UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

Form 10-K

 

 

 

One Dell Way, Round Rock, Texas 78682

DOCUMENTS INCORPORATED BY REFERENCE

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

DELL TECHNOLOGIES INC.

TABLE OF CONTENTS

PART I

Dell Technologies helps organizations and individuals build their digital futurefutures and individuals transform how they work, live, and play. We provide customers with one of the industry’s broadest and most innovative technology and servicessolutions portfolio for the data era, spanning bothincluding traditional infrastructure and extending to multi-cloud technologies. We continue to seamlessly deliverenvironments. Our differentiated and holistic information technology (“IT”)IT solutions benefit our results and enable us to our customers, which has driven significantcapture revenue growth and share gains.as customer spending priorities evolve.

Dell Technologies’ integrated solutions help customers modernize their IT infrastructure, manage and operate in a multi-cloudmulticloud world, address workforce transformation, and provide critical solutions that keep people and organizations connected, which has proven even more important in this current time of disruption caused by the coronavirus pandemic.connected. We are helping customers accelerate their digital transformations to improve and strengthen business and workforce productivity. With our extensive portfolio and our commitment to innovation, we offer secure, integrated solutions that extend from the edge to the core to the cloud, and we are at the forefront of the software-defined and cloud native infrastructure era. As further evidence of our commitment to innovation, in Fiscal 2021 we announced our plan to evolve and expand our IT as-a-Service and cloud offerings through Apex. Apex will provide our customers with greater flexibility to scale IT to meet their evolving business needs and budgets.solutions.

Dell Technologies’ end-to-end portfolio isTechnologies operates globally in approximately 180 countries, supported by a world-class organization with unmatched size and scale. We operate globally in 180 countries across key functional areas, including technology and product development, marketing, sales, financial services, and global services. We have a number of durable competitive advantages that provide a critical foundation for our success. Our go-to-market engine includes a 39,000-person31,000-person direct sales force and a global network of over 200,000approximately 240,000 channel partners. We employ approximately 35,000 full-time service and support professionals and maintain approximately 2,200 vendor-managed service centers. We also manage a world-class supply chain at significant scale with approximately $77 billion in annual procurement expenditures and over 725 parts distribution centers.

We further strengthen customer relationships through our financing offerings provided by Dell Financial Services and its affiliates (“DFS”) offer customer paymentand our flexible consumption models, including utility, subscription, and as-a-Service models, which we continue to expand under Dell APEX. These offerings enable our customers to pay over time and provide them with financial flexibility and enables synergies across the business. DFS funded $9 billion of originations in Fiscal 2021 and maintains a $10 billion global portfolio of high-quality financing receivables. We employ 34,000 full-time service and support professionals and maintain more than 2,400 vendor-managed service centers. We manage a world-class supply chain that drives long-term growth and operating efficiencies, with approximately $70 billion in annual procurement expenditures and over 750 parts distribution centers. Together, these elements provide a critical foundation for our success.to meet their changing technological requirements.

On July 15, 2020, we announced thatWe believe we are exploring potential alternatives with respectuniquely positioned in the data and multicloud era and that our results will continue to benefit from our ownership in VMware, Inc., including a potential spin-offdurable competitive advantages. We intend to continue to execute our business model and position our company for long-term success while balancing liquidity, profitability, and growth and keeping our purpose at the forefront of our decision-making: to create technologies that ownership interest to Dell Technologies’ stockholders. Although this process is currently only at an exploratory stage, we believe a spin-off could benefit both Dell Technologies’ and VMware, Inc.’s stockholders by simplifying capital structures and enhancing strategic flexibility, while still maintaining a mutually beneficial strategic and commercial partnership. Any potential spin-off would not occur prior to September 2021. Other strategic options include maintaining the status quo with respect to our ownership interest in VMware, Inc.drive human progress.

We design, develop, manufacture, market, sell, and support a wide range of comprehensive and integratedIT solutions, products, and services. We are organized into the followingtwo business units which are also our reportable segments:segments, referred to as Infrastructure Solutions Group;Group and Client Solutions Group; and VMware.Group.

DFS supports our businesses by offering and arranging various financing options and services for our customers primarily in North America, Europe, Australia, and New Zealand.globally. DFS originates, collects, and services customer receivables primarily related to the purchase or use of our product, software, and services solutions. We also arrange financing for some of our customers in various countries where DFS does not currently operate as a captive. DFScaptive entity. We further strengthens ourstrengthen customer relationships through its flexible consumption models, including utility, subscription, and as-a-Service models, which enable us to offer our customers the option to pay over time and, in certain cases, based on utilization,to provide them with financial flexibility to meet their changing technological requirements. The

We focus on developing scalable technology solutions that incorporate desirable features and capabilities at competitive prices. We employ a collaborative approach to product design and development in which our engineers, with direct customer input, design innovative solutions and work with a global network of technology companies to architect new system designs, influence the direction of future development, and integrate new technologies into our products. products and solutions. Through our collaborative, customer-focused approach to innovation, we strive to deliver new and relevant products to the market quickly and efficiently.

Our team of software engineers isare focused on developing the next generation of solutions for newinnovative solutions. Our software simplifies the complex through automation, increasingly leveraging artificial intelligence and innovative technologies.machine-learning technology. Most of our research and development (“R&D”) expenditures represent costs to develop the software that powers ourthese solutions. This software simplifies the complex through automation, increasingly leveraging artificial intelligence and machine learning technology.

Additionally, we invest in early-stage, privately-held companies that develop software, hardware, and other technologies or provide services supporting our technologies. We manage our investments through our venture capital investment arm, Dell Technologies Capital.

