Dell Technologies Inc. Q1 FY2023 Earnings Call

· Earnings call transcript and AI-powered summary

Quarter Overview

  • Record Q1 revenue of $26.1B, up 16% year-over-year (YoY). This compares to strong FY2022 Q1 performance and continues Dell’s growth trajectory.
  • Diluted EPS reached a record $1.84, up 36% YoY, driven by higher operating income and lower interest expenses.
  • Operating income grew 21% YoY to $2.1B.
  • Cash flow from operations over the last 12 months totaled $5.8B.

Business Segment Performance

Infrastructure Solutions Group (ISG)
  • Record Q1 revenue of $9.3B, up 16% YoY and marking the fifth straight quarter of ISG growth.
  • Operating income up 39% YoY; operating margin expanded 200 basis points to 11.7%.
  • Servers and networking revenue up 22% YoY, driven by richer configurations, higher ASPs, and increased enterprise penetration.
  • Storage revenue up 9% YoY as four consecutive quarters of order growth flowed into the P&L. Demand growth was broad-based across high-end, midrange, unstructured, HCI, and data protection solutions.
  • PowerStore remained the fastest-growing architecture in Dell’s storage portfolio.
Client Solutions Group (CSG)
  • Record Q1 revenue of $15.6B, up 17% YoY on top of a 20% YoY comparison from prior-year Q1.
  • Commercial CSG revenue up 22%, while Consumer increased 3% due to expected consumer softness.

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Operator: Good afternoon, and welcome to the Fiscal Year 2023 First Quarter Financial Results Conference Call for Dell Technologies Incorporated. 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 Incorporated. 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, Jermiria, and thanks, everyone, for joining us. With me today are Jeff Clarke, Chuck Whitten, Tom Sweet and Tyler Johnson. Our earnings materials are available on our IR website. And I encourage you to review these presentation materials, which include rich content to complement our discussion this afternoon. Guidance will also be covered on today's call. During this call, unless otherwise indicated, all references to financial measures refer to non-GAAP financial measures, which include non-GAAP revenue gross margin, operating expenses, operating income, net income, earnings per share and adjusted free cash flow. A reconciliation of these measures to the most directly comparable GAAP measures can be found in our web deck and press release. Growth percentages refer to year-over-year change unless otherwise noted

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