Q4 FY23 Performance Review
Q4 FY23 Performance Review
Q4 FY23 Performance Review
Performance Review
March 2, 2023
Disclosures
#1 positions in E2E product Largest GTM Leading global Industry-leading Leading First & best
CSG and ISG and Multicloud and Channel services footprint scale and supply financial services VMware alliance
offerings ecosystem chain capabilities
7 Copyright © Dell Inc. All Rights Reserved.
Ample room to grow within $720B core business TAM
… and pursuing growth in adjacent markets within an incremental $720B TAM
External
# 1 Enterprise
Storage
Dell maintained the #1 position
# 1 High end
Storage
Per IDC WW Quarterly Enterprise Storage Systems Tracker CY22Q3 Per IDC WW Quarterly Enterprise Storage Systems Tracker CY22Q3 Per IDC WW Quarterly Enterprise Storage Systems Tracker CY22Q3 Per IDC WW Storage Software and Cloud Services Tracker CY22Q3
Purpose-Built
# 1 Converged
Systems
Per IDC WW Quarterly Converged Systems Tracker CY22Q3 Per IDC WW Quarterly Converged Systems Tracker CY22Q3 Per IDC WW Quarterly Purpose-Built Backup Appliance Tracker Per IDC WW Quarterly Enterprise Storage Systems Tracker CY22Q3
CY22Q3
9 Note: based on vendor revenue. Copyright © Dell Inc. All Rights Reserved.
Dell Technologies Server & PC key leadership positions
We have #1 positions in servers and the most profitable segments of the PC market
# 1 Server
Units
# 1 Server
Revenue
Per IDC WW Quarterly Server Tracker CY22Q3 Per IDC WW Quarterly Monitor Tracker CY22Q4 Per IDC Quarterly Gaming Tracker, CY22Q4, $1,500+ price band Per IDC WW Quarterly PC Device Tracker, CY22Q4
10 Note: based on units unless otherwise indicated. Copyright © Dell Inc. All Rights Reserved.
Multicloud Strategy
We are broadening our ecosystem to help make multicloud a reality for our customers
We have a significant presence with many of the leading cloud-based companies in the world, providing infrastructure to 77% 1 of them.
Our CSP customers, which include SaaS, telecom, cloud hosting companies and consumer webtech represent roughly 21%2 of our ISG portfolio.
Our goal is to bring a holistic multicloud experience to our customers through existing offerings and expansions via Project Alpine & Project Frontier.
AWS EKS-Anywhere container platform First announced in January, Project Alpine is Dell Technologies initiative to deliver an edge
running on top of VxRail bringing our file, block, and object storage operations software platform to securely scale
software to all major public clouds to deliver edge applications and infrastructure for
Microsoft Azure Stack HCI solution data mobility and consistent operations deployments across a broad set of industries
across cloud and on-premises locations
PowerScale for Google Cloud With Project Frontier, customers can
PowerFlex now available in the AWS Marketplace • Orchestrate applications and manage
PowerProtect Cyber Recovery for AWS, infrastructure remotely at global scale
Azure, and now for GCP • The first of Dell's storage software offerings to
be made available in the public cloud via • Secure their edge estate with zero trust
security
CyberSense for PowerProtect Cyber Recovery Project Alpine
