025, respectively, and $1,047 million and $1,973 million for the fiscal quarter and two fiscal quarters ended May 5, 2024, respectively. The decreases were primarily from an overall reduction in outstanding debt balances and debt refinancing activities that drove lower effective interest rates compared to the prior year fiscal periods.
Current wording
Interest expense. Interest expense was $807 million and $2,449 million for the fiscal quarter and three fiscal quarters ended August 3, 2025, respectively, and $1,064 million and $3,037 million for the fiscal quarter and three fiscal quarters ended August 4, 2024, respectively. The decreases were primarily from an overall reduction in outstanding debt balances and debt refinancing activities that drove lower effective interest rates compared to the prior year fiscal periods.
Previous 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 $25 million and $128 million for the fiscal quarter and two fiscal quarters ended May 4, 2025, respectively, and $87 million and $272 million for the fiscal quarter and two fiscal quarters ended May 5, 2024, respectively. The decreases were primarily due to lower interest income as a result of lower interest rates on lower invested balances.
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 $205 million and $82 million for the fiscal quarters ended August 3, 2025 and August 4, 2024, respectively. The increase was primarily due to a gain on the sale of a business. Other income, net was $333 million and $354 million for the three fiscal quarters ended August 3, 2025 and August 4, 2024, respectively. The decrease was primarily due to lower interest income as a result of lower interest rates on lower invested balances, partially offset by a gain on the sale of a business.
Previous wording
Provision for (benefit from) income taxes. The provision for income taxes was $120 million and $107 million for the fiscal quarter and two fiscal quarters ended May 4, 2025, respectively. The provision for income taxes was primarily due to income before income taxes and the jurisdictional mix of income, partially offset by excess tax benefits from stock-based awards. 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 the jurisdictional mix of income, partially offset by income tax expense on operations.
Current wording
The provision for income taxes was $1,145 million and $1,252 million for the fiscal quarter and three fiscal quarters ended August 3, 2025, respectively, and was primarily due to the impact from a valuation allowance against our CAMT credits, income before income taxes, and the jurisdictional mix of income, partially offset by excess tax benefits from stock-based awards.
Previous wording
Our primary sources of liquidity as of May 4, 2025 consisted of: (i) $9,472 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 August 3, 2025 consisted of: (i) $10,718 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 $69,407 million of outstanding indebtedness with $5,550 million principal amounts payable within 12 months, (vi) discretionary share repurchases, and (vii) 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.
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 $66,257 million of outstanding indebtedness with $1,400 million principal amounts payable within 12 months, (vi) discretionary share repurchases, and (vii) 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
We believe that our cash and cash equivalents on hand, cash flows from operations and our revolving credit facility will provide sufficient liquidity to operate our business and fund our current and assumed obligations for at least the next 12 months. For additional information regarding our cash requirement from contractual obligations and indebtedness, see Note 11. “Commitments and Contingencies” and Note 7. “Borrowings” in Part I, Item 1 of this Form 10-Q.
Current wording
We believe that our cash and cash equivalents on hand, cash flows from operations and our revolving credit facility will provide sufficient liquidity to operate our business and fund our current obligations for at least the next 12 months. For additional information regarding our cash requirement from contractual obligations and indebtedness, see Note 11. “Commitments and Contingencies” and Note 7. “Borrowings” in Part I, Item 1 of this Form 10-Q.
Previous wording
Working capital decreased to $1,584 million at May 4, 2025 from $2,898 million at November 3, 2024. The decrease was primarily attributable to the following:
Current wording
Working capital increased to $8,294 million at August 3, 2025 from $2,898 million at November 3, 2024. The increase was primarily attributable to the following:
Previous wording
•We repurchased $2,450 million of common stock.
Current wording
•Cash and cash equivalents increased to $10,718 million at August 3, 2025 from $9,348 million at November 3, 2024, primarily due to $19,834 million in net cash provided by operating activities, partially offset by $8,345 million of dividend payments, $3,860 million of employee withholding tax payments related to net settled equity awards, $3,657 million of net repayments of borrowings, and $2,450 million of common stock repurchases.
