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Dell Technologies Announces Third Quarter Fiscal 2023 Financial Results
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Dell Technologies Announces Third Quarter Fiscal 2023 Financial Results

News summary

  • Third quarter revenue down 6% at $24.7 billion
  • Operating income up 68% at a record $1.8 billion, and non-GAAP operating income up 22% at a record $2.4 billion
  • Diluted earnings per share at $0.33, and non-GAAP diluted earnings per share at $2.30

ROUND ROCK, Texas, Nov. 21, 2022 /PRNewswire/ —

Full story

Dell Technologies (NYSE: DELL) announces financial results for its fiscal 2023 third quarter. Revenue was $24.7 billion, down 6%. Operating income was a record $1.8 billion, up 68%, representing 7.1% of revenue, and non-GAAP operating income was a record $2.4 billion, up 22%, representing 9.6% of revenue. Net income from continuing operations was $241 million, and non-GAAP net income was $1.7 billion. Diluted earnings per share was $0.33, and non-GAAP diluted earnings per share was $2.30.

Dell Technologies ended the quarter with remaining performance obligations of $39 billion and deferred revenue of $27.1 billion. Recurring revenue for the third quarter was approximately $5.4 billion, up 11% year-over-year. Cash and investments were $6.5 billion, and $847 million was returned to shareholders in the third quarter through share repurchases and dividends.

Third Quarter Fiscal 2023 Financial Results


Three Months Ended




Nine Months Ended




October 28, 2022


October 29, 2021


Change


October 28, 2022


October 29, 2021


Change


(in millions, except per share amounts and percentages; unaudited)

Total net revenue

$          24,721


$          26,424


(6) %


$          77,262


$          73,205


6 %

Operating income

$            1,762


$            1,046


68 %


$            4,582


$            3,050


50 %

Net income from continuing operations

$               241


$            3,683


(93) %


$            1,816


$            4,971


(63) %

Earnings per share – diluted

$              0.33


$              4.68


(93) %


$              2.41


$              6.34


(62) %













Non-GAAP net revenue

$          24,721


$          26,432


(6) %


$          77,262


$          73,229


6 %

Non-GAAP operating income

$            2,380


$            1,956


22 %


$            6,467


$            5,594


16 %

Non-GAAP net income

$            1,705


$            1,313


30 %


$            4,405


$            3,534


25 %

Non-GAAP earnings per share – diluted

$              2.30


$              1.66


39 %


$              5.81


$              4.50


29 %

During the three and nine months ended October 28, 2022, net income from continuing operations and earnings per share-diluted include a $1.0 billion expense recognized within interest and other, net, in connection with a previously reported litigation settlement agreement.

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.

Operating segments summary

Infrastructure Solutions Group delivered record third quarter revenue of $9.6 billion, up 12% year-over-year and its seventh consecutive quarter of year-over-year growth. Servers and networking revenue was $5.2 billion, up 14%. Storage revenue was $4.4 billion, up 11%. Operating income was a record $1.4 billion, up 54% and approximately 14.3% of Infrastructure Solutions Group revenue.

Client Solutions Group delivered third quarter revenue of $13.8 billion, down 17% year-over-year. Commercial revenue was $10.7 billion, down 13%, and Consumer revenue was $3 billion, down 29%. Operating income was $1.1 billion, down 7% and approximately 7.7% of Client Solutions Group revenue. 

Key areas of innovation:

Executive Quotes:

  • “We played our hand in Q3 exceptionally well; it’s what we do,” said Jeff Clarke, vice chairman and co-chief operating officer, Dell Technologies. “We reduced backlog to meet customer needs and deliver record business results, including record third quarter ISG revenue of $9.6 billion. At the same time, our innovation engine is operating at full throttle in strategic areas like edge, multicloud and as-a-Service.”
  • “We executed Q3 with focus and delivered strong operating results, successfully navigating the challenging environment we highlighted in our Q2 earnings call,” said Chuck Whitten, co-chief operating officer, Dell Technologies. “With the industry’s largest direct sales force and our technology ecosystem, we anticipated the changing landscape and responded quickly. We combatted slower demand and drove record profitability, with record operating income of $1.8 billion.”
  • “We continue to perform well in any environment, driving record operating income and growing revenue 6% year-to-date to $77 billion,” said Tom Sweet, chief financial officer, Dell Technologies. “We’re creating long-term value with strong share positions in the most profitable parts of the market, generating solid free cash flow over time and returning capital to shareholders.”

