Dell (DELL) 26 Feb 212021 Q4 Earnings call transcript

Good afternoon, and welcome to the Fiscal Year 2021 Fourth Quarter and Year End 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. to Investor call Relations. like Williams, to I’d of Head Instructions] turn over the Rob [Operator Mr. Williams, may you begin.

and our Thanks, Katherine Treasurer, today Chairman me us Tyler today. Jeff and thanks, everyone are for Johnson. our and Tom Sweet; CFO, joining With COO, our Clarke, Vice

are section Our release, will on call. materials be web our IR remarks and deck, covered press on prepared website. tables, additional financial available The guidance today's

measures, flow. unless we found note income, growth refer otherwise indicate, non-GAAP percentages to A directly operating references margin, measures be in financial most EBITDA, earnings our adjusted net unless their call, refer all to web to that all year-over-year EBITDA press measures specified. reconciliation free financial expenses, also of change non-GAAP deck and this including to share, income, gross revenue, Please can comparable adjusted During GAAP operating otherwise measures cash and these per release.

differ during you based Additionally, that on I’d statements, events remind Actual discussed materially deck our due future from to current our forward-looking update relate could like SEC of statements a expectations. obligation forward-looking that and no results this We and are to to in filings. assume web which uncertainties, and call statements. those results events made risks and number projected are all to

with amended alternatives on Finally, potential in before regarding I VMware. turn to to exploration Jeff, XXD interest we in of the filed I it touch over to our XXXX, our want ownership July respect

strategic and Dell on to Both maintaining strong communicated discussion. engaged continue in are continue key significant enabling our making could today, we structures shareholder VMware while drive believe progress be work our value a tax-free greater simplifying a between capital companies and earlier streams, spin partnership We by as and commercial VMware. to that flexibility,

However, definitive there will assurance that reach no agreement. is we a

further discussions the address not related call. today's any this topic or on questions will take We to

Jeff. over it turn to I’ll Now,

our solving want of for of out XXXX. joining year everyone. it of none to Technologies, brought But Rob. humanity problems society, was a repeat. in lives Hi, honored none the from our and a for moving first that reinforced us XXXX consumers calendar to and our are have to call helping Dell tomorrow. best we largest role grateful and enterprises, and At central our Thanks technology criticality the and of today our us Thanks the customers, of forward. the to also of economy anticipated us keep

for throughout real they not of our year, challenging be delivering world-wide, I this QX Finally, prouder customers, business how the and could responded outcomes teams in need.

As moving about And a and relationships digital is conversations their customer in their their future. deepened. transformations. businesses It’s and can result, asking customer how our forward unwind they investing have investments in no all

when the of examples as-a-Service that the These take they benefit why is flexible digital trends. highly computing middle to solutions turned edge customers to cloud and local will learning Mahindra enable to from Technologies, service advantage hybrid And, we as-a-Service distributed, extra for the insights our that AG Technologies to gaining Pisa PowerStore, Brazil and using AI core projects. access recently and PowerMax highly market positioned capacity for the in with to future like offer transformation, providers. remote in need and on-demand data, and AlefEdge the telecom but tailwinds Dell of customer Swisscomm Tech uniquely not and their is Italy, in consumption edge is telecommunication are and just to Dell most example, illustrate a For PowerScale of University it. affordable, storage storage infrastructure accelerate

transformation. where anyone touches as allowing we their to insights build solutions, meet more engine in customers digital direct unique us technology, and are us Our customers sales than giving in they

customers. teams, reach, financing from breadth services cloud IT decision us the of Dell allow for to to us to all us make are makers customer unmatched our award of our edge that global all or been simplify to global and complexity unmatched companies no stronger makes challenge relevant. sizes. at relevant core Behind and matter and product chain more has this, Our advisors trusted scale with capabilities a winning of IT supply never Technologies course,

our in delivered Turning billion to with $XX.X more in of ISG strong the financial revenue our results record VMware a the driven as sequential later in improvement growth in well businesses, detail business. QX will call. as cover revenue in results, QX of CSG by and XX%, our we Tom

revenue up X%. was was up what Earnings up For depth the record was delivered for we $XX.X up was of year, where the was into X%. share record and an FYXX, environment, billion, X% billion occurred. to when and pockets the dynamic $XX.X $XX.X billion, year per leveraged income a and Throughout full we EBITDA portfolio full X%. in they $X.XX, And, to Operating extremely results. breadth precision. executed lean growth our of with discipline, and the speed We adjusted

year, revenue in IDC, shipped Group XX.X $XX.X ever year million full Our and up for the most XXXX, X% and X% up billion, year. an income. units, X% we up Revenue shipments, was had outstanding the delivering according year income operating to and Client And calendar record billion. the operating a $X.X to Solutions was for

the even the stronger a us, PC this of shopping vendors work, with fast growing concentrated consumers gained anything PC were entertainment, gain commercial hub the the economic notebooks. with new comes of do world from driven to in to technology-enabled is demand of Resilient share where commercial share or most commercial Our by can unit growth all of top it Dell the anywhere. Instead model. three was unit results restaurant, going school, XX%.

