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

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which are subject to the “safe harbor” created by those sections. These statements involve known and unknown risks, uncertainties and other factors, which may cause our actual results to differ materially from those implied by the forward-looking statements. Words such as “anticipates,” “expects,” “intends,” “plans,” “projects,” “believes,” “seeks,” “estimates,” “forecasts,” “targets,” “may,” “can,” “will,” “would” and similar expressions identify such forward-looking statements.

Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those indicated in the forward-looking statements. Factors that could cause actual results to differ materially from those predicted include, but are not limited to:

*•*risks related to changes in general economic conditions such as economic slowdowns, inflation, stagflation, rising interest rates, and recessions or political conditions, such as the tariffs and trade restrictions with China, Russia and other foreign nations, and specific conditions in the end markets we address, including the continuing volatility in the technology sector and semiconductor industry and the U.S. National Science and Technology Council’s designation of semiconductors as a critical and emerging technology;

• risks related to cancellations, rescheduling or deferrals of significant customer orders or shipments, as well as the ability of our customers to manage inventory;

• risks related to the impact of the COVID-19 pandemic or other future pandemics, on the global economy and on our customers, suppliers, employees and business;

• risks related to our ability to scale our business;

• risks related to the extension of lead time due to supply chain disruptions, component shortages that impact the costs and production of our products and kitting process, and constrained availability from other electronic suppliers impacting our customers' ability to ship their products, which in turn may adversely impact our sales to those customers;

• risks related to the ability of our customers, particularly in jurisdictions such as China that may be subject to trade restrictions (including the need to obtain export licenses) to develop their own solutions or acquire fully developed solutions from third-parties;

• risks related to our ability to successfully integrate and to realize anticipated benefits or synergies, on a timely basis or at all, in connection with our past, current, or any future acquisitions, divestitures, significant investments or strategic transactions;

• risks related to our debt obligations;

• risks related to the highly competitive nature of the end markets we serve, particularly within the semiconductor and infrastructure industries;

• risks related to our dependence on a few customers for a significant portion of our revenue including risks related to severe financial hardship or bankruptcy or other attrition of one or more of our major customers, particularly as our major customers comprise an increasing percentage of our revenue;

• risks related to our ability to execute on changes in strategy and realize the expected benefits from restructuring activities;

• risks related to our ability to maintain a competitive cost structure for our manufacturing, assembly, testing and packaging processes and our reliance on third parties to produce our products;

• risks related to our ability to attract, retain and motivate a highly skilled workforce, especially engineering, managerial, sales and marketing personnel;

• risks related to any current and future litigation, regulatory investigations, or contractual disputes with customers

that could result in substantial costs and a diversion of management’s attention and resources that are needed to successfully maintain and grow our business;

• risks related to gain or loss of a design win or key customer;

*•*risks related to seasonality or volatility related to sales into the infrastructure, semiconductor and related industries and end markets;

• risks related to failures to qualify our products or our suppliers’ manufacturing lines;

• risks related to our ability to develop and introduce new and enhanced products, in particular in the 5G and Cloud markets, in a timely and effective manner, as well as our ability to anticipate and adapt to changes in technology;

• risks related to failures to protect our intellectual property, particularly outside the United States;

• risks related to the potential impact of a significant events or natural disasters, or the effects of climate change (such as droughts, flooding, wildfires, increased storm severity, sea level rise, and power outages), particularly in certain regions in which we operate or own buildings, such as Santa Clara, California, and where our third-party manufacturing partners or suppliers operate, such as Taiwan and elsewhere in the Pacific Rim;

• risks related to our Environmental, Social and Governance (ESG) programs; and

• risks related to failures of our customers to agree to pay for NRE (non-recurring engineering) costs, failure to pay enough to cover the costs we incur in connection with NREs, or non-payment of previously agreed NRE costs due to us.

Additional factors which could cause actual results to differ materially include those set forth in the following discussion, as well as the risks discussed in Part II, Item 1A, “Risk Factors,” and other sections of this Quarterly Report on Form 10-Q. These forward-looking statements speak only as of the date hereof. We undertake no obligation to update any forward-looking statements.

