UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(MARK ONE)

☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended April 30, 2023

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to                     

	Broadcom Inc.
	(Exact name of registrant as specified in its charter)
Delaware	001-38449				35-2617337
(State or other jurisdiction of incorporation or organization)	(Commission file Number)				(I.R.S. Employer Identification No.)
	1320 Ridder Park Drive
	San Jose,	CA		95131-2313
	(408)		433-8000
	(Address, including zip code, of principal executive offices and registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class	Trading Symbol(s)	Name of Each Exchange on Which Registered
Common Stock, $0.001 par value	AVGO	The NASDAQ Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes þ No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer þ Accelerated filer ☐ Non-accelerated filer ☐ Smaller reporting company ☐ Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No þ

As of May 26, 2023, there were 412,685,405 shares of our common stock outstanding.

BROADCOM INC.

Quarterly Report on Form 10-Q

For the Quarterly Period Ended April 30, 2023

TABLE OF CONTENTS

	Page
PART I — FINANCIAL INFORMATION	1
Item 1. Condensed Consolidated Financial Statements — Unaudited	1
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	22
Item 3. Quantitative and Qualitative Disclosures About Market Risk	30
Item 4. Controls and Procedures	30
PART II — OTHER INFORMATION	30
Item 1. Legal Proceedings	30
Item 1A. Risk Factors	30
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	50
Item 3. Defaults Upon Senior Securities	50
Item 4. Mine Safety Disclosures	50
Item 5. Other Information	50
Item 6. Exhibits	51
SIGNATURES	52

PART I — FINANCIAL INFORMATION

Item 1. Condensed Consolidated Financial Statements — Unaudited

BROADCOM INC.

INDEX TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — UNAUDITED

	Page
Condensed Consolidated Balance Sheets — Unaudited	2
Condensed Consolidated Statements of Operations - Unaudited	3
Condensed Consolidated Statements of Comprehensive Income — Unaudited	4
Condensed Consolidated Statements of Cash Flows — Unaudited	5
Condensed Consolidated Statements of Stockholders’ Equity — Unaudited	6
Notes to Unaudited Condensed Consolidated Financial Statements	8

1

BROADCOM INC.

CONDENSED CONSOLIDATED BALANCE SHEETS — UNAUDITED

	April 30, 2023		October 30, 2022
	(In millions, except par value)
ASSETS
Current assets:
Cash and cash equivalents	$	11,553	$	12,416
Trade accounts receivable, net	3,031		2,958
Inventory	1,886		1,925
Other current assets	1,401		1,205
Total current assets	17,871		18,504
Long-term assets:
Property, plant and equipment, net	2,209		2,223
Goodwill	43,614		43,614
Intangible assets, net	5,434		7,111
Other long-term assets	2,539		1,797
Total assets	$	71,667	$	73,249
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	831	$	998
Employee compensation and benefits	634		1,202
Current portion of long-term debt	1,117		440
Other current liabilities	4,929		4,412
Total current liabilities	7,511		7,052
Long-term liabilities:
Long-term debt	38,194		39,075
Other long-term liabilities	3,955		4,413
Total liabilities	49,660		50,540
Commitments and contingencies (Note 11)
Stockholders’ equity:
Preferred stock, $0.001 par value; 100 shares authorized; none issued and outstanding	—		—
Common stock, $0.001 par value; 2,900 shares authorized; 414 and 418 shares issued and outstanding as of April 30, 2023 and October 30, 2022, respectively	—		—
Additional paid-in capital	20,826		21,159
Retained earnings	1,363		1,604
Accumulated other comprehensive loss	(182)		(54)
Total stockholders’ equity	22,007		22,709
Total liabilities and equity	$	71,667	$	73,249