needed was direct revenue a record our a Our revenue was shift consumer up up were XX% business half record. year results on up best for on Commercial XX% digits. Chromebooks ISG our basis online Commercial consumer saw e-commerce the based XX%. infrastructure to on basis $XX up orders up based fourth business strategy of basis power PowerEdge our revenue was year, and QX, have were our for this billion orders year and growth $XX.X the and unit demand direct revenue the digits. a Server while revenue. Solutions the was World. orders an selling with mid-single Do-From-Anywhere in quarter. notebooks networking revenue but consumer and down QX, our as online second Servers billion, revenue was $XX.X delivered the to paid in improve triple the up with increased orders We off, on X%. advantaged down commercial in demand X%, for billion, year, Customers XX% in X% up on year spend $XX.X earlier shifted to XX% orders was Orders business the and our for and of to also billion, in for the revenue improved Group

storage Data $XX.X but during an areas. all year Our key we Domain and saw orders PowerMax, growth infrastructure X%, solid was billion, revenue growth demand PowerProtect down hyperconverged did see in the basis. on

than have embrace center grew PowerStore. modern accelerated we making fastest business its quarter, applications. quarter PowerStore of to Our In driven to and technology by adoption returned is midrange of released. the in and XtremIO as the it data times third the environment, four new compared VxRail, a customers orders orders growth PowerStore architecture ramping fourth generation faster challenging next storage

our Additionally, to number are competitors’ approximately business of new XX% of we wins as key PowerStore tripled storage customers our against the quarter-over-quarter.

X&. VMware billion, $XX.X business also had up with strong year, Our a revenue of

edge In we been disciplined co-innovation we Our where on deliver stronger. XG-enabled to VMware a quickly, QX, with engine profitable enterprises and never financial gains, returns. data collaboration strong disruption, a help partnership Throughout pivot innovation, has able and quickly consistent and deliver solutions it Telecom computing execution, resides. were unprecedented to of with SK VMware growth, share to year act announced

stay. value That a notebooks. infrastructure enormous, growth. we $XXX creation spend billion I’ll we from the believe both including spending share Now, begins drive PCs, improve. Technologies believe to we around ahead. are number We connectivity the PCs data little are cycles here accelerating a Do-From-Anywhere opportunity This shift will calendar XG refresh in environment of client is see after within of what consolidate and continue expanding see real-time, let’s mid-single-digits IT in our to infrastructure markets on lot a the core growth outcomes And, our Gartner PC, move will businesses. with year estimated and and The in edge. our at and are perspective Estimates have increase, continues we in of addressable the cumulative household growing need a core The intelligent that There ahead World millions and world widespread still on Dell cusp decade. is are the total businesses and children balanced IT share an storage additionally, growing of there to is in on server, market and and to GDP-like growth modernizing markets. demand centers from the steady, strategy. with that the FY automated, edge it IDC the for in XXXX, as potential XXXX is as and We with going driving

on respond distributed of in history at APEX just which customer the market We new momentum, a offerings to towards and us by fueled over we IT-as-a-Service to momentum offering of doing Dell extending resources a to first APEX, at technology, long-term bring offers work to brings to IT us our consolidation; and modernizing sets to foundational built experience, the what our also data know we up World. enabling APEX, winning the analytics. This us foundation of more Starting customers course only the scale. Dell-managed October the than accelerating on long use, and new customer will market pay last success needs add year. hybrid, of are infrastructure, means requires the you keep future for capture trusted it May, Technologies deliver With demand, announced to

capabilities the I security our model highlighted create at ecosystems and the ML cloud a us extending advantages throughout. of across the infrastructure the We are our the AI and next our edge, win intimacy, to and provide The And we data, capability customer can we to global that’s competitive how environment. industry. Data and and that edge, and end-to-end Era, integrating frontier. for approach our leading with automated, position applications, services integrated distinctive security VMware is and next By sales with earlier, a partner and to the across technology intrinsic portfolio, in enabled innovating our infrastructure, force, the our entire evolution consistent XG, give ecosystem

let leave thoughts. it me turn to Before you I over Tom, few a with

the for technology Technologies digital futures for computing. advantaged Technology in opportunities position in and already clearly Data win XG, and enormous We the edge underway. an to are emerging positioned ahead, the center Dell is uniquely and Era is delivered is front as-a-Service, that

Now, turn a it at financials. over I'll look for to closer Tom the

Jeff. Thanks,

and tailwind dollar, driven navigate growth our were we team the generation; cash our The operating business. and $XX.X positioned FX with the basis both With approximately the with X% for the with US the what digital early flexibility record of in last year model operating the with share business fourth VMware driven quarter. employee-related client XXX businesses CSG Operating improved a us revenue hiring share, income, strong macro earnings the year a lower the weaker environment. successfully am demand ended to to per CSG billion, the in environment while points. and $X.X sequentially. up margins. QX. $X.X revenue Consumer our in environment, down support of margin transformation. and Operating X% costs and of the per pleased up share, like Gross by Revenue Consolidated $X.X adaptability modeling primarily year expense $X.X billion, In our strong strong new basis given was pandemic, started XX% we ISG certain controls, XX% and was the was billion, driven XXX(k) Given revenue. to a growth quarter the in the $X.XX as revenue, the for was by earnings revenue expense overall customers' up or percent We XXX our improvement CSG full promotions mix billion, XX.X% merit, billion, but was margin back was gross up points income I in to results enabling of onset of to by quarter, X% a year-over-year, net the primarily was a add up X% of income Gross and was XX%. up shift of XX%, demand growth. match, and to

