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Item 7. Management’s Discussion and Analysis

2025-12-18 compared with 2024-12-20 · 117 added, 132 removed, 243 unchanged (51% of the section changed)

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Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under the caption “Risk Factors” or in other parts of this Annual Report on Form 10-K.

The following section generally discusses our financial condition and results of operations for our fiscal year ended November 3, 2024 (“fiscal year 2024”) compared to our fiscal year ended October 29, 2023 (“fiscal year 2023”).

The following section generally discusses our financial condition and results of operations for our fiscal year ended November 2, 2025 (“fiscal year 2025”) compared to our fiscal year ended November 3, 2024 (“fiscal year 2024”).

A discussion regarding our financial condition and results of operations for fiscal year 2024 compared to our fiscal year ended October 29, 2023 can be found in Part II, Item 7 of our Annual Report on Form 10-K for fiscal year 2024, filed with the Securities and Exchange Commission (the “SEC”) on December 20, 2024.

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 are a global technology leader that designs, develops and supplies a broad range of semiconductor and semiconductor-based solutions and infrastructure software solutions.

Our semiconductor and semiconductor-based solutions include a broad portfolio of complex digital and mixed signal devices based on silicon wafers with complementary metal oxide semiconductor transistors, III-V based devices, network interface cards and other modules, switches, subsystems and, in some cases, racks.

Our solutions are used in a wide array of environments, end products and applications, such as enterprise and artificial intelligence (“AI”) data centers, servers and networking and connectivity equipment, as well as storage systems, home connectivity devices, set-top boxes, broadband access, telecommunication equipment, wireless devices 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.

Our customers rely on our infrastructure and security software solutions to modernize, optimize, and secure the most complex private cloud, hybrid cloud and edge environments.

This enables 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.

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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.

Our fiscal year 2024 was a 53-week fiscal year compared to our fiscal year 2023, which was a 52-week fiscal year.

The additional week in the first quarter of fiscal year 2024 resulted in higher net revenue, gross margin dollars, research and development expense, and selling general and administrative expense for fiscal year 2024, compared to the corresponding prior year fiscal period.

Our strategy is focused on technology leadership and category-leading semiconductor and infrastructure software solutions delivering a comprehensive suite of innovative infrastructure technology products to the world’s leading business and government customers.

We seek to achieve this through strategic acquisitions of businesses and technologies, as well as extensive internal research and development, to ensure our products retain their technology market leadership.

Our semiconductor solutions segment includes all of our semiconductor-based product lines and intellectual property (“IP”) licensing.

Our infrastructure software segment includes our private cloud, mainframe software, cybersecurity and enterprise software portfolios, and our FC SAN business.

Our strategy is focused on sustained technology leadership and developing category-leading solutions to deliver a comprehensive suite of innovative infrastructure technology products to the world’s leading business and government customers.

We seek to achieve this through extensive internal research and development, as well as strategic acquisitions of businesses and technologies, to ensure our products retain their technology market leadership.

This strategy results in a robust business model designed to drive diversified and sustainable operating and financial results.

The demand for our products has been affected in the past, and is likely to continue to be affected in the future, by various factors, including the following:

The demand for our solutions has been affected in the past, and is likely to continue to be affected in the future, by various factors, including the following:

• gain or loss of significant customers;

• general economic and market conditions in the industries and markets in which we compete;

• anticipated or actual demand for AI-related products;

• our distributors’ product inventory and end customer demand;

• the rate at which our present and future customers and end-users adopt our products and technologies in our target markets, including our AI related products, and the rate at which our customers' products that include our technology are accepted in their markets;

• the shift to cloud-based information technology solutions and services, such as hyperscale computing, which may adversely affect the timing and volume of sales of our products for use in traditional enterprise data centers;

• anticipated or actual demand for AI-related products and solutions;

• our distributors’ product inventory and end-user demand;

• the rate at which our present and future customers and end-users adopt our solutions in our target markets, including our AI-related solutions, and the rate at which our customers' products that include our solutions are accepted in their markets;

• the shift to cloud-based information technology solutions and services, such as hyperscale computing, which may adversely affect the timing and volume of sales of our solutions for use in traditional enterprise data centers;

• the timing, rescheduling or cancellation of expected customer orders.