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

2

BROADCOM INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS — UNAUDITED

	Fiscal Quarter Ended				Two Fiscal Quarters Ended
	April 30, 2023		May 1, 2022		April 30, 2023		May 1, 2022
	(In millions, except per share data)
Net revenue:
Products	$	6,741	$	6,417	$	13,823	$	12,470
Subscriptions and services	1,992		1,686		3,825		3,339
Total net revenue	8,733		8,103		17,648		15,809
Cost of revenue:
Cost of products sold	2,019		1,798		4,244		3,567
Cost of subscriptions and services	158		158		307		314
Amortization of acquisition-related intangible assets	441		707		976		1,437
Restructuring charges	—		1		2		3
Total cost of revenue	2,618		2,664		5,529		5,321
Gross margin	6,115		5,439		12,119		10,488
Research and development	1,312		1,261		2,507		2,467
Selling, general and administrative	438		368		786		689
Amortization of acquisition-related intangible assets	348		398		696		795
Restructuring, impairment and disposal charges	9		18		19		35
Total operating expenses	2,107		2,045		4,008		3,986
Operating income	4,008		3,394		8,111		6,502
Interest expense	(405)		(518)		(811)		(925)
Other income (expense), net	113		(86)		256		(100)
Income before income taxes	3,716		2,790		7,556		5,477
Provision for income taxes	235		200		301		415
Net income	3,481		2,590		7,255		5,062
Dividends on preferred stock	—		(75)		—		(149)
Net income attributable to common stock	$	3,481	$	2,515	$	7,255	$	4,913
Net income per share attributable to common stock:
Basic	$	8.39	$	6.16	$	17.40	$	11.98
Diluted	$	8.15	$	5.93	$	16.95	$	11.53
Weighted-average shares used in per share calculations:
Basic	415		408		417		410
Diluted	427		424		428		426

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

3

BROADCOM INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME — UNAUDITED

	Fiscal Quarter Ended				Two Fiscal Quarters Ended
	April 30, 2023		May 1, 2022		April 30, 2023		May 1, 2022
	(In millions)
Net income	$	3,481	$	2,590	$	7,255	$	5,062
Other comprehensive income (loss), net of tax:
Change in unrealized loss on derivative instruments	(2)		—		(128)		—
Change in actuarial loss and prior service costs associated with defined benefit plans	—		—		—		1
Other comprehensive income (loss), net of tax	(2)		—		(128)		1
Comprehensive income	$	3,479	$	2,590	$	7,127	$	5,063

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

4

BROADCOM INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS — UNAUDITED

	Two Fiscal Quarters Ended
	April 30, 2023		May 1, 2022
	(In millions)
Cash flows from operating activities:
Net income	$	7,255	$	5,062
Adjustments to reconcile net income to net cash provided by operating activities:
Amortization of intangible and right-of-use assets	1,715		2,280
Depreciation	256		271
Stock-based compensation	904		773
Deferred taxes and other non-cash taxes	(889)		70
Loss on debt extinguishment	—		100
Non-cash interest expense	65		65
Other	(18)		125
Changes in assets and liabilities, net of acquisitions and disposals:
Trade accounts receivable, net	(91)		(1,004)
Inventory	39		(370)
Accounts payable	(194)		(31)
Employee compensation and benefits	(566)		(313)
Other current assets and current liabilities	405		808
Other long-term assets and long-term liabilities	(343)		(107)
Net cash provided by operating activities	8,538		7,729
Cash flows from investing activities:
Acquisitions of businesses, net of cash acquired	—		(234)
Purchases of property, plant and equipment	(225)		(186)
Purchases of investments	(197)		(200)
Other	1		1
Net cash used in investing activities	(421)		(619)
Cash flows from financing activities:
Proceeds from long-term borrowings	—		1,935
Payments on debt obligations	(260)		(2,352)
Payments of dividends	(3,840)		(3,514)
Repurchases of common stock - repurchase program	(3,994)		(5,500)
Shares repurchased for tax withholdings on vesting of equity awards	(947)		(889)
Issuance of common stock	63		60
Other	(2)		(8)
Net cash used in financing activities	(8,980)		(10,268)
Net change in cash and cash equivalents	(863)		(3,158)
Cash and cash equivalents at beginning of period	12,416		12,163
Cash and cash equivalents at end of period	$	11,553	$	9,005

