Summary of Dell Technologies Inc. Conference Call Company Overview - **Company**: Dell Technologies Inc. (NYSE: DELL) - **Event**: Citi 2022 Global Technology Conference - **Date**: September 7, 2022 - **Participants**: Michael Dell (Chairman and CEO), Tom Sweet (CFO), Jim Suva (Citigroup) Key Points Industry and Market Position - Dell operates in a **$1.4 trillion Total Addressable Market (TAM)** with a business generating over **$100 billion** annually, indicating significant growth opportunities [9][12] - The company has a strong focus on **multi-cloud environments**, which is becoming increasingly important as customers seek infrastructure-agnostic solutions [16][18] Strategic Changes and Growth - The **EMC acquisition** was highlighted as a historic opportunity that provided substantial revenue synergies and a leading portfolio across infrastructure [6][12] - Dell has successfully consolidated its storage portfolio, leading to consistent growth in storage solutions [7][12] - The company is focusing on **edge computing** and **telco** as new areas of growth, with partnerships with over **30 major carriers** to enhance infrastructure [10][12] Financial Performance - Dell's **Client Solutions Group (CSG)** grew by **9%**, with **15% growth in Commercial** and a **9% decline in Consumer** segments [15][16] - The **Infrastructure Solutions Group (ISG)** reported **12% growth**, with **15% in servers** and **6% in storage**, marking the seventh consecutive quarter of growth in the server platform [16][18] - The company has generated approximately **$6 billion in free cash flow** annually over the last four years, with a commitment to return capital to shareholders through stock buybacks and dividends [12][42] Supply Chain and Economic Resilience - Dell has maintained a competitive edge in supply chain management, which has been crucial during the ongoing supply chain challenges [29][34] - The company is prepared to manage costs and navigate potential economic downturns, leveraging its broad portfolio to provide complete solutions to customers [19][34] Capital Allocation Strategy - Dell has initiated a **3% dividend** and is focused on stock buybacks as part of its capital allocation strategy, emphasizing intrinsic value buying [39][41] - The company remains open to M&A opportunities but has not identified compelling targets recently [40][42] Future Outlook - Dell's management believes in the potential for continued growth and market share consolidation, supported by a strong execution track record and a shareholder-friendly approach [44] - The company is expanding its **APEX** flexible consumption model, which is expected to enhance cash flow and create a more sticky customer relationship [37][25] Conclusion - Dell Technologies is positioned for growth in a large and expanding market, with a focus on execution, shareholder value, and adapting to changing customer needs in the technology landscape [44]

Summary of Dell Technologies Conference Call Company Overview - **Company**: Dell Technologies, Inc. (NYSE: DELL) - **Industry**: Technology, specifically IT hardware and services Key Points and Arguments Company Strategy and Performance - Dell has made significant progress on its post-VMware spin framework, focusing on two main strategies: growing and modernizing the core business and building adjacent businesses where it has a competitive advantage [8][9] - The company reported $101 billion in revenue for FY '22, with double-digit growth and a 12% revenue increase in the first half of FY '23 [10] - Q2 revenue reached a record $26.4 billion, up 9%, with EPS growth of 14% [12] - The company is a structural share gainer, having gained PC share in 34 out of the last 38 quarters [19] Market Dynamics - The PC market is experiencing a slowdown, with a projected decline in CSG (Client Solutions Group) revenue in the high teens for the second half of the year [18][19] - Despite the slowdown, the installed base of PCs is larger than pre-pandemic levels, indicating potential for future refresh cycles [16][17] - The overall PC market is expected to be around 290 million units, down from previous estimates of 330 million [17] Infrastructure Solutions Group (ISG) - ISG revenue grew 12%, marking the sixth consecutive quarter of growth, driven by strong demand in storage and server segments [13][22] - The company expects ISG to grow in the low teens for the second half of the year, supported by a backlog in storage and server [24][25] Supply Chain and Inventory Management - Supply chain challenges persist, but improvements have been noted in high-volume components like CPUs and memory [27][28] - CSG backlog has returned to normal levels, while ISG backlog remains elevated due to trailing edge components [32] Pricing and Cost Management - Dell has raised prices to offset inflation and currency headwinds, with ASPs (Average Selling Prices) increasing due to richer configurations and higher attach rates [34][36] - The company has a history of managing costs effectively, having reduced OpEx by $1 billion during the pandemic and continuing to control costs in the current environment [40][41] Capital Allocation and Future Outlook - Dell's capital allocation framework aims to return 40% to 60% of adjusted free cash flow to shareholders through buybacks and dividends, with $2.7 billion in buybacks executed [49][50] - The company is focused on targeted M&A to enhance its IP and invest in growth areas like edge computing, telecom, and AI/ML [51] APEX and Subscription Services - Dell's APEX as-a-Service model has seen significant growth, with a 78% year-over-year increase and an ARR exceeding $1 billion [47][48] - The company is positioning itself to support customers' digital transformation journeys, emphasizing the importance of subscription revenue in the current market [42][43] Additional Important Insights - The company has a strong core business with solid cash flow generation and a durable competitive advantage through its direct sales force [53] - Dell is optimistic about future growth opportunities in adjacent markets, leveraging its unique strengths [53]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q (Mark One) ☑QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended July 29, 2022 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-37867 Dell Technologies Inc. (Exact name of registrant as specified in its charter) Delaware 80-0890963 (State ...