for AWS • Delivers customers the mission critical • Design edge deployments with global planning
performance, scale, resilience, and and support services
management of PowerFlex with the ability to
purchase using their existing cloud credits
Dell APEX Private Cloud Dell APEX Backup Services Dell APEX Data Center Utility
Simplify operations with built-in lifecycle Scalable, efficient and secure hosted data Enterprise clients can move part of or all their
automation capabilities with infrastructure owned protection for SaaS Apps, Endpoints, and Hybrid data center operations to a Dell managed pay-
and deployed by Dell for VMware workloads workloads per-use model, leveraging the full suite of Dell’s
portfolio
Dell APEX High Performance Computing Dell APEX Cyber Recovery Services
Dell APEX Flex on Demand
Run large scale, compute-intensive workloads Dell managed day-to-day data protection and
Customers choose on-premises infrastructure &
delivered as-a-Service with a fully managed, recovery operations assistance from an isolated,
minimum usage, leveraging the full suite of Dell’s
subscription-based experience immutable & intelligent data vault
portfolio
$ in millions, except per share amounts 4Q22 1Q23 2Q23 3Q23 4Q23 Y/Y Q/Q FY22 FY23 Y/Y
SG&A 3,398 3,553 3,543 3,268 3,772 11% 15% 14,655 14,136 -4%
R&D 611 681 626 677 795 30% 17% 2,577 2,779 8%
Operating Expense 4,009 4,234 4,169 3,945 4,567 14% 16% 17,232 16,915 -2%
Operating Expense as a % of Revenue 14.4% 16.2% 15.8% 16.0% 18.3% 17.0% 16.6%
Operating Income 1,609 1,550 1,270 1,762 1,189 -26% -33% 4,659 5,771 24%
Operating Income as a % of Revenue 5.7% 5.9% 4.8% 7.1% 4.7% 4.6% 5.6%
Interest and Other, Net (1,657) (337) (635) (1,308) (266) 84% 80% 1,264 (2,546) -301%
Income Tax (19) 144 129 213 317 NM 49% 981 803 -18%
Effective tax rate % 39.6% 11.9% 20.3% 46.9% 34.3% 16.6% 24.9%
Net Income from Continuing Operations (29) 1,069 506 241 606 NM 151% 4,942 2,422 -51%
Less: Net Income attributable to non-controlling interests from cont. ops (1) (3) (5) (4) (8) -700% -100% (6) (20) -233%
Net Income attributable to Dell Technologies Inc. from cont. ops (28) 1,072 511 245 614 -93% -52% 4,948 2,442 -51%
3
Earnings Per Share from cont. ops - basic ($0.04) 1.42 0.69 0.34 0.86 NM 153% 6.49 3.33 -49%
3
Earnings Per Share cont. ops - diluted ($0.04) 1.37 0.68 0.33 0.84 NM 155% 6.26 3.24 -48%
1 Results include adjustments related to purchase accounting and other items. For additional detail on these adjustments, please refer to supplemental slides in Appendix B.
2 Results are presented on a continuing operations basis only. See Appendix C for consolidated GAAP results inclusive of net income attributable to discontinued operations.
3 See Appendix B for weighted average shares and EPS calculation.
15 Copyright © Dell Inc. All Rights Reserved.
Consolidated non-GAAP results1
Record FY23 revenue, operating income, and EPS
$ in millions, except per share amounts 4Q22 1Q23 2Q23 3Q23 4Q23 Y/Y Q/Q FY22 FY23 Y/Y
Operating Income 2,191 2,135 1,952 2,380 2,170 -1% -9% 7,785 8,637 11%
Operating Income as a % of Revenue 7.8% 8.2% 7.4% 9.6% 8.7% 7.7% 8.4%
