News summary
- Fourth quarter revenue of $22.3
billion and full-year revenue of $88.4 billion
- Full-year operating income of $5.2
billion and non-GAAP operating income of $7.7 billion
- Full-year cash flow from operations of $8.7 billion
- Full-year diluted earnings per share of $4.36 and non-GAAP diluted earnings per share of
$7.13
- Announcing a 20% increase in annual cash dividend to
$1.78 per common share
ROUND
ROCK, Texas, Feb. 29,
2024 /PRNewswire/ --
Full story
Dell Technologies (NYSE: DELL) announces
financial results for its fiscal 2024 fourth quarter and full year.
Fourth quarter revenue was $22.3
billion, down 11% year over year. Operating income was
$1.5 billion and non-GAAP operating
income was $2.1 billion, up 25% and
down 1% year over year, respectively. Cash flow from operations was
$1.5 billion. Diluted earnings per
share was $1.59, and non-GAAP diluted
earnings per share was $2.20, up 89%
and 22% year over year, respectively.
Revenue for the year was $88.4
billion, down 14% from fiscal year 2023. Operating income
was $5.2 billion and non-GAAP
operating income was $7.7 billion,
down 10% and 11% year over year, respectively. Cash flow from
operations for the full year was $8.7
billion. Full-year diluted earnings per share was
$4.36, and non-GAAP diluted earnings
per share was $7.13, up 35% and down
6% year over year, respectively.
Cash and investments were $9.0
billion, and Dell reached its core leverage target of 1.5x
exiting the fiscal year. Dell is increasing its annual cash
dividend by 20% to $1.78 per common
share, with $0.445 per common share
for the first quarterly distribution payable on May 3 to shareholders of record as of
April 23.
"We generated $8.7 billion in cash
flow from operations this fiscal year, returning $7 billion to shareholders since Q1 FY23," said
Yvonne McGill, chief financial
officer, Dell Technologies. "We're optimistic about FY25 and are
increasing our annual dividend by 20% – a testament to our
confidence in the business and ability to generate strong cash
flow."
Fourth Quarter Fiscal 2024 Financial Results
|
Three Months
Ended
|
|
|
|
Fiscal Year
Ended
|
|
|
|
February 2,
2024
|
|
February 3,
2023
|
|
Change
|
|
February 2,
2024
|
|
February 3,
2023
|
|
Change
|
|
(in millions, except
per share amounts and percentages; unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
Net revenue
|
$
22,318
|
|
$
25,039
|
|
(11) %
|
|
$
88,425
|
|
$
102,301
|
|
(14) %
|
Operating
income
|
$
1,491
|
|
$
1,189
|
|
25 %
|
|
$
5,211
|
|
$
5,771
|
|
(10) %
|
Net income
|
$
1,158
|
|
$
606
|
|
91 %
|
|
$
3,195
|
|
$
2,422
|
|
32 %
|
Earnings per share -
diluted
|
$
1.59
|
|
$
0.84
|
|
89 %
|
|
$
4.36
|
|
$
3.24
|
|
35 %
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP operating
income
|
$
2,139
|
|
$
2,170
|
|
(1) %
|
|
$
7,678
|
|
$
8,637
|
|
(11) %
|
Non-GAAP net
income
|
$
1,610
|
|
$
1,322
|
|
22 %
|
|
$
5,245
|
|
$
5,727
|
|
(8) %
|
Adjusted free cash
flow
|
$
1,010
|
|
$
2,267
|
|
(55) %
|
|
$
5,607
|
|
$
1,533
|
|
266 %
|
Non-GAAP earnings per
share - diluted
|
$
2.20
|
|
$
1.80
|
|
22 %
|
|
$
7.13
|
|
$
7.61
|
|
(6) %
|
|
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.
|
Infrastructure Solutions Group (ISG)
delivered fourth quarter revenue of $9.3
billion, up 10% sequentially and down 6% year over year.
Servers and networking revenue was $4.9
billion, with sequential growth driven primarily by
AI-optimized servers. Storage revenue was $4.5 billion, up 16% sequentially with demand
strength across the portfolio. Operating income was $1.4 billion. Full-year ISG revenue was
$33.9 billion, down 12% year over
year, and full-year operating income was $4.3 billion, down 15% year over year.