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

5

BROADCOM INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY — UNAUDITED

Two Fiscal Quarters Ended April 30, 2023

		Common Stock			Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Total Stockholders’ Equity
		Shares	Par Value
	(In millions)
Balance as of October 30, 2022		418	$	—	$	21,159	$	1,604	$	(54)	$	22,709
Net income		—	—		—		3,774		—		3,774
Other comprehensive loss		—	—		—		—		(126)		(126)
Dividends to common stockholders		—	—		—		(1,926)		—		(1,926)
Common stock issued		2	—		—		—		—		—
Stock-based compensation		—	—		391		—		—		391
Repurchases of common stock		(2)	—		(107)		(1,081)		—		(1,188)
Shares repurchased for tax withholdings on vesting of equity awards		(1)	—		(324)		—		—		(324)
Balance as of January 29, 2023		417	—		21,119		2,371		(180)		23,310
Net income		—	—		—		3,481		—		3,481
Other comprehensive loss		—	—		—		—		(2)		(2)
Dividends to common stockholders		—	—		—		(1,914)		—		(1,914)
Common stock issued		3	—		63		—		—		63
Stock-based compensation		—	—		513		—		—		513
Repurchases of common stock		(5)	—		(248)		(2,575)		—		(2,823)
Shares repurchased for tax withholdings on vesting of equity awards		(1)	—		(621)		—		—		(621)
Balance as of April 30, 2023		414	$	—	$	20,826	$	1,363	$	(182)	$	22,007

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

6

BROADCOM INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY — UNAUDITED

Two Fiscal Quarters Ended May 1, 2022

	8.00% Mandatory Convertible Preferred Stock			Common Stock			Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Total Stockholders’ Equity
	Shares	Par Value		Shares	Par Value
	(In millions)
Balance as of October 31, 2021	4	$	—	413	$	—	$	24,330	$	748	$	(116)	$	24,962
Net income	—	—		—	—		—		2,472		—		2,472
Other comprehensive income	—	—		—	—		—		—		1		1
Dividends to common stockholders	—	—		—	—		—		(1,689)		—		(1,689)
Dividends to preferred stockholders	—	—		—	—		—		(74)		—		(74)
Common stock issued	—	—		2	—		1		—		—		1
Stock-based compensation	—	—		—	—		387		—		—		387
Repurchases of common stock	—	—		(4)	—		(1,267)		(1,457)		—		(2,724)
Shares repurchased for tax withholdings on vesting of equity awards	—	—		(1)	—		(368)		—		—		(368)
Balance as of January 30, 2022	4	—		410	—		23,083		—		(115)		22,968
Net income	—	—		—	—		—		2,590		—		2,590
Fair value of partially vested equity awards assumed in connection with an acquisition	—	—		—	—		4		—		—		4
Dividends to common stockholders	—	—		—	—		—		(1,676)		—		(1,676)
Dividends to preferred stockholders	—	—		—	—		—		(75)		—		(75)
Common stock issued	—	—		2	—		59		—		—		59
Stock-based compensation	—	—		—	—		386		—		—		386
Repurchases of common stock	—	—		(5)	—		(1,937)		(839)		—		(2,776)
Shares repurchased for tax withholdings on vesting of equity awards	—	—		(1)	—		(517)		—		—		(517)
Balance as of May 1, 2022	4	$	—	406	$	—	$	21,078	$	—	$	(115)	$	20,963

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

7

BROADCOM INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1. Overview, Basis of Presentation and Significant Accounting Policies

Overview

Broadcom Inc. (“Broadcom”), a Delaware corporation, is a global technology leader that designs, develops and supplies a broad range of semiconductor and infrastructure software solutions. We develop semiconductor devices with a focus on complex digital and mixed signal complementary metal oxide semiconductor based devices and analog III-V based products. We have a history of innovation in the semiconductor industry and offer thousands of products that are used in end products such as enterprise and data center networking, home connectivity, set-top boxes, broadband access, telecommunication equipment, smartphones and base stations, data center servers and storage systems, factory automation, power generation and alternative energy systems, and electronic displays. Our infrastructure software solutions enable customers to plan, develop, automate, manage and secure applications across mainframe, distributed, mobile and cloud platforms. Our portfolio of infrastructure and security software is designed to modernize, optimize, and secure the most complex hybrid environments, enabling scalability, agility, automation, insights, resiliency and security. We also offer mission critical fibre channel storage area networking (“FC SAN”) products and related software in the form of modules, switches and subsystems incorporating multiple semiconductor products. Unless stated otherwise or the context otherwise requires, references to “Broadcom,” “we,” “our,” and “us” mean Broadcom and its consolidated subsidiaries. We have two reportable segments: semiconductor solutions and infrastructure software.

