Dell Technologies Inc. Q1 FY2021 Earnings Call

· Earnings call transcript and AI-powered summary

Quarter Overview

  • Q1 FY2021 revenue was 21.9 billion dollars, flat year-over-year. Foreign exchange created a 170 basis‑point headwind.
  • The company saw exceptionally strong demand for work‑from‑home and learn‑from‑home solutions during the first two months of the quarter, followed by softening in late April.
  • Gross margin was 7.3 billion dollars (33.4 percent of revenue), down 1 percent year‑over‑year due to mix shift toward large commercial and government clients.
  • Operating income was 2.2 billion dollars, down 2 percent year‑over‑year. Net income was 1.1 billion dollars, down 5 percent.
  • Adjusted EBITDA reached 2.6 billion dollars for the quarter and 11.8 billion dollars for the trailing twelve months.

Business Segment Highlights

Client Solutions Group (CSG)
  • Revenue was 11.1 billion dollars, up 2 percent year‑over‑year.
  • Commercial revenue grew 4 percent to 8.6 billion dollars, benefiting from double‑digit notebook and mobile workstation orders.
  • Consumer revenue declined 5 percent due to a deliberate shift of supply from retail to direct channels.
  • CSG operating income was 592 million dollars (5.3 percent margin), pressured by mix shift toward large customers and limited component deflation compared with last year.

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Operator: Good afternoon, and welcome to the Fiscal Year 2021 First Quarter Results Conference Call for Dell Technologies Inc. I'd like to inform all participants this call is being recorded at the request of Dell Technologies. This broadcast is the copyrighted property of Dell Technologies Inc. Any rebroadcast of this information in whole or part without the prior written permission of Dell Technologies is prohibited. Following prepared remarks, we will conduct a question-and-answer session. [Operator Instructions] I'd like to turn the call over to Rob Williams, Head of Investor Relations. Mr. Williams, you may begin. Rob Williams: Thanks, Erica, and thanks, everyone, for joining us. With me today are our Vice Chairman and Chief Operating Officer, Jeff Clarke; our CFO, Tom Sweet; and our Treasurer, Tyler Johnson. In addition to our press release, financial tables and web deck, beginning with Q1, edited prepared remarks and additional materials are now available before the call on our IR website. The guidance section will be covered on today's call. During this call, unless we indicate otherwise, all references to financial measures refer to non-GAAP financial measures, including non-GAAP revenue, gross margin, operating expenses, operating income, net income, EBITDA, adjusted EBITDA and adjusted free cash flow. A reconciliation of these measures to their most directly comparable GAAP measures can be found in our web deck and press release. Please also note that all growth pe

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