Interest and Other, Net (335) (358) (371) (353) (383) -14% -8% (1,724) (1,465) 15%
Income Tax 466 343 315 322 465 0% 44% 1,137 1,445 27%
Effective tax rate % 25.1% 19.3% 19.9% 15.9% 26.0% 18.8% 20.1%
Net Income 1,390 1,434 1,266 1,705 1,322 -5% -22% 4,924 5,727 16%
Less: Net Income attributable to non-controlling interests - (1) (2) (2) (2) NM - 1 (7) -800%
Net Income attributable to Dell Technologies Inc. 1,390 1,435 1,268 1,707 1,324 -5% -22% 4,923 5,734 16%
2
Earnings Per Share - basic 1.82 1.90 1.72 2.34 1.85 2% -21% 6.46 7.81 21%
Earnings Per Share - diluted 2 1.72 1.84 1.68 2.30 1.80 5% -22% 6.22 7.61 22%
Fiscal quarter
CASH FLOW FROM TTM
1 $7.1B
OPERATIONS $5.8B $5.7B
$3.9B $3.6B
$3.1B $2.7B
$2.7B $-0.3B
$0.7B $0.4B
Q4 cash flow from Cash and investments
-12% Y/Y operations was $2.7B; was $10.2B and core
4Q22 1Q23 2Q23 3Q23 4Q23
inventory was down debt was $18.1B
$1.4B sequentially ending the year
ADJUSTED
2 $5.2B
FCF $3.9B $3.7B
$3.0B
$2.2B $2.3B
$1.5B
$2.3B $-1.1B $0.3B $0.1B
-24% Y/Y 4Q22 1Q23 2Q23 3Q23 4Q23
RPO was down Y/Y
due to a reduction in Recurring revenue4
3 backlog, partially offset was $5.6B during Q4,
RPO
$42B $42B $41B $40B
by a 10% Y/Y increase up 12% Y/Y
$39B
in deferred revenue
$40B
-4% Y/Y
+3% Q/Q
$9.9B
+7% Y/Y
REVENUE $9.5B $9.6B
Strong revenue growth Servers and networking
+12% Y/Y
+12% Y/Y
$9.2B $9.3B and record operating revenue grew 5% Y/Y,
$9.9B +3% Y/Y +16% Y/Y
income as we benefited
from cost favorability,
its 9th consecutive
quarter of growth,
+7% Y/Y
+3% Q/Q
pricing discipline, and despite a weak server
4Q22 1Q23 2Q23 3Q23 4Q23
higher revenue demand environment
Servers & Networking $4.7B, +7% Y/Y $5.0B, +22% Y/Y $5.2B, +16% Y/Y $5.2B, +14% Y/Y $4.9B, +5% Y/Y
Storage $4.5B, 0% Y/Y $4.2B, +9% Y/Y $4.3B, +6% Y/Y $4.4B, +11% Y/Y $5.0B, +10% Y/Y
OPERATING $1,543M
$1,374M +40% Y/Y Storage demand growth
INCOME $1,102M $1,082M $1,046M +54% Y/Y
-7% Y/Y +39% Y/Y +9% Y/Y
Storage revenue across multiple
was up 10% Y/Y, its categories, including
$1.5B 4th consecutive quarter PowerFlex, VxRail,
+40% Y/Y
+12% Q/Q of growth Data Protection and
4Q22 1Q23 2Q23 3Q23 4Q23 PowerStore
% of ISG revenue 12.0% 11.7% 11.0% 14.3% 15.6%
Basis points -130bps Y/Y +200bps Y/Y -30bps Y/Y +390bps Y/Y +360bps Y/Y
1 Amounts are based on underlying data and may not visually foot due to rounding.
18 Copyright © Dell Inc. All Rights Reserved.
ISG has a strong portfolio of #1 positions
With steady financial performance and a growing TAM
Server7
~$35B ~$4B
1) IDC Quarterly Enterprise Storage Systems Tracker, 2022Q3, based on revenue. 2) IDC Quarterly Converged Systems Tracker 2022Q3, based on revenue. 3) IDC Quarterly Server Tracker, 2022Q3, based on revenue.
Mainstream Server is based on OEM vendor type and includes: Large System, Standard Rack, Tower, and Blade. 4) IDC Quarterly Server Tracker, 2022Q3, based on revenue. 5) FY21-FY23. 6) Dell’Oro CY23-26
forecasts (Networking). 7) Dell analysis leveraging external data sources: IDC 2022Q3 Forecasts (Server, Storage); TAM note: Storage includes Core Storage, Data Protection, and HCI; Server is total server less HCI HW.