We own manufacturing facilities located in the United States, Malaysia, China, Brazil, India, Poland, and Ireland. See “Item 2 — Properties” for information about our manufacturing and distribution facilities.

We also utilize contract manufacturers throughout the world to manufacture or assemble our products under the Dell Technologies brand as part of our strategy to enhance our variable cost structure and to achieve our goals of generating cost efficiencies, delivering products faster, better serving our customers, and enhancing our world-class supply chain.

Our quality management system is maintained through the testing of components, sub-assemblies, software, and systems at various stages in the manufacturing process. Quality control procedures also include a burn-in period for completed units after assembly, ongoing production reliability audits, failure tracking for early identification of production and component problems, and processing of information from customers obtained through services and support programs. This system is certified to the ISO 9001 International Standard that includes most of our global sites and organizations that design, manufacture, and service our products.

Our order fulfillment, manufacturing, and test facilities in Massachusetts, North Carolina, and Ireland are also certified to the ISO 9001 International Standard for quality management systems, the ISO 14001 International Standard for environmental management systems, the ISO 45001 International Standard for health and also have achieved OHSAS 18001 certification, an international standardsafety management systems, and the ISO 50001 International Standard for facilities with world-class safety and healthenergy management systems. These internationally-recognized endorsements of ongoing quality, environmental, health and environmentalsafety, and energy management are among the highest levels of certifications

We maintain a robust Supplier Code of Conduct, actively manage recycling processes for our returned products, and are certified by the Environmental Protection Agency as a Smartway Transport Partner.

We purchase materials, supplies, product components, and products from a large number of qualified suppliers. In some cases, where multiple sources of supply are not available, we rely on a single source or a limited number of sources of supply if we believe it is advantageous to do so because of performance, quality, support, delivery, capacity, or price considerations. We believe that any disruption that may occur because of our dependence on single- or limited-source vendors would not disproportionately disadvantage us relative to our competitors. See “Item 1A — Risk Factors — Risks Relating to Our Business and Our Industry — Reliance on vendors for products and components, many of which are single-source or limited-source suppliers, could harm our business by adversely affecting product availability, delivery, reliability, and cost” for information about the risks associated with Dell Technologies’ use of single- or limited-source suppliers.

Our global corporate headquarters is located in Round Rock, Texas. We have operations and conduct business in many countries located in the Americas, Europe, the Middle East, Asia, and other geographic regions. To increase our global presence,reach, we continue to focus on emerging markets outside of the United States, Western Europe, Canada, and Japan. We continue to view these geographical markets, which include the vast majority of the world’s population, as a long-term growth opportunity. Accordingly, we pursue the development of technology solutions that meet the needs of these markets. Our expansion in emerging markets creates additional complexity in coordinating the design, development, procurement, manufacturing, distribution, and support of our product and services offerings. For information about the amount of net revenue we generated from our operations outside of the United States during the last three fiscal years, see Note 19 of the Notes to the Consolidated Financial Statements included in this report.

Our sales arecan be affected by seasonal trends. Among the trends with the most significant effect onWithin ISG, our operating results,storage sales to government customers (particularly the U.S. government) generally are typically stronger in our thirdfourth fiscal quarter,quarter. Our sales within the Americas are typically stronger in the second and fourth fiscal quarters, with sales in Europe,EMEA typically stronger during the Middle East and Africa are often weaker in our third fiscal quarter, and sales to consumers are typically strongest during our fourth fiscal quarter. Historical seasonal patterns may not continue in the future and have been impacted by, and may continue to be impacted by, the COVID-19 pandemic, the changing macroeconomic environment, and our mix of business.

We operate in an industry in which there are rapid technological advances in hardware, software, and services offerings. We face ongoing product and price competition in all areas of our business, including from both branded and generic competitors. We compete based on our ability to offer customers competitive, scalable, and integrated solutions that provide the most current and desired product and services features at a competitive price. We closely monitor market pricing, and solutions trends, including the effect of foreign exchange rate movements, in an effort to provide the best value for our customers. We believe that our strong relationships with our customers and channel partners allow us to respond quickly to changing customer needs and other macroeconomic factors.

The markets in which we compete are comprised of largespan countries around the world with customers that range from the world’s largest corporations to small and small companies across all areas of our business.medium-sized businesses to consumers and also includes government and not-for-profit organizations. We believe that new businesses will continue to enter these markets and develop technologies that, if successfully commercialized, may compete with our products and services. Moreover, current competitors may enter into new strategic relationships with new or existing competitors, which may further increase the competitive pressures. See “Item 1A — Risk Factors — Risks Relating to Our Business and Our Industry” for information about our competitive risks.

We believe our direct business strategy, whichmodel is a significant competitive advantage and emphasizes direct communication with customers, thereby allowing us to refine our products and marketing programs for specific customer groups. and enabling us to successfully navigate environments with constrained supply chains.

In addition to our direct business model, we rely onuse our network of channel partners to sell our products and services, enabling us to efficiently serve a greater number of customers. The Dell Technologies partner program contributes to the development of

channel sales by providing appropriate incentives for revenueto encourage sales generation. We also provide our channel partnersfacilitate access to third-party financing to help our channel partners manage their working capital. We believe that building long-term relationships with our channel partners enhances our ability to deliver an excellenta high-quality customer experience. During Fiscal 2021,2023, our other sales channels contributed overgenerated approximately 50% of our net revenue.

