Goodwill and Purchased Intangible Assets, Net

9 Months Ended

Jan. 28, 2022

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Purchased Intangible Assets, Net

4. Goodwill and Purchased Intangible Assets, Net

Goodwill activity is summarized as follows (in millions):

	Amount
Balance as of April 30, 2021	$	2,039
Additions		291
Balance as of January 28, 2022	$	2,330

Beginning with the first quarter of fiscal 2022, the Company has two reportable segments: Public Cloud and Hybrid Cloud. As a result, goodwill was allocated to the segments using a relative fair value approach. Goodwill additions of $291 million related to the acquisition of CloudCheckr and Data Mechanics have been allocated to our Public Cloud segment.

Goodwill by reportable segment as of January 28, 2022 is as follows (in millions):

	Amount
Public Cloud	$	616
Hybrid Cloud		1,714
Total goodwill	$	2,330

As a result of the realignment, the Company performed an interim quantitative goodwill impairment test for its reporting units as of July 30, 2021, which did not result in any goodwill impairment charges. The Company will continue to evaluate the recoverability of goodwill on an annual basis in the fourth fiscal quarter and whenever events or changes in circumstances indicate there may be a potential impairment.

Purchased intangible assets, net are summarized below (in millions):

	January 28,  2022							April 30,  2021
	Gross		Accumulated			Net		Gross		Accumulated			Net
	Assets		Amortization			Assets		Assets		Amortization			Assets
Developed technology	$	151	$	(56	)	$	95	$	215	$	(147	)	$	68
Customer contracts/relationships		68		(15	)		53		38		(8	)		30
Other purchased intangibles		4		(2	)		2		3		—			3
Total purchased intangible assets	$	223	$	(73	)	$	150	$	256	$	(155	)	$	101

During fiscal 2022, we retired approximately $114 million of fully amortized developed technology intangible assets.

Amortization expense for purchased intangible assets is summarized below (in millions):

	Three Months Ended				Nine Months Ended				Statements of
	January 28,  2022		January 29,  2021		January 28,  2022		January 29,  2021		Income Classification
Developed technology	$	9	$	12	$	23	$	34	Cost of revenues
Customer contracts/relationships		4		3		7		6	Operating expenses
Other purchased intangibles		—		—		2		—	Operating expenses
Total	$	13	$	15	$	32	$	40

As of January 28, 2022, future amortization expense related to purchased intangible assets is as follows (in millions):

Fiscal Year	Amount
2022 (remainder)	$	14
2023		45
2024		34
2025		35
2026		18
2027		4
Total	$	150