ROUND ROCK, Texas, Dec. 7, 2017 /PRNewswire/ --
News summary
- Third quarter revenue of $19.6
billion, non-GAAP revenue of $19.9
billion
- Cash flow from operations of $1.6
billion
- Company unveils new capabilities and offerings, including new
midrange storage solutions and Future-Proof Storage Loyalty
Program
Full story
Dell Technologies (NYSE: DVMT) announces its fiscal 2018 third
quarter results. For the third quarter, consolidated revenue was
$19.6 billion and non-GAAP revenue
was $19.9 billion. During the
quarter, the company generated an operating loss of $533 million1, with non-GAAP operating
income of $2.0 billion. The company
generated cash flow from operations of $1.6
billion.
"In the third fiscal quarter, we delivered solid performance
across the business," said Tom
Sweet, chief financial officer, Dell Technologies. "Moving
forward, we'll maintain our focus on profitable growth, generating
strong cash flow and delivering a comprehensive and seamless
solutions portfolio, incorporating the capabilities of all of the
companies under Dell Technologies."
Fiscal year 2018
third quarter results:
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|
|
|
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|
|
|
|
|
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Three Months
Ended
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Nine Months
Ended
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November 3,
2017
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October 28,
2016
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Change
|
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November 3,
2017
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October 28,
2016
|
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Change
|
|
(in millions, except
percentages; unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
revenue
|
$
19,610
|
|
$
16,247
|
|
21 %
|
|
$
56,725
|
|
$
41,568
|
|
36 %
|
Operating
loss
|
$
(533)
|
|
$
(1,512)
|
|
65 %
|
|
$
(3,012)
|
|
$
(1,584)
|
|
(90)%
|
Net loss from
continuing operations
|
$
(941)
|
|
$
(1,637)
|
|
43 %
|
|
$
(3,302)
|
|
$
(2,323)
|
|
(42)%
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP net
revenue
|
$
19,905
|
|
$
16,777
|
|
19 %
|
|
$
57,710
|
|
$
42,241
|
|
37 %
|
Non-GAAP operating
income
|
$
1,986
|
|
$
1,975
|
|
1 %
|
|
$
4,735
|
|
$
3,270
|
|
45 %
|
Non-GAAP net income
from continuing operations
|
$
1,109
|
|
$
970
|
|
14 %
|
|
$
2,563
|
|
$
1,596
|
|
61 %
|
Adjusted
EBITDA
|
$
2,318
|
|
$
2,230
|
|
4 %
|
|
$
5,751
|
|
$
3,757
|
|
53 %
|
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.
"Our strategy to be the essential infrastructure provider is
resonating with our customers, who turn to Dell Technologies to
transform and digitize their environments," said Jeff Clarke, vice-chairman, Products &
Operations, Dell Technologies. "We
deliver a more holistic view and set of solutions, offering a
higher level of innovation and integration across the edge, core
and cloud that is unmatched in the industry."
Operating segments summary
Client Solutions Group (Dell) continued to outperform the
market worldwide as the overall PC market moved back to positive
year-over-year growth during the calendar quarter. Revenue for the
third fiscal quarter was $10.0
billion, up 8 percent from the same quarter of fiscal 2017.
Operating income was $672 million, a
6 percent increase.
Key highlights:
- Double-digit revenue growth in notebooks for both commercial
and consumer
- Delivered 19th consecutive quarter of year-over-year
PC unit share growth2
- No. 1 workstation vendor worldwide, outperforming the industry
and positive growth in every major region3
- No. 1 displays provider worldwide for the 17th
consecutive quarter4
Infrastructure Solutions Group (Dell EMC) experienced
growth of 2 percent quarter over quarter, with third quarter
revenue of $7.5 billion and operating
income of $678 million. Servers and
networking revenue was $3.9 billion,
which was an increase of 32 percent year over year and 3 percent
quarter over quarter. Storage revenue remained flat at $3.7 billion quarter over quarter.
Key highlights:
- Record revenue and double-digit growth for servers for
2nd consecutive quarter
- Worldwide leader in servers, outgrowing the market in units and
revenue for both mainstream and hyperscale5
- Triple-digit growth in hyperconverged portfolio, led by
VxRail
- Double-digit demand growth for Isilon scale-out NAS and
all-flash arrays
VMware segment revenue for the third quarter was
$2.0 billion, with operating income
of $639 million, or 32.7 percent of
revenue.
