☑
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
☐
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Delaware
|
94-3292913
|
|
(State or other jurisdiction of
incorporation or organization)
|
(I.R.S. Employer
Identification Number)
|
|
|
|
|
3401 Hillview Avenue
|
|
|
Palo Alto,
|
CA
|
94304
|
(Address of principal executive offices)
|
(Zip Code)
|
Title of each class
|
|
Trading Symbol(s)
|
|
Name of each exchange on which registered
|
Class A common stock
|
|
VMW
|
|
New York Stock Exchange
|
Large accelerated filer
|
☑
|
|
Accelerated filer
|
☐
|
Non-accelerated filer
|
☐
|
|
Smaller reporting company
|
☐
|
|
|
|
Emerging growth company
|
☐
|
|
|
Page
|
PART I – FINANCIAL INFORMATION
|
|
|
|
|
|
Item 1.
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
Item 2.
|
||
|
|
|
Item 3.
|
||
|
|
|
Item 4.
|
||
|
|
|
PART II – OTHER INFORMATION
|
|
|
|
|
|
Item 1.
|
||
|
|
|
Item 1A.
|
||
|
|
|
Item 2.
|
||
|
|
|
Item 6.
|
||
|
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
October 30,
|
|
November 1,
|
|
October 30,
|
|
November 1,
|
||||||||
|
2020
|
|
2019(1)
|
|
2020
|
|
2019(1)
|
||||||||
Net income
|
$
|
434
|
|
|
$
|
390
|
|
|
$
|
1,267
|
|
|
$
|
6,040
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
||||||||
Changes in fair value of effective foreign currency forward contracts:
|
|
|
|
|
|
|
|
||||||||
Unrealized gains (losses), net of tax provision (benefit) of $— for all periods
|
2
|
|
|
(1
|
)
|
|
(1
|
)
|
|
3
|
|
||||
Reclassification of (gains) losses realized during the period, net of tax (provision) benefit of $— for all periods
|
2
|
|
|
(3
|
)
|
|
—
|
|
|
(2
|
)
|
||||
Net change in fair value of effective foreign currency forward contracts
|
4
|
|
|
(4
|
)
|
|
(1
|
)
|
|
1
|
|
||||
Total other comprehensive income (loss)
|
4
|
|
|
(4
|
)
|
|
(1
|
)
|
|
1
|
|
||||
Comprehensive income, net of taxes
|
438
|
|
|
386
|
|
|
1,266
|
|
|
6,041
|
|
||||
Less: Net loss attributable to the non-controlling interests
|
—
|
|
|
(17
|
)
|
|
—
|
|
|
(50
|
)
|
||||
Comprehensive income attributable to VMware, Inc.
|
$
|
438
|
|
|
$
|
403
|
|
|
$
|
1,266
|
|
|
$
|
6,091
|
|
__________
|
|
|
|
|
|
|
|
||||||||
(1) Adjusted to reflect the recast of prior period information due to the Pivotal acquisition in fiscal 2020, which was accounted for as a transaction between entities under common control (refer to Note A).