Basis of Presentation

We operate on a 52- or 53-week fiscal year ending on the Sunday closest to October 31 in a 52-week year and the first Sunday in November in a 53-week year. Our fiscal year ending October 29, 2023 (“fiscal year 2023”) is a 52-week fiscal year. The first quarter of our fiscal year 2023 ended on January 29, 2023, the second quarter ended on April 30, 2023 and the third quarter ends on July 30, 2023. Our fiscal year ended October 30, 2022 (“fiscal year 2022”) was also a 52-week fiscal year.

The accompanying condensed consolidated financial statements include the accounts of Broadcom and its subsidiaries, and have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) for interim financial information. The financial information included herein is unaudited, and reflects all adjustments which are, in the opinion of our management, of a normal recurring nature and necessary for a fair statement of the results for the periods presented. The October 30, 2022 condensed consolidated balance sheet data were derived from Broadcom’s audited consolidated financial statements included in its Annual Report on Form 10-K for fiscal year 2022 as filed with the Securities and Exchange Commission. All intercompany balances and transactions have been eliminated in consolidation. The operating results for the fiscal quarter ended April 30, 2023 are not necessarily indicative of the results that may be expected for fiscal year 2023, or for any other future period.

Significant Accounting Policies

Use of estimates. The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. The inputs into certain of these estimates and assumptions include the consideration of the economic impact of the COVID-19 pandemic, and many of these estimates could require increased judgment and carry a higher degree of variability and volatility. Actual results could differ materially from these estimates, and such differences could affect the results of operations reported in future periods.

2. Revenue from Contracts with Customers

We account for a contract with a customer when both parties have approved the contract and are committed to perform their respective obligations, each party’s rights can be identified, payment terms can be identified, the contract has commercial substance, and it is probable that we will collect substantially all of the consideration to which we are entitled. Revenue is recognized when, or as, performance obligations are satisfied by transferring control of a promised product or service to a customer.

8

Disaggregation

We have considered (1) information that is regularly reviewed by our Chief Executive Officer, who has been identified as the chief operating decision maker (the “CODM”) as defined by the authoritative guidance on segment reporting, in evaluating financial performance and (2) disclosures presented outside of our financial statements in our earnings releases and used in investor presentations to disaggregate revenues. The principal category we use to disaggregate revenues is the nature of our products and subscriptions and services, as presented in our condensed consolidated statements of operations. In addition, revenues by reportable segment are presented in Note 10. “Segment Information.”

The following tables present revenue disaggregated by type of revenue and by region for the periods presented:

	Fiscal Quarter Ended April 30, 2023
	Americas		Asia Pacific		Europe, the Middle East and Africa		Total
	(In millions)
Products	$	780	$	5,458	$	503	$	6,741
Subscriptions and services (a)	1,454		126		412		1,992
Total	$	2,234	$	5,584	$	915	$	8,733

	Fiscal Quarter Ended May 1, 2022
	Americas		Asia Pacific		Europe, the Middle East and Africa		Total
	(In millions)
Products	$	658	$	5,260	$	499	$	6,417
Subscriptions and services (a)	1,154		125		407		1,686
Total	$	1,812	$	5,385	$	906	$	8,103

	Two Fiscal Quarters Ended April 30, 2023
	Americas		Asia Pacific		Europe, the Middle East and Africa		Total
	(In millions)
Products	$	1,389	$	11,395	$	1,039	$	13,823
Subscriptions and services (a)	2,684		326		815		3,825
Total	$	4,073	$	11,721	$	1,854	$	17,648

	Two Fiscal Quarters Ended May 1, 2022
	Americas		Asia Pacific		Europe, the Middle East and Africa		Total
	(In millions)
Products	$	1,206	$	10,244	$	1,020	$	12,470
Subscriptions and services (a)	2,263		253		823		3,339
Total	$	3,469	$	10,497	$	1,843	$	15,809

_______________

(a) Subscriptions and services predominantly include software licenses with termination for convenience clauses.

