News summary
- Record first quarter revenue of $26.1
billion, up 16%, with growth across ISG and CSG
- Record first quarter operating income of $1.6 billion, up 57%, and record first quarter
non-GAAP operating income of $2.1
billion, up 21%
- Record first quarter diluted earnings per share of $1.37, up 63%, and record non-GAAP diluted
earnings per share of $1.84, up
36%
ROUND
ROCK, Texas, May 26, 2022
/PRNewswire/ --
Full story
Dell Technologies (NYSE: DELL) announces
financial results for its fiscal 2023 first quarter. Revenue was a
first quarter record of $26.1
billion, up 16%, with growth across Infrastructure Solutions
Group (ISG) and Client Solutions Group (CSG). The company generated
record first quarter operating income of $1.6 billion, a 57% increase, and record non-GAAP
operating income of $2.1 billion, up
21%. Net income from continuing operations was $1.1 billion, up 62%, and non-GAAP net income was
$1.4 billion, up 36%, both driven by
growth in operating income and lower interest expense due to
reduced debt balances. Diluted earnings per share was $1.37, up 63%, and non-GAAP diluted earnings per
share was $1.84, up 36%.
Dell Technologies ended the quarter with remaining performance
obligations of $42 billion, up 14%
year-over-year, deferred revenue of $27.4
billion, and cash and investments of $8.5 billion. Recurring revenue for the first
quarter was approximately $5.3 billion, up 15%.
First Quarter Fiscal 2023 Financial Results
|
Three Months Ended
|
|
|
|
April 29, 2022
|
|
April 30, 2021
|
|
Change
|
|
(in millions, except
per share amounts and percentages; unaudited)
|
Total net
revenue
|
$
|
26,116
|
|
$
|
22,590
|
|
16%
|
Operating
income
|
$
|
1,550
|
|
$
|
987
|
|
57%
|
Net income from
continuing operations
|
$
|
1,069
|
|
$
|
659
|
|
62%
|
Earnings per share -
diluted
|
$
|
1.37
|
|
$
|
0.84
|
|
63%
|
|
|
|
|
|
|
Non-GAAP net
revenue
|
$
|
26,116
|
|
$
|
22,589
|
|
16%
|
Non-GAAP operating
income
|
$
|
2,135
|
|
$
|
1,770
|
|
21%
|
Non-GAAP net
income
|
$
|
1,434
|
|
$
|
1,055
|
|
36%
|
Non-GAAP earnings per
share - diluted
|
$
|
1.84
|
|
$
|
1.35
|
|
36%
|
|
|
|
Information about
Dell Technologies' use of non-GAAP financial information is
provided under "Non-GAAP Financial Measures" below. All
comparisons in this press release are year-over-year unless
otherwise noted.
|
Operating segments summary
Infrastructure Solutions Group delivered record first
quarter revenue of $9.3 billion, up
16%. Storage revenue was $4.2
billion, up 9%, with demand across the company's broad
storage portfolio. Servers and networking revenue was $5 billion, up 22% year-over-year. Operating
income was $1.1 billion or
approximately 11.7% of Infrastructure Solutions Group revenue.
Key areas of innovation:
- More than 500 storage software advancements across Dell
PowerStore, PowerMax and PowerFlex to help customers deliver faster
insights, achieve better multi-cloud data control and increase
cyber resiliency.
- APEX Cyber Recovery Services, the first in a series of APEX
full stack solutions, offering customers a cloud experience and
simplifying recovery from cyberattacks.
- A collaboration with Snowflake will connect on-premises data
from Dell's industry-leading enterprise storage portfolio with the
Snowflake Data Cloud.
- Dell Telecom Multi-Cloud Foundation helps communications
service providers (CSPs) build and deploy open, cloud-native
networks faster with lower cost and complexity.
- Dell Validated Design for Retail Edge helps retailers simplify
edge infrastructure and launch new applications for better customer
experiences.
Client Solutions Group delivered record first quarter
revenue of $15.6 billion, up 17%
year-over-year. Performance was driven by continued strength in
commercial PCs, with commercial PC revenue of $12 billion, a 22% increase year-over-year.
Consumer revenue was $3.6 billion, a
3% increase year-over-year. Operating income was $1.1 billion, or approximately 7.2% of Client
Solutions Group revenue.
Key areas of innovation:
- Dell Optimizer software, which is built into commercial PCs,
integrates AI for increased privacy, connectivity and collaboration
to provide greater intelligence for hybrid work styles.