|
|
October 30,
|
|
January 31,
|
||||
|
2020
|
|
2020
|
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
3,898
|
|
|
$
|
2,915
|
|
Accounts receivable, net of allowance for doubtful accounts of $6 and $7
|
1,789
|
|
|
1,883
|
|
||
Due from related parties, net
|
672
|
|
|
1,457
|
|
||
Other current assets
|
473
|
|
|
436
|
|
||
Total current assets
|
6,832
|
|
|
6,691
|
|
||
Property and equipment, net
|
1,311
|
|
|
1,280
|
|
||
Other assets
|
2,698
|
|
|
2,266
|
|
||
Deferred tax assets
|
5,865
|
|
|
5,556
|
|
||
Intangible assets, net
|
1,059
|
|
|
1,172
|
|
||
Goodwill
|
9,559
|
|
|
9,329
|
|
||
Total assets
|
$
|
27,324
|
|
|
$
|
26,294
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
190
|
|
|
$
|
208
|
|
Accrued expenses and other
|
2,232
|
|
|
2,151
|
|
||
Current portion of long-term debt and other borrowings
|
—
|
|
|
2,747
|
|
||
Unearned revenue
|
5,205
|
|
|
5,218
|
|
||
Total current liabilities
|
7,627
|
|
|
10,324
|
|
||
Note payable to Dell
|
270
|
|
|
270
|
|
||
Long-term debt
|
4,715
|
|
|
2,731
|
|
||
Unearned revenue
|
4,030
|
|
|
4,050
|
|
||
Income tax payable
|
790
|
|
|
817
|
|
||
Operating lease liabilities
|
904
|
|
|
746
|
|
||
Other liabilities
|
512
|
|
|
347
|
|
||
Total liabilities
|
18,848
|
|
|
19,285
|
|
||
Contingencies (refer to Note D)
|
|
|
|
||||
Stockholders’ equity:
|
|
|
|
||||
Class A common stock, par value $0.01; authorized 2,500,000 shares; issued and outstanding 113,300 and 110,484 shares
|
1
|
|
|
1
|
|
||
Class B convertible common stock, par value $0.01; authorized 1,000,000 shares; issued and outstanding 307,222 shares
|
3
|
|
|
3
|
|
||
Additional paid-in capital
|
2,201
|
|
|
2,000
|
|
||
Accumulated other comprehensive loss
|
(5
|
)
|
|
(4
|
)
|
||
Retained earnings
|
6,276
|
|
|
5,009
|
|
||
Total stockholders’ equity
|
8,476
|
|
|
7,009
|
|
||
Total liabilities and stockholders’ equity
|
$
|
27,324
|
|
|
$
|
26,294
|
|
|
Nine Months Ended
|
||||||
|
October 30,
|
|
November 1,
|
||||
|
2020
|
|
2019(1)
|
||||
Operating activities:
|
|
|
|
||||
Net income
|
$
|
1,267
|
|
|
$
|
6,040
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||
Depreciation and amortization
|
757
|
|
|
626
|
|
||
Stock-based compensation
|
869
|
|
|
705
|
|
||
Deferred income taxes, net
|
(177
|
)
|
|
(5,138
|
)
|
||
Unrealized (gain) loss on equity securities, net
|
(197
|
)
|
|
(30
|
)
|
||
(Gain) loss on disposition of assets, revaluation and impairment, net
|
22
|
|
|
(4
|
)
|
||
Loss on extinguishment of debt
|
8
|
|
|
—
|
|
||
Other
|
—
|
|
|
4
|
|
||
Changes in assets and liabilities, net of acquisitions:
|
|
|
|
||||
Accounts receivable
|
102
|
|
|
164
|
|
||
Other current assets and other assets
|
(622
|
)
|
|
(444
|
)
|
||
Due to/from related parties, net
|
785
|
|
|
299
|
|
||
Accounts payable
|
(4
|
)
|
|
14
|
|
||
Accrued expenses and other liabilities
|
393
|
|
|
(82
|
)
|
||
Income taxes payable
|
(53
|
)
|
|
15
|
|
||
Unearned revenue
|
(65
|
)
|
|
618
|
|
||
Net cash provided by operating activities
|
3,085
|
|
|
2,787
|
|
||
Investing activities:
|
|
|
|
||||
Additions to property and equipment
|
(247
|
)
|
|
(215
|
)
|
||
Purchases of strategic investments
|
(16
|
)
|
|
(18
|
)
|
||
Proceeds from disposition of assets
|
21
|
|
|
22
|
|
||
Business combinations, net of cash acquired, and purchases of intangible assets
|
(390
|
)
|
|
(2,437
|
)
|
||
Net cash paid on disposition of a business
|
—
|
|
|
(4
|
)
|
||
Net cash used in investing activities
|
(632
|
)
|
|
(2,652
|
)
|
||
Financing activities:
|
|
|
|
||||
Proceeds from issuance of common stock
|
264
|
|
|
294
|
|
||
Net proceeds from issuance of long-term debt
|
1,979
|
|
|
—
|
|
||
Borrowings under term loan, net of issuance costs
|
—
|
|
|
1,993
|
|
||
Repayment of term loan
|
(1,500
|
)
|
|
(1,400
|
)
|
||
Repayment of current portion of long-term debt
|
(1,257
|
)
|
|
—
|
|
||
Repurchase of common stock
|
(566
|
)
|
|
(1,279
|
)
|
||
Shares repurchased for tax withholdings on vesting of restricted stock
|
(319
|
)
|
|
(393
|
)
|
||
Payment to acquire non-controlling interests
|
(91
|
)
|
|
—
|
|
||
Contribution from Dell
|
—
|
|
|
27
|
|
||
Principal payments on finance lease obligations
|
(3
|
)
|
|
(1
|
)
|
||
Net cash used in financing activities
|
(1,493
|
)
|
|
(759
|
)
|