Dell Technologies Inc. (NYSE:DELL) Q2 2023 Earnings Conference Call August 25, 2022 5:30 PM ET Company Participants Rob Williams - Head, Investor Relations Jeff Clarke - Vice Chairman and Co-Chief Operating Officer Chuck Whitten - Co-Chief Operating Officer Tom Sweet - Chief Financial Officer Tyler Johnson - Senior Vice President and Treasurer Conference Call Participants Toni Sacconaghi - Bernstein Erik Woodring - Morgan Stanley Simon Leopold - Raymond James Shannon Cross - Credit Suisse Rod Hall - Goldman ...

Summary of Dell Technologies, Inc. Conference Call Company Overview - **Company**: Dell Technologies, Inc. (NYSE: DELL) - **Event**: Bank of America 2022 Global Technology Conference - **Date**: June 7, 2022 - **Participants**: Yvonne McGill (SVP, Corporate Controller and CFO), Wamsi Mohan (Bank of America Merrill Lynch Analyst) Key Points Industry and Market Dynamics - **Digital Transformation**: Remains a top priority for enterprise customers, with strong demand for infrastructure solutions [9] - **Revenue Growth Expectations**: Dell anticipates overall revenue growth of 6% and EPS growth of over 12% for the year, reflecting a doubling of their long-term value creation framework [9][11] - **PC Market Outlook**: Dell projects a total addressable market (TAM) of approximately 330 million PC units, slightly above IDC's estimate of 320 million units, with expectations of sustained demand due to increased mobility and faster replacement cycles [40][41] Financial Performance - **Strong ASPs**: Dell has maintained strong average selling prices (ASPs) across its portfolio, with a 26% year-over-year growth in Client Solutions Group (CSG) and 22% growth in servers [11][20] - **Inventory Management**: Dell is carrying higher inventory levels due to business growth and supply chain challenges, but expects to work down these levels over time [18] - **Cost Headwinds**: Significant headwinds from foreign exchange (FX) rates, NAND and memory costs, and elevated logistics costs are anticipated to impact margins [20][21] Supply Chain and Competitive Advantage - **Supply Chain Resilience**: Dell's integrated business model and strong supplier relationships are seen as competitive advantages, allowing for better navigation through supply chain challenges [16] - **Component Shortages**: Servers are currently the most constrained product line, followed by PCs, while storage is less impacted [22] Strategic Initiatives - **Apex as a Service**: Dell's Apex service model is expected to provide stable cash flow and is growing in double digits, with annual recurring revenue (ARR) exceeding $1 billion [55] - **M&A Strategy**: Dell is focused on targeted M&A that accelerates innovation and fits within its strategic framework, with no large-scale acquisitions currently planned [66] Investor Relations and Market Perception - **Valuation Concerns**: Dell is perceived to be trading at a discount compared to peers, with a compelling valuation at a 7X forward price-to-earnings ratio [69] - **Free Cash Flow Generation**: Dell has consistently generated $6 billion in free cash flow annually over the past four years, highlighting its financial stability [69] Conclusion - **Future Outlook**: Dell Technologies is positioned for growth with a strong focus on digital transformation, robust financial performance, and strategic initiatives aimed at enhancing customer choice and operational efficiency [70]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q (Mark One) ☑QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended April 29, 2022 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-37867 Dell Technologies Inc. (Exact name of registrant as specified in its charter) Delaware 80-0890963 (State ...

Dell Technologies Inc. (NYSE:DELL) Q1 2023 Earnings Conference Call May 26, 2022 5:30 PM ET Company Participants Rob Williams - Head of Investor Relations Jeff Clarke - Vice Chairman and Co-Chief Operating Officer Chuck Whitten - Co-Chief Operating Officer Tom Sweet - Executive Vice President & Chief Financial Officer Tyler Johnson - Senior Vice President and Treasurer Conference Call Participants Krish Sankar - Cowen and Company Aaron Rakers - Wells Fargo Samik Chatterjee - JPMorgan Sidney Ho - Deutsche Ba ...

