Revenue

3 Months Ended

May 01, 2021

Revenue from Contract with Customer [Abstract]

Revenue

Revenue

The majority of the Company’s revenue is generated from sales of the Company’s products. The following table summarizes net revenue disaggregated by product group (in thousands, except percentages):

	Three Months Ended
	May 1, 2021		% of Total		May 2, 2020		% of Total
Net revenue by product group:
Networking (1)	$	498,250	60	%	$	393,920	57	%
Storage (2)	302,918		36	%	258,688		37	%
Other (3)	31,111		4	%	41,033		6	%
	$	832,279			$	693,641

(1)Networking products are comprised primarily of ethernet solutions, embedded processors, custom ASICs and electro-optics solutions.

(2)Storage products are comprised primarily of storage controllers and fibre channel adapters.

(3)Other products are comprised primarily of printer solutions.

The following table summarizes net revenue disaggregated by primary geographical market based on destination of shipment (in thousands, except percentages):

	Three Months Ended
	May 1, 2021		% of Total		May 2, 2020		% of Total
Net revenue based on destination of shipment:
China	$	341,078	41	%	$	280,146	40	%
United States	87,414		11	%	81,232		12	%
Thailand	77,792		9	%	67,544		10	%
Malaysia	58,579		7	%	64,668		9	%
Singapore	51,510		6	%	38,706		6	%
Philippines	47,618		6	%	24,574		4	%
Other	168,288		20	%	136,771		19	%
	$	832,279			$	693,641

These destinations of shipment are not necessarily indicative of the geographic location of the Company’s end customers or the country in which the Company’s end customers sell devices containing the Company’s products. For example, a substantial majority of the shipments made to China relate to sales to non-China based customers that have factories or contract manufacturing operations located within China.

The following table summarizes net revenue disaggregated by customer type (in thousands, except percentages):

	Three Months Ended
	May 1, 2021		% of Total		May 2, 2020		% of Total
Net revenue by customer type:
Direct customers	$	570,306	69	%	$	531,404	77	%
Distributors	261,973		31	%	162,237		23	%
	$	832,279			$	693,641

Contract Liabilities

Contract liabilities consist of the Company’s obligation to transfer goods or services to a customer for which the Company has received consideration or the amount is due from the customer. As of May 1, 2021, contract liability balances are comprised of variable consideration estimated based on a portfolio basis using the expected value methodology based on analysis of historical data, current economic conditions, and contractual terms. Variable consideration estimates consist of the estimated returns, price discounts, price protection, rebates, and stock rotation programs. As of the end of a reporting period, some of the performance obligations associated with contracts will have been unsatisfied or only partially satisfied. In accordance with the practical expedients available in the guidance, the Company does not disclose the value of unsatisfied performance obligations for contracts with an original expected duration of one year or less. Contract liabilities are included in accrued liabilities in the unaudited condensed consolidated balance sheets.

The opening balance of contract liabilities at the beginning of the first quarter of fiscal year 2022 was $181.0 million. During the three months ended May 1, 2021, contract liabilities increased by $238.2 million associated with variable consideration estimates, offset by $248.7 million decrease in such reserves primarily due to credit memos issued to customers. The ending balance of contract liabilities as of the first quarter of fiscal year 2022 was $170.5 million. The amount of revenue recognized during the three months ended May 1, 2021 that was included in the contract liabilities balance at January 30, 2021 was not material.

Sales Commissions

The Company has elected to apply the practical expedient to expense commissions when incurred as the amortization period is typically one year or less. These costs are recorded in selling, general and administrative expenses in the unaudited condensed consolidated statements of operations.