Client Solutions Group (CSG) delivered fourth
quarter revenue of $11.7 billion,
down 5% sequentially and 12% year over year. Commercial client
revenue was $9.6 billion, and
Consumer revenue was $2.2 billion.
Operating income was $726 million.
Full-year CSG revenue was $48.9
billion, down 16% year over year, and full-year operating
income was $3.5 billion, down 8% year
over year.
"Our strong AI-optimized server momentum continues, with orders
increasing nearly 40% sequentially and backlog nearly doubling,
exiting our fiscal year at $2.9
billion," said Jeff Clarke,
vice chairman and chief operating officer, Dell Technologies.
"We've just started to touch the AI opportunities ahead of us, and
we believe Dell is uniquely positioned with our broad portfolio to
help customers build GenAI solutions that meet performance, cost
and security requirements."
Dell continues to expand its portfolio to help customers meet
their performance, cost and security requirements across clouds, on
premises and at the edge:
- Expanded the Dell Generative AI Solutions portfolio with
support for the AMD Instinct™ MI300X accelerator in Dell PowerEdge
XE9680 servers and the new Dell Validated Design for Generative AI
with AMD ROCm™ powered AI frameworks.
- Introduced new enterprise data storage advancements and planned
validation with the NVIDIA DGX SuperPOD AI infrastructure, helping
customers quickly access data for AI workloads with Dell PowerScale
systems.
- Announced Dell will have the broadest portfolio of commercial
AI laptops and mobile workstations, which feature built-in AI
acceleration with the addition of the neural processing unit (NPU).
New XPS systems also feature the NPU, helping to improve
performance, productivity and collaboration.
- Forged partnership with Nokia to serve as its preferred
infrastructure partner for Nokia AirFrame customers, transitioning
them to Dell PowerEdge servers with Dell global services and
support. Dell will also offer Nokia's Digital Automation Cloud
solution with Dell NativeEdge to provide a comprehensive, scalable
solution for enterprises.
Operating Segments Results
|
Three Months
Ended
|
|
|
|
Fiscal Year
Ended
|
|
|
|
February 2,
2024
|
|
February 3,
2023
|
|
Change
|
|
February 2,
2024
|
|
February 3,
2023
|
|
Change
|
|
(in millions, except
percentages; unaudited)
|
Infrastructure
Solutions Group (ISG):
|
|
|
|
|
|
|
|
|
|
|
|
Net
revenue:
|
|
|
|
|
|
|
|
|
|
|
|
Servers and
networking
|
$ 4,857
|
|
$
4,940
|
|
(2) %
|
|
$
17,624
|
|
$
20,398
|
|
(14) %
|
Storage
|
4,475
|
|
4,965
|
|
(10) %
|
|
16,261
|
|
17,958
|
|
(9) %
|
Total ISG net
revenue
|
$ 9,332
|
|
$
9,905
|
|
(6) %
|
|
$
33,885
|
|
$
38,356
|
|
(12) %
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Income:
|
|
|
|
|
|
|
|
|
|
|
|
ISG operating
income
|
$ 1,428
|
|
$
1,543
|
|
(7) %
|
|
$
4,286
|
|
$
5,045
|
|
(15) %
|
% of ISG net
revenue
|
15.3 %
|
|
15.6 %
|
|
|
|
12.6 %
|
|
13.2 %
|
|
|
% of total
reportable segment operating income
|
66 %
|
|
70 %
|
|
|
|
55 %
|
|
57 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Client Solutions
Group (CSG):
|
|
|
|
|
|
|
|
|
|
|
|
Net
revenue:
|
|
|
|
|
|
|
|
|
|
|
|
Commercial
|
$ 9,563
|
|
$
10,697
|
|
(11) %
|
|
$
39,814
|
|
$
45,556
|
|
(13) %
|
Consumer
|
2,152
|
|
2,664
|
|
(19) %
|
|
9,102
|
|
12,657
|
|
(28) %
|
Total CSG net
revenue
|
$
11,715
|
|
$
13,361
|
|
(12) %
|
|
$
48,916
|
|
$
58,213
|
|
(16) %
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Income:
|
|
|
|
|
|
|
|
|
|
|
|
CSG operating
income
|
$
726
|
|
$ 671
|
|
8 %
|
|
$ 3,512
|
|
$
3,824
|
|
(8) %
|
% of CSG net
revenue
|
6.2 %
|
|
5.0 %
|
|
|
|
7.2 %
|
|
6.6 %
|
|
|
% of total
reportable segment operating income
|
34 %
|
|
30 %
|
|
|
|
45 %
|
|
43 %
|
|
|
Conference call information
As previously announced,
the company will hold a conference call to discuss its performance
and financial guidance on Feb. 29 at
3:30 p.m. CST. Prior to the start of
the conference call, prepared remarks and a presentation containing
additional financial and operating information prior to
financial guidance may be downloaded from
investors.delltechnologies.com. The conference call will be
broadcast live over the internet and can be accessed at
https://investors.delltechnologies.com/news-events/upcoming-events
For those unable to listen to the live broadcast, the final
remarks and presentation with financial guidance will be available
following the broadcast, and an archived version will be available
at the same location for one year.