19 Copyright © Dell Inc. All Rights Reserved.
Client Solutions Group
Focused on our principal markets – commercial PC, high-end consumer, and gaming
$17.3B
$15.6B $15.5B
REVENUE +26% Y/Y
+17% Y/Y +9% Y/Y
$13.8B $13.4B
-17% Y/Y -23% Y/Y CSG revenue has
Gained 140+ bps of
grown at an 8% CAGR
Commercial PC unit
$13.4B since FY20 and FY23
share in CY222, our
-23% Y/Y revenue remained
-3% Q/Q tenth consecutive year
4Q22 1Q23 2Q23 3Q23 4Q23
above pre-pandemic
of share gains3
Commercial $12.9B, +30% Y/Y $12.0B, +22% Y/Y $12.1B, +15% Y/Y $10.7B, -13% Y/Y $10.7B, -17% Y/Y levels
Consumer $4.4B, +16% Y/Y $3.6B, +3% Y/Y $3.3B, -9% Y/Y $3.0B, -29% Y/Y $2.7B, -40% Y/Y
$1,157M $1,115M
OPERATING +11% Y/Y +3% Y/Y
$1,060M
$978M -7% Y/Y The near-term PC Q4 operating income
INCOME -1% Y/Y
$671M
market remains declined primarily due
challenged and was to descaling amid a
$0.7B -42% Y/Y
1 Amounts are based on underlying data and may not visually foot due to rounding.
2 Source: IDC Worldwide PC Tracker Q4 CY22 Final Historical.
3 Based on units, as of the Q4 CY22 IDC data. Data between Q1 CY2012 – Q4 CY2022
20 Copyright © Dell Inc. All Rights Reserved.
Focused on the most stable & profitable PC segments
Long track record of structural share gain … and will continue to consolidate and modernize
Working towards a shared goal of human progress, Brazilian oil and gas company Petrobras is working Zurich Insurance Group is working with Dell
Dell has provided computing systems and services with Dell Technologies to build its new Technologies to provide its workforce the latest Dell
to NASA for more than a decade, including for the supercomputer, Gaia. The new HPC system will PCs and peripherals. Configured to their specific
recent Artemis 1 launch, which marked the first to feature 7.7 petaflops of computing power, allowing needs, Zurich is ensuring employees can start work
put humans back on the moon since the Apollo 17 Petrobras to add another powerful exploration tool immediately, from anywhere, and support
mission in 1972. to help find oil or gas every time they drill. customers across over 210 countries and territories.
APEX Cyber Recovery Services - Dell managed New PowerEdge servers designed to accelerate Project Alpine
day-to-day data protection and recovery operations performance and reliability with greater security, First announced in January, PowerFlex is now
assistance from an isolated, immutable & intelligent including purpose built servers to support core available in the AWS Marketplace
data vault data centers, AI/ML workloads, cloud service Project Frontier
Dell APEX Containers for Red Hat Openshift - providers and Edge/Telecom
Initiative to deliver edge operations software platform
Offers an on-premises, Dell-managed Container-as- to securely scale edge applications and infrastructure
a-Service solution to empower developer innovation Storage for deployments across a broad set of industries
Dell APEX High Performance Compute - Snowflake Partnership
Empowers organizations to run large scale,
During Q1, we announced new PowerMax, We are helping customers have greater flexibility
compute-intensive workloads delivered as-a-Service
PowerStore, and PowerFlex that included over operating in multicloud environments, meet data
with a fully managed, subscription-based experience
500 new software enhancements to our industry sovereignty requirements, and easily turn data into
Dell APEX VMware Tanzu support - New offerings leading storage portfolio insights.
for VMware workloads that help speed development
Starburst Data Partnership
of cloud-native apps and better allocate compute
and storage resources for applications at the edge Our Latest collaboration with Starburst Data will allow
Concept Luna our analytics customers to deliver flexible and efficient
Dell APEX Data Storage Services -
architectures by combining the fastest and most
Custom Managed: gives organizations increased Building on Concept Luna, our new Latitude 5000 secure query engine and leading hardware platforms
control of their as-a-Service experience by owning series laptops are Dell’s most sustainable laptops for compute and storage
more of the day-to-day management. yet. The new design incorporates recycled
Back Up Target: provides customers with secure ocean-bound plastics, renewable bio-based
backup storage in a flexible as-a-Service rubber, and 100% recyclable packaging that is
consumption model made of 100% recycled or renewable materials And many more…
Advancing sustainability. Cultivating inclusion. Transforming lives. Upholding ethics & privacy.