Additional highlights
During the third quarter, Dell Technologies paid down
$1.7 billion in debt, and since the
close of the EMC transaction, it has paid down $9.7 billion of gross debt, excluding DFS-related
debt. Also since closing the EMC transaction, the company has
repurchased a total of 23.4 million shares of Class V common stock
under the previously announced repurchase programs. The company
ended the quarter with a cash and investments balance of
$18.0 billion.
During the quarter, Dell Technologies launched a dedicated
Internet of Things (IoT) division aimed at coordinating development
of IoT products and services across all of our businesses. This
comprehensive approach includes IoT-specific products, labs,
partner program and consumption models to help customers speed the
implementation of their IoT solutions.
Subsequent to the end of the quarter, Dell EMC announced the
expansion of its industry-leading midrange storage portfolio with
two new SC All-Flash data storage arrays, along with key software
updates to Dell EMC Unity designed to boost efficiency and cost
savings for mixed block and file workloads. Additionally, Dell EMC
launched its new Future-Proof Storage Loyalty Program to help
customers protect their investment.
Conference call information
As previously announced, the company will hold a conference call
to discuss its third quarter performance this morning at
7 a.m. CST. The conference call will
be broadcast live over the internet and can be accessed at
investors.delltechnologies.com. 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 investors.delltechnologies.com.
Additional resources
- Find out more about how Dell Technologies is collaboratively
solving customers' biggest challenges by visiting our Annual Report
to Customers
- Follow the latest news on Twitter from @DellTech
About Dell Technologies
Dell Technologies is a unique family of businesses that provides
the essential infrastructure for organizations to build their
digital future, transform IT and protect their most important
asset, information. The company services customers of all sizes
across 180 countries – ranging from 98 percent of the Fortune 500
to individual consumers – with the industry's most comprehensive
and innovative portfolio from the edge to the core to the
cloud.
Copyright © 2017 Dell Inc. or its subsidiaries. All Rights
Reserved. Dell, Dell Inc. and the Dell logo are trademarks of Dell
Technologies in the United States and/or other jurisdictions. All
other marks and names mentioned herein may be trademarks of their
respective companies.
1 Due to the EMC transaction and to a lesser extent the Dell
going-private transaction, significant non-cash bridging items will
remain between GAAP and non-GAAP results for the next few years. As
a result of the EMC merger transaction completed on September 7, 2016 and its impact on the third
quarter and first nine months of Fiscal 2018, our results for the
fiscal periods discussed herein are not directly comparable.
2 IDC WW Quarterly Personal Computing Device (PCD) Tracker
CY17Q3
3 IDC WW Quarterly Workstation Tracker CY17Q3
4 DisplaySearch Desktop Monitor Market Tracker CY17Q2
5 IDC WW Quarterly Server Tracker CY17Q3
Non-GAAP Financial Measures:
This press release presents 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 from
continuing operations, 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 of the foregoing
historical non-GAAP financial measures to the most directly
comparable historical GAAP financial measures 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; the costs, time, and effort required to be dedicated to the
integration of the Dell and EMC businesses; the ability to realize
the anticipated synergies from the merger with EMC; the ability to
integrate EMC's technology, solutions, products, and services with
those of Dell in an effective manner; 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 the Dell
Technologies' business, financial condition, results of operations,
and prospects, in its reports filed with the Securities and
Exchange Commission, including Dell Technologies' Annual Report on
Form 10-K for the fiscal year ended February
3, 2017, quarterly reports on Form 10-Q, and current reports
on Form 8-K. These filings are available for review through the
