Dell Technologies Delivers Record Third Quarter Fiscal 2022 Results

Rhea-AI Summary

Dell Technologies achieved record financial results for Q3 FY2022, reporting $28.4 billion in revenue, a 21% year-over-year increase. Diluted EPS rose to $4.87, reflecting a 351% increase. Operating income reached $1.3 billion, up 19%, with net income totaling $3.9 billion. Notably, the Client Solutions Group revenue hit $16.5 billion, up 35%, driven by commercial and consumer growth. Remaining performance obligations stood at $47 billion, a 26% increase, showcasing strong future prospects.

Positive

• Record Q3 revenue of $28.4 billion, up 21%
• Diluted EPS of $4.87, up 351%
• Operating income increased to $1.3 billion, up 19%
• Client Solutions Group revenue reached $16.5 billion, up 35%
• Remaining performance obligations rose to $47 billion, up 26%

Negative

• None.

ROUND ROCK, Texas, Nov. 23, 2021 /PRNewswire/ --

News summary

• Best third quarter in Dell Technologies history, driven by robust demand, durable competitive advantages and strong execution
• Record third quarter revenue of $28.4 billion, up 21%
• Third quarter diluted earnings per share of $4.87, non-GAAP diluted earnings per share of $2.37

Full story
Dell Technologies (NYSE: DELL) announces record financial results for its fiscal 2022 third quarter. The company generated record revenue of $28.4 billion, up 21%, driven by growth in all business units, customer segments and geographies, as well as broad strength across commercial PCs, servers and storage. Operating income was a third quarter record of $1.3 billion, a 19% increase over the same period the prior year, and non-GAAP operating income was a third quarter record of $2.9 billion, up 5%. Net income was $3.9 billion, non-GAAP net income was $2.0 billion and adjusted EBITDA was $3.4 billion. Net cash from operating activities was $3.3 billion. Diluted earnings per share was $4.87, up 351% and non-GAAP diluted earnings per share was $2.37, up 17%.

Third Quarter Fiscal 2022 Financial Results

	Three Months Ended										Nine Months Ended
	October 29, 2021				October 30, 2020				Change		October 29, 2021				October 30, 2020				Change
	(in millions, except per share amounts and percentages; unaudited)
Total net revenue	$	28,394			$	23,482			21%		$	79,003			$	68,112			16%
Operating income	$	1,349			$	1,129			19%		$	4,096			$	2,967			38%
Net income	$	3,888			$	881			341%		$	5,706			$	2,162			164%
Earnings per share - diluted	$	4.87			$	1.08			351%		$	7.08			$	2.64			168%
Non-GAAP net revenue	$	28,405			$	23,521			21%		$	79,037			$	68,241			16%
Non-GAAP operating income	$	2,868			$	2,725			5%		$	8,393			$	7,504			12%
Non-GAAP net income	$	2,015			$	1,711			18%		$	5,745			$	4,475			28%
Adjusted EBITDA	$	3,410			$	3,231			6%		$	9,976			$	8,938			12%
Non-GAAP earnings per share - diluted	$	2.37			$	2.03			17%		$	6.75			$	5.28			28%

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.

Dell Technologies ended the quarter with remaining performance obligations of $47 billion, up 26%, deferred revenue of $31 billion, and cash and investments of $24.2 billion. The company has paid down a total of $15.9 billion of debt year-to-date and received an Investment Grade corporate family rating from all three of the major credit rating agencies.

Operating Segments Summary

Client Solutions Group revenue for the third quarter was up 35% to a record $16.5 billion. Operating income was a third quarter record of $1.1 billion, up 14%, and 6.9% of Client Solutions Group revenue. Commercial revenue was a record $12.3 billion, up an unprecedented 40%, and consumer revenue was also a record $4.3 billion, up 21%.

Key highlights:

• Continued growth in high-value segments, including commercial PCs, high-end consumer and gaming – which will drive long-term profitable share gains.
• Achieved highest year-over-year PC share gain in Dell's history for calendar third quarter, with shipments up 26.6% and global PC share up 3.0 points to 17.4%.¹ 
• Announced new Latitude Rugged notebooks – including the industry's smallest 5G-capable 13" fully-rugged laptop.
• Timed to the 25^th anniversary of Alienware – released the redesigned Alienware Aurora, the pinnacle of gaming desktop experiences. With a special focus on airflow and thermals, the open-air design provides better accessibility and improved performance – enriching the gaming experience in every possible way.