-30% reduction in Scopes 1 & 2 99.6% of our employees participated Board of Directors receives regular
market-based greenhouse gas in foundational learning on key ESG updates
emissions since FY20 DE&I topics (up ~67%)
100% of employees completed
55% of electricity from renewable 88% of team members rated their assigned ethics and compliance
sources across Dell facilities job as meaningful training
Robust shareholder
Net-Zero goal across our full value 47% of our employees participated in engagement program driving
chain by 2050 or earlier Employee Resource Groups ongoing governance enhancements
(ERGs) to drive Social Impact
Source: 1.) Metrics are for Dell Technologies; excluding Secureworks. 2.) FY22 Environmental, Social, and Governance Report.
25 Copyright © Dell Inc. All Rights Reserved.
Appendix A
Debt and DFS summary
Debt summary1
2,3 4Q22 1Q23 2Q23 3Q23 4Q23
$ in billions
Revolver - - - - -
Term Loan A - - - - -
Term Loan B - - - - -
Senior Notes 16.3 16.3 16.3 16.3 18.3
High Yield Notes - - - - -
Legacy Dell IG Notes 1.0 1.0 1.0 1.0 1.0
Legacy EMC IG Notes - - - - -
DFS Allocated Debt (1.1) (0.7) (1.1) (1.0) (1.2)
1
Originations 2.7 2.1 2.3 2.3 3.0
Trailing twelve months 8.5 8.7 9.1 9.4 9.7
1 Originationsrepresent the amounts of financing provided by DFS to customers for equipment and related software and services, including third-party originations.
2 Amounts represent financing receivables included on the Dell Technologies Consolidated Statements of Financial Position.
3 Amounts represent net carrying value of equipment for DFS operating leases.
4 Total managed assets consists of financing receivables, syndicated receivables DFS still service, operating leases, and committed contract value for flex on demand.
1
Impact of purchase accounting 8 - - - -
1 This amount includes non-cash purchase accounting adjustments primarily related to the EMC merger transaction in 3Q17.
2 Consists of severance, facilities action, impairment, and other costs.
30 Copyright © Dell Inc. All Rights Reserved.
Supplemental non-GAAP measures
SG&A, R&D and operating expense
$ in millions 4Q22 1Q23 2Q23 3Q23 4Q23
1 This amount includes non-cash purchase accounting adjustments primarily related to the EMC merger transaction in 3Q17.
2 Consists of acquisition, integration, and divestiture-related costs.
3 Consists of impairment charges, severance, facilities action, incentive charges related to equity investments, other costs, and effective Q1FY23, payroll taxes associated with stock-based compensation. 4Q23
contains $281 million in severance expense associated with our announcement on Feb 6, 2023.
31 Copyright © Dell Inc. All Rights Reserved.
Supplemental non-GAAP measures
Operating Income
$ in millions 4Q22 1Q23 2Q23 3Q23 4Q23
Non-GAAP adjustments:
1 This amount includes non-cash purchase accounting adjustments primarily related to the EMC merger transaction in 3Q17.
2 Consists of acquisition, integration, and divestiture-related costs.
3 Consists of impairment charges, severance, facilities action, incentive charges related to equity investments, other costs, and effective Q1FY23, payroll taxes associated with stock-based compensation.
During Q2FY23, other corporate expenses also includes asset impairment charges and other costs associated with exiting our business in Russia. 4Q23 contains $367 million in severance expense
associated with our announcement on Feb 6, 2023.
32 Copyright © Dell Inc. All Rights Reserved.
Supplemental non-GAAP measures
Interest and other
$ in millions 4Q22 1Q23 2Q23 3Q23 4Q23
GAAP interest and other, net (1,657) (337) (635) (1,308) (266)
Adjustments:
2
Non-GAAP adjustments 1,322 (21) 264 955 (117)
Non-GAAP interest and other, net (335) (358) (371) (353) (383)
1 During 4Q22, other includes debt extinguishment fees of $1.5B primarily related to the early retirement of certain Investment Grade Notes. During 3Q23, other includes $1.0B expense recognized for the Class V
litigation settlement.