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Highlights during fiscal year 2025 include the following:

• On November 22, 2023, we completed the acquisition of VMware, Inc.

(“VMware”), for approximately $30.8 billion in cash and 544 million shares of Broadcom common stock (on a split adjusted basis) with a fair value of $53.4 billion.

• We generated $27,537 million of cash from operations.

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• We repurchased $2,450 million of common stock.

• We completed a ten-for-one forward stock split of our common stock.

All share, equity award and per share amounts have been retroactively adjusted to reflect the stock split.

Acquisitions and Divestitures

Acquisition of VMware and Divestiture of EUC

On November 22, 2023, we acquired VMware in a cash-and-stock transaction (the “VMware Merger”).

On November 22, 2023, we acquired VMware, Inc.

(“VMware”) in a cash-and-stock transaction (the “VMware Merger”).

The VMware stockholders received approximately $30,788 million in cash and 544 million shares of Broadcom common stock with a fair value of $53,398 million.

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for cash consideration of $3.5 billion , after working capital adjustments.

Acquisition of Seagate’s SoC Operations

On April 23, 2024, we acquired certain assets related to the design, development, and manufacture of System-on-Chip (“SoC”) operations of Seagate Technology Holdings plc for $600 million .

A majority of our net revenue is derived from sales of a broad range of semiconductor devices that are incorporated into electronic products, as well as from modules, switches and subsystems.

Acquisition of Seagate’s System-on-Chip Operations

On April 23, 2024, we acquired certain assets related to the design, development, and manufacture of System-on-Chip operations of Seagate Technology Holdings plc for $600 million .

A majority of our net revenue is derived from sales of a broad range of semiconductor and semiconductor-based solutions that are incorporated into electronic products, as well as from modules, switches and subsystems and, in some cases, racks.

Net revenue is also generated from the sale of software solutions that enable our customers to plan, develop, deliver, automate, manage, and secure applications across mainframe, distributed, edge, mobile, and private and hybrid cloud platforms.

Our overall net revenue, as well as the percentage of total net revenue generated by sales in our semiconductor solutions and infrastructure software segments, have varied from quarter to quarter, due largely to fluctuations in end-market demand, including the effects of seasonality, which are discussed in detail in Part I, Item 1.

Business under “Seasonality” of this Annual Report on Form 10-K.

Risk Factors of this Annual Report on Form 10-K.

Distributors and original equipment manufacturers (“OEMs”), or their contract manufacturers, typically account for the substantial majority of our semiconductor sales.

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Our software customers generally consist of large enterprises that have computing environments from multiple vendors and are highly complex.

Our private cloud infrastructure suite of solutions are available directly from Broadcom, resellers and distributors, hyperscale cloud providers, value-added OEMs and VMware cloud service provider partners.

Our private cloud infrastructure suite of solutions is available directly from Broadcom, resellers and distributors, hyperscale cloud providers, value-added OEMs and VMware cloud service provider partners.

VMware Cloud Foundation (“VCF”) provides license portability, which enables customers to purchase subscriptions of VCF software and move their VCF environments between on-premises data centers and supported cloud endpoints.

We remain focused on strengthening relationships and increasing penetration within our existing core, mainframe, VMware, and Symantec endpoint customers and expanding the adoption of our enterprise software offerings with these customers.

We remain focused on strengthening relationships and increasing penetration within our existing core, mainframe, VMware, and Symantec endpoint

customers and expanding the adoption of our enterprise software offerings with these customers.

We believe our enterprise-wide license model will continue to offer our customers reduced complexity, more flexibility and an easier renewal process that will help drive revenue growth.