- Latitude 9330, the world's first laptop with a collaboration
touchpad that lets users mute, turn video on/off, screen share and
chat. Also announced the Latitude 5000 series, Dell's most
sustainable laptops yet, featuring the world's most innovative use
of sustainable materials.
- New Precision mobile workstations for creators, engineers and
architects – including the Precision 5470, the world's smallest,
thinnest and most powerful 14" mobile workstation. New 16- and
17-inch workstations offer a new form factor for DDR5 memory that
enables a thinner chassis design and makes systems more accessible
for repairs.
- Asset Recovery Services expansion into 35 new countries across
EMEA and APJ, includes new data sanitization offers and simplifies
the asset disposal process of PCs, servers, peripherals and
accessories.
- New Latitude, Precision and XPS devices now ship with 100%
recyclable packaging that is also made from 100% recycled or
renewable materials.
Executive Quotes:
- "We followed a record FY22 with a record first quarter FY23.
Revenue was $26.1 billion, up 16%,
with growth across our business units," said Jeff Clarke, vice chairman and co-chief
operating officer, Dell Technologies. "We are built to outperform,
in a balanced and consistent way across the company, as our
customers invest in their digital futures and choose Dell as their
trusted partner."
- "Our first quarter – with record Q1 revenue, operating income
and diluted EPS – demonstrates the benefits of having a strong,
geographically and sector-diverse business covering the edge to the
core data center to the cloud," said Chuck
Whitten, co-chief operating officer. "Plus we are positioned
to pursue growth wherever it materializes in the IT market, given
the predictability, durability and flexibility in our
business."
- "In our first quarter, we returned $1.75
billion to our shareholders through a combination of share
repurchases and dividends," said Tom
Sweet, chief financial officer, Dell Technologies. "We are
delivering long-term value by executing our strategy for growth,
taking share, generating strong cash flow from operations and
executing our capital allocation framework."
Conference call information
As previously announced,
the Company will hold a conference call to discuss its performance
and financial guidance on May 26,
2022, at 4:30 p.m. CDT. The
conference call will be broadcast live over the internet and can be
accessed at
https://investors.delltechnologies.com/events-and-presentations/upcoming-events
For those unable to listen to the live broadcast, an archived
version will be available at the same location for one year.
Additional financial and operating information may be downloaded
from
https://investors.delltechnologies.com/financial-information/quarterly-results
Customer Highlights Blog
Read our quarterly blog from
Bill Scannell, Dell Technologies
president of Global Sales & Customer Operations, to learn more
about how we are helping customers with their digital
transformations:
https://www.dell.com/en-us/blog/accelerating-customer-transformation-at-the-center-of-multi-cloud/
Environmental, Social and Governance (ESG)
Our
Environmental, Social and Governance (ESG) efforts focus on driving
positive impact for people and our planet while delivering
long-term value for our stakeholders. The FY22 ESG report will
publish June 30, 2022, and the
Company will hold a conference call to discuss the report in July.
ESG resources can be accessed at
https://www.dell.com/en-us/dt/corporate/social-impact/reporting/esg-governance.htm
About Dell Technologies
Dell Technologies (NYSE:DELL)
helps organizations and individuals build their digital future and
transform how they work, live and play. The company provides
customers with the industry's broadest and most innovative
technology and services portfolio for the data era.
Copyright © 2022 Dell Inc. or its subsidiaries. All Rights
Reserved. Dell Technologies, Dell, EMC and Dell EMC are trademarks
of Dell Inc. or its subsidiaries. Other trademarks may be
trademarks of their respective owners.
Non-GAAP Financial Measures:
This press
release presents information about Dell Technologies' non-GAAP net
revenue, non-GAAP gross margin, non-GAAP operating expenses,
non-GAAP operating income, non-GAAP net income, non-GAAP net income
attributable to non-controlling interests, non-GAAP net income
attributable to Dell Technologies Inc. - basic, non-GAAP net income
attributable to Dell Technologies Inc. - diluted, non-GAAP earnings
per share attributable to Dell Technologies Inc. - basic, and
non-GAAP earnings per share attributable to Dell Technologies Inc.
- diluted, which are non-GAAP financial measures provided as a
supplement to the results provided in accordance with generally
accepted accounting principles in the
United States of America ("GAAP"). A reconciliation of each
non-GAAP financial measure to the most directly comparable GAAP
financial measure is provided in the attached tables for each of
the fiscal periods indicated.