Securities and Exchange Commission'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 (Loss) and Related Financial
Highlights
|
(in millions,
except per share amounts and percentages; unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
Nine Months
Ended
|
|
|
|
November 3,
2017
|
|
October 28,
2016
|
|
Change
|
|
November 3,
2017
|
|
October 28,
2016
|
|
Change
|
Net
revenue:
|
|
|
|
|
|
|
|
|
|
|
|
Products
|
$
14,680
|
|
$
12,366
|
|
19 %
|
|
$
42,003
|
|
$
33,510
|
|
25 %
|
Services
|
4,930
|
|
3,881
|
|
27 %
|
|
14,722
|
|
8,058
|
|
83 %
|
Total net
revenue
|
19,610
|
|
16,247
|
|
21 %
|
|
56,725
|
|
41,568
|
|
36 %
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of net
revenue:
|
|
|
|
|
|
|
|
|
|
|
|
Products
|
12,369
|
|
10,562
|
|
17 %
|
|
36,206
|
|
28,856
|
|
25 %
|
Services
|
2,078
|
|
1,786
|
|
16 %
|
|
6,245
|
|
4,284
|
|
46 %
|
Total cost of net
revenue
|
14,447
|
|
12,348
|
|
17 %
|
|
42,451
|
|
33,140
|
|
28 %
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
margin
|
5,163
|
|
3,899
|
|
32 %
|
|
14,274
|
|
8,428
|
|
69 %
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general, and
administrative
|
4,625
|
|
4,556
|
|
2 %
|
|
13,989
|
|
8,647
|
|
62 %
|
Research and
development
|
1,071
|
|
855
|
|
25 %
|
|
3,297
|
|
1,365
|
|
142 %
|
Total operating
expenses
|
5,696
|
|
5,411
|
|
5 %
|
|
17,286
|
|
10,012
|
|
73 %
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
loss
|
(533)
|
|
(1,512)
|
|
65 %
|
|
(3,012)
|
|
(1,584)
|
|
(90)%
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest and other,
net
|
(682)
|
|
(794)
|
|
14 %
|
|
(1,800)
|
|
(1,362)
|
|
(32)%
|
Loss from continuing
operations before income taxes
|
(1,215)
|
|
(2,306)
|
|
47 %
|
|
(4,812)
|
|
(2,946)
|
|
(63)%
|
Income tax
benefit
|
(274)
|
|
(669)
|
|
59 %
|
|
(1,510)
|
|
(623)
|
|
(142)%
|
Net loss from
continuing operations
|
(941)
|
|
(1,637)
|
|
43 %
|
|
(3,302)
|
|
(2,323)
|
|
(42)%
|
Income (loss) from
discontinued operations, net of income taxes
|
—
|
|
(438)
|
|
100 %
|
|
—
|
|
875
|
|
(100)%
|
Net loss
|
(941)
|
|
(2,075)
|
|
55 %
|
|
(3,302)
|
|
(1,448)
|
|
(128)%
|
Less: Net loss
attributable to non-controlling interests
|
(4)
|
|
(11)
|
|
64 %
|
|
(85)
|
|
(12)
|
|
(608)%
|
Net loss attributable
to Dell Technologies Inc.
|
$
(937)
|
|
$
(2,064)
|
|
55 %
|
|
$
(3,217)
|
|
$
(1,436)
|
|
(124)%
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per
share attributable to Dell Technologies Inc. - basic:
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations
- Class V Common Stock - basic
|
$
1.10
|
|
$
0.79
|
|
|
|
$
2.50
|
|
$
0.79
|
|
|
Continuing operations
- DHI Group - basic
|
$
(2.05)
|
|
$
(3.62)
|
|
|
|
$
(6.57)
|
|
$
(5.70)
|
|
|
Discontinued
operations - DHI Group - basic
|
$
—
|
|
$
(0.88)
|
|
|
|
$
—
|
|
$
2.01
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per
share attributable to Dell Technologies Inc. - diluted:
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations
- Class V Common Stock - diluted
|
$
1.09
|
|
$
0.78
|
|
|
|
$
2.46
|
|
$
0.78
|
|
|
Continuing operations
- DHI Group - diluted
|
$
(2.05)
|
|
$
(3.63)
|
|
|
|
$
(6.58)
|
|
$
(5.70)
|
|
|
Discontinued
operations - DHI Group - diluted
|
$
—
|
|
$
(0.88)
|
|
|
|
$
—
|
|
$
2.01
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average
shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
Basic - Class V Common
Stock
|
202
|
|
222
|
|
|
|
204
|
|
222
|
|
|
Diluted - Class V
Common Stock
|
202
|
|
222
|
|
|
|
204
|
|
222
|
|
|
Basic - DHI
Group
|
567
|
|
497
|
|
|
|
567
|
|
436
|
|
|
Diluted - DHI
Group
|
567
|
|
497
|
|
|
|
567
|
|
436
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Percentage of
Total Net Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
Gross
margin
|
26 %
|
|
24 %
|
|
|
|
25 %
|
|
20 %
|
|
|
Selling, general, and
administrative
|
24 %
|
|
28 %
|
|
|
|
25 %
|
|
21 %
|
|
|
Research and
development
|
5 %
|
|
5 %
|
|
|
|
6 %
|
|
3 %
|
|
|
Operating
expenses
|
29 %
|
|
33 %
|
|
|
|
30 %
|
|
24 %
|
|
|
Operating
loss
|
(3)%
|
|
(9)%
|
|
|
|
(5)%
|
|
(4)%
|
|
|
Loss from continuing
operations before income taxes
|
(6)%
|
|
(14)%
|
|
|
|
(8)%
|
|
(7)%
|
|
|
Net loss from
continuing operations
|
(5)%
|
|
(10)%
|
|
|
|
(6)%
|
|
(6)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax
rate
|
23 %
|
|
29 %
|
|
|
|
31 %
|
|
21 %
|
|
|
DELL TECHNOLOGIES
INC.