Infrastructure Solutions Group revenue for the third quarter was $8.4 billion, up 5% and the third consecutive quarter of positive year-over-year revenue growth, as customers accelerate IT investments. Storage revenue was $3.9 billion, up 1%. Servers and networking revenue was $4.5 billion, up 9% for a fourth consecutive quarter of year-over-year growth. Operating income was $892 million or approximately 10.6% of Infrastructure Solutions Group revenue. Customer investments in IT infrastructure and digital transformation will continue to drive strong demand for compute and storage and create future growth opportunities for new innovations in multi-cloud, telecom and 5G.

Key highlights: 

• Introduced updates to the network-attached storage (NAS) portfolio, including new Dell EMC PowerScale systems and software enhancements, all focused on providing customers with the flexible and secure consumption and management of unstructured data.
• Launched the industry's first end-to-end NVMe/TCP solution, featuring SmartFabric Storage Software, which provides the intelligence for automated storage connectivity at scale.
• Announced edge innovations across the portfolio to help organizations simplify deployments and capture more value from data generated and processed outside the traditional data center and public cloud.
• Introduced new telecom software, solutions and services to help communications service providers (CSPs) accelerate their open, cloud-native network deployments and create new revenue opportunities at the edge.
• Announced APEX Cloud Services with VMware Cloud, which gives organizations the ability to move workloads across multiple cloud environments and scale resources quickly with predictable pricing and transparent costs.

VMware revenue was $3.2 billion for the third quarter, up 10% driven by broad-based strength across a diverse product portfolio. Operating income for the quarter was $837 million, or 26.3% of VMware revenue.

Executive quotes:

• "We continue to deliver strong results, with more than $13 billion in cash flow from operations on a trailing-twelve-month basis," said Tom Sweet, chief financial officer, Dell Technologies. "The digital trends are tailwinds for our business, and along with our strategy and financial flexibility, lead us to be optimistic about our long-term growth prospects."
   
• "Technology is more essential today than ever before, and we are clearly winning in our core, keeping us at the center of customers' IT and digital agendas," said Jeff Clarke, vice chairman and co-chief operating officer, Dell Technologies. "Our product, global operations and sales teams did an outstanding job this quarter as we shipped a record number of products and delivered record revenue of $28.4 billion." 
   
• "We're three quarters into what will prove to be a historic year for Dell, and we are just beginning to write the next chapter of the Dell Technologies story," said Chuck Whitten, co-chief operating officer, Dell Technologies. "We are uniquely positioned in the data era, with durable advantages and market-leading positions. Our strategy is focused on growing our core business and in adjacent multi-billion-dollar markets including multi-cloud, edge, telecom and as-a-Service."

Conference call information
As previously announced, the Company will hold a conference call to discuss its third quarter performance today, Nov. 23, 2021 at 4:30 p.m. CST. 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

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.delltechnologies.com/en-us/blog/accelerating-customers-digital-journeys-every-step-of-the-way/

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 © 2021 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.

1.    IDC WW Quarterly Personal Computing Device (PCD) Tracker CY21Q3.

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, non-GAAP earnings per share attributable to Dell Technologies Inc. - diluted, EBITDA, and adjusted EBITDA, 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; Dell Technologies' dependence on the services of Michael Dell and key employees; and Dell Technologies' level of indebtedness.

