Dell Technologies : Remote Work and Learn Solutions Drive Dell Technologies’ Third Quarter Fiscal 2021 Financial Results

ROUND ROCK, Texas - November 24, 2020 -

Dell Technologies (NYSE: DELL) announces financial results for its fiscal 2021 third quarter. Revenue was up 3% to $23.5 billion. The company generated operating income of $1.1 billion, a 35% increase over the same period in the prior year, and non-GAAP operating income of $2.7 billion, up 12%. Net income was $881 million, non-GAAP net income was $1.7 billion and adjusted EBITDA was $3.2 billion. Net cash from operating activities was $3.0 billion. Diluted earnings per share was $1.08, up 64% and non-GAAP diluted earnings per share was $2.03, up 16%.

'Technology has never been more important, and as the world evolves, so does our business,' said Jeff Clarke, vice chairman and chief operating officer, Dell Technologies. ' We met unprecedented demand for remote work and learn solutions this quarter while increasing revenue to $23.5 billion. At the same time, we accelerated our as-a-Service strategy and hybrid cloud capabilities at the edge - positioning us to win in these growing markets and making it easy for customers to manage data and workloads across all their operations.'

In October, at Dell Technologies World Experience, the company announced the expansion of its as-a-Service capabilities with Project APEX to simplify how customers and partners access technology on-demand - across storage, servers, networking, hyperconverged infrastructure, PCs and broader solutions. Project APEX will unify the company's as-a-Service and cloud strategies, technology offerings, and go-to-market efforts. Businesses will have a consistent as-a-Service experience wherever they run workloads including on-premises, edge locations and public clouds.

Third Quarter Fiscal 2021 Financial Results

	Three Months Ended										Nine Months Ended
	October 30, 2020				November 1, 2019				Change		October 30, 2020				November 1, 2019				Change
	(in millions, except per share amounts and percentages; unaudited)
Total net revenue	$	23,482			$	22,844			3%		$	68,112			$	68,122			-%
Operating income	$	1,129			$	836			35%		$	2,967			$	1,905			56%
Net income	$	881			$	552			60%		$	2,162			$	5,113			(58)%
Earnings per share - diluted	$	1.08			$	0.66			64%		$	2.64			$	5.50			(52)%
Non-GAAP net revenue	$	23,521			$	22,928			3%		$	68,241			$	68,372			-%
Non-GAAP operating income	$	2,725			$	2,442			12%		$	7,504			$	7,381			2%
Non-GAAP net income	$	1,711			$	1,445			18%		$	4,475			$	4,405			2%
Adjusted EBITDA	$	3,231			$	2,857			13%		$	8,938			$	8,586			4%
Non-GAAP earnings per share - diluted	$	2.03			$	1.75			16%		$	5.28			$	5.35			(1)%

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 cash and investments of $13 billion and paid down $4.6 billion in debt during the quarter. The company had total deferred revenue of $28.7 billion as of quarter end, up 11% year-over-year. Recurring revenue, which includes deferred revenue amortization, utility and as-a-Service models was approximately $6 billion for the quarter, up 13% year-over-year.

'We delivered differentiated performance through our diversified portfolio and are leaning into growth opportunities while managing operating expenses in a disciplined way,' said Tom Sweet, chief financial officer, Dell Technologies. 'In the third quarter, we drove value by expanding profitability at a significant multiple of revenue and generated $3 billion in operating cash flow.'

Operating segments summary

Client Solutions Group revenue for the third quarter was a record $12.3 billion. Operating income was a record $1.0 billion, up 36% and 8.2% of Client Solutions Group revenue. The company saw continued demand for remote work, learning and gaming solutions. Consumer revenue was $3.5 billion, up 14%, while commercial client revenue was $8.8 billion, up 5%.

Key highlights:

• Consumer direct business up 47% with consumer direct online business up 62%, based on orders.
• Strong performance with double-digit revenue growth in Latitude and Precision notebooks and triple-digit revenue growth in Commercial Chromebooks.
• Strength in the XPS premium line and gaming systems including Alienware, with strong double-digit revenue growth for both notebooks and desktops.

Infrastructure Solutions Group revenue for the third quarter was $8.0 billion, with customers continuing to direct more spending towards remote work and business continuity solutions. Storage revenue was $3.9 billion, while servers and networking revenue was $4.2 billion. Operating income was $882 million for the third quarter, or approximately 11% of Infrastructure Solutions Group revenue.

Key highlights:

• Launch of new HCI, cloud, storage and data protection integration with latest VMware releases to help customers innovate across edge locations, data centers and hybrid clouds.
• Continued strong demand for VxRail and PowerMax solutions, with double-digit orders growth in both for the third straight quarter.
• PowerEdge server orders up single digits sequentially.

VMware revenue was $2.9 billion for the third quarter, up 8% driven by broad-based strength across a diverse product portfolio. Operating income for the quarter was $837 million, or 28.9% of VMware revenue.

Conference call information

As previously announced, the Company will hold a conference call to discuss its third quarter performance today, November 24, 2020 at 4:30 p.m. CST. 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.

Additional financial and operating information may be downloaded from https://investors.delltechnologies.com/financial-information/quarterly-results