Debt and Financial Obligations - As of January 28, 2022, the company had an aggregate of $12.7 billion of outstanding indebtedness[74] - The company has entered into a $1.5 billion unsecured revolving credit facility, which is currently undrawn[74] - The company intends to reduce its indebtedness during the next fiscal years, relying on cash generated from operations[74] - VMware incurred $10.0 billion in indebtedness to fund the special dividend, including $6.0 billion in senior notes issued in August 2021[207] - The total principal amount of VMware's long-term debt as of January 28, 2022, was $9.25 billion, an increase from $4.75 billion as of January 29, 2021[294] - VMware's outstanding balance on the 2021 Term Loan was $3.5 billion as of January 28, 2022, after repaying $500 million on January 25, 2022[295] - VMware established a revolving credit facility with a borrowing capacity of up to $1.5 billion, which replaced the previous $1.0 billion facility[296] Tax Liabilities and Compliance - The company estimates a potential impact on fiscal 2023 cash from operations possibly exceeding $500 million due to changes in tax provisions[76] - The company is undergoing audits by the IRS for fiscal years 2015 through 2019, which may result in additional tax liabilities[78] - The company is subject to potential tax liabilities due to its former membership in Dell's consolidated tax group[75] - Changes in tax laws and regulations could materially affect the company's effective tax rate and financial condition[76] - The 2017 Tax Act requires the company to amortize research and development expenditures over five to fifteen years, affecting cash flow[76] - The effective tax rate for the year ended January 28, 2022, was 13%, a slight decrease from 14% for the year ended January 29, 2021[328] - VMware's gross unrecognized tax benefits decreased from $508 million as of January 28, 2022, to $527 million, with additions of $68 million related to current year tax positions[336] Revenue and Financial Performance - Total revenue for the year ended January 28, 2022, was $12.9 billion[191] - Net income attributable to VMware, Inc. for the year ended January 28, 2022, was $1,820 million, down from $2,058 million in the previous year, a decrease of 11.6%[197] - Total revenue for the year ended January 28, 2022, was $12,851 million, an increase from $11,767 million in the previous year, representing a growth of 9.2%[195] - VMware recognized $9.1 billion in total billings and $8.2 billion in revenue for the year ended January 28, 2022, compared to $8.4 billion in billings and $7.4 billion in revenue for the year ended January 29, 2021[248] Cybersecurity Risks - Cybersecurity risks are increasing as the company relies on IT systems and cloud-based environments to conduct business operations[79] - Cyber-attacks are increasing in number and sophistication, posing risks to the company's proprietary information and IT services[80] - The company has faced unauthorized access incidents in the past, which could lead to significant liability claims and regulatory actions[80] - The complexity of the company's technical environment increases the risk of vulnerabilities being introduced into its products and services[81] Legal and Regulatory Proceedings - The company is involved in various legal and regulatory proceedings that could negatively impact its business and financial condition[83] - VMware is currently involved in multiple legal proceedings, including a lawsuit filed by Cirba Inc. for patent infringement[264] - VMware accrued a total of $237 million for patent infringement damages, which was later derecognized following a new trial order[266] Acquisitions and Investments - VMware completed the acquisition of Pivotal for $2.0 billion, enhancing its cloud-native Kubernetes portfolio[274] - The acquisition of Carbon Black was executed at a price of $26.00 per share, totaling $2.0 billion net of cash acquired[274] - VMware acquired SaltStack, Inc. for $51 million, which included $29 million of identifiable intangible assets and $24 million of goodwill[269] - VMware's acquisitions during fiscal 2021 included five other non-material acquisitions totaling $62 million, enhancing product features for VMware Carbon Black Cloud and vRealize Operations[273] Stockholder Influence and Equity - MSD Stockholders and SLP Stockholders hold significant influence, owning 40.2% and 10.0% of VMware's outstanding stock respectively as of March 15, 2022[89] - The combined ownership of MSD and SLP Stockholders is 62.9%, which may conflict with the interests of other stockholders[90] - VMware's stock repurchase program had $1.7 billion remaining available for repurchase as of January 28, 2022[342] Cash Flow and Liquidity - Cash and cash equivalents decreased to $3,614 million as of January 28, 2022, from $4,692 million in the previous year, a decline of 22.9%[199] - Net cash provided by operating activities was $4,357 million, slightly down from $4,409 million year-over-year[201] - Cash, cash equivalents, and restricted cash at the end of the period totaled $3,663 million, down from $4,770 million at the beginning of the period[201] Goodwill and Intangible Assets - Goodwill and amortizable intangible assets were valued at $9.6 billion and $714 million respectively as of January 28, 2022[92] - The carrying amount of definite-lived intangible assets decreased from $993 million as of January 29, 2021, to $714 million as of January 28, 2022, reflecting amortization expenses of $303 million[276] - Goodwill decreased slightly from $9.599 billion as of January 29, 2021, to $9.598 billion as of January 28, 2022, due to business combinations and related adjustments[280] Foreign Currency Risks - Fluctuations in foreign currency exchange rates may adversely affect operating results, particularly due to business conducted outside the U.S. dollar[92] - Approximately 70% of VMware's sales are denominated in U.S. dollars, with significant invoicing in euros, British pounds, Japanese yen, Australian dollars, and Chinese renminbi[174] - VMware utilizes derivative financial instruments, primarily foreign currency forward contracts, to manage foreign currency exchange rate risks[174] Environmental, Social, and Governance (ESG) Goals - The company has committed to a 2030 Agenda focused on ESG goals, which includes sustainability and diversity initiatives[94] - Failure to meet ESG reporting expectations may result in reputational harm and increased litigation risk[94]