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Restructuring and other charges.

Restructuring and other charges consist primarily of non-recurring charges related to compensation costs associated with employee exit programs, IP litigation, alignment of our global manufacturing operations, rationalization of product development program costs, facility and lease abandonments, fixed asset impairment, IPR&D impairment, and other exit costs, including curtailment of service or supply agreements.

Restructuring and other charges consist primarily of non-recurring charges related to compensation costs associated with employee exit programs, IP litigation, alignment of our global manufacturing operations, rationalization of product development program costs, facility and lease abandonments, asset impairment, and other exit costs, including curtailment of service or supply agreements.

Interest expense.

Interest expense includes coupon interest, commitment fees, accretion of original issue discount, amortization of debt premiums and debt issuance costs, and expenses related to debt modifications or extinguishments.

Other income (expense), net.

Other income (expense), net includes interest income, gains and losses on investments, foreign currency remeasurement, and other miscellaneous items.

Provision for income taxes.

Other income, net.

Other income, net includes interest income, gains and losses on investments or sales of businesses, foreign currency remeasurement, and other miscellaneous items.

Provision for (benefit from) income taxes.

We benefit from the tax incentives extended to us in various jurisdictions to encourage investment or employment.

Our tax incentives from the Singapore Economic Development Board provide that any qualifying income earned in Singapore is subject to tax incentives or reduced rates of Singapore income tax, subject to our compliance with the conditions specified in these incentives and legislative developments.

These Singapore tax incentives are scheduled

to expire in November 2030.

These Singapore tax incentives are scheduled to expire through November 2030.

The corporate income tax rate in Singapore that would otherwise apply to us would be 17%.

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If we cannot, or elect not to, comply with any such operating conditions specified, we could, in some instances, be required to refund previously realized material tax benefits, or if such tax incentive or tax holiday is terminated prior to its expiration absent a new incentive applying, we will lose the related tax benefits earlier than scheduled.

We may elect to modify our operational structure and tax strategy, which may not be as beneficial to us as the benefits provided under the present tax concession arrangements.

Before taking into consideration the effects of the U.S.

Tax Cuts and Jobs Act and other indirect tax impacts, the effect of these tax incentives and tax holiday decreased the provision for income taxes by approximately $2,261 million and $2,104 million for fiscal years 2024 and 2023, respectively.

We may elect to modify our

operational structure and tax strategy, which may not be as beneficial to us as the benefits provided under the present tax concession arrangements.

Before taking into consideration the impacts of indirect taxes, the effect of these tax incentives and tax holiday decreased the provision for income taxes by approximately $2,709 million and $2,261 million for fiscal years 2025 and 2024, respectively.

Our interpretations and conclusions regarding the tax incentives are not binding on any taxing authority, and if our assumptions about tax and other laws are incorrect, the benefits of the tax incentives may be adversely affected.

Many countries have enacted or are in the process of enacting a global minimum tax, some of which became effective for us starting in our fiscal year 2025 and, more importantly, the enactment in Singapore will become effective in our fiscal year ending November 1, 2026 (“fiscal year 2026”).

While the tax did not have a material impact on our fiscal year 2025 consolidated results of operations, we expect a material impact from the enactment of these laws on our consolidated results of operations and cash flows for our fiscal year 2026.

Critical Accounting Estimates

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Valuation of goodwill and long-lived assets.

We perform an annual impairment review of our goodwill during the fourth fiscal quarter of each year, and more frequently if we believe indicators of impairment exist.

We perform an annual impairment review of our goodwill during the fourth fiscal quarter of each fiscal year, and more frequently if we believe indicators of impairment exist.

The process of evaluating the potential impairment of goodwill is highly subjective and requires significant judgment.

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Our fiscal year 2025 was a 52-week fiscal year.

Fiscal years 2023 and 2022 each consisted of 52 weeks.

Fiscal year 2024 was a 53-week fiscal year and fiscal year 2023 was a 52-week fiscal year.