Special Note on Forward-Looking
Statements:
Statements in this press release that
relate to future results and events are forward-looking statements
within the meaning of Section 21E of the Securities Exchange Act of
1934 and Section 27A of the Securities Act of 1933 and are based on
Dell Technologies' current expectations. In some cases, you can
identify these statements by such forward-looking words as
"anticipate," "believe," "confidence," "could," "estimate,"
"expect," "guidance," "intend," "may," "objective," "outlook,"
"plan," "project," "possible," "potential," "should," "will" and
"would," or similar words or expressions that refer to future
events or outcomes.
Dell Technologies' results or events in future periods could
differ materially from those expressed or implied by these
forward-looking statements because of risks, uncertainties, and
other factors that include, but are not limited to, the following:
risks and uncertainties relating to our spin-off of VMware, Inc.,
including the potential effects on our business of the transaction;
the effects of the COVID-19 pandemic; competitive pressures; Dell
Technologies' reliance on third-party suppliers for products and
components, including reliance on single-source or limited-source
suppliers; Dell Technologies' ability to achieve favorable pricing
from its vendors; adverse global economic conditions and
instability in financial markets; Dell Technologies' execution of
its growth, business and acquisition strategies; the success of
Dell Technologies' cost efficiency measures; Dell Technologies'
ability to manage solutions and products and services transitions
in an effective manner; Dell Technologies' ability to deliver
high-quality products, software, and services; cyber attacks or
other data security incidents; Dell Technologies' foreign
operations and ability to generate substantial non-U.S. net
revenue; Dell Technologies' product, services, customer, and
geographic sales mix, and seasonal sales trends; the performance of
Dell Technologies' sales channel partners; access to the capital
markets by Dell Technologies or its customers; material impairment
of the value of goodwill or intangible assets; weak economic
conditions and the effect of additional regulation on Dell
Technologies' financial services activities; counterparty default
risks; the loss by Dell Technologies of any contracts for ISG
services and solutions and its ability to perform such contracts at
their estimated costs; loss by Dell Technologies of government
contracts; Dell Technologies' ability to develop and protect its
proprietary intellectual property or obtain licenses to
intellectual property developed by others on commercially
reasonable and competitive terms; disruptions in Dell Technologies'
infrastructure; Dell Technologies' ability to hedge effectively its
exposure to fluctuations in foreign currency exchange rates and
interest rates; expiration of tax holidays or favorable tax rate
structures, or unfavorable outcomes in tax audits and other tax
compliance matters; impairment of portfolio investments;
unfavorable results of legal proceedings; compliance requirements
of changing environmental and safety laws or other laws; the effect
of armed hostilities, terrorism, natural disasters, and public
health issues; the effect of global climate change and legal,
regulatory, or market measures to address climate change; Dell
Technologies' dependence on the services of Michael Dell and key employees; Dell
Technologies' level of indebtedness; the effect of the transition
from LIBOR as a reference rate to calculate interest rates under
our variable-rate indebtedness; and business and financial factors
and legal restrictions affecting continuation of Dell Technologies'
quarterly cash dividend policy and dividend rate.
This list of risks, uncertainties, and other factors is not
complete. Dell Technologies discusses some of these matters more
fully, as well as certain risk factors that could affect Dell
Technologies' business, financial condition, results of operations,
and prospects, in its reports filed with the SEC, including Dell
Technologies' annual report on Form 10-K for the fiscal year ended
January 28, 2022, quarterly reports
on Form 10-Q, and current reports on Form 8-K. These filings are
available for review through the SEC's website at www.sec.gov. Any
or all forward-looking statements Dell Technologies makes may turn
out to be wrong and can be affected by inaccurate assumptions Dell
Technologies might make or by known or unknown risks, uncertainties
and other factors, including those identified in this press
release. Accordingly, you should not place undue reliance on the
forward-looking statements made in this press release, which speak
only as of its date. Dell Technologies does not undertake to
update, and expressly disclaims any duty to update, its
forward-looking statements, whether as a result of circumstances or
events that arise after the date they are made, new information, or
otherwise.
DELL TECHNOLOGIES INC. FINANCIAL
INFORMATION
Basis of Presentation
Spin-Off of VMware, Inc. — On November 1,
2021, Dell Technologies Inc. completed its spin-off of
VMware, Inc. by means of a special stock dividend (the "VMware
Spin-off"). The VMware Spin-off was effectuated pursuant to a
Separation and Distribution Agreement, dated as of April 14, 2021.