2 Consists of the fair value adjustments on strategic equity investments as well as adjustments for $1.5B of debt extinguishment fees during 4Q22 and $1.0B expense recognized for the Class V litigation settlement
during 3Q23.
33 Copyright © Dell Inc. All Rights Reserved.
Supplemental non-GAAP measures
Net income from continuing operations
$ in millions 4Q22 1Q23 2Q23 3Q23 4Q23
GAAP net income from cont. ops (29) 1,069 506 241 606
Non-GAAP adjustments:
1 This amount includes non-cash purchase accounting adjustments primarily related to the EMC merger transaction in 3Q17.
2 Consists of acquisition, integration, and divestiture-related costs and gains. 4Q22 includes $1.5B debt extinguishment fees primarily related to the early retirement of certain Investment Grade Notes.
3 Consists of impairment charges, incentive charges related to equity investments, severance, facility action, other costs, and effective Q1FY23, payroll taxes associated with stock-based compensation. During Q2FY23, other corporate expenses also
includes asset impairment charges and other costs associated with exiting our business in Russia. During 3Q23, other includes $1.0B expense recognized for the Class V litigation settlement. 4Q23 contains $367 million in severance expense
associated with our announcement on Feb 6, 2023.
4 Consists of the gain (loss) on strategic investments, which includes recurring fair value adjustments on equity investments.
5 Consists of the tax effects of non-GAAP adjustments, as well as an adjustment for discrete tax items.
34 Copyright © Dell Inc. All Rights Reserved.
Supplemental non-GAAP measures
Net income attributable to Dell Technologies Inc. from continuing operations
$ in millions 4Q22 1Q23 2Q23 3Q23 4Q23
GAAP net income from cont. ops attributable to Dell Technologies Inc. (28) 1,072 511 245 614
Non-GAAP net income attributable to Dell Technologies Inc. 1,390 1,435 1,268 1,707 1,324
1 This amount includes non-cash purchase accounting adjustments primarily related to the EMC merger transaction in 3Q17.
2 Consists of acquisition, integration, and divestiture-related costs and gains. 4Q22 includes $1.5B debt extinguishment fees primarily related to the early retirement of certain Investment Grade Notes.
3 Consists of impairment charges, incentive charges related to equity investments, severance, facility action, other costs, and effective Q1FY23, payroll taxes associated with stock-based compensation. During Q2FY23, other corporate expenses also
includes asset impairment charges and other costs associated with exiting our business in Russia. During 3Q23, other includes $1.0B expense recognized for the Class V litigation settlement. 4Q23 contains $367 million in severance expense
associated with our announcement on Feb 6, 2023.
4 Consists of the gain (loss) on strategic investments, which includes recurring fair value adjustments on equity investments.
