10-QPeriod: Q1 FY2022

Dell Technologies Inc. Quarterly Report for Q1 Ended Apr 30, 2021

Filed June 7, 2021For Securities:DELL

Summary

Dell Technologies Inc. reported robust financial performance for the first quarter of Fiscal Year 2022, ending April 30, 2021. Total net revenue saw a significant increase of 12% year-over-year, reaching $24.5 billion, driven by strong demand across its Client Solutions Group (CSG) and contributions from the Infrastructure Solutions Group (ISG) and VMware. This growth was fueled by the continued "do-anything-from-anywhere" economy, increasing the demand for remote work and learning solutions. The company also demonstrated substantial improvement in profitability. Operating income surged by 96% to $1.38 billion, and net income attributable to Dell Technologies Inc. increased dramatically by 520% to $887 million. This strong performance reflects effective cost management and operational efficiencies, alongside resilient demand for Dell's integrated IT solutions. A key strategic development during the quarter was the announcement of the planned spin-off of VMware, Inc., which is expected to reshape the company's structure and capital allocation strategy upon completion.

Financial Highlights

56 data points
Beta

Revenue

$22.59B

23.3% Gross Margin

Net Income

$887.00M

3.9% Net Margin

EPS (Diluted)

$1.13

Total Assets

$121.75B

Cash & Equivalents

$14.24B

Free Cash Flow

$1.61B

Financial Statements
Beta
Revenue$22.59B
Cost of Revenue$17.33B
Gross Profit$5.26B
R&D Expenses$619.00M
SG&A Expenses$3.66B
Operating Expenses$4.28B
Operating Income$987.00M
Interest Expense$433.00M
Net Income$887.00M
EPS (Basic)$1.17
EPS (Diluted)$1.13
Shares Outstanding (Basic)757.00M
Shares Outstanding (Diluted)782.00M

Key Highlights

  • 1Total net revenue increased by 12% to $24.49 billion, driven by strong demand in CSG and ISG, and growth in VMware.
  • 2Operating income significantly increased by 96% to $1.38 billion, reflecting improved profitability across segments.
  • 3Net income attributable to Dell Technologies Inc. surged by 520% to $887 million, demonstrating enhanced earnings power.
  • 4CSG revenue grew by 20%, largely due to sustained demand for remote work/learning solutions and gaming systems.
  • 5ISG revenue increased by 5%, supported by improved macroeconomic conditions and server demand.
  • 6VMware revenue grew by 9%, primarily driven by subscriptions and SaaS offerings.
  • 7The company announced a planned spin-off of VMware, Inc., which is expected to occur in Q4 2021 and will involve a cash dividend to Dell Technologies stockholders.

Frequently Asked Questions

Dell Technologies reported a 12% increase in total net revenue for the quarter ended April 30, 2021, reaching $24.49 billion. This growth was primarily driven by strong demand in the Client Solutions Group (CSG) and contributions from the Infrastructure Solutions Group (ISG) and VMware.

Profitability showed significant improvement. Operating income increased by 96% to $1.38 billion, and net income attributable to Dell Technologies Inc. rose by 520% to $887 million, indicating strong operational leverage and effective cost management.

Dell announced plans to spin off VMware, Inc. This strategic move is expected to separate Dell's businesses from VMware's, resulting in two distinct public companies. VMware will pay a cash dividend to Dell stockholders before the separation, which Dell intends to use to repay debt. The transaction is anticipated to close in Q4 2021.

The Client Solutions Group (CSG) saw a 20% revenue increase driven by sustained demand for remote work and learning solutions, as well as gaming systems. The Infrastructure Solutions Group (ISG) grew 5% due to improved macroeconomic conditions and increased server demand. VMware's revenue increased by 9%, primarily fueled by growth in subscription and SaaS offerings.