In accordance with applicable accounting guidance, the results
of VMware, excluding Dell's resale of VMware offerings, are
presented as discontinued operations in the Condensed Consolidated
Statements of Income and, as such, have been excluded from both
continuing operations and segment results for the three months
ended April 30, 2021. The
Condensed Consolidated Statements of Cash Flows are presented on a
consolidated basis for both continuing operations and discontinued
operations.
DELL TECHNOLOGIES
INC. Consolidated Statements of Income and Related
Financial Highlights (in millions, except percentages;
unaudited)
|
|
|
Three Months Ended
|
|
|
|
April 29, 2022
|
|
April 30, 2021
|
|
Change
|
Net revenue:
|
|
|
|
|
|
Products
|
$ 20,464
|
|
$ 17,487
|
|
17%
|
Services
|
5,652
|
|
5,103
|
|
11%
|
Total net revenue
|
26,116
|
|
22,590
|
|
16%
|
Cost of net revenue:
|
|
|
|
|
|
Products
|
17,009
|
|
14,434
|
|
18%
|
Services
|
3,323
|
|
2,892
|
|
15%
|
Total cost of net revenue
|
20,332
|
|
17,326
|
|
17%
|
Gross
margin
|
5,784
|
|
5,264
|
|
10%
|
Operating expenses:
|
|
|
|
|
|
Selling,
general, and administrative
|
3,553
|
|
3,658
|
|
(3)%
|
Research
and development
|
681
|
|
619
|
|
10%
|
Total operating expenses
|
4,234
|
|
4,277
|
|
(1)%
|
Operating
income
|
1,550
|
|
987
|
|
57%
|
Interest and other,
net
|
(337)
|
|
(288)
|
|
(17)%
|
Income
before income taxes
|
1,213
|
|
699
|
|
74%
|
Income tax
expense
|
144
|
|
40
|
|
260%
|
Net income
from continuing operations
|
1,069
|
|
659
|
|
62%
|
Income
from discontinued operations, net of income taxes
|
—
|
|
279
|
|
(100)%
|
Net income
|
1,069
|
|
938
|
|
14%
|
Less: Net
loss attributable to non-controlling interests
|
(3)
|
|
(1)
|
|
(200)%
|
Less: Net
income attributable to non-controlling interests of discontinued
operations
|
—
|
|
52
|
|
(100)%
|
Net income attributable
to Dell Technologies Inc.
|
$
1,072
|
|
$
887
|
|
21%
|
|
|
|
|
|
|
Percentage of Total Net
Revenue:
|
|
|
|
|
Gross
margin
|
22.1 %
|
|
23.3 %
|
|
|
Selling,
general, and administrative
|
13.6 %
|
|
16.2 %
|
|
|
Research
and development
|
2.6 %
|
|
2.7 %
|
|
|
Operating
expenses
|
16.2 %
|
|
18.9 %
|
|
|
Operating
income
|
5.9 %
|
|
4.4 %
|
|
|
Income
before income taxes
|
4.6 %
|
|
3.1 %
|
|
|
Net income
from continuing operations
|
4.1 %
|
|
2.9 %
|
|
|
Income tax
rate
|
11.9
%
|
|
5.7 %
|
|
|
|
Amounts are based on
underlying data and may not visually foot due to
rounding.
