Balance Sheet Components

6 Months Ended

Jul. 30, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Balance Sheet Components

Balance Sheet Components 

Certain balance sheet components are as follows:

	July 30,		January 29,
	2023		2023
Inventories (1):	(In millions)
Raw materials	$	1,632	$	2,430
Work in-process	1,058		466
Finished goods	1,629		2,263
Total inventories	$	4,319	$	5,159

(1)    During the second quarter of fiscal years 2024 and 2023, we recorded an inventory provision of approximately $343 million and $570 million, respectively, in cost of revenue.

	July 30,		January 29,
	2023		2023
Other Assets:	(In millions)
Prepaid supply and capacity agreements (1)	$	3,008	$	2,989
Investments in non-affiliated entities	800		299
Prepaid royalties	375		387
Prepaid cloud services	170		23
Other	148		122
Total other assets	$	4,501	$	3,820

(1)    As of July 30, 2023 and January 29, 2023, there were $799 million and $458 million of short-term prepaid supply and capacity agreements included in Prepaid expenses and other current assets, respectively.

	July 30,		January 29,
	2023		2023
Accrued and Other Current Liabilities:	(In millions)
Taxes payable	$	2,803	$	467
Customer program accruals	1,482		1,196
Excess inventory purchase obligations (1)	870		954
Accrued payroll and related expenses	642		530
Deferred revenue (2)	421		354
Unsettled share repurchases	217		—
Operating leases	208		176
Product warranty and return provisions	168		108
Licenses and royalties	144		149
Other	201		186
Total accrued and other current liabilities	$	7,156	$	4,120

(1)    During the second quarter of fiscal years 2024 and 2023, we recorded an expense of approximately $232 million and $650 million, respectively, in cost of revenue for inventory purchase obligations in excess of our current demand projections, and cancellation and underutilization penalties.

(2)    Deferred revenue primarily includes customer advances and deferrals related to license and development arrangements, support for hardware and software, and cloud services.

	July 30,		January 29,
	2023		2023
Other Long-Term Liabilities:	(In millions)
Income tax payable (1)	$	1,350	$	1,204
Deferred income tax	373		247
Deferred revenue (2)	308		218
Licenses payable	127		181
Other	65		63
Total other long-term liabilities	$	2,223	$	1,913

(1)    Income tax payable is comprised of the long-term portion of the one-time transition tax payable, unrecognized tax benefits, and related interest and penalties.

(2)    Deferred revenue primarily includes deferrals related to support for hardware and software.

Deferred Revenue

The following table shows the changes in deferred revenue during the first half of fiscal years 2024 and 2023:

	July 30,		July 31,
	2023		2022
	(In millions)
Balance at beginning of period	$	572	$	502
Deferred revenue additions during the period	713		399
Revenue recognized during the period	(556)		(341)
Balance at end of period	$	729	$	560

Revenue allocated to remaining performance obligations, which includes deferred revenue and amounts that will be invoiced and recognized as revenue in future periods, was $717 million as of July 30, 2023. We expect to recognize approximately 44% of this revenue over the next twelve months and the remainder thereafter. This excludes revenue related to performance obligations for contracts with a length of one year or less.