ROUND ROCK, Texas, March 8, 2018 /PRNewswire/ --
News summary
- Strong velocity with record revenue of $21.9 billion for the fourth quarter, up 9
percent
- $6.8 billion cash flow from
operations for the full year and paid $10
billion of debt since EMC transaction close
- Exited the fiscal year with growth across all segments; strong
customer acceptance across the Dell Technologies portfolio
- Leader in 21 of the top market share categories
Full story
Dell Technologies (NYSE: DVMT) announces its fiscal 2018 fourth
quarter and full year results. For the fourth quarter, consolidated
revenue was $21.9 billion, up 9
percent, and non-GAAP revenue was $22.2
billion, up 8 percent from the prior period. During the
quarter, the company generated a GAAP operating loss of
$321 million1, with a
non-GAAP operating income of $2.1
billion, up 15 percent.
For the full year, consolidated revenue was $78.7 billion and non-GAAP revenue was
$79.9 billion. The company generated
an annual GAAP operating loss of $3.3
billion, with a non-GAAP operating income of $6.9 billion.
"I was pleased with our results in fiscal 2018. We finished the
year with good revenue and profitability momentum, with non-GAAP
operating income up 15 percent year-over-year," said Tom Sweet, chief financial officer, Dell
Technologies. "We drove velocity at or above market rate in
multiple areas of the business and generated strong operating cash
flow as we brought the full capabilities of Dell Technologies
together. In fiscal 2019 we'll continue to execute our long-term
strategy, capitalizing on our broad portfolio of solutions for
customers at every stage of the digital transformation
journey."
The company ended the year with a cash and investments balance
of $20.3 billion, an increase of
$2.3 billion from the third quarter
and an increase of $5.0 billion from
last year. Since closing the EMC transaction, Dell Technologies has
paid down approximately $10 billion
in gross debt, excluding Dell Financial Services debt.
Fiscal year 2018 fourth quarter and full year results
|
Three Months
Ended
|
|
|
|
Fiscal Year
Ended
|
|
|
|
February 2,
2018
|
|
February 3,
2017
|
|
Change
|
|
February 2,
2018
|
|
February 3,
2017
|
|
Change
|
|
(in millions, except
percentages; unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
revenue
|
$
21,935
|
|
$
20,074
|
|
9 %
|
|
$
78,660
|
|
$
61,642
|
|
28 %
|
Operating
loss
|
$
(321)
|
|
$
(1,668)
|
|
81 %
|
|
$
(3,333)
|
|
$
(3,252)
|
|
(2)%
|
Net loss from
continuing operations
|
$
(553)
|
|
$
(1,414)
|
|
61 %
|
|
$
(3,855)
|
|
$
(3,737)
|
|
(3)%
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP net
revenue
|
$
22,219
|
|
$
20,581
|
|
8 %
|
|
$
79,929
|
|
$
62,822
|
|
27 %
|
Non-GAAP operating
income
|
$
2,120
|
|
$
1,843
|
|
15 %
|
|
$
6,855
|
|
$
5,113
|
|
34 %
|
Non-GAAP net income
from continuing operations
|
$
1,097
|
|
$
1,091
|
|
1 %
|
|
$
3,660
|
|
$
2,687
|
|
36 %
|
Adjusted
EBITDA
|
$
2,466
|
|
$
2,184
|
|
13 %
|
|
$
8,217
|
|
$
5,941
|
|
38 %
|
Dell Technologies' fiscal year 2017 included an additional
week, which is incorporated into the company's fourth quarter
results for FY2017. Fourth quarter fiscal 2018 non-GAAP operating
income excludes approximately $2.4
billion of adjustments, and full year fiscal 2018 non-GAAP
operating income excludes approximately $10.2 billion of adjustments, primarily related
to purchase accounting and amortization of intangible
assets.
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.
