10-QPeriod: Q2 FY2022

Dell Technologies Inc. Quarterly Report for Q2 Ended Jul 30, 2021

Filed September 3, 2021For Securities:DELL

Summary

Dell Technologies Inc. reported solid financial results for the quarter and six months ended July 30, 2021. The company saw a significant increase in net revenue, driven by strong performance in its Client Solutions Group (CSG), which benefited from sustained demand for its commercial and consumer products. The Infrastructure Solutions Group (ISG) also experienced moderate growth, supported by improved macroeconomic conditions and increased IT infrastructure investment. Profitability also improved, with operating income and net income showing increases, particularly for the six-month period. This was largely driven by the strong performance of CSG and a reduction in interest expenses. The company continues to manage its debt effectively, with a notable reduction in overall debt principal during the period. The planned spin-off of VMware, Inc. remains on track for the fourth quarter of calendar year 2021 and is expected to strategically reposition Dell Technologies for future growth and investment.

Financial Highlights

56 data points
Beta

Revenue

$24.19B

22.6% Gross Margin

Net Income

$831.00M

3.4% Net Margin

EPS (Diluted)

$1.05

Total Assets

$122.68B

Cash & Equivalents

$11.72B

Free Cash Flow

$1.09B

Financial Statements
Beta
Revenue$24.19B
Cost of Revenue$18.72B
Gross Profit$5.47B
R&D Expenses$697.00M
SG&A Expenses$3.76B
Operating Expenses$4.46B
Operating Income$1.02B
Interest Expense$416.00M
Net Income$831.00M
EPS (Basic)$1.09
EPS (Diluted)$1.05
Shares Outstanding (Basic)763.00M
Shares Outstanding (Diluted)786.00M

Key Highlights

  • 1Total net revenue increased by 15% year-over-year for the second quarter and 13% for the first six months of Fiscal 2022.
  • 2The Client Solutions Group (CSG) was a key driver of growth, with net revenue up 27% in Q2 and 24% for the first six months, benefiting from strong demand for commercial and consumer products.
  • 3Infrastructure Solutions Group (ISG) net revenue grew by 3% in Q2 and 4% for the first six months, supported by an improving macroeconomic environment and increased IT infrastructure spending.
  • 4Operating income saw a significant increase of 21% in Q2 and 49% for the first six months, reflecting strong performance across segments and improved cost management.
  • 5Net income attributable to Dell Technologies Inc. increased by 44% for the first six months of the fiscal year.
  • 6The company reduced its total debt principal by $4.4 billion during the first six months of the fiscal year.
  • 7Dell Technologies remains on track for the planned spin-off of VMware, Inc. in the fourth quarter of calendar year 2021.

Frequently Asked Questions

Dell Technologies demonstrated strong financial performance, with net revenue increasing by 15% year-over-year in the second quarter and 13% for the first six months of Fiscal 2022. Profitability also improved, with operating income up 21% in the quarter and 49% for the six-month period, driven by growth in all key segments and effective cost management.

The Client Solutions Group (CSG) was the standout performer, with net revenue increasing by 27% year-over-year in the second quarter and 24% for the first six months, fueled by strong demand for both commercial and consumer products. The Infrastructure Solutions Group (ISG) also showed positive growth, up 3% in the quarter and 4% for the six-month period, benefiting from an improving economic environment and increased IT infrastructure investments.

The company confirmed that the planned spin-off of VMware, Inc. is proceeding as expected and is anticipated to close in the fourth quarter of calendar year 2021. This strategic move is intended to reposition Dell Technologies for future growth and investment.

Dell Technologies continued its deleveraging efforts, reducing its total debt principal by $4.4 billion during the first six months of Fiscal 2022. This was primarily achieved through debt repayments, including significant principal payments on the Margin Loan Facility and Senior Notes.