Product backlog represents the value of unfulfilled manufacturing orders.orders and is included as a component of remaining performance obligations to the extent we determine that the manufacturing orders are non-cancelable. Our business model generally gives us the ability to optimize product backlog at any point in time, for example,by such actions as expediting shipping or prioritizing customer orders towardfor products that have shorter lead times. Because productWe ended Fiscal 2022 with elevated backlog at any point in time may notlevels as a result of industry-wide constraints in the generationsupply of any predictable amount of net revenue in any subsequent period,limited-source components. During Fiscal 2023, we do not believe productlowered our backlog to be a meaningful indicator of future net revenue. Product backlog is includedlevels across both CSG and ISG as a component of remaining performance obligation to the extent we determine that the manufacturing orders are non-cancelable.supply positions improved and demand declined.

As of January 29, 2021,February 3, 2023, we held a worldwide portfolio of 21,87620,693 granted patents and 10,108 pending patent applications. Of those, VMware, Inc. held 5,230 granted patents and 3,1548,045 pending patent applications. We continue to obtain new patents through our ongoing research and development activities.  The inventions claimed in our patents and patent applications cover aspects of our current and possible future offerings, computer system andsystems, software products, manufacturing processes, and related technologies.  We also hold licenses to use numerous third-party patents.  Although we use our patented inventions and license some of them to others, we are not substantially dependent on any single patent or group of related patents.  Our product and process patents may establish barriers to entry, and we anticipate that our worldwide patent portfolio will continue to be of value in negotiating intellectual property rights with others in the industry.

We have used, registered, or applied to register certain trademarks and copyrights in the United States and in other countries. We believe that Dell Technologies, DELL, Dell EMC, VMware, Alienware, Secureworks, Pivotal, and VirtustreamSecureworks word marks and logo marks in the United States are material to our operations.

We have entered into software licensing agreements with other companies. We also license certain technology and intellectual property from third parties for use in our offerings and processes, and license some of our technologies and intellectual property to third parties.

Our business is subject to regulation by various U.S. federal and state governmental agencies and other governmental agencies. Such regulation includes the activities of the U.S. Federal Communications Commission; the anti-trust regulatory activities of the U.S. Federal Trade Commission, the U.S. Department of Justice, and the European Union; the consumer protection laws and financial services regulation of the U.S. Federal Trade Commission and various stateU.S. governmental agencies; the export regulatory activities of the U.S. Department of Commerce and the U.S. Department of the Treasury; the import regulatory activities of the U.S. Customs and Border Protection; the product safety regulatory activities of the U.S. Consumer Product Safety Commission and the U.S. Department of Transportation; the health information privacy and security requirements of the U.S. Department of Health and Human Services; and the environmental, employment and labor, and other regulatory activities of a variety of governmental authorities in each of the countries in which we conduct business.

Our operations are subject to a variety of environmental, performance, and safety regulations in all areas in which we conduct business. Product design and procurement operations must comply with new and future requirements relating to climate change laws and regulations, materials composition, sourcing, radiated emissions, energy efficiency and collection, recycling, treatment, transportation, and disposal of electronics products, including restrictions on mercury, lead, cadmium, lithium metal, lithium ion, and other substances. Operations may also become subject to new or emergent standards relating to climate change laws and regulations. The costsamount and timing of costs under environmental and safety laws are difficult to predict. We were not assessed any material environmental fines, nor did we have any material environmental remediation or other environmental costs, during Fiscal 2021.2023.

We and our subsidiaries are subject to various anti-corruption laws that prohibit improper payments or offers of payments to foreign governments and their officials for the purpose of obtaining or retaining business, and are also subject to export controls, customs regulations, economic sanctions laws, including those currently imposed on Russia, and embargoes imposed by the U.S. government. Violations of the U.S. Foreign Corrupt Practices Act or other anti-corruption laws or export control, customs, or economic sanctions laws and regulations may result in severe criminal or civil sanctions and penalties.

We are subject to provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act intended to improve transparency and accountability concerning the supply of minerals originating from the conflict zones of the Democratic Republic of the Congo or adjoining countries. We incur costs to comply with the disclosure requirements of this law and other costs relating to the sourcing and availability of minerals used in our products.

Dell Technologies is committed to driving human progress by putting our technology and expertise to work where it can do the most good for both people and the planet.  AllWe recognize that all of our stakeholders — shareholders, customers, suppliers, employees, and communities — as well as the environment and society, — are essential to our business.

Dell Technologies launched its Social Impact Planis committed to progressing towards the goals set forth in our plan for 2030 (theand beyond (our “2030 Plan”Goals”) in November 2019.. Our goals under the 2030 PlanGoals represent an extension of our purpose as a company — to create technologies that drive human progress. We are using these goals to build our social impact strategies over the next decade. TheOur 2030 Plan hasGoals have four critical areas of focus:

Dell Technologies is measuring itsmeasures progress against each of theour 2030 social impact goalsGoals in our annually released social impact reports. The Dell Technologies Social Impact Plan for 2030 and annual social impact reports are available on the social impact reporting page of our website.

We provide a multitude of programs to support employees’ career growth and development through a centralized experience called “Build Your Career.” Through this program, we offer formal training options, individualized development programs and sponsorship, tools for 360-degree feedback, mentoring, networking, stretch assignments, and growth opportunities. Our tools and resources are designed to empower and inspire employees to direct their own career paths and build a portfolio of transferable skills for success in the technology industry. Our internal Career Hub supports employee growth by our values.providing personalized development suggestions, such as mentors and job opportunities, that align with their skills and development goals. We workare committed to building a diverse leadership pipeline with a broad spectrum of skills, including the ability to lead with integrity and lead by acknowledging the importance of relationships, drive, judgment, vision, optimism, humility,inspire others.