Although we recognize revenue for the majority of our products when title and control transfer in Penang, Malaysia, we disclose net revenue by region based primarily on the geographic shipment location or delivery location specified by our distributors, original equipment manufacturer customers, contract manufacturers, channel partners, or software customers.

9

Contract Balances

		April 30, 2023		October 30, 2022
	(In millions)
Contract Assets		$	401	$	128
Contract Liabilities		$	3,793	$	3,341

Changes in our contract assets and contract liabilities primarily result from the timing difference between our performance and the customer’s payment. We fulfill our obligations under a contract with a customer by transferring products and services in exchange for consideration from the customer. We recognize a contract asset when we transfer products or services to a customer and the right to consideration is conditional on something other than the passage of time. Accounts receivable are recorded when the customer has been billed or the right to consideration is unconditional. We recognize contract liabilities when we have received consideration or an amount of consideration is due from the customer and we have a future obligation to transfer products or services. Contract liabilities include amounts billed or collected and advanced payments on contracts or arrangements, which may include termination for convenience provisions. The amount of revenue recognized during the two fiscal quarters ended April 30, 2023 that was included in the contract liabilities balance as of October 30, 2022 was $2,287 million. The amount of revenue recognized during the two fiscal quarters ended May 1, 2022 that was included in the contract liabilities balance as of October 31, 2021 was $1,974 million.

Remaining Performance Obligations

Revenue allocated to remaining performance obligations represents the transaction price allocated to unsatisfied or partially unsatisfied performance obligations. Remaining performance obligations include unearned revenue and amounts that will be invoiced and recognized as revenue in future periods, but do not include contracts for software, subscriptions or services where the customer is not committed. The customer is not considered committed when termination for convenience without payment of a substantive penalty exists, either contractually or through customary business practice. The majority of our customer software contracts include termination for convenience clauses without a substantive penalty and are not considered committed. Additionally, as a practical expedient, we have not included contracts that have an original duration of one year or less, nor have we included contracts with sales-based or usage-based royalties promised in exchange for a license of intellectual property (“IP”).

Certain multi-year customer contracts primarily in our semiconductor solutions segment contain firmly committed amounts and the remaining performance obligations under these contracts as of April 30, 2023 were approximately $21.4 billion. We expect approximately 27% of this amount to be recognized as revenue over the next 12 months. Although the majority of our software contracts are not deemed to be committed, our customers generally do not exercise their termination for convenience rights. In addition, the majority of our contracts for products, subscriptions and services have a duration of one year or less. Accordingly, our remaining performance obligations disclosed above are not indicative of revenue for future periods.

3. Pending Acquisition of VMware, Inc.

On May 26, 2022, we entered into an Agreement and Plan of Merger (the “VMware Merger Agreement”) to acquire all of the outstanding shares of VMware, Inc. (“VMware”) in a cash-and-stock transaction (the “VMware Merger”) that values VMware at approximately $61 billion based on the closing price of Broadcom common stock on May 25, 2022. We will also assume VMware’s closing date outstanding debt, net of expected cash.

Under the terms of the VMware Merger Agreement, each share of VMware common stock issued and outstanding immediately prior to the effective time of the VMware Merger will be indirectly converted into the right to receive, at the election of the holder of such share of VMware common stock, either $142.50 in cash, without interest, or 0.2520 shares of Broadcom common stock. The stockholder election will be subject to proration, such that the total number of shares of VMware common stock entitled to receive cash and the total number of shares of VMware common stock entitled to receive Broadcom common stock, will, in each case, be equal to 50% of the aggregate number of shares of VMware common stock issued and outstanding immediately prior to the effective time of the VMware Merger.

We will assume all outstanding VMware restricted stock unit (“RSU”) awards and performance stock unit awards held by continuing employees. The assumed awards will be converted into RSU awards for shares of Broadcom common stock. All outstanding in-the-money VMware stock options and RSU awards held by non-employee directors will be accelerated and converted into the right to receive cash and shares of Broadcom common stock, in equal parts.