Overview

We are a leading supplier of infrastructure semiconductor solutions, spanning the data center core to network edge. We are a fabless semiconductor supplier of high-performance standard and semi-custom products with core strengths in developing and scaling complex System-on-a-Chip architectures, integrating analog, mixed-signal and digital signal processing functionality. Leveraging leading intellectual property and deep system-level expertise, as well as highly innovative security firmware, our solutions are empowering the data economy and enabling the data center, enterprise networking, carrier infrastructure, consumer, and automotive/industrial end markets.

Net revenue in the third quarter of fiscal 2023 was $1.5 billion and was 27% higher than net revenue of $1.2 billion in the third quarter of fiscal 2022. This was due to an increase in sales from a majority of our end markets. Revenue increased from the data center end market by 26%, from the enterprise networking end market by 52%, from the carrier infrastructure end market by 26%, and from the automotive/industrial end market by 26% compared to the three months ended October 30, 2021. The sales from the consumer end market were relatively flat for the three months ended October 29, 2022 compared to the three months ended October 30, 2021.

Over the last several quarters, in response to an increase in demand from our customers for our products as they continued to invest in data infrastructure, our operations team has continued to ramp production with our global supply chain partners. With the start of a broad inventory correction in the semiconductor industry, we expect supply constraints will start to moderate. During the third quarter of fiscal 2023, in response to a changing demand environment, customers started requesting to push out shipments and reschedule orders to manage their inventory. We saw the largest impact from our storage customers. In addition, demand for our products has come down significantly from our OEM customers in China, as they deal with a changing macroeconomic situation.

To secure capacity over the long term, we have entered into and continue to enter into capacity reservation arrangements with certain foundries and partners for substrates. See “Note 5 – Commitments and Contingencies” in the Notes to the Unaudited Condensed Consolidated Financial Statements for additional information.

We continue to monitor the impact of COVID-19 on our business. We adopted a hybrid work policy where most employees have the option to split their time between home and the office. We expect COVID-19 to continue to impact our business, for a further discussion of the uncertainties and business risks associated with the COVID-19 pandemic, see Part II, Item 1A, “Risk Factors,” including but not limited to the risk detailed under the caption “We face risks related to the COVID-19 pandemic which currently has, and may continue in the future to, significantly disrupt and adversely impact our manufacturing, research and development, operations, sales and financial results.”

We expect that the U.S. government’s export restrictions on certain Chinese customers to continue to impact our revenue. Moreover, concerns that U.S. companies may not be reliable suppliers as a result of these and other actions has caused, and may in the future cause, some of our customers in China to amass large inventories of our products well in advance of need or cause some of our customers to replace our products in favor of products from other suppliers. Customers in China may also choose to develop indigenous solutions, as replacements for products that are subject to U.S. export controls. In addition, there may be indirect impacts to our business that we cannot easily quantify such as the fact that some of our other customers’ products which use our solutions may also be impacted by export restrictions.

Capital Return Program. We remain committed to delivering stockholder value through our stock repurchase and dividend programs. Under the program authorized by our Board of Directors, we may repurchase our stock in the open-market or through privately negotiated transactions. The extent to which we repurchase our stock and the timing of such repurchases will depend upon market conditions, legal rules and regulations, and other corporate considerations, as determined by our management team. We resumed our stock repurchase program in the first quarter of fiscal 2023, which had been temporarily suspended in fiscal 2021 to preserve cash during the COVID-19 pandemic. During the nine months ended October 29, 2022, we repurchased 2.3 million shares of our common stock for $115.0 million, including 0.9 million shares of our common stock repurchased for $50.0 million pursuant to a 10b5-1 trading plan during the second quarter of fiscal 2023. As of October 29, 2022, $449.5 million remained available for future stock repurchases.

As of October 29, 2022, a total of 310.4 million shares have been repurchased to date under our current and previous stock repurchase programs for an aggregate total of $4.4 billion in cash. We returned $268.1 million to stockholders in the nine months ended October 29, 2022, including our repurchases of common stock and $153.1 million in cash dividends.