strong from environment was in the billion. Total and deferred combined $X metrics demand Our billion, $XX.X a record to operations. P&L flow operational and billion up revenue execution deliver record cash $X.X

deferred utility as approximately meet $X as-a-Service our and revenue, which offerings revenue scale our quarter, X% now our giving budgets. their needs up is year-over-year. And broaden recurring to flexibility billion includes to as-a-Service Our more amortization, models, will portfolio, solutions business highlighted, across and their a APEX Jeff IT solutions customers

across was record Turning record and strength all as CSG systems The income $X.X operating a work billion, reached Commercial shipments, consumer our results. again for to billion, of was ongoing demand saw continued XX%, up expense a in profitability better-than-expected Solutions with by record drove systems. improved we at we gaming record-high costs, and our notebooks across in as the $X.X record solutions, billion, Latitude favorable continued revenue. Chromebooks. units, revenue up learning our driven XX% and notebooks Commercial to remote Group X.X% controls to see CSG business. to Precision operating $XX.X of to due up and and XX% profitability revenue gaming up and consumer delivered component business revenue strong We shipments delivered Client Consumer along quarter. the $X.X XX% to billion also was in growth the strong

business FY This take quickly advantage moved generates the extraordinary the in flow revenue in year demand XXXX, cash regardless we see Our client strong PC space. of as to of solutions opportunities. business we stable demand provides cycles consistently and had an

but for sequentially. has we We finished, year years, five grown XX%. CSG by CAGR Storage income Domain over fiscal see and record there ISG for and ended $X.X a flat at CAGR which growth. billion, the were demand improvement X% in VxRail three was will revenue X%. that be just were year-over-year the last to Midrange, move as the highlights pleased has up the was operating we with revenue grown down while we XX% this XXXX. orders Now $X.X improved saw solid through as business Data billion, revenue believe as year infrastructure all we FY PowerProtect was

As Jeff quarter-over-quarter. revenue by grew as of ramp with networking gaining momentum, PowerStore billion. are to upward $X.X and we is the X% orders up trajectory Servers the and Xx encouraged returned described, to growth

small we and was XX.X% also The or was a We benefited are sequentially. XX large with XX% lower customers. improvement billion had a from orders and an revenue, $X.X operating pleased up up medium saw points Mainstream from continued expense from and We ISG at enterprises growth, improved income quarter, as our of demand demand operating which basis improving environment. unit VMware record delivering workloads business XX.X% again revenue. X%, Computing, Cloud $X.X End-user Cloud and VMware and on grew with income Program, VMware's quarter Provider nearly Cloud VMware great results, VMware Carbon the saw both AWS on on once Black, AWS. year-over-year. and operating billion, a had doubling growth revenue revenue business XX%. standalone Subscription The of of billion, of $X.X up strong Based or in revenue as-a-service record

encouraging of three Dell in demand from States United China up perspective, In across up with a managed $X.X countries. our up historical the lows. global Financial markets, orders our Dell year, up and was results year up UK an QX at were billion Services fourth we saw was with X%. our XX$. portfolio geographic many the total billion the rebound $X.X XX%, billion X%, ended top assets, originations Technologies largest quarter Looking losses and $XX.X DFS in for record full the a at year-over-year were billion $X.X was

and both record cash sheet, balance structure full to from Turning fourth our operations, for the we flow quarter and year. the capital had

with of billion. sequential $X.X cash QX capital and flow our drove working operations management growth profitability from record along strong Our

investments generation For flow Cash revenue. $X.X ability. core flow was the of average years $XX.X the Cash year, we approximately at in generated an flow cash $XX.X from strong, free adjusted billion and the XX% year, at operations. three up up for illustrating billion, a cash in the of was Adjusted billion operations quarter stable EBITDA billion $X.X for end from $XX.X Adjusted of flow and cash the XX.X% was $XX.X past Dell. the full quarter, and at billion, maintained cash billion. XX%, $X.X was billion free

EBITDA the our drove early with and X%. pay-down The For stages our team $XX.X position the expense year-over-year. of for are in exited progress pandemic, XXXX up was the we've proud made as with year strong of down lower the of and We we core debt interest this target the full the rates, extraordinary, year, approximately progress $X.X debt is arose strong pay-down, Considering interest $XXX de-levering. along billion I'm delivered billion, million fiscal adjusted that on year. liquidity pleased the on uncertainty

During the the of our our are we yield remaining intent core down paid the have quarter year bond maturities repay Since $X this only approximately billion legacy With in ended, quarter, coming to billion year. high $XXX of of pay-down, fourth notified anticipated debt. approximately in fiscal we that have later scheduled due holders for million we $X.X and XXXX. notes

Our of $XX.X at and and billion. that includes stands $X.X as of debt total balance $XX.X debt DFS-related subsidiary fiscal debt now of year-end principal billion billion

now ended debt to core $XX.X quarter X.Xx. is leverage target ratio X.X core core billion, which our at leverage well range Our of approximately is our within X.Xx, and the

and and their VMware maintaining Stable continued Fitch, Given Dell generation from both strong our for cash debt credit credit while to and Negative outlooks raised current S&P pay-down, their ratings. Technologies

prioritize an strategy, in rating. part pay-down and we to toward grade of our as debt allocation are capital will investment confident We our continue path

year outlook and Now our fiscal for QX. to XXXX

benefit move we particularly through as the return while economy year and fluid, the improve expect customers is year. we exact office. the fiscal our For timing as progresses; the should to This VMware as to ISG XX, year global the

compares risks half tougher mid-single CSG VMware the RSA environment, through to in the to revenue the expect grow in in second digit with ongoing first guidance, currently we expect the standalone strength associated the divestiture of macro half. continue Factoring range. to with and low the We

