Dell Technologies Inc. Q1 FY2024 Earnings Call

· Earnings call transcript and AI-powered summary

Overall Performance

  • Q1 revenue was 20.9 billion dollars, down 20 percent year over year, impacted by broad-based demand softness and a 290 basis point currency headwind.
  • Operating income was 1.6 billion dollars, supported by lower operating expenses and improved gross margin rates.
  • Diluted EPS was 1.31 dollars, down 29 percent due to lower net income.
  • Cash flow from operations was strong at 1.8 billion dollars, helped by an 800 million dollar inventory reduction.
  • Recurring revenue reached 5.6 billion dollars, up 6 percent. Remaining performance obligations were 39 billion dollars, down 7 percent due to backlog drawdown.

Business Segment Highlights

Infrastructure Solutions Group (ISG)
  • ISG revenue was 7.6 billion dollars, down 18 percent year over year.
  • Storage revenue was 3.8 billion dollars. PowerStore and PowerFlex both posted continued demand growth.
  • Server and networking revenue also totaled 3.8 billion dollars, pressured by muted demand in large enterprise deals.
  • ISG operating margin was 9.7 percent, contracting 2 percentage points from last year.
  • Early strength noted in new AI-optimized servers, including strong interest in the PowerEdge X9680, though still a small part of the mix.
Client Solutions Group (CSG)

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Operator: Good afternoon, and welcome to the fiscal year 2024 first quarter financial 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. [Operator Instructions] I'd like to turn the call over to Rob Williams, Head of Investor Relations. Mr. Williams, you may begin. Robert Williams: Thanks, everyone, for joining us. With me today are Jeff Clarke, Chuck Whitten, Tom Sweet, Yvonne McGill and Tyler Johnson. Our earnings materials are available on our IR website, and I encourage you to review our materials and presentation, which includes additional content to complement our discussion this afternoon. Guidance will be covered on today's call. During this call, unless otherwise indicated, all references to financial measures refer to non-GAAP financial measures, including non-GAAP gross margin, operating expenses, operating income, net income and diluted earnings per share. A reconciliation of these measures to their most directly comparable GAAP measures can be found in our web deck and our press release. Growth percentages refer to year-over-year change unless otherwise specified. Statements made during this call that relate to future results and events are forward-looking statements based

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