Dell Technologies Inc. Q2 FY2023 Earnings Call

· Earnings call transcript and AI-powered summary

Quarter Overview

  • Record Q2 revenue of $26.4B, up 9% year-over-year.
  • Diluted EPS of $1.68, up 14% year-over-year.
  • Growth across both CSG (Client Solutions Group) and ISG (Infrastructure Solutions Group).
  • Macro environment weakened through the quarter, impacting demand—especially in PCs.
  • Supply chain performance strong; PC backlog normalized, ISG backlog remains elevated.

Key Segment Performance

Client Solutions Group (CSG)
  • Record Q2 revenue of $15.5B, up 9% year-over-year.
  • Commercial revenue up 15%; Consumer revenue down 9%.
  • Commercial PC share up over 300 bps; Dell becomes #1 worldwide commercial PC vendor.
  • PC demand declined through the quarter; higher ASPs partially offset unit decline.
  • Dell expects FY2022 PC unit market closer to 290M (vs prior 330M estimate and IDC 305M).
Infrastructure Solutions Group (ISG)
  • Record ISG revenue of $9.5B, up 12% year-over-year.
  • Servers and networking revenue up 16%; storage revenue up 6%.
  • PowerStore (mid-range storage) grew double digits; has grown every quarter since launch.
  • APEX ARR surpassed $1B; APEX orders grew 78% year-over-year with ~200 new customers.
  • ISG demand growth slowed late in the quarter; still expected to grow low-teens in Q3.

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Operator: Please stand by. Good afternoon. And welcome to the Fiscal Year 2023 Second 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. 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. Rob, you may begin. Rob Williams: Thanks everyone for joining us. With me today are Jeff Clarke; Chuck Whitten; and Tom Sweet. Our earnings materials are available on our IR website and I encourage you to review our presentation, which includes rich 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 revenue, gross margin, operating expenses, operating income, net income and earnings per share. A reconciliation of these measures to their 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 specified. Statements made during this call that relate to future results and events are f

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