01—Abstract
Summary
Summary of the 10-K filed March 26, 2021. Cited figures are marked; the original filing is the authoritative source.
Dell Technologies Inc. reported a 2% increase in net revenue for fiscal year 2021, reaching $94.2 billiona, primarily driven by growth in its Client Solutions Group (CSG) and VMware segments, despite a slight decline in the Infrastructure Solutions Group (ISG).
The company's performance was resilient amidst the ongoing COVID-19 pandemic, with strong demand for remote work and learning solutions bolstering CSG results. VMware continued its upward trajectory with increased subscription and software-as-a-service revenue. Operating income saw a significant 96% increase to $5.1 billionb, aided by cost-saving measures and the absence of certain charges recognized in the prior year.
The company also generated a record $11.4 billionc in cash flow from operating activities, demonstrating strong profitability and effective working capital management. Dell Technologies also announced plans to explore strategic alternatives for its VMware investment, potentially including a spin-off, which could simplify capital structures and enhance strategic flexibility for both entities. The company continues to focus on debt reduction and maintaining a strong capital structure.
02—Key points
Key Highlights
- Net revenue increased by 2% to $94.2 billion in fiscal year 2021, driven by strong performance in CSG and VMware.
- Operating income surged by 96% to $5.1 billion, benefiting from cost efficiencies and prior-year charge reversals.
- Generated record cash flow from operations of $11.4 billion, highlighting strong profitability and working capital management.
- The company is exploring strategic alternatives for its VMware investment, including a potential spin-off.
- ISG revenue declined by 4% due to a weaker demand environment for data center infrastructure as customers prioritized remote work solutions.
- CSG revenue grew by 5%, fueled by increased demand for notebooks for remote work and learning.
- VMware segment revenue increased by 9%, primarily due to growth in subscription and SaaS offerings.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2021, Dell Technologies Inc. kept $0.04.
- Revenue$86.67B100.0%
- Cost of revenue−$66.53B76.8%
- Gross profit$20.14B23.2%
- Operating costs−$16.45B19.0%
- Operating income$3.69B4.3%
- Interest, other & tax−$435.0M0.5%
- Net income$3.25B3.7%
Where FY2021 revenue went
$86.67B- Cost of revenue: $66.53B, 77% of revenue
- SG&A: $14.00B, 16% of revenue
- Net income: $3.25B, 3.7% of revenue
- R&D: $2.46B, 2.8% of revenue
- Interest, other & tax: $435.0M, 0.5% of revenue
Kept 3.7% as net incomeNet income $3.25B · 3.7%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2021filed March 26, 2021Financial Statements
FY2021 against FY2020
| Line item | FY2021FY2020 | Change |
|---|---|---|
| Revenue | $86.67B$84.81B | +2.2% |
| Cost of Revenue | $66.53B$64.18B | +3.7% |
| Gross Profit | $20.14B$20.64B | −2.4% |
| R&D Expenses | $2.46B$2.45B | 0.0% |
| SG&A Expenses | $14.00B$15.82B | −11.5% |
| Operating Expenses | $16.45B$18.27B | −9.9% |
| Operating Income | $3.69B$2.37B | +55.7% |
| Interest Expense | $2.05B$2.33B | −12.1% |
| Net Income | $3.25B$4.62B | −29.6% |
| EPS (Basic) | $4.37$6.38 | −31.5% |
| EPS (Diluted) | $4.22$6.03 | −30.0% |
| Shares Outstanding (Basic) | 744.00M724.00M | +2.8% |
| Shares Outstanding (Diluted) | 767.00M751.00M | +2.1% |
05—Questions
Frequently Asked Questions
What was Dell Technologies' overall financial performance in fiscal year 2021?
Dell Technologies reported a 2% increase in net revenue to $94.2 billion and a significant 96% increase in operating income to $5.1 billion for fiscal year 2021. The company also generated a record $11.4 billion in cash flow from operations.
How did the COVID-19 pandemic impact Dell Technologies' business segments?
The pandemic positively impacted the Client Solutions Group (CSG) with strong demand for remote work and learning solutions, driving a 5% revenue increase. However, the Infrastructure Solutions Group (ISG) experienced a 4% revenue decline as customers shifted investments towards immediate remote work needs. VMware's segment revenue grew 9%, driven by subscriptions and SaaS offerings.
What is the company's strategy regarding its investment in VMware?
Dell Technologies announced on July 15, 2020, that it is exploring potential strategic alternatives for its ownership interest in VMware, Inc., including a potential spin-off to Dell Technologies' stockholders. The company believes this could simplify capital structures and enhance strategic flexibility for both entities, though any spin-off would not occur before September 2021.
What is the company's approach to debt management?
Dell Technologies continues to prioritize debt paydown as part of its capital allocation strategy. During fiscal year 2021, the outstanding principal amount of debt decreased by $4.2 billion to $48.5 billion. The company believes its current cash position and future operating cash flows will be sufficient to fund its operations and debt service requirements.
06—Continue