[Business Overview](index=5&type=section&id=Item%201.%20Business) Dell Technologies focuses on IT solutions, digital transformation, and multi-cloud strategies, supported by a robust supply chain, R&D, and a commitment to ESG goals [Company Profile and Strategy](index=5&type=section&id=Company%20Overview%20%26%20Strategy) Dell Technologies strategically divested VMware and Boomi in Fiscal 2022 to reduce debt and achieve an investment-grade rating, while focusing on modernizing core IT solutions and pursuing new growth areas - Completed the spin-off of VMware on November 1, 2021, receiving a special cash dividend of **$9.3 billion**[17](index=17&type=chunk) - Completed the sale of Boomi on October 1, 2021, for approximately **$4.0 billion** in cash consideration[19](index=19&type=chunk) - Achieved an **investment grade rating** from three major credit rating agencies following significant debt reduction[20](index=20&type=chunk) - The company's two main strategic priorities are to grow and modernize its core offerings and to pursue new growth opportunities in areas like Edge, Telecom, and as-a-Service models[28](index=28&type=chunk) [Products and Services](index=6&type=section&id=Products%20and%20Services) Dell's core operations are divided into Infrastructure Solutions Group (ISG) for data center and multi-cloud solutions, and Client Solutions Group (CSG) for hardware and peripherals, complemented by other businesses like VMware resale and cybersecurity - Infrastructure Solutions Group (ISG) enables customers' digital transformation via multi-cloud and big data solutions built on modern data center infrastructure, including servers, networking, and storage[31](index=31&type=chunk) - Client Solutions Group (CSG) includes branded hardware (desktops, workstations, notebooks) and peripherals (displays, projectors), along with attached software and services[37](index=37&type=chunk) - Other businesses consist of VMware Resale, where Dell acts as a key channel partner, Secureworks for cybersecurity solutions, and Virtustream for cloud software and IaaS[38](index=38&type=chunk)[39](index=39&type=chunk)[41](index=41&type=chunk) [Operations, R&D, and Sales](index=8&type=section&id=Operations) Dell manages a $75 billion supply chain, invests **$2.6 billion** in R&D, leverages a hybrid sales model with over **50%** revenue from partners, and supports sales through Dell Financial Services' **$8.5 billion** originations R&D Expenses (Fiscal Years 2020-2022) | Fiscal Year | R&D Expense (in billions) | | :--- | :--- | | Fiscal 2022 | $2.6 | | Fiscal 2021 | $2.5 | | Fiscal 2020 | $2.5 | - The company's sales channels, including value-added resellers, system integrators, distributors, and retailers, contributed over **50% of net revenue** in Fiscal 2022[66](index=66&type=chunk) - Dell Financial Services (DFS) funded **$8.5 billion of originations** in Fiscal 2022 and maintains an **$11 billion global portfolio** of financing receivables[27](index=27&type=chunk) [Human Capital and ESG](index=12&type=section&id=Human%20Capital%20Management) Dell's "Progress Made Real" 2030 plan targets net-zero emissions by 2050 and sets ambitious diversity goals, including **50% women** in the global workforce and **25% Black/African American and Hispanic/Latino** representation in the U.S. workforce - The company's "Progress Made Real" 2030 plan focuses on four key areas: Advancing Sustainability, Cultivating Inclusion, Transforming Lives, and Upholding Ethics and Privacy[80](index=80&type=chunk)[81](index=81&type=chunk)[82](index=82&type=chunk) - Dell aims to achieve **net-zero greenhouse gas emissions** across Scopes 1, 2, and 3 by 2050[85](index=85&type=chunk) 2030 Diversity & Inclusion Goals | Metric | 2030 Goal | | :--- | :--- | | Women in Global Workforce | 50% | | Women in Global People Leaders | 40% | | Black/African American & Hispanic/Latino in U.S. Workforce | 25% | | Black/African American & Hispanic/Latino in U.S. People Leaders | 15% | [Risk Factors](index=18&type=section&id=Item%201A.%20Risk%20Factors) Dell faces diverse risks including business and industry competition, operational challenges from supply chain and cybersecurity, financial exposures from debt and economic conditions, and governance issues related to its multi-class stock structure [Business and Industry Risks](index=18&type=section&id=Risks%20Relating%20to%20Our%20Business%20and%20Our%20Industry) Dell faces business and industry risks from the potential failure of the VMware spin-off to yield benefits, ongoing COVID-19 impacts on supply chains and demand, and intense competition affecting market share and profitability - The spin-off of VMware may not achieve the intended benefits, and the separation could lead to business disruption, customer uncertainty, and significant costs[122](index=122&type=chunk) - The