Financial Data and Key Metrics Changes - Revenue for Q4 was $3.53 billion, an increase of 7% from Q4 FY21. Total revenue for FY22 was $12.85 billion, up 9% from FY21 [5][17] - Subscription and SaaS revenue for Q4 was $868 million, growing 23% year-over-year. For FY22, subscription and SaaS revenue totaled $3.2 billion, representing 25% of total revenue [17][18] - Non-GAAP operating income for Q4 was $1.137 billion, with a non-GAAP operating margin of 32.2% and non-GAAP earnings per share of $2.02 [19] - Cash flow from operations for FY22 was $4.4 billion, with Q4 cash flow from operations at $1.137 billion [20] Business Line Data and Key Metrics Changes - Subscription and SaaS revenue grew to 25% of overall revenue by the end of FY22, with a goal to surpass $4 billion in FY23 [17][23] - In Q4, license revenue grew 2% year-over-year to $1.035 billion, while term license revenue was $191 million, up from $95 million in Q3 [18] - Services revenue for Q4 was $1.628 billion, an increase of approximately 3.5% year-over-year [19] Market Data and Key Metrics Changes - Total subscription and SaaS ARR increased to $3.6 billion in FY22, up 24% versus FY21 [18] - RPO in Q4 was $12 billion, up 6% year-over-year, with current RPO at $6.8 billion, up 9% year-over-year [20] Company Strategy and Development Direction - The company aims to be a leading platform vendor in the multi-cloud era, focusing on accelerating multi-cloud innovation and offerings [6][7] - Plans for FY23 include making all major products available as subscription or SaaS offerings, with a focus on accelerating the subscription and SaaS transformation [8][23] - The company is emphasizing partnerships and expanding its strategic alliances to enhance its multi-cloud capabilities [13] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about FY23, expecting to drive accelerated growth and innovation in the multi-cloud space [16][23] - The company is aware of macroeconomic factors, including the impact of the Ukraine conflict, but remains focused on long-term strategic goals [29][45] Other Important Information - VMware was recognized for its commitment to environmental, social, and governance (ESG) practices, ranking 1 in the environmental category [15] - The company repurchased approximately 2.5 million shares in Q4 at an average price of $119 per share [22] Q&A Session Summary Question: Can you talk about the rollout of subscription and SaaS offerings in FY23? - Management highlighted the excitement around FY23 and the completion of making all SDDC products available as subscription offerings, with a focus on sales incentives and partner certifications [28][34] Question: What are you seeing in terms of customer behavior post-pandemic? - Management noted an increase in strategic decisions by customers to accelerate digital transformation and cloud migration, with a focus on cloud-smart approaches [40][41] Question: Did the Omicron variant affect your quarter? - Management stated there was no significant impact from Omicron on bookings or quarter performance, and they have accounted for macroeconomic factors in their guidance [44][45] Question: How much of the subscription revenue is from new sales versus existing maintenance? - Approximately $100 million in subscription revenue in Q4 came from converting existing maintenance to subscription, with ongoing opportunities to grow subscription percentages [51][52] Question: How does the reduction in valuations affect M&A strategy? - The M&A strategy remains unchanged, focusing on tuck-in acquisitions based on product needs rather than valuation changes [58]

Table of Contents 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 October 29, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to | --- | --- | --- | --- | |-------------------|----------------------------------------|----------------------------------------------- ...

