Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of the financial condition and results of operations should be read in conjunction with the unaudited condensed consolidated financial statements and the related notes thereto included elsewhere in this Quarterly Report on Form 10-Q (“Form 10-Q”) and the audited consolidated financial statements and notes thereto and management’s discussion and analysis of financial condition and results of operations for the fiscal year ended October 29, 2023 (“fiscal year 2023”) included in our Annual Report on Form 10-K for fiscal year 2023 (“2023 Annual Report on Form 10-K”). References to “Broadcom,” “we,” “our,” and “us” are to Broadcom Inc. and its consolidated subsidiaries, unless otherwise specified or the context otherwise requires. This Form 10-Q may contain predictions, estimates and other forward-looking statements that involve a number of risks and uncertainties, which are made under the safe harbor provisions of Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These forward-looking statements may include projections of financial information; statements about historical results that may suggest trends for our business; statements of the plans, strategies and objectives of management for future operations; and statements of expectation or belief regarding future events (including any acquisitions we may make), technology developments, our products, product sales, expenses, liquidity, cash flow and growth rates, customer concentration and relationships, or enforceability of our intellectual property (“IP”) rights. Such statements are based on current expectations, estimates, forecasts and projections of our industry performance and macroeconomic conditions, based on management’s judgment, beliefs, current trends and market conditions, and involve risks and uncertainties that may cause actual results to differ materially from those contained in the forward-looking statements. We derive most of our forward-looking statements from our operating budgets and forecasts, which are based upon many detailed assumptions. While we believe that our assumptions are reasonable, we caution that it is very difficult to predict the impact of known factors, and it is impossible for us to anticipate all factors that could affect our actual results. Accordingly, undue reliance should not be placed on these statements. Important factors that could cause actual results to differ materially from our expectations are disclosed under “Risk Factors” in Part II, Item 1A of this Form 10-Q, and in other documents we file from time to time with the Securities and Exchange Commission (the “SEC”). All of the forward-looking statements in this Form 10-Q are qualified in their entirety by reference to the factors listed above and those discussed under the heading “Risk Factors” below. We undertake no intent or obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise, except as otherwise required by law.

Overview

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

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

Our fiscal year ending November 3, 2024 (“fiscal year 2024”), is a 53-week fiscal year, with our first fiscal quarter ended February 4, 2024 containing 14 weeks compared to 13 weeks in the prior year fiscal period. The additional week resulted in higher net revenue, gross margin dollars, research and development expense, and selling general and administrative expense in the first fiscal quarter and first two fiscal quarters of fiscal year 2024, compared to the corresponding prior year fiscal periods.

Quarterly Highlights

Highlights during the fiscal quarter ended May 5, 2024 include the following:

• We generated $4,580 million of cash from operations.

• We paid $2,443 million in cash dividends.

• We repaid $2.0 billion on our unsecured term A-2 facility.

Acquisitions

Acquisition of VMware

On November 22, 2023, we acquired VMware, Inc. (“VMware”) in a cash-and-stock transaction (the “VMware Merger”). The VMware stockholders received approximately $30,788 million in cash and 54.4 million shares of Broadcom common stock with a fair value of $53,398 million. In addition, we assumed all outstanding VMware restricted stock unit (“RSU”) awards and performance stock unit awards held by continuing employees. The assumed awards were converted into RSU awards for shares of Broadcom common stock. All outstanding RSU awards held by non-employee directors and in-the-money VMware stock options were accelerated and converted into the right to receive cash and shares of Broadcom common stock, in equal parts.

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. We acquired these assets to strengthen our portfolio of SoC products.

Critical Accounting Estimates

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

There were no significant changes in our critical accounting estimates during the two fiscal quarters ended May 5, 2024 compared to those previously disclosed in “Critical Accounting Estimates” in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in the 2023 Annual Report on Form 10-K.

