10-KPeriod: FY2021

Dell Technologies Inc. Annual Report, Year Ended Jan 29, 2021

Filed March 26, 2021For Securities:DELL

Summary

Dell Technologies Inc. reported a 2% increase in net revenue for fiscal year 2021, reaching $94.2 billion, 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 billion, aided by cost-saving measures and the absence of certain charges recognized in the prior year. The company also generated a record $11.4 billion 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.

Financial Highlights

57 data points
Beta

Revenue

$86.67B

23.2% Gross Margin

Net Income

$3.25B

3.7% Net Margin

EPS (Diluted)

$4.22

Total Assets

$123.42B

Cash & Equivalents

$9.51B

Free Cash Flow

$9.32B

Financial Statements
Beta
Revenue$86.67B
Cost of Revenue$66.53B
Gross Profit$20.14B
R&D Expenses$2.46B
SG&A Expenses$14.00B
Operating Expenses$16.45B
Operating Income$3.69B
Interest Expense$2.05B
Net Income$3.25B
EPS (Basic)$4.37
EPS (Diluted)$4.22
Shares Outstanding (Basic)744.00M
Shares Outstanding (Diluted)767.00M

Key Highlights

  • 1Net revenue increased by 2% to $94.2 billion in fiscal year 2021, driven by strong performance in CSG and VMware.
  • 2Operating income surged by 96% to $5.1 billion, benefiting from cost efficiencies and prior-year charge reversals.
  • 3Generated record cash flow from operations of $11.4 billion, highlighting strong profitability and working capital management.
  • 4The company is exploring strategic alternatives for its VMware investment, including a potential spin-off.
  • 5ISG revenue declined by 4% due to a weaker demand environment for data center infrastructure as customers prioritized remote work solutions.
  • 6CSG revenue grew by 5%, fueled by increased demand for notebooks for remote work and learning.
  • 7VMware segment revenue increased by 9%, primarily due to growth in subscription and SaaS offerings.

Frequently Asked Questions

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.

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.

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.

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.