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Segment, Geographic, and Significant Customer Information
 9 Months Ended
Jan. 26, 2024
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 management and infrastructure solutions that help customers modernize their data centers with the power of the cloud and modernize applications with a single solution that supports file, block, and object storage. 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 CloudOps services. Public Cloud includes certain reseller arrangements in which the timing of our consideration follows the end user consumption of the reseller services.

Segment Revenues and Gross Profit

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

 

Three Months Ended January 26, 2024

 

 

Hybrid Cloud

 

 

Public Cloud

 

 

Consolidated

 

Product revenues

$

747

 

 

$

—

 

 

$

747

 

Support revenues

 

631

 

 

 

—

 

 

 

631

 

Professional and other services revenues

 

77

 

 

 

—

 

 

 

77

 

Public cloud revenues

 

—

 

 

 

151

 

 

 

151

 

     Net revenues

 

1,455

 

 

 

151

 

 

 

1,606

 

Cost of product revenues

 

280

 

 

 

—

 

 

 

280

 

Cost of support revenues

 

49

 

 

 

—

 

 

 

49

 

Cost of professional and other services revenues

 

58

 

 

 

—

 

 

 

58

 

Cost of public cloud revenues

 

—

 

 

 

52

 

 

 

52

 

     Segment cost of revenues

 

387

 

 

 

52

 

 

 

439

 

         Segment gross profit

$

1,068

 

 

$

99

 

 

$

1,167

 

         Segment gross margin

 

73.4

%

 

 

65.6

%

 

 

72.7

%

            Unallocated cost of revenues1

 

 

 

 

 

 

 

16

 

                   Total gross profit

 

 

 

 

 

 

$

1,151

 

                   Total gross margin

 

 

 

 

 

 

 

71.7

%

1 Unallocated cost of revenues are composed of $7 million of stock-based compensation expense and $9 million of amortization of intangible assets.

 

 

 

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.

 

 

 

Nine Months Ended January 26, 2024

 

 

Hybrid Cloud

 

 

Public Cloud

 

 

Consolidated

 

Product revenues

$

2,043

 

 

$

—

 

 

$

2,043

 

Support revenues

 

1,865

 

 

 

—

 

 

 

1,865

 

Professional and other services revenues

 

233

 

 

 

—

 

 

 

233

 

Public cloud revenues

 

—

 

 

 

459

 

 

 

459

 

     Net revenues

 

4,141

 

 

 

459

 

 

 

4,600

 

Cost of product revenues

 

819

 

 

 

—

 

 

 

819

 

Cost of support revenues

 

146

 

 

 

—

 

 

 

146

 

Cost of professional and other services revenues

 

176

 

 

 

—

 

 

 

176

 

Cost of public cloud revenues

 

—

 

 

 

155

 

 

 

155

 

     Segment cost of revenues

 

1,141

 

 

 

155

 

 

 

1,296

 

         Segment gross profit

$

3,000

 

 

$

304

 

 

$

3,304

 

         Segment gross margin

 

72.4

%

 

 

66.2

%

 

 

71.8

%

            Unallocated cost of revenues1

 

 

 

 

 

 

 

47

 

                   Total gross profit

 

 

 

 

 

 

$

3,257

 

                   Total gross margin

 

 

 

 

 

 

 

70.8

%

1 Unallocated cost of revenues are composed of $21 million of stock-based compensation expense and $26 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.

 

 

Geographical Revenues and Certain Assets

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

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

January 26,
 2024

 

 

January 27,
2023

 

 

January 26,
 2024

 

 

January 27,
2023

 

United States, Canada and Latin America (Americas)

 

$

802

 

 

$

781

 

 

$

2,345

 

 

$

2,453

 

Europe, Middle East and Africa (EMEA)

 

 

567

 

 

 

510

 

 

 

1,538

 

 

 

1,584

 

Asia Pacific (APAC)

 

 

237

 

 

 

235

 

 

 

717

 

 

 

744

 

Net revenues

 

$

1,606

 

 

$

1,526

 

 

$

4,600

 

 

$

4,781

 

Effective in the first quarter of fiscal 2024, management began evaluating revenues by geographic region based on the location to which products and services are delivered, rather than based on the location from which the customer relationship is managed. Prior year numbers have been recast to conform to the current year presentation.

Americas revenues consist of sales to Americas commercial and U.S. public sector markets. Sales to customers inside the U.S. were $744 million and $719 million during the three months ended January 26, 2024 and January 27, 2023, respectively, and were $2,172 million and $2,275 million during the nine months ended January 26, 2024 and January 27, 2023, 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 26,
 2024

 

 

April 28,
  2023

 

U.S.

 

$

574

 

 

$

887

 

International

 

 

2,343

 

 

 

2,183

 

Total

 

$

2,917

 

 

$

3,070

 

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 26,
 2024

 

 

April 28,
  2023

 

U.S.

 

$

376

 

 

$

413

 

International

 

 

231

 

 

 

237

 

Total

 

$

607

 

 

$

650

 

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 26,
 2024

 

 

January 27,
2023

 

 

January 26,
 2024

 

 

January 27,
2023

 

Arrow Electronics, Inc.

 

 

21

%

 

 

24

%

 

 

22

%

 

 

24

%

TD Synnex Corporation (previously presented as Tech Data Corporation)

 

 

21

%

 

 

21

%

 

 

21

%

 

 

20

%

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

 

 

January 26,
 2024

 

 

April 28,
  2023

 

Arrow Electronics, Inc.

 

 

5

%

 

 

15

%

TD Synnex Corporation (previously presented as Tech Data Corporation)

 

 

16

%

 

 

19

%