Strong Storage, VMware and PC Performance Power Dell Technologies' Third Quarter Results

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Storage revenue up 7%; Client Solutions Group revenue up 5%
VMware revenue up 11%
Operating income of $836 million; non-GAAP operating income of $2.4 billion
Cash flow from operations of $1.8 billion
Diluted earnings per share of $0.66; non-GAAP diluted earnings per share of $1.75

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Dell Technologies (NYSE: DELL) announces financial results for its fiscal 2020 third quarter. Third quarter revenue was $22.8 billion, up 2 percent, and non-GAAP revenue was $22.9 billion, up 1 percent over the same period last year. Operating income was $836 million1 compared to an operating loss of $356 million last year, and non-GAAP operating income was up 18 percent to $2.4 billion. Net income was $552 million or 2.4 percent of revenue, non-GAAP net income was $1.4 billion or 6.3 percent of non-GAAP revenue, and adjusted EBITDA was $2.9 billion or 12.5 percent of non-GAAP revenue. Cash flow from operations was $1.8 billion. Diluted earnings per share was $0.66 and non-GAAP diluted earnings per share was $1.75.

“Dell Technologies is innovating and integrating solutions across our entire portfolio to create the technology infrastructure of the future for our customers,” said Jeff Clarke, vice chairman, Dell Technologies. “Our highly differentiated set of offerings enables us to continue to win in a consolidating industry, while also driving long-term value for all stakeholders.”

Dell Technologies ended the quarter with a cash and investments balance of $9.4 billion. The company repaid approximately $1.1 billion of gross debt in the quarter and approximately $3.5 billion year-to-date. The company has paid down more than $18 billion in gross debt over the three years since closing the EMC transaction and remains on track to repay approximately $5 billion of gross debt in fiscal 2020.

“This quarter’s results were driven by the strength of our diverse model, with our storage, commercial client and VMware businesses performing very well,” said Tom Sweet, chief financial officer, Dell Technologies. “We remain focused on long-term profitable growth, growing faster than competitors and the industry, growing operating income and EPS faster than revenue and generating strong cash flow over time.”

Operating segments summary

Client Solutions Group revenue for the third quarter was $11.4 billion, up 5 percent versus the third quarter of last year. Commercial revenue grew 9 percent to $8.3 billion, and Consumer revenue was down 6 percent to $3.1 billion. Operating income was $739 million or 6.5 percent of Client Solutions Group revenue.

Key highlights:
• Double-digit unit and revenue growth in commercial desktops and workstations
• Outperformed the PC industry, gaining year-over-year worldwide share in total and commercial client units2
• Expanded PC as a service to include small businesses, offering growing companies full PC lifecycle management for a single, predictable price per month

Infrastructure Solutions Group revenue for the third quarter was $8.4 billion, a 6 percent decrease year-over-year. Storage revenue was $4.1 billion, up 7 percent year-over-year, while servers and networking decreased 16 percent to $4.2 billion. Operating income was $1.0 billion for the third quarter or 11.9 percent of Infrastructure Solutions Group revenue.

Key highlights:
• Strong adoption of the Dell Technologies Cloud with recent customer wins in the logistics, transportation, financial, communications and retail sectors
• Continued strong demand for our leading HCI solutions, with VxRail orders up 82 percent year-over-year
• Announced availability of Dell EMC PowerOne autonomous infrastructure to make deploying, managing and consuming IT easier for organizations

VMware revenue was $2.5 billion for the third quarter, up 11 percent driven by broad-based strength across a diverse product portfolio. Operating income for the third quarter was $717 million, or 28.9 percent of VMware revenue.
Earlier this month at the Dell Technologies Summit, the company ushered in a new decade of responsibility and innovation with the announcement of moonshot goals that will propel the company’s social impact worldwide. The ambitious goals are the linchpin of the company’s 2030 Progress Made Real plan, and are grounded in the belief that technology and data combined with human spirit are, and will always be, positive forces in the world.

Conference call information

As previously announced, the company will hold a conference call to discuss its third quarter performance and financial guidance today, November 26, 2019 at 4:30 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

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 including tariffs and other effects of trade 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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