||
Net increase (decrease) in cash, cash equivalents and restricted cash
|
960
|
|
|
(624
|
)
|
||
Cash, cash equivalents and restricted cash at beginning of the period
|
3,031
|
|
|
3,596
|
|
||
Cash, cash equivalents and restricted cash at end of the period
|
$
|
3,991
|
|
|
$
|
2,972
|
|
Supplemental disclosures of cash flow information:
|
|
|
|
||||
Cash paid for interest
|
$
|
142
|
|
|
$
|
131
|
|
Cash paid for taxes, net
|
393
|
|
|
283
|
|
||
Non-cash items:
|
|
|
|
||||
Changes in capital additions, accrued but not paid
|
$
|
(18
|
)
|
|
$
|
5
|
|
Changes in tax withholdings on vesting of restricted stock, accrued but not paid
|
(4
|
)
|
|
49
|
|
||
__________
|
|
|
|
||||
(1) Adjusted to reflect the recast of prior period information due to the Pivotal acquisition in fiscal 2020, which was accounted for as a transaction between entities under common control (refer to Note A).
|
|
Three Months Ended October 30, 2020
|
||||||||||||||||||||||||||||
|
Class A
Common Stock
|
|
Class B
Convertible
Common Stock
|
|
Additional
Paid-in
Capital
|
|
Retained
Earnings
|
|
Accumulated
Other
Comprehensive
Income (Loss)
|
|
Stockholders’
Equity
|
||||||||||||||||||
Shares
|
|
Par Value
|
|
Shares
|
|
Par Value
|
|
||||||||||||||||||||||
Balance, July 31, 2020
|
113
|
|
|
$
|
1
|
|
|
307
|
|
|
$
|
3
|
|
|
$
|
2,070
|
|
|
$
|
5,842
|
|
|
$
|
(9
|
)
|
|
$
|
7,907
|
|
Proceeds from issuance of common stock
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
122
|
|
|
—
|
|
|
—
|
|
|
122
|
|
||||||
Repurchase and retirement of common stock
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(255
|
)
|
|
—
|
|
|
—
|
|
|
(255
|
)
|
||||||
Issuance of restricted stock
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Shares withheld for tax withholdings on vesting of restricted stock
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(39
|
)
|
|
—
|
|
|
—
|
|
|
(39
|
)
|
||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
303
|
|
|
—
|
|
|
—
|
|
|
303
|
|
||||||
Amount due from tax sharing arrangement
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total other comprehensive income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|
4
|
|
||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
434
|
|
|
—
|
|
|
434
|
|
||||||
Balance, October 30, 2020
|
113
|
|
|
$
|
1
|
|
|
307
|
|
|
$
|
3
|
|
|
$
|
2,201
|
|
|
$
|
6,276
|
|
|
$
|
(5
|
)
|
|
$
|
8,476
|
|
|
Nine Months Ended October 30, 2020
|
||||||||||||||||||||||||||||
|
Class A
Common Stock
|
|
Class B
Convertible
Common Stock
|
|
Additional
Paid-in
Capital
|
|
Retained
Earnings
|
|
Accumulated
Other
Comprehensive
Income (Loss)
|
|
Stockholders’
Equity
|
||||||||||||||||||
Shares
|
|
Par Value
|
|
Shares
|
|
Par Value
|
|
||||||||||||||||||||||
Balance, January 31, 2020
|
110
|
|
|
$
|
1
|
|
|
307
|
|
|
$
|
3
|
|
|
$
|
2,000
|
|
|
$
|
5,009
|
|
|
$
|
(4
|
)
|
|
$
|
7,009
|
|
Proceeds from issuance of common stock
|
3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
264
|
|
|
—
|
|
|
—
|
|
|
264
|
|
||||||
Repurchase and retirement of common stock
|
(4
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(566
|
)
|
|
—
|
|
|
—
|
|
|
(566
|
)
|
||||||
Issuance of restricted stock
|
6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Shares withheld for tax withholdings on vesting of restricted stock
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(315
|
)
|
|
—
|
|
|
—
|
|
|
(315
|
)
|
||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
863
|
|
|
—
|
|
|
—
|
|
|
863
|
|
||||||
Amount due from tax sharing arrangement
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(45
|
)
|
|
—
|
|
|
—
|
|
|
(45
|
)
|
||||||
Total other comprehensive income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
(1
|
)
|
||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,267
|
|
|
—
|
|
|
1,267
|
|
||||||
Balance, October 30, 2020
|
113
|
|
|
$
|
1
|
|
|
307
|
|
|
$
|
3
|
|
|
$
|
2,201
|
|
|
$
|
6,276
|
|
|
$
|
(5
|
)
|
|
$
|
8,476
|
|
|
Three Months Ended November 1, 2019(1)
|
||||||||||||||||||||||||||||||||
|
Class A
Common Stock
|
|
Class B
Convertible
Common Stock
|
|
Additional
Paid-in
Capital
|
|
Retained Earnings
|
|
Accumulated
Other
Comprehensive
Income (Loss)
|
|
Non-controlling Interests
|
|
Stockholders’
Equity
|