Results of Operations

Fiscal Quarter and Two Fiscal Quarters Ended May 5, 2024 Compared to Fiscal Quarter and Two Fiscal Quarters Ended April 30, 2023

The following table sets forth our results of operations for the periods presented:

						Fiscal Quarter Ended
						May 5, 2024						April 30, 2023						May 5, 2024						April 30, 2023
						(In millions)												(As a percentage of net revenue)
Statements of Operations Data:
Net revenue:
Products						$	7,192					$	6,741					58		%				77		%
Subscriptions and services						5,295						1,992						42						23
Total net revenue						12,487						8,733						100						100
Cost of revenue:
Cost of products sold						2,429						2,019						19						23
Cost of subscriptions and services						713						158						6						2
Amortization of acquisition-related intangible assets						1,516						441						13						5
Restructuring charges						53						—						—						—
Total cost of revenue						4,711						2,618						38						30
Gross margin						7,776						6,115						62						70
Research and development						2,415						1,312						19						15
Selling, general and administrative						1,277						438						10						5
Amortization of acquisition-related intangible assets						827						348						7						4
Restructuring and other charges						292						9						2						—
Total operating expenses						4,811						2,107						38						24
Operating income						$	2,965					$	4,008					24		%				46		%

						Two Fiscal Quarters Ended
						May 5, 2024						April 30, 2023						May 5, 2024						April 30, 2023
						(In millions)												(As a percentage of net revenue)
Statements of Operations Data:
Net revenue:
Products						$	14,604					$	13,823					60		%				78		%
Subscriptions and services						9,844						3,825						40						22
Total net revenue						24,448						17,648						100						100
Cost of revenue:
Cost of products sold						4,589						4,244						19						24
Cost of subscriptions and services						1,667						307						7						2
Amortization of acquisition-related intangible assets						2,896						976						11						5
Restructuring charges						145						2						1						—
Total cost of revenue						9,297						5,529						38						31
Gross margin						15,151						12,119						62						69
Research and development						4,723						2,507						19						14
Selling, general and administrative						2,849						786						11						5
Amortization of acquisition-related intangible assets						1,619						696						7						4
Restructuring and other charges						912						19						4						—
Total operating expenses						10,103						4,008						41						23
Operating income						$	5,048					$	8,111					21		%				46		%

Net Revenue

A relatively small number of customers account for a significant portion of our net revenue. Direct sales to one customer, which is a distributor, accounted for 29% and 28% of our net revenue for the fiscal quarter and two fiscal quarters ended May 5, 2024, respectively, and 17% and 19% of our net revenue for the fiscal quarter and two fiscal quarters ended April 30, 2023, respectively.

We believe aggregate sales to our top five end customers, through all channels, accounted for approximately 40% of our net revenue for each of the fiscal quarter and two fiscal quarters ended May 5, 2024, and approximately 35% of our net revenue for each of the fiscal quarter and two fiscal quarters ended April 30, 2023. We expect to continue to experience significant customer concentration in future periods. The loss of, or significant decrease in demand from, any of our top five end customers could have a material adverse effect on our business, results of operations and financial condition.

From time to time, some of our key semiconductor customers place large orders or delay orders, causing our quarterly net revenue to fluctuate significantly. This is particularly true of our wireless products as fluctuations may be magnified by the timing of launches, and seasonal variations in sales, of mobile devices. In addition, the macroeconomic environment remains uncertain and may cause our net revenue to fluctuate significantly and impact our results of operations.

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

						Fiscal Quarter Ended																								Two Fiscal Quarters Ended
Net Revenue by Segment						May 5, 2024						April 30, 2023						$ Change						% Change						May 5, 2024						April 30, 2023						$ Change						% Change
						(Dollars in millions)
Semiconductor solutions						$	7,202					$	6,808					$	394					6		%				$	14,592					$	13,915					$	677					5		%
Infrastructure software						5,285						1,925						3,360						175		%				9,856						3,733						6,123						164		%
Total net revenue						$	12,487					$	8,733					$	3,754					43		%				$	24,448					$	17,648					$	6,800					39		%

						Fiscal Quarter Ended												Two Fiscal Quarters Ended
Net Revenue by Segment						May 5, 2024						April 30, 2023						May 5, 2024						April 30, 2023
						(As a percentage of net revenue)
Semiconductor solutions						58		%				78		%				60		%				79		%
Infrastructure software						42						22						40						21
Total net revenue						100		%				100		%				100		%				100		%

Net revenue from our semiconductor solutions segment increased in the fiscal quarter and two fiscal quarters ended May 5, 2024 compared to the prior year fiscal periods due to strong product demand for our networking products, including products in AI networking, partially offset by lower demand for our broadband and server storage products. Net revenue from our infrastructure software segment increased in the fiscal quarter and two fiscal quarters ended May 5, 2024 compared to the prior year fiscal periods primarily due to contributions from VMware.