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. 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 © 2024 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 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.,
non-GAAP earnings per share attributable to Dell Technologies Inc.
– diluted, free cash flow, and adjusted free cash flow 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:
adverse global economic conditions and instability in financial
markets; 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; Dell Technologies' execution of its strategy; 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'
ability to successfully execute on strategic initiatives including
acquisitions, divestitures or cost savings measures; 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; adverse 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; expectations relating to environmental,
social and governance (ESG) considerations; compliance requirements
of changing environmental and safety laws, human rights laws, or
other laws; the effect of armed hostilities, terrorism, natural
disasters, or 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; 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
February 3, 2023, 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.
Consolidated
Statements of Income and Related Financial
Highlights
(in millions, except
percentages; unaudited)
|
|
|
Three Months
Ended
|
|
|
|
Fiscal Year
Ended
|
|
|
|
February 2,
2024
|
|
February 3,
2023
|
|
Change
|
|
February 2,
2024
|
|
February 3,
2023
|
|
Change
|
Net
revenue:
|
|
|
|
|
|
|
|
|
|
|
|
Products
|
$
16,149
|
|
$
19,038
|
|
(15) %
|
|
$
64,353
|
|
$
79,250
|
|
(19) %
|
Services
|
6,169
|
|
6,001
|
|
3 %
|
|
24,072
|
|
23,051
|
|
4 %
|
Total net
revenue
|
22,318
|
|
25,039
|
|
(11) %
|
|
88,425
|
|
102,301
|
|
(14) %
|
Cost of net
revenue:
|
|
|
|
|
|
|
|
|
|
|
|
Products
|
13,393
|
|
15,748
|
|
(15) %
|
|
53,316
|
|
66,029
|
|
(19) %
|
Services
|
3,609
|
|
3,535
|
|
2 %
|
|
14,240
|
|
13,586
|
|
5 %
|
Total cost of net
revenue
|
17,002
|
|
19,283
|
|
(12) %
|
|
67,556
|
|
79,615
|
|
(15) %
|
Gross
margin
|
5,316
|
|
5,756
|
|
(8) %
|
|
20,869
|
|
22,686
|
|
(8) %
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general, and
administrative
|
3,109
|
|
3,772
|
|
(18) %
|
|
12,857
|
|
14,136
|
|
(9) %
|
Research and
development
|
716
|
|
795
|
|
(10) %
|
|
2,801
|
|
2,779
|
|
1 %
|
Total operating
expenses
|
3,825
|
|
4,567
|
|
(16) %
|
|
15,658
|
|
16,915
|
|
(7) %
|
Operating
income
|
1,491
|
|
1,189
|
|
25 %
|
|
5,211
|
|
5,771
|
|
(10) %
|
Interest and other,
net
|
(203)
|
|
(266)
|
|
24 %
|
|
(1,324)
|
|
(2,546)
|
|
48 %
|
Income before income
taxes
|
1,288
|
|
923
|
|
40 %
|
|
3,887
|
|
3,225
|
|
21 %
|
Income tax
expense
|
130
|
|
317
|
|
(59) %
|
|
692
|
|
803
|
|
(14) %
|
Net income
|
1,158
|
|
606
|
|
91 %
|
|
3,195
|
|
2,422
|
|
32 %
|
Less: Net loss
attributable to non-controlling interests
|
(2)
|
|
(8)
|
|
75 %
|
|
(16)
|
|
(20)
|
|
20 %
|
Net income
attributable to Dell Technologies Inc.