Conference call information

As previously announced, the Company will hold a conference call to discuss its performance and financial guidance on Nov. 21, 2022, at 3:30 p.m. CST. Prior to the start of the conference call, prepared remarks and a presentation containing additional financial and operating information prior to financial guidance may be downloaded from investors.delltechnologies.com. The conference call will be broadcast live over the internet and can be accessed at

https://investors.delltechnologies.com/events-and-presentations/upcoming-events 

For those unable to listen to the live broadcast, the final remarks and presentation with financial guidance will be available following the broadcast, and an archived version will be available at the same location for one year.

Customer Highlights Blog

Read our quarterly blog from Bill Scannell, Dell Technologies president of Global Sales & Customer Operations, to learn more about how we are helping customers with their digital transformations:

https://www.dell.com/en-us/blog/driving-our-customers-businesses-forward/

Environmental, Social and Governance (ESG)

Our Environmental, Social and Governance (ESG) efforts focus on driving positive impact for people and our planet while delivering long-term value for our stakeholders. Explore our ESG resources at

https://www.dell.com/en-us/dt/corporate/social-impact/reporting/esg-governance.htm

About Dell Technologies

Dell Technologies (NYSE:DELL) helps organizations and individuals build their digital future and transform how they work, live and play. The company provides customers with the industry’s broadest and most innovative technology and services portfolio for the data era.

Copyright © 2022 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. 

Non-GAAP Financial Measures:

This press release presents information about Dell Technologies’ non-GAAP net revenue, non-GAAP gross margin, non-GAAP operating expenses, non-GAAP operating income, non-GAAP net income, non-GAAP net income attributable to non-controlling interests, non-GAAP net income attributable to Dell Technologies Inc. – basic, non-GAAP net income attributable to Dell Technologies Inc. – diluted, non-GAAP earnings per share attributable to Dell Technologies Inc. – basic, and non-GAAP earnings per share attributable to Dell Technologies Inc. – diluted, which are non-GAAP financial measures provided as a supplement to the results provided in accordance with generally accepted accounting principles in the United States of America (“GAAP”). A reconciliation of each non-GAAP financial measure to the most directly comparable GAAP financial measure is provided in the attached tables for each of the fiscal periods indicated.

Special Note on Forward-Looking Statements:

Statements in this press release that relate to future results and events are forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934 and Section 27A of the Securities Act of 1933 and are based on Dell Technologies’ current expectations. In some cases, you can identify these statements by such forward-looking words as “anticipate,” “believe,” “confidence,” “could,” “estimate,” “expect,” “guidance,” “intend,” “may,” “objective,” “outlook,” “plan,” “project,” “possible,” “potential,” “should,” “will” and “would,” or similar words or expressions that refer to future events or outcomes.

Dell Technologies’ results or events in future periods could differ materially from those expressed or implied by these forward-looking statements because of risks, uncertainties, and other factors that include, but are not limited to, the following: risks and uncertainties relating to our spin-off of VMware, Inc., including the potential effects on our business of the transaction; the effects of the COVID-19 pandemic; 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, software, and services; cyber attacks or other data security incidents; Dell Technologies’ foreign operations and ability to generate substantial non-U.S. net revenue; Dell Technologies’ product, services, 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; material impairment of the value of goodwill or intangible assets; weak economic conditions and the effect of additional regulation on Dell Technologies’ financial services activities; counterparty default risks; the loss by Dell Technologies of any contracts for ISG services and solutions and its ability to perform such contracts at their estimated costs; loss by Dell Technologies of government contracts; 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; disruptions in Dell Technologies’ infrastructure; 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, including the risk associated with final court approval of the recently announced litigation settlement; compliance requirements of changing environmental and safety laws or other laws; the effect of armed hostilities, terrorism, natural disasters, and public health issues; the effect of global climate change and legal, regulatory, or market measures to address climate change; Dell Technologies’ dependence on the services of Michael Dell and key employees; Dell Technologies’ level of indebtedness; the effect of the transition from LIBOR as a reference rate to calculate interest rates under our variable-rate indebtedness; and business and financial factors and legal restrictions affecting continuation of Dell Technologies’ quarterly cash dividend policy and dividend rate.

