Segment, Geographic, and Significant Customer Information

3 Months Ended

Jul. 28, 2023

Segment Reporting [Abstract]

Segment, Geographic, and Significant Customer Information

14. Segment, Geographic, and Significant Customer Information

Our operations are organized into two segments: Hybrid Cloud and Public Cloud. The two segments are based on the information reviewed by our Chief Operating Decision Maker (CODM), who is the Chief Executive Officer, to evaluate results and allocate resources. The CODM measures performance of each segment based on segment revenue and segment gross profit. We do not allocate to our segments certain cost of revenues which we manage at the corporate level. These unallocated costs include stock-based compensation and amortization of intangible assets. We do not allocate assets to our segments.

Hybrid Cloud offers a portfolio of storage and infrastructure solutions that help customers recast their data centers with the power of cloud. This portfolio is designed to operate with public clouds to unlock the potential of hybrid, multi-cloud operations. Hybrid Cloud is composed of software, hardware, and related support, as well as professional and other services.

Public Cloud offers a portfolio of products delivered primarily as-a-service, including related support. This portfolio includes cloud storage and data services, and cloud operations services. Public Cloud includes certain reseller arrangements in which the timing of our consideration follows the end user consumption of the reseller services.

Segment Revenues and Gross Profit

Financial information by segment is as follows (in millions, except percentages):

	Three Months Ended July 28, 2023
	Hybrid Cloud			Public Cloud			Consolidated
Product revenues	$	590		$	—		$	590
Support revenues		611			—			611
Professional and other services revenues		77			—			77
Public cloud revenues		—			154			154
Net revenues		1,278			154			1,432
Cost of product revenues		264			—			264
Cost of support revenues		47			—			47
Cost of professional and other services revenues		58			—			58
Cost of public cloud revenues		—			51			51
Segment cost of revenues		369			51			420
Segment gross profit	$	909		$	103		$	1,012
Segment gross margin		71.1	%		66.9	%		70.7	%
Unallocated cost of revenues1								16
Total gross profit							$	996
Total gross margin								69.6	%
1 Unallocated cost of revenues are composed of $7 million of stock-based compensation expense and $9 million of amortization of intangible assets.

	Three Months Ended July 29, 2022
	Hybrid Cloud			Public Cloud			Consolidated
Product revenues	$	786		$	—		$	786
Support revenues		598			—			598
Professional and other services revenues		76			—			76
Public cloud revenues		—			132			132
Net revenues		1,460			132			1,592
Cost of product revenues		395			—			395
Cost of support revenues		43			—			43
Cost of professional and other services revenues		52			—			52
Cost of public cloud revenues		—			40			40
Segment cost of revenues		490			40			530
Segment gross profit	$	970		$	92		$	1,062
Segment gross margin		66.4	%		69.7	%		66.7	%
Unallocated cost of revenues1								16
Total gross profit							$	1,046
Total gross margin								65.7	%
1 Unallocated cost of revenues are composed of $5 million of stock-based compensation expense and $11 million of amortization of intangible assets.

Geographical Revenues and Certain Assets

Revenues summarized by geographic region are as follows (in millions):

	Three Months Ended
	July 28,  2023		July 29, 2022
United States, Canada and Latin America (Americas)	$	754	$	827
Europe, Middle East and Africa (EMEA)		446		509
Asia Pacific (APAC)		232		256
Net revenues	$	1,432	$	1,592

Effective in the three months ended July 28, 2023, management began evaluating revenues by geographic region based on the location to which products and services are delivered, rather than based on the location from which the customer relationship is managed. Prior period numbers have been recast to conform to the current period presentation. Americas revenues consist of sales to Americas commercial and U.S. public sector markets. Sales to customers inside the U.S. were $699 million and $772 million during the three months ended July 28, 2023 and July 29, 2022, respectively.

The majority of our assets, excluding cash, cash equivalents, short-term investments and accounts receivable, were attributable to our domestic operations. The following table presents cash, cash equivalents and short-term investments held in the U.S. and internationally in various foreign subsidiaries (in millions):

	July 28,  2023		April 28,   2023
U.S.	$	842	$	887
International		2,133		2,183
Total	$	2,975	$	3,070

With the exception of property and equipment, we do not identify or allocate our long-lived assets by geographic area. The following table presents property and equipment information for geographic areas based on the physical location of the assets (in millions):

	July 28,  2023		April 28,   2023
U.S.	$	407	$	413
International		234		237
Total	$	641	$	650

Significant Customers

The following customers, each of which is a distributor, accounted for 10% or more of our net revenues:

	Three Months Ended
	July 28,  2023			July 29, 2022
Arrow Electronics, Inc.		24	%		25	%
TD Synnex Corporation (previously presented as Tech Data Corporation)		21	%		21	%

The following customers accounted for 10% or more of accounts receivable in at least one of the periods presented:

	July 28,  2023			April 28,   2023
Arrow Electronics, Inc.		10	%		15	%
TD Synnex Corporation (previously presented as Tech Data Corporation)		17	%		19	%