5 Consists of the tax effects of non-GAAP adjustments, as well as an adjustment for discrete tax items.
35 Copyright © Dell Inc. All Rights Reserved.
Supplemental non-GAAP measures
Earnings per share - basic and diluted
$ in millions, except per share figures 4Q22 1Q23 2Q23 3Q23 4Q23
GAAP net income from cont. ops attributable to Dell Technologies Inc. (28) 1,072 511 245 614
Weighted-average shares outstanding - basic 763 754 739 728 716
GAAP EPS attributable to Dell Technolgies Inc. - basic ($0.04) $1.42 $0.69 $0.34 $0.86
GAAP net income attributable to Dell Technolgies Inc. - diluted (28) 1,072 511 245 614
Weighted-average shares outstanding - diluted 763 780 755 743 735
GAAP EPS attributable to Dell Technolgies Inc. - diluted ($0.04) $1.37 $0.68 $0.33 $0.84
Non-GAAP net income attributable to Dell Technologies Inc. 1,390 1,435 1,268 1,707 1,324
Weighted-average shares outstanding - basic 763 754 739 728 716
Non-GAAP EPS attributable to Dell Technolgies Inc. - basic $1.82 $1.90 $1.72 $2.34 $1.85
Non-GAAP net income attributable to Dell Technolgies Inc. - diluted 1,390 1,435 1,268 1,707 1,324
Weighted-average shares outstanding - diluted 810 780 755 743 735
Non-GAAP EPS attributable to Dell Technolgies Inc. - diluted $1.72 $1.84 $1.68 $2.30 $1.80
Adjustments:
1
Interest and other, net 1,657 337 635 1,308 266
Income tax provision (benefit) (19) 144 129 213 317
Depreciation and amortization 830 726 744 832 854
Adjustments:
2
Impact of purchase accounting 8 - - - -
3
Transaction costs (income) (22) 5 3 8 6
Stock-based compensation 216 232 236 235 228
4
Other corporate expenses 45 96 196 109 498
1 During 4Q22, interest and other includes $1.5B of debt extinguishment costs. During 3Q23, other includes $1.0B expense recognized for the Class V litigation settlement.
2 This amount includes non-cash purchase accounting adjustments primarily related to the EMC merger transaction in 3Q17.
3 Consists of acquisition, integration, and divestiture-related costs and gains.
4 Consists of impairment charges, incentive charges related to equity investments, severance, facility action, other costs, and effective Q1FY23, payroll taxes associated with stock-based compensation.
During Q2FY23, other corporate expenses also includes asset impairment charges and other costs associated with exiting our business in Russia.
37 Copyright © Dell Inc. All Rights Reserved.
Supplemental non-GAAP measures
Free cash flow
$ in millions 4Q22 1Q23 2Q23 3Q23 4Q23
Adjustments:
Capital expenditures and capitalized software development costs, net (719) (690) (807) (747) (749)
Adjustments:
DFS financing receivables 475 (280) 202 364 175
1
DFS operating leases 128 158 134 81 127
Free cash flow before impact from DFS related items 2,977 (1,081) 253 94 2,267
1 Amount represents change in net carrying value of equipment for DFS operating leases.
Adjustments:
Capital expenditures and capitalized software development costs, net (2,553) (2,062) (2,755) (2,993)
Adjustments:
DFS financing receivables 1,329 728 241 461
2
DFS operating leases 819 474 394 500
Free cash flow before impact from DFS related items 8,886 10,547 8,187 1,533
Adjustments:
VMware capital expenditures (279) (329) (263) -
Free cash flow, excluding VMware, before impact from DFS related items 5,293 6,467 5,230 1,533
1 Amounts are based on underlying data and may not visually foot due to rounding.
39 2 Amount represents change in net carrying value of equipment for DFS operating leases. Copyright © Dell Inc. All Rights Reserved.
Supplemental FY20 - FY23 non-GAAP Measures
$ in millions, except per share amounts FY20 FY21 FY22 FY23
Net income from continuing operations attributable to Dell Technologies Inc. $ 525 $ 2,249 $ 4,948 $ 2,442
Amortization of intangibles 2,971 2,133 1,641 970
Impact of purchase accounting 1 274 144 67 44
Transaction costs 2 116 (332) (2,143) (16)
Stock-based compensation 245 487 808 931
Other corporate expenses 3 844 268 337 1,812
Fair value adjustment on equity investments 4 (159) (427) (572) 206
Aggregate adjustment for income taxes 5 (1,361) (772) (156) (642)
Total non-GAAP adjustments attributable to non-controlling interest (4) (6) (7) (13)
Total adjustments to Net income attributable to Dell Technologies Inc. $ 2,926 $ 1,495 $ (25) $ 3,292
Non-GAAP net income attributable to Dell Technologies Inc. $ 3,451 $ 3,744 $ 4,923 $ 5,734
Net income attributable to Dell Technologies Inc. $ 525 $ 2,249 $ 4,948 $ 2,442
Weighted-average shares outstanding - basic 724 744 762 734
Earnings per share attributable to Dell Technologies Inc. - basic $ 0.73 $ 3.02 $ 6.49 $ 3.33
1 This amount includes non-cash purchase accounting adjustments primarily related to the EMC merger transaction.
2 Consists of acquisition, integration, and divestiture-related costs and gains.
3 Consists of impairment charges, severance, facilities action, incentive charges related to equity investments, and other costs.