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 29, 2021, 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. Condensed Consolidated Statements of Income and Related Financial Highlights (in millions, except percentages; unaudited)
	Three Months Ended										Nine Months Ended
	October 29, 2021				October 30, 2020				Change		October 29, 2021				October 30, 2020				Change
Net revenue:
Products	$	21,540			$	17,352			24%		$	58,968			$	50,127			18%
Services	6,854				6,130				12%		20,035				17,985				11%
Total net revenue	28,394				23,482				21%		79,003				68,112				16%
Cost of net revenue:
Products	17,552				13,789				27%		47,137				39,923				18%
Services	2,783				2,432				14%		8,164				6,919				18%
Total cost of net revenue	20,335				16,221				25%		55,301				46,842				18%
Gross margin	8,059				7,261				11%		23,702				21,270				11%
Operating expenses:
Selling, general, and administrative	5,293				4,772				11%		15,398				14,419				7%
Research and development	1,417				1,360				4%		4,208				3,884				8%
Total operating expenses	6,710				6,132				9%		19,606				18,303				7%
Operating income	1,349				1,129				19%		4,096				2,967				38%
Interest and other, net	3,436				273				NM		2,689				(929)				389%
Income before income taxes	4,785				1,402				241%		6,785				2,038				233%
Income tax expense (benefit)	897				521				72%		1,079				(124)				970%
Net income	3,888				881				341%		5,706				2,162				164%
Less: Net income attributable to non-controlling interests	45				49				(8)%		145				139				4%
Net income attributable to Dell Technologies Inc.	$	3,843			$	832			362%		$	5,561			$	2,023			175%
Percentage of Total Net Revenue:
Gross margin	28		%		31		%				30		%		31		%
Selling, general, and administrative	19		%		20		%				19		%		21		%
Research and development	5		%		6		%				5		%		6		%
Operating expenses	24		%		26		%				25		%		27		%
Operating income	5		%		5		%				5		%		4		%
Income before income taxes	17		%		6		%				9		%		3		%
Net income	14		%		4		%				7		%		3		%
Income tax rate	18.7		%		37.2		%				15.9		%		-6.1		%
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)
	October 29, 2021				January 29, 2021
ASSETS
Current assets:
Cash and cash equivalents	$	22,406			$	14,201
Accounts receivable, net	14,177				12,788
Short-term financing receivables, net	4,970				5,155
Inventories, net	5,442				3,402
Other current assets	10,184				8,021
Total current assets	57,179				43,567
Property, plant, and equipment, net	6,925				6,431
Long-term investments	1,827				1,624
Long-term financing receivables, net	5,270				5,339
Goodwill	40,701				40,829
Intangible assets, net	12,319				14,429
Other non-current assets	11,456				11,196
Total assets	$	135,677			$	123,415
LIABILITIES, REDEEMABLE SHARES, AND STOCKHOLDERS' EQUITY
Current liabilities:
Short-term debt	$	16,280			$	6,362
Accounts payable	26,772				21,696
Accrued and other	10,081				9,549
Short-term deferred revenue	16,569				16,525
Total current liabilities	69,702				54,132
Long-term debt	31,699				41,622
Long-term deferred revenue	14,885				14,276
Other non-current liabilities	5,197				5,360
Total liabilities	121,483				115,390
Redeemable shares	—				472
Stockholders' equity:
Total Dell Technologies Inc. stockholders' equity	8,954				2,479
Non-controlling interests	5,240				5,074
Total stockholders' equity	14,194				7,553
Total liabilities, redeemable shares, and stockholders' equity	$	135,677			$	123,415

 

DELL TECHNOLOGIES INC. Condensed Consolidated Statements of Cash Flows (in millions; unaudited)
	Three Months Ended								Nine Months Ended
	October 29, 2021				October 30, 2020				October 29, 2021				October 30, 2020
Cash flows from operating activities:
Net income	$	3,888			$	881			$	5,706			$	2,162
Adjustments to reconcile net income to net cash provided by (used in) operating activities	(637)				2,113				1,508				3,368
Change in cash from operating activities	3,251				2,994				7,214				5,530
Cash flows from investing activities:
Purchases of investments	(50)				(122)				(320)				(296)
Maturities and sales of investments	119				27				454				98
Capital expenditures and capitalized software development costs	(799)				(480)				(2,056)				(1,584)
Acquisition of businesses and assets, net	—				(71)				(16)				(405)
Divestitures of businesses and assets, net	3,957				2,067				3,957				2,187
Other	14				14				34				26
Change in cash from investing activities	3,241				1,435				2,053				26
Cash flows from financing activities:
Proceeds from the issuance of common stock	140				168				326				389
Repurchases of parent common stock (a)	(18)				—				(35)				(240)
Repurchases of subsidiary common stock (a)	(196)				(299)				(1,174)				(890)
Proceeds from debt	9,102				2,925				13,037				14,772
Repayments of debt	(4,646)				(7,024)				(13,069)				(17,244)
Other	(99)				(80)				(113)				(270)
Change in cash from financing activities	4,283				(4,310)				(1,028)				(3,483)
Effect of exchange rate changes on cash, cash equivalents, and restricted cash	(33)				(15)				(54)				(67)
Change in cash, cash equivalents, and restricted cash	10,742				104				8,185				2,006
Cash, cash equivalents, and restricted cash at beginning of the period	12,627				12,053				15,184				10,151
Cash, cash equivalents, and restricted cash at end of the period	$	23,369			$	12,157			$	23,369			$	12,157