We manage our responsible business practices in one of the world’s largest supply chains. Our supply chain has always demonstrated high standards of responsibility and integrity, and we continue our efforts to drive responsible manufacturing our stakeholders can trust. Our supply chainchains, which involves hundreds of thousands of people around the world. We continue our efforts to drive responsible manufacturing through robust assurance practices, including human rights due diligence and environmental stewardship. We recognize that looking after the wellbeing of people in our supply chain is important and have set goals for our work in this area, including:

We support supplier employees at all levels with training on key topics, including forced labor and health and safety, and we continue to work with suppliers to deliver training directly to employees via their mobile phones. Through this program,initiative, Dell Technologies covers the cost of developing training modules and shares training costs with suppliers who deliver them.

Dell Technologies continuesworks to make significant progress to help ensure that we and our suppliers manufacture our products responsibly. Dell Technologies has one of the largestresponsibly, in part through our social and environmental responsibility assurance programs in the technology sector, both in terms of number ofprogram. Through risk assessments and audits and the program’s reach across the supply chain. Through these audits,conducted under this program, we are ableseek to monitor a supplier factory’sfactories’ adherence to the Responsible Business Alliance (“RBA”) Code of Conduct. Audits are conducted by third-party auditors that have been trained and certified by the RBA. AuditsThe audits cover topics across five areas: labor, including risks of forced labor and weekly working hours; employee health and safety; environment; ethics; and management systems. Through our audit program, we aim to identify and solve concerns in our supply chain, and seek continuouscontinual improvements to address issues and enable suppliers to build their own in-house capabilities. We supplement our audits with targeted assessments of suppliers when we identify opportunities to drive further improvements.

Dell Technologies Supply Chain Sustainability Progress Reports areOur supply chain sustainability progress is available through annual reporting on the social impact reporting page of our website.

We are a holding company that conducts our operations through subsidiaries.

We were incorporated in the state of Delaware on January 31, 2013 under the name Denali Holding Inc. in connection with Dell’s going-private transaction, which was completed in October 2013. We changed our name to Dell Technologies Inc. on August 25, 2016. The mailing address of our principal executive offices is One Dell Way, Round Rock, Texas 78682. Our telephone number is 1-800-289-3355.

Our website address is www.delltechnologies.com.  We make available free of charge through our website our annual report on Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K, and all amendments to those reports, as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC. The contents ofinformation on, or accessible through, our website referred to above and the contents ofor any other website we refer to herein arein this report is not a part of, and is not incorporated by reference into, this annual report on Form 10-K.report.

The following table sets forth, as of March 5, 2021,4, 2023, information about our executive officers, who are appointed by our boardBoard of directors.Directors.

and has served in a variety of other engineering and management roles. Prior toBefore joining Dell Technologies, Mr. Clarke served as a reliability and product engineer at Motorola, Inc.Inc, a global technology company.

Our business, operating results, financial condition, and prospects are subject to a variety of significant risks, many of which are beyond our control. The following is a description of some of the important risk factors that may cause our actual results in future periods to differ substantially from those we currently expect or seek. The risks described below are not the only risks we face. There are additional risks and uncertainties not currently known to us or that we currently deem to be immaterial that also may materially adversely affect our business, operating results, financial condition, or prospects.

The COVID-19 pandemicAs a global company with customers operating in a broad range of businesses and associated containment measures have causedindustries, our performance is affected by global economic conditions and financial disruptions globally, affecting regions in which we sell ourthe demand for technology products and services in international markets. Adverse economic conditions may negatively affect customer demand, and could result in which we conduct our business operations. We are unable to predictpostponed or decreased spending amid customer concerns over unemployment or slowing demand for their products, reduced asset values, volatile energy costs, geopolitical issues, the full impact the pandemic may have on our results of operations, financial condition, liquidity, and cash flows due to numerous uncertainties, including the progression of the pandemic, governmental and other responses, vaccine availability and cost of credit, and the timingstability and solvency of financial institutions, financial markets, businesses, local and state governments, and sovereign nations. Weak or unstable global economic recovery. We are also unableconditions, including those attributable to predictinternational conflicts, such as the extent ofconflict in Ukraine, international trade protection measures and disputes, such as those between the impact of the pandemic on our customers, suppliers,United States and other partners, which could materially adversely affect demand for our products and services and our results of operations and financial condition.

We operate in an industry in which there are rapid technological advances in hardware, software, and services offerings. As a result, we face aggressive productoffering and price competition from both branded and generic competitors. We compete based on our ability to offer to our customers integrated solutions that provide desired product and services features at a competitive price. Our competitors may provide productsofferings that are less costly, perform better, or include additional features. Further, our productoffering portfolios may quickly become outdated or our market share may quickly erode. Efforts to balance the mix of products and services to optimize profitability, liquidity, and growth may put pressure on our industry position.

As the technology industry continues to expand, there may be new and increased competition in different geographic regions. The generally low barriers to entry into the technology industry increase the potential for challenges from new competitors. Competition also may intensify from an increase in optionsalternatives for mobile and cloud computing solutions. In addition, companies with which we have strategic alliances may become competitors in other product areas, or current competitors may enter into new strategic relationships with new or existing competitors, all of which may further increase competitive pressures.

We maintain several single-source or limited-source supplier relationships, including relationships with third-party software providers, either because multiple sources are not readily available or because the relationships are advantageous due to performance, quality, support, delivery, capacity, or price considerations. A delay in the supply of a critical single- or limited-source product or component may prevent the timely shipment of the related product in desired quantities or configurations. In addition, we may not be able to replace the functionality provided by third-party software currently offered with our products if that software becomes obsolete, defective, or incompatible with future product versions or is not adequately maintained or updated. Even where multiple sources of supply are available, qualification of the alternative suppliers and establishment of reliable supplies could result in delays and a possible loss of sales, which could harm our operating results.

