Skip to content
AnalystLens

Dell Technologies Inc. 8-K Report, Financial Results (May 30, 2024)

Reports
Earnings & Results·Exhibits & Filings
Filing Date
Filed May 30, 2024
Period End
May 30, 2024
Security
DELL
In the record · 2016–202610-K1010-Q328-K174

DELL filed 10 annual reports (10-K), 32 quarterly reports (10-Q) and 174 current reports (8-K) between 2016 and 2026.

  1. Material agreement8-K · Oct ’17Oct ’17
  2. Leadership change8-K · Dec ’19Dec ’19
  3. Material agreement8-K · Dec ’21Dec ’21
  4. Leadership change8-K · Oct ’26Oct ’26

01—Abstract

Summary

Summary of the 8-K filed May 30, 2024. Cited figures are marked; the original filing is the authoritative source.

Dell Technologies reported first quarter fiscal 2025 results (quarter ended May 3, 2024) with revenue of $22.2 billiona, up 6% year over year, driven by its Infrastructure Solutions Group (ISG).

ISG revenue rose 22% to $9.2 billionb, with servers and networking reaching a record $5.5 billion, up 42%, while Client Solutions Group (CSG) revenue was flat at $12.0 billion, with commercial client up 3% and consumer down 15%. Management highlighted AI-optimized server orders of $2.6 billion, shipments of $1.7 billion (up more than 100%), and backlog of $3.8 billion (up more than 30%) as evidence of accelerating AI demand. Profitability was weaker.

GAAP operating income fell 14% to $920 millionc and operating margin contracted to 4.1% from 5.1%, as gross margin declined to 21.6% from 24.0%. Non-GAAP operating income declined 8% to $1.5 billion, and non-GAAP diluted EPS fell 3% to $1.27. GAAP diluted EPS rose 67% to $1.32, but this was largely due to a favorable income tax benefit of $408 million, not operating improvement.

Cash flow from operations fell 41% to $1.0 billiond, and free cash flow declined 58% to $457 million. Adjusted free cash flow was $623 million, down 9%. On the balance sheet, Dell ended the quarter with $7.3 billion in cash and investments and returned $1.1 billion to shareholders through buybacks and dividends.

Total stockholders' equity remained negative at $(2.7) billion, and total debt was roughly $25.5 billion, reflecting the company's leveraged capital structure. Investors will be focused on whether the ISG AI momentum can offset margin pressure in both segments and on the cash flow trajectory going forward.

02—Key points

Key Highlights

  1. Revenue of $22.2 billion grew 6% year over year, led by ISG, which grew 22% to $9.2 billion.
  2. Servers and networking revenue hit a record $5.5 billion, up 42%, with AI-optimized server orders of $2.6 billion, shipments of $1.7 billion (up more than 100%), and backlog of $3.8 billion (up more than 30%).
  3. GAAP operating income declined 14% to $920 million, and operating margin fell to 4.1% from 5.1%, with gross margin down to 21.6% from 24.0%.
  4. GAAP diluted EPS rose 67% to $1.32, but the increase was driven by a $408 million income tax benefit; non-GAAP diluted EPS declined 3% to $1.27.
  5. Cash flow from operations fell 41% to $1.0 billion, and free cash flow dropped 58% to $457 million, a notable concern for investors.
  6. CSG revenue was flat at $12.0 billion, with commercial up 3% but consumer down 15%, and CSG operating income fell 18% to $732 million.
  7. Dell returned $1.1 billion to shareholders and ended the quarter with $7.3 billion in cash and investments, while stockholders' deficit widened to $(2.7) billion.

03—Questions

Frequently Asked Questions

  1. Why did GAAP EPS rise 67% while operating income fell 14%?

    The EPS increase was driven mainly by a favorable income tax benefit of $408 million in the quarter, compared with a $127 million tax expense a year earlier. Pre-tax income actually fell 22% to $547 million, so the EPS gain reflects a tax item rather than stronger operating performance. Management's non-GAAP EPS, which uses a fixed estimated annual tax rate beginning in fiscal 2025, declined 3% to $1.27.

  2. How strong is AI-related demand for Dell's servers?

    Demand appears strong. AI-optimized server orders increased sequentially to $2.6 billion, shipments more than doubled to $1.7 billion, and backlog grew more than 30% to $3.8 billion. Servers and networking revenue rose 42% to a record $5.5 billion, with both AI and traditional server demand contributing. However, ISG operating margin fell to 8.0% from 9.7%, so investors should watch whether growth is translating into profitable scale.

  3. Why did cash flow decline so sharply?

    Cash flow from operations fell 41% to $1.0 billion, and free cash flow declined 58% to $457 million. Management's adjusted free cash flow, which adjusts for financing receivables and operating leases, fell 9% to $623 million. The filing does not break down the drivers in detail here, but the sharp drop in operating cash flow alongside a 65% rise in inventory to $4.8 billion suggests working capital investment, which investors should monitor in future quarters.

  4. Is Dell's balance sheet a concern given the negative equity?

    Stockholders' equity is negative, at $(2.7) billion, and total liabilities of $82.9 billion exceed total assets of $80.2 billion. Negative equity is common for companies that have historically prioritized share repurchases and dividends, and it does not by itself indicate distress. Dell held $7.3 billion in cash and investments against roughly $25.5 billion in total debt. Investors should weigh this leverage against the company's ability to generate cash, which fell in the quarter.

  5. What is driving the weakness in the Client Solutions Group?

    CSG revenue was flat at $12.0 billion, with commercial client revenue up 3% to $10.2 billion, offset by a 15% decline in consumer revenue to $1.8 billion. CSG operating income fell 18% to $732 million, and operating margin declined to 6.1% from 7.4%. The margin compression indicates pricing or mix pressure, and the filing does not provide further detail on the causes.

04—Continue

← View all 8-K filings