We pre-pandemic not expect costs P&L, into to though fully the back to back come OpEx levels. see

combined operating and number remember operating benefits, expense factored We most XX% investing additional XXXk your income promotions their growth. impact, for and have include should combined models. of guidance employee-related a core for Also, reinstated VMware full-year are Dell unit line, repurchase notably recognize for merit, a interest additions of business VMware long-term These businesses income higher planned be that benefit Please and VMware share of Technologies and by FY the the with results average match, P&L, for Dell weighted to ’XX into tax standalone count will Below their and ’XX. expense a solutions selling program related also in or factor OpEx rate share we expenses. from plus of FY stable operating basis lower in currently XX% points. minus XXX income and absence we a driven

expect a addition, the at including In debt we billion I year, in down to $X moment pay this ago. $X least billion referenced

we For you QX, consider. to would there a few like items are

should factor you in normal which revenue is seasonality. guidance, in with VMware First, line standalone

ISG. expect We typical revenue seasonality also for

we had fourth potentially exceptional industry an outpacing demand solid For with in CSG, expect industry quarter QX and demand we continued supply.

growth result, mid-teens currently strong expect a we year-over-year. in As the revenue

value income we execution will our QX that This the we I we in dollars to businesses strong revenue nets down would last slightly a QX mid-single-digit creation out in over the Given heritage operating and Below range. shared line, be exceptional same for operating growth In expect the modeling. core closing, also our year, perspectives on the this year-over-year. in, full year-over-year in results time. year focused revenue result. happy to and QX Factoring be have QX with impact your

through economic model generates flow delivers various and top-line environments. profitability growth, strong cycles cash and Our solid

revenue income. has combined and years, the value the we Over potential than time gaining was year capital allocation policy and income. profitability goal XXXX down. VMware execution We in the ISG record $XX mid-range outgrew in same servers; commercial revenue ongoing billion at reenergized and de-levering period, more And, that has with operating and $XX client our strong of offering, grew by CSG share to generated CAGR corporate last in continue we In our Last VMware. billion as X% tax-free focus grown a our spin billion on delivered and our creation $XX our storage revenue FY segment the and in We no exploration operating of business to four RSA in exception and focus. a of debt approximately taken cash of $XXX delivered faster that revenue divestiture competitors, contributed and our than structure the we've on evidenced appropriate pay simplification operations, steps billion flow.

I'll and what we to it will growth on profitability be we turn As begin look forward, we vectors. can investing in back growth balancing in disciplined Q&A. with to With focus control continue and to future Rob that,

Tom. Thanks,

Q&A. to you that ask the question? we you please as many of allow as ask introduce us get Let’s question participant each get one to We first can to to Katherine, can.

question of the comes from Wells line first Aaron Our Fargo. with Rakers

we XXXX? PCs? look Yes, as guess question see business down you think the the to back demand what's was the of the we through environment that curious on commercial thanks. move do growth commercial up how XX%, I'm normal segment competitor I X%. course as of we And tonight in growth your on as expectation just your I PC just return at your is

Sure Aaron, this is Jeff.

as XXXX us. calendar up points the of continues head being being soon for some where those there's so desktops do and there or our fuel think organizations catching about roughly notebook have that to -- notebooks the one be year think XX% modernization think growth sector seeing XX-XX as strong bodes that factory excuse and we now the That of being We the the you growth education of factor. well of XX% represent one XXXX me been towards public into this are now moving to form marketplace mobile fiscal been We're year commercial form XX% have of there. XXXX for If sources the to marketplace. past roughly we public to those in or of the head we mobile a desktops, growth in

think I good. signs are So those

to or also the that think to seven largest on or are occurs. for in work significant mix, domestic this aging post to also we installed pandemic an we of industry. cases haven't quarters aging important depending they in office be in go I to significant slows most an back environment, an this believe going six, and into seen certainly have I the aging that base going five, ever and go down we've back in realize it's many do-from-anywhere people the work-from-home don't That that -- will think been our consideration when or post people office.

more So going people more will and where away office, work from more essential more this to work in we're type see environment. has which an this environment, type of of consumer to of become demand the and driving PCs continue environment activities for their do

that of, I the if last today. PC device in think essential in become Long-winded do-from-anywhere the I of I most strong. said question call, mind saying on in one the market think to continues not has look this environment that our our we're no there's work-from-anywhere, way

the out that you hope the helps. consumer of continues to marketplaces came calendar data XXXX. strong their in that If demand both the IDC commercial strength and in environment be saw yesterday I

Yeah. appreciate Thank it. you and I

question, Let’s go the next please? to

Rod of Hall comes question from line the Goldman Sachs. Your with next

about mean just Yeah. the can talk you into that capital. number maybe in this How year. wonder a Great. to strong. increasing cash drill if I And in I because little question. change capital wanted bit extremely working I for case there. April? to to normally April, looks you'd working Thanks the going Tom, this it's that's working be changes flow capital be