Gross Margin

Gross margin was $7,776 million for the fiscal quarter ended May 5, 2024 compared to $6,115 million for the fiscal quarter ended April 30, 2023, and $15,151 million for the two fiscal quarters ended May 5, 2024 compared to $12,119 million for the two fiscal quarters ended April 30, 2023. The increases were primarily due to contributions from VMware, partially offset by higher amortization of acquisition-related intangible assets from the VMware Merger.

As a percentage of net revenue, gross margin was 62% of net revenue for each of the fiscal quarter and two fiscal quarters ended May 5, 2024, and 70% and 69% for the fiscal quarter and two fiscal quarters ended April 30, 2023, respectively. The decreases were primarily due to higher amortization of acquisition-related intangible assets from the VMware Merger. In addition, gross margin contributions from our infrastructure software segment were partially offset by less favorable margin within the semiconductor solutions segment driven by product mix.

Research and Development Expense

Research and development expense increased $1,103 million, or 84%, and $2,216 million, or 88%, for the fiscal quarter and two fiscal quarters ended May 5, 2024, respectively, compared to the prior year fiscal periods. The increases were primarily due to higher compensation, including higher stock-based compensation, as a result of an increase in headcount from the VMware Merger. The increases in stock-based compensation expense were also due to annual employee equity awards granted at higher grant-date fair values.

Selling, General and Administrative Expense

Selling, general and administrative expense increased $839 million, or 192%, and $2,063 million, or 262%, for the fiscal quarter and two fiscal quarters ended May 5, 2024, respectively, compared to the prior year fiscal periods. The increases were primarily due to higher compensation, including higher stock-based compensation, as a result of an increase in headcount from the VMware Merger. The increases in stock-based compensation expense were also due 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 $479 million, or 138%, and $923 million, or 133%, for the fiscal quarter and two fiscal quarters ended May 5, 2024, respectively, compared to the prior year fiscal periods primarily due to higher amortization of customer-related intangible assets from the VMware Merger.

Restructuring and Other Charges

Restructuring and other charges recognized in operating expenses were $292 million and $912 million for the fiscal quarter and two fiscal quarters ended May 5, 2024, respectively, primarily due to employee termination costs associated with the VMware Merger. We expect to incur additional restructuring and other charges in future periods as a result of the VMware Merger.

Stock-Based Compensation Expense

Total stock-based compensation expense was $1,403 million and $2,975 million for the fiscal quarter and two fiscal quarters ended May 5, 2024, respectively, and $513 million and $904 million for the fiscal quarter and two fiscal quarters ended April 30, 2023, respectively. The increases were primarily due to equity awards assumed and granted in connection with the VMware Merger and annual employee equity awards granted at higher grant-date fair values. Stock-based compensation expense for the two fiscal quarters ended May 5, 2024 also included a one-time impact from aligning the vesting dates of certain assumed awards with our RSU vesting dates, as well as accelerated vesting of certain assumed awards held by employees terminated in connection with the VMware Merger.

The following table sets forth the total unrecognized compensation cost related to unvested stock-based awards outstanding and expected to vest as of May 5, 2024. The remaining weighted-average service period was 3.3 years.

Fiscal Year:						Unrecognized Compensation Cost, Net of Expected Forfeitures
						(In millions)
2024 (remainder)						$	2,658
2025						4,476
2026						3,598
2027						2,604
2028						475
Total						$	13,811

Segment Operating Results

						Fiscal Quarter Ended																								Two Fiscal Quarters Ended
Operating Income by Segment						May 5, 2024						April 30, 2023						$ Change						% Change						May 5, 2024						April 30, 2023						$ Change						% Change
						(Dollars in millions)
Semiconductor solutions						$	3,978					$	4,000					$	(22)					(1)		%				$	8,094					$	8,123					$	(29)					—		%
Infrastructure software						3,168						1,412						1,756						124		%				5,883						2,719						3,164						116		%
Unallocated expenses						(4,181)						(1,404)						(2,777)						198		%				(8,929)						(2,731)						(6,198)						227		%
Total operating income						$	2,965					$	4,008					$	(1,043)					(26)		%				$	5,048					$	8,111					$	(3,063)					(38)		%