We obtain many products and all of our components from third-party vendors, many of which are located outside of the United States. In addition, significant portions of our products are assembled by contract manufacturers, primarily in various locations in Asia. A significant concentration of such outsourced manufacturing is performed by only a few contract manufacturers, often in single locations. We sell components to these contract manufacturers and generate large non-trade accounts

receivables, an arrangement that would present a risk of uncollectibility if the financial condition of a contract manufacturer should deteriorate.

Although these relationships generate cost efficiencies, they limit our direct control over production. The increasing reliance on vendors subjects us to a greater risk of shortages and reduced control over delivery schedules of components and products, as well as a greater risk of increases in product and component costs. We experienced some of these adverse effects in Fiscal 2023, Fiscal 2022, and Fiscal 2021 as a result of continued impacts of the COVID-19.

We may experience additional supply shortages and price increases caused by changes to raw material availability, manufacturing capacity, labor shortages, public health issues, tariffs, trade disputes and protectionist measures, natural catastrophes or the effects of climate change (such as extreme weather conditions, sea level rise, drought, flooding, and wildfires), and significant changes in the financial condition of our suppliers. Because we maintain minimal levels of component and product inventories, a disruption in component or product availability could harm our ability to satisfy customer needs. In addition, defective parts and products from these vendors could reduce product reliability and harm our reputation.

Our profitability is affected by our ability to achieve favorable pricing from vendors and contract manufacturers, including through negotiations for vendor rebates, marketing funds, and other vendor funding received in the normal course of business. Because these supplier negotiations are continual and reflect the evolving competitive environment, the variability in timing and amount of incremental vendor discounts and rebates can affect our profitability. The vendor programs may change periodically, potentially resulting in adverse profitability trends if we cannot adjust pricing or variable costs. An inability to establish a cost and product advantage, or determine alternative means to deliver value to customers, may adversely affect our revenue and profitability.

As a global company with customers operating in a broad rangeOn November 1, 2021, upon completion of the VMware Spin-off, the businesses of VMware were separated from our remaining businesses, and industries,we and VMware entered into various agreements that govern our performance is affected by global economic conditionscurrent relationship. Among those agreements, a commercial framework agreement provides a framework under which we and VMware are continuing our strategic relationship, particularly with respect to projects we and VMware believe have the demand for technology products and services in international markets. Adverse economic conditionspotential to accelerate the growth of the industry, product, service, or platform that may negatively affect customer demand, and could result in postponedprovide one or decreased spending amid customer concerns over unemployment, reduced asset values, volatile energy costs, geopolitical issues,both of our companies with a strategic market opportunity. We may not obtain the availability and costbenefits we seek from a continuation of credit, andour strategic relationship with VMware under the stability and solvency of financial institutions, financial markets, businesses, local and state governments, and sovereign nations. Weak or unstable global economic conditions, including due to international trade protection measures and disputes, such as those between the United States and China, or due to public health issues, such as the outbreak of COVID-19 discussed above, also could harm our business by contributing to product shortages or delays, supply chain disruptions, insolvency of key suppliers, customer and counterparty insolvencies, increased product costs and associated price increases, reduced global sales,commercial framework agreement and other adverse effects onarrangements. In addition to a potential for business disruption, the VMware Spin-off could cause our operations. Any such effectscustomers to delay or defer decisions to purchase products or renew contracts, or cause them to end their relationships with us, which could have a negative impactmaterial adverse effect on our net revenue and profitability.business, financial condition, results of operations, or cash flows.

Our strategy involves enabling the digital transformation of our customers while leading in the core infrastructure markets in which we compete. Accordingly, we must continue to expand our customer base through direct sales, new distribution channels, continued development of new growth businesses, further development of relationships with resellers, and augmentation of selected business areas through targeted acquisitions and other commercial arrangements. As we reach more customers through new distribution channels and expanded reseller relationships, we may fail to effectively manage effectively the increasingly difficult tasks of inventory management and demand forecasting. Our ability to implement this strategy depends on efficiently transitioning sales capabilities, successfully adding to the breadth of our solutions capabilities through selective acquisitions of other businesses, and effective management of the consequences of these strategic initiatives. If we are unable to meet these challenges, our results of operations could be adversely affected.

We are organized into threetwo business units consisting of ISG and CSG and VMware whichthat are each important components of our strategy. ISG consists ofoffers a portfolio of storage, server, and networking solutions and faces intense competition from existing on-premises competitors and increasing competitive pressures from public cloudInfrastructure-as-a-Service providers. Accordingly, we couldexpect we will be required to make additional investments to combat such competitive pressures and drive future growth. Such pressures could result in the erosion of revenue and operating income and adversely affect ISG’s results of operations. To address an industry trend toward hybrid-computing models, we have developed and continue to develop traditional, converged, and hyper-converged infrastructure solutions. ISG’s results of operations could be adversely affected if such solutions are not adopted by our customers or potential customers, or if customers move rapidly to adopt public cloud solutions.

Continuing improvements in technology result in the frequent introduction of new solutions, products, and services, improvements in product performance characteristics, and short product life cycles. If we fail to effectively manage effectively transitions to new solutions and offerings, the products and services associated with such offerings and customer demand for our solutions, products, and services could diminish, and our profitability could suffer.

We must identify and address quality issues associated with itsour products, software, and services, many of which include third-party components. Although quality testing is performed regularly to detect quality problems and implement required solutions, failure to identify and correct significant product quality issues before the sale of such products to customers could result in lower sales, increased warranty or replacement expenses, and reduced customer confidence, which could harm our operating results.

