Segment, Geographic, and Significant Customer Information

9 Months Ended

Jan. 27, 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.

Segment Revenues and Gross Profit

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

	Three Months Ended January 27, 2023
	Hybrid Cloud			Public Cloud			Consolidated
Product revenues	$	682		$	—		$	682
Support revenues		616			—			616
Professional and other services revenues		78			—			78
Public cloud revenues		—			150			150
Net revenues		1,376			150			1,526
Cost of product revenues		365			—			365
Cost of support revenues		44			—			44
Cost of professional and other services revenues		50			—			50
Cost of public cloud revenues		—			47			47
Segment cost of revenues		459			47			506
Segment gross profit	$	917		$	103		$	1,020
Segment gross margin		66.6	%		68.7	%		66.8	%
Unallocated cost of revenues1								19
Total gross profit							$	1,001
Total gross margin								65.6	%
1 Unallocated cost of revenues are composed of $8 million of stock-based compensation expense and $11 million of amortization of intangible assets.

	Three Months Ended January 28, 2022
	Hybrid Cloud			Public Cloud			Consolidated
Product revenues	$	846		$	—		$	846
Support revenues		586			—			586
Professional and other services revenues		72			—			72
Public cloud revenues		—			110			110
Net revenues		1,504			110			1,614
Cost of product revenues		404			—			404
Cost of support revenues		45			—			45
Cost of professional and other services revenues		46			—			46
Cost of public cloud revenues		—			32			32
Segment cost of revenues		495			32			527
Segment gross profit	$	1,009		$	78		$	1,087
Segment gross margin		67.1	%		70.9	%		67.3	%
Unallocated cost of revenues1								14
Total gross profit							$	1,073
Total gross margin								66.5	%
1 Unallocated cost of revenues are composed of $5 million of stock-based compensation expense and $9 million of amortization of intangible assets.

	Nine Months Ended January 27, 2023
	Hybrid Cloud			Public Cloud			Consolidated
Product revenues	$	2,305		$	—		$	2,305
Support revenues		1,821			—			1,821
Professional and other services revenues		231			—			231
Public cloud revenues		—			424			424
Net revenues		4,357			424			4,781
Cost of product revenues		1,177			—			1,177
Cost of support revenues		132			—			132
Cost of professional and other services revenues		156			—			156
Cost of public cloud revenues		—			132			132
Segment cost of revenues		1,465			132			1,597
Segment gross profit	$	2,892		$	292		$	3,184
Segment gross margin		66.4	%		68.9	%		66.6	%
Unallocated cost of revenues1								50
Total gross profit							$	3,134
Total gross margin								65.6	%
1 Unallocated cost of revenues are composed of $18 million of stock-based compensation expense and $32 million of amortization of intangible assets.

	Nine Months Ended January 28, 2022
	Hybrid Cloud			Public Cloud			Consolidated
Product revenues	$	2,390		$	—		$	2,390
Support revenues		1,754			—			1,754
Professional and other services revenues		218			—			218
Public cloud revenues		—			276			276
Net revenues		4,362			276			4,638
Cost of product revenues		1,099			—			1,099
Cost of support revenues		141			—			141
Cost of professional and other services revenues		151			—			151
Cost of public cloud revenues		—			80			80
Segment cost of revenues		1,391			80			1,471
Segment gross profit	$	2,971		$	196		$	3,167
Segment gross margin		68.1	%		71.0	%		68.3	%
Unallocated cost of revenues1								36
Total gross profit							$	3,131
Total gross margin								67.5	%
1 Unallocated cost of revenues are composed of $13 million of stock-based compensation expense and $23 million of amortization of intangible assets.

Geographical Revenues and Certain Assets

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

	Three Months Ended				Nine Months Ended
	January 27, 2023		January 28, 2022		January 27, 2023		January 28, 2022
United States, Canada and Latin America (Americas)	$	821	$	902	$	2,566	$	2,556
Europe, Middle East and Africa (EMEA)		491		516		1,526		1,431
Asia Pacific (APAC)		214		196		689		651
Net revenues	$	1,526	$	1,614	$	4,781	$	4,638

Americas revenues consist of sales to Americas commercial and U.S. public sector markets. Sales to customers inside the U.S. were $714 million and $796 million during the three months ended January 27, 2023 and January 28, 2022, respectively, and were $2,241 million and $2,265 million during the nine months ended January 27, 2023 and January 28, 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):

	January 27, 2023		April 29,  2022
U.S.	$	1,113	$	1,820
International		2,028		2,314
Total	$	3,141	$	4,134

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):

	January 27, 2023		April 29,  2022
U.S.	$	427	$	392
International		240		210
Total	$	667	$	602

Significant Customers

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

	Three Months Ended						Nine Months Ended
	January 27, 2023			January 28, 2022			January 27, 2023			January 28, 2022
Arrow Electronics, Inc.		24	%		25	%		24	%		25	%
Tech Data Corporation		21	%		21	%		20	%		21	%

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

	January 27, 2023			April 29,  2022
Arrow Electronics, Inc.		10	%		10	%
Tech Data Corporation		17	%		19	%