Dell Technologies Reports Second Quarter Results

Revenue and Profits Grow Year-Over-Year

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News summary
• Operating income of $519 million; non-GAAP operating income of $2.7 billion
• Client Solutions Group posts record revenue and units
• VMware revenue up 12%
• Record cash flow from operations of $3.3 billion

Full story
Dell Technologies (NYSE: DELL) today announced financial results for its fiscal 2020 second quarter ended August 2, 2019. Second quarter revenue was $23.4 billion, up 2 percent, and non-GAAP revenue was $23.5 billion, up 1 percent over the same period last year. Operating income was $519 million1 compared to an operating loss of $13 million last year, and non-GAAP operating income was $2.7 billion compared to $2.1 billion in fiscal 2019. Net income was $4.5 billion or 19.3 percent of revenue, non-GAAP net income was $1.8 billion or 7.5 percent of non-GAAP revenue, and adjusted EBITDA was $3.2 billion or 13.5 percent of non-GAAP revenue. Record cash flow from operations was $3.3 billion. Diluted earnings per share was $4.83 and non-GAAP diluted earnings per share was $2.15.

“We are in the early stages of a technology-led investment cycle. IT spending remains healthy and our business drivers remain strong,” said Jeff Clarke, vice chairman, Dell Technologies. “We are innovating and integrating across the Dell Technologies portfolio, from the edge to the core to the cloud, with a diverse business designed to succeed in any macro environment. For example, core Dell orders were up four percent in the quarter excluding China.”

Dell Technologies ended the quarter with a cash and investments balance of $10 billion. The company repaid approximately $2 billion of gross debt in the quarter and approximately $2.4 billion year-to-date. The company has paid down approximately $17 billion in gross debt over the three years since closing the EMC transaction and is on track to repay approximately $5 billion of gross debt in fiscal 2020.

“This quarter’s results are strong thanks to our leading and diverse portfolio and consistent execution. Operating income, gross margin and deferred revenue are up double digits, our PC business produced record results, and we saw record cash flow,” said Tom Sweet, chief financial officer, Dell Technologies. “Couple this with our focus on long-term value creation, growing faster than competitors and the industry, growing operating income and EPS faster than revenue, and generating strong cash flow over time. We are well-positioned for the future.”

Operating segments summary

Infrastructure Solutions Group revenue for the second quarter was $8.6 billion, a 7 percent decrease year-over-year. Storage revenue was flat at $4.2 billion, while servers and networking decreased 12 percent to $4.4 billion. Operating income was $1.1 billion for the second quarter or 12.2 percent of Infrastructure Solutions Group revenue.

Key highlights:
• Launch of the Dell Technologies Cloud, which combines the power of VMware and Dell Technologies to make hybrid cloud environments simpler to deploy and manage with consistent infrastructure, operations, and services
• Initial availability of VMware Cloud on Dell EMC, the industry’s first fully managed on-premises Data Center-as-a-Service
• Strong customer receptivity to the recently launched Unity XT midrange storage solution

Client Solutions Group revenue for the second quarter was $11.7 billion, up 6 percent versus the second quarter of last year. Commercial revenue grew 12 percent to $9.1 billion, and Consumer revenue was down 12 percent to $2.7 billion. Operating income was $982 million for the second quarter or 8.4 percent of Client Solutions Group revenue.

Key highlights:
• Record revenue and units
• Double-digit revenue growth in commercial notebooks, desktops, and workstations
• Launch of the new OptiPlex 7070 Ultra, an innovative desktop with the industry’s most flexible, zero-footprint desktop design
• Launch of Unified Workspace, an integrated solution for end-user computing that simplifies the entire device lifecycle for IT while providing workers with the personalized, frictionless, ready-to-work experience they demand

VMware revenue was $2.5 billion for the second quarter, up 12 percent driven by broad-based strength across a diverse product portfolio. Operating income for the second quarter was $762 million, or 30.9 percent of VMware revenue.

Conference call information
As previously announced, the company will hold a conference call to discuss its second quarter performance today, August 29, 2019 at 4:00 p.m. CDT. The conference call will be broadcast live over the internet and can be accessed at

For those unable to listen to the live broadcast, an archived version will be available at the same location for one year.

A slide presentation containing additional financial and operating information may be downloaded from Dell Technologies’ website at

About Dell Technologies
Dell Technologies (NYSE:DELL) is a unique family of businesses that helps organizations and individuals build their digital future and transform how they work and live. The company provides customers with the industry’s broadest and most innovative technology and services portfolio spanning from edge to core to cloud. The Dell Technologies family includes Dell, Dell EMC, Pivotal, RSA, Secureworks, Virtustream and VMware.

Investor Relations:
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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 historical 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: 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 and services; Dell Technologies’ foreign operations and ability to generate substantial non-U.S. net revenue; Dell Technologies’ product, 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; weak economic conditions and additional regulation; counterparty default risks; the loss by Dell Technologies of any services contracts with its customers, including government contracts, and its ability to perform such contracts at its estimated costs; 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; infrastructure disruptions, cyberattacks, or other data security breaches; 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; increased costs and additional regulations and requirements as a result of Dell Technologies’ operation as a public company; Dell Technologies’ ability to develop and maintain effective internal control over financial reporting; compliance requirements of changing environmental and safety laws; the effect of armed hostilities, terrorism, natural disasters, and public health issues; Dell Technologies’ substantial level of indebtedness; the impact of the financial performance of VMware; and the market volatility of Dell Technologies’ pension plan assets.

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 1, 2019, 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 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.
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