_________________
(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											Nine Months Ended
	October 29, 2021				October 30, 2020				Change			October 29, 2021				October 30, 2020				Change
Infrastructure Solutions Group (ISG):
Net Revenue:
Servers and networking	$	4,533			$	4,164			9	%		$	13,104			$	12,118			8	%
Storage	3,895				3,860				1	%		11,667				11,682				—	%
Total ISG net revenue	$	8,428			$	8,024			5	%		$	24,771			$	23,800			4	%
Operating Income:
ISG operating income	$	892			$	882			1	%		$	2,650			$	2,587			2	%
% of ISG net revenue	11		%		11		%					11		%		11		%
% of total reportable segment operating income	31		%		32		%					32		%		35		%
Client Solutions Group (CSG):
Net Revenue:
Commercial	$	12,292			$	8,783			40	%		$	32,668			$	25,456			28	%
Consumer	4,254				3,503				21	%		11,446				9,137				25	%
Total CSG net revenue	$	16,546			$	12,286			35	%		$	44,114			$	34,593			28	%
Operating Income:
CSG operating income	$	1,147			$	1,002			14	%		$	3,232			$	2,309			40	%
% of CSG net revenue	7		%		8		%					7		%		7		%
% of total reportable segment operating income	40		%		37		%					38		%		31		%
VMware:
Net Revenue:
Total VMware net revenue	$	3,178			$	2,893			10	%		$	9,317			$	8,556			9	%
Operating Income:
VMware operating income	$	837			$	837			—	%		$	2,527			$	2,504			1	%
% of VMware net revenue	26		%		29		%					27		%		29		%
% of total reportable segment operating income	29		%		31		%					30		%		34		%
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								Nine Months Ended
	October 29, 2021				October 30, 2020				October 29, 2 021				October 30, 2020
Reconciliation to consolidated net revenue:
Reportable segment net revenue	$	28,152			$	23,203			$	78,202			$	66,949
Other businesses (a)	251				314				829				1,288
Unallocated transactions (b)	2				4				6				4
Impact of purchase accounting (c)	(11)				(39)				(34)				(129)
Total consolidated net revenue	$	28,394			$	23,482			$	79,003			$	68,112
Reconciliation to consolidated operating income:
Reportable segment operating income	$	2,876			$	2,721			$	8,409			$	7,400
Other businesses (a)	(9)				3				(17)				105
Unallocated transactions (b)	1				1				1				(1)
Impact of purchase accounting (c)	(17)				(49)				(62)				(165)
Amortization of intangibles	(694)				(845)				(2,114)				(2,547)
Transaction-related expenses (d)	(311)				(52)				(422)				(211)
Stock-based compensation expense (e)	(472)				(436)				(1,406)				(1,219)
Other corporate expenses (f)	(25)				(214)				(293)				(395)
Total consolidated operating income	$	1,349			$	1,129			$	4,096			$	2,967