|
DELL TECHNOLOGIES
INC. Consolidated Statements of Financial
Position (in millions; unaudited)
|
|
|
April 29, 2022
|
|
January 28, 2022
|
ASSETS
|
Current
assets:
|
|
|
|
Cash and
cash equivalents
|
$
6,654
|
|
$
9,477
|
Accounts
receivable, net
|
11,837
|
|
12,912
|
Due from
related party, net
|
131
|
|
131
|
Short-term
financing receivables, net
|
4,796
|
|
5,089
|
Inventories
|
6,277
|
|
5,898
|
Other
current assets
|
11,681
|
|
11,526
|
Total current assets
|
41,376
|
|
45,033
|
Property, plant, and equipment, net
|
5,516
|
|
5,415
|
Long-term
investments
|
1,868
|
|
1,839
|
Long-term financing
receivables, net
|
5,398
|
|
5,522
|
Goodwill
|
19,598
|
|
19,770
|
Intangible assets,
net
|
7,217
|
|
7,461
|
Due from related party,
net
|
713
|
|
710
|
Other non-current
assets
|
6,720
|
|
6,985
|
Total assets
|
$
88,406
|
|
$
92,735
|
LIABILITIES AND STOCKHOLDERS'
EQUITY
|
Current
liabilities:
|
|
|
|
Short-term
debt
|
$
5,925
|
|
$
5,823
|
Accounts
payable
|
25,585
|
|
27,143
|
Due to
related party
|
622
|
|
1,414
|
Accrued
and other
|
6,598
|
|
7,578
|
Short-term
deferred revenue
|
14,329
|
|
14,261
|
Total current liabilities
|
53,059
|
|
56,219
|
Long-term
debt
|
21,197
|
|
21,131
|
Long-term deferred
revenue
|
13,074
|
|
13,312
|
Other non-current
liabilities
|
3,431
|
|
3,653
|
Total liabilities
|
90,761
|
|
94,315
|
Stockholders' equity
(deficit):
|
|
|
|
Total Dell
Technologies Inc. stockholders' equity (deficit)
|
(2,462)
|
|
(1,685)
|
Non-controlling interests
|
107
|
|
105
|
Total stockholders' equity (deficit)
|
(2,355)
|
|
(1,580)
|
Total liabilities and stockholders' equity
|
$
88,406
|
|
$
92,735
|
DELL TECHNOLOGIES
INC. Consolidated Statements of Cash Flows (in
millions; unaudited)
|
|
|
Three Months Ended
|
|
April 29, 2022
|
|
April 30, 2021
|
Cash flows from
operating activities:
|
|
|
|
Net
income
|
$
1,069
|
|
$
938
|
Adjustments to reconcile net income to net cash provided by
operating activities:
|
(1,338)
|
|
1,300
|
Change in cash from operating activities
|
(269)
|
|
2,238
|
Cash flows from
investing activities:
|
|
|
|
Purchases
of investments
|
(52)
|
|
(146)
|
Maturities
and sales of investments
|
18
|
|
256
|
Capital
expenditures and capitalized software development costs
|
(690)
|
|
(625)
|
Acquisition of businesses and assets, net
|
—
|
|
(10)
|
Other
|
4
|
|
6
|
Change in cash from investing activities
|
(720)
|
|
(519)
|
Cash flows from
financing activities:
|
|
|
|
Proceeds
from the issuance of common stock
|
4
|
|
160
|
Repurchases of parent common stock (a)
|
(1,779)
|
|
(9)
|
Repurchases of subsidiary common stock (a)
|
(7)
|
|
(434)
|
Payment of
dividend to stockholders
|
(248)
|
|
—
|
Proceeds
from debt
|
3,034
|
|
2,726
|
Repayments
of debt
|
(2,703)
|
|
(4,070)
|
Debt-related costs and other, net
|
(7)
|
|
(11)
|
Change in cash from financing activities
|
(1,706)
|
|
(1,638)
|
Effect of exchange rate
changes on cash, cash equivalents, and restricted cash
|
(111)
|
|
(5)
|
Change in cash, cash
equivalents, and restricted cash
|
(2,806)
|
|
76
|
Cash, cash equivalents,
and restricted cash at beginning of the period, including cash
attributable to discontinued operations
|
10,082
|
|
15,184
|
Cash, cash equivalents,
and restricted cash at end of the period, including cash
attributable to discontinued operations
|
7,276
|
|
15,260
|
Less:
Cash, cash equivalents, and restricted cash attributable to
discontinued operations
|
—
|
|
5,667
|
Cash, cash equivalents,
and restricted cash from continuing operations
|
$
7,276
|
|
$
9,593
|
|
|
|
|
(a)
|
Common stock
repurchases are inclusive of employee tax withholding on
stock-based compensation.