|
$ 1,160
|
|
$
614
|
|
89 %
|
|
$ 3,211
|
|
$ 2,442
|
|
31 %
|
|
|
|
|
|
|
|
|
|
|
|
|
Percentage of Total
Net Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
Gross
margin
|
23.8 %
|
|
23.0 %
|
|
|
|
23.6 %
|
|
22.2 %
|
|
|
Selling, general, and
administrative
|
13.9 %
|
|
15.1 %
|
|
|
|
14.5 %
|
|
13.9 %
|
|
|
Research and
development
|
3.2 %
|
|
3.2 %
|
|
|
|
3.2 %
|
|
2.7 %
|
|
|
Operating
expenses
|
17.1 %
|
|
18.3 %
|
|
|
|
17.7 %
|
|
16.6 %
|
|
|
Operating
income
|
6.7 %
|
|
4.7 %
|
|
|
|
5.9 %
|
|
5.6 %
|
|
|
Income before income
taxes
|
5.8 %
|
|
3.7 %
|
|
|
|
4.4 %
|
|
3.2 %
|
|
|
Net income
|
5.2 %
|
|
2.4 %
|
|
|
|
3.6 %
|
|
2.4 %
|
|
|
Income tax
rate
|
10.1 %
|
|
34.3 %
|
|
|
|
17.8 %
|
|
24.9 %
|
|
|
|
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)
|
|
|
February 2,
2024
|
|
February 3,
2023
|
ASSETS
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
7,366
|
|
$
8,607
|
Accounts receivable,
net of allowance of $71 and $78
|
9,343
|
|
12,482
|
Due from related
party, net
|
—
|
|
378
|
Short-term financing
receivables, net of allowance of $79 and $142
|
4,643
|
|
5,281
|
Inventories
|
3,622
|
|
4,776
|
Other current
assets
|
10,957
|
|
10,827
|
Current assets held for
sale
|
16
|
|
—
|
Total current
assets
|
35,947
|
|
42,351
|
Property, plant, and
equipment, net
|
6,432
|
|
6,209
|
Long-term
investments
|
1,316
|
|
1,518
|
Long-term financing
receivables, net of allowance of $91 and $59
|
5,877
|
|
5,638
|
Goodwill
|
19,700
|
|
19,676
|
Intangible assets,
net
|
5,701
|
|
6,468
|
Due from related party,
net
|
—
|
|
440
|
Other non-current
assets
|
7,116
|
|
7,311
|
Total
assets
|
$
82,089
|
|
$
89,611
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
Current
liabilities:
|
|
|
|
Short-term
debt
|
$
6,982
|
|
$
6,573
|
Accounts
payable
|
19,389
|
|
18,598
|
Due to related
party
|
—
|
|
2,067
|
Accrued and
other
|
6,805
|
|
8,874
|
Short-term deferred
revenue
|
15,318
|
|
15,542
|
Total current
liabilities
|
48,494
|
|
51,654
|
Long-term
debt
|
19,012
|
|
23,015
|
Long-term deferred
revenue
|
13,827
|
|
14,744
|
Other non-current
liabilities
|
3,065
|
|
3,223
|
Total
liabilities
|
84,398
|
|
92,636
|
Stockholders' equity
(deficit):
|
|
|
|
Total Dell Technologies
Inc. stockholders' equity (deficit)
|
(2,404)
|
|
(3,122)
|
Non-controlling
interests
|
95
|
|
97
|
Total stockholders'
equity (deficit)
|
(2,309)
|
|
(3,025)
|
Total liabilities and
stockholders' equity
|
$
82,089
|
|
$
89,611
|
DELL TECHNOLOGIES
INC.
