DELL TECHNOLOGIES INC.
Reconciliation of Selected Non-GAAP Financial Measures
(in millions, except percentages; unaudited; continued on next page)

Three Months Ended

May 5, 2023

Change

Gross margin

$              5,018

$              5,784

Non-GAAP adjustments:

Amortization of intangibles

79

104

Impact of purchase accounting

—

2

Stock-based compensation expense

38

38

Other corporate expenses

29

13

Non-GAAP gross margin

$              5,164

$              5,941

(13) %

Operating expenses

$              3,949

$              4,234

(7) %

Non-GAAP adjustments:

Amortization of intangibles

(120)

(139)

Impact of purchase accounting

(4)

(7)

Transaction-related (income) expenses

(3)

(5)

Stock-based compensation expense

(187)

(194)

Other corporate expenses

(69)

(83)

Non-GAAP operating expenses

$              3,566

$              3,806

(6) %

Operating income

$              1,069

$              1,550

(31) %

Non-GAAP adjustments:

Amortization of intangibles

199

243

Impact of purchase accounting

4

9

Transaction-related expenses

3

5

Stock-based compensation expense

225

232

Other corporate expenses

98

96

Non-GAAP operating income

$              1,598

$              2,135

(25) %

Net income  

$                 578

$              1,069

(46) %

Non-GAAP adjustments:

Amortization of intangibles

199

243

Impact of purchase accounting

4

9

Transaction-related (income) expenses

(1)

(2)

Stock-based compensation expense

225

232

Other corporate expenses

99

96

Fair value adjustments on equity investments

15

(14)

Aggregate adjustment for income taxes

(156)

(199)

Non-GAAP net income

$                 963

$              1,434

(33) %