|
DELL TECHNOLOGIES
INC. Segment Information (in millions, except
percentages; unaudited; continued on next page)
|
|
|
Three Months Ended
|
|
|
|
April 29, 2022
|
|
April 30, 2021
|
|
Change
|
Infrastructure Solutions Group
(ISG):
|
Net
revenue:
|
|
|
|
|
|
Servers and networking
|
$
5,048
|
|
$
4,140
|
|
22%
|
Storage
|
4,237
|
|
3,893
|
|
9%
|
Total ISG net revenue
|
$
9,285
|
|
$
8,033
|
|
16%
|
|
|
|
|
|
|
Operating
Income:
|
|
|
|
|
|
ISG
operating income
|
$
1,082
|
|
$
778
|
|
39%
|
% of ISG net
revenue
|
11.7
%
|
|
9.7
%
|
|
|
% of total reportable segment operating
income
|
49
%
|
|
42
%
|
|
|
|
|
|
|
|
|
Client Solutions Group (CSG):
|
Net
revenue:
|
|
|
|
|
|
Commercial
|
$ 11,971
|
|
$
9,808
|
|
22%
|
Consumer
|
3,616
|
|
3,503
|
|
3%
|
Total CSG net revenue
|
$ 15,587
|
|
$ 13,311
|
|
17%
|
|
|
|
|
|
|
Operating
Income:
|
|
|
|
|
|
CSG
operating income
|
$
1,115
|
|
$
1,080
|
|
3%
|
% of CSG net
revenue
|
7.2
%
|
|
8.1
%
|
|
|
% of total reportable segment operating
income
|
51
%
|
|
58
%
|
|
|
|
Amounts are based on
underlying data and may not visually foot due to
rounding.
|
DELL TECHNOLOGIES
INC. Segment Information (in millions, except
percentages; unaudited; continued)
|
|
|
Three Months Ended
|
|
April 29, 2022
|
|
April 30, 2021
|
Reconciliation to consolidated net
revenue:
|
|
|
Reportable
segment net revenue
|
$
24,872
|
|
$
21,344
|
Other businesses (a)
|
1,239
|
|
1,252
|
Unallocated transactions (b)
|
5
|
|
2
|
Impact of purchase accounting (c)
|
—
|
|
(8)
|
Total consolidated net revenue
|
$
26,116
|
|
$
22,590
|
|
|
|
|
Reconciliation to consolidated operating
income:
|
|
|
|
Reportable
segment operating income
|
$
2,197
|
|
$
1,858
|
Other businesses (a)
|
(64)
|
|
(90)
|
Unallocated transactions (b)
|
2
|
|
2
|
Impact of purchase accounting (c)
|
(9)
|
|
(20)
|
Amortization of intangibles
|
(243)
|
|
(445)
|
Transaction-related expenses (d)
|
(5)
|
|
(29)
|
Stock-based compensation expense (e)
|
(232)
|
|
(172)
|
Other corporate expenses (f)
|
(96)
|
|
(117)
|
Total consolidated operating income
|
$
1,550
|
|
$
987
|
|
|
|
|
|
|
(a)
|
Other businesses
consists of: 1) Dell's resale of standalone VMware, Inc. products
and services, "VMware Resale", 2) Secureworks, and 3) Virtustream,
and do not meet the requirements for a reportable segment, either
individually or collectively.
|
(b)
|
Unallocated
transactions includes other corporate items that are not allocated
to Dell Technologies' reportable segments.
|
(c)
|
Impact of purchase
accounting includes non-cash purchase accounting adjustments that
are primarily related to the EMC merger transaction.
|
(d)
|
Transaction-related
expenses includes acquisition, integration, and divestiture related
costs.
|
(e)
|
Stock-based
compensation expense consists of equity awards granted based on the
estimated fair value of those awards at grant date.
|
(f)
|
Other corporate
expenses includes impairment charges, incentive charges related to
equity investments, severance, payroll taxes associated with
stock-based compensation, facilities action, and other
costs.
|
SUPPLEMENTAL SELECTED NON-GAAP FINANCIAL
MEASURES
These tables present information about the Company's non-GAAP
net revenue, non-GAAP gross margin, non-GAAP operating expenses,
non-GAAP operating income, non-GAAP net income, non-GAAP net income
attributable to Dell Technologies Inc. - basic and diluted,
non-GAAP earnings per share attributable to Dell Technologies Inc.
- basic, and non-GAAP earnings per share attributable to Dell
Technologies Inc. - diluted which are non-GAAP financial measures
provided as a supplement to the results provided in accordance with
generally accepted accounting principles in the United States of America ("GAAP"). A
detailed discussion of Dell Technologies' reasons for including
these non-GAAP financial measures, the limitations
associated with these measures, the items excluded from these
measures, and our reason for excluding those items are presented in
"Management's Discussion and Analysis of Financial Condition and
Results of Operations — Non-GAAP Financial Measures" in our
periodic reports filed with the SEC. Dell Technologies encourages
investors to review the non-GAAP discussion in these reports in
conjunction with the presentation of non-GAAP financial
measures.