"We exited the year with growth across all of our segments, with
particular strength in commercial client and in servers and
networking. In addition, we saw demand growth up double digits for
all-flash and triple digits for hyper-converged infrastructure in
the fourth quarter, and we see a significant opportunity to ignite
momentum in traditional storage in fiscal 2019," said Jeff Clarke, vice-chairman, Products &
Operations, Dell Technologies. "With
our industry leadership, innovation and laser-like focus on making
our solutions easy to buy and own, we'll continue in fiscal year
2019 to deliver on the commitments we make to customers."
Operating segments summary
Client Solutions Group revenue for the fiscal fourth
quarter was $10.6 billion, up 8
percent versus the fourth quarter of last year. Commercial revenue
grew 9 percent to $7.3 billion and
Consumer revenue was up 6 percent to $3.3
billion. Revenue for the full year was $39.5 billion. Operating income for the fourth
quarter was $581 million, a 70
percent increase, and was $2.2
billion for the full year.
Key fourth quarter highlights include:
- Year-over-year worldwide PC share growth for 20th
consecutive quarter2
- No. 1 share position worldwide for displays, gaining unit share
year over year for the 18th consecutive
quarter3
- Record holiday season sales for consumer and gaming
products
- Record-high 87 product awards at the Consumer Electronics
Show
Infrastructure Solutions Group revenue for the fourth
quarter was $8.8 billion, a 5 percent
increase. This was driven by $4.6
billion in servers and networking, a 27 percent increase,
and $4.2 billion in storage. Revenue
for the full year was $30.7 billion,
with servers and networking revenue at $15.4
billion and storage revenue at $15.3
billion. Operating income was $748
million for the fourth quarter and $2.2 billion for the full year.
Key fourth quarter highlights:
- Third consecutive quarter of record server revenue, fueled by
double-digit growth for both PowerEdge and Cloud servers
- Worldwide leader for x86 servers in calendar fourth quarter,
both in units and revenue4
- No. 1 market share position in all-flash
arrays4
- Demand for all-flash offerings exited fiscal 2018 at a nearly
$5 billion run rate
VMware revenue for the fourth quarter was $2.3 billion, up 20 percent, with operating
income of $834 million, up 48
percent, and 35.8 percent of revenue.
Fourth quarter revenue from other businesses, including
Pivotal, RSA, Secureworks and Virtustream, was $492 million, up 3 percent.
Conference call information
As previously announced, the company will hold a conference call
to discuss its fourth quarter and full-year performance today at
7 a.m. CDT. 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.
Dell Technologies World
Join us April 30 - May 3 in
Las Vegas at Dell Technologies
World, the company's flagship event that brings together latest
emerging trends, technology and gurus, from the edge to the core to
the cloud. During the event, experts from all seven Dell
Technologies businesses will demonstrate to customers and partners
the connected ecosystem of IT infrastructure, applications, devices
and security that can enable real transformation across their
organizations. Learn more at www.delltechnologiesworld.com.
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 99 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 © 2018 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 Due to the EMC transaction as well as the Dell
going-private transaction, significant non-cash bridging items will
remain between GAAP and non-GAAP results for the next few years.
Prior-year historical Dell Technologies financials do not include
EMC historical results for the first and second quarters and a
portion of the third quarter in fiscal 2017, thereby impacting any
year-over-year comparisons for the full year. EMC results are
included for the full fourth quarter of Fiscal 2017, thereby
year-over-year results are comparable for the fourth quarter.