_________________
(a)	Secureworks and Virtustream constitute Other businesses and do not meet the requirements for a reportable segment, either individually or collectively. The results of Other businesses are not material to the Company's overall results. On September 1, 2020, the Company completed the sale of RSA Security. On October 1, 2021, the Company completed the sale of Boomi. Prior to the divestitures, the results of Boomi and RSA Security were included within Other businesses.
(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, severance, 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 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, non-GAAP earnings per share attributable to Dell Technologies Inc. - diluted, EBITDA, and adjusted EBITDA, 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													Nine Months Ended
	October 29, 2021					October 30, 2020					Change			October 29, 2021				October 30, 2020				Change
Non-GAAP net revenue	$	28,405				$	23,521				21	%		$	79,037			$	68,241			16	%
Non-GAAP gross margin	$	8,410				$	7,771				8	%		$	24,770			$	22,722			9	%
% of non-GAAP net revenue	30			%		33			%					31		%		33		%
Non-GAAP operating expenses	$	5,542				$	5,046				10	%		$	16,377			$	15,218			8	%
% of non-GAAP net revenue	20			%		21			%					21		%		22		%
Non-GAAP operating income	$	2,868				$	2,725				5	%		$	8,393			$	7,504			12	%
% of non-GAAP net revenue	10			%		12			%					11		%		11		%
Non-GAAP net income	$	2,015				$	1,711				18	%		$	5,745			$	4,475			28	%
% of non-GAAP net revenue	7			%		7			%					7		%		7		%
Adjusted EBITDA	$	3,410				$	3,231				6	%		$	9,976			$	8,938			12	%
% of non-GAAP net revenue	12			%		14			%					13		%		13		%
Non-GAAP earnings per share - diluted	$	2.37				$	2.03				17	%		$	6.75			$	5.28			28	%
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										Nine Months Ended
	October 29, 2021				October 30, 2020				Change		October 29, 2021				October 30, 2020				Change
Net revenue	$	28,394			$	23,482			21%		$	79,003			$	68,112			16%
Non-GAAP adjustments:
Impact of purchase accounting	11				39						34				129
Non-GAAP net revenue	$	28,405			$	23,521			21%		$	79,037			$	68,241			16%
Gross margin	$	8,059			$	7,261			11%		$	23,702			$	21,270			11%
Non-GAAP adjustments:
Amortization of intangibles	275				375						826				1,122
Impact of purchase accounting	12				40						37				134
Transaction-related expenses	—				—						—				—
Stock-based compensation expense	62				51						183				141
Other corporate expenses	2				44						22				55
Non-GAAP gross margin	$	8,410			$	7,771			8%		$	24,770			$	22,722			9%
Operating expenses	$	6,710			$	6,132			9%		$	19,606			$	18,303			7%
Non-GAAP adjustments:
Amortization of intangibles	(419)				(470)						(1,288)				(1,425)
Impact of purchase accounting	(5)				(9)						(25)				(31)
Transaction-related expenses	(311)				(52)						(422)				(211)
Stock-based compensation expense	(410)				(385)						(1,223)				(1,078)
Other corporate expenses	(23)				(170)						(271)				(340)
Non-GAAP operating expenses	$	5,542			$	5,046			10%		$	16,377			$	15,218			8%
Operating income	$	1,349			$	1,129			19%		$	4,096			$	2,967			38%
Non-GAAP adjustments:
Amortization of intangibles	694				845						2,114				2,547
Impact of purchase accounting	17				49						62				165
Transaction-related expenses	311				52						422				211
Stock-based compensation expense	472				436						1,406				1,219
Other corporate expenses	25				214						293				395
Non-GAAP operating income	$	2,868			$	2,725			5%		$	8,393			$	7,504			12%

 

DELL TECHNOLOGIES INC. Reconciliation of Selected Non-GAAP Financial Measures (in millions, except percentages; unaudited; continued)
	Three Months Ended										Nine Months Ended
	October 29, 2021				October 30, 2020				Change		October 29, 2021				October 30, 2020				Change
Net income	$	3,888			$	881			341%		$	5,706			$	2,162			164%
Non-GAAP adjustments:
Amortization of intangibles	694				845						2,114				2,547
Impact of purchase accounting	17				49						62				165
Transaction-related expenses	(3,607)				(286)						(3,508)				(247)
Stock-based compensation expense	472				436						1,406				1,219
Other corporate expenses	25				106						293				287
Fair value adjustments on equity investments	(27)				(489)						(352)				(591)
Aggregate adjustment for income taxes	553				169						24				(1,067)
Non-GAAP net income	$	2,015			$	1,711			18%		$	5,745			$	4,475			28%
Net income	$	3,888			$	881			341%		$	5,706			$	2,162			164%
Adjustments:
Interest and other, net	(3,436)				(273)						(2,689)				929
Income tax expense (benefit)	897				521						1,079				(124)
Depreciation and amortization	1,242				1,361						3,721				4,017
EBITDA	$	2,591			$	2,490			4%		$	7,817			$	6,984			12%
EBITDA	$	2,591			$	2,490			4%		$	7,817			$	6,984			12%
Adjustments:
Stock-based compensation expense	472				436						1,406				1,219
Impact of purchase accounting	11				39						38				129
Transaction-related expenses	311				52						422				211
Other corporate expenses	25				214						293				395
Adjusted EBITDA	$	3,410			$	3,231			6%		$	9,976			$	8,938			12%

