01—Abstract
Summary
Summary of the 10-K filed March 24, 2022. Cited figures are marked; the original filing is the authoritative source.
Dell Technologies' fiscal year 2022 (ending January 28, 2022) was marked by significant strategic divestitures, including the spin-off of VMware and the sale of Boomi.
These actions, coupled with strong demand for its Client Solutions Group (CSG) products, particularly during the ongoing work-from-home environment, led to a substantial increase in net revenue. The company also made significant progress in debt reduction, achieving an investment-grade rating from major credit agencies. Despite supply chain challenges and component cost increases impacting gross margins, Dell Technologies demonstrated resilience and strategic financial management, positioning itself for continued growth in the evolving IT landscape.
02—Key points
Key Highlights
- Completed the spin-off of VMware, Inc., receiving $9.3 billion in cash.
- Sold Boomi, Inc. for approximately $4.0 billion, supporting strategic investments.
- Achieved investment grade ratings from three major credit rating agencies due to debt reduction efforts.
- Experienced robust revenue growth, with total net revenue increasing by 17% year-over-year, driven primarily by strong performance in the Client Solutions Group (CSG).
- Managed supply chain constraints and increased component/logistics costs, which impacted gross margins, but mitigated some effects through pricing adjustments.
- Announced a new quarterly cash dividend policy, signaling a commitment to returning capital to shareholders.
- Invested $2.6 billion in Research and Development (R&D) to drive innovation and support long-term growth.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2022, Dell Technologies Inc. kept $0.06.
- Revenue$101.20B100.0%
- Cost of revenue−$79.31B78.4%
- Gross profit$21.89B21.6%
- Operating costs−$17.23B17.0%
- Operating income$4.66B4.6%
- Interest, other & tax$1.05B1.0%
- Net income$5.71B5.6%
Where FY2022 revenue went
$101.20B- Cost of revenue: $79.31B, 78% of revenue
- SG&A: $14.65B, 14% of revenue
- Operating income: $4.66B, 4.6% of revenue
- R&D: $2.58B, 2.5% of revenue
Kept 4.6% as operating income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2022filed March 24, 2022Financial Statements
FY2022 against FY2021
| Line item | FY2022FY2021 | Change |
|---|---|---|
| Revenue | $101.20B$86.67B | +16.8% |
| Cost of Revenue | $79.31B$66.53B | +19.2% |
| Gross Profit | $21.89B$20.14B | +8.7% |
| R&D Expenses | $2.58B$2.46B | +5.0% |
| SG&A Expenses | $14.65B$14.00B | +4.7% |
| Operating Expenses | $17.23B$16.45B | +4.7% |
| Operating Income | $4.66B$3.69B | +26.4% |
| Interest Expense | $1.54B$2.05B | −24.9% |
| Net Income | $5.71B$3.25B | +75.6% |
| Shares Outstanding (Basic) | 762.00M744.00M | +2.4% |
| Shares Outstanding (Diluted) | 791.00M767.00M | +3.1% |
05—Questions
Frequently Asked Questions
What were the major strategic actions taken by Dell Technologies in fiscal year 2022?
Dell Technologies executed two major strategic divestitures: the spin-off of its VMware business and the sale of its Boomi business. These actions aimed to streamline operations, focus on core growth initiatives, and strengthen the company's financial position.
How did the VMware spin-off impact Dell Technologies financially?
The VMware spin-off resulted in Dell Technologies receiving $9.3 billion in cash from VMware. This liquidity was used to pay down outstanding debt, contributing to the company's deleveraging strategy and achievement of investment-grade credit ratings.
What were the key drivers of Dell's revenue growth in fiscal year 2022?
The primary driver of revenue growth was the strong performance of the Client Solutions Group (CSG), fueled by continued demand for PCs and related products due to remote work and learning trends. The Infrastructure Solutions Group (ISG) also contributed positively with growth in servers and networking.
What challenges did Dell face during fiscal year 2022?
Dell Technologies faced significant supply chain challenges, including industry-wide constraints on limited-source components and increased logistics costs due to global economic recovery and pandemic-related disruptions. These factors put pressure on gross margins, though the company managed these impacts through pricing strategies.
What is Dell's strategy for returning capital to shareholders?
Dell Technologies announced a new dividend policy to pay quarterly cash dividends, beginning in fiscal year 2023. This complements the company's ongoing stock repurchase programs, demonstrating a balanced approach to capital allocation.
06—Continue