Financial Performance - VMware reported Q3 fiscal year 2022 revenue of $3.2 billion, with non-GAAP earnings of $1.72 per diluted share, exceeding expectations [7][19] - Combined subscription and SaaS and license revenue grew 16% year-over-year to $1.5 billion, with subscription and SaaS revenue of $820 million up 21% year-over-year [19][20] - Non-GAAP operating income for the quarter was $935 million, with a non-GAAP operating margin of 29.3% [20] - The company ended the quarter with $10.2 billion in unearned revenue and $12.5 billion in cash, cash equivalents, and short-term investments [20][21] Business Lines Performance - Subscription and SaaS ARR reached $3.3 billion, up 25% year-over-year, with strong contributions from VCPP, Tanzu, EUC, Carbon Black, and VMware Cloud on AWS [19][20] - License revenue grew 11% year-over-year to $710 million, with core SDDC product bookings increasing over 20% year-over-year [19][22] - VMware Cloud services saw momentum, particularly with hyperscalers like Amazon, Microsoft, Google, and Oracle [22] Market Data - VMware was ranked number one in the IDC report for Cloud System and Service Management Software Market Shares [13] - The company received recognition as a leader in the Gartner Magic Quadrant for Unified Endpoint Management Tools and WAN Edge Infrastructure [15] Company Strategy and Industry Competition - VMware aims to be a leader in multi-cloud solutions, focusing on delivering a cloud-native app platform, migrating enterprise applications, and building secure edge solutions [8][12] - The company is enhancing its product offerings, including the introduction of Project Arctic and VMware Sovereign Cloud initiative [11][12] - VMware's strategy includes tailoring go-to-market programs and sales incentives to drive subscription and SaaS growth [35] Management Commentary on Operating Environment and Future Outlook - Management expressed confidence in the company's multi-cloud strategy and its ability to leverage partnerships for growth [27] - The company anticipates total revenue for fiscal 2022 to reach $12.83 billion, with a growth rate of approximately 9% year-over-year [24] - For Q4, VMware expects total revenue of $3.51 billion, reflecting a growth rate of approximately 7% year-over-year [25] Other Important Information - VMware completed a special dividend of $11.5 billion in conjunction with its spin-off from Dell Technologies [21] - The company repurchased approximately 1 million shares at an average price of $150 per share [23] Q&A Session Summary Question: License revenue performance and subscription trends - Management noted that license revenue was stronger than expected, while subscription and SaaS performance was in line with expectations, with a healthy year-over-year increase in ARR [30][32] Question: Partner ecosystem excitement post-spin-off - Management observed excitement among partners, with some planning to increase VMware-certified personnel and engage in co-marketing efforts [38][39] Question: Impact of term licenses on revenue - Approximately 13.5% of license revenue came from term licenses, which are seen as a bridge to subscription and SaaS offerings [49] Question: Adoption of vSphere 7 with Tanzu - Management reported successful adoption of vSphere 7, with customers appreciating the ability to run containers natively [52][54] Question: Impact of hardware supply shortages - Management indicated that while chip shortages are affecting the economy, VMware has not seen significant impacts on its business due to its software-centric model [58] Question: Guidance for Q4 and fiscal year-end - Management expressed optimism about Q4, noting strong demand and execution, while acknowledging that some deals may have landed in Q3 [64]

Financial Analyst Meeting October 7, 2021 ©2021 VMware, Inc. Agenda Strategy Customers Product Financial Raghu Raghuram Chief Executive Officer Sumit Dhawan President Ajay Patel General Manager, Modern Apps & Management Business Group Zane Rowe Chief Financial Officer Mark Lohmeyer General Manager, Cloud Infrastructure Business Group ©2021 VMware, Inc. 2 Strategy Raghu Raghuram CEO ©2021 VMware, Inc. 3 The Next Phase for VMware: Multi-Cloud & Apps Platform Strong track record of driving innovative industry- ...

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 October 30, 2020 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 001-33622 _______________________________________________________ VMWARE, INC. (Exact name of registrant as specified in its chart ...