|
Condensed
Consolidated Statements of Financial Position
|
(in millions;
unaudited)
|
|
|
|
|
|
November 3,
2017
|
|
February 3,
2017
|
ASSETS
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
11,706
|
|
$
9,474
|
Short-term
investments
|
2,008
|
|
1,975
|
Accounts receivable,
net
|
9,189
|
|
9,420
|
Short-term financing
receivables, net
|
3,643
|
|
3,222
|
Inventories,
net
|
2,582
|
|
2,538
|
Other current
assets
|
5,397
|
|
4,144
|
Total current
assets
|
34,525
|
|
30,773
|
Property, plant, and
equipment, net
|
5,378
|
|
5,653
|
Long-term
investments
|
4,273
|
|
3,802
|
Long-term financing
receivables, net
|
3,317
|
|
2,651
|
Goodwill
|
39,330
|
|
38,910
|
Intangible assets,
net
|
29,846
|
|
35,053
|
Other non-current
assets
|
1,725
|
|
1,364
|
Total
assets
|
$
118,394
|
|
$
118,206
|
|
|
|
|
LIABILITIES,
REDEEMABLE SHARES, AND STOCKHOLDERS' EQUITY
|
Current
liabilities:
|
|
|
|
Short-term
debt
|
$
6,235
|
|
$
6,329
|
Accounts
payable
|
16,711
|
|
14,422
|
Accrued and
other
|
6,901
|
|
7,119
|
Short-term deferred
revenue
|
10,895
|
|
10,265
|
Total current
liabilities
|
40,742
|
|
38,135
|
Long-term
debt
|
45,416
|
|
43,061
|
Long-term deferred
revenue
|
9,161
|
|
8,431
|
Other non-current
liabilities
|
7,487
|
|
9,339
|
Total
liabilities
|
102,806
|
|
98,966
|
|
|
|
|
Redeemable
shares
|
362
|
|
231
|
Stockholders'
equity:
|
|
|
|
Total Dell
Technologies Inc. stockholders' equity
|
9,519
|
|
13,243
|
Non-controlling
interests
|
5,707
|
|
5,766
|
Total stockholders'
equity
|
15,226
|
|
19,009
|
Total liabilities,
redeemable shares, and stockholders' equity
|
$
118,394
|
|
$
118,206
|
|
|
|
|
DELL TECHNOLOGIES
INC.