Operating income from our semiconductor solutions segment was relatively flat for the fiscal quarter ended May 5, 2024 compared to the prior year fiscal period. Higher engineering project costs and lower gross margins driven by product mix were partially offset by higher revenue from networking products. Operating income from our semiconductor solutions segment was also relatively flat for the two fiscal quarters ended May 5, 2024 compared to the prior year fiscal period. Higher compensation expense as a result of an additional week in the current year fiscal quarter and lower gross margins driven by product mix were offset by higher revenue from networking products. Higher operating income from our infrastructure software segment in the fiscal quarter and two fiscal quarters ended May 5, 2024 compared to the prior year fiscal periods was 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 198% and 227% for the fiscal quarter and two fiscal quarters ended May 5, 2024, respectively, compared to the prior year fiscal periods primarily due to higher amortization of acquisition-related intangible assets, stock-based compensation expense and restructuring and other charges. These increases were primarily due to the VMware Merger. The increase in stock-based compensation expense was also due to annual employee equity awards granted at higher grant-date fair values.

Non-Operating Income and Expenses

Interest expense. Interest expense was $1,047 million and $1,973 million for the fiscal quarter and two fiscal quarters ended May 5, 2024, respectively, and $405 million and $811 million for the fiscal quarter and two fiscal quarters ended April 30, 2023, respectively. The increases were primarily due to interest on debt incurred for the VMware Merger.

Other income, net. Other income, net includes interest income, gains or losses on investments, foreign currency remeasurement and other miscellaneous items. Other income, net, was $87 million and $113 million for the fiscal quarters ended May 5, 2024 and April 30, 2023, respectively. The decrease was primarily due to lower interest income as a result of a lower invested balance, partially offset by higher interest rates. Other income, net, was $272 million and $256 million for the two fiscal quarters ended May 5, 2024 and April 30, 2023, respectively. The increase was primarily due to higher interest income as a result of higher interest rates, partially offset by a lower invested balance.

Provision for (benefit from) income taxes. The benefit from income taxes was $116 million and $48 million for the fiscal quarter and two fiscal quarters ended May 5, 2024, respectively. The benefit from income taxes was primarily due to excess tax benefits from stock-based awards and a shift in the jurisdictional mix of income and expense, partially offset by income tax expense on operations. The provision for income taxes was $235 million and $301 million for the fiscal quarter and two fiscal quarters ended April 30, 2023, respectively. The provision for income taxes was primarily driven by income before income taxes, partially offset by excess tax benefits from stock-based awards and the recognition of uncertain tax benefits as a result of lapses of statutes of limitations.

Liquidity and Capital Resources

The following section discusses our principal liquidity and capital resources as well as our principal liquidity requirements and uses of cash. Our cash and cash equivalents are maintained in highly liquid investments with remaining maturities of 90 days or less at the time of purchase. We believe our cash equivalents are liquid and accessible.

Our primary sources of liquidity as of May 5, 2024 consisted of: (i) $9,809 million in cash and cash equivalents, (ii) cash we expect to generate from operations and (iii) available capacity under our $7.5 billion unsecured revolving credit facility. In addition, we may also generate cash from the sale of assets and debt or equity financings from time to time. In February 2024, we signed a definitive agreement to sell VMware’s end-user computing business for approximately $3.8 billion, before working capital adjustments and estimated selling costs. The sale is expected to close in calendar year 2024, subject to customary closing conditions.

Our short-term and long-term liquidity requirements primarily arise from: (i) business acquisitions and investments we may make from time to time, (ii) working capital requirements, (iii) research and development and capital expenditure needs, (iv) cash dividend payments (if and when declared by our Board of Directors), (v) interest and principal payments related to our $76,521 million of outstanding indebtedness and (vi) payment of income taxes. Our ability to fund these requirements will depend, in part, on our future cash flows, which are determined by our future operating performance and, therefore, subject to prevailing global macroeconomic conditions and financial, business and other factors, some of which are beyond our control. Our debt and liquidity needs increased in fiscal year 2024 as a result of completing the VMware Merger. We funded the cash portion of the consideration with net proceeds from the issuance of $30,390 million in term loans (the “2023 Term Loans”), as well as cash on hand. We also assumed $8,250 million of VMware’s outstanding senior unsecured notes. During the fiscal quarter ended May 5, 2024, we made a partial repayment of $2.0 billion on our 2023 Term Loans. We also expect capital expenditures to be higher in fiscal year 2024 as compared to fiscal year 2023.

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.

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

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.

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 the two fiscal quarters ended May 5, 2024.

