Dell Technologies Delivers Fourth Quarter and Full Year Fiscal 2024 Financial Results
- Strong 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 reached $8.7 billion.
- Full-year diluted earnings per share of $4.36 and non-GAAP diluted earnings per share of $7.13.
- Announcement of a 20% increase in annual cash dividend to $1.78 per common share.
- Fourth-quarter revenue down 11% year over year.
- Operating income for the full year down 10% year over year.
- Non-GAAP operating income down 11% year over year.
- Non-GAAP diluted earnings per share down 6% year over year.
Insights
The announcement from Dell Technologies regarding their financial results for the fiscal year 2024 presents several key points for stakeholders to consider. The decline in year-over-year revenue by 14% to $88.4 billion is a significant figure, indicating a contraction in the company's sales or services. However, this is juxtaposed against a substantial increase in diluted earnings per share (EPS), up 35% to $4.36 and even more pronounced in the non-GAAP EPS figures. This suggests that despite the revenue shortfall, the company has effectively managed its expenses or benefited from other income streams or tax advantages.
Additionally, the increase in the annual cash dividend by 20% is a strong signal of confidence by the company's management in its cash flow generation and financial stability. The achievement of a core leverage target of 1.5x is also noteworthy, as it indicates a healthy balance between debt and equity, which is crucial for maintaining financial flexibility. Investors will be evaluating these figures carefully, balancing the concerns of shrinking revenues against the positive signals of profitability and shareholder returns.
From a market perspective, Dell's performance must be contextualized within the broader technology sector and the economic environment. The downward trend in revenue could be reflective of industry-wide challenges such as market saturation, competition, or cyclical downturns. The increase in EPS despite lower revenues could be attributed to cost-cutting measures or restructuring efforts that improve operational efficiency. These contrasting dynamics illustrate the complex interplay between market conditions and corporate strategy.
It's also important to consider the potential impact of the increased dividend on investor sentiment. A higher dividend yield can make the company's stock more attractive to income-focused investors, possibly offsetting concerns about revenue declines. However, investors will also be vigilant about the sustainability of such dividend increases, especially if revenue continues to decrease. Long-term growth prospects remain a critical factor for the stock's valuation.
Examining the broader economic implications, Dell's financial results may reflect underlying economic trends affecting consumer and business spending on technology products and services. The reduction in revenue might indicate a slowdown in technology investment, which could have ramifications for the sector's employment and innovation rates. On the other hand, the company's ability to increase operational cash flow and shareholder returns amidst a revenue decline could suggest a resilient business model capable of weathering economic headwinds.
The strategic decision to increase dividends could be seen as a move to redistribute wealth to shareholders in the absence of more profitable investment opportunities, a decision that sometimes occurs during periods of economic uncertainty. The implications for the broader economy will depend on whether this pattern is isolated to Dell or indicative of a sector-wide shift towards capital return strategies over reinvestment and expansion.
News summary
- Fourth quarter revenue of
$22.3 billion $88.4 billion - Full-year operating income of
$5.2 billion $7.7 billion - Full-year cash flow from operations of
$8.7 billion - Full-year diluted earnings per share of
$4.36 $7.13 - Announcing a
20% increase in annual cash dividend to$1.78
Full story
Dell Technologies (NYSE: DELL) announces financial results for its fiscal 2024 fourth quarter and full year. Fourth quarter revenue was
Revenue for the year was
Cash and investments were
"We generated
Fourth Quarter Fiscal 2024 Financial Results
Three Months Ended | Fiscal Year Ended | ||||||||||
February 2, | February 3, | Change | February 2, | February 3, | 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
Client Solutions Group (CSG) delivered fourth quarter revenue of
"Our strong AI-optimized server momentum continues, with orders increasing nearly
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, | February 3, | Change | February 2, | February 3, | 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
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-
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, | February 3, | Change | February 2, | February 3, | 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 | 9,343 | 12,482 | |
Due from related party, net | — | 378 | |
Short-term financing receivables, net of allowance of | 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 | 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, | February 3, | February 2, | February 3, | ||||
Cash flows from operating activities: | |||||||
Net income | $ 1,158 | $ 606 | $ 3,195 | $ 2,422 | |||
Adjustments to reconcile net income to net cash provided by | 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 | (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 | 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 | 8,448 | 5,224 | 8,894 | 10,082 | |||
Cash, cash equivalents, and restricted cash at end of the | $ 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, | February 3, | Change | February 2, | February 3, | 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, | February 3, | February 2, | February 3, | ||||
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
DELL TECHNOLOGIES INC. Selected Financial Measures (in millions, except per share amounts and percentages; unaudited) | |||||||||||
Three Months Ended | Fiscal Year Ended | ||||||||||
February 2, | February 3, | % | February 2, | February 3, | 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, | February 3, | % | February 2, | February 3, | % | ||||||
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, | February 3, | % | February 2, | February 3, | % | ||||||
Earnings per share attributable to Dell | $ 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 | (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 | (0.01) | (0.01) | (0.02) | (0.02) | |||||||
Non-GAAP earnings per share | $ 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, | February 3, | % | February 2, | February 3, | % | ||||||
Cash flow from operations | $ 1,533 | $ 2,714 | (44) % | $ 8,676 | $ 3,565 | 143 % | |||||
Non-GAAP adjustments: | |||||||||||
Capital expenditures and capitalized | (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
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