|
Condensed
Consolidated Statements of Cash Flows
|
(in millions;
unaudited)
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
November 3,
2017
|
|
October 28,
2016
|
|
November 3,
2017
|
|
October 28,
2016
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
|
Net loss
|
$
(941)
|
|
$
(2,075)
|
|
$
(3,302)
|
|
$
(1,448)
|
Adjustments to
reconcile net loss to net cash provided by operating
activities
|
2,564
|
|
1,829
|
|
6,981
|
|
3,017
|
Change in cash from
operating activities
|
1,623
|
|
(246)
|
|
3,679
|
|
1,569
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
Investments:
|
|
|
|
|
|
|
|
Purchases
|
(1,194)
|
|
(503)
|
|
(3,454)
|
|
(511)
|
Maturities and
sales
|
935
|
|
543
|
|
2,993
|
|
561
|
Capital
expenditures
|
(341)
|
|
(182)
|
|
(902)
|
|
(417)
|
Proceeds from sale of
facilities, land, and other assets
|
—
|
|
5
|
|
—
|
|
24
|
Capitalized software
development costs
|
(94)
|
|
(85)
|
|
(281)
|
|
(85)
|
Collections on
purchased financing receivables
|
15
|
|
6
|
|
25
|
|
31
|
Acquisition of
businesses, net
|
—
|
|
(37,614)
|
|
(223)
|
|
(37,614)
|
Divestitures of
businesses, net
|
—
|
|
—
|
|
—
|
|
—
|
Asset acquisitions,
net
|
(9)
|
|
—
|
|
(95)
|
|
—
|
Asset dispositions,
net
|
(12)
|
|
—
|
|
(53)
|
|
—
|
Other
|
—
|
|
(8)
|
|
—
|
|
(48)
|
Change in cash from
investing activities
|
(700)
|
|
(37,838)
|
|
(1,990)
|
|
(38,059)
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
|
Payment of dissenting
shares obligation
|
—
|
|
—
|
|
—
|
|
(446)
|
Proceeds from the
issuance of DHI Group Common Stock
|
—
|
|
4,404
|
|
—
|
|
4,404
|
Proceeds from the
issuance of common stock of subsidiaries
|
30
|
|
1
|
|
110
|
|
101
|
Repurchases of DHI
Group Common Stock
|
(4)
|
|
(8)
|
|
(6)
|
|
(10)
|
Repurchases of Class V
Common Stock
|
(300)
|
|
(132)
|
|
(722)
|
|
(132)
|
Repurchases of common
stock of subsidiaries
|
(555)
|
|
(611)
|
|
(555)
|
|
(611)
|
Issuance of common
stock under employee plans
|
—
|
|
—
|
|
1
|
|
—
|
Payments for debt
issuance costs
|
(39)
|
|
(834)
|
|
(44)
|
|
(849)
|
Proceeds from
debt
|
8,416
|
|
43,838
|
|
13,192
|
|
45,986
|
Repayments of
debt
|
(5,872)
|
|
(7,000)
|
|
(11,181)
|
|
(9,638)
|
Share repurchases for
tax withholdings on vesting of equity awards
|
(105)
|
|
(26)
|
|
(299)
|
|
(28)
|
Other
|
—
|
|
4
|
|
—
|
|
10
|
Change in cash from
financing activities
|
1,571
|
|
39,636
|
|
496
|
|
38,787
|
|
|
|
|
|
|
|
|
Effect of exchange
rate changes on cash and cash equivalents
|
(1)
|
|
(21)
|
|
47
|
|
31
|
|
|
|
|
|
|
|
|
Change in cash and
cash equivalents
|
2,493
|
|
1,531
|
|
2,232
|
|
2,328
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents at beginning of period, including amounts held for
sale
|
9,213
|
|
7,373
|
|
9,474
|
|
6,576
|
Cash and cash
equivalents at end of the period
|
$
11,706
|
|
$
8,904
|
|
$
11,706
|
|
$
8,904
|
Less: Cash included
in current assets held for sale
|
—
|
|
82
|
|
—
|
|
82
|
Cash and cash
equivalents from continuing operations
|
$
11,706
|
|
$
8,822
|
|
$
11,706
|
|
$
8,822
|
|
|
|
|
|
|
|
|
DELL TECHNOLOGIES
INC.
