What was the primary driver of Dell's revenue growth in this period?

The primary driver of Dell's revenue growth was the acquisition of EMC, which closed on September 7, 2016. The financial results of EMC were consolidated, significantly boosting net revenue across all business segments.

How is Dell Technologies managing its debt load after the EMC acquisition?

Dell Technologies financed the EMC acquisition with a significant amount of debt. While the total debt principal amount was approximately $49.9 billion as of August 4, 2017, the company is actively managing its debt through refinancing efforts and has strong operating cash flows and available credit facilities to meet its debt service requirements.

What is the significance of the Class V Common Stock and the Class V Group?

The Class V Common Stock is a tracking stock designed to track the economic performance of a specific set of assets and liabilities, primarily the company's economic interest in VMware, Inc. The company also engaged in share repurchase programs for its Class V Common Stock, funded by proceeds from VMware, Inc. stock repurchases.

DELL 10-Q Quarterly Report Q3 FY2018 — Revenue, Net Income, EPS

Q: Why did Dell report an operating loss despite significant revenue growth?

The company reported an operating loss primarily due to substantial non-cash charges, including amortization of intangible assets and purchase accounting adjustments related to the EMC merger. These adjustments, along with other transaction-related expenses, significantly impacted GAAP operating income.

Summary

Dell Technologies Inc. reported its financial results for the second quarter and first six months of Fiscal Year 2018, ending August 4, 2017. The company experienced significant revenue growth, largely driven by the acquisition of EMC, which closed in September 2016. Net revenue increased by 48% year-over-year for the quarter and 47% for the six-month period. This growth was across all business segments, including Client Solutions Group (CSG), Infrastructure Solutions Group (ISG), and VMware. Despite revenue growth, the company reported an operating loss of $0.979 billion for the quarter and $2.479 billion for the six months. This loss was largely due to significant non-cash charges, including amortization of intangible assets and purchase accounting adjustments related to the EMC merger. Excluding these items and other transaction-related costs, the non-GAAP operating income showed substantial improvement, increasing by 105% for the quarter and 112% for the six-month period. Dell Technologies' liquidity remains strong, with $9.2 billion in cash and cash equivalents and $3.1 billion in available borrowings under its revolving credit facility.

Financial Highlights

50 data points

Beta

Revenue

$19.30B

0.3% Gross Margin

Net Income

-$732.00M

-0.0% Net Margin

Total Assets

$117.49B

Cash & Equivalents

$9.21B

Free Cash Flow

$1.50B

Financial Statements

Beta

Revenue	$19.30B
Cost of Revenue	$14.55B
Gross Profit	$4.97B
R&D Expenses	$1.09B
SG&A Expenses	$4.54B
Operating Expenses	$5.63B
Operating Income	-$665.00M
Net Income	-$732.00M

Key Highlights

1Dell Technologies reported a 48% increase in net revenue for the second quarter of FY18 and a 47% increase for the first six months, primarily driven by the significant contribution from the recently acquired EMC business.
2The Infrastructure Solutions Group (ISG) saw a substantial 96% revenue increase in the quarter, largely due to incremental storage revenue from the acquired EMC storage business.
3Despite strong revenue growth, the company reported an operating loss of $979 million for the quarter and $2.479 billion for the six months, significantly impacted by non-cash expenses like amortization of intangibles and purchase accounting adjustments related to the EMC merger.
4Non-GAAP operating income showed a strong increase of 105% year-over-year for the quarter and 112% for the six-month period, highlighting improved operational performance excluding merger-related charges.
5VMware, a key component of Dell Technologies, generated $1.9 billion in net revenue for the quarter, with an operating income margin of 29.4%.
6The company maintained a strong liquidity position with $9.2 billion in cash and cash equivalents and $3.1 billion in available credit as of August 4, 2017.
7Dell Technologies repurchased $300 million of its Class V Common Stock during the six-month period under its approved repurchase programs.

Dell Technologies Inc. Quarterly Report for Q3 Ended Aug 4, 2017

Summary

Financial Highlights

Key Highlights

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