Cash and Short-Term Investments. Our cash and cash equivalents were $723.4 million at October 29, 2022, which was $109.9 million higher than our balance at our fiscal year ended January 29, 2022 of $613.5 million.

Sales and Customer Composition. Our accounts receivable was concentrated with four customers at October 29, 2022, who comprised a total of 56% of gross accounts receivable, compared with seven customers at October 30, 2021, who represented 51% of gross accounts receivable. This presentation is at the customer consolidated level. During the three and nine months ended October 29, 2022 and October 30, 2021, there was no net revenue attributable to a single customer, other than one distributor, whose revenue as a percentage of net revenue was 10% or greater of total net revenue. Net revenue attributable to a distributor whose revenue as a percentage of net revenue was 10% or greater of total net revenue is presented in the following table:

			Three Months Ended																								Nine Months Ended
			October 29, 2022						October 30, 2021																														October 29, 2022						October 30, 2021
Distributor:
Distributor A			22		%				14		%																												22		%				16		%

We continuously monitor the creditworthiness of our customers and distributors and believe these distributors’ sales to diverse end customers and geographies further serve to mitigate our exposure to credit risk.

Most of our sales are made to customers located outside of the United States, primarily in Asia, and majority of our products are manufactured outside the United States. Sales shipped to customers with operations in Asia represented approximately 75% and 76% of our net revenue in the three and nine months ended October 29, 2022, respectively, and approximately 79% of net revenue in the three and nine months ended October 30, 2021. Because many manufacturers and manufacturing subcontractors of our customers are located in Asia, we expect that most of our net revenue will continue to be represented by sales to our customers in that region. For risks related to our global operations, see Part II, Item 1A, “Risk Factors,” including but not limited to the risk detailed under the caption “We face additional risks due to the extent of our global operations since a majority of our products, and those of many of our customers, are manufactured and sold outside of the United States. The occurrence of any or a combination of the additional risks described below would significantly and negatively impact our business and results of operations.”

The development process for our products is long, which may cause us to experience a delay between the time we incur expenses and the time revenue is generated from these expenditures. We anticipate that the rate of new orders may vary significantly from quarter to quarter. For risks related to our sales cycle, see Part II, Item 1A, “Risk Factors,” including but not limited to the risk detailed under the caption “We are subject to order and shipment uncertainties. If we are unable to accurately predict customer demand, we may hold excess or obsolete inventory, which would reduce our gross margin. Conversely, we may have insufficient inventory, which would result in lost revenue opportunities and potential loss of market share as well as damaged customer relationships.”

Critical Accounting Policies and Estimates

There have been no material changes during the three months ended October 29, 2022 to our critical accounting policies and estimates from the information provided in the “Critical Accounting Policies and Estimates” section of our Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the fiscal year ended January 29, 2022.

In the current macroeconomic environment, our estimates could require increased judgment and carry a higher degree of variability and volatility. We continue to monitor and assess our estimates in light of developments, and as events continue to evolve and additional information becomes available, our estimates may change materially in future periods.

Results of Operations

The following table sets forth information derived from our Unaudited Condensed Consolidated Statements of Operations expressed as a percentage of net revenue:

			Three Months Ended																								Nine Months Ended
			October 29, 2022						October 30, 2021																														October 29, 2022						October 30, 2021
Net revenue			100.0		%				100.0		%																												100.0		%				100.0		%
Cost of goods sold			49.4						51.5																														48.6						55.8
Gross profit			50.6						48.5																														51.4						44.2
Operating expenses:
Research and development			29.1						30.7																														29.8						32.9
Selling, general and administrative			13.5						20.1																														14.2						22.6
Legal settlement			—						—																														2.2						—
Restructuring related charges			1.0						0.5																														0.4						1.0
Total operating expenses			43.6						51.3																														46.6						56.5
Operating income (loss)			7.0						(2.8)																														4.8						(12.3)
Interest income			0.1						—																														0.1						—
Interest expense			(2.9)						(2.9)																														(2.7)						(3.3)
Other income (loss), net			0.2						0.1																														0.3						—
Income (loss) before income taxes			4.4						(5.6)																														2.5						(15.6)
Provision (benefit) for income taxes			3.4						(0.4)																														5.7						(1.9)
Net income (loss)			1.0		%				(5.2)		%																												(3.2)		%				(13.7)		%

