Dell Technologies(DELL) - 2024 Q4 - Annual Results

Financial Performance - Fourth quarter revenue was $22.3 billion, down 11% year over year, and full-year revenue was $88.4 billion, down 14% from fiscal year 2023[1][2] - Operating income for the fourth quarter was $1.5 billion, up 25% year over year, while full-year operating income was $5.2 billion, down 10% year over year[1][2] - Non-GAAP diluted earnings per share for the fourth quarter was $2.20, up 22% year over year, and for the full year, it was $7.13, down 6% year over year[1][2] - Total consolidated net revenue for the three months ended February 2, 2024, was $22,318 million, a decrease of 11% compared to $25,039 million for the same period in 2023[35] - Net income for the three months ended February 2, 2024, was $1,158 million, representing a 91% increase from $606 million in the same period last year[23] - Gross margin for the fiscal year ended February 2, 2024, was 23.6%, up from 22.2% in the previous fiscal year[23] - Total ISG net revenue decreased by 6% to $9,332 million for the three months ended February 2, 2024, down from $9,905 million in the same period last year[32] - Total CSG net revenue for the fiscal year ended February 2, 2024, was $48,916 million, a decrease of 16% from $58,213 million in the previous fiscal year[32] - Reportable segment net revenue for the fiscal year ended February 2, 2024, was $82,801 million, down from $96,569 million in the previous fiscal year, reflecting a decrease of 14%[35] Cash Flow and Shareholder Returns - Cash flow from operations for the full year was $8.7 billion, with $7 billion returned to shareholders since Q1 FY23[4] - Cash flows from operating activities for the fiscal year ended February 2, 2024, were $8,676 million, compared to $3,565 million for the previous year[30] - Cash flow from operations decreased by 44% to $1,533 million for the three months ended February 2, 2024, compared to $2,714 million in the same period last year[52] - Free cash flow dropped by 59% to $806 million for the three months ended February 2, 2024, down from $1,965 million in the prior year[52] - The company reported a significant increase in free cash flow for the fiscal year 2024, reaching $5,923 million compared to $572 million in fiscal year 2023, marking a 935% increase[52] - Dell is increasing its annual cash dividend by 20% to $1.78 per common share, reflecting confidence in the business[3][4] Segment Performance - The Infrastructure Solutions Group (ISG) reported fourth quarter revenue of $9.3 billion, down 6% year over year, and full-year revenue of $33.9 billion, down 12% year over year[6][11] - The Client Solutions Group (CSG) delivered fourth quarter revenue of $11.7 billion, down 12% year over year, and full-year revenue of $48.9 billion, down 16% year over year[7][11] - CSG operating income increased by 8% to $726 million for the three months ended February 2, 2024, compared to $671 million for the same period in 2023[32] - ISG operating income as a percentage of ISG net revenue was 15.3% for the three months ended February 2, 2024, compared to 15.6% for the same period in 2023[32] Research and Development - Research and development expenses for the three months ended February 2, 2024, were $716 million, a decrease of 10% from $795 million in the same period of 2023[23] - New product developments include support for AMD Instinct™ MI300X accelerator and advancements in enterprise data storage for AI workloads[9][10] Strategic Partnerships and Market Trends - AI-optimized server orders increased nearly 40% sequentially, with a backlog of $2.9 billion at the end of the fiscal year[8] - Dell has partnered with Nokia to serve as its preferred infrastructure partner, transitioning Nokia AirFrame customers to Dell PowerEdge servers[10] Tax and Other Expenses - The income tax expense for the three months ended February 2, 2024, was $130 million, a significant decrease of 59% from $317 million in the same period last year[23] - Capital expenditures and capitalized software development costs for the three months ended February 2, 2024, were $727 million, slightly down from $749 million in the same period last year[52] Earnings Per Share - Earnings per share attributable to Dell Technologies, Inc. increased by 89% to $1.59 for the three months ended February 2, 2024, compared to $0.84 for the same period in 2023[49] - Non-GAAP earnings per share attributable to Dell Technologies, Inc. was $2.20, a 22% increase from $1.80 in the prior year quarter[49] - Non-GAAP earnings per share for the fiscal year 2024 was $7.13, a 6% decrease from $7.61 in fiscal year 2023[49] - Non-GAAP earnings per share - diluted increased by 22% to $2.20 for the three months ended February 2, 2024, compared to $1.80 for the same period in 2023[41] - Non-GAAP gross margin for the three months ended February 2, 2024, was $5,468 million, down 8% from $5,971 million in the same period last year[41]