Dell Technologies Reports Fiscal Year 2018 First Quarter Financial Results
News summary
- First quarter revenue was
$17.8 billion , non-GAAP revenue was$18.2 billion - Operating loss of
$1.5 billion , non-GAAP operating income of$1.2 billion - Successfully integrated sales organization to execute one go-to-market motion for customers
Full story
For the first quarter, consolidated revenue was
"We're pleased with overall results in the first quarter of our new go-to-market structure and the demand velocity we saw in a challenging component cost environment," said
The company ended the quarter with a cash and investments balance of
Fiscal first quarter 2018 results
Three Months Ended |
|||||
May 5, 2017 |
April 29, 2016 |
Change |
|||
(in millions, except percentages; unaudited) |
|||||
Net revenue |
$ 17,816 |
$ 12,241 |
46 % |
||
Operating loss |
$ (1,500) |
$ (139) |
(979)% |
||
Net loss from continuing operations |
$ (1,383) |
$ (424) |
(226)% |
||
Non-GAAP net revenue |
$ 18,171 |
$ 12,319 |
48 % |
||
Non-GAAP operating income |
$ 1,197 |
$ 539 |
122 % |
||
Non-GAAP net income from continuing operations |
$ 581 |
$ 264 |
120 % |
||
Adjusted EBITDA |
$ 1,567 |
$ 643 |
144 % |
||
Information about
Operating segments summary
Client
Key highlights:
- Increased PC shipments by 6.2 percent year-over-year, with 17 consecutive quarters of year-over-year PC unit share growth 2
- Maintained
No. 1 share position worldwide for displays, gaining unit share year-over-year for the 17th consecutive quarter 3 - Only vendor to gain share year-over-year in both Fixed and Mobile workstation categories 4
Infrastructure
Key highlights:
- Remained the worldwide market share leader in x86 servers, with PowerEdge units and revenue growth up by double digits in the fiscal quarter 5
- Demand for hyperconverged portfolio grew at a triple-digit rate, while demand for all-flash solutions grew at a very high double-digit rate
- Increased demand for Virtustream Public Cloud for mission-critical applications by approximately 100 percent
Early in the first quarter, the company successfully integrated the combined sales organization and is now operating with one common go-to-market sales motion for customers. Immediately following the quarter close,
Conference call information
As previously announced, the company will hold a conference call to discuss its first quarter performance today at
A slide presentation containing additional financial and operating information may be downloaded from
About
Copyright © 2017 Dell Inc. or its subsidiaries. All Rights Reserved. Dell, Dell EMC, Dell Inc. and the Dell logo are trademarks of Dell Technologies in the United States and/or other jurisdictions. All other marks and names mentioned herein may be trademarks of their respective companies.
1 Due to the
2 IDC Worldwide Quarterly Personal Computing Device (PCD) Tracker CY17Q1
3 IDC Worldwide Quarterly PC Monitor Tracker CY16Q4
4 IDC Worldwide Quarterly Workstation Tracker CY17Q1
5 IDC Worldwide Quarterly Server Tracker,
Non-GAAP Financial Measures
The press release presents information about the Company's non-GAAP net revenue, non-GAAP gross margin, non-GAAP operating expenses, non-GAAP operating income, non-GAAP net income from continuing operations, EBITDA and adjusted EBITDA, which are non-GAAP financial measures provided as a supplement to the results provided in accordance with generally accepted accounting principles in
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
This list of risks, uncertainties, and other factors is not complete.
