Dell Technologies Inc. Q3 FY2021 Earnings Call

· Earnings call transcript and AI-powered summary

Quarter Overview

  • Q3 FY2021 revenue was $23.5 billion, up 3% year-over-year and above typical seasonality.
  • Operating income reached $2.7 billion, up 12% year-over-year.
  • Net income was $1.7 billion, up 18% year-over-year; EPS of $2.03, up 16% year-over-year.
  • Adjusted EBITDA was $3.2 billion, up 13% year-over-year.
  • Recurring revenue reached approximately $6 billion per quarter, up 13% year-over-year.
  • Company continued significant debt paydown, reducing total debt to $50.4 billion, with core debt at $31.4 billion.

Business Segment Performance

Client Solutions Group (CSG)
  • Revenue: $12.3 billion, up 8% year-over-year (record quarter).
  • Operating income: $1 billion, up 36% year-over-year.
  • Strong demand for remote work and remote learning devices continued.
  • Commercial revenue: $8.8 billion, up 5% year-over-year.
  • Consumer revenue: $3.5 billion, up 14% year-over-year.
  • Premium products (XPS, Alienware): strong double-digit growth.
  • Chromebooks: commercial orders more than doubled.
  • Online consumer business up 62% as company continues shift to direct/e-commerce.
  • Dell noted losing share in calendar Q3 due to earlier strategic decision to pull back in retail, but results show financial benefits of this strategy.

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Operator: Good afternoon, and welcome to the Fiscal Year 2021 Third 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. 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, Erica and thanks, everyone for joining us. With me today are our Vice Chairman and COO, Jeff Clarke, our CFO, Tom Sweet along with 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 change unless otherwise s

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