|
Segment
Information
|
(in millions,
except percentages; unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
Nine Months
Ended
|
|
|
|
November 3,
2017
|
|
October 28,
2016
|
|
Change
|
|
November 3,
2017
|
|
October 28,
2016
|
|
Change
|
Client
Solutions Group (CSG):
|
|
|
|
|
|
|
|
|
|
|
|
Net
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
Commercial
|
$
6,907
|
|
$
6,400
|
|
8 %
|
|
$
20,453
|
|
$
19,343
|
|
6 %
|
Consumer
|
3,052
|
|
2,787
|
|
10 %
|
|
8,413
|
|
7,635
|
|
10 %
|
Total CSG net
revenue
|
$
9,959
|
|
$
9,187
|
|
8 %
|
|
$
28,866
|
|
$
26,978
|
|
7 %
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Income:
|
|
|
|
|
|
|
|
|
|
|
|
CSG operating
income
|
$
672
|
|
$
634
|
|
6 %
|
|
$
1,612
|
|
$
1,503
|
|
7 %
|
% of CSG net
revenue
|
7 %
|
|
7 %
|
|
|
|
6 %
|
|
6 %
|
|
|
% of total segment
operating income
|
34
%
|
|
30
%
|
|
|
|
34
%
|
|
44
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Infrastructure
Solutions Group (ISG):
|
|
|
|
|
|
|
|
|
|
|
|
Net
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
Servers and
networking
|
$
3,851
|
|
$
2,910
|
|
32 %
|
|
$
10,822
|
|
$
9,222
|
|
17 %
|
Storage
|
3,667
|
|
3,079
|
|
19 %
|
|
11,018
|
|
4,159
|
|
165 %
|
Total ISG net
revenue
|
$
7,518
|
|
$
5,989
|
|
26 %
|
|
$
21,840
|
|
$
13,381
|
|
63 %
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Income:
|
|
|
|
|
|
|
|
|
|
|
|
ISG operating
income
|
$
678
|
|
$
897
|
|
(24)%
|
|
$
1,431
|
|
$
1,389
|
|
3 %
|
% of ISG net
revenue
|
9 %
|
|
15
%
|
|
|
|
7 %
|
|
10
%
|
|
|
% of total segment
operating income
|
34
%
|
|
43
%
|
|
|
|
30
%
|
|
40
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
VMware:
|
|
|
|
|
|
|
|
|
|
|
|
Net
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
Total VMware net
revenue
|
$
1,953
|
|
$
1,289
|
|
52 %
|
|
$
5,596
|
|
$
1,289
|
|
334 %
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Income:
|
|
|
|
|
|
|
|
|
|
|
|
VMware operating
income
|
$
639
|
|
$
548
|
|
17 %
|
|
$
1,686
|
|
$
548
|
|
208 %
|
% of VMware net
revenue
|
33
%
|
|
43
%
|
|
|
|
30
%
|
|
43
%
|
|
|
% of total segment
operating income
|
32
%
|
|
26
%
|
|
|
|
36
%
|
|
16
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation
to consolidated net revenue:
|
|
|
|
|
|
|
|
|
|
|
|
Reportable segment net
revenue
|
$
19,430
|
|
$
16,465
|
|
|
|
$
56,302
|
|
$
41,648
|
|
|
Other businesses
(a)
|
475
|
|
312
|
|
|
|
1,409
|
|
530
|
|
|
Unallocated
transactions (b)
|
—
|
|
—
|
|
|
|
(1)
|
|
63
|
|
|
Impact of purchase
accounting (c)
|
(295)
|
|
(530)
|
|
|
|
(985)
|
|
(673)
|
|
|
Total net
revenue
|
$
19,610
|
|
$
16,247
|
|
|
|
$
56,725
|
|
$
41,568
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation
to consolidated operating income (loss):
|
|
|
|
|
|
|
|
|
|
|
|
Reportable segment
operating income
|
$
1,989
|
|
$
2,079
|
|
|
|
$
4,729
|
|
$
3,440
|
|
|
Other businesses
(a)
|
6
|
|
(13)
|
|
|
|
10
|
|
(48)
|
|
|
Unallocated
transactions (b)
|
(9)
|
|
(91)
|
|
|
|
(4)
|
|
(122)
|
|
|
Impact of purchase
accounting (c)
|
(366)
|
|
(850)
|
|
|
|
(1,195)
|
|
(1,054)
|
|
|
Amortization of
intangibles
|
(1,734)
|
|
(1,164)
|
|
|
|
(5,250)
|
|
(2,146)
|
|
|
Transaction-related
expenses (d)
|
(86)
|
|
(1,200)
|
|
|
|
(415)
|
|
(1,329)
|
|
|
Other corporate
expenses (e)
|
(333)
|
|
(273)
|
|
|
|
(887)
|
|
(325)
|
|
|
Total operating
loss
|
$
(533)
|
|
$
(1,512)
|
|
|
|
$
(3,012)
|
|
$
(1,584)
|
|
|
_________________
|
|
|
|
|
|
|
|
|
|
|
|
(a) Other businesses
consist of RSA Information Security, SecureWorks, Pivotal, and
Boomi, and do not constitute a reportable segment, either
individually or collectively, as the results of the businesses are
not material to the Company's overall results and the businesses do
not meet the criteria for reportable segments.