This list of risks, uncertainties, and other factors is not complete. Dell Technologies discusses some of these matters more fully, as well as certain risk factors that could affect Dell Technologies’ business, financial condition, results of operations, and prospects, in its reports filed with the SEC, including Dell Technologies’ annual report on Form 10-K for the fiscal year ended January 28, 2022, quarterly reports on Form 10-Q, and current reports on Form 8-K. These filings are available for review through the SEC’s website at 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. FINANCIAL INFORMATION

Basis of Presentation

Spin-Off of VMware, Inc. — On November 1, 2021, Dell Technologies Inc. completed its spin-off of VMware, Inc. (“VMware”) by means of a special stock dividend (the “VMware Spin-off”). In accordance with applicable accounting guidance, the results of VMware, excluding Dell’s resale of VMware offerings, are presented as discontinued operations in the Condensed Consolidated Statements of Income and, as such, have been excluded from both continuing operations and segment results for the three and nine months ended October 29, 2021. The Condensed Consolidated Statements of Cash Flows are presented on a consolidated basis for both continuing operations and discontinued operations.

DELL TECHNOLOGIES INC.

Consolidated Statements of Income and Related Financial Highlights

(in millions, except percentages; unaudited)



Three Months Ended




Nine Months Ended




October 28, 2022


October 29, 2021


Change


October 28, 2022


October 29, 2021


Change

Net revenue:












Products

$     18,938


$     20,979


(10) %


$  60,212


$  57,361


5 %

Services

5,783


5,445


6 %


17,050


15,844


8 %

Total net revenue

24,721


26,424


(6) %


77,262


73,205


6 %

Cost of net revenue:












Products

15,601


17,833


(13) %


50,281


47,959


5 %

Services

3,413


3,057


12 %


10,051


8,973


12 %

Total cost of net revenue

19,014


20,890


(9) %


60,332


56,932


6 %

Gross margin

5,707


5,534


3 %


16,930


16,273


4 %

Operating expenses:












Selling, general, and administrative

3,268


3,838


(15) %


10,364


11,257


(8) %

Research and development

677


650


4 %


1,984


1,966


1 %

Total operating expenses

3,945


4,488


(12) %


12,348


13,223


(7) %

Operating income

1,762


1,046


68 %


4,582


3,050


50 %

Interest and other, net

(1,308)


3,501


(137) %


(2,280)


2,921


(178) %

Income before income taxes

454


4,547


(90) %


2,302


5,971


(61) %

Income tax expense

213


864


(75) %


486


1,000


(51) %

Net income from continuing operations

241


3,683


(93) %


1,816


4,971


(63) %

Income from discontinued operations, net of income taxes


205


(100) %



735


(100) %

Net income

241


3,888


(94) %


1,816


5,706


(68) %

Less: Net loss attributable to non-controlling interests

(4)


(2)


(100) %


(12)


(5)


(140) %

Less: Net income attributable to non-controlling interests of discontinued operations


47


(100) %



150


(100) %

Net income attributable to Dell Technologies Inc.

$           245


$       3,843


(94) %


$     1,828


$     5,561


(67) %













Percentage of Total Net Revenue:












Gross margin

23.1 %


20.9 %




21.9 %


22.2 %



Selling, general, and administrative

13.3 %


14.4 %




13.4 %


15.3 %



Research and development

2.7 %


2.5 %




2.6 %


2.7 %



Operating expenses

16.0 %


16.9 %




16.0 %


18.0 %



Operating income

7.1 %


4.0 %




5.9 %


4.2 %



Income before income taxes

1.8 %


17.2 %




3.0 %


8.2 %



Net income from continuing operations

1.0 %


13.9 %




2.4 %


6.8 %



Income tax rate

46.9 %


19.0 %




21.1 %


16.7 %



____________________

During the three and nine months ended October 28, 2022, net income from continuing operations includes the impact of $1.0 billion expense recognized within interest and other, net, in connection with a previously reported litigation settlement agreement.


