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HPC & AI Wall StreetROUND ROCK, Texas, Nov. 27, 2019 — Dell Technologies announces financial results for its fiscal 2020 third quarter. Third quarter revenue was $22.8 billion, up 2 percent, and non-GAAP revenue was $22.9 billion, up 1 percent over the same period last year. Operating income was $836 million1 compared to an operating loss of $356 million last year, and non-GAAP operating income was up 18 percent to $2.4 billion. Net income was $552 million or 2.4 percent of revenue, non-GAAP net income was $1.4 billion or 6.3 percent of non-GAAP revenue, and adjusted EBITDA was $2.9 billion or 12.5 percent of non-GAAP revenue. Cash flow from operations was $1.8 billion. Diluted earnings per share was $0.66 and non-GAAP diluted earnings per share was $1.75.
“Dell Technologies is innovating and integrating solutions across our entire portfolio to create the technology infrastructure of the future for our customers,” said Jeff Clarke, vice chairman, Dell Technologies. “Our highly differentiated set of offerings enables us to continue to win in a consolidating industry, while also driving long-term value for all stakeholders.”
Third Quarter Fiscal 2020 Financial Results
| Three Months Ended | Nine Months Ended | ||||||||||||||||||
| November 1, 2019 | November 2, 2018 | Change | November 1, 2019 | November 2, 2018 | Change | ||||||||||||||
| (in millions, except percentages; unaudited) | |||||||||||||||||||
| Total net revenue | $ | 22,844 | $ | 22,482 | 2% | $ | 68,122 | $ | 66,780 | 2% | |||||||||
| Operating income (loss) | $ | 836 | $ | (356 | ) | 335% | $ | 1,905 | $ | (522 | ) | 465% | |||||||
| Net income (loss) | $ | 552 | $ | (895 | ) | 162% | $ | 5,113 | $ | (1,894 | ) | 370% | |||||||
| Non-GAAP net revenue | $ | 22,928 | $ | 22,651 | 1% | $ | 68,372 | $ | 67,316 | 2% | |||||||||
| Non-GAAP operating income | $ | 2,442 | $ | 2,064 | 18% | $ | 7,381 | $ | 6,198 | 19% | |||||||||
| Non-GAAP net income | $ | 1,445 | $ | 1,197 | 21% | $ | 4,405 | $ | 3,635 | 21% | |||||||||
| Adjusted EBITDA | $ | 2,857 | $ | 2,426 | 18% | $ | 8,586 | $ | 7,268 | 18% | |||||||||
Information about Dell Technologies’ use of non-GAAP financial information is provided under “Non-GAAP Financial Measures” below. All comparisons in this press release are year-over-year unless otherwise noted.
Dell Technologies ended the quarter with a cash and investments balance of $9.4 billion. The company repaid approximately $1.1 billion of gross debt in the quarter and approximately $3.5 billion year-to-date. The company has paid down more than $18 billion in gross debt over the three years since closing the EMC transaction and remains on track to repay approximately $5 billion of gross debt in fiscal 2020.
“This quarter’s results were driven by the strength of our diverse model, with our storage, commercial client and VMware businesses performing very well,” said Tom Sweet, chief financial officer, Dell Technologies. “We remain focused on long-term profitable growth, growing faster than competitors and the industry, growing operating income and EPS faster than revenue and generating strong cash flow over time.”
Operating segments summary
Client Solutions Group revenue for the third quarter was $11.4 billion, up 5 percent versus the third quarter of last year. Commercial revenue grew 9 percent to $8.3 billion, and Consumer revenue was down 6 percent to $3.1 billion. Operating income was $739 million or 6.5 percent of Client Solutions Group revenue.
Key highlights:
- Double-digit unit and revenue growth in commercial desktops and workstations
- Outperformed the PC industry, gaining year-over-year worldwide share in total and commercial client units2
- Expanded PC as a service to include small businesses, offering growing companies full PC lifecycle management for a single, predictable price per month
Infrastructure Solutions Group revenue for the third quarter was $8.4 billion, a 6 percent decrease year-over-year. Storage revenue was $4.1 billion, up 7 percent year-over-year, while servers and networking decreased 16 percent to $4.2 billion. Operating income was $1.0 billion for the third quarter or 11.9 percent of Infrastructure Solutions Group revenue.
Key highlights:
- Strong adoption of the Dell Technologies Cloud with recent customer wins in the logistics, transportation, financial, communications and retail sectors
- Continued strong demand for our leading HCI solutions, with VxRail orders up 82 percent year-over-year
- Announced availability of Dell EMC PowerOne autonomous infrastructure to make deploying, managing and consuming IT easier for organizations
VMware revenue was $2.5 billion for the third quarter, up 11 percent driven by broad-based strength across a diverse product portfolio. Operating income for the third quarter was $717 million, or 28.9 percent of VMware revenue.
Earlier this month at the Dell Technologies Summit, the company ushered in a new decade of responsibility and innovation with the announcement of moonshot goals that will propel the company’s social impact worldwide. The ambitious goals are the linchpin of the company’s 2030 Progress Made Real plan, and are grounded in the belief that technology and data combined with human spirit are, and will always be, positive forces in the world.
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