|
(b) Unallocated
transactions includes long-term incentives, certain short-term
incentive compensation expenses, and 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) Other corporate
expenses includes severance and facility action costs as well as
stock-based compensation expense.
|
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 from continuing
operations, 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 conjunction with the
presentation of non-GAAP financial measures.
DELL TECHNOLOGIES
INC.
|
Selected Non-GAAP
Financial Measures
|
(in millions,
except percentages; unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
Nine Months
Ended
|
|
|
|
November 3,
2017
|
|
October 28,
2016
|
|
Change
|
|
November 3,
2017
|
|
October 28,
2016
|
|
Change
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP net
revenue
|
$
19,905
|
|
$
16,777
|
|
19 %
|
|
$
57,710
|
|
$
42,241
|
|
37 %
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP gross
margin
|
$
6,417
|
|
$
5,324
|
|
21 %
|
|
$
18,163
|
|
$
10,224
|
|
78 %
|
% of non-GAAP net
revenue
|
32
%
|
|
32
%
|
|
|
|
31
%
|
|
24
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP operating
expenses
|
$
4,431
|
|
$
3,349
|
|
32 %
|
|
$
13,428
|
|
$
6,954
|
|
93 %
|
% of non-GAAP net
revenue
|
22
%
|
|
20
%
|
|
|
|
23
%
|
|
16
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP operating
income
|
$
1,986
|
|
$
1,975
|
|
1 %
|
|
$
4,735
|
|
$
3,270
|
|
45 %
|
% of non-GAAP net
revenue
|
10
%
|
|
12
%
|
|
|
|
8 %
|
|
8 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP net income
from continuing operations
|
$
1,109
|
|
$
970
|
|
14 %
|
|
$
2,563
|
|
$
1,596
|
|
61 %
|
% of non-GAAP net
revenue
|
6 %
|
|
6 %
|
|
|
|
4 %
|
|
4 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
$
2,318
|
|
$
2,230
|
|
4 %
|
|
$
5,751
|
|
$
3,757
|
|
53 %
|
% of non-GAAP net
revenue
|
12
%
|
|
13
%
|
|
|
|
10
%
|
|
9 %
|
|
|
DELL TECHNOLOGIES
INC.
|
Reconciliation of
Selected Non-GAAP Financial Measures
|
(in millions,
except percentages; unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
Nine Months
Ended
|
|
|
|
November 3,
2017
|
|
October 28,
2016
|
|
Change
|
|
November 3,
2017
|
|
October 28,
2016
|
|
Change
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
revenue
|
$
19,610
|
|
$
16,247
|
|
21 %
|
|
$
56,725
|
|
$
41,568
|
|
36 %
|
Non-GAAP
adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
Impact of purchase
accounting
|
295
|
|
530
|
|
|
|
985
|
|
673
|
|
|
Non-GAAP net
revenue
|
$
19,905
|
|
$
16,777
|
|
19 %
|
|
$
57,710
|
|
$
42,241
|
|
37 %
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
margin
|
$
5,163
|
|
$
3,899
|
|
32 %
|
|
$
14,274
|
|
$
8,428
|
|
69 %
|
Non-GAAP
adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
Impact of purchase
accounting
|
307
|
|
729
|
|
|
|
1,020
|
|
897
|
|
|
Amortization of
intangibles
|
914
|
|
604
|
|
|
|
2,784
|
|
806
|
|
|
Transaction-related
expenses
|
5
|
|
30
|
|
|
|
22
|
|
25
|
|
|
Other corporate
expenses
|
28
|
|
62
|
|
|
|
63
|
|
68
|
|
|
Non-GAAP gross
margin
|