COVID-19 pandemic continues to adversely affect the business through supply constraints, increased freight costs, and uncertain demand for products and services[123](index=123&type=chunk)[124](index=124&type=chunk) - Aggressive product and price competition from both branded and generic competitors, as well as non-traditional IT companies, may adversely affect unit share, revenue, and profitability[63](index=63&type=chunk)[129](index=129&type=chunk) [Strategic and Operational Risks](index=19&type=section&id=Strategic%20and%20Operational%20Risks) Operational risks include reliance on limited suppliers, evolving cybersecurity threats, challenges in executing M&A strategies, and managing extensive international operations amidst geopolitical and regulatory uncertainties - The company relies on single-source or limited-source suppliers for many components, creating a risk of shortages, delivery delays, and cost increases that could harm the business[131](index=131&type=chunk)[132](index=132&type=chunk)[134](index=134&type=chunk) - Cyber-attacks and other security incidents pose a significant risk of disrupting operations, compromising confidential data, and exposing the company to costly litigation and regulatory enforcement[149](index=149&type=chunk)[150](index=150&type=chunk)[151](index=151&type=chunk) - Failure to successfully implement its acquisition strategy or manage divestitures could result in unforeseen operating difficulties, increased costs, and disruption to existing business[156](index=156&type=chunk)[157](index=157&type=chunk)[159](index=159&type=chunk) - Approximately **half of the company's net revenue** comes from outside the U.S., exposing it to risks from political instability, trade protection measures, and foreign currency fluctuations[160](index=160&type=chunk) [Financial and Market Risks](index=20&type=section&id=Financial%20and%20Market%20Risks) Financial risks include adverse global economic conditions, substantial indebtedness of approximately **$27.0 billion** requiring significant cash flow, and potential impacts from changes in tax laws or unfavorable tax audit outcomes - As a global company, performance is affected by adverse economic conditions, international conflicts like the one in Ukraine, trade disputes, and public health issues that can reduce customer demand and disrupt supply chains[138](index=138&type=chunk) - As of January 28, 2022, the company had approximately **$27.0 billion in aggregate principal amount of indebtedness**, which requires a substantial portion of cash flow for interest and principal payments, reducing funds available for other purposes[205](index=205&type=chunk) - The company's profitability could be adversely affected by changes in tax laws, the expiration of tax holidays in various jurisdictions, or unfavorable outcomes in tax audits[184](index=184&type=chunk)[185](index=185&type=chunk)[186](index=186&type=chunk) [Ownership and Governance Risks](index=29&type=section&id=Risks%20Relating%20to%20Ownership%20of%20Our%20Class%20C%20Common%20Stock) Risks related to Class C Common Stock include the multi-class structure granting Michael Dell and Silver Lake **94.4% voting power**, ineligibility for major S&P indices, and exemptions from certain NYSE corporate governance requirements as a "controlled company" - The multi-class common stock structure grants Michael Dell and Silver Lake stockholders approximately **94.4% of the total voting power**, allowing them to effectively control corporate actions[209](index=209&type=chunk)[217](index=217&type=chunk) - The multi-class structure makes the company ineligible for inclusion in key S&P indices (S&P 500, MidCap 400, SmallCap 600), which may depress the stock's valuation[210](index=210&type=chunk) - As a "controlled company" under NYSE rules, Dell is exempt from certain corporate governance requirements, including having a compensation committee and a nominating/corporate governance committee composed entirely of independent directors[226](index=226&type=chunk)[227](index=227&type=chunk) [Financial Performance Analysis (MD&A)](index=38&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Fiscal 2022 was a transformative year for Dell, marked by strategic divestitures, significant debt reduction, strong revenue growth across business units, and enhanced capital return initiatives, despite ongoing supply chain challenges [Executive Summary & Key Developments](index=38&type=section&id=Fiscal%202022%20Significant%20Developments) Fiscal 2022 was transformational for Dell, marked by the VMware spin-off and Boomi divestiture, which facilitated significant debt reduction and an investment-grade rating, alongside **17% revenue growth** to **$101.2 billion** despite supply chain constraints - Completed the spin-off of VMware, receiving