Amounts are based on underlying data and may not visually foot due to rounding.

 

DELL TECHNOLOGIES INC.

Consolidated Statements of Financial Position

(in millions; unaudited)



October 28, 2022


January 28, 2022

ASSETS

Current assets:




Cash and cash equivalents

$                           4,909


$                           9,477

Accounts receivable, net

11,431


12,912

Due from related party, net

203


131

Short-term financing receivables, net

4,915


5,089

Inventories

6,172


5,898

Other current assets

11,157


11,526

Total current assets

38,787


45,033

Property, plant, and equipment, net

5,847


5,415

Long-term investments

1,534


1,839

Long-term financing receivables, net

5,659


5,522

Goodwill

19,366


19,770

Intangible assets, net

6,728


7,461

Due from related party, net

612


710

Other non-current assets

6,639


6,985

Total assets

$                         85,172


$                         92,735

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:




Short-term debt

$                           6,767


$                           5,823

Accounts payable

22,507


27,143

Due to related party

712


1,414

Accrued and other

7,915


7,578

Short-term deferred revenue

14,106


14,261

Total current liabilities

52,007


56,219

Long-term debt

20,562


21,131

Long-term deferred revenue

12,983


13,312

Other non-current liabilities

2,988


3,653

Total liabilities

88,540


94,315

Stockholders’ equity (deficit):




Total Dell Technologies Inc. stockholders’ equity (deficit)

(3,469)


(1,685)

Non-controlling interests

101


105

Total stockholders’ equity (deficit)

(3,368)


(1,580)

Total liabilities and stockholders’ equity

$                        85,172


$                        92,735

 

DELL TECHNOLOGIES INC.

Consolidated Statements of Cash Flows

(in millions; unaudited)



Three Months Ended


Nine Months Ended


October 28, 2022


October 29, 2021


October 28, 2022


October 29, 2021

Cash flows from operating activities:








Net income

$                241


$            3,888


$            1,816


$            5,706

Adjustments to reconcile net income to net cash provided by

operating activities:

155


(637)


(965)


1,508

Change in cash from operating activities

396


3,251


851


7,214

Cash flows from investing activities:








Purchases of investments

(21)


(50)


(101)


(320)

Maturities and sales of investments

31


119


99


454

Capital expenditures and capitalized software development costs

(747)


(799)


(2,244)


(2,056)

Acquisition of businesses and assets, net




(16)

Divestitures of businesses and assets, net


3,957



3,957

Other

7


14


18


34

Change in cash from investing activities

(730)


3,241


(2,228)


2,053

Cash flows from financing activities:








Proceeds from the issuance of common stock


140


5


326

Repurchases of parent common stock (a)

(622)


(18)


(3,090)


(35)

Repurchases of subsidiary common stock (a)


(196)


(8)


(1,174)

Payments of dividends to stockholders

(238)



(728)


Proceeds from debt

2,314


9,102


8,779


13,037

Repayments of debt

(1,837)


(4,646)


(8,079)


(13,069)

Debt-related costs and other, net

(3)


(99)


(17)


(113)

Change in cash from financing activities

(386)


4,283


(3,138)


(1,028)

Effect of exchange rate changes on cash, cash equivalents,

and restricted cash

(149)


(33)


(343)


(54)

Change in cash, cash equivalents, and restricted cash

(869)


10,742


(4,858)


8,185

Cash, cash equivalents, and restricted cash at beginning of the

period, including cash attributable to discontinued operations

6,093


12,627


10,082


15,184

Cash, cash equivalents, and restricted cash at end of the

period, including cash attributable to discontinued operations

5,224


23,369


5,224


23,369

Less: Cash, cash equivalents, and restricted cash

attributable to discontinued operations


12,553



12,553

Cash, cash equivalents, and restricted cash from continuing

operations

$            5,224


$          10,816


$            5,224


$          10,816

_________________

(a)

Common stock repurchases are inclusive of employee tax withholding on stock-based compensation.