||||||||||||||||||||
Shares
|
|
Par Value
|
|
Shares
|
|
Par Value
|
|
||||||||||||||||||||||||||
Balance, August 2, 2019
|
109
|
|
|
$
|
1
|
|
|
300
|
|
|
$
|
3
|
|
|
$
|
2,437
|
|
|
$
|
4,330
|
|
|
$
|
3
|
|
|
$
|
1,097
|
|
|
$
|
7,871
|
|
Proceeds from issuance of common stock
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
94
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
94
|
|
|||||||
Issuance of stock-based awards in acquisition
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10
|
|
|||||||
Repurchase and retirement of common stock
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(194
|
)
|
|
(48
|
)
|
|
—
|
|
|
—
|
|
|
(242
|
)
|
|||||||
Issuance of restricted stock
|
2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Shares withheld for tax withholdings on vesting of restricted stock
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(94
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(94
|
)
|
|||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
230
|
|
|
—
|
|
|
—
|
|
|
26
|
|
|
256
|
|
|||||||
Investment from Dell, net
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
2
|
|
|||||||
Total other comprehensive income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4
|
)
|
|
—
|
|
|
(4
|
)
|
|||||||
Transactions with Pivotal’s non-controlling stockholders
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4
|
)
|
|
—
|
|
|
—
|
|
|
49
|
|
|
45
|
|
|||||||
Net income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
407
|
|
|
—
|
|
|
(17
|
)
|
|
390
|
|
|||||||
Balance, November 1, 2019
|
110
|
|
|
$
|
1
|
|
|
300
|
|
|
$
|
3
|
|
|
$
|
2,480
|
|
|
$
|
4,689
|
|
|
$
|
(1
|
)
|
|
$
|
1,156
|
|
|
$
|
8,328
|
|
|
Nine Months Ended November 1, 2019(1)
|
||||||||||||||||||||||||||||||||
|
Class A
Common Stock
|
|
Class B
Convertible
Common Stock
|
|
Additional
Paid-in
Capital
|
|
Retained Earnings (Accumulated Deficit)
|
|
Accumulated
Other
Comprehensive
Income (Loss)
|
|
Non-controlling Interests
|
|
Stockholders’
Equity
|
||||||||||||||||||||
Shares
|
|
Par Value
|
|
Shares
|
|
Par Value
|
|
||||||||||||||||||||||||||
Balance, February 1, 2019
|
111
|
|
|
$
|
1
|
|
|
300
|
|
|
$
|
3
|
|
|
$
|
2,959
|
|
|
$
|
(1,096
|
)
|
|
$
|
(2
|
)
|
|
$
|
1,026
|
|
|
$
|
2,891
|
|
Cumulative effect of adoption of new accounting pronouncements
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|||||||
Proceeds from issuance of common stock
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
200
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
200
|
|
|||||||
Issuance of stock-based awards in acquisition
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12
|
|
|||||||
Repurchase and retirement of common stock
|
(7
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(972
|
)
|
|
(307
|
)
|
|
—
|
|
|
—
|
|
|
(1,279
|
)
|
|||||||
Issuance of restricted stock
|
7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Shares withheld for tax withholdings on vesting of restricted stock
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(442
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(442
|
)
|
|||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
632
|
|
|
—
|
|
|
—
|
|
|
73
|
|
|
705
|
|
|||||||
Credit from tax sharing arrangement
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
85
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
85
|
|
|||||||
Investment from Dell, net
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
17
|
|
|
—
|
|
|
—
|
|
|
12
|
|
|
29
|
|
|||||||
Total other comprehensive income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|||||||
Transactions with Pivotal’s non-controlling stockholders
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(11
|
)
|
|
—
|
|
|
—
|
|
|
95
|
|
|
84
|
|
|||||||
Net income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,090
|
|
|
—
|
|
|
(50
|
)
|
|
6,040
|
|
|||||||
Balance, November 1, 2019
|
110
|
|
|
$
|
1
|
|
|
300
|
|
|
$
|
3
|
|
|
$
|
2,480
|
|
|
$
|
4,689
|
|
|
$
|
(1
|
)
|
|
$
|
1,156
|
|
|
$
|
8,328
|
|
__________
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
(1) Adjusted to reflect the recast of prior period information due to the Pivotal acquisition in fiscal 2020, which was accounted for as a transaction between entities under common control (refer to Note A).
