Dell Technologies Inc. Q2 FY2021 Earnings Call

· Earnings call transcript and AI-powered summary

Quarter Overview

  • Revenue was $22.8B, down 3% year-over-year but up 4% sequentially. Sequential growth was weaker than typical seasonal patterns due to macroeconomic pressure.
  • Operating income was $2.6B (11.5% margin), down 5% year-over-year but up 21% sequentially due to strong cost controls.
  • Net income was $1.6B, down 7% year-over-year; EPS of $1.92 fell 11% year-over-year but rose 43% sequentially.
  • Adjusted EBITDA was $3.1B, down 2% year-over-year; trailing 12‑month EBITDA totaled $11.8B.
  • Recurring revenue increased 15% year-over-year to approximately $6B per quarter.

Business Segment Performance

Client Solutions Group (CSG)
  • Revenue: $11.2B, down 5% year-over-year.
  • Consumer revenue: $3.2B, up 18% year-over-year, driven by strong notebook and gaming demand.
  • XPS and Alienware orders grew 25% year-over-year.
  • Commercial revenue: $8B, down 11% year-over-year. Weak desktop demand offset strong Chromebook and Latitude notebook sales.
  • Operating income: $715M, with margin of 6.4%. Margin declined from last year due to less favorable component cost environment.
Infrastructure Solutions Group (ISG)
  • Revenue: $8.2B, down 5% year-over-year.
  • Storage revenue: $4B, down 4% year-over-year, but up 5% sequentially.

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Operator: Good afternoon, and welcome to the Fiscal Year 2021 Second 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. [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, Holly, 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 trials are available 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, 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 change unless otherwise specified, and that VMware historical segment results have been recast to include

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