Three and Nine Months Ended October 29, 2022 and October 30, 2021

Net Revenue

			Three Months Ended																																										Nine Months Ended
			October 29, 2022						October 30, 2021						% Change																																										October 29, 2022						October 30, 2021						% Change
			(in millions, except percentage)
Net revenue			$	1,537.3					$	1,211.2					26.9%																																										$	4,501.1					$	3,119.4					44.3%

Our net revenue for the three months ended October 29, 2022 increased by $326.1 million compared to net revenue for the three months ended October 30, 2021. This was due to an increase in sales from a majority of our end markets. Revenue increased from the data center end market by 26%, from the enterprise networking end market by 52%, from the carrier infrastructure end market by 26%, and from the automotive/industrial end market by 26% compared to the three months ended October 30, 2021. The sales from the consumer end market were relatively flat for the three months ended October 29, 2022 compared to the three months ended October 30, 2021.

Our net revenue for the nine months ended October 29, 2022 increased by $1.4 billion compared to net revenue for the nine months ended October 30, 2021. This was due to an increase in sales from all our end markets. Revenue increased from the data center end market by 58%, from the enterprise networking end market by 56%, from the carrier infrastructure end market by 40%, from the consumer end market by 1%, and from the automotive/industrial end market by 51% compared to the nine months ended October 30, 2021.

The overall increases in net revenue of 27% and 44% for the three and nine months ended October 29, 2022, respectively, were primarily driven by relatively higher sales of products with higher average selling prices associated with higher content and more features. In addition, the overall increase in net revenue for the nine months ended October 29, 2022 was also driven by an increase in demand for our products and the year-over-year impact of acquisitions made in fiscal 2022, with both factors contributing to higher unit shipments.

Cost of Goods Sold and Gross Profit

			Three Months Ended																																										Nine Months Ended
			October 29, 2022						October 30, 2021						% Change																																										October 29, 2022						October 30, 2021						% Change
			(in millions, except percentage)
Cost of goods sold			$	760.0					$	623.4					21.9%																																										$	2,186.9					$	1,741.6					25.6%
% of net revenue			49.4		%				51.5		%																																														48.6		%				55.8		%
Gross profit			$	777.3					$	587.8					32.2%																																										$	2,314.2					$	1,377.8					68.0%
% of net revenue			50.6		%				48.5		%																																														51.4		%				44.2		%

Cost of goods sold as a percentage of net revenue decreased for the three and nine months ended October 29, 2022 compared to the three and nine months ended October 30, 2021, which is primarily due to lower amortization of inventory fair value adjustment and acquired intangible assets as a percentage of net revenue. As a result, gross margin for the three and nine months ended October 29, 2022 increased 2.1 and 7.2 percentage points compared to the three and nine months ended October 30, 2021.

Research and Development

			Three Months Ended																																										Nine Months Ended
			October 29, 2022						October 30, 2021						% Change																																										October 29, 2022						October 30, 2021						% Change
			(in millions, except percentage)
Research and development			$	448.1					$	371.9					20.5%																																										$	1,341.2					$	1,025.0					30.8%
% of net revenue			29.1		%				30.7		%																																														29.8		%				32.9		%

Research and development expense increased by $76.2 million in the three months ended October 29, 2022 compared to the three months ended October 30, 2021. The increase was primarily due to $48.9 million of higher employee personnel-related costs as a result of headcount increases including new employees from our recent acquisitions.

Research and development expense increased by $316.2 million in the nine months ended October 29, 2022 compared to the nine months ended October 30, 2021. The increase was primarily due to $250.8 million of higher employee personnel-related costs as a result of headcount increases including new employees from our recent acquisitions.