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 |
|||||
May 5, 2017 |
April 29, 2016 |
Change |
|||
Net revenue: |
|||||
Products |
$ 12,968 |
$ 10,183 |
27 % |
||
Services |
4,848 |
2,058 |
136 % |
||
Total net revenue |
17,816 |
12,241 |
46 % |
||
Cost of net revenue: |
|||||
Products |
11,459 |
8,799 |
30 % |
||
Services |
2,055 |
1,249 |
65 % |
||
Total cost of net revenue |
13,514 |
10,048 |
34 % |
||
Gross margin |
4,302 |
2,193 |
96 % |
||
Operating expenses: |
|||||
Selling, general, and administrative |
4,669 |
2,068 |
126 % |
||
Research and development |
1,133 |
264 |
329 % |
||
Total operating expenses |
5,802 |
2,332 |
149 % |
||
Operating loss |
(1,500) |
(139) |
(979)% |
||
Interest and other, net |
(573) |
(219) |
(162)% |
||
Loss from continuing operations before income taxes |
(2,073) |
(358) |
(479)% |
||
Income tax provision (benefit) |
(690) |
66 |
NM |
||
Net loss from continuing operations |
(1,383) |
(424) |
(226)% |
||
Income from discontinued operations, net of income taxes |
— |
479 |
(100)% |
||
Net income (loss) |
(1,383) |
55 |
NM |
||
Less: Net loss attributable to non-controlling interests |
(49) |
— |
NA |
||
Net income (loss) attributable to Dell Technologies Inc. |
$ (1,334) |
$ 55 |
NM |
||
Earnings (loss) per share attributable to Dell Technologies Inc. - basic: |
|||||
Continuing operations - Class V Common Stock - basic |
$ 0.57 |
$ — |
|||
Continuing operations - DHI Group - basic |
$ (2.57) |
$ (1.05) |
|||
Discontinued operations - DHI Group - basic |
$ — |
$ 1.18 |
|||
Earnings (loss) per share attributable to Dell Technologies Inc. - diluted: |
|||||
Continuing operations - Class V Common Stock - diluted |
$ 0.56 |
$ — |
|||
Continuing operations - DHI Group - diluted |
$ (2.57) |
$ (1.05) |
|||
Discontinued operations - DHI Group - diluted |
$ — |
$ 1.18 |
|||
Weighted-average shares outstanding: |
|||||
Basic - Class V Common Stock |
207 |
— |
|||
Diluted - Class V Common Stock |
207 |
— |
|||
Basic - DHI Group |
566 |
405 |
|||
Diluted - DHI Group |
566 |
405 |
|||
Percentage of Total Net Revenue: |
|||||
Gross margin |
24 % |
18 % |
|||
Selling, general, and administrative |
26 % |
17 % |
|||
Research and development |
6 % |
2 % |
|||
Operating expenses |
33 % |
19 % |
|||
Operating loss |
(8)% |
(1)% |
|||
Loss from continuing operations before income taxes |
(12)% |
(3)% |
|||
Net loss from continuing operations |
(8)% |
(3)% |
|||
Income tax rate |
33 % |
(18)% |
DELL TECHNOLOGIES INC. |
|||
Condensed Consolidated Statements of Financial Position |
|||
(in millions; unaudited) |
|||
May 5, 2017 |
February 3, 2017 |
||
ASSETS |
|||
Current assets: |
|||
Cash and cash equivalents |
$ 9,554 |
$ 9,474 |
|
Short-term investments |
1,620 |
1,975 |
|
Accounts receivable, net |
8,834 |
9,420 |
|
Short-term financing receivables, net |
3,255 |
3,222 |
|
Inventories, net |
2,466 |
2,538 |
|
Other current assets |
4,655 |
4,144 |
|
Total current assets |
30,384 |
30,773 |
|
Property, plant, and equipment, net |
5,438 |
5,653 |
|
Long-term investments |
3,772 |
3,802 |
|
Long-term financing receivables, net |
2,741 |
2,651 |
|
Goodwill |
38,930 |
38,910 |
|
Intangible assets, net |
33,283 |
35,053 |
|
Other non-current assets |
1,492 |
1,364 |
|
Total assets |
$ 116,040 |
$ 118,206 |
|
LIABILITIES, REDEEMABLE SHARES, AND STOCKHOLDERS' EQUITY |
|||
Current liabilities: |
|||
Short-term debt |
$ 4,842 |
$ 6,329 |
|
Accounts payable |
15,064 |
14,422 |
|
Accrued and other |
6,376 |
7,119 |
|
Short-term deferred revenue |
10,354 |
10,265 |
|
Total current liabilities |
36,636 |
38,135 |
|
Long-term debt |
44,948 |
43,061 |
|
Long-term deferred revenue |
8,330 |
8,431 |
|
Other non-current liabilities |
8,435 |
9,339 |
|
Total liabilities |
98,349 |
98,966 |
|
Redeemable shares |
301 |
231 |
|
Stockholders' equity: |
|||