4 Consists of the gain (loss) on strategic investments, which includes recurring fair value adjustments on equity investments.
5 Consists of the tax effects of non-GAAP adjustments, as well as an adjustment for discrete tax items.
Current assets:
Cash and cash equivalents 9,477 6,654 5,507 4,904 8,607
Accounts receivable, net 12,912 11,837 13,431 11,431 12,482
Due from related parties, net 131 131 195 203 378
Short-term financing receivables, net 5,089 4,796 4,860 4,915 5,281
Inventories, net 5,898 6,277 5,883 6,172 4,776
Other current assets 11,526 11,681 12,386 11,157 10,827
Property, plant, and equipment, net 5,415 5,516 5,772 5,847 6,209
Long-term investments 1,839 1,868 1,520 1,534 1,518
Long-term financing receivables, net 5,522 5,398 5,450 5,659 5,638
Goodwill 19,770 19,598 19,505 19,366 19,676
Intangible assets, net 7,461 7,217 6,972 6,728 6,468
Due from related parties, net 710 713 609 612 440
Other non-current assets 6,985 6,720 6,685 6,639 7,311
Current liabilities:
Short-term debt 5,823 5,925 6,647 6,767 6,573
Accounts payable 27,143 25,585 25,339 22,507 18,598
Due to related parties, net 1,414 622 1,269 712 2,067
Accrued and other 7,578 6,598 6,810 7,915 8,874
Short-term deferred revenue 14,261 14,329 14,724 14,106 15,542
Total Dell Technologies Inc. stockholders' equity (deficit) (1,685) (2,462) (2,860) (3,469) (3,122)
Non-controlling interest 105 107 105 101 97
Total liabilities, redeemable shares and stockholders' equity (deficit) 92,735 88,406 88,775 85,172 89,611
Less: Net Income attributable to non-controlling interests from cont. ops (6) (20) -233%
Less: Net Income attributable to non-controlling interests from discont. ops 150 - -100%
Net Income attributable to Dell Technologies Inc. - basic 5,563 2,442 -56%
2
Earnings Per Share from cont. ops - basic $6.49 $3.33 -49%
2
Earnings Per Share from cont. ops - diluted $6.26 $3.24 -48%
1 Results include material adjustments related to purchase accounting and other items. For additional detail on these adjustments, please refer to supplemental slides in Appendix B.
2 See Appendix B for weighted average shares and EPS calculation.
44 Copyright © Dell Inc. All Rights Reserved.
Appendix D
FY23 Q4 Guidance
Supplemental non-GAAP Measures
Financial Guidance1
1Q24 FY24
(in billions, except per share amounts) Gross margin Diluted EPS Interest and other, net Diluted EPS
1 Amounts are subject to change with no obligation to reconcile these estimates. Amounts may not visually foot due to underlying data. Reconciliations are not provided for net revenue as, effective Q1FY23, there are no longer adjustments to net revenue.
2 No estimates are included for 1Q24 and FY24 guidance purposes on potential fair value adjustments on strategic investments gi ven the potential volatility of either gains or losses on those equity investments.
3 Impact of purchase accounting and amortization of intangibles represents an estimate for acquisitions completed as of February 3, 2023 and does not include estimates for potential acquisitions, if any, during FY24.
4 Consists of acquisition, integration, divestiture-related, and other costs. No estimate is included for any potential severance expense as it cannot be reasonably estimated at this time.
5 The aggregate adjustment for income taxes is the estimated combined income tax effect for the adjustments shown above.