$
6,417
|
|
$
5,324
|
|
21 %
|
|
$
18,163
|
|
$
10,224
|
|
78 %
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses
|
$
5,696
|
|
$
5,411
|
|
5 %
|
|
$
17,286
|
|
$
10,012
|
|
73 %
|
Non-GAAP
adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
Impact of purchase
accounting
|
(59)
|
|
(121)
|
|
|
|
(175)
|
|
(157)
|
|
|
Amortization of
intangibles
|
(820)
|
|
(560)
|
|
|
|
(2,466)
|
|
(1,340)
|
|
|
Transaction-related
expenses
|
(81)
|
|
(1,170)
|
|
|
|
(393)
|
|
(1,304)
|
|
|
Other corporate
expenses
|
(305)
|
|
(211)
|
|
|
|
(824)
|
|
(257)
|
|
|
Non-GAAP operating
expenses
|
$
4,431
|
|
$
3,349
|
|
32 %
|
|
$
13,428
|
|
$
6,954
|
|
93 %
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
loss
|
$
(533)
|
|
$
(1,512)
|
|
65 %
|
|
$
(3,012)
|
|
$
(1,584)
|
|
(90)%
|
Non-GAAP
adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
Impact of purchase
accounting
|
366
|
|
850
|
|
|
|
1,195
|
|
1,054
|
|
|
Amortization of
intangibles
|
1,734
|
|
1,164
|
|
|
|
5,250
|
|
2,146
|
|
|
Transaction-related
expenses
|
86
|
|
1,200
|
|
|
|
415
|
|
1,329
|
|
|
Other corporate
expenses
|
333
|
|
273
|
|
|
|
887
|
|
325
|
|
|
Non-GAAP operating
income
|
$
1,986
|
|
$
1,975
|
|
1 %
|
|
$
4,735
|
|
$
3,270
|
|
45 %
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss from
continuing operations
|
$
(941)
|
|
$
(1,637)
|
|
43 %
|
|
$
(3,302)
|
|
$
(2,323)
|
|
(42)%
|
Non-GAAP
adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
Impact of purchase
accounting
|
366
|
|
850
|
|
|
|
1,195
|
|
1,054
|
|
|
Amortization of
intangibles
|
1,734
|
|
1,164
|
|
|
|
5,250
|
|
2,146
|
|
|
Transaction-related
expenses
|
86
|
|
1,200
|
|
|
|
415
|
|
1,326
|
|
|
Other corporate
expenses
|
333
|
|
273
|
|
|
|
887
|
|
325
|
|
|
Aggregate adjustment
for income taxes
|
(469)
|
|
(880)
|
|
|
|
(1,882)
|
|
(932)
|
|
|
Non-GAAP net income
from continuing operations
|
$
1,109
|
|
$
970
|
|
14 %
|
|
$
2,563
|
|
$
1,596
|
|
61 %
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss from
continuing operations
|
$
(941)
|
|
$
(1,637)
|
|
43 %
|
|
$
(3,302)
|
|
$
(2,323)
|
|
(42)%
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
Interest and other,
net
|
682
|
|
794
|
|
|
|
1,800
|
|
1,362
|
|
|
Income tax
benefit
|
(274)
|
|
(669)
|
|
|
|
(1,510)
|
|
(623)
|
|
|
Depreciation and
amortization
|
2,137
|
|
1,576
|
|
|
|
6,491
|
|
2,799
|
|
|
EBITDA
|
$
1,604
|
|
$
64
|
|
NM
|
|
$
3,479
|
|
$
1,215
|
|
186 %
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA
|
$
1,604
|
|
$
64
|
|
NM
|
|
$
3,479
|
|
$
1,215
|
|
186 %
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based
compensation expense
|
221
|
|
144
|
|
|
|
630
|
|
177
|
|
|
Impact of purchase
accounting
|
298
|
|
693
|
|
|
|
990
|
|
851
|
|
|
Transaction-related
expenses
|
86
|
|
1,200
|
|
|
|
415
|
|
1,366
|
|
|
Other corporate
expenses
|
109
|
|
129
|
|
|
|
237
|
|
148
|
|
|
Adjusted
EBITDA
|
$
2,318
|
|
$
2,230
|
|
4 %
|
|
$
5,751
|
|
$
3,757
|
|
53 %
|
|
|
|
|
|
|
|
|
|
|
|
|
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SOURCE Dell Technologies