Total Dell Technologies Inc. stockholders' equity |
11,532 |
13,243 |
|
Non-controlling interests |
5,858 |
5,766 |
|
Total stockholders' equity |
17,390 |
19,009 |
|
Total liabilities, redeemable shares, and stockholders' equity |
$ 116,040 |
$ 118,206 |
DELL TECHNOLOGIES INC. |
|||
Condensed Consolidated Statements of Cash Flows |
|||
(in millions; unaudited) |
|||
Three Months Ended |
|||
May 5, 2017 |
April 29, 2016 |
||
Cash flows from operating activities: |
|||
Net income (loss) |
$ (1,383) |
$ 55 |
|
Adjustments to reconcile net loss to net cash provided by operating activities |
1,623 |
(118) |
|
Change in cash from operating activities |
240 |
(63) |
|
Cash flows from investing activities: |
|||
Investments: |
|||
Purchases |
(559) |
— |
|
Maturities and sales |
973 |
12 |
|
Capital expenditures |
(245) |
(92) |
|
Proceeds from sale of facilities, land, and other assets |
— |
4 |
|
Capitalized software development costs |
(89) |
— |
|
Collections on purchased financing receivables |
3 |
16 |
|
Acquisition of businesses, net |
(12) |
— |
|
Divestitures of businesses, net |
(20) |
— |
|
Change in cash from investing activities |
51 |
(60) |
|
Cash flows from financing activities: |
|||
Proceeds from the issuance of common stock of subsidiaries |
8 |
102 |
|
Repurchases of DHI Group Common Stock |
(2) |
— |
|
Repurchases of Class V Common Stock |
(368) |
— |
|
Issuance of common stock under employee plans |
1 |
— |
|
Payments for debt issuance costs |
(5) |
(2) |
|
Proceeds from debt |
3,441 |
552 |
|
Repayments of debt |
(3,154) |
(1,041) |
|
Repurchases for tax withholdings on vesting of equity awards |
(126) |
(1) |
|
Other |
— |
3 |
|
Change in cash from financing activities |
(205) |
(387) |
|
Effect of exchange rate changes on cash and cash equivalents |
(6) |
73 |
|
Change in cash and cash equivalents |
80 |
(437) |
|
Cash and cash equivalents at beginning of the period, including amounts held for sale |
9,474 |
6,576 |
|
Cash and cash equivalents at end of the period |
$ 9,554 |
$ 6,139 |
|
Less: Cash included in current assets held for sale |
— |
268 |
|
Cash and cash equivalents from continuing operations |
$ 9,554 |
$ 5,871 |
DELL TECHNOLOGIES INC. |
|||||
Segment Information |
|||||
(in millions, except percentages; unaudited) |
|||||
Three Months Ended |
|||||
May 5, 2017 |
April 29, 2016 |
Change |
|||
Client Solutions Group (CSG): |
|||||
Net Revenue: |
|||||
Commercial |
$ 6,350 |
$ 6,145 |
3 % |
||
Consumer |
2,706 |
2,426 |
12 % |
||
Total CSG net revenue |
$ 9,056 |
$ 8,571 |
6 % |
||
Operating Income: |
|||||
CSG operating income |
$ 374 |
$ 385 |
(3)% |
||
% of CSG net revenue |
4 % |
4 % |
|||
% of total segment operating income |
32 % |
67 % |
|||
Infrastructure Solutions Group (ISG): |
|||||
Net Revenue: |
|||||
Servers and networking |
$ 3,231 |
$ 3,075 |
5 % |
||
Storage |
3,685 |
538 |
585 % |
||
Total ISG net revenue |
$ 6,916 |
$ 3,613 |
91 % |
||
Operating Income: |
|||||
ISG operating income |
$ 323 |
$ 192 |
68 % |
||
% of ISG net revenue |
5 % |
5 % |
|||
% of total segment operating income |
27 % |
33 % |
|||
VMware: |
|||||
Net Revenue: |
|||||
Total VMware net revenue |
$ 1,736 |
$ — |
NA |
||
Operating Income: |
|||||
VMware operating income |
$ 486 |
$ — |
NA |
||
% of VMware net revenue |
28 % |
NA |
|||
% of total segment operating income |
41 % |
NA |
|||
Reconciliation to consolidated net revenue: |
|||||
Reportable segment net revenue |
$ 17,708 |
$ 12,184 |
|||
Other businesses (a) |
462 |
110 |
|||
Unallocated transactions (b) |
1 |
25 |
|||
Impact of purchase accounting (c) |
(355) |
(78) |
|||
Total net revenue |
$ 17,816 |
$ 12,241 |
|||
Reconciliation to consolidated operating income (loss): |
|||||
Reportable segment operating income |
$ 1,183 |
$ 577 |
|||
Other businesses (a) |
3 |
(16) |
|||
Unallocated transactions (b) |
11 |