2 IDC WW Quarterly Personal Computing Device (PCD) Tracker
CY17Q4
3 DisplaySearch Desktop Monitor Market Tracker CY17Q3
4 IDC WW Quarterly Server Tracker CY17Q4
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
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 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
|
|
|
|
Fiscal Year
Ended
|
|
|
|
February 2,
2018
|
|
February 3,
2017
|
|
Change
|
|
February 2,
2018
|
|
February 3,
2017
|
|
Change
|
Net
revenue:
|
|
|
|
|
|
|
|
|
|
|
|
Products
|
$
16,798
|
|
$
15,196
|
|
11 %
|
|
$
58,801
|
|
$
48,706
|
|
21 %
|
Services
|
5,137
|
|
4,878
|
|
5 %
|
|
19,859
|
|
12,936
|
|
54 %
|
Total net
revenue
|
21,935
|
|
20,074
|
|
9 %
|
|
78,660
|
|
61,642
|
|
28 %
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of net
revenue:
|
|
|
|
|
|
|
|
|
|
|
|
Products
|
14,009
|
|
13,313
|
|
5 %
|
|
50,215
|
|
42,169
|
|
19 %
|
Services
|
2,146
|
|
2,230
|
|
(4)%
|
|
8,391
|
|
6,514
|
|
29 %
|
Total cost of net
revenue
|
16,155
|
|
15,543
|
|
4 %
|
|
58,606
|
|
48,683
|
|
20 %
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
margin
|
5,780
|
|
4,531
|
|
28 %
|
|
20,054
|
|
12,959
|
|
55 %
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general, and
administrative
|
5,014
|
|
4,928
|
|
2 %
|
|
19,003
|
|
13,575
|
|
40 %
|
Research and
development
|
1,087
|
|
1,271
|
|
(14)%
|
|
4,384
|
|
2,636
|
|
66 %
|
Total operating
expenses
|
6,101
|
|
6,199
|
|
(2)%
|
|
23,387
|
|
16,211
|
|
44 %
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
loss
|
(321)
|
|
(1,668)
|
|
81 %
|
|
(3,333)
|
|
(3,252)
|
|
(2)%
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest and other,
net
|
(555)
|
|
(742)
|
|
25 %
|
|
(2,355)
|
|
(2,104)
|
|
(12)%
|
Loss from continuing
operations before income taxes
|
(876)
|
|
(2,410)
|
|
64 %
|
|
(5,688)
|
|
(5,356)
|
|
(6)%
|
Income tax
benefit
|
(323)
|
|
(996)
|
|
68 %
|
|
(1,833)
|
|
(1,619)
|
|
(13)%
|
Net loss from
continuing operations
|
(553)
|
|
(1,414)
|
|
61 %
|
|
(3,855)
|
|
(3,737)
|
|
(3)%
|
Income from
discontinued operations, net of income taxes
|
—
|
|
1,144
|
|
(100)%
|
|
—
|
|
2,019
|
|
(100)%
|
Net loss
|
(553)
|
|
(270)
|
|
(105)%
|
|
(3,855)
|
|
(1,718)
|
|
(124)%
|
Less: Net loss
attributable to non-controlling interests
|
(42)
|
|
(34)
|
|
(24)%
|
|
(127)
|
|
(46)
|
|
(176)%
|
Net loss attributable
to Dell Technologies Inc.
|
$
(511)
|
|
$
(236)
|
|
(117)%
|
|
$
(3,728)
|
|
$
(1,672)
|
|
(123)%
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per
share attributable to Dell Technologies Inc. - basic:
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations
- Class V Common Stock - basic
|
$
(1.12)
|
|
$
0.64
|
|
|
|
$
1.41
|
|
$
1.44
|
|
|
Continuing operations
- DHI Group - basic
|
$
(0.51)
|
|
$
(2.68)
|
|
|
|
$
(7.08)
|
|
$
(8.52)
|
|
|
Discontinued
operations - DHI Group - basic
|
$
—
|
|
$
2.02
|
|
|
|
$
—
|
|
$
4.30
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per
share attributable to Dell Technologies Inc. - diluted:
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations
- Class V Common Stock - diluted
|
$
(1.12)
|
|
$
0.64
|
|
|
|
$
1.39
|
|
$
1.43
|
|
|
Continuing operations
- DHI Group - diluted
|
$
(0.51)
|
|
$
(2.68)
|
|
|
|
$
(7.08)
|
|
$
(8.52)
|
|
|
Discontinued
operations - DHI Group - diluted
|
$
—
|
|
$
2.02
|
|
|
|
$
—
|
|
$
4.30
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average
shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
Basic - Class V
Common Stock
|
199
|
|
215
|
|
|
|
203
|
|
217
|
|
|
Diluted - Class V
Common Stock
|
199
|
|
215
|
|
|
|
203
|
|
217
|
|
|
Basic - DHI
Group
|
568
|
|
566
|
|
|
|
567
|
|
470
|
|
|
Diluted - DHI
Group
|
568
|
|
566
|
|
|
|
567
|
|
470
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Percentage of
Total Net Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
Gross
margin
|
26 %
|
|
23 %
|
|
|
|
25 %
|
|
21 %
|
|
|
Selling, general, and
administrative
|
23 %
|
|
25 %
|
|
|
|
24 %
|
|
22 %
|
|
|
Research and
development
|
5 %
|
|
6 %
|
|
|
|
6 %
|
|
4 %
|
|
|
Operating
expenses
|
28 %
|
|
31 %
|
|
|
|
30 %
|
|
26 %
|
|
|
Operating
loss
|
(1)%
|
|
(8)%
|
|
|
|
(4)%
|
|
(5)%
|
|
|
Loss from continuing
operations before income taxes
|
(4)%
|
|
(12)%
|
|
|
|
(7)%
|
|
(9)%
|
|
|
Net loss from
continuing operations
|
(3)%
|
|
(7)%
|
|
|
|
(5)%
|
|
(6)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax
rate
|
37 %
|
|
41 %
|
|
|
|
32 %
|
|
30 %
|
|
|
DELL TECHNOLOGIES
INC.
|
Consolidated
Statements of Financial Position
|
(in millions;
unaudited)
|
|
|
|
|
|
February 2,
2018
|
|
February 3,
2017
|
ASSETS
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
13,942
|
|
$
9,474
|
Short-term
investments
|
2,187
|
|
1,975
|
Accounts receivable,
net
|
11,177
|
|
9,420
|
Short-term financing
receivables, net
|
3,919
|
|
3,222
|
Inventories,
net
|
2,678
|
|
2,538
|
Other current
assets
|
5,054
|
|
4,144
|
Total current
assets
|
38,957
|
|
30,773
|
Property, plant, and
equipment, net
|
5,390
|
|
5,653
|
Long-term
investments
|
4,163
|
|
3,802
|
Long-term financing
receivables, net
|
3,724
|
|
2,651
|
Goodwill
|
39,920
|
|
38,910
|
Intangible assets,
net
|
28,265
|
|
35,053
|
Other non-current
assets
|
1,862
|
|
1,364
|
Total
assets
|
$
122,281
|
|
$
118,206
|
|
|
|
|
LIABILITIES,
REDEEMABLE SHARES, AND STOCKHOLDERS' EQUITY
|
Current
liabilities:
|
|
|
|
Short-term
debt
|
$
7,873
|
|
$
6,329
|
Accounts
payable
|
18,334
|
|
14,422
|
Accrued and
other
|
7,661
|
|
7,119
|
Short-term deferred
revenue
|
12,024
|
|
10,265
|
Total
current liabilities
|
45,892
|
|
38,135
|
Long-term
debt
|
43,998
|
|
43,061
|
Long-term deferred
revenue
|
10,223
|
|
8,431
|
Other non-current
liabilities
|
6,797
|
|
9,339
|
Total
liabilities
|
106,910
|
|
98,966
|
|
|
|
|
Redeemable
shares
|
384
|
|
231
|
Stockholders'
equity:
|
|
|
|
Total Dell
Technologies Inc. stockholders' equity
|
9,326
|
|
13,243
|
Non-controlling
interests
|
5,661
|
|
5,766
|
Total stockholders'
equity
|
14,987
|
|
19,009
|
Total liabilities,
redeemable shares, and stockholders' equity
|
$
122,281
|
|
$
118,206
|
DELL TECHNOLOGIES
INC.