The financial statements included in Part II, Item 8 of this Annual Report on Form 10-K are presented in accordance with GAAP and expressed in U.S.

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Fiscal Year Ended

2024 October 29,

2025 November 3,

2024 October 29,

2024 November 2,

2025 November 3,

(In millions) (As a percentage of net revenue)

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Operating income $ 25,484 $ 13,463 40 % 26 %

In fiscal year 2025, we included upfront license revenue of $7,800 million within products revenue.

To conform to the current year presentation, we reclassified $4,601 million of upfront license revenue from subscriptions and services revenue to products revenue for fiscal year 2024.

We also reclassified the related costs for the upfront license revenue, which were immaterial, for the periods presented.

“Revenue from Contracts with Customers” in Part II, Item 8.

of this Annual Report on Form 10-K for additional information.

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 28% and 21% of our net revenue for fiscal years 2024 and 2023, respectively.

We believe aggregate sales to our top five end customers, through all channels, accounted for approximately 40% and 35% of our net revenue for fiscal years 2024 and 2023, respectively.

Direct sales to one semiconductor solutions customer, which is a distributor, accounted for 32% and 28% of our net revenue for fiscal years 2025 and 2024, respectively.

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 years 2025 and 2024.

We expect to continue to experience significant customer concentration in future periods.

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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 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.

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.

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.

Although we recognize revenue for the majority of our products when title and control transfer in Penang, Malaysia, we disclose net revenue by country based primarily on the geographic shipment or delivery location specified by our distributors, OEMs, contract manufacturers, channel partners, or software customers.

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However, the end customers for either our products or for the end products into which our products are incorporated, are frequently located in countries other than China (including Hong Kong).

As a result, we believe that a substantially smaller percentage of our net revenue is ultimately dependent on sales of either our product or our customers’ product incorporating our product, to end customers located in China (including Hong Kong).

As a result, we believe that a substantially smaller percentage of our net

revenue is ultimately dependent on sales of either our product or our customers’ product incorporating our product, to end customers located in China (including Hong Kong).

The following tables set forth net revenue by segment for the periods presented:

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Net Revenue by Segment November 2,

2024 October 29,

2025 November 3,

2024 $ Change % Change

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Fiscal Year Ended

Net Revenue by Segment November 3, 2024 October 29, 2023

Net Revenue by Segment November 2, 2025 November 3, 2024

(As a percentage of net revenue)

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Total net revenue 100 % 100 %

Net revenue from our semiconductor solutions segment increased 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 increased primarily due to contributions from VMware.

Net revenue from our semiconductor solutions segment increased due to strong demand for our networking solutions, primarily custom AI accelerators and AI networking products.

Net revenue from our infrastructure software segment increased primarily due to strong demand for our VCF product, including license revenue recognized on contracts where customers do not have the right to terminate and the transition to a subscription license model.

Gross margin was $43,294 million for fiscal year 2025 compared to $32,509 million for fiscal year 2024.

The increase was primarily due to contributions from VMware, partially offset by higher amortization of acquisition-related intangible assets from the VMware Merger.

The increase was primarily due to higher software revenue and strong product demand for our AI-related semiconductor solutions.

As a percentage of net revenue, gross margin was 68% and 63% of net revenue for the fiscal years 2025 and 2024, respectively.

The decrease was primarily due to higher amortization of acquisition-related intangible assets from the VMware Merger.

In addition, gross margin contributions from our infrastructure software segment were partially offset by less favorable margin within the semiconductor solutions segment driven by product mix.

The increase was primarily due to higher revenue impact on margin and higher infrastructure software gross margin percentage, driven by an increase in license revenue and lower infrastructure software labor costs following our integration of the VMware business.

Research and Development Expense

Research and development expense increased $1,667 million, or 18%, in fiscal year 2025, compared to the prior fiscal year.

The increase was primarily due to higher compensation, including higher stock-based compensation, as a result of an increase in headcount from the VMware Merger.