We routinely manage, store, transmit and otherwise process large amounts of proprietary information and confidential data, including sensitive and personally identifiable information, relating to our operations, products, and our customers. We face numerous and evolving cyber risksthreats of increasingsignificant scale, volume, severity, and volume.complexity, making it increasingly difficult to defend against security incidents successfully or to implement adequate preventative measures.

Despite our internal controls and significant and ongoing investment in security measures, criminal or other unauthorized threat actors, including nation states or state-sponsored organizations, may be able to penetrate our security measures,defenses, breach our information technology systems, misappropriate or compromise confidential and proprietary information of our company andor our customers, cause system disruptions and shutdowns, or introduce ransomware, malware, or vulnerabilities into our products, systems, and networks or those of our customers and partners. Employees, contractors, or other insiders may introduce vulnerabilities into our environments or otherwise may seek to misappropriate our intellectual property and proprietary information. Hardware and operating system software and applications that we produce or procure from third parties may contain defects in design or manufacture or other problems that unexpectedly could interfere with the operation of our products. The shift to work-from-home and flexible work arrangements resulting fromfollowing the COVID-19 pandemic may also increase our vulnerability, as employees and contractors of our company and third-party providers are working remotely and using home networks that may pose a significant risk to network, data, and cyber security. In addition, our business may be adversely affected by cyber-attacks and data thefts resulting from ongoing wars and geopolitical conflicts. In the past, we have experienced security incidents, including the unauthorized activity on our network attempting to extract Dell.com customer information we disclosed in November 2018.

The costs to address cyber risks, both before and after a security incident, could be significant, regardless of whether incidents result from an attack on us directly or on third-party vendors upon which we rely. CyberattacksOur customers, partners, and third-party vendors continue to experience security incidents of varying severity, including, but not limited to, increased ransomware attacks, network intrusions, and unauthorized data exfiltration, which have directly and indirectly impacted our operations in the past. Targeted cyber-attacks or those that may result from a security incident directed at a third-party vendor could compromise our internal systems, products, services, and productsofferings, and the systems of our customers, resulting in interruptions, delays, or

cessation of service that could disrupt business operations for us and our customers. Our proactive measures and remediation efforts may not be successful or timely. Any actual or perceived security vulnerabilities in our products or services, or those of third parties we sell, could lead to loss of existing or potential customers, and may impede our sales, manufacturing, distribution, outsourcing services, information technology solutions, and other critical functions and offerings. In addition, breaches of our security measures, including through the use and the unapproved dissemination of proprietary information or sensitive or confidential data about us, our customers, or other third parties, could impair our intellectual property rights and expose us, our customers, or such other third parties to a risk of loss or misuse of such information or data. Any such incidents also could also subject us to government investigations and regulatory enforcement actions, litigation, potential liability, and damage to our brand and reputation, or otherwise harm our business and operations.

As a global enterprise, we are subject to an increasing number of laws and regulations in the United States and numerous other countries relating to the collection, use, residency, transfer, and protection of data, including customer data, and other data.sensitive, confidential, and proprietary information. Our ability to execute transactions and to process and use personal information and other data in the conduct of our business, the operation of our products and offers, and the provision of services to our customers subjects us to complianceincreased obligations to comply with applicable laws and regulations and may require us to notify regulators, customers, employees, or other individuals or entitiesthird parties of aour data processing and data transfer activities, as well as provide notification and disclosure of security incident orincidents and data or privacy breach.breaches. The rapid evolution and increased adoption of artificial intelligence (“AI”) technologies and our obligations to comply with emerging AI laws and regulations may require us to develop additional AI-specific governance programs. We continue to incur significant expenditures to comply with mandatory privacy, security, data protection and securitylocalization requirements and controls imposed by law, regulation, industry standards and contractual obligations. Despite such expenditures, we may face regulatory and other legal actions, including potential liability or the inability to conduct business or sell our products or offers in a specific jurisdiction, in the event of a security incident or data or privacy breach or perceived or actual non-compliance with such regulatory requirements and controls.

We make strategic acquisitions of other companies as part of our growth strategy. We could experience unforeseen operating difficulties in integrating the businesses, technologies, services, products, personnel, or operations of acquired companies, especially if we are unable to retain the key personnel of an acquired company. Further, future acquisitions may result in a delay or reduction of sales for both us and the acquired company because of customer uncertainty about the continuity and effectiveness of solutions offered by either company and may disrupt our existing business by diverting resources and significant management attention that otherwise would be focused on development of the existing business. Acquisitions also may negatively affect our relationships with strategic partners if the acquisitions are seen as bringing us into competition with such partners.

To complete an acquisition, we may be required to use substantial amounts of cash, engage in equity or debt financings, or enter into credit agreements to secure additional funds. Such debt financings could involve restrictive covenants that might limit our capital-raising activities and operating flexibility. Further, an acquisition may negatively affect our results of operations because it may expose us to unexpected liabilities, require the incurrence of charges and substantial indebtedness or other liabilities, have adverse tax consequences, result in acquired in-process research and development expenses, or in the future require the amortization, write-down, or impairment of amounts related to deferred compensation, goodwill, and other intangible assets, or fail to generate a financial return sufficient to offset acquisition costs.

In addition, we periodically divest businesses, including businesses that are no longer a part of our strategic plan. These divestitures similarly require significant investment of time and resources, may disrupt our business and distract management from other responsibilities, and may result in losses on disposition or continued financial involvement in the divested business,

including through indemnification or other financial arrangements, for a period following the transaction, which could adversely affect our financial results.