|
|
Three Months Ended
|
||||||||||||||
|
November 1, 2019
|
||||||||||||||
|
As Previously Reported
|
|
Reclassification For New Revenue Line
|
|
Pivotal Adjustments(1)
|
|
As Adjusted
|
||||||||
Revenue:
|
|
|
|
|
|
|
|
||||||||
License
|
$
|
974
|
|
|
$
|
(246
|
)
|
|
$
|
—
|
|
|
$
|
728
|
|
Subscription and SaaS
|
—
|
|
|
330
|
|
|
140
|
|
|
470
|
|
||||
Services
|
1,482
|
|
|
(84
|
)
|
|
60
|
|
|
1,458
|
|
||||
Operating expenses:
|
|
|
|
|
|
|
|
||||||||
Cost of license revenue
|
59
|
|
|
(17
|
)
|
|
—
|
|
|
42
|
|
||||
Cost of subscription and SaaS revenue
|
—
|
|
|
77
|
|
|
26
|
|
|
103
|
|
||||
Cost of services revenue
|
319
|
|
|
(60
|
)
|
|
52
|
|
|
311
|
|
|
Nine Months Ended
|
||||||||||||||
|
November 1, 2019
|
||||||||||||||
|
As Previously Reported
|
|
Reclassification For New Revenue Line
|
|
Pivotal Adjustments(1)
|
|
As Adjusted
|
||||||||
Revenue:
|
|
|
|
|
|
|
|
||||||||
License
|
$
|
2,853
|
|
|
$
|
(706
|
)
|
|
$
|
—
|
|
|
$
|
2,147
|
|
Subscription and SaaS
|
—
|
|
|
921
|
|
|
399
|
|
|
1,320
|
|
||||
Services
|
4,308
|
|
|
(215
|
)
|
|
178
|
|
|
4,271
|
|
||||
Operating expenses:
|
|
|
|
|
|
|
|
||||||||
Cost of license revenue
|
160
|
|
|
(44
|
)
|
|
—
|
|
|
116
|
|
||||
Cost of subscription and SaaS revenue
|
—
|
|
|
219
|
|
|
75
|
|
|
294
|
|
||||
Cost of services revenue
|
936
|
|
|
(175
|
)
|
|
155
|
|
|
916
|
|
|
October 30,
|
|
January 31,
|
||||
|
2020
|
|
2020
|
||||
Unearned license revenue
|
$
|
11
|
|
|
$
|
19
|
|
Unearned subscription and SaaS revenue
|
1,596
|
|
|
1,534
|
|
||
Unearned software maintenance revenue
|
6,574
|
|
|
6,700
|
|
||
Unearned professional services revenue
|
1,054
|
|
|
1,015
|
|
||
Total unearned revenue
|
$
|
9,235
|
|
|
$
|
9,268
|
|
•
|
Pursuant to original equipment manufacturer (“OEM”) and reseller arrangements, Dell integrates or bundles VMware’s products and services with Dell’s products and sells them to end users. Dell also acts as a distributor, purchasing VMware’s standalone products and services for resale to end-user customers through VMware-authorized resellers. Revenue under these arrangements is presented net of related marketing development funds and rebates paid to Dell. In addition, VMware provides professional services to end users based upon contractual agreements with Dell.