Thank how sustainable you. through us kind of talk some maybe that Just is? of

about to Yes. it. happy Hi, Rod. I'm chat

just when Rod. me begin get to a us cash cash it the the QX was think let flow did. extraordinary growth power a quarter-on-quarter normally from of strong QX had like for an perspective. sequential shows in you with we the say, And quarter And I business the model First, I company think flow

build look dynamics improved. the was actually you capital, or receivable, the So what if drove aging which working strong in at you demands our despite of a accounts revenue the saw

positions. I good appropriate. I around think discipline payables were our think we positions inventory had And our

As I so the I capital would is into -- in executed working from perspective. saw. the from the we really sheet balance traditionally year we also weakest quarter than that think unusual strong QX we benefited in other so the weakest -- team business quarter. the everybody and we step business I dynamic think generally a there our that environment as QX, QX from of well remind managing anything would the quarter our environment our and cash wasn't from revenue It's

probably So we cash did expectation a although our the see is QX. year in think to not normally normally do cash again I we in the quarter, ago. extent And -- burn we'll some that that that we it a

position Dell good really at good feel being core level. $XX.X about billion we're think cash the -- our I mean I I So

positioned we're I liquidity think think from perspective. the teams, I well a

prepared schedules which billion for year. scheduled we've of bondholders of that in the $XXX are the If of $X leaves you year us heard million my pay-down maturities maturity from remarks notified some this the already due only

good in disciplined we're continue and think you add shape manage our way the to in sheet. I and to be anything would we'll Tyler, So Rod that? balance

Okay. Thank you

really think Yes. be I as the mean levels, work a capital, through only good is, Look we I at year. I we'll don't think I thing end did on right? next working to there shift would expect we look, focused material remain add I right?

going QX also same thing impacts a other QX ago, year. the working did we have in have that year we from COVID mind into is only keep So guess this to won't those capital, some impacts I right? obviously So

Thanks, Rod. Tyler. Thanks,

Thank you

please? Next question,

Katy of comes line Huberty question the next Morgan from Your with Stanley.

a Maybe just shape given the a of ISG build what you. in recovery around recovery? saw in ISG the And that laggard fiscal Yes. the pipeline expect might in to XXXX? that this look in color Thank like Thanks. or was confidence you do orders Jeff, year some a you that build

we tell often on and plan at look company Tom and back it's reflect XXXX the you one as sit of the inside responds. ISG market will questions how I FY just I Sure. our the

little in growth time the looks you to seen a as at it if lot our negative. still signs of encouraging sectors. storage if forecast, to some rate and a the comes back. think said, you the because there it's server at of what when in terms You've what out both a be storage to spend like will, look example that figure in trying business. I IDC an forecast model, That market and It's for call, shows there's QX, foggy, We in

in I our QX in QX in quarter encouraging. large momentum and positively. the made that the our server We server I for where respond first point continued a comments growth, business server saw business that to bids in back time had, the you that's our comment quarters, eight business If throughout recall think, accelerated our

business Our small sectors back came medium business and positively.

looks now seeing So you've think growth we by actually results; in continues. I the for double and We most very equally digits, our saw grew growth will, growth significant We're our both data I workloads we array down I'm segment our let's We grew we which us. I increasing made PowerStore the business if server the segment. all-flash HCI the like nine We in in our in domain workloads. the say, believe, improvement center. valuable our the in back in and first on midrange workloads seeing had time very We and in that the over quarters. QX. were in, high-value being is the -- by midrange, vast important sector we've in grew growth encouraging about high-value midrange the that segment the Storage; we've storage, data it in excited in X% clearly share that seen it's momentum is clearly our grown improvement in in our you server think PowerProtect PowerStore. of encouraged quarter, an position data saw progress

business, still had I'm encouraged midrange. by the we in progress areas our in made but So growth down those in storage the we've obviously,

buyers. and talking I XX% QX is the what I X think points up about made customers our times was it in in PowerStore are new reference QX. now of storage

X share consolidating if over times, the progress marketplace up given three basis end. XX% And market we've of that the we've made up in the high points, you competition high against is to aggregated in or last I will. rate think where over our of over win Our tripled, the years by position the end the bodes storage or well X,XXX the

with outlook eye. opportunity the How sub-$XXX,XXX the have in that our have the in lot and some We a that? moment. here which we momentum for grow both midrange, the to of -- the we of Now what that's back is segment is business. comes the can the again to weigh probably seen Tom don't in -- a spend that we prudent midrange time I in when year you've of know call

agree just first the little trying Katie. is a out what focused figure -- I I We clearly better it's would been now. would half the we've to No, say, it's I just the a half. back timing Jeff, than mean with unclear on that I is think and think

Correct.

sequencing that of question a just velocity, ISG and of timing. terms the In

and be on will history little sequencing focused growth So of a going to in our drive there's opportunities terms still unclear advantage you've the our think seen of where take it. there. I we market we're and but And where it's execution obviously bit

Thanks. Thanks question. if Awesome. All Katy, Tom. right. the next you take Katherine,

Your line next Tim Long with of comes the Barclays. question from

quarter. if component on bit specifically a margin Zdebski This Tim. you wonder and down Congratulations as costs on XXXX, could any Hi. is supply I Peter the fiscal into drill there. chain for outlook gross related on to considerations the

take and me you start then and supply Jeff component should cost. the let Yeah. Hey, chain

think not look, margin. to go we I'm gross -- So, as margin going about I and think to

tell just year Look, be dynamics work through to about so our some the as ISG mix we think P&L, speak. me way of you think businesses. there'll sort Let how the in we the the about of of bottom terms CSG