 

DELL TECHNOLOGIES INC. Reconciliation of Selected Non-GAAP Financial Measures For the Three Months Ended October 29, 2021 (in millions, except per share amounts; unaudited)
	GAAP				Amortization of intangibles			Impact of purchase accounting			Transaction- related expenses			Stock-based compensation expense			Other corporate expenses			Fair value adjustments on equity investments			Aggregate adjustment for income taxes			Non-GAAP
Net income	$	3,888			694			17			(3,607)			472			25			(27)			553			$	2,015
Less: Net income attributable to non-controlling interests (a)	45				54			1			15			52			—			(2)			(22)			143
Net income attributable to Dell Technologies Inc. - basic	3,843				640			16			(3,622)			420			25			(25)			575			1,872
Incremental dilution from VMware, Inc. attributable to Dell Technologies Inc. (b)	(2)																									(3)
Net income attributable to Dell Technologies Inc. - diluted	$	3,841																								$	1,869
Earnings per share - basic	$	5.02																								$	2.44
Earnings per share - diluted	$	4.87																								$	2.37
Weighted-average shares outstanding - basic	766																									766
Weighted-average shares outstanding - diluted	788																									788

_________________
(a)	Net income attributable to non-controlling interests is calculated by multiplying the minority interest percentage of VMware, Inc. and SecureWorks Corp. by their respective non-GAAP net income adjustments for the period presented.
(b)	Incremental dilution from VMware, Inc. attributable to Dell Technologies Inc. represents the impact of VMware, Inc.'s dilutive securities on the diluted earnings per share of Dell Technologies Inc. and is calculated by multiplying the difference between VMware, Inc.'s basic and diluted earnings per share by the number of shares of VMware, Inc. common stock held by Dell Technologies Inc.

 

DELL TECHNOLOGIES INC. Reconciliation of Selected Non-GAAP Financial Measures For the Nine Months Ended October 29, 2021 (in millions, except per share amounts; unaudited)
	GAAP				Amortization of intangibles			Impact of purchase accounting			Transaction- related expenses			Stock-based compensation expense			Other corporate expenses			Fair value adjustments on equity investments			Aggregate adjustment for income taxes			Non-GAAP
Net income	$	5,706			2,114			62			(3,508)			1,406			293			(352)			24			$	5,745
Less: Net income attributable to non-controlling interests (a)	145				162			3			24			162			—			5			(67)			434
Net income attributable to Dell Technologies Inc. - basic	5,561				1,952			59			(3,532)			1,244			293			(357)			91			5,311
Incremental dilution from VMware, Inc. attributable to Dell Technologies Inc. (b)	(7)																									(12)
Net income attributable to Dell Technologies Inc. - diluted	$	5,554																								$	5,299
Earnings per share - basic	$	7.30																								$	6.97
Earnings per share - diluted	$	7.08																								$	6.75
Weighted-average shares outstanding - basic	762																									762
Weighted-average shares outstanding - diluted	785																									785

_________________
(a)	Net income attributable to non-controlling interests is calculated by multiplying the minority interest percentage of VMware, Inc. and SecureWorks Corp. by their respective non-GAAP net income adjustments for the period presented.
(b)	Incremental dilution from VMware, Inc. attributable to Dell Technologies Inc. represents the impact of VMware, Inc.'s dilutive securities on the diluted earnings per share of Dell Technologies Inc. and is calculated by multiplying the difference between VMware, Inc.'s basic and diluted earnings per share by the number of shares of VMware, Inc. common stock held by Dell Technologies Inc.