Selling, General and Administrative

			Three Months Ended																																										Nine Months Ended
			October 29, 2022						October 30, 2021						% Change																																										October 29, 2022						October 30, 2021						% Change
			(in millions, except percentage)
Selling, general and administrative			$	207.8					$	243.4					(14.6)%																																										$	640.2					$	704.1					(9.1)%
% of net revenue			13.5		%				20.1		%																																														14.2		%				22.6		%

Selling, general and administrative expense decreased by $35.6 million in the three months ended October 29, 2022 compared to the three months ended October 30, 2021. The decrease was primarily due to $21.7 million of lower intangibles amortization expense related to intangibles that were fully amortized during the first quarter of fiscal 2023 and $20.4 million of lower integration costs associated with our acquisition of Inphi and Innovium in fiscal 2022. The decrease was partially offset by $6.7 million of higher employee personnel-related costs as a result of headcount increases including new employees from our recent acquisitions.

Selling, general and administrative expense decreased by $63.9 million in the nine months ended October 29, 2022 compared to the nine months ended October 30, 2021. The decrease was primarily due to $85.9 million of lower transaction and integration costs associated with our acquisition of Inphi and Innovium and $28.4 million of lower stock based compensation expense mainly related to accelerated vesting of Inphi and Innovium equity awards incurred due to the deal closing in the prior year. The decrease was partially offset by $20.5 million of higher employee personnel-related costs and $20.0 million of higher intangibles amortization expense associated with our acquisitions of Inphi and Innovium in fiscal 2022, as well as acquisitions in the current period.

Legal Settlement

			Three Months Ended																																										Nine Months Ended
			October 29, 2022						October 30, 2021						% Change																																										October 29, 2022						October 30, 2021						% Change
			(in millions, except percentage)
Legal settlement			$	—					$	—					*																																										$	100.0					$	—					*
% of net revenue			—		%				—		%																																														2.2		%				—		%

*Not meaningful

We recorded a charge of $100.0 million in the nine months ended October 29, 2022 related to the settlement of a contractual dispute. Refer to “Note 5 – Commitments and Contingencies” for further information.

Restructuring Related Charges

			Three Months Ended																																										Nine Months Ended
			October 29, 2022						October 30, 2021						% Change																																										October 29, 2022						October 30, 2021						% Change
			(in millions, except percentage)
Restructuring related charges			$	15.6					$	5.9					164.4%																																										$	18.1					$	31.1					(41.8)%
% of net revenue			1.0		%				0.5		%																																														0.4		%				1.0		%

We recognized $15.6 million and $18.1 million of total restructuring related charges in the three and nine months ended October 29, 2022, respectively, as we continued to evaluate our existing operations to increase operational efficiency, decrease costs, and increase profitability. See “Note 9 – Restructuring” in the Notes to the Unaudited Condensed Consolidated Financial Statements for further information.

Interest Income

			Three Months Ended																																										Nine Months Ended
			October 29, 2022						October 30, 2021						% Change																																										October 29, 2022						October 30, 2021						% Change
			(in millions, except percentage)
Interest income			$	1.5					$	0.2					650.0%																																										$	2.8					$	0.6					366.7%
% of net revenue			0.1		%				—		%																																														0.1		%				—		%

Interest income increased by $1.3 million and $2.2 million in the three and nine months ended October 29, 2022, respectively, compared to the three and nine months ended October 30, 2021 due to higher interest rates on our invested cash.

Interest Expense

			Three Months Ended																																										Nine Months Ended
			October 29, 2022						October 30, 2021						% Change																																										October 29, 2022						October 30, 2021						% Change
			(in millions, except percentage)
Interest expense			$	(45.2)					$	(35.4)					27.7%																																										$	(121.3)					$	(104.3)					16.3%
% of net revenue			(2.9)		%				(2.9)		%																																														(2.7)		%				(3.3)		%

Interest expense increased by $9.8 million and $17.0 million in the three and nine months ended October 29, 2022, respectively, compared to the three and nine months ended October 30, 2021. The increase was primarily due to higher interest expense and amortization of debt issuance costs associated with the 2024 and 2026 Term Loans and 2026, 2028 and 2031 Senior Notes, partially offset by prior period costs associated with the bridge loan termination.