a **$9.3 billion special cash dividend**, which was used for debt paydown[261](index=261&type=chunk)[264](index=264&type=chunk) - Completed the sale of Boomi for approximately **$4.0 billion in cash**, supporting focus on core infrastructure and high-priority growth areas[263](index=263&type=chunk) - Achieved an **investment grade rating** from three major credit rating agencies as a result of significant deleveraging[264](index=264&type=chunk) - Experienced strong demand, particularly for CSG offerings, but faced industry-wide supply chain constraints, leading to elevated backlog and increased component and logistics costs[266](index=266&type=chunk)[308](index=308&type=chunk) [Consolidated Results of Operations](index=52&type=section&id=Consolidated%20Results) In Fiscal 2022, Dell's total net revenue grew **17% to $101.2 billion**, operating income increased **26% to $4.7 billion**, and net income from continuing operations surged **120% to $4.9 billion**, significantly impacted by the Boomi sale gain and debt extinguishment fees Consolidated Results of Operations (GAAP) | Fiscal Year Ended | Jan 28, 2022 ($M) | Jan 29, 2021 ($M) | % Change | | :--- | :--- | :--- | :--- | | **Total net revenue** | 101,197 | 86,670 | 17% | | Products | 79,830 | 67,744 | 18% | | Services | 21,367 | 18,926 | 13% | | **Total gross margin** | 21,891 | 20,140 | 9% | | **Operating income** | 4,659 | 3,685 | 26% | | **Net income from continuing operations** | 4,942 | 2,245 | 120% | Non-GAAP Financial Highlights | Fiscal Year Ended | Jan 28, 2022 ($M) | Jan 29, 2021 ($M) | % Change | | :--- | :--- | :--- | :--- | | **Non-GAAP net revenue** | 101,229 | 86,776 | 17% | | **Non-GAAP operating income** | 7,785 | 6,949 | 12% | | **Adjusted EBITDA** | 9,660 | 8,645 | 12% | - The change in interest and other, net was favorable by **$2.6 billion**, primarily driven by the **$4.0 billion pre-tax gain** on the Boomi sale, partially offset by **$1.6 billion in debt extinguishment fees**[390](index=390&type=chunk)[391](index=391&type=chunk) [Business Unit Performance](index=60&type=section&id=Business%20Unit%20Results) Dell's business units showed strong Fiscal 2022 growth, with Client Solutions Group (CSG) revenue up **27% to $61.5 billion** and Infrastructure Solutions Group (ISG) revenue up **4% to $34.4 billion** [Infrastructure Solutions Group (ISG)](index=60&type=section&id=Infrastructure%20Solutions%20Group) In Fiscal 2022, ISG net revenue grew **4% to $34.4 billion**, driven by servers and networking, while operating income remained stable at **$3.7 billion**, with margin contracting to **10.9%** due to mix shift and cost pressures ISG Financial Performance | Fiscal Year Ended | Jan 28, 2022 ($M) | Jan 29, 2021 ($M) | % Change | | :--- | :--- | :--- | :--- | | **Total ISG net revenue** | 34,366 | 33,002 | 4% | | Servers and networking | 17,901 | 16,592 | 8% | | Storage | 16,465 | 16,410 | 0% | | **ISG operating income** | 3,736 | 3,753 | 0% | - ISG operating income as a percentage of net revenue decreased **50 basis points to 10.9%** due to a decline in gross margin percentage, driven by a mix shift to servers, competitive pricing, and supply chain cost pressures[410](index=410&type=chunk) [Client Solutions Group (CSG)](index=62&type=section&id=Client%20Solutions%20Group) CSG achieved record Fiscal 2022 performance, with net revenue surging **27% to $61.5 billion** and operating income growing **31% to $4.4 billion**, expanding its operating margin to **7.1%** due to lower operating expenses CSG Financial Performance | Fiscal Year Ended | Jan 28, 2022 ($M) | Jan 29, 2021 ($M) | % Change | | :--- | :--- | :--- | :--- | | **Total CSG net revenue** | 61,464 | 48,387 | 27% | | Commercial | 45,576 | 35,423 | 29% | | Consumer | 15,888 | 12,964 | 23% | | **CSG operating income** | 4,365 | 3,333 | 31% | - CSG operating income as a percentage of net revenue increased **20 basis points to 7.1%**, primarily due to a decrease in operating expenses as a percentage of revenue[423](index=423&type=chunk) [Liquidity and Capital Resources](index=66&type=section&id=LIQUIDITY%2C%20CAPITAL%20COMMITMENTS%2C%20AND%20CONTRACTUAL%20CASH%20OBLIGATIONS) Dell ended Fiscal 2022 with **$9.5 billion** cash, **$10.3 billion** operating cash flow, and reduced total debt by **$12.4 billion** to **$27.2 billion**, while initiating a **$5 billion** share repurchase program and a **$0.33 per share** quarterly dividend - Cash provided by operating activities was **$10.3 billion** in Fiscal 2022, compared to **$11.4 billion** in Fiscal 2021[452](index=452&type=chunk) Debt Reduction (FY2022) | Debt Category | Jan 29, 2021 ($B) | Jan 28, 2022 ($B) | Change ($B) | | :--- | :--- | :--- | :--- | | Core Debt | 29.2 | 16.1 | (13.1) | | Total Debt (Principal) | 39.7 | 27.2 | (12.5) | - A new **$5 billion stock