Dell Technologies Inc. Q3 FY2022 Earnings Call

· Earnings call transcript and AI-powered summary

Overview

  • Dell reported its best third quarter ever, continuing a record-setting fiscal year.
  • Company-wide revenue for the first three quarters reached $79 billion, up 16% year-over-year.
  • Q3 revenue was $28.4 billion, up 21% from the same quarter last year.
  • Demand remained ahead of revenue growth due to ongoing global supply chain and semiconductor constraints.
  • Dell emphasized strong execution across its PC, server, and storage lines, with broad-based regional strength.
  • Major strategic milestones included VMware spin-off completion and a return to investment-grade credit rating.

Key Financial Highlights (Year-over-Year Comparisons Unless Noted)

  • Revenue: $28.4 billion, up 21%.
  • Gross Margin: $8.4 billion, up 8%; gross margin rate of 29.6%, down 340 basis points due to component cost inflation and mix shift.
  • Operating Income: $2.9 billion, up 5%.
  • Net Income: $2 billion, up 18%.
  • Diluted EPS: $2.37, up 17%.
  • Adjusted EBITDA: $3.4 billion, up 6%.
  • Cash Flow from Operations: $3.3 billion, up 9%.
  • Recurring Revenue: Approximately $6 billion per quarter, up 13%.
  • RPO (Remaining Performance Obligations): $47 billion, up 26% (or $36 billion excluding VMware, up 32%).

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Operator: Good afternoon, and welcome to the Fiscal Year 2022 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, Jemaira, and thanks, everyone, for joining us. With me today are Jeff Clarke, Chuck Whitten, Tom Sweet and 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, adjusted free cash flow as well as an estimated non-GAAP revenue, operating income and EPS from continuing operations. A reconciliation of these measures to their most directly comparable GAAP measures can be found in our web deck and press release. Also note that all growth percentages refer

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