|
Condensed
Consolidated Statements of Cash Flows
|
(in millions;
unaudited)
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Fiscal Year
Ended
|
|
February 2,
2018
|
|
February 3,
2017
|
|
February 2,
2018
|
|
February 3,
2017
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
|
Net loss
|
$
(553)
|
|
$
(270)
|
|
$
(3,855)
|
|
$
(1,718)
|
Adjustments to
reconcile net loss to net cash provided by operating
activities
|
3,684
|
|
1,010
|
|
10,665
|
|
4,027
|
Change in cash from
operating activities
|
3,131
|
|
740
|
|
6,810
|
|
2,309
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
Investments:
|
|
|
|
|
|
|
|
Purchases
|
(935)
|
|
(267)
|
|
(4,389)
|
|
(778)
|
Maturities and
sales
|
885
|
|
612
|
|
3,878
|
|
1,173
|
Capital
expenditures
|
(310)
|
|
(282)
|
|
(1,212)
|
|
(699)
|
Proceeds from sale of
facilities, land, and other assets
|
—
|
|
—
|
|
—
|
|
24
|
Capitalized software
development costs
|
(88)
|
|
(122)
|
|
(369)
|
|
(207)
|
Collections on
purchased financing receivables
|
5
|
|
4
|
|
30
|
|
35
|
Acquisition of
businesses, net
|
(435)
|
|
(15)
|
|
(658)
|
|
(37,629)
|
Divestitures of
businesses, net
|
—
|
|
6,873
|
|
—
|
|
6,873
|
Asset acquisitions,
net
|
(1)
|
|
—
|
|
(96)
|
|
—
|
Asset dispositions,
net
|
(6)
|
|
—
|
|
(59)
|
|
—
|
Other
|
(6)
|
|
—
|
|
(6)
|
|
(48)
|
Change in cash from
investing activities
|
(891)
|
|
6,803
|
|
(2,881)
|
|
(31,256)
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
|
Payment of dissenting
shares obligation
|
—
|
|
—
|
|
—
|
|
(446)
|
Share repurchases for
tax withholdings on vesting of equity awards
|
(86)
|
|
(65)
|
|
(385)
|
|
(93)
|
Proceeds from the
issuance of DHI Group Common Stock
|
—
|
|
18
|
|
—
|
|
4,422
|
Proceeds from the
issuance of common stock of subsidiaries
|
21
|
|
63
|
|
131
|
|
164
|
Repurchases of DHI
Group Common Stock
|
—
|
|
—
|
|
(6)
|
|
(10)
|
Repurchases of Class
V Common Stock
|
(1)
|
|
(569)
|
|
(723)
|
|
(701)
|
Repurchases of common
stock of subsidiaries
|
(169)
|
|
—
|
|
(724)
|
|
(611)
|
Payments for debt
issuance costs
|
(4)
|
|
(4)
|
|
(48)
|
|
(853)
|
Proceeds from
debt
|
1,247
|
|
907
|
|
14,439
|
|
46,893
|
Repayments of
debt
|
(1,140)
|
|
(7,322)
|
|
(12,321)
|
|
(16,960)
|
Other
|
—
|
|
6
|
|
1
|
|
16
|
Change in cash from
financing activities
|
(132)
|
|
(6,966)
|
|
364
|
|
31,821
|
|
|
|
|
|
|
|
|
Effect of exchange
rate changes on cash and cash equivalents
|
128
|
|
(7)
|
|
175
|
|
24
|
|
|
|
|
|
|
|
|
Change in cash and
cash equivalents
|
2,236
|
|
570
|
|
4,468
|
|
2,898
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents at beginning of period, including amounts held for
sale
|
11,706
|
|
8,904
|
|
9,474
|
|
6,576
|
Cash and cash
equivalents at end of the period
|
$
13,942
|
|
$
9,474
|
|
$
13,942
|
|
$
9,474
|
DELL TECHNOLOGIES
INC.