|
•
|
Dell purchases products and services from VMware for its internal use.
|
•
|
From time to time, VMware and Dell enter into agreements to collaborate on technology projects, and Dell pays VMware for services or reimburses VMware for costs incurred by VMware, in connection with such projects.
|
|
Revenue and Receipts
|
|
Unearned Revenue
|
||||||||||||||||||||
|
Three Months Ended
|
|
Nine Months Ended
|
|
As of
|
||||||||||||||||||
|
October 30,
|
|
November 1,
|
|
October 30,
|
|
November 1,
|
|
October 30,
|
|
January 31,
|
||||||||||||
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
2020
|
|
2020
|
||||||||||||
Reseller revenue
|
$
|
927
|
|
|
$
|
780
|
|
|
$
|
2,738
|
|
|
$
|
2,223
|
|
|
$
|
4,159
|
|
|
$
|
3,787
|
|
Internal-use revenue
|
16
|
|
|
37
|
|
|
50
|
|
|
60
|
|
|
28
|
|
|
57
|
|
||||||
Collaborative technology project receipts
|
4
|
|
|
2
|
|
|
9
|
|
|
7
|
|
|
n/a
|
|
|
n/a
|
|
•
|
VMware purchases and leases products and purchases services from Dell.
|
•
|
From time to time, VMware and Dell enter into agreements to collaborate on technology projects, and VMware pays Dell for services provided to VMware by Dell related to such projects.
|
•
|
In certain geographic regions where VMware does not have an established legal entity, VMware contracts with Dell subsidiaries for support services and support from Dell personnel who are managed by VMware. The costs incurred by Dell on VMware’s behalf related to these employees are charged to VMware with a mark-up intended to approximate costs that would have been incurred had VMware contracted for such services with an unrelated third party. These costs are included as expenses on VMware’s condensed consolidated statements of income and primarily include salaries, benefits, travel and occupancy expenses. Dell also incurs certain administrative costs on VMware’s behalf in the United States (“U.S.”) that are recorded as expenses on VMware’s condensed consolidated statements of income.
|
•
|
In certain geographic regions, Dell files a consolidated indirect tax return, which includes value added taxes and other indirect taxes collected by VMware from its customers. VMware remits the indirect taxes to Dell, and Dell remits the tax payment to the foreign governments on VMware’s behalf.
|
•
|
From time to time, VMware invoices end users on behalf of Dell for certain services rendered by Dell. Cash related to these services is collected from the end user by VMware and remitted to Dell.
|
•
|
From time to time, VMware enters into agency arrangements with Dell that enable VMware to sell its subscriptions and services, leveraging the Dell enterprise relationships and end customer contracts.
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
October 30,
|
|
November 1,
|
|
October 30,
|
|
November 1,
|
||||||||
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
Purchases and leases of products and purchases of services(1)
|
$
|
49
|
|
|
$
|
61
|
|
|
$
|
138
|
|
|
$
|
196
|
|
Dell subsidiary support and administrative costs
|
12
|
|
|
27
|
|
|
54
|
|
|
91
|
|
|
October 30,
|
|
January 31,
|
||||
|
2020
|
|
2020
|
||||
Due from related parties, current
|
$
|
771
|
|
|
$
|
1,618
|
|
Due to related parties, current(1)
|
99
|
|
|
161
|
|
||
Due from related parties, net, current
|
$
|
672
|
|
|
$
|
1,457
|
|
|
October 30, 2020
|
||||||||||||
|
Weighted-Average Useful Lives
(in years) |
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