DELL TECHNOLOGIES
INC. Selected Non-GAAP Financial
Measures (in millions, except per share amounts and
percentages; unaudited)
|
|
|
Three Months Ended
|
|
|
|
April 29, 2022
|
|
April 30, 2021
|
|
Change
|
Non-GAAP net
revenue
|
$
26,116
|
|
$
22,598
|
|
16%
|
Non-GAAP gross
margin
|
$
5,941
|
|
$
5,464
|
|
9%
|
% of non-GAAP net
revenue
|
22.7
%
|
|
24.2
%
|
|
|
Non-GAAP operating
expenses
|
$
3,806
|
|
$
3,694
|
|
3%
|
% of non-GAAP net
revenue
|
14.5
%
|
|
16.4
%
|
|
|
Non-GAAP operating
income
|
$
2,135
|
|
$
1,770
|
|
21%
|
% of non-GAAP net
revenue
|
8.2
%
|
|
7.8
%
|
|
|
Non-GAAP net
income
|
$
1,434
|
|
$
1,055
|
|
36%
|
% of non-GAAP net
revenue
|
5.5
%
|
|
4.7
%
|
|
|
Non-GAAP earnings per
share - diluted
|
$
1.84
|
|
$
1.35
|
|
36%
|
|
|
|
Amounts are based on
underlying data and may not visually foot due to
rounding.
|
DELL TECHNOLOGIES
INC. Reconciliation of
Selected Non-GAAP Financial Measures (in
millions, except percentages; unaudited; continued on next
page)
|
|
|
Three Months Ended
|
|
|
|
April 29, 2022
|
|
April 30, 2021
|
|
Change
|
Net revenue
|
$
26,116
|
|
$
22,590
|
|
16%
|
Non-GAAP
adjustments:
|
|
|
|
|
|
Impact of purchase accounting
|
—
|
|
8
|
|
|
Non-GAAP net revenue
|
$
26,116
|
|
$
22,598
|
|
16%
|
|
|
|
|
|
|
Gross margin
|
$
5,784
|
|
$
5,264
|
|
10%
|
Non-GAAP
adjustments:
|
|
|
|
|
|
Amortization of intangibles
|
104
|
|
150
|
|
|
Impact of purchase accounting
|
2
|
|
9
|
|
|
Stock-based compensation expense
|
38
|
|
28
|
|
|
Other corporate expenses
|
13
|
|
13
|
|
|
Non-GAAP gross margin
|
$
5,941
|
|
$
5,464
|
|
9%
|
|
|
|
|
|
|
Operating
expenses
|
$
4,234
|
|
$
4,277
|
|
(1)%
|
Non-GAAP
adjustments:
|
|
|
|
|
|
Amortization of intangibles
|
(139)
|
|
(295)
|
|
|
Impact of purchase accounting
|
(7)
|
|
(11)
|
|
|
Transaction-related expenses
|
(5)
|
|
(29)
|
|
|
Stock-based compensation expense
|
(194)
|
|
(144)
|
|
|
Other corporate expenses
|
(83)
|
|
(104)
|
|
|
Non-GAAP operating expenses
|
$
3,806
|
|
$
3,694
|
|
3%
|
|
|
|
|
|
|
Operating
income
|
$
1,550
|
|
$
987
|
|
57%
|
Non-GAAP
adjustments:
|
|
|
|
|
|
Amortization of intangibles
|
243
|
|
445
|
|
|
Impact of purchase accounting
|
9
|
|
20
|
|
|
Transaction-related (income) expenses
|
5
|
|
29
|
|
|
Stock-based compensation expense
|
232
|
|
172
|
|
|
Other corporate expenses
|
96
|
|
117
|
|
|
Non-GAAP operating income
|
$
2,135
|
|
$
1,770
|
|
21%
|
DELL TECHNOLOGIES
INC. Reconciliation of
Selected Non-GAAP Financial Measures (in
millions, except percentages; unaudited; continued)
|
|
|
Three Months Ended
|
|
|
|
April 29, 2022
|
|
April 30, 2021
|
|
Change
|
Net income from
continuing operations
|
$
1,069
|
|
$
659
|
|
62%
|
Non-GAAP
adjustments:
|
|
|
|
|
|
Amortization of intangibles
|
243
|
|
445
|
|
|
Impact of purchase accounting
|
9
|
|
20
|
|
|
Transaction-related (income) expenses
|
(2)
|
|
29
|
|
|
Stock-based compensation expense
|
232
|
|
172
|
|
|
Other corporate expenses
|
96
|
|
117
|
|
|
Fair value adjustments on equity investments
|
(14)
|
|
(194)
|
|
|
Aggregate adjustment for income taxes
|
(199)
|
|
(193)
|
|
|
Non-GAAP net income
|
$
1,434
|
|
$
1,055
|
|
36%
|
|
|
|
|
|
|
Net income from
continuing operations attributable to Dell Technologies
Inc.