The increase in stock-based compensation expense was also due to annual employee equity awards granted at higher grant-date fair values.

The increase was primarily due to higher stock-based compensation.

Selling, General and Administrative Expense

Selling, general and administrative expense increased $3,367 million, or 211%, in fiscal year 2024, compared to the prior fiscal year.

The increase was primarily due to higher compensation, including higher stock-based compensation, as a result of an increase in headcount from the VMware Merger.

The increase in stock-based compensation expense was also due to annual employee equity awards granted at higher grant-date fair values.

Amortization of Acquisition-Related Intangible Assets

Amortization of acquisition-related intangible assets recognized in operating expenses increased $1,850 million, or 133%, in fiscal year 2024, compared to the prior fiscal year primarily due to higher amortization of customer-related intangible assets from the VMware Merger.

Selling, general and administrative expense decreased $748 million, or 15%, in fiscal year 2025, compared to the prior fiscal year.

The decrease was primarily due to lower compensation resulting from a decrease in headcount and lower VMware acquisition-related costs, partially offset by higher stock-based compensation.

Amortization of Acquisition-Related Intangible Assets in Operating Expenses

Amortization of acquisition-related intangible assets recognized in operating expenses decreased $1,213 million, or 37%, in fiscal year 2025, compared to the prior fiscal year primarily due to full amortization of customer-related intangible assets from previous software acquisitions other than VMware.

Restructuring and Other Charges

Restructuring and other charges recognized in operating expenses were $1,533 million and $244 million in fiscal years 2024 and 2023, respectively.

The fiscal year 2024 charges primarily included employee termination costs from cost reduction activities related to the VMware Merger.

The fiscal year 2023 charges primarily included non-recurring charges related to IP litigation.

Restructuring and other charges recognized in operating expenses decreased $942 million, or 61%, in fiscal year 2025, compared to the prior fiscal year primarily due to lower employee termination costs associated with the integration of the VMware business.

Stock-Based Compensation Expense

During the fiscal quarter ended May 4, 2025, we granted two-year time- and market-based restricted stock unit awards (the “Two-Year Equity Awards”), in lieu of our annual employee equity awards historically granted in the second quarter of each fiscal year.

Each Two-Year Equity Award vests on the same basis as two annual grants with staggered vesting start dates

of March 15, 2025 and March 15, 2026 and successive four-year vesting periods.

We recognize stock-based compensation expense related to these awards from the grant date through their respective vesting date, ranging from four to five years.

Total stock-based compensation expense was $7,568 million and $5,670 million for fiscal years 2025 and 2024, respectively.

The increase was primarily due to equity awards assumed and granted in connection with the VMware Merger and annual employee equity awards granted at higher grant-date fair values.

The increase was primarily 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.

The following table sets forth the total unrecognized compensation cost related to unvested stock-based awards outstanding and expected to vest as of November 2, 2025.

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Total $ 23,833

During the first quarter of fiscal year ended November 3, 2019 (“fiscal year 2019”), our Compensation Committee approved a broad-based program of multi-year equity grants of time- and market-based RSUs (the “Multi-Year Equity Awards”) in lieu of our annual employee equity awards historically granted on March 15 of each year.

Each Multi-Year Equity Award vests on the same basis as four annual grants made on March 15 of each year, beginning in fiscal year 2019, with successive four-year vesting periods.

We recognize stock-based compensation expense related to the Multi-Year Equity Awards from the grant date through their respective vesting date, ranging from 4 years to 7 years.

Segment Operating Results

Fiscal Year Ended

Operating Income by Segment November 3, 2024 October 29, 2023 $ Change % Change

Operating Income by Segment November 2, 2025 November 3, 2024 $ Change % Change

(In millions, except percentages)

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Total operating income $ 25,484 $ 13,463 $ 12,021 89 %

Operating income from our semiconductor solutions segment increased mainly driven by revenue growth from networking products, primarily AI networking products, partially offset by lower net revenue from our broadband and server storage products.

