Balance Sheet Components

9 Months Ended

Oct. 29, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Balance Sheet Components

Balance Sheet Components 

Two customers each accounted for 11% of our accounts receivable balance as of October 29, 2023. Two customers accounted for 14% and 11% of our accounts receivable balance as of January 29, 2023.

Certain balance sheet components are as follows:

	October 29,		January 29,
	2023		2023
Inventories (1):	(In millions)
Raw materials	$	1,663	$	2,430
Work in-process	1,338		466
Finished goods	1,778		2,263
Total inventories	$	4,779	$	5,159

(1)    During the third quarter of fiscal years 2024 and 2023, we recorded an inventory provision of approximately $208 million and $354 million, respectively, in cost of revenue.

	October 29,		January 29,
	2023		2023
Other Assets:	(In millions)
Prepaid supply and capacity agreements (1)	$	2,927	$	2,989
Investments in non-affiliated entities	1,172		299
Prepaid royalties	369		387
Prepaid cloud services	60		23
Other	139		122
Total other assets	$	4,667	$	3,820

(1)    As of October 29, 2023 and January 29, 2023, there were an additional $743 million and $458 million of short-term prepaid supply and capacity agreements included in Prepaid expenses and other current assets, respectively.

	October 29,		January 29,
	2023		2023
Accrued and Other Current Liabilities:	(In millions)
Customer program accruals	$	1,771	$	1,196
Excess inventory purchase obligations (1)	1,280		954
Accrued payroll and related expenses	516		530
Deferred revenue (2)	513		354
Taxes payable	420		467
Product warranty and return provisions	299		108
Operating leases	230		176
Licenses and royalties	150		149
Unsettled share repurchases	117		—
Other	176		186
Total accrued and other current liabilities	$	5,472	$	4,120

(1)    During the third quarter of fiscal years 2024 and 2023, we recorded an expense of approximately $473 million and $348 million, respectively, in cost of revenue for inventory purchase obligations in excess of our current demand projections, supplier charges and for penalties related to cancellations and underutilization.

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

	October 29,		January 29,
	2023		2023
Other Long-Term Liabilities:	(In millions)
Income tax payable (1)	$	1,206	$	1,204
Deferred revenue (2)	425		218
Deferred income tax	424		247
Licenses payable	113		181
Other	66		63
Total other long-term liabilities	$	2,234	$	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 nine months of fiscal years 2024 and 2023:

	October 29,		October 30,
	2023		2022
	(In millions)
Balance at beginning of period	$	572	$	502
Deferred revenue additions during the period	1,269		577
Revenue recognized during the period	(903)		(528)
Balance at end of period	$	938	$	551

Revenue allocated to remaining performance obligations, which includes deferred revenue and amounts that will be invoiced and recognized as revenue in future periods, was $896 million as of October 29, 2023. We expect to recognize approximately 42% 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.