repurchase program** was approved in September 2021. In Fiscal 2022, the company repurchased approximately **12 million shares for $659 million**[462](index=462&type=chunk)[853](index=853&type=chunk) - Announced a new dividend policy to begin in Q1 Fiscal 2023, with an initial quarterly dividend of **$0.33 per share**[464](index=464&type=chunk)[943](index=943&type=chunk) [Critical Accounting Estimates](index=75&type=section&id=Critical%20Accounting%20Estimates) Critical accounting estimates involve significant judgment in revenue recognition for multi-element contracts, annual impairment testing of goodwill and intangibles using discounted cash flow models, and determining income tax provisions including deferred tax assets and uncertain tax positions - Revenue Recognition: Involves significant judgment in identifying distinct performance obligations and estimating their standalone selling prices (SSP) to allocate contract value[491](index=491&type=chunk)[492](index=492&type=chunk)[495](index=495&type=chunk) - Goodwill and Intangible Asset Impairment: Fair value is estimated using discounted cash flow and market multiple methods, which require significant judgment in forecasting future revenues, margins, and selecting appropriate discount rates[496](index=496&type=chunk)[498](index=498&type=chunk) - Income Taxes: Requires significant judgment in determining the consolidated provision for income taxes, assessing the need for valuation allowances on deferred tax assets, and evaluating uncertain tax positions[501](index=501&type=chunk)[502](index=502&type=chunk) [Financial Statements and Notes](index=79&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) The financial statements provide a comprehensive view of Dell's financial position, performance, and cash flows, supplemented by detailed notes on key accounting policies, the VMware spin-off, debt, and segment information [Consolidated Financial Statements Overview](index=83&type=section&id=Consolidated%20Financial%20Statements) As of January 28, 2022, Dell reported **$92.7 billion** in total assets, **$94.3 billion** in total liabilities, and a **$1.6 billion** stockholders' deficit, with Fiscal 2022 generating **$101.2 billion** in revenue and **$10.3 billion** cash from operations Consolidated Balance Sheet Highlights (As of Jan 28, 2022) | Account | Amount ($M) | | :--- | :--- | | Total Assets | 92,735 | | Total Liabilities | 94,315 | | Total Stockholders' Equity (Deficit) | (1,580) | Consolidated Income Statement Summary (FY 2022) | Account | Amount ($M) | | :--- | :--- | | Total Net Revenue | 101,197 | | Operating Income | 4,659 | | Net Income from Continuing Operations | 4,942 | | Net Income Attributable to Dell | 5,563 | Consolidated Cash Flow Summary (FY 2022) | Activity | Amount ($M) | | :--- | :--- | | Cash from Operations | 10,307 | | Cash from Investing | 1,306 | | Cash from Financing | (16,609) | | **Change in Cash** | **(5,102)** | [Key Accounting Notes](index=89&type=section&id=Key%20Accounting%20Notes) Key accounting notes detail the VMware spin-off as discontinued operations, Dell Financial Services portfolio, significant debt reduction, segment performance, and post-spin-off related-party transactions with VMware [Discontinued Operations (VMware)](index=104&type=section&id=NOTE%203%20%E2%80%94%20DISCONTINUED%20OPERATIONS) Post-November 1, 2021 spin-off, VMware's results are reported as discontinued operations, yielding **$765 million** income in Fiscal 2022 and a **$9.3 billion** special cash dividend to Dell, with an ongoing commercial relationship - The VMware spin-off was completed on November 1, 2021. Dell received a special cash dividend of **$9.3 billion** from VMware[668](index=668&type=chunk)[670](index=670&type=chunk) - The results of VMware, excluding Dell's resale of VMware offerings, are presented as discontinued operations for all periods[675](index=675&type=chunk) Income from Discontinued Operations, Net of Tax | Fiscal Year | Amount ($M) | | :--- | :--- | | 2022 | 765 | | 2021 | 1,260 | | 2020 | 5,008 | [Financial Services (DFS)](index=110&type=section&id=NOTE%205%20%E2%80%94%20FINANCIAL%20SERVICES) Dell Financial Services (DFS) originated **$8.5 billion** in new financing in Fiscal 2022, maintaining **$10.6 billion** in net financing receivables and **$9.6 billion** in DFS-specific debt at year-end - New financing originations were **$8.5 billion** in Fiscal 2022, compared to **$8.9 billion** in Fiscal 2021 and **$8.5 billion** in Fiscal 2020[705](index=705&type=chunk) - Total net financing receivables were **$10.6 billion** as of January 28, 2022, compared to **$10.5 billion** as of January 29, 2021[710](index=710&type=chunk) - Total DFS debt was **$9.6 billion** at the end of Fiscal 2022, compared to **$9.7 billion** at the end of Fiscal 