Sales outside the United States accounted for approximately half of our consolidated net revenue for Fiscal 2021.2023. Our future growth rates and success are substantially dependent on the continued growth of our business outside of the United States. Our international operations face many risks and uncertainties, including varied local economic and labor conditions; political instability; public health issues; changes in the U.S. and international regulatory environments; the impacts of trade protection measures, including increases in tariffs and trade barriers due to the current geopolitical climate and changes and instability in government policies and international trade arrangements, which could adversely affect our ability to conduct business in non-U.S. markets; changes in tax laws (including U.S. taxes on foreign operations);laws; potential theft or other compromise of our technology, data, or intellectual property; copyright levies; and volatility in foreign currency exchange rates. Our international operations could suffer as a result of the withdrawal of the United Kingdom from the European Union, commonly referred to as Brexit, including as a result of modification of trade, immigration, and commercial regulation. We could incur additional operating costs, or sustain supply chain disruptions, due to any such changes. Any of these factors could negatively affect our international business results and growth prospects.

Our overall profitability for any period may be adversely affected by changes in the mix of products and services, customers, or geographic markets reflected in sales for that period, and by seasonal trends. Profit margins vary among products, services, customers, and geographic markets. For example, our services offerings generally have a higher profit margin than consumer products. In addition, parts of our business are subject to seasonal sales trends. Among the trends with the most significant impact onWithin ISG, our operating results,storage sales to government customers (particularly the U.S. federal government) generally are typically stronger in our thirdfourth fiscal quarter,quarter. Our sales within the Americas are typically stronger in the second and fourth fiscal quarters, while our sales in Europe, the Middle East and Africa are often weaker in our third fiscal quarter, and sales to consumersEMEA are typically strongeststronger during ourthe fourth fiscal quarter.

We rely on value-added resellers, system integrators, distributors, and retailers as sales channels to complement our direct sales organization in order to reach more end-users. FutureOur future operating results depend on the performance of sales channel participants and on our success in maintaining and developing these relationships. RevenueOur revenue and gross margins could be negatively affected if the financial condition or operations of channel participants weaken as a result of adverse economic conditions or other business challenges, or if uncertainty regarding the demand for our products causes channel participants to reduce their orders for these products. Further, some channel participants may consider the expansion of our direct sales initiatives to conflict with their business interests as distributors or resellers of our products, which could lead them to reduce their investment in the distribution and sale of such products, or to cease all sales of our products.

We may access debt and capital sources to provide financing for customers and to obtain funds for general corporate purposes, including working capital, acquisitions, capital expenditures, and funding of customer receivables. In addition, we maintain customer financing relationships with some companies that rely on access to the debt and capital markets to meet significant funding needs. Any inability of these companies to access such markets could compel us to self-fund transactions with such companies or to forgo customer financing opportunities, which could harm our financial performance. The debt and capital markets may experience extreme volatility and disruption from time to time, in the future, which could result in higher credit spreads in such markets and higher funding costs for us. Deterioration in our business performance, a credit rating downgrade, volatility in the securitization markets, changes in financial services regulation, or adverse changes in the economy could lead to reductions in the availability of debt financing. In addition, these events could limit our ability to continue asset securitizations or other forms of financing from debt or capital sources, reduce the amount of financing receivables that we originate, or negatively

affect the costs or terms on which we may be able to obtain capital. Any of these developments could adversely affect our net revenue, profitability, and cash flows.

Our financial services activities areprimarily through DFS can be negatively affected by adverse economic conditions that contribute to loan delinquencies and defaults. An increase in loan delinquencies and defaults would result in greater net credit losses, which may require us to increase our reserves for customer receivables.

In addition, the implementation of new financial services regulations,regulation, or the application of existing financial services regulation, in countries where we conduct our financial services and related supporting activities, could unfavorably affect the profitability and cash flows of our consumer financing activities.

We have numerous arrangements with financial institutions that include cash and investment deposits, interest rate swap contracts, foreign currency option contracts, and forward contracts. As a result, we are subject to the risk that the counterparty to one or more of these arrangements will default, either voluntarily or involuntarily, on its performance under the terms of the arrangement. In times of market distress, a counterparty may default rapidly and without notice, and we may be unable to take

We offer our ISG customers a range of consumption models for our services and solutions, including as-a-service,as-a-Service, utility, leases, or immediate pay models, all designed to match customers’ consumption preferences. These solutions generally are multiyear agreements that typically result in recurring revenue streams over the term of the arrangement. Our financial results and growth depend, in part, on customers continuing to purchase our services and solutions over the contract life on the agreed terms. The contracts allow customers to take actions that may adversely affect our recurring revenue and profitability. These actions include terminating a contract if our performance does not meet specified services levels, requesting rate reductions, reducing the use of our services and solutions or terminating a contract early upon payment of agreed fees. In addition, we estimate the costs of delivering the services and solutions at the outset of the contract. If we fail to estimate such costs accurately and actual costs significantly exceed estimates, we may incur losses on the contracts. We also are subject to the risk of loss under the contracts as a result of a default, voluntarily or involuntarily, in payment by the customer, whether because of financial weakness or other reasons.

Contracts with U.S. federal, state, and local governments and with foreign governments are subject to future funding that may affect the extension or termination of programs and to the right of such governments to terminate contracts for convenience or non-appropriation. There is pressure on governments, both domestically and internationally, to reduce spending. Funding reductions or delays could adversely affect public sector demand for our products and services. In addition, if we violate legal or regulatory requirements, the applicable government could suspend or disbar us as a contractor, which would unfavorably affect our net revenue and profitability.