Consolidated
Statements of Cash Flows
(in millions;
unaudited)
|
|
|
Three Months
Ended
|
|
Fiscal Year
Ended
|
|
February 2,
2024
|
|
February 3,
2023
|
|
February 2,
2024
|
|
February 3,
2023
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
|
Net income
|
$
1,158
|
|
$
606
|
|
$
3,195
|
|
$
2,422
|
Adjustments to
reconcile net income to net cash provided by
operating activities:
|
375
|
|
2,108
|
|
5,481
|
|
1,143
|
Change in cash from
operating activities
|
1,533
|
|
2,714
|
|
8,676
|
|
3,565
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
Purchases of
investments
|
(29)
|
|
(7)
|
|
(172)
|
|
(108)
|
Maturities and sales of
investments
|
76
|
|
17
|
|
226
|
|
116
|
Capital expenditures
and capitalized software development
costs
|
(727)
|
|
(759)
|
|
(2,756)
|
|
(3,003)
|
Acquisition of
businesses and assets, net
|
1
|
|
(70)
|
|
(126)
|
|
(70)
|
Other
|
10
|
|
23
|
|
45
|
|
41
|
Change in cash from
investing activities
|
(669)
|
|
(796)
|
|
(2,783)
|
|
(3,024)
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
|
Proceeds from the
issuance of common stock
|
2
|
|
—
|
|
10
|
|
5
|
Repurchases of common
stock
|
(878)
|
|
(165)
|
|
(2,080)
|
|
(2,883)
|
Repurchases of common
stock for employee tax withholdings
|
(18)
|
|
(18)
|
|
(372)
|
|
(398)
|
Payments of dividends
and dividend equivalents
|
(261)
|
|
(236)
|
|
(1,072)
|
|
(964)
|
Proceeds from
debt
|
871
|
|
3,700
|
|
7,775
|
|
12,479
|
Repayments of
debt
|
(1,480)
|
|
(1,746)
|
|
(11,246)
|
|
(9,825)
|
Debt-related costs and
other, net
|
(55)
|
|
(22)
|
|
(109)
|
|
(39)
|
Change in cash from
financing activities
|
(1,819)
|
|
1,513
|
|
(7,094)
|
|
(1,625)
|
Effect of exchange
rate changes on cash, cash
equivalents, and restricted cash
|
14
|
|
239
|
|
(186)
|
|
(104)
|
Change in cash, cash
equivalents, and restricted cash
|
(941)
|
|
3,670
|
|
(1,387)
|
|
(1,188)
|
Cash, cash equivalents,
and restricted cash at beginning of the
period
|
8,448
|
|
5,224
|
|
8,894
|
|
10,082
|
Cash, cash
equivalents, and restricted cash at end of the
period
|
$
7,507
|
|
$
8,894
|
|
$
7,507
|
|
$
8,894
|
DELL TECHNOLOGIES
INC.
Segment
Information
(in millions, except
percentages; unaudited; continued on next page)
|
|
|
Three Months
Ended
|
|
|
|
Fiscal Year
Ended
|
|
|
|
February 2,
2024
|
|
February 3,
2023
|
|
Change
|
|
February 2,
2024
|
|
February 3,
2023
|
|
Change
|
Infrastructure
Solutions Group (ISG):
|
|
|
|
|
|
|
|
|
|
|
|
Net
revenue:
|
|
|
|
|
|
|
|
|
|
|
|
Servers and
networking
|
$ 4,857
|
|
$
4,940
|
|
(2) %
|
|
$
17,624
|
|
$
20,398
|
|
(14) %
|
Storage
|
4,475
|
|
4,965
|
|
(10) %
|
|
16,261
|
|
17,958
|
|
(9) %
|
Total ISG net
revenue
|
$ 9,332
|
|
$
9,905
|
|
(6) %
|
|
$
33,885
|
|
$
38,356
|
|
(12) %
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Income:
|
|
|
|
|
|
|
|
|
|
|
|
ISG operating
income
|
$ 1,428
|
|
$
1,543
|
|
(7) %
|
|
$ 4,286
|
|
$
5,045
|
|
(15) %
|
% of ISG net
revenue
|
15.3 %
|
|
15.6 %
|
|
|
|
12.6 %
|
|
13.2 %
|
|
|
% of total
reportable segment operating income
|
66 %
|
|
70 %
|
|
|
|
55 %
|
|
57 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Client Solutions
Group (CSG):
|
|
|
|
|
|
|
|
|
|
|
|
Net
revenue:
|
|
|
|
|
|
|
|
|
|
|
|
Commercial
|
$ 9,563
|
|
$
10,697
|
|
(11) %
|
|
$
39,814
|
|
$
45,556
|
|
(13) %
|
Consumer
|
2,152
|
|
2,664
|
|
(19) %
|
|
9,102
|
|
12,657
|
|
(28) %
|
Total CSG net
revenue
|
$
11,715
|
|
$
13,361
|
|
(12) %
|
|
$
48,916
|
|
$
58,213
|
|
(16) %
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Income:
|
|
|
|
|
|
|
|
|
|
|
|
CSG operating
income
|
$
726
|
|
$ 671
|
|
8 %
|
|
$ 3,512
|
|
$
3,824
|
|
(8) %
|
% of CSG net
revenue
|
6.2 %
|
|
5.0 %
|
|
|
|
7.2 %
|
|
6.6 %
|
|
|
% of total
reportable segment operating income
|
34 %
|
|
30 %
|
|
|
|
45 %
|
|
43 %
|
|
|
|
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
|
|
Fiscal Year
Ended
|
|
February 2,
2024
|
|
February 3,
2023
|
|
February 2,
2024
|
|
February 3,
2023
|
Reconciliation to
consolidated net revenue:
|
|
|
|
|
|
|
Reportable segment net
revenue
|
$
21,047
|
|
$
23,266
|
|
$
82,801
|
|
$
96,569
|
Other businesses
(a)
|
1,269
|
|
1,770
|
|
5,614
|
|
5,721
|
Unallocated
transactions (b)
|
2
|
|
3
|
|
10
|
|
11
|
Total consolidated net
revenue
|
$
22,318
|
|
$
25,039
|
|
$
88,425
|
|
$
102,301
|
|
|
|
|
|
|
|
|
Reconciliation to
consolidated operating income:
|
|
|
|
|
|
|
|
Reportable segment
operating income
|
$
2,154
|
|
$
2,214
|
|
$
7,798
|
|
$
8,869
|
Other businesses
(a)
|
(17)
|
|
(48)
|
|
(129)
|
|
(240)
|
Unallocated
transactions (b)
|
2
|
|
4
|
|
9
|
|
8
|
Impact of purchase
accounting (c)
|
(4)
|
|
(11)
|
|
(14)
|
|
(44)
|
Amortization of
intangibles
|
(206)
|
|
(238)
|
|
(819)
|
|
(970)
|
Transaction-related
expenses (d)
|
(3)
|
|
(6)
|
|
(12)
|
|
(22)
|
Stock-based
compensation expense (e)
|
(203)
|
|
(228)
|
|
(878)
|
|
(931)
|
Other corporate
expenses (f)
|
(232)
|
|
(498)
|
|
(744)
|
|
(899)
|
Total consolidated
operating income
|
$
1,491
|
|
$
1,189
|
|
$
5,211
|
|
$
5,771
|
_________________
|
(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. From time to time, this category also may include
transaction-related income related to divestitures of businesses or
asset sales.
|
(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 severance, impairment charges, incentive charges
related to equity investments, 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
gross margin, non-GAAP operating expenses, non-GAAP operating
income, non-GAAP net income, non-GAAP net income attributable to
Dell Technologies Inc., non-GAAP earnings per share attributable to
Dell Technologies Inc. - diluted, free cash flow and adjusted free
cash flow, 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 Financial
Measures
(in millions, except
per share amounts and percentages; unaudited)
|
|
|
Three Months
Ended
|
|
|
|
Fiscal Year
Ended
|
|
|
|
February 2,
2024
|
|
February 3,
2023
|
|
%
Change
|
|
February 2,
2024
|
|
February 3,
2023
|
|
Change
|
Net revenue
(a)
|
$
22,318
|
|
$
25,039
|
|
(11) %
|
|
$
88,425
|
|
$
102,301
|
|
(14) %
|
Non-GAAP gross
margin
|
$
5,468
|
|
$
5,971
|
|
(8) %
|
|
$
21,444
|
|
$
23,427
|
|
(8) %
|
% of non-GAAP net
revenue
|
24.5 %
|
|
23.8 %
|
|
|
|
24.3 %
|
|
22.9 %
|
|
|
Non-GAAP operating
expenses
|
$
3,329
|
|
$
3,801
|
|
(12) %
|
|
$
13,766
|
|
$
14,790
|
|
(7) %
|
% of non-GAAP net
revenue
|
14.9 %
|
|
15.1 %
|
|
|
|
15.6 %
|
|
14.5 %
|
|
|
Non-GAAP operating
income
|
$
2,139
|
|
$
2,170
|
|
(1) %
|
|
$
7,678
|
|
$
8,637
|
|
(11) %
|
% of non-GAAP net
revenue
|
9.6 %
|
|
8.7 %
|
|
|
|
8.7 %
|
|
8.4 %
|
|
|
Non-GAAP net
income
|
$
1,610
|
|
$
1,322
|
|
22 %
|
|
$
5,245
|
|
$
5,727
|
|
(8) %
|
% of non-GAAP net
revenue
|
7.2 %
|
|
5.3 %
|
|
|
|
5.9 %
|
|
5.6 %
|
|
|
Non-GAAP earnings per
share - diluted
|
$
2.20
|
|
$
1.80
|
|
22 %
|
|
$
7.13
|
|
$
7.61
|
|
(6) %
|
____________________
|
(a)
|
Effective in the first
quarter of Fiscal 2023, non-GAAP net revenue no longer differs from
net revenue, the most comparable GAAP financial measure.