 

DELL TECHNOLOGIES INC.

Segment Information

(in millions, except percentages; unaudited; continued on next page)



Three Months Ended




Nine Months Ended




October 28, 2022


October 29, 2021


Change


October 28, 2022


October 29, 2021


Change

Infrastructure Solutions Group (ISG):

Net revenue:












Servers and networking

$           5,201


$           4,561


14 %


$         15,458


$         13,181


17 %

Storage

4,429


4,003


11 %


12,993


11,966


9 %

Total ISG net revenue

$           9,630


$           8,564


12 %


$         28,451


$         25,147


13 %













Operating Income:












ISG operating income

$           1,374


$               894


54 %


$           3,502


$           2,634


33 %

% of ISG net revenue

14.3 %


10.4 %




12.3 %


10.5 %



% of total reportable segment operating income

56 %


44 %




53 %


45 %















Client Solutions Group (CSG):

Net revenue:












Commercial

$         10,747


$         12,300


(13) %


$         34,859


$         32,685


7 %

Consumer

3,028


4,256


(29) %


9,993


11,450


(13) %

Total CSG net revenue

$         13,775


$         16,556


(17) %


$         44,852


$         44,135


2 %













Operating Income:












CSG operating income

$           1,060


$           1,142


(7) %


$           3,153


$           3,208


(2) %

% of CSG net revenue

7.7 %


6.9 %




7.0 %


7.3 %



% of total reportable segment operating income

44 %


56 %




47 %


55 %





Amounts are based on underlying data and may not visually foot due to rounding.

 

DELL TECHNOLOGIES INC.

Segment Information

(in millions, except percentages; unaudited; continued)



Three Months Ended


Nine Months Ended


October 28, 2022


October 29, 2021


October 28, 2022


October 29, 2021

Reconciliation to consolidated net revenue:







Reportable segment net revenue

$             23,405


$             25,120


$             73,303


$             69,282

Other businesses (a)

1,313


1,310


3,951


3,940

Unallocated transactions (b)

3


2


8


7

Impact of purchase accounting (c)


(8)



(24)

Total consolidated net revenue

$             24,721


$             26,424


$             77,262


$             73,205









Reconciliation to consolidated operating income:








Reportable segment operating income

$                2,434


$                2,036


$                6,655


$                5,842

Other businesses (a)

(57)


(81)


(192)


(248)

Unallocated transactions (b)

3


1


4


Impact of purchase accounting (c)

(21)


(12)


(33)


(47)

Amortization of intangibles

(245)


(431)


(732)


(1,318)

Transaction-related expenses (d)

(8)


(229)


(16)


(295)

Stock-based compensation expense (e)

(235)


(214)


(703)


(592)

Other corporate expenses (f)

(109)


(24)


(401)


(292)

Total consolidated operating income

$                1,762


$                1,046


$                4,582


$                3,050

_________________

(a)

Other businesses consists of: 1) Dell’s resale of standalone VMware, Inc. products and services, “VMware Resale,” 2) Secureworks, and 3) Virtustream, and do not meet the requirements for a reportable segment, either individually or collectively.

(b)

Unallocated transactions includes 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)

Stock-based compensation expense consists of equity awards granted based on the estimated fair value of those awards at grant date.

(f)

Other corporate expenses includes impairment charges, incentive charges related to equity investments, severance, payroll taxes associated with stock-based compensation, facilities action, and other costs. During the nine months ended October 28, 2022, other corporate expenses includes impairment and other costs incurred in connection with exiting the Company’s business in Russia.

 

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, non-GAAP net income attributable to Dell Technologies Inc. – basic and diluted, non-GAAP earnings per share attributable to Dell Technologies Inc. – basic, and non-GAAP earnings per share attributable to Dell Technologies Inc. – diluted, 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 these reports in conjunction with the presentation of non-GAAP financial measures.