We of OpEx we merit business also into cycle. adding benefits the and VMware the think like me reinstated that their we you some as the some also -- is this investing about added, back the we've business. let of XXX(k) remind are also we've in that match employee year

bit the more business. -- And OpEx a heavier they've so got a into

that than percentage would it are I dollars run think -- probably lower you it that the about we And we slightly this probably basis absolute there's on net-net, it do think tell a margin do think slightly is So well. down if did we operating year. -- a as

through. that we're So our way working the those are things

to the can to mean, the our it's have work year which well. that I through look Jeff be in that think have I reality highlight, is, through dynamic is Now, going we'll costs as a way component work going to to we're

the and year. a year have XXXX we commodity I dynamics. weigh in supply cost to Yes. as deflationary ended chain Clearly, the on

we that ICs will now in view eye the cost XXXX the becomes Freight supply and And is deflationary. see today. in in a I driving was you challenge the some What's light out we shortages freight look on we which to have at driving is inflationary. as if be are keeping one what see to in that costs. SSDs coming increased year, specific by Our If right thing, QX be costs our of believe demand we're We continue over call to then costs it that? LCDs QX continue down us. offset, marketplace for we

and exactly not network cost are eased industry supply more chain or that's have, is I the the of using is is that part more little And fact the a using we're think we So commodity our while air, air rates tight. component and expediting bit, transformation.

fiscal to XXXX overall to cost QX as in but that into excuse in as specific So inflationary deflationary we the continue watch calendar calendar steering overall year -- area, increase QX, an in well be me.

Jeff. Thanks,

question. Next

from Toni comes line Sacconaghi Bernstein. the question of next with Your

confirm X%. mid-single you at in IDC can points. at Thank Yes. guidance will two think digits, the probably growing spot you. I markets rates to low you full Maybe commented Tom currency and and help about talked XXXX that Gartner also you almost end but year being about

those putting down one the there's reconcile that specifically years. ISG And last business interest been investors loss over you And you're that's So I if has altogether more that. a in from share I'm wondering, think would be the of of that assuming about maybe lot and can always kind four XXXX. been up

fiscal down -- of it's in that you think, can been four. guidance? sort XXXX three at Thank and and storage Do that last your in is embedded servers networking that is currency believe grow you. the I constant and in

points connect Hey, try that Toni, dots threw and the so me with let data you multiple those out.

does through optimism in view think -- my now I XXXX think do sequence as are with our that, our the in demand. well signs right is fiscal opinion of we or on of fact way We look in. ISG terms and So being we are there prudent that when let me start

take they of opportunities we'll that as themselves. the So advantage growth there are present

think from Obviously, to revenue X% think roughly you we continue that now in revenue X% a I about a know to of have range to rate this advantage perspective continue framework what on provide made. our I'll today. of range and take jump through with comment spot expect growth the we way right you you well. year. we'll would of is ask think I thinking watch opportunities from currency. the in that and to as a as On Look, currency the from go a as bit our a get basis, our tailwind Tyler won't to do we I we

it's guess fair. I

a benefit should think what be -- I know think we with that's today. I currency

you would add So that? anything on Tyler

we'll seeing year. over I what But mean, No, see I definitely and there, agree we we're course think the see think should happens look Yes. favorability. I I some of favorability the

All right. Good. Thanks, Toni.

Next question.

from with Raymond Your Leopold the next of Simon James. question line comes

April you you quarter a from if shortages if we've to expect impact you. terms I could in impact can the supply wanted the semiconductor of what question. quantify shortages? across supply a you address, discuss see there the what current in as taking doing the board And of just Thank heard what for Thanks constraints the to if was of semiconductors? and in constraint the chain quarter you're maybe revenue

sure, I being what you're X.X I'll I'm for clearly most we've Sure. what exactly are shortages working of supply past microprocessors. at been couple now maneuvering know we're with base not years part illustrate our but better for across hearing, the notably through, least years Simon. the there of

X-inch as Certainly basic it. T-com, issues a things of of the tax. I There's been microcontrollers, number the in substrate are last The the that. a particularly think of the the industry. LCDs. ICs the notion readers, need we Codex all Those are at like impacted that's disrupted impacting network. working that quarter, industry name an we makes ICs is is now power the types the end through components is card that that At Dell to through the issues network made supply to from we driver of of mention X-inch the of working issue have of is lot capacity it wafer core you

million there that. about of absolute is the what and in are terms We I just to This to a we've IDC. living. QX. most the think XX shipped ever shipped calendar we shipments resilient shipped we've of in up of year. calendar denial PC point came in most in We off according the we've pride, be quarter for this challenges. shipping shipments and shown that ever the -- in ability we the PCs, This PCs QX certainly is more units in responsive. do best followed QX. by fee had At not We I'm

see make And us And what to here. look demand. supply from Again, it's last challenges a of our night, hearing helps We lot relationship at sure hope the base think think are I total correctly. there's to helps helps companies. components for get demand that shortages do that we supply supply and today. buy real-time that's areas you out navigating by hope here helps you the I you our it's If We us are the we we we IDC our that forecast our us certainly direct but across shifting hearing model that have are I if the Simon. we're described. get there new. We came long-term that totally with here. our that think

It does.

issue to an not Just affect you're your seeing clarify April quarter?