Operating income from our infrastructure software segment increased primarily due to contributions from VMware.

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 192% in fiscal year 2024, compared to the prior fiscal year, 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 to annual employee equity awards granted at higher grant-date fair values .

Operating income from our semiconductor solutions segment increased due to strong demand for our networking solutions, primarily custom AI accelerators and AI networking products.

Higher operating income from our infrastructure software segment was primarily due to strong demand for our VCF product, including license revenue recognized on contracts where customers do not have the right to terminate and the transition to a subscription license model.

In addition, labor costs were lower following our integration of the VMware business.

Unallocated expenses include amortization of acquisition-related intangible assets, stock-based compensation expense, restructuring and other charges, and acquisition-related costs which are not used in evaluating the results of, or in allocating resources to, our segments.

Unallocated expenses decreased 4% in fiscal year 2025, compared to the prior fiscal year, primarily due to lower amortization of acquisition-related intangible assets, restructuring and other charges, and acquisition-related costs, partially offset by higher stock-based compensation expense.

Non-Operating Income and Expenses

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Interest expense was $3,210 million and $3,953 million for fiscal years 2025 and 2024, respectively.

The increase was primarily due to interest on debt incurred for the VMware Merger.

Other income (expense), net.

Other income (expense), net includes interest income, gains and losses on investments, foreign currency remeasurement and other miscellaneous items.

The decrease was primarily from a reduction in outstanding debt balances and debt refinancing activities that drove lower effective interest rates compared to the prior fiscal year.

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 $455 million and $406 million for fiscal years 2025 and 2024, respectively.

The decrease was primarily due to lower interest income as a result of a lower invested balance.

Provision for income taxes.

The provision for income taxes was $3,748 million and $1,015 million for fiscal years 2024 and 2023, respectively.

The increase was primarily due to the impact of a non-recurring intra-group transfer of certain IP rights to the United States as a result of supply chain realignment and the resulting shift in the jurisdictional mix of income.

The increase was primarily due to a gain on the sale of a business, partially offset by lower interest income as a result of lower interest rates on lower invested balances.

Provision for (benefit from) 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 and certain capital expenditures, and changes 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 $1,321 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 the exception of immediate expensing of qualifying property being effective in fiscal year 2025.

The benefit from income taxes was $397 million for fiscal year 2025, and was primarily due to the recognition of uncertain tax benefits from expiration of statutes of limitations and audit settlements, and excess tax benefits from stock-based awards, partially offset by income from operations and a valuation allowance against our CAMT credits.

The provision for income taxes was $3,748 million for fiscal year 2024, and was primarily due to the impact of a non-recurring intra-group transfer of certain IP rights to the United States as a result of supply chain realignment and the resulting shift in the jurisdictional mix of income, partially offset by excess tax benefits from stock-based awards.

Liquidity and Capital Resources

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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 $69,847 million of outstanding indebtedness, and (vi) payment of income taxes.

(i) working capital requirements, (ii) research and development and capital expenditure needs, (iii) cash dividend payments (if and when declared by our Board of Directors), (iv) interest and principal payments related to our $67,120 million of outstanding indebtedness with $3,152 million principal amounts payable within 12 months, (v) payment of income taxes, (vi) business acquisitions and investments we may make from time to time, and (vii) discretionary share repurchases.

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.

We expect capital expenditures to be higher in the fiscal year ending November 2, 2025 as compared to fiscal year 2024.

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 fiscal year 2024, we made repayments of $16,795 million on our 2023 Term Loans.

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.

We expect capital expenditures to be higher in fiscal year 2026 as compared to fiscal year 2025.

For additional information regarding our cash requirement from contractual obligations, indebtedness and lease obligations, see Note 14.

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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.

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.

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 issue additional debt or equity securities for reasons other than those specified above.