|
Net Book Value
|
||||||
Purchased technology
|
5.4
|
|
$
|
978
|
|
|
$
|
(461
|
)
|
|
$
|
517
|
|
Customer relationships and customer lists
|
11.4
|
|
733
|
|
|
(259
|
)
|
|
474
|
|
|||
Trademarks and tradenames
|
7.6
|
|
132
|
|
|
(73
|
)
|
|
59
|
|
|||
Other
|
2.0
|
|
21
|
|
|
(12
|
)
|
|
9
|
|
|||
Total definite-lived intangible assets
|
|
|
$
|
1,864
|
|
|
$
|
(805
|
)
|
|
$
|
1,059
|
|
|
January 31, 2020
|
||||||||||||
|
Weighted-Average Useful Lives
(in years) |
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
|
Net Book Value
|
||||||
Purchased technology
|
5.7
|
|
$
|
1,030
|
|
|
$
|
(488
|
)
|
|
$
|
542
|
|
Customer relationships and customer lists
|
11.4
|
|
739
|
|
|
(200
|
)
|
|
539
|
|
|||
Trademarks and tradenames
|
7.6
|
|
131
|
|
|
(58
|
)
|
|
73
|
|
|||
Other
|
2.0
|
|
22
|
|
|
(4
|
)
|
|
18
|
|
|||
Total definite-lived intangible assets
|
|
|
$
|
1,922
|
|
|
$
|
(750
|
)
|
|
$
|
1,172
|
|
Balance, January 31, 2020
|
$
|
9,329
|
|
Increase in goodwill due to business combinations and related adjustments
|
230
|
|
|
Balance, October 30, 2020
|
$
|
9,559
|
|
|
For the Nine Months Ended October 30, 2020
|
||||||||||||||
|
Balance as of
January 31, 2020
|
|
Realignment Expense
|
|
Utilization
|
|
Balance as of
October 30, 2020
|
||||||||
Severance-related costs
|
$
|
74
|
|
|
$
|
47
|
|
|
$
|
(96
|
)
|
|
$
|
25
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
October 30,
|
|
November 1,
|
|
October 30,
|
|
November 1,
|
||||||||
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
Net income attributable to VMware, Inc.
|
$
|
434
|
|
|
$
|
407
|
|
|
$
|
1,267
|
|
|
$
|
6,090
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted-average shares, basic for Classes A and B
|
420,857
|
|
|
416,387
|
|
|
419,758
|
|
|
417,002
|
|
||||
Effect of other dilutive securities
|
2,543
|
|
|
6,648
|
|
|
3,335
|
|
|
8,364
|
|
||||
Weighted-average shares, diluted for Classes A and B
|
423,400
|
|
|
423,035
|
|
|
423,093
|
|
|
425,366
|
|
||||
Net income per weighted-average share attributable to VMware, Inc. common stockholders, basic for Classes A and B
|
$
|
1.03
|
|
|
$
|
0.98
|
|
|
$
|
3.02
|
|
|
$
|
14.60
|
|
Net income per weighted-average share attributable to VMware, Inc. common stockholders, diluted for Classes A and B
|
$
|
1.02
|
|
|
$
|
0.96
|
|
|
$
|
3.00
|
|
|
$
|
14.32
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||
|
October 30,
|
|
November 1,
|
|
October 30,
|
|
November 1,
|
||||
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||
Anti-dilutive securities:
|
|
|
|
|
|
|
|
||||
Employee stock options
|
140
|
|
|
159
|
|
|
202
|
|
|
10
|
|
Restricted stock units
|
2,968
|
|
|
4,220
|
|
|
4,696
|
|
|
363
|
|
Total
|
3,108
|
|
|
4,379
|
|
|
4,898
|
|
|
373
|
|
|
October 30,
|
|
January 31,
|
||||
|
2020
|
|
2020
|
||||
Cash and cash equivalents
|
$
|
3,898
|
|
|
$
|
2,915
|
|
Restricted cash within other current assets
|
67
|
|
|
83
|
|
||
Restricted cash within other assets
|
26
|
|
|
33
|
|
||
Total cash, cash equivalents and restricted cash
|
$
|
3,991
|
|
|
$
|
3,031
|
|
|
October 30,
|
|
January 31,
|
|
Effective Interest Rate
|
||||
|
2020
|
|
2020
|
|
|||||
Senior Notes issued August 21, 2017:
|
|
|
|
|
|
||||
2.30% Senior Note Due August 21, 2020
|
$
|
—
|
|
|
$
|
1,250
|
|
|
2.56%
|
2.95% Senior Note Due August 21, 2022
|
1,500
|
|
|
1,500
|
|
|
3.17%
|
||
3.90% Senior Note Due August 21, 2027
|
1,250
|
|
|
1,250
|
|
|
4.05%
|
||