Simon one question. just go to we're going Hey,

like back and you'd the jump if can into follow-up You to. queue Thanks.

& Company. question next of Sankar the from Krish Your with comes line Cowen

the Hi. Yes. you taking for I delevering. Thank question a the congrats results had front. good my storage on Jeff question and in on

XXXX? highlighted few we market years. portfolio share in we And great should a the your momentum gains And ago. done the product last over have share storage going into storage is of think How some where quarters folks that couple of You consolidating FY today? job a

Lots of questions.

can Let I through me work see that. if

and quoted PowerScale years. years the the simplifying So them portfolio PowerStore, in as we've progress in from is three primary would gone the portfolio I've the largely think consolidation of our across platforms, XX power different over PowerVault, seen PowerMax, vehicles. roughly I three into consolidating last consolidating in spent to That's that the product you the the storage last above We've of tremendous past portfolio. space $XXX,XXX that XX know

are of that basis in fiscal we calls and over more ended have ambitions over I'm The I set the by of guess, in I begin which I in of new takeouts. the have We pleased just had us. we storage change clearly we've taken customers first have the valuable we of midrange about that about amount launched doubled the portion strategic of to we share for marketplace Again product XXXX. We big the progress the want midrange, on customers market. X,XXX and our share XX% of like made, about to ramping being a talked exit XXXX the I numerous points customers. is vehicle share May alone. customers, the is XX% the which QX, note single in PowerStore storage excuse to times. the largest new back The me front is think in we mid-range received all well faster. are of and quarters. year. that our Again, like and we but of with four intend or time impatience vehicle to challenges competitive how the storage nine most is trajectory we the we've and to taking talked of mentioned PowerStore. the We I business. for It's our, we've business and tripled take a have calendar XX% do of amount the say Tom we've built. year have to we been to of these that PowerStore grew grew we've the growth if through -- grown fiscal on X% mid-range in in our QX. the It work new is high We PowerStore.

in and made made progress unstructured, to we've high is market that end progress for absolutely we've to space this do us share so. the the capture needed intend the the Given we

what's I -- from what's I'm believe market serves IDC, memory reported by of the If in me at our QX. share? question quarter last a XXths, right which if Your right was last XX% from the-- I'm it's couple -- off

XX?

XX. appreciate That's -- wrong? XX. much. Rob. was Thank you, I like more I me, Excuse that than don't off to be

Thank you, Jeff.

I rounded off

You round it up on…

up basis points. to Rounded XX

Appreciate that. Chris. Thanks, question. Nice

the Your next of Wamsi Bank question line from comes with Mohan America. of

from Yes. fiscal Thank for be XXXX it to you. look Last had op out reasons. you fiscal quite different perspective rate obvious to turned instead expected year margin about an ago like XXXX months XX

months comparison As you. three that we fiscal if whether Thank fiscal think be order look we looking or to should and XXXX, profile back would of comment draw And trends XXXX fiscal similar prior how you too? it's XXXX visibility about at a ago XXXX? at you on relative talk about can can years maybe helpful XXXX, the

Hey, Wamsi, it's Tom.

me try let So and, you it. some give sort context of, around

the and with with twist the pandemic work-from-home growth the in XXXX dynamic sort stable has FY business margin XXXX a in helped along pricing perspective. from was the obviously, a FY turns which As -- of and of, had us -- number relatively the extraordinary in the, supply/demand the and CSG environment

to of, operating things XXXX op it and expect into VMware as guidance first reasons; relates think step down. for a think margin couple is in of sort to, their foremost as couple the -- and XXXX do down one We about margin. about go a standalone op guidance we think I of to where margin

from benefit some we benefits Secondly, OpEx incremental an going as investments. both perspective reinstates as well and employee business into as have the

-- that it XXXX. from FY we So think than margin operating than less percentage be do will an

that context, will XXXX to operating you it an If go the I XXXX FY margin. FY instance, expect do than for back be lower

dynamic but account, our do think take about I into principally consolidation. you think to got So that the VMware to got within you

from about. that should perspective, you be and thinking -- that that's So think something I

there way I some have challenges we'll there, year work overall through and vectors think, we'll the our be -- we So, way will of our work year the but advantage that the through as work usual. are growth to take as

Wamsi. Thanks, right. All

the Your Daryanani of next with question from comes line Amit Evercore.

cash target Really I to flow cash talked going back discussion. generation your the you've taking back my question. I flow think, leverage really impressive for this within Thanks you're my guess about. quarter, question free free

about trying the your and in do free that target to XXXX now? So, of expect flow your allocation understand I fact capital kind then should are consider? and cash puts we to the we how range I'm guess, takes fiscal shift what leverage was macro commentary think the for all given And

Yes. Hey, we Amit. flow don't a se. Look, give cash think, forecast I per

be depending the overall right? our business flow of as we So, as generation cash I cash think, we're will mean, result some I our our the that. flow about performance our generation the a and look year cash work upon to business and extent flow how way optimistic drives, -- the But through

or do as to we in as on rethink well capital program Our grade consistent and fact the that want that that to before have is much to we've stable achieve at focused versus going policy us relook shareholder we the delevering. policy capital allows we debt about vote We've allocation pretty of remain the about continuing in fairly business. of investment terms what and return it out talked a been to of some as as get how context our repayment broaden allocation to talked is type to then on and capital invest of in the