From time to time, we manage our indebtedness through financings, redemptions, repayments, exchanges, tender offers, and other transactions.

Such transactions will depend on prevailing market conditions, our liquidity requirements, the terms of indentures, contractual restrictions and other factors.

Working Capital

On November 22, 2023, we completed the VMware Merger.

The following table presents the changes in selected balance sheet captions other than assets acquired and liabilities assumed from the VMware Merger during fiscal year 2024.

Balances Acquired and Assumed from VMware (a)

Non-VMware Acquisition

(In millions)

Trade accounts receivable, net

$ 3,154 $ 3,571 $ 4,416 $ (2,309)

Other current assets $ 1,606 $ 1,108 $ 4,071 $ 1,357

Accounts payable $ 1,210 $ 359 $ 1,662 $ 93

Employee compensation and benefits $ 935 $ 848 $ 1,971 $ 188

Current portion of long-term debt $ 1,608 $ 1,264 $ 1,271 $ (1,601)

Other current liabilities $ 3,652 $ 11,217 $ 11,793 $ (3,076)

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(a) Excludes VMware’s EUC assets and liabilities held for sale.

• Trade accounts receivable, net decreased primarily due to strong collections and additional receivables sold through factoring arrangements.

• Other current assets increased from higher contract assets due to the timing of software revenue recognition.

• Current portion of long-term debt decreased primarily due to $2,813 million of repayments, offset in part by $1,245 million becoming due within the next twelve months.

• Other current liabilities decreased primarily from lower contract liabilities as software revenue was recognized from previous software contracts.

Working capital increased to $13,059 million at November 2, 2025 from $2,898 million at November 3, 2024.

The increase was primarily attributable to the following:

• Cash and cash equivalents increased to $16,178 million at November 2, 2025 from $9,348 million at November 3, 2024 primarily due to $27,537 million in net cash provided by operating activities, partially offset by $11,142 million of dividend payments, $3,860 million of employee withholding tax payments related to net settled equity awards, $2,812 million of net repayments of borrowings, and $2,450 million of common stock repurchases.

• Trade accounts receivable, net increased to $7,145 million at November 2, 2025 from $4,416 million at November 3, 2024 primarily due to higher billings.

• Other current assets increased to $5,980 million at November 2, 2025 from $4,071 million at November 3, 2024 primarily from higher software contract assets, offset in part by lower prepaid taxes and the sale of assets held for sale.

These increases in working capital were offset in part by the following:

• Short-term debt increased to $3,152 million at November 2, 2025 from $1,271 million at November 3, 2024 primarily due to certain senior notes becoming due within the next twelve months, offset in part by repayments.

Capital Returns

Fiscal Year Ended

Cash Dividends Declared and Paid November 3, 2024 October 29, 2023

Cash Dividends Declared and Paid November 2, 2025 November 3, 2024

(In millions, except per share data)

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Dividends to common stockholders $ 11,142 $ 9,814

In December 2021, our Board of Directors authorized a stock repurchase program to repurchase up to $10 billion of our common stock from time to time through December 31, 2022, which was subsequently extended to December 31, 2023.

In May 2022, our Board of Directors authorized another stock repurchase program to repurchase up to an additional $10 billion of our common stock from time to time through December 31, 2023.

During fiscal years 2024 and 2023, we repurchased and retired approximately 67 million and 91 million shares of our common stock for $7,176 million and $5,824 million, respectively.

All $20 billion of the authorized amount under these stock repurchase programs was utilized prior to expiration on December 31, 2023.

During fiscal years 2024 and 2023, we paid approximately $5,216 million and $1,861 million, respectively, in employee withholding taxes due upon the vesting of net settled equity awards.

We withheld approximately 38 million and 26 million shares of common stock from employees in connection with such net share settlements during fiscal years 2024 and 2023, respectively.

In April 2025, our Board of Directors authorized a stock repurchase program to repurchase up to $10 billion of our common stock from time to time through December 31, 2025, which was extended to December 31, 2026 subsequent to fiscal year 2025 .