Previous wording
•Trade accounts receivable, net increased to $5,563 million at May 4, 2025 from $4,416 million at November 3, 2024 primarily due to higher software billings.
Current wording
•Trade accounts receivable, net increased to $6,494 million at August 3, 2025 from $4,416 million at November 3, 2024 primarily due to higher billings and the timing of collections.
Previous wording
•Other current assets increased to $5,129 million at May 4, 2025 from $4,071 million at November 3, 2024 primarily from higher software contract assets, offset in part by lower prepaid taxes.
Current wording
•Other current assets increased to $5,606 million at August 3, 2025 from $4,071 million at November 3, 2024 primarily from higher software contract assets, offset in part by lower prepaid taxes.
Previous wording
During the two fiscal quarters ended May 4, 2025 and May 5, 2024, we paid $3,802 million and $2,662 million, respectively, in employee withholding taxes due upon the vesting of net settled equity awards. We withheld 17 million and 22 million shares of common stock from employees in connection with such net share settlements during the two fiscal quarters ended May 4, 2025 and May 5, 2024, respectively.
Current wording
During the three fiscal quarters ended August 3, 2025 and August 4, 2024, we paid $3,860 million and $4,012 million, respectively, in employee withholding taxes due upon the vesting of net settled equity awards. We withheld 17 million and 30 million shares of common stock from employees in connection with such net share settlements during the three fiscal quarters ended August 3, 2025 and August 4, 2024, respectively. Beginning in the fiscal quarter ended August 3, 2025, we settle withholding taxes upon the vesting of employee equity awards using proceeds from the sale of a portion of the vested shares, thereby eliminating our cash outflow for employee withholding taxes on equity award vesting.
Previous 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 $3,273 million increase in cash provided by operations during the two fiscal quarters ended May 4, 2025 compared to the prior year fiscal period was primarily due to $7,022 million higher net income, offset in part by $2,750 million from changes in operating assets and liabilities and $999 million lower non-cash adjustments including amortization of intangible assets and deferred taxes and other non-cash taxes.
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 $5,476 million increase in cash provided by operations during the three fiscal quarters ended August 3, 2025 compared to the prior year fiscal period was primarily due to $13,037 million higher net income, offset in part by $3,816 million lower non-cash adjustments for deferred taxes and other non-cash taxes, as well as $3,576 million from changes in operating assets and liabilities.
Previous 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 $25,876 million decrease in cash used in investing activities during the two fiscal quarters ended May 4, 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.
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 $22,725 million decrease in cash used in investing activities during the three fiscal quarters ended August 3, 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, offset in part by $3,185 million lower proceeds from sales of businesses during the three fiscal quarters ended August 3, 2025 compared to the prior year fiscal period.
Previous 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. Cash flows from financing activities during the two fiscal quarters ended May 4, 2025 compared to the prior year fiscal period decreased $24,645 million. The decrease was primarily from the $30,010 million of net proceeds from term loans issued in connection with the acquisition of VMware in the prior year fiscal period, increases in the current year fiscal period in employee withholding tax payments related to net settled equity awards and dividend payments, offset in part by a decrease 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. Cash flows from financing activities during the three fiscal quarters ended August 3, 2025 compared to the prior year fiscal period decreased $22,594 million. The decrease was primarily from the net proceeds from term loans issued in connection with the acquisition of VMware in the prior year fiscal period, debt repayments and higher dividend payments in the current year fiscal period, offset in part by a decrease in stock repurchases.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
Selling, general and administrative expense decreased $194 million, or 15%, for the fiscal quarter ended May 4, 2025 compared to the prior year fiscal period. The decrease was primarily due to lower compensation resulting from a decrease in headcount, partially offset by higher stock-based compensation.