|
|
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
|
|
|
|
Fiscal Year
Ended
|
|
|
|
February 2,
2024
|
|
February 3,
2023
|
|
%
Change
|
|
February 2,
2024
|
|
February 3,
2023
|
|
%
Change
|
Gross margin
|
$
5,316
|
|
$
5,756
|
|
(8) %
|
|
$
20,869
|
|
$
22,686
|
|
(8) %
|
Non-GAAP
adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of
intangibles
|
84
|
|
99
|
|
|
|
331
|
|
414
|
|
|
Impact of purchase
accounting
|
—
|
|
—
|
|
|
|
—
|
|
2
|
|
|
Stock-based
compensation expense
|
37
|
|
40
|
|
|
|
149
|
|
152
|
|
|
Other corporate
expenses
|
31
|
|
76
|
|
|
|
95
|
|
173
|
|
|
Non-GAAP gross
margin
|
$
5,468
|
|
$
5,971
|
|
(8) %
|
|
$
21,444
|
|
$
23,427
|
|
(8) %
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses
|
$
3,825
|
|
$
4,567
|
|
(16) %
|
|
$
15,658
|
|
$
16,915
|
|
(7) %
|
Non-GAAP
adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of
intangibles
|
(122)
|
|
(139)
|
|
|
|
(488)
|
|
(556)
|
|
|
Impact of purchase
accounting
|
(4)
|
|
(11)
|
|
|
|
(14)
|
|
(42)
|
|
|
Transaction-related
expenses
|
(3)
|
|
(6)
|
|
|
|
(12)
|
|
(22)
|
|
|
Stock-based
compensation expense
|
(166)
|
|
(188)
|
|
|
|
(729)
|
|
(779)
|
|
|
Other corporate
expenses
|
(201)
|
|
(422)
|
|
|
|
(649)
|
|
(726)
|
|
|
Non-GAAP operating
expenses
|
$
3,329
|
|
$
3,801
|
|
(12) %
|
|
$
13,766
|
|
$
14,790
|
|
(7) %
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
income
|
$
1,491
|
|
$
1,189
|
|
25 %
|
|
$
5,211
|
|
$
5,771
|
|
(10) %
|
Non-GAAP
adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of
intangibles
|
206
|
|
238
|
|
|
|
819
|
|
970
|
|
|
Impact of purchase
accounting
|
4
|
|
11
|
|
|
|
14
|
|
44
|
|
|
Transaction-related
expenses
|
3
|
|
6
|
|
|
|
12
|
|
22
|
|
|
Stock-based
compensation expense
|
203
|
|
228
|
|
|
|
878
|
|
931
|
|
|
Other corporate
expenses
|
232
|
|
498
|
|
|
|
744
|
|
899
|
|
|
Non-GAAP operating
income
|
$
2,139
|
|
$
2,170
|
|
(1) %
|
|
$
7,678
|
|
$
8,637
|
|
(11) %
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
$
1,158
|
|
$
606
|
|
91 %
|
|
$
3,195
|
|
$
2,422
|
|
32 %
|
Non-GAAP
adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of
intangibles
|
206
|
|
238
|
|
|
|
819
|
|
970
|
|
|
Impact of purchase
accounting
|
4
|
|
11
|
|
|
|
14
|
|
44
|
|
|
Transaction-related
(income) expenses
|
(5)
|
|
(14)
|
|
|
|
49
|
|
(16)
|
|
|
Stock-based
compensation expense
|
203
|
|
228
|
|
|
|
878
|
|
931
|
|
|
Other corporate
expenses
|
232
|
|
392
|
|
|
|
744
|
|
1,812
|
|
|
Fair value adjustments
on equity investments
|
(83)
|
|
9
|
|
|
|
(47)
|
|
206
|
|
|
Aggregate adjustment
for income taxes
|
(105)
|
|
(148)
|
|
|
|
(407)
|
|
(642)
|
|
|
Non-GAAP net
income
|
$
1,610
|
|
$
1,322
|
|
22 %
|
|
$
5,245
|
|
$
5,727
|
|
(8) %
|
DELL TECHNOLOGIES
INC.