|
Segment
Information
|
(in millions,
except percentages; unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
Fiscal Year
Ended
|
|
|
|
February 2,
2018
|
|
February 3,
2017
|
|
Change
|
|
February 2,
2018
|
|
February 3,
2017
|
|
Change
|
Client
Solutions Group (CSG):
|
|
|
|
|
|
|
|
|
|
|
|
Net
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
Commercial
|
$
7,294
|
|
$
6,663
|
|
9 %
|
|
$
27,747
|
|
$
26,006
|
|
7 %
|
Consumer
|
3,295
|
|
3,113
|
|
6 %
|
|
11,708
|
|
10,748
|
|
9 %
|
Total CSG net
revenue
|
$
10,589
|
|
$
9,776
|
|
8 %
|
|
$
39,455
|
|
$
36,754
|
|
7 %
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Income:
|
|
|
|
|
|
|
|
|
|
|
|
CSG operating
income
|
$
581
|
|
$
342
|
|
70 %
|
|
$
2,193
|
|
$
1,845
|
|
19 %
|
% of CSG
net revenue
|
5 %
|
|
3 %
|
|
|
|
6 %
|
|
5 %
|
|
|
% of total
segment operating income
|
27
%
|
|
18
%
|
|
|
|
32
%
|
|
34
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Infrastructure
Solutions Group (ISG):
|
|
|
|
|
|
|
|
|
|
|
|
Net
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
Servers and
networking
|
$
4,576
|
|
$
3,612
|
|
27 %
|
|
$
15,398
|
|
$
12,834
|
|
20 %
|
Storage
|
4,236
|
|
4,783
|
|
(11)%
|
|
15,254
|
|
8,942
|
|
71 %
|
Total ISG net
revenue
|
$
8,812
|
|
$
8,395
|
|
5 %
|
|
$
30,652
|
|
$
21,776
|
|
41 %
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Income:
|
|
|
|
|
|
|
|
|
|
|
|
ISG operating
income
|
$
748
|
|
$
1,004
|
|
(25)%
|
|
$
2,179
|
|
$
2,393
|
|
(9)%
|
% of ISG
net revenue
|
8 %
|
|
12
%
|
|
|
|
7 %
|
|
11
%
|
|
|
% of total
segment operating income
|
35
%
|
|
53
%
|
|
|
|
32
%
|
|
45
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
VMware:
|
|
|
|
|
|
|
|
|
|
|
|
Net
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
Total VMware
net revenue
|
$
2,329
|
|
$
1,936
|
|
20 %
|
|
$
7,925
|
|
$
3,225
|
|
146 %
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Income:
|
|
|
|
|
|
|
|
|
|
|
|
VMware
operating income
|
$
834
|
|
$
565
|
|
48 %
|
|
$
2,520
|
|
$
1,113
|
|
126 %
|
% of VMware
net revenue
|
36
%
|
|
29
%
|
|
|
|
32
%
|
|
35
%
|
|
|
% of total
segment operating income
|
38
%
|
|
30
%
|
|
|
|
36
%
|
|
21
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation
to consolidated net revenue:
|
|
|
|
|
|
|
|
|
|
|
|
Reportable segment
net revenue
|
$
21,730
|
|
$
20,107
|
|
|
|
$
78,032
|
|
$
61,755
|
|
|
Other
businesses (a)
|
492
|
|
480
|
|
|
|
1,901
|
|
1,026
|
|
|
Unallocated
transactions (b)
|
(3)
|
|
(6)
|
|
|
|
(4)
|
|
41
|
|
|
Impact of
purchase accounting (c)
|
(284)
|
|
(507)
|
|
|
|
(1,269)
|
|
(1,180)
|
|
|
Total net
revenue
|
$
21,935
|
|
$
20,074
|
|
|
|
$
78,660
|
|
$
61,642
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation
to consolidated operating income (loss):
|
|
|
|
|
|
|
|
|
|
|
|
Reportable segment
operating income
|
$
2,163
|
|
$
1,911
|
|
|
|
$
6,892
|
|
$
5,351
|
|
|
Other
businesses (a)
|
(31)
|
|
(3)
|
|
|
|
(21)
|
|
(39)
|
|
|
Unallocated
transactions (b)
|
(12)
|
|
(65)
|
|
|
|
(16)
|
|
(199)
|
|
|