10

Effective upon the effective time of the VMware Merger, one member of the VMware Board of Directors, to be mutually agreed by us and VMware, will be added to our Board of Directors.

In connection with the execution of the VMware Merger Agreement, we entered into a commitment letter on May 26, 2022, with certain financial institutions that committed to provide, subject to the terms and conditions of the commitment letter, a senior unsecured bridge facility in an aggregate principal amount of $32 billion.

The VMware Merger, which is expected to be completed in our fiscal year 2023, is subject to satisfaction or waiver of customary closing conditions, including the expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvement Act of 1976 and clearance under the antitrust laws of the European Union and certain other jurisdictions. On October 3, 2022, we registered approximately 59 million shares of our common stock. On November 4, 2022, VMware stockholders adopted the VMware Merger Agreement. We and VMware each have termination rights under the VMware Merger Agreement and, under specified circumstances, upon termination of the agreement, we and VMware would be required to pay the other a termination fee of $1.5 billion.

4. Supplemental Financial Information

Cash Equivalents

Cash equivalents included $3,018 million and $3,915 million of time deposits and $2,414 million and $2,365 million of money-market funds as of April 30, 2023 and October 30, 2022, respectively. For time deposits, carrying value approximates fair value due to the short-term nature of the instruments. The fair value of money-market funds, which was consistent with their carrying value, was determined using unadjusted prices in active, accessible markets for identical assets, and as such, they were classified as Level 1 assets in the fair value hierarchy.

Accounts Receivable Factoring

We sell certain of our trade accounts receivable on a non-recourse basis to third-party financial institutions pursuant to factoring arrangements. We account for these transactions as sales of receivables and present cash proceeds as cash provided by operating activities in the condensed consolidated statements of cash flows. Total trade accounts receivable sold under the factoring arrangements were $900 million and $1,925 million during the fiscal quarter and two fiscal quarters ended April 30, 2023, respectively, and $900 million and $2,100 million during the fiscal quarter and two fiscal quarters ended May 1, 2022, respectively. Factoring fees for the sales of receivables were recorded in other income (expense), net and were not material for any of the periods presented.

Inventory

	April 30, 2023		October 30, 2022
	(In millions)
Finished goods	$	577	$	780
Work-in-process	1,038		966
Raw materials	271		179
Total inventory	$	1,886	$	1,925

Other Current Assets

	April 30, 2023		October 30, 2022
	(In millions)
Prepaid expenses	$	676	$	864
Other	725		341
Total other current assets	$	1,401	$	1,205

11

Other Current Liabilities

	April 30, 2023		October 30, 2022
	(In millions)
Contract liabilities	$	3,427	$	2,931
Tax liabilities	650		680
Interest payable	382		393
Other	470		408
Total other current liabilities	$	4,929	$	4,412

Other Long-Term Liabilities

	April 30, 2023		October 30, 2022
	(In millions)
Unrecognized tax benefits	$	2,841	$	3,229
Other	1,114		1,184
Total other long-term liabilities	$	3,955	$	4,413

Supplemental Cash Flow Information

	Fiscal Quarter Ended				Two Fiscal Quarters Ended
	April 30, 2023		May 1, 2022		April 30, 2023		May 1, 2022
	(In millions)
Cash paid for interest	$	397	$	459	$	758	$	699
Cash paid for income taxes	$	891	$	240	$	1,164	$	426

Derivative Instruments

During the fiscal quarter ended January 29, 2023 and fiscal year 2022, we entered into treasury rate lock contracts with original maturities of approximately one year to hedge variability of cash flows due to changes in the benchmark interest rate of anticipated future debt issuances. These treasury rate locks are designated and accounted for as cash flow hedging instruments. As of April 30, 2023 and October 30, 2022, the total notional amounts of these contracts were $5.5 billion and $1.3 billion, respectively. As of April 30, 2023, the fair value of $120 million was recorded in other current liabilities. As of October 30, 2022, the fair value of $47 million was recorded in other long-term assets. The change in fair value was recorded as a component of other comprehensive income (loss), net of tax, in our condensed consolidated statements of comprehensive income.