 

DELL TECHNOLOGIES INC. Reconciliation of Selected Non-GAAP Financial Measures For the Three Months Ended October 30, 2020 (in millions, except per share amounts; unaudited)
	GAAP				Amortization of intangibles			Impact of purchase accounting			Transaction- related expenses			Stock-based compensation expense			Other corporate expenses			Fair value adjustments on equity investments			Aggregate adjustment for income taxes			Non-GAAP
Net income	$	881			845			49			(286)			436			106			(489)			169			$	1,711
Less: Net income attributable to non-controlling interests (a)	49				63			3			5			61			9			(34)			(13)			143
Net income attributable to Dell Technologies Inc. - basic	832				782			46			(291)			375			97			(455)			182			1,568
Incremental dilution from VMware, Inc. attributable to Dell Technologies Inc. (b)	(3)																									(4)
Net income attributable to Dell Technologies Inc. - diluted	$	829																								$	1,564
Earnings per share - basic	$	1.11																								$	2.10
Earnings per share - diluted	$	1.08																								$	2.03
Weighted-average shares outstanding - basic	747																									747
Weighted-average shares outstanding - diluted	771																									771

_________________
(a)	Net income attributable to non-controlling interests is calculated by multiplying the minority interest percentage of VMware, Inc. and SecureWorks Corp. by their respective non-GAAP net income adjustments for the period presented.
(b)	Incremental dilution from VMware, Inc. attributable to Dell Technologies Inc. represents the impact of VMware, Inc.'s dilutive securities on the diluted earnings per share of Dell Technologies Inc. and is calculated by multiplying the difference between VMware, Inc.'s basic and diluted earnings per share by the number of shares of VMware, Inc. common stock held by Dell Technologies Inc.

 

DELL TECHNOLOGIES INC. Reconciliation of Selected Non-GAAP Financial Measures For the Nine Months Ended October 30, 2020 (in millions, except per share amounts; unaudited)
	GAAP				Amortization of intangibles				Impact of purchase accounting				Transaction- related expenses				Stock-based compensation expense				Other corporate expenses				Fair value adjustments on equity investments				Aggregate adjustment for income taxes				Non-GAAP
Net income	$	2,162			2,547				165				(247)				1,219				287				(591)				(1,067)				$	4,475
Less: Net income attributable to non-controlling interests (a)	139				187				10				20				172				9				(35)				(77)				425
Net income attributable to Dell Technologies Inc. - basic	2,023				$	2,360			$	155			$	(267)			$	1,047			$	278			$	(556)			$	(990)			4,050
Incremental dilution from VMware, Inc. attributable to Dell Technologies Inc. (b)	(8)																																(13)
Net income attributable to Dell Technologies Inc. - diluted	$	2,015																															$	4,037
Earnings per share - basic	$	2.73																															$	5.46
Earnings per share - diluted	$	2.64																															$	5.28
Weighted-average shares outstanding - basic	742																																742
Weighted-average shares outstanding - diluted	764																																764

_________________
(a)	Net income attributable to non-controlling interests is calculated by multiplying the minority interest percentage of VMware, Inc. and SecureWorks Corp. by their respective non-GAAP net income adjustments for the period presented.
(b)	Incremental dilution from VMware, Inc. attributable to Dell Technologies Inc. represents the impact of VMware, Inc.'s dilutive securities on the diluted earnings per share of Dell Technologies Inc. and is calculated by multiplying the difference between VMware, Inc.'s basic and diluted earnings per share by the number of shares of VMware, Inc. common stock held by Dell Technologies Inc.

 

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SOURCE Dell Technologies

FAQ

What were Dell Technologies' Q3 FY2022 revenues and earnings?

Dell reported Q3 FY2022 revenues of $28.4 billion and diluted earnings per share of $4.87.

How much did Dell's net income increase in Q3 FY2022?

Net income increased to $3.9 billion, a 341% rise compared to the previous year.

What is the growth percentage of Dell's Client Solutions Group revenue?

The Client Solutions Group revenue grew by 35% to reach $16.5 billion.

What were Dell's remaining performance obligations for Q3 FY2022?

Remaining performance obligations were $47 billion, reflecting a 26% year-over-year increase.

What was the operating income reported by Dell for Q3 FY2022?

Dell reported operating income of $1.3 billion, a 19% increase from the prior year.