Dell Technologies Reports First Quarter Fiscal 2020 Financial Results 

ROUND ROCK, Texas, May 31, 2019 -- Dell Technologies has announced financial results for its fiscal 2020 first quarter ended May 3, 2019. First quarter revenue was $21.9 billion, up 3 percent, and non-GAAP revenue was $22.0 billion, up 2 percent over the same period in the prior year. The company generated operating income of $550 million, compared to an operating loss of $153 million last year, and non-GAAP operating income of $2.2 billion, compared to $2.0 billion last year. Net income was $329 million or 1.5 percent of revenue, non-GAAP net income was $1.2 billion or 5.5 percent of non-GAAP revenue, and adjusted EBITDA was $2.6 billion or 11.7 percent of non-GAAP revenue. Cash flow from operations was approximately $682 million for the quarter with diluted earnings per share of $0.38 and non-GAAP diluted earnings per share of $1.45.

"We're in the middle of a technology led investment cycle that's fueled by the explosion of data," said Jeff Clarke, vice chairman, Dell Technologies. "No one is better positioned to deliver the solutions customers need to grow in the data era. One example is our new Dell Technologies Cloud platform jointly engineered with VMware to expedite customers' moves to hybrid cloud environments."

Unveiled at Dell Technologies World earlier in the quarter, the Dell Technologies Cloud combines the power of VMware and Dell Technologies to make hybrid cloud environments simpler to deploy and manage with consistent infrastructure, operations, and services. Dell Technologies Cloud seamlessly extends from the public cloud into the data center with the option of hyperconverged or converged infrastructure, including VMware Cloud Foundation on VxRail, as well as being able to be consumed as a fully managed Data Center-as-a-Service, VMware Cloud on Dell EMC.

Also at Dell Technologies World 2019, the company extended its leadership in edge computing with the announcement of Unified Workspace, which integrates solutions across Dell devices and services, VMware Workspace ONE, and Secureworks to simplify the entire device lifecycle for IT.

First Quarter Fiscal 2020 Financial Results

Dell Technologies ended the quarter with a cash and investments balance of $9.8 billion. The company paid down approximately $400 million in gross debt in the first quarter and approximately $15 billion in gross debt over the two and a half years since the closing of the EMC transaction, excluding Dell Financial Services-related debt, public subsidiary debt, and debt incurred to finance the Class V transaction. The company is on track to repay approximately $4.8 billion of gross debt in fiscal year 2020.

"I am pleased that we grew revenue and profitability while taking share in a dynamic environment," said Tom Sweet, chief financial officer, Dell Technologies. "We remain focused on long-term relative growth and innovating across our family of businesses to help our customers transform for their digital future."

Operating segments summary

Infrastructure Solutions Group revenue for the first quarter was $8.2 billion, a 5 percent decrease year-over-year. This was driven by a 1 percent decrease in storage revenue to $4.0 billion and a 9 percent decrease in server and networking revenue to $4.2 billion. Operating income was $843 million for the first quarter, or 10.3 percent of Infrastructure Solutions Group revenue.

Key highlights:

• Newer software-defined data center solutions and hyper converged infrastructure are growing rapidly, including VxRail, which grew triple digits again during the first quarter
• Launched midrange storage portfolio with new Unity XT solution announced at Dell Technologies World 2019, as well as new Cloud Storage Services extending support for hybrid cloud environments
• Strengthened data protection portfolio with announcement of PowerProtect X400 and PowerProtect Software platform offerings at Dell Technologies World 2019

Client Solutions Group revenue for the first quarter was $10.9 billion, up 6 percent versus the first quarter of last year. Commercial revenue grew 13 percent to $8.3 billion, and Consumer revenue was down 10 percent to $2.6 billion. Operating income was $793 million for the first quarter, or 7.3 percent of Client Solutions Group revenue.

Key highlights:

• Gained year-over-year worldwide PC share² for 25^th consecutive quarter
• Double-digit revenue growth in commercial notebooks, desktops, and workstations
• Launched new Dell Latitude mobile PC portfolio with breakthroughs in security, productivity, and connectivity

VMware revenue was $2.3 billion for the first quarter, up 13 percent driven by broad-based strength across a diverse product portfolio. Operating income for the first quarter was $614 million, or 26.9 percent of VMware revenue.

Conference call information

As previously announced, the company will hold a conference call to discuss its first quarter performance today, May 30, 2019 at 4:30 p.m. CDT. The conference call will be broadcast live over the internet and can be accessed at https://investors.delltechnologies.com/events-and-presentations/upcoming-events For those unable to listen to the live broadcast, an archived version will be available at the same location for one year.

A slide presentation containing additional financial and operating information may be downloaded from Dell Technologies' website at https://investors.delltechnologies.com/financial-information/quarterly-results

About Dell Technologies

Dell Technologies is a unique family of businesses that helps organizations and individuals build their digital future and transform how they work and live. The company provides customers with the industry's broadest and most innovative technology and services portfolio spanning from edge to core to cloud. The Dell Technologies family includes Dell, Dell EMC, Pivotal, RSA, Secureworks, Virtustream and VMware.

Source: Dell Technologies