Tyler would XXXX add flow. you add if free So, know would on anything you FY I don't what cash

thinking it. I'm about how that's So,

mean earlier nothing CCC huge shifts capital expecting a our think perspective I not I it mentioned look I metrics working in we're unusual. Yes, just any there's from and

think the and issues flow. mean got target the guess I quarter very the positive. the cash balance And is frankly year P&L, of throwing out billion on better quite they cash I there. are I it We'll for shape feel is We've with Tom of mean the with right. plus modeled. had what good performance all sheet. debt all generate we will our $X for the pay-down obviously, my So, rating than conversations it with three them we're follow the that but comfortable

X, to I that modeling Where but right? of and do. We're going to closer forward their for I S&P think I happens a their Obviously, X.X see with VMware. goes into We'll we'll three of watching at inside want and we where they're that probably turn happens to the what little wants expectations metrics There over see year. work a closely us. what get using we're we've crossovers. see that got our are half and think think to bit

We're our and We'll X.X So get get Moody's sub-X.X with we're we'll now. S&P. and probably metrics. there Fitch to

Thanks. I appreciate it.

Thanks Amit.

line Research. of Cross comes Cross with question Your next from the Shannon

comp you coming look at your changes when the plans? kind your much. to strategy as maybe very you're And what our of and Thanks. plans given comp time you curious Thank I is channel your as was focused channel What on about made year? the well this for you've strategy. both

as and Hey then well. Shannon, can jump it's in Jeff here Tom

channel made strategy. plans haven't We change to significant our comp our

that We an channel our our are frameworks making continue team to and want driving both refine and member on we from and and them behaviors and our sure seller higher-value around programs framework Dell capabilities products inside services and focused compensation consistent. the incentivizing

payout lot the might we you focus We've a imagine be and based portfolio of to upon be structures right? a heavy to on continue to honest not ISG So, change certain adjusted emphasis extent. which focused

focused that? VMware solution we're anything Jeff I appropriately. on know with those We our to if don't continue to you'd add be capabilities incentivizing the and

with with just our I'd storage Shannon the our two high-value VMware help transformation. before and And real digital you've those solutions heard that storage. help storage, me the storage, this company companies precise say be solutions -- customers between

you. Thank

All right. Thanks Shannon.

the Your Jim Citigroup. of with Suva from line last comes question

commentaries on I'd very really ask much to follow-up for like the your business. fitting one you business just question segments. in. different on good overall you storage in me some gave Tom, Thank

how year-over-year is though your say feel some about of in portfolio just lot of talked NetApp to that though your others. the like and recently came lagging You ones consolidating good done decline the shape. you your still your products you've other compare recent really of is sales results we out If and a

the realignment between it you're you come with positioning of your positioning a can bridge of future? lot comments to help is is the So, difference me in or the portfolio and Thank midrange you. where the yet that simply

large part of answer Jim rate. hot we the the playing think aspects grow lies similar at storage a very broad all in all portfolio I Well, marketplace. a diverse of in to have of All them

For down example in We've that high about in I the and show mentioned we've made of progress slowed progress end. quarter-over-quarter I will the made the it marketplace highest. the The high end tremendous year-over-year. think

the on make that not One we're day does as had Dell slows momentum the us share but the that with and trend, is is marketplace was half our that about continues that exited mid-range that mid-range. mid-range we've that We've about or QX, area year positive fiscal on with call now the that Our this going the challenges that had We've side. and and in growing an optimistic exposure point talked the of forward. in this side to of HCI encouraged share I business. a for has the down to the had half impact. continued HCI we data success mentioned Conversely, is

the of optimistic. a The have to do quarter. others get know XXXX. need our Dell customers times FY build have the I We're to double, It's it from great are I It's competitive doing are us new the don't number build continues and work hunt encouraged. us well have the lot to storage that takeouts, of the to point what there. PowerStore we clearly four We tripled that than -- of on We quarter-over-quarter. into marketplace. to in very of The was We think number things product one to in new said that and momentum business. larger we previous momentum customers five keep

that to absolute in performance. unstructured. key expectations to area. made large be our That's and have progress We've We going

the for the look share how So results was I'm earlier to and what some market our performance those at over to the of looking questions from one marketplaces. comparisons. with rebound over satisfied looking what we and versus earlier or back back made year. to outperform year. of performance the in improved point well of you and greater as We're and we're It quarter to the I product And and business was when in believe have continue at product one That it optimistic go at to was I look these ended make FY in QX to run our we the businesses those respond said, performance I the we're where Look expectations the in that, I'd questions, Katy. ask we XXXX. that's not QX and

We expect to take commercial PC share.

XXXX in we're business We going XXXX. expect and share share storage fiscal to run take to take the to server calendar the

we I didn't where don't your Jeff, the questions know could qualify how there. last focus was. if two do

for -- course of World for events Dell in So of everyone host I other joining number calendars participating Jeff. Financial World got will hosting a with Dell with Q&A and that. week that the next on be Thanks and virtually at or a we'll your be Technologies appreciate virtual We've We'll another Stanley mark May we event Xth Xth, Analyst us. -- that.

us. joining So thanks for

participation. gentlemen conference We you call. this and for thank Ladies concludes today's your

You now disconnect. may