|
$
1,072
|
|
$
660
|
|
62%
|
Non-GAAP
adjustments:
|
|
|
|
|
|
Amortization of intangibles
|
243
|
|
445
|
|
|
Impact of purchase accounting
|
9
|
|
20
|
|
|
Transaction-related (income) expenses
|
(2)
|
|
29
|
|
|
Stock-based compensation expense
|
232
|
|
172
|
|
|
Other corporate expenses
|
96
|
|
117
|
|
|
Fair value adjustments on equity investments
|
(14)
|
|
(194)
|
|
|
Aggregate adjustment for income taxes
|
(199)
|
|
(193)
|
|
|
Total non-GAAP adjustments attributable to non-controlling
interests
|
(2)
|
|
(1)
|
|
|
Non-GAAP net income attributable to Dell Technologies
Inc.
|
$
1,435
|
|
$
1,055
|
|
36%
|
DELL TECHNOLOGIES
INC. Reconciliation of
Selected Non-GAAP Financial Measures (in
millions, except percentages and per share amounts; unaudited;
continued)
|
|
|
Three Months Ended
|
|
|
|
April 29, 2022
|
|
April 30, 2021
|
|
Change
|
|
|
|
|
|
|
Earnings per share from continuing operations
attributable to Dell Technologies
Inc.
|
Net income
from continuing operations attributable to Dell Technologies Inc.
— basic
|
$
1,072
|
|
$
660
|
|
|
Weighted-average shares outstanding — basic
|
754
|
|
757
|
|
|
Earnings per share
attributable to Dell Technologies Inc. — basic
|
$
1.42
|
|
$
0.87
|
|
63%
|
|
|
|
|
|
|
Net income from
continuing operations attributable to Dell Technologies Inc.
— diluted
|
$
1,072
|
|
$
660
|
|
|
Weighted-average shares outstanding —
diluted
|
780
|
|
782
|
|
|
Earnings per share
attributable to Dell Technologies Inc. — diluted:
|
$
1.37
|
|
$
0.84
|
|
63%
|
|
|
|
|
|
|
Earnings per share from discontinued operations
attributable to Dell Technologies Inc.
|
Net income
from discontinued operations attributable to Dell Technologies Inc.
— basic
|
$
—
|
|
$
227
|
|
|
Weighted-average shares outstanding — basic
|
—
|
|
757
|
|
|
Earnings per share
attributable to Dell Technologies Inc. — basic
|
$
—
|
|
$
0.30
|
|
NM
|
Incremental dilution from VMware, Inc. attributable to Dell
Technologies
|
—
|
|
(2)
|
|
|
Net income from
discontinued operations attributable to Dell Technologies Inc.
— diluted
|
$
—
|
|
$
225
|
|
|
Weighted-average shares outstanding —
diluted
|
—
|
|
782
|
|
|
Earnings per share
attributable to Dell Technologies Inc. — diluted
|
$
—
|
|
$
0.29
|
|
NM
|
|
|
|
|
|
|
Non-GAAP earnings per share attributable to Dell
Technologies Inc.
|
Non-GAAP
net income attributable to Dell Technologies Inc. —
basic
|
$
1,435
|
|
$
1,055
|
|
|
Weighted-average shares outstanding — basic
|
754
|
|
757
|
|
|
Earnings
per share attributable to Dell Technologies Inc. —
basic
|
$
1.90
|
|
$
1.39
|
|
37%
|
|
|
|
|
|
|
Non-GAAP
net income attributable to Dell Technologies Inc. —
diluted
|
$
1,435
|
|
$
1,055
|
|
|
Weighted-average shares outstanding —
diluted
|
780
|
|
782
|
|
|
Earnings
per share attributable to Dell Technologies Inc. —
diluted
|
$
1.84
|
|
$
1.35
|
|
36%
|
|
|
|
Amounts may not
visually recalculate due to rounding.
|
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SOURCE Dell Technologies