Impact of
purchase accounting (c)
|
(351)
|
|
(1,240)
|
|
|
|
(1,546)
|
|
(2,294)
|
|
|
Amortization
of intangibles
|
(1,730)
|
|
(1,535)
|
|
|
|
(6,980)
|
|
(3,681)
|
|
|
Transaction-related expenses (d)
|
(87)
|
|
(159)
|
|
|
|
(502)
|
|
(1,488)
|
|
|
Other
corporate expenses (e)
|
(273)
|
|
(577)
|
|
|
|
(1,160)
|
|
(902)
|
|
|
Total
operating loss
|
$
(321)
|
|
$
(1,668)
|
|
|
|
$
(3,333)
|
|
$
(3,252)
|
|
|
_________________
|
|
|
|
|
|
|
|
|
|
|
|
(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
|
|
|
|
Fiscal Year
Ended
|
|
|
|
February 2,
2018
|
|
February 3,
2017
|
|
Change
|
|
February 2,
2018
|
|
February 3,
2017
|
|
Change
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP net
revenue
|
$
22,219
|
|
$
20,581
|
|
8 %
|
|
$
79,929
|
|
$
62,822
|
|
27 %
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP gross
margin
|
$
7,022
|
|
$
6,595
|
|
6 %
|
|
$
25,185
|
|
$
16,819
|
|
50 %
|
% of non-GAAP net
revenue
|
32
%
|
|
32
%
|
|
|
|
32
%
|
|
27
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP operating
expenses
|
$
4,902
|
|
$
4,752
|
|
3 %
|
|
$
18,330
|
|
$
11,706
|
|
57 %
|
% of non-GAAP net
revenue
|
22
%
|
|
23
%
|
|
|
|
23
%
|
|
19
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP operating
income
|
$
2,120
|
|
$
1,843
|
|
15 %
|
|
$
6,855
|
|
$
5,113
|
|
34 %
|
% of non-GAAP net
revenue
|
10
%
|
|
9 %
|
|
|
|
9 %
|
|
8 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP net income
from continuing operations
|
$
1,097
|
|
$
1,091
|
|
1 %
|
|
$
3,660
|
|
$
2,687
|
|
36 %
|
% of non-GAAP net
revenue
|
5 %
|
|
5 %
|
|
|
|
5 %
|
|
4 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
$
2,466
|
|
$
2,184
|
|
13 %
|
|
$
8,217
|
|
$
5,941
|
|
38 %
|
% of non-GAAP net
revenue
|
11
%
|
|
11
%
|
|
|
|
10
%
|
|
9 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DELL TECHNOLOGIES
INC.
|
Reconciliation of
Selected Non-GAAP Financial Measures
|
(in millions,
except percentages; unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
Fiscal Year
Ended
|
|
|
|
February 2,
2018
|
|
February 3,
2017
|
|
Change
|
|
February 2,
2018
|
|
February 3,
2017
|
|
Change
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
revenue
|
$
21,935
|
|
$
20,074
|
|
9 %
|
|
$
78,660
|
|
$
61,642
|
|
28 %
|
Non-GAAP
adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
Impact of
purchase accounting
|
284
|
|
507
|
|
|
|
1,269
|
|
1,180
|
|
|
Non-GAAP net
revenue
|
$
22,219
|
|
$
20,581
|
|
8 %
|
|
$
79,929
|
|
$
62,822
|
|
27 %
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
margin
|
$
5,780
|
|
$
4,531
|
|
28 %
|
|
$
20,054
|
|
$
12,959
|
|
55 %
|
Non-GAAP
adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
Amortization
of intangibles
|
910
|
|
847
|
|
|
|
3,694
|
|
1,653
|
|
|
Impact of
purchase accounting
|
292
|
|
1,110
|
|
|
|
1,312
|
|
2,007
|
|
|
Transaction-related expenses
|
2
|
|
18
|
|
|
|
24
|
|
43
|
|
|
Other
corporate expenses
|
38
|
|
89
|
|
|
|
101
|
|
157
|
|
|
Non-GAAP gross
margin
|
$
7,022
|
|
$
6,595
|
|
6 %
|
|
$
