01—Abstract
Summary
Summary of the 10-K filed March 25, 2024. Cited figures are marked; the original filing is the authoritative source.
Dell Technologies reported a 14%a year-over-year decrease in net revenue for Fiscal 2024, primarily driven by softness in both the Client Solutions Group (CSG) and Infrastructure Solutions Group (ISG) segments, attributed to broader macroeconomic uncertainty impacting IT spending.
Despite the revenue decline, the company saw an improvement in gross margin percentage due to lower input costs and disciplined pricing, which positively impacted operating income margins. The Infrastructure Solutions Group, however, experienced a decline in operating income as a percentage of revenue due to increased operating expenses relative to revenue. A significant development for Dell was the strong demand for AI-optimized servers, which outpaced GPU supply and led to an elevated backlog exiting the fiscal year.
This highlights a key growth area for the company. Dell also continued its capital return program through share repurchases and dividends, demonstrating a commitment to shareholder value. Management anticipates a return to net revenue growth in Fiscal 2025, driven by expected PC refresh cycles and continued demand for AI solutions, though it also foresees increased input costs and competitive pricing pressures.
02—Key points
Key Highlights
- Net revenue decreased by 14% in Fiscal 2024, reaching $88.4 billion, primarily due to a decline in both Client Solutions Group (CSG) and Infrastructure Solutions Group (ISG) segments.
- Despite lower revenue, gross margin percentage improved by 140 basis points to 23.6% due to lower input costs and disciplined pricing.
- The company experienced strong demand for AI-optimized servers, leading to an elevated backlog for these products.
- Operating income for Fiscal 2024 decreased by 10% to $5.2 billion, while non-GAAP operating income decreased by 11% to $7.7 billion.
- Dell Technologies returned $3.2 billion to stockholders in Fiscal 2024 through share repurchases ($2.1 billion) and dividends ($1.1 billion).
- The company anticipates net revenue growth in Fiscal 2025, driven by AI-optimized servers and a potential PC refresh cycle.
- The VMware resale business is expected to see continued revenue reduction following Broadcom's acquisition and Dell's termination of their commercial framework agreement.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2024, Dell Technologies Inc. kept $0.04.
- Revenue$88.42B100.0%
- Cost of revenue−$67.36B76.2%
- Gross profit$21.07B23.8%
- Operating costs−$15.66B17.7%
- Operating income$5.41B6.1%
- Interest, other & tax−$2.04B2.3%
- Net income$3.37B3.8%
Where FY2024 revenue went
$88.42B- Cost of revenue: $67.36B, 76% of revenue
- SG&A: $12.86B, 15% of revenue
- Net income: $3.37B, 3.8% of revenue
- R&D: $2.80B, 3.2% of revenue
- Interest, other & tax: $2.04B, 2.3% of revenue
Kept 3.8% as net incomeNet income $3.37B · 3.8%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2024filed March 25, 2024Financial Statements
FY2024 against FY2023
| Line item | FY2024FY2023 | Change |
|---|---|---|
| Revenue | $88.42B$102.30B | −13.6% |
| Cost of Revenue | $67.36B$79.61B | −15.4% |
| Gross Profit | $21.07B$22.69B | −7.1% |
| R&D Expenses | $2.80B$2.78B | +0.8% |
| SG&A Expenses | $12.86B$14.14B | −9.0% |
| Operating Expenses | $15.66B$16.91B | −7.4% |
| Operating Income | $5.41B$5.77B | −6.2% |
| Interest Expense | $1.50B$1.22B | +22.8% |
| Net Income | $3.37B$2.42B | +39.2% |
| EPS (Basic) | $4.71$3.33 | +41.4% |
| EPS (Diluted) | $4.60$3.24 | +42.0% |
| Shares Outstanding (Basic) | 720.00M734.00M | −1.9% |
| Shares Outstanding (Diluted) | 736.00M753.00M | −2.3% |
05—Questions
Frequently Asked Questions
What was Dell's overall financial performance in Fiscal Year 2024?
Dell Technologies reported a 14% decrease in net revenue for Fiscal Year 2024, totaling $88.4 billion. This decline was primarily attributed to a slowdown in IT spending due to macroeconomic uncertainty, impacting both the Client Solutions Group (CSG) and Infrastructure Solutions Group (ISG).
What are the key drivers of Dell's Infrastructure Solutions Group (ISG) performance?
ISG revenue decreased by 12% in Fiscal Year 2024, driven by lower sales in servers, networking, and storage. However, Dell saw strong demand for its AI-optimized servers, which led to an increased backlog, indicating a significant growth opportunity in this area despite current supply constraints for GPUs.
How did Dell return capital to shareholders in Fiscal Year 2024?
In Fiscal Year 2024, Dell Technologies returned approximately $3.2 billion to shareholders through share repurchases ($2.1 billion) and dividend payments ($1.1 billion). The company also announced a 20% increase in its quarterly dividend.
What is Dell's outlook for Fiscal Year 2025?
Dell expects to see net revenue growth in Fiscal Year 2025. This growth is anticipated to be driven by an improvement in demand for its products and services, including a potential PC refresh cycle and continued demand for AI-optimized servers. However, the company also anticipates higher input costs and increased competitive pricing.
What is the impact of the Broadcom acquisition of VMware on Dell?
Following Broadcom's acquisition of VMware, Dell terminated its commercial framework agreement with VMware, which will lead to a continued reduction in revenue from its 'other businesses' segment related to VMware resale. While Dell will continue to integrate select VMware products, the strategic commercial relationship has significantly changed.
06—Continue