(22) |
|||
Impact of purchase accounting (c) |
(423) |
(106) |
|||
Amortization of intangibles |
(1,776) |
(491) |
|||
Transaction-related expenses (d) |
(191) |
(57) |
|||
Other corporate expenses(e) |
(307) |
(24) |
|||
Total operating loss |
$ (1,500) |
$ (139) |
|||
_________________ |
|||||
(a) Other businesses consist of RSA Information Security, SecureWorks, Pivotal, and Boomi offerings, 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 |
|||||
May 5, 2017 |
April 29, 2016 |
Change |
|||
Non-GAAP net revenue |
$ 18,171 |
$ 12,319 |
48 % |
||
Non-GAAP gross margin |
$ 5,646 |
$ 2,385 |
137 % |
||
% of non-GAAP net revenue |
31 % |
19 % |
|||
Non-GAAP operating expenses |
$ 4,449 |
$ 1,846 |
141 % |
||
% of non-GAAP net revenue |
24 % |
15 % |
|||
Non-GAAP operating income |
$ 1,197 |
$ 539 |
122 % |
||
% of non-GAAP net revenue |
7 % |
4 % |
|||
Non-GAAP net income from continuing operations |
$ 581 |
$ 264 |
120 % |
||
% of non-GAAP net revenue |
3 % |
2 % |
|||
Adjusted EBITDA |
$ 1,567 |
$ 643 |
144 % |
||
% of non-GAAP net revenue |
9 % |
5 % |
DELL TECHNOLOGIES INC. |
|||||
Reconciliation of Selected Non-GAAP Financial Measures |
|||||
(in millions, except percentages; unaudited) |
|||||
Three Months Ended |
|||||
May 5, 2017 |
April 29, 2016 |
Change |
|||
Net revenue |
$ 17,816 |
$ 12,241 |
46 % |
||
Non-GAAP adjustments: |
|||||
Impact of purchase accounting |
355 |
78 |
|||
Non-GAAP net revenue |
$ 18,171 |
$ 12,319 |
48 % |
||
Gross margin |
$ 4,302 |
$ 2,193 |
96 % |
||
Non-GAAP adjustments: |
|||||
Impact of purchase accounting |
365 |
89 |
|||
Amortization of intangibles |
950 |
101 |
|||
Transaction-related expenses |
7 |
(1) |
|||
Other corporate expenses |
22 |
3 |
|||
Non-GAAP gross margin |
$ 5,646 |
$ 2,385 |
137 % |
||
Operating expenses |
$ 5,802 |
$ 2,332 |
149 % |
||
Non-GAAP adjustments: |
|||||
Impact of purchase accounting |
(58) |
(17) |
|||
Amortization of intangibles |
(826) |
(390) |
|||
Transaction-related expenses |
(184) |
(58) |
|||
Other corporate expenses |
(285) |
(21) |
|||
Non-GAAP operating expenses |
$ 4,449 |
$ 1,846 |
141 % |
||
Operating loss |
$ (1,500) |
$ (139) |
(979)% |
||
Non-GAAP adjustments: |
|||||
Impact of purchase accounting |
423 |
106 |
|||
Amortization of intangibles |
1,776 |
491 |
|||
Transaction-related expenses |
191 |
57 |
|||
Other corporate expenses |
307 |
24 |
|||
Non-GAAP operating income |
$ 1,197 |
$ 539 |
122 % |
||
Net loss from continuing operations |
$ (1,383) |
$ (424) |
(226)% |
||
Non-GAAP adjustments: |
|||||
Impact of purchase accounting |
423 |
106 |
|||
Amortization of intangibles |
1,776 |
491 |
|||
Transaction-related expenses |
191 |
57 |
|||
Other corporate expenses |
307 |
24 |
|||
Aggregate adjustment for income taxes |
(733) |
10 |
|||
Non-GAAP net income from continuing operations |
$ 581 |
$ 264 |
120 % |
||
Net loss from continuing operations |
$ (1,383) |
$ (424) |
(226)% |
||
Adjustments: |
|||||
Interest and other, net |
573 |
219 |
|||
Income tax provision (benefit) |
(690) |
66 |
|||
Depreciation and amortization |
2,212 |
618 |
|||
EBITDA |
$ 712 |
$ 479 |
49 % |
||
EBITDA |
$ 712 |
$ 479 |
49 % |
||
Adjustments: |
|||||
Stock-based compensation expense |
201 |
14 |
|||
Impact of purchase accounting |
357 |
83 |
|||
Transaction-related expenses |
191 |
57 |
|||
Other corporate expenses |
106 |
10 |
|||
Adjusted EBITDA |
$ 1,567 |
$ 643 |
144 % |
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/dell-technologies-reports-fiscal-year-2018-first-quarter-financial-results-300470675.html
SOURCE
MEDIA CONTACTS: Dave Farmer, (508) 293-7206, dave.farmer@dell.com, or Lauren Lee, (512) 728-4374, lauren.lee@dell.com; INVESTOR RELATIONS CONTACTS: Kristy Harris Bias, (512) 728-1658, kristy.harris.bias@dell.com, or Karen Litzler-Hollier, (512) 728-0388, karen.litzler-hollie@dell.com