2021[724](index=724&type=chunk) [Debt](index=120&type=section&id=NOTE%207%20%E2%80%94%20DEBT) Dell significantly reduced its total debt by **$12.2 billion** to **$27.0 billion** in Fiscal 2022, primarily using the **$9.3 billion** VMware dividend, and established a new **$5.0 billion** senior unsecured revolving credit facility Debt Summary (Carrying Value) | As of | Jan 28, 2022 ($M) | Jan 29, 2021 ($M) | | :--- | :--- | :--- | | Senior Notes | 16,100 | 20,900 | | Senior Secured Credit Facilities | 0 | 6,277 | | DFS Debt | 9,646 | 9,666 | | **Total Debt, Carrying Value** | **26,954** | **39,222** | - Entered into a new **$5.0 billion senior unsecured revolving credit facility** on November 1, 2021, which matures on November 1, 2026[754](index=754&type=chunk)[755](index=755&type=chunk) - In December 2021, completed debt tender offers to retire **$1.7 billion of high-coupon senior notes**, incurring **$1.2 billion in debt extinguishment fees**[752](index=752&type=chunk)[753](index=753&type=chunk) [Segment Information](index=151&type=section&id=NOTE%2019%20%E2%80%94%20SEGMENT%20INFORMATION) Dell's Fiscal 2022 segment performance shows ISG with **$34.4 billion** revenue and **$3.7 billion** operating income, CSG with **$61.5 billion** revenue and **$4.4 billion** operating income, and **54%** of total revenue from foreign countries Segment Revenue and Operating Income (FY 2022) | Segment | Net Revenue ($M) | Operating Income ($M) | | :--- | :--- | :--- | | Infrastructure Solutions Group (ISG) | 34,366 | 3,736 | | Client Solutions Group (CSG) | 61,464 | 4,365 | | Other businesses | 5,388 | (319) | - In Fiscal 2022, net revenue from the United States was **$46.8 billion (46%)** and from foreign countries was **$54.4 billion (54%)**[907](index=907&type=chunk) [Related Party Transactions (VMware)](index=158&type=section&id=NOTE%2021%20%E2%80%94%20RELATED%20PARTY%20TRANSACTIONS) Post-spin-off, VMware is a related party, with Dell purchasing **$4.1 billion** in products and services for resale and selling **$188 million** in products to VMware in Fiscal 2022, resulting in a **$710 million** net tax receivable - Dell's purchases of VMware products and services for resale totaled **$4,064 million** in Fiscal 2022 (**$1,577M products, $2,487M services**)[930](index=930&type=chunk) - Dell's sales and leases of products to VMware totaled **$188 million** in Fiscal 2022[930](index=930&type=chunk) - As of January 28, 2022, Dell had a non-current net receivable from VMware of **$710 million**, primarily related to tax agreements[934](index=934&type=chunk)[937](index=937&type=chunk) [Other Information](index=33&type=section&id=Other%20Information) This section covers Dell's common stock market, including new dividend and share repurchase programs, disclosures on market risks like foreign currency and interest rates, and the effectiveness of internal controls over financial reporting [Market for Common Equity](index=33&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) Dell's Class C Common Stock trades on NYSE, with a new **$0.33 per share** quarterly dividend commencing in Fiscal 2023, complementing a **$5 billion** share repurchase program under which **$659 million** in stock was bought back in Fiscal 2022 - Announced a new dividend policy with an initial quarterly dividend of **$0.33 per share**, with the first payment scheduled for April 29, 2022[245](index=245&type=chunk)[943](index=943&type=chunk) - A new **stock repurchase program for up to $5 billion** of Class C Common Stock was approved in September 2021[250](index=250&type=chunk)[853](index=853&type=chunk) - During the fourth quarter of Fiscal 2022, the company repurchased **11.6 million shares of Class C Common Stock for approximately $659 million**[250](index=250&type=chunk)[462](index=462&type=chunk) [Market Risk Disclosures](index=77&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Dell manages market risks including foreign currency and interest rate fluctuations, with a **100 basis point** interest rate increase on **$0.9 billion** unhedged variable-rate debt resulting in a **$9 million** annual interest expense increase, and holds **$1.4 billion** in non-marketable strategic investments - The company uses foreign currency forward and option contracts to hedge its exposure on forecasted transactions denominated in currencies other than the U.S. dollar[508](index=508&type=chunk)[771](index=771&type=chunk) - As of January 28, 2022, a **100 basis point increase** in interest rates would increase annual interest expense by approximately **$9 million** on its **$0.9 billion of unhedged variable-rate debt**[511](index=511&type=chunk)[512](index=512&type=chunk) - The carrying value of strategic investments in non-marketable securities was **$1.4 billion** as of January 28, 2022[516](index=516&type=chunk)[694](index=694&type=chunk) [Controls