During fiscal year 2025, we repurchased and retired 16 million shares of our common stock for $2,450 million with a $7,550 million remaining authorized amount available for future purchases as of November 2, 2025.

Repurchases under this stock repurchase program may be effected through a variety of methods, including open market or privately negotiated purchases.

The timing and amount of shares repurchased will depend on the stock price, business and market conditions, corporate and regulatory requirements, alternative investment opportunities, acquisition opportunities, and other factors.

We are not obligated to repurchase any specific amount of shares of common stock, and the stock repurchase program may be suspended or terminated at any time.

In December 2021 and May 2022, our Board of Directors authorized stock repurchase programs to repurchase up to an aggregate of $20 billion of our common stock from time to time through December 31, 2023.

During the first quarter of fiscal year 2024, we repurchased and retired 67 million shares of our common stock for $7,176 million, and all $20 billion of the aggregate authorized amount was utilized prior to expiration on December 31, 2023.

During fiscal years 2025 and 2024, we paid $3,860 million and $5,216 million, respectively, in employee withholding taxes due upon the vesting of net settled equity awards.

We withheld 17 million and 38 million shares of common stock from employees in connection with such net share settlements during fiscal years 2025 and 2024, respectively.

In the second half of fiscal year 2025, we settled withholding taxes upon the vesting of employee equity awards using proceeds from the sale of a portion of the vested shares.

Fiscal Year Ended

November 3, 2024 October 29, 2023

November 2, 2025 November 3, 2024

(In millions)

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Operating Activities

Cash flows from operating activities consisted of net income adjusted for certain non-cash and other items and changes in assets and liabilities.

The $1,877 million increase in cash provided by operations during fiscal year 2024 compared to fiscal year 2023 was primarily due to contributions from VMware.

The $8,187 million decrease in net income was largely driven by $13,058 million higher non-cash adjustments including amortization of intangible assets, stock-based compensation, and deferred taxes and other non-cash taxes related to the VMware Merger.

Cash flows from operating activities consist of net income adjusted for certain non-cash and other items and changes in assets and liabilities.

The $7,575 million increase in cash provided by operations during fiscal year 2025 compared to fiscal year 2024 was primarily due to $17,231 million higher net income, offset in part by $5,973 million lower non-cash adjustments for deferred taxes and other non-cash taxes, as well as $3,863 million from changes in operating assets and liabilities.

Investing Activities

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 $22,381 million increase in cash used in investing activities for fiscal year 2024 compared to fiscal year 2023 was primarily due to a $25,925 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.

Cash flows from investing activities primarily consist of cash used for acquisitions, proceeds from sales of businesses, capital expenditures, and proceeds and payments related to investments.

The $22,490 million decrease in cash used in investing activities during fiscal year 2025 compared to fiscal year 2024 was primarily due to $25,416 million cash paid in connection with the acquisition of VMware, net of cash acquired in fiscal year 2024, offset in part by $3,185 million lower proceeds from sales of businesses in fiscal year 2025 compared to fiscal year 2024.

Financing Activities

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 $13,890 million increase in cash flows from financing activities for fiscal year 2024 compared to fiscal year 2023 was primarily due to $39,954 million of net proceeds from the 2023 Term Loans and the issuance of senior notes, offset in part by a $19,205 million increase in payments on debt obligations, a $3,355 million increase in employee withholding tax payments related to net settled equity awards, a $2,169 million increase in dividend payments, and a $1,352 million increase in stock repurchases.

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 $18,394 million increase in cash used in financing activities during fiscal year 2025 compared to fiscal year 2024 was primarily due to net proceeds from term loans issued in connection with the acquisition of VMware in fiscal year 2024, debt repayments and higher dividend payments in fiscal year 2025, offset in part by lower stock repurchases and employee withholding tax payments related to net settled equity awards in fiscal year 2025 compared to fiscal year 2024.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis