DELL TECHNOLOGIES INC.

Reconciliation of Selected Non-GAAP Financial Measures

(in millions, except percentages; unaudited; continued on next page)

Three Months Ended

Six Months Ended

July 31, 2020

August 2, 2019

Change

July 31, 2020

August 2, 2019

Change

Net revenue

$

22,733

$

23,370

(3)%

$

44,630

$

45,278

(1)%

Non-GAAP adjustments:

  Impact of purchase accounting

42

84

90

166

  Non-GAAP net revenue

$

22,775

$

23,454

(3)%

$

44,720

$

45,444

(2)%

Gross margin

$

7,156

$

7,326

(2)%

$

14,009

$

14,123

(1)%

Non-GAAP adjustments:

  Amortization of intangibles

375

519

747

1,038

  Impact of purchase accounting

43

85

94

169

  Transaction-related expenses

—

—

—

(5)

  Stock-based compensation expense

50

32

90

58

  Other corporate expenses

2

24

11

37

  Non-GAAP gross margin

$

7,626

$

7,986

(5)%

$

14,951

$

15,420

(3)%

Operating expenses

$

6,020

$

6,807

(12)%

$

12,171

$

13,054

(7)%

Non-GAAP adjustments:

  Amortization of intangibles

(472)

(541)

(955)

(1,239)

  Impact of purchase accounting

(10)

(17)

(22)

(34)

  Transaction-related expenses

(83)

(47)

(159)

(94)

  Stock-based compensation expense

(363)

(269)

(693)

(506)

  Other corporate expenses

(84)

(690)

(170)

(700)

  Non-GAAP operating expenses

$

5,008

$

5,243

(4)%

$

10,172

$

10,481

(3)%

Operating income

$

1,136

$

519

119%

$

1,838

$

1,069

72%

Non-GAAP adjustments:

  Amortization of intangibles

847

1,060

1,702

2,277

  Impact of purchase accounting

53

102

116

203

  Transaction-related expenses

83

47

159

89

  Stock-based compensation expense

413

301

783

564

  Other corporate expenses

86

714

181

737

  Non-GAAP operating income

$

2,618

$

2,743

(5)%

$

4,779

$

4,939

(3)%