 

DELL TECHNOLOGIES INC.

Selected Non-GAAP Financial Measures

(in millions, except per share amounts and percentages; unaudited)



Three Months Ended




Nine Months Ended




October 28, 2022


October 29, 2021


Change


October 28, 2022


October 29, 2021


Change

Non-GAAP net revenue

$            24,721


$            26,432


(6) %


$            77,262


$            73,229


6 %

Non-GAAP gross margin

$              5,865


$              5,729


2 %


$            17,456


$            16,866


3 %

% of non-GAAP net revenue

23.7 %


21.7 %




22.6 %


23.0 %



Non-GAAP operating expenses

$              3,485


$              3,773


(8) %


$            10,989


$            11,272


(3) %

% of non-GAAP net revenue

14.1 %


14.3 %




14.2 %


15.4 %



Non-GAAP operating income

$              2,380


$              1,956


22 %


$              6,467


$              5,594


16 %

% of non-GAAP net revenue

9.6 %


7.4 %




8.4 %


7.6 %



Non-GAAP net income

$              1,705


$              1,313


30 %


$              4,405


$              3,534


25 %

% of non-GAAP net revenue

6.9 %


5.0 %




5.7 %


4.8 %



Non-GAAP earnings per share – diluted

$                2.30


$                1.66


39 %


$                5.81


$                4.50


29 %


Amounts are based on underlying data and may not visually foot due to rounding.

 

DELL TECHNOLOGIES INC.

Reconciliation of Selected Non-GAAP Financial Measures

(in millions, except percentages; unaudited; continued on next page)



Three Months Ended




Nine Months Ended




October 28, 2022


October 29, 2021


Change


October 28, 2022


October 29, 2021


Change

Net revenue

$             24,721


$             26,424


(6) %


$             77,262


$             73,205


6 %

Non-GAAP adjustments:












Impact of purchase accounting


8





24



Non-GAAP net revenue

$             24,721


$             26,432


(6) %


$             77,262


$             73,229


6 %













Gross margin

$                5,707


$                5,534


3 %


$             16,930


$             16,273


4 %

Non-GAAP adjustments:












Amortization of intangibles

106


148




315


448



Impact of purchase accounting


9




2


27



Stock-based compensation

expense

37


36




112


96



Other corporate expenses

15


2




97


22



Non-GAAP gross margin

$                5,865


$                5,729


2 %


$             17,456


$             16,866


3 %













Operating expenses

$                3,945


$                4,488


(12) %


$             12,348


$             13,223


(7) %

Non-GAAP adjustments:












Amortization of intangibles

(139)


(283)




(417)


(870)



Impact of purchase accounting

(21)


(3)




(31)


(20)



Transaction-related expenses

(8)


(229)




(16)


(295)



Stock-based compensation

expense

(198)


(178)




(591)


(496)



Other corporate expenses

(94)


(22)




(304)


(270)



Non-GAAP operating

expenses

$               3,485


$               3,773


(8) %


$             10,989


$             11,272


(3) %













Operating income

$                1,762


$                1,046


68 %


$                4,582


$                3,050


50 %

Non-GAAP adjustments:












Amortization of intangibles

245


431




732


1,318



Impact of purchase

accounting

21


12




33


47



Transaction-related expenses

8


229




16


295



Stock-based compensation

expense

235


214




703


592



Other corporate expenses

109


24




401


292



Non-GAAP operating income

$                2,380


$                1,956


22 %


$                6,467


$                5,594


16 %

 

DELL TECHNOLOGIES INC.