Other Income, Net

			Three Months Ended																																										Nine Months Ended
			October 29, 2022						October 30, 2021						% Change																																										October 29, 2022						October 30, 2021						% Change
			(in millions, except percentage)
Other income, net			$	3.2					$	1.0					220.0%																																										$	12.1					$	0.5					2,320.0%
% of net revenue			0.2		%				0.1		%																																														0.3		%				—		%

Other income, net, increased by $2.2 million and $11.6 million in the three months and nine months ended October 29, 2022, respectively, compared to the three and nine months ended October 30, 2021. The increase was primarily due to gain from equity investments and exchange rate fluctuations.

Provision (benefit) for Income Taxes

			Three Months Ended																																										Nine Months Ended
			October 29, 2022						October 30, 2021						% Change																																										October 29, 2022						October 30, 2021						% Change
			(in millions, except percentage)
Provision (benefit) for income taxes			$	52.0					$	(5.0)					(1,140.0)%																																										$	256.4					$	(58.4)					(539.0)%

Our income tax expense for the three months ended October 29, 2022 was $52.0 million compared to a tax benefit of $5.0 million for the three months ended October 30, 2021. Our income tax expense $52.0 million for the three months ended October 29, 2022 differed from the 21% federal income tax rate, primarily due to a discrete income tax expense related to the Israel clawback tax on prior earnings. Our income tax benefit for the three months ended October 30, 2021 differed from the U.S. federal tax rate of 21% primarily because of discrete income tax benefits for stock-based compensation, tax rate differentials on foreign income (losses), and recognition of tax benefits related to the settlement of audits in certain jurisdictions.

Our income tax expense for the nine months ended October 29, 2022, was $256.4 million compared to a tax benefit of $58.4 million for the nine months ended October 30, 2021. Our income tax expense of $256.4 million for the nine months ended October 29, 2022, differed from the federal statutory tax rate of 21% primarily due to the $213.6 million tax impact of the remeasurement of deferred taxes in Singapore and $22.4 million tax impact of the Israel clawback taxes on prior earnings, offset by the recognition of discrete tax benefits related to stock-based compensation. Our income tax benefit of $58.4 million for the nine months ended October 30, 2021, differed from the 21% federal statutory tax rate primarily because of the recognition of a $10.0 million tax benefit attributable to Singapore tax basis in intellectual property, tax benefits related to stock-based compensation, and benefits from expirations of the statutes of limitations related to certain previously unrecognized tax benefits that were recorded in prior periods.

Our provision for incomes taxes may be affected by changes in the geographic mix of earnings with different applicable tax rates, acquisitions, changes in the realizability of deferred tax assets, accruals related to contingent tax liabilities and period-to-period changes in such accruals, the results of income tax audits, the expiration of statutes of limitations, the implementation of tax planning strategies, tax rulings, court decisions, settlements with tax authorities and changes in tax laws and regulations.

The ultimate realization of deferred tax assets depends upon the generation of future taxable income during the periods in which those assets become deductible or creditable. We evaluate the recoverability of these assets, weighing all positive and negative evidence, and provide or maintain a valuation allowance for these assets if it is more likely than not that some, or all, of the deferred tax assets will not be realized. If negative evidence exists, sufficient positive evidence is necessary to support a conclusion that a valuation allowance is not needed. We consider all available evidence such as our earnings history including the existence of cumulative income or losses, reversals of taxable temporary differences, projected future taxable income, and tax planning strategies. In future periods, it is possible that significant positive or negative evidence could arise that results in a change in our judgment with respect to the need for a valuation allowance, which could result in a tax benefit, or adversely affect our income tax provision, in the period of such change in judgment.

We also continuously evaluate potential changes to our legal structure in response to guidelines and requirements in various international tax jurisdictions where we conduct business. Additionally, please see the information in “Item 1A: Risk Factors” under the caption “Changes in existing taxation benefits, tax rules or tax practices may adversely affect our financial results.”