25,185
|
|
$
16,819
|
|
50 %
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses
|
$
6,101
|
|
$
6,199
|
|
(2)%
|
|
$
23,387
|
|
$
16,211
|
|
44 %
|
Non-GAAP
adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
Amortization
of intangibles
|
(820)
|
|
(688)
|
|
|
|
(3,286)
|
|
(2,028)
|
|
|
Impact of
purchase accounting
|
(59)
|
|
(130)
|
|
|
|
(234)
|
|
(287)
|
|
|
Transaction-related expenses
|
(85)
|
|
(141)
|
|
|
|
(478)
|
|
(1,445)
|
|
|
Other
corporate expenses
|
(235)
|
|
(488)
|
|
|
|
(1,059)
|
|
(745)
|
|
|
Non-GAAP
operating expenses
|
$
4,902
|
|
$
4,752
|
|
3 %
|
|
$
18,330
|
|
$
11,706
|
|
57 %
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
loss
|
$
(321)
|
|
$
(1,668)
|
|
81 %
|
|
$
(3,333)
|
|
$
(3,252)
|
|
(2)%
|
Non-GAAP
adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
Amortization
of intangibles
|
1,730
|
|
1,535
|
|
|
|
6,980
|
|
3,681
|
|
|
Impact of
purchase accounting
|
351
|
|
1,240
|
|
|
|
1,546
|
|
2,294
|
|
|
Transaction-related expenses
|
87
|
|
159
|
|
|
|
502
|
|
1,488
|
|
|
Other
corporate expenses
|
273
|
|
577
|
|
|
|
1,160
|
|
902
|
|
|
Non-GAAP
operating income
|
$
2,120
|
|
$
1,843
|
|
15 %
|
|
$
6,855
|
|
$
5,113
|
|
34 %
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss from
continuing operations
|
$
(553)
|
|
$
(1,414)
|
|
61 %
|
|
$
(3,855)
|
|
$
(3,737)
|
|
(3)%
|
Non-GAAP
adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
Amortization
of intangibles
|
1,730
|
|
1,535
|
|
|
|
6,980
|
|
3,681
|
|
|
Impact of
purchase accounting
|
351
|
|
1,240
|
|
|
|
1,546
|
|
2,294
|
|
|
Transaction-related expenses
|
87
|
|
159
|
|
|
|
502
|
|
1,485
|
|
|
Other
corporate expenses
|
273
|
|
577
|
|
|
|
1,160
|
|
902
|
|
|
Aggregate
adjustment for income taxes
|
(791)
|
|
(1,006)
|
|
|
|
(2,673)
|
|
(1,938)
|
|
|
Non-GAAP net
income from continuing operations
|
$
1,097
|
|
$
1,091
|
|
1 %
|
|
$
3,660
|
|
$
2,687
|
|
36 %
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss from
continuing operations
|
$
(553)
|
|
$
(1,414)
|
|
61 %
|
|
$
(3,855)
|
|
$
(3,737)
|
|
(3)%
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
Interest and
other, net
|
555
|
|
742
|
|
|
|
2,355
|
|
2,104
|
|
|
Income tax
benefit
|
(323)
|
|
(996)
|
|
|
|
(1,833)
|
|
(1,619)
|
|
|
Depreciation
and amortization
|
2,143
|
|
2,041
|
|
|
|
8,634
|
|
4,840
|
|
|
EBITDA
|
$
1,822
|
|
$
373
|
|
388 %
|
|
$
5,301
|
|
$
1,588
|
|
234 %
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA
|
$
1,822
|
|
$
373
|
|
388 %
|
|
$
5,301
|
|
$
1,588
|
|
234 %
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based
compensation expense
|
205
|
|
215
|
|
|
|
835
|
|
392
|
|
|
Impact of
purchase accounting
|
284
|
|
1,075
|
|
|
|
1,274
|
|
1,926
|
|
|
Transaction-related expenses
|
87
|
|
159
|
|
|
|
502
|
|
1,525
|
|
|
Other
corporate expenses
|
68
|
|
362
|
|
|
|
305
|
|
510
|
|
|
Adjusted
EBITDA
|
$
2,466
|
|
$
2,184
|
|
13 %
|
|
$
8,217
|
|
$
5,941
|
|
38 %
|
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SOURCE Dell Technologies