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5. Intangible Assets

	Gross Carrying Amount		Accumulated Amortization		Net Book Value
	(In millions)
As of April 30, 2023:
Purchased technology	$	19,450	$	(16,396)	$	3,054
Customer contracts and related relationships	7,066		(5,147)		1,919
Order backlog	484		(432)		52
Trade names	700		(405)		295
Other	174		(89)		85
Intangible assets subject to amortization	27,874		(22,469)		5,405
In-process research and development	29		—		29
Total	$	27,903	$	(22,469)	$	5,434
As of October 30, 2022:
Purchased technology	$	19,450	$	(15,422)	$	4,028
Customer contracts and related relationships	7,066		(4,535)		2,531
Order backlog	484		(382)		102
Trade names	700		(372)		328
Other	174		(81)		93
Intangible assets subject to amortization	27,874		(20,792)		7,082
In-process research and development	29		—		29
Total	$	27,903	$	(20,792)	$	7,111

Based on the amount of intangible assets subject to amortization as of April 30, 2023, the expected amortization expense was as follows:

Fiscal Year:	Expected Amortization Expense
	(In millions)
2023 (remainder)	$	1,578
2024	2,388
2025	681
2026	344
2027	216
Thereafter	198
Total	$	5,405

The weighted-average remaining amortization periods by intangible asset category were as follows:

Amortizable intangible assets:	April 30, 2023
	(In years)
Purchased technology	3
Customer contracts and related relationships	2
Order backlog	1
Trade names	8
Other	8

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6. Net Income Per Share

Basic net income per share is computed by dividing net income attributable to common stock by the weighted-average number of shares of common stock outstanding during the period. Diluted net income per share is computed by dividing net income attributable to common stock by the weighted-average number of shares of common stock and potentially dilutive shares of common stock outstanding during the period.

Potentially dilutive shares outstanding include the dilutive effect of unvested RSUs and employee stock purchase plan rights under the Broadcom Inc. Employee Stock Purchase Plan (“ESPP”), (collectively referred to as “equity awards”), as well as 8.00% Mandatory Convertible Preferred Stock, Series A, $0.001 par value per share (“Mandatory Convertible Preferred Stock”), which was all converted into shares of our common stock before the end of fiscal year 2022. Potentially dilutive shares whose effect would have been antidilutive are excluded from the computation of diluted net income per share.

The dilutive effect of equity awards is calculated based on the average stock price for each fiscal period, using the treasury stock method. Under the treasury stock method, the amount the employee must pay for purchasing shares under the ESPP and the amount of stock-based compensation expense for future service that we have not yet recognized are collectively assumed to be used to repurchase shares. The dilutive effect of Mandatory Convertible Preferred Stock is calculated using the if-converted method. The if-converted method assumes that these securities were converted at the beginning of the reporting period to the extent that the effect is dilutive.

For each of the fiscal quarter and two fiscal quarters ended May 1, 2022, diluted net income per share excluded the potentially dilutive effect of 12 million shares of common stock issuable upon the conversion of Mandatory Convertible Preferred Stock as their effect was antidilutive.

The following is a reconciliation of the numerators and denominators of the basic and diluted net income per share computations for the periods presented:

	Fiscal Quarter Ended				Two Fiscal Quarters Ended
	April 30, 2023		May 1, 2022		April 30, 2023		May 1, 2022
	(In millions, except per share data)
Numerator:
Net income	$	3,481	$	2,590	$	7,255	$	5,062
Dividends on preferred stock	—		(75)		—		(149)
Net income attributable to common stock	$	3,481	$	2,515	$	7,255	$	4,913
Denominator:
Weighted-average shares outstanding - basic	415		408		417		410
Dilutive effect of equity awards	12		16		11		16
Weighted-average shares outstanding - diluted	427		424		428		426

Net income per share attributable to common stock:
Basic	$	8.39	$	6.16	$	17.40	$	11.98
Diluted	$	8.15	$	5.93	$	16.95	$	11.53

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7. Borrowings

	Effective Interest Rate		April 30, 2023		October 30, 2022
	(Dollars in millions)
April 2022 Senior Notes - fixed rate
4.000% notes due April 2029	4.17	%	$	750	$