						Balances at October 29, 2023						Balances Acquired and Assumed from VMware						Balances at May 5, 2024						Non-VMware Acquisition Increase (Decrease)
						(In millions)
Cash and cash equivalents						$	14,189					$	6,642					$	9,809					$	(11,022)
Trade accounts receivable, net						$	3,154					$	3,571					$	5,500					$	(1,225)
Assets held-for-sale						$	—					$	5,206					$	5,221					$	15
Other current assets						$	1,606					$	757					$	2,930					$	567
Employee compensation and benefits						$	935					$	848					$	1,385					$	(398)
Current portion of long-term debt						$	1,608					$	1,264					$	2,426					$	(446)
Liabilities held-for-sale						$	—					$	1,901					$	1,757					$	(144)
Other current liabilities						$	3,652					$	11,041					$	13,162					$	(1,531)

• Cash and cash equivalents decreased primarily due to $32,058 million paid for the VMware Merger, $7,176 million of common stock repurchases, $4,878 million of dividend payments and $2,662 million of employee withholding tax payments related to net settled equity awards, offset in part by $27,076 million in net proceeds from borrowings and $9,395 million in net cash provided by operating activities.

• Trade accounts receivable, net decreased primarily due to strong collections.

• Other current assets increased primarily due to higher prepaid income taxes.

• Employee compensation and benefits decreased primarily due to the timing of annual employee bonus plan payments.

• Current portion of long-term debt decreased due to $934 million of repayments, offset in part by $495 million becoming due within the next twelve months.

• Liabilities held-for-sale decreased due to software revenue recognized in discontinued operations.

• Other current liabilities decreased as software revenue recognized resulted in lower contract liabilities, offset in part by an increase in liabilities related to restructuring activities associated with the VMware Merger.

Capital Returns

						Two Fiscal Quarters Ended
Cash Dividends Declared and Paid						May 5, 2024						April 30, 2023
						(In millions, except per share data)
Dividends per share to common stockholders						$	10.50					$	9.20
Dividends to common stockholders						$	4,878					$	3,840

During each of the two fiscal quarters ended May 5, 2024 and April 30, 2023, we repurchased and retired approximately 7 million shares of our common stock for $7,176 million and $3,994 million, respectively. All $20 billion under our previously authorized stock repurchase programs was utilized prior to expiration on December 31, 2023.

During the two fiscal quarters ended May 5, 2024 and April 30, 2023, we paid approximately $2,662 million and $947 million, respectively, in employee withholding taxes due upon the vesting of net settled equity awards. We withheld approximately 2 million shares of common stock from employees in connection with such net share settlements during each of the two fiscal quarters ended May 5, 2024 and April 30, 2023.

Cash Flows

						Two Fiscal Quarters Ended
						May 5, 2024						April 30, 2023
						(In millions)
Net cash provided by operating activities						$	9,395					$	8,538
Net cash used in investing activities						(26,183)						(421)
Net cash provided by (used in) financing activities						12,408						(8,980)
Net change in cash and cash equivalents						$	(4,380)					$	(863)

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 $857 million increase in cash provided by operations during the two fiscal quarters ended May 5, 2024 compared to the prior year fiscal period was primarily due to contributions from VMware. The $3,809 million decrease in net income was largely driven by $5,427 million of higher non-cash adjustments including amortization of intangible assets and stock-based compensation.

Investing Activities

Cash flows from investing activities primarily consisted of cash used for acquisitions, capital expenditures and proceeds and payments related to investments. The $25,762 million increase in cash used in investing activities during the two fiscal quarters ended May 5, 2024 compared to the prior year fiscal period was primarily due to $25,976 million cash paid in connection with the VMware Merger and the acquisition of Seagate’s SoC operations, net of cash acquired.

Financing Activities

Cash flows from financing activities primarily consisted of proceeds and payments related to our long-term borrowings, stock repurchases, dividend payments and employee withholding tax payments related to net settled equity awards. The $21,388 million increase in cash flows from financing activities during the two fiscal quarters ended May 5, 2024 compared to the prior year fiscal period was primarily due to $30,010 million of net proceeds from the 2023 Term Loans, partially offset by a $3,182 million increase in stock repurchases, a $2,674 million increase in payments of debt obligations, a $1,715 million increase in employee withholding tax payments related to net settled equity awards and a $1,038 million increase in dividend payments.