and Procedures](index=163&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that Dell's disclosure controls and internal control over financial reporting were effective as of January 28, 2022, a conclusion affirmed by an unqualified audit opinion from PricewaterhouseCoopers LLP - Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of January 28, 2022[950](index=950&type=chunk) - Management concluded that internal control over financial reporting was effective as of January 28, 2022[952](index=952&type=chunk) - The independent auditor, PricewaterhouseCoopers LLP, issued an unqualified audit report on the effectiveness of the company's internal control over financial reporting as of January 28, 2022[522](index=522&type=chunk)[953](index=953&type=chunk)

Dell Technologies, Inc. (NYSE:DELL) Raymond James Institutional Investors Conference March 8, 2022 10:25 AM ET Company Participants Yvonne McGill - CFO Conference Call Participants Brian Alexander - Raymond James & Associates Brian Alexander Good morning, everybody. I'm Brian Alexander. I'm the Director of Research at Raymond James, recovering tech analyst. Simon Leopold, who covers Dell Technologies, is off-site. And I have the pleasure of pitch-hitting this morning fireside chat format. Very pleased to h ...

Summary of Dell Technologies Inc. Conference Call Company Overview - **Company**: Dell Technologies Inc. (NYSE: DELL) - **Event**: Morgan Stanley Technology, Media and Telecom Conference 2022 - **Date**: March 7, 2022 - **Key Representative**: Chuck Whitten - Co-CEO Core Industry Insights - **Market Position**: Dell is positioned in the data and multicloud area with leadership in several markets, including: - Number one in client revenue - Number one in x86 servers - Number one in external storage - Number one in hyperconverged infrastructure - Number one in data protection - **Market Size**: The total addressable market (TAM) for Dell's core business is approximately $670 billion, indicating significant growth potential within established markets [5][6] Strategic Framework - **Three Pillars of Strategy**: 1. **Core Business Strength**: Dell's core businesses are in large, stable, and growing markets, providing a solid foundation for growth [5] 2. **Adjacent Growth Opportunities**: Opportunities in areas like Edge computing, Telco, and APEX offerings that expand Dell's TAM [6] 3. **Shareholder Value Commitment**: A balanced capital allocation framework aimed at delivering sustained growth and shareholder returns [6] Financial Performance - **Fiscal Year 2022 Highlights**: - Revenue: $101.2 billion, up 17% year-over-year - Earnings Per Share (EPS): $6.22, up 27% - Free Cash Flow: $7.1 billion, marking a historic year for the company [7] - **CSG Business**: Generated $17.3 billion, growing 26% on a P&L basis and 21% on a demand basis, with market share gains in 32 of the last 36 quarters [8] - **ISG Business**: Returned to growth with $9.2 billion, growing 3% on a P&L basis and 17% on a demand basis in Q4 [8] Market Dynamics - **PC Market Resilience**: The commercial PC market is expected to remain stable due to its evolving usage model, with Dell focusing on high-end commercial and gaming segments [12][13] - **Infrastructure Demand**: Digital transformation and hybrid cloud adoption are driving infrastructure spending, positioning Dell favorably in the servers and storage markets [16] Supply Chain Challenges - **Component Shortages**: Ongoing semiconductor shortages and logistics issues are impacting supply chains, with expectations of challenges persisting through the first half of fiscal 2023 [21][22] - **Backlog Management**: Dell has improved backlog management but anticipates continued challenges, particularly in high-end displays and server components [20][22] Capital Allocation Strategy - **Balanced Approach**: Dell is shifting towards a more balanced capital allocation strategy, including: - Dividend of $0.33 per share announced for Q1 - $900 million of share repurchases against a $5 billion authorization [34][35] - **Debt Reduction**: Aiming to reduce core leverage ratio to 1.5 over the long term [35] Valuation and Investor Sentiment - **Current Valuation**: Dell trades at a discount compared to peers (7.5x PE vs. 9x for peers) [37] - **Investor Expectations**: Investors are looking for proof of PC market durability, consistent execution in growth areas, and adherence to capital allocation strategies [39][41] Future Outlook - **Growth Guidance**: Dell anticipates 3% to 4% revenue growth for fiscal 2023, with expectations for both CSG and ISG segments to grow [42][44] - **Long-term Investment Thesis**: Dell's core markets are stable, and the company is well-positioned for long-term growth, making it an attractive investment opportunity [46][47]