Liquidity and Capital Resources

Our principal source of liquidity as of October 29, 2022 consisted of approximately $723.4 million of cash and cash equivalents, of which approximately $500.8 million was held by subsidiaries outside of the United States. We manage our worldwide cash requirements by, among other things, reviewing available funds held by our foreign subsidiaries and the cost effectiveness by which those funds can be accessed in the United States. See “Note 10 – Income Taxes” in the Notes to the Unaudited Condensed Consolidated Financial Statements for further information.

In December 2020, to fund the Inphi acquisition, we executed a debt agreement to obtain a 3-year term loan of $875.0 million and a 5-year term loan of $875.0 million. For the nine months ended October 29, 2022, we repaid $43.7 million of the principal outstanding on the 5-year term loan.

In December 2020, we also executed a debt agreement to obtain a $750.0 million revolving credit facility (the “2020 Revolving Credit Facility”). During the third quarter of fiscal 2023, we repaid $70.0 million of the aggregate principal amount of borrowings that remained outstanding, and as at October 29, 2022, there was no amount outstanding under the 2020 Revolving Credit Facility.

In April 2021, we completed an offering and issued (i) 5-year $500.0 million senior notes due in 2026, (ii) 7-year $750.0 million senior notes due in 2028, and (iii) 10-year $750.0 million senior notes due in 2031 (collectively, the “Senior Notes”). On October 8, 2021, the Senior Notes issued in April 2021 were exchanged for new notes.

See “Note 4 – Debt” in the Notes to the Unaudited Condensed Consolidated Financial Statements for additional information.

We believe that our existing cash, cash equivalents, together with cash generated from operations, and funds from our 2020 Revolving Credit Facility will be sufficient to cover our working capital needs, capital expenditures, investment requirements, any declared dividends, repurchases of our common stock and commitments (including those discussed in “Note 5 – Commitments and Contingencies” in the Notes to the Unaudited Condensed Consolidated Financial Statements) for at least the next twelve months. Our capital requirements will depend on many factors, including our rate of sales growth, market acceptance of our products, costs of securing access to adequate manufacturing capacity, the timing and extent of research and development projects and increases in operating expenses, all of which are subject to uncertainty.

To the extent that our existing cash and cash equivalents, together with cash generated by operations, and funds available under our 2020 Revolving Credit Facility are insufficient to fund our future activities, we may need to raise additional funds through public or private debt or equity financing. We may also acquire additional businesses, purchase assets or enter into other strategic arrangements in the future, which could also require us to seek debt or equity financing. Additional equity financing or convertible debt financing may be dilutive to our current stockholders. If we elect to raise additional funds, we may not be able to obtain such funds on a timely basis or on acceptable terms, if at all. In addition, the equity or debt securities that we issue may have rights, preferences or privileges senior to our common stock.

Future payment of a regular quarterly cash dividend on our common stock and our planned repurchases of common stock will be subject to, among other things, the best interests of the Company and our stockholders, our results of operations, cash balances and future cash requirements, financial condition, developments in ongoing litigation, statutory requirements under Delaware law, U.S. securities laws and regulations, market conditions and other factors that our Board of Directors may deem relevant. Our dividend payments and repurchases of common stock may change from time to time, and we cannot provide assurance that we will continue to declare dividends or repurchase stock at all or in any particular amounts.