Reconciliation of Selected Non-GAAP Financial Measures

(in millions, except percentages; unaudited; continued)



Three Months Ended




Nine Months Ended




October 28, 2022


October 29, 2021


Change


October 28, 2022


October 29, 2021


Change

Net income from continuing operations

$             241


$          3,683


(93) %


$          1,816


$          4,971


(63) %

Non-GAAP adjustments:












Amortization of intangibles

245


431




732


1,318



Impact of purchase accounting

21


12




33


47



Transaction-related (income) expenses

4


(3,689)




(2)


(3,635)



Stock-based compensation expense

235


214




703


592



Other corporate expenses

1,112


24




1,420


292



Fair value adjustments on equity investments

(44)


(18)




197


(380)



Aggregate adjustment for income taxes

(109)


656




(494)


329



Non-GAAP net income

$          1,705


$          1,313


30 %


$          4,405


$          3,534


25 %













Net income from continuing operations attributable to Dell Technologies Inc.

$             245


$          3,685


(93) %


$          1,828


$          4,976


(63) %

Non-GAAP adjustments:












Amortization of intangibles

245


431




732


1,318



Impact of purchase accounting

21


12




33


47



Transaction-related (income) expenses

4


(3,689)




(2)


(3,635)



Stock-based compensation expense

235


214




703


592



Other corporate expenses

1,112


24




1,420


292



Fair value adjustments on equity investments

(44)


(18)




197


(380)



Aggregate adjustment for income taxes

(109)


656




(494)


329



Total non-GAAP adjustments attributable to non-controlling interests

(2)


(3)




(7)


(6)



Non-GAAP net income attributable to Dell Technologies Inc.

$          1,707


$          1,312


30 %


$          4,410


$          3,533


25 %

 

DELL TECHNOLOGIES INC.

Reconciliation of Selected Non-GAAP Financial Measures

(in millions, except percentages and per share amounts; unaudited; continued)



Three Months Ended




Nine Months Ended




October 28, 2022


October 29, 2021


Change


October 28, 2022


October 29, 2021


Change













Earnings per share from continuing operations attributable to Dell Technologies Inc.  





Net income from continuing operations attributable to Dell Technologies Inc. basic

$             245


$          3,685




$          1,828


$          4,976



Weighted-average shares outstanding basic

728


766




740


762



Earnings per share attributable to Dell Technologies Inc. basic

$            0.34


$            4.81


(93) %


$            2.47


$            6.53


(62) %













Net income from continuing operations attributable to Dell Technologies Inc. diluted

$             245


$          3,685




$          1,828


$          4,976



Weighted-average shares outstanding diluted

743


788




759


785



Earnings per share attributable to Dell Technologies Inc. — diluted

$            0.33


$            4.68


(93) %


$            2.41


$            6.34


(62) %













Earnings per share from discontinued operations attributable to Dell Technologies Inc.





Net income from discontinued operations attributable to Dell Technologies Inc. basic

$                —


$             158




$                —


$             585



Weighted-average shares outstanding basic


766





762



Earnings per share attributable to Dell Technologies Inc. basic

$                —


$            0.21


NM


$                —


$            0.77


NM

Incremental dilution from VMware, Inc. attributable to Dell Technologies


(2)





(7)



Net income from discontinued operations attributable to Dell Technologies Inc. diluted

$                —


$             156




$                —


$             578



Weighted-average shares outstanding diluted


788





785



Earnings per share attributable to Dell Technologies Inc. — diluted

$                —


$            0.19


NM


$                —


$            0.74


NM













Non-GAAP earnings per share attributable to Dell Technologies Inc.



Non-GAAP net income attributable to Dell Technologies Inc. basic

$          1,707


$          1,312




$          4,410


$          3,533



Weighted-average shares outstanding basic

728


766




740


762



Earnings per share attributable to Dell Technologies Inc. basic

$            2.34


$            1.71


37 %


$            5.96


$            4.64


28 %













Non-GAAP net income attributable to Dell Technologies Inc. diluted

$          1,707


$          1,312




$          4,410


$          3,533



Weighted-average shares outstanding diluted

743


788




759


785



Earnings per share attributable to Dell Technologies Inc. — diluted

$            2.30


$            1.66


39 %


$            5.81


$            4.50


29 %


Amounts may not visually recalculate due to rounding.

 

Cision View original content to download multimedia:https://www.prnewswire.com/news-releases/dell-technologies-announces-third-quarter-fiscal-2023-financial-results-301684324.html

SOURCE Dell Technologies

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