Dell Technologies Inc. Q1 FY2022 Earnings Call

· Earnings call transcript and AI-powered summary

Quarter Overview

  • Record Q1 revenue of $24.5B, up 12% year-over-year (YoY).
  • Record operating income of $2.7B, up 26% YoY.
  • Net income rose 59% YoY to $1.8B; EPS up 59% to $2.13.
  • Strong cash flow: $2.2B from operations in Q1 vs. a typical seasonal use of cash.
  • Recurring revenue ~$6B per quarter, up 12% YoY; remaining performance obligations reached ~$42B, up 15% YoY.

Business Segment Performance

Client Solutions Group (CSG)
  • Record revenue: $13.3B, up 20% YoY.
  • Commercial revenue: $9.8B, up 14% YoY.
  • Consumer revenue: $3.5B, up 42% YoY.
  • Strong demand in Latitudes, Precision systems, Chromebooks, XPS (orders +21%), Alienware (+76%).
  • Operating income: $1.1B, up 84% YoY, representing 8.2% of revenue.
  • Favorable component pricing in Q1 helped margins; mix shift to higher-end consumer systems continues.
Infrastructure Solutions Group (ISG)
  • Revenue: $7.9B, up 5% YoY.
  • Servers and networking revenue: $4.1B, up 9% YoY.
  • Storage revenue: $3.8B, flat YoY, but storage orders grew strongly in key areas:
    • Midrange storage orders: +23%.
    • Hyperconverged infrastructure: +23%.
    • Storage buyers increased 12% YoY.

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Operator: Good afternoon, and welcome to the Fiscal Year 2022 First Quarter Results Conference Call for Dell Technologies Incorporated. I’d like to inform all participants that this call is being recorded at the request of Dell Technologies. This broadcast is the copyrighted property of Dell Technologies Incorproated. 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 now like to turn the call over to Rob Williams, Head of Investor Relations. Mr. Williams, you may begin. Rob Williams: Thanks, Jermiria, and thanks, everyone, for joining us. With me today are our Vice Chairman and COO, Jeff Clarke; our CFO, Tom Sweet; and our Treasurer, Tyler Johnson. Our press release, financial tables, web deck, prepared remarks and additional materials are available on our IR website. The guidance section will be covered on today’s call. During this call, unless we otherwise indicate, all references to financial measures refer to non-GAAP financial measures, including non-GAAP revenue, gross margin, operating expenses, operating income, net income, earnings per share, 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 percentages refer to year-over-year

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