This list of risks, uncertainties, and other factors is not complete. Dell Technologies discusses some of these matters more fully, as well as certain risk factors that could affect Dell Technologies' business, financial condition, results of operations, and prospects, in its reports filed with the SEC, including Dell Technologies' annual report on Form 10-K for the fiscal year ended January 29, 2021, quarterly reports on Form 10-Q, and current reports on Form 8-K. These filings are available for review through the SEC's website at www.sec.gov. Any or all forward-looking statements Dell Technologies makes may turn out to be wrong and can be affected by inaccurate assumptions Dell Technologies might make or by known or unknown risks, uncertainties and other factors, including those identified in this press release. Accordingly, you should not place undue reliance on the forward-looking statements made in this press release, which speak only as of its date. Dell Technologies does not undertake to update, and expressly disclaims any duty to update, its forward-looking statements, whether as a result of circumstances or events that arise after the date they are made, new information, or otherwise.
DELL TECHNOLOGIES INC. FINANCIAL INFORMATION
Basis of Presentation
Spin-Off of VMware, Inc. — On November 1, 2021, Dell Technologies Inc. completed its previously announced spin-off of VMware, Inc. by means of a special stock dividend (the "VMware Spin-off"). The VMware Spin-off was effectuated pursuant to a Separation and Distribution Agreement, dated as of April 14, 2021.
In accordance with applicable accounting guidance, the results of VMware, Inc., excluding Dell Technologies' resale of VMware, Inc. offerings, are presented as discontinued operations in the Consolidated Statements of Income and, as such, have been excluded from both continuing operations and segment results for all periods presented. The results of Dell Technologies' resale of VMware, Inc. offerings are presented as continuing operations for all periods presented.
Dell Technologies reclassified the assets and liabilities of VMware, Inc. as assets and liabilities of discontinued operations in the Consolidated Statements of Financial Position as of January 29, 2021. The Consolidated Statements of Cash Flows are presented on a consolidated basis for both continuing operations and discontinued operations. Except as noted, the presentation in this press release is consistent with the foregoing accounting guidance.
DELL TECHNOLOGIES INC. Consolidated Statements of Income and Related Financial Highlights (in millions, except percentages; unaudited) | |||||||||||
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| Three Months Ended |
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| Fiscal Year Ended |
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| January 28,
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| January 29,
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| Change |
| January 28,
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| January 29,
|
| Change |
Net revenue: |
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|
Products | $ 22,469 |
| $ 19,167 |
| 17% |
| $ 79,830 |
| $ 67,744 |
| 18% |
Services | 5,523 |
| 4,983 |
| 11% |
| 21,367 |
| 18,926 |
| 13% |
Total net revenue | 27,992 |
| 24,150 |
| 16% |
| 101,197 |
| 86,670 |
| 17% |
Cost of net revenue: |
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|
|
|
|
|
|
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|
Products | 19,265 |
| 15,879 |
| 21% |
| 67,224 |
| 56,431 |
| 19% |
Services | 3,109 |
| 2,747 |
| 13% |
| 12,082 |
| 10,099 |
| 20% |
Total cost of net revenue | 22,374 |
| 18,626 |
| 20% |
| 79,306 |
| 66,530 |
| 19% |
| Gross margin | 5,618 |
| 5,524 |
| 2% |
| 21,891 |
| 20,140 |
| 9% |
| Operating expenses: |
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| Selling, general, and administrative | 3,398 |
| 3,467 |
| (2)% |
| 14,655 |
| 14,000 |
| 5% |
| Research and development | 611 |
| 634 |
| (4)% |
| 2,577 |
| 2,455 |
| 5% |
| Total operating expenses | 4,009 |
| 4,101 |
| (2)% |
| 17,232 |
| 16,455 |
| 5% |
| Operating income | 1,609 |
| 1,423 |
| 13% |
| 4,659 |
| 3,685 |
| 26% |
| Interest and other, net | (1,657) |
| (475) |
| (249)% |
| 1,264 |
| (1,339) |
| 194% |
| Income (loss) before income taxes | (48) |
| 948 |
| (105)% |
| 5,923 |
| 2,346 |
| 152% |
| Income tax expense (benefit) | (19) |
| 253 |
| (108)% |
| 981 |
| 101 |
| 871% |
| Net income (loss) from continuing operations | (29) |
| 695 |
| (104)% |
| 4,942 |
| 2,245 |
| 120% |
| Income from discontinued operations, net of income taxes | 30 |
| 648 |
| (95)% |
| 765 |
| 1,260 |
| (39)% |
| Net income | 1 |
| 1,343 |
| (100)% |
| 5,707 |
| 3,505 |
| 63% |
| Less: Net loss attributable to non-controlling interests | (1) |
| (2) |
| 50% |
| (6) |
| (4) |
| (50)% |
| Less: Net income attributable to non-controlling interests of discontinued operations | — |
| 118 |
| (100)% |
| 150 |
| 259 |
| (42)% |
| Net income attributable to Dell Technologies Inc. | $ 2 |
| $ 1,227 |
| (100)% |
| $ 5,563 |
| $ 3,250 |
| 71% |
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| Percentage of Total Net Revenue: |
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| |
| Gross margin | 20 % |
| 23 % |
|
|
| 22 % |
| 23 % |
|
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| Selling, general, and administrative | 12 % |
| 14 % |
|
|
| 14 % |
| 16 % |
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| Research and development | 2 % |
| 3 % |
|
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| 3 % |
| 3 % |
|
|
| Operating expenses | 14 % |
| 17 % |
|
|
| 17 % |
| 19 % |
|
|
| Operating income | 6 % |
| 6 % |
|
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| 5 % |
| 4 % |
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| Income (loss) from continuing operations before income taxes | — % |
| 4 % |
|
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| 6 % |
| 3 % |
|
|
| Net income (loss) from continuing operations | — % |
| 3 % |
|
|
| 5 % |
| 3 % |
|
|
| Income tax rate | 39.6 % |
| 26.7 % |
|
|
| 16.6 % |
| 4.3 % |
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| Amounts are based on underlying data and may not visually foot due to rounding. | |||||||||||