Reconciliation of
Selected Non-GAAP Financial Measures
(unaudited;
continued)
|
|
|
Three Months
Ended
|
|
|
|
Fiscal Year
Ended
|
|
|
|
February 2,
2024
|
|
February 3,
2023
|
|
%
Change
|
|
February 2,
2024
|
|
February 3,
2023
|
|
%
Change
|
Earnings per share
attributable to Dell
Technologies, Inc. - diluted
|
$
1.59
|
|
$
0.84
|
|
89 %
|
|
$
4.36
|
|
$
3.24
|
|
35 %
|
Non-GAAP
adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of
intangibles
|
0.28
|
|
0.32
|
|
|
|
1.11
|
|
1.29
|
|
|
Impact of purchase
accounting
|
0.01
|
|
0.01
|
|
|
|
0.02
|
|
0.06
|
|
|
Transaction-related
(income) expenses
|
(0.01)
|
|
(0.02)
|
|
|
|
0.07
|
|
(0.02)
|
|
|
Stock-based
compensation expense
|
0.28
|
|
0.31
|
|
|
|
1.19
|
|
1.24
|
|
|
Other corporate
expenses
|
0.32
|
|
0.53
|
|
|
|
1.01
|
|
2.41
|
|
|
Fair value adjustments
on equity
investments
|
(0.11)
|
|
0.01
|
|
|
|
(0.06)
|
|
0.27
|
|
|
Aggregate adjustment
for income taxes
|
(0.15)
|
|
(0.19)
|
|
|
|
(0.55)
|
|
(0.86)
|
|
|
Total non-GAAP
adjustments attributable
to non-controlling interests
|
(0.01)
|
|
(0.01)
|
|
|
|
(0.02)
|
|
(0.02)
|
|
|
Non-GAAP earnings per
share
attributable to Dell Technologies, Inc. -
diluted
|
$
2.20
|
|
$
1.80
|
|
22 %
|
|
$
7.13
|
|
$
7.61
|
|
(6) %
|
DELL TECHNOLOGIES
INC.
Reconciliation of
Selected Non-GAAP Financial Measures
(in millions, except
percentages; unaudited; continued)
|
|
|
Three Months
Ended
|
|
|
|
Fiscal Year
Ended
|
|
|
|
February 2,
2024
|
|
February 3,
2023
|
|
%
Change
|
|
February 2,
2024
|
|
February 3,
2023
|
|
%
Change
|
Cash flow from
operations
|
$
1,533
|
|
$
2,714
|
|
(44) %
|
|
$
8,676
|
|
$
3,565
|
|
143 %
|
Non-GAAP
adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
Capital expenditures
and capitalized
software development costs, net (a)
|
(727)
|
|
(749)
|
|
|
|
(2,753)
|
|
(2,993)
|
|
|
Free cash
flow
|
$
806
|
|
$
1,965
|
|
(59) %
|
|
$
5,923
|
|
$
572
|
|
935 %
|
|
|
|
|
|
|
|
|
|
|
|
|
Free cash
flow
|
$
806
|
|
$
1,965
|
|
(59) %
|
|
$
5,923
|
|
$
572
|
|
935 %
|
Non-GAAP
adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
DFS financing
receivables (b)
|
136
|
|
175
|
|
|
|
(309)
|
|
461
|
|
|
DFS operating leases
(c)
|
68
|
|
127
|
|
|
|
(7)
|
|
500
|
|
|
Adjusted free cash
flow
|
$
1,010
|
|
$
2,267
|
|
(55) %
|
|
$
5,607
|
|
$
1,533
|
|
266 %
|
____________________
|
(a)
|
Capital expenditures
and capitalized software development costs is net of proceeds from
sales of facilities, land, and other assets.
|
(b)
|
DFS financing
receivables represents the operating cash flow impact from the
change in financing receivables.
|
(c)
|
DFS operating leases
represents the change in net carrying value of equipment for DFS
operating leases.
|
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SOURCE Dell Technologies