Cash Flows from Operating Activities

Net cash flow provided by operating activities for the nine months ended October 29, 2022 was $937.3 million. We had a net loss of $148.1 million adjusted for the following non-cash items: amortization of acquired intangible assets of $814.2 million, stock-based compensation expense of $421.7 million, depreciation and amortization of $227.0 million, deferred income tax expense of $53.6 million, amortization of inventory fair value adjustment associated with the Innovium acquisition of $26.0 million, and $58.5 million net loss from other non-cash items. Cash outflow from working capital of $515.6 million for the nine months ended October 29, 2022 was primarily driven by increases in accounts receivable, inventory, and prepaid expenses and other assets and a decrease in accounts payable, partially offset by increases in accrued liabilities and other non-current liabilities and accrued employee compensation. The increase in accounts receivable was primarily due to increased sales, as well as the timing of shipments due to ongoing supply chain challenges. The increase in inventory was to better support unfulfilled backlog, future customer demand and new product ramps. The increase in prepaid expenses and other assets was primarily due to prepayments on supply capacity reservation agreements. The decrease in accounts payable was primarily due to the timing of payments. The increase in accrued liabilities and other non-current liabilities was primarily due to an accrual related to a settlement of a contractual dispute and an increase in the ship and debit claim reserve due to price increases and stock replenishment. The increase in accrued employee compensation was due to increases in our bonus accrual and in employee contributions to the employee stock purchase plan.

Net cash flow provided by operating activities for the nine months ended October 30, 2021 was $473.1 million. We had a net loss of $427.2 million adjusted for the following non-cash items: amortization of acquired intangible assets of $684.6 million, stock-based compensation expense of $325.9 million, amortization of inventory fair value adjustment associated with the Inphi and Innovium acquisitions of $191.1 million, depreciation and amortization of $189.6 million, deferred income tax benefit of $67.6 million, and $84.4 million net loss from other non-cash items. Cash outflow from working capital of $507.7 million for the nine months ended October 30, 2021 was primarily driven by increases in accounts receivable, inventory, and prepaid expenses and other assets, partially offset by an increase in accounts payable. The increase in accounts receivable was primarily due to increased sales as well as the timing of shipments due to ongoing supply chain challenges. The increase in inventory was due to increased procurement to support our future growth. The increase in prepaid expenses and other assets was primarily due to prepayments on supply capacity reservation agreements. The higher accounts payable was due to an increase in purchases and the timing of payments.

Cash Flows from Investing Activities

For the nine months ended October 29, 2022, net cash used in investing activities of $264.2 million was primarily driven by purchases of property and equipment of $152.2 million, net cash paid for business acquisitions of $103.0 million, and purchases of technology licenses of $9.1 million.

For the nine months ended October 30, 2021, net cash used in investing activities of $3.7 billion was primarily driven by the net cash paid to acquire Inphi of $3.6 billion, purchases of property and equipment of $130.4 million and purchases of technology licenses of $9.3 million, partially offset by cash acquired from Innovium of $60.4 million.

Cash Flows from Financing Activities

For the nine months ended October 29, 2022, net cash used in financing activities of $563.2 million was primarily attributable to $243.8 million for repayment of debt, $201.2 million for tax withholding payments on behalf of employees for net share settlements, $153.1 million for the payment of our quarterly dividends, $115.0 million for repurchases of common stock and $103.6 million for payments for technology license obligations, partially offset by a $200.0 million drawdown from our 2020 Revolving Credit Facility and $52.5 million in proceeds from our employee stock plans.

For the nine months ended October 30, 2021, net cash provided by financing activities of $3.0 billion was primarily attributable to proceeds from the issuance of debt of $3.8 billion, proceeds from capped calls of $160.3 million, partially offset by $425.9 million for repayment of debt, $181.2 million for the repurchase and settlement of convertible notes, $169.1 million for tax withholding payments on behalf of employees for net share settlements, $140.3 million for the payment of our quarterly dividends and $97.9 million for payments for technology license obligations.

Capital Resources and Material Cash Requirements

A summary of our capital resources and material cash requirements is presented in Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, in our Annual Report on Form 10-K for the fiscal year ended January 29, 2022. We also discuss updates of our significant commitments in “Note 5 – Commitments and Contingencies” in the Notes to the Unaudited Condensed Consolidated Financial Statements. Other than as described above, there were no material changes to our capital resources and material cash requirements during the nine months ended October 29, 2022.

Indemnification Obligations

See “Note 5 – Commitments and Contingencies” in the Notes to the Unaudited Condensed Consolidated Financial Statements set forth in Part I, Item 1 of this Quarterly Report on Form 10-Q.