If we or our suppliers are unable to develop or protect desirable technology or technology licenses, we may be prevented from marketing products, may have to market products without desirable features, or may incur substantial costs to redesign products. We also may have to defend or enforce legal actions or pay damages if we are found to have violated the intellectual property of other parties. Although our suppliers might be contractually obligated to obtain or protect such licenses and indemnify us against related expenses, those suppliers could be unable to meet their obligations. We invest in research and development and obtain additional intellectual property through acquisitions, but those activities do not guarantee that we will develop or obtain intellectual property necessary for profitable operations. Costs involved in developing and protecting rights in intellectual property may have a negative impact on our business. In addition, our operating costs could increase because of copyright levies or similar fees by rights holders and collection agencies in European and other countries.

We depend on our information technology and manufacturing infrastructure to achieve our business objectives. Natural disasters, manufacturing failures, telecommunications system failures, or defective or improperly installed new or upgraded business management systems could lead to disruptions in this infrastructure. Portions of our IT infrastructure, including those provided by third parties, also may experience interruptions, delays, or cessations of service, or produce errors in connection with systems integration or migration work. Such disruptions may adversely affect our ability to receive or process orders, manufacture and ship products in a timely manner, or otherwise conduct business in the normal course. Further, portions of our services business involve the processing, storage, and transmission of data, which also would be negatively affected by such an event. Disruptions in our infrastructure could lead to loss of customers and revenue, particularly during a period of heavy demand for our products and services. We also could incur significant expense in repairing system damage and taking other remedial measures.

We utilize derivative instruments to hedge our exposure to fluctuations in foreign currency exchange rates and interest rates. Some of these instruments and contracts may involve elements of market and credit risk in excess of the amounts recognized in our financial statements. Global economic events, including trade disputes, economic sanctions and emerging market volatility, and associated uncertainty maycould cause currencies to fluctuate, which may contribute to variations in our sales of products and services in various jurisdictions. If we are not successful in monitoring our foreign exchange exposures and conducting an effective hedging program, our foreign currency hedging activities may not offset the impact of fluctuations in currency exchange rates on our future results of operations and financial position.

Changes in tax laws (including any future U.S. Treasury notices or regulations related to the Tax Cuts and Jobs Act that was signed into law on December 22, 2017) could adversely affect our operations and profitability. In recent years, numerous legislative, judicial, and administrative changes have been made to tax laws applicable to us and similar companies. The Organisation for Economic Co-operation and Development (the “OECD”), an international association of 3738 countries, including the United States, has issued guidelines that change long-standing tax principles. The OECD guidelines may introduce tax uncertainty as countries amend their tax laws to adopt certain parts of the guidelines. Additional changes to tax laws are likely to occur, and such changes may adversely affect our tax liability.

Portions of our operations are subject to a reduced tax rate or are free of tax under various tax holidays that expire in whole or in part from time to time. Many of these holidays may be extended when certain conditions are met, or may be terminated if certain conditions are not met.met or as a result of changes in tax legislation. If the tax holidays are not extended, if tax legislation changes, or if we fail to satisfy the conditions of the reduced tax rate, our effective tax rate would be affected. Our effective tax rate also could be impacted if our geographic sales mixdistribution of earnings changes. In addition, any actions by us to repatriate non-U.S. earnings for which we have not previously provided for U.S. taxes may affect the effective tax rate.

We are continually under audit in various tax jurisdictions. We may not be successful in resolving potential tax claims that arise from these audits. A final determination of tax audits or disputes may differ from what is reflected in our historical income tax provisions or benefits and accruals. An unfavorable outcome in certain of these matters could result in a substantial increase in our tax expense. In addition, our provision for income taxes could be adversely affected by changes in the valuation of deferred tax assets.

We invest a significant portion of available funds in a portfolio consisting primarily of both equity and debt securities of various types and maturities pending the deployment of these funds in our business. Our earnings performance could suffer from anyequity investments consist of strategic investments in both marketable and non-marketable securities. Investments in marketable securities are measured at fair value on a recurring basis. We have elected to apply the measurement alternative for non-marketable securities. Under the alternative, we measure investments without readily determinable fair values at cost, less impairment, of our investments.adjusted by observable price changes. Our portfoliodebt securities generally are classified as available-for-saleheld to maturity and are recorded in our financial statements at fair value. If any such investments experienceamortized cost. Our earnings performance could suffer from declines in market price and it is determined that such declines are other than temporary, we may have to recognize in earnings the decline in the fair market value or impairment of such investments below their cost or carrying value.our investments.

We are involved in various claims, suits, investigations, and legal proceedings that arise from time to time in the ordinary course of business as well as those that arose in connection with the Class V transaction, including those described elsewhere in this report.or otherwise. Additional legal claims or regulatory matters affecting us and our subsidiaries may arise in the future and could involve stockholder, consumer, regulatory, compliance, intellectual property, antitrust, tax, and other issues on a global basis. Litigation is inherently unpredictable. Regardless of the merits of a claim, litigation may be both time-consuming and disruptive to our business. We could incur judgments or enter into settlements of claims that could adversely affect our operating results or cash flows in a particular period. Even if we are not named a party to a particular suit, we may be subject to indemnification obligations to the named parties that could subject us to liability for damages or other amounts payable as a result of such judgments or settlements. In addition, our business, operating results, and financial condition could be adversely affected if any infringement or other intellectual property claim made against us by any third party is successful, or

Our operations are subject to environmental and safety regulations in all areas in which we conduct business. Product design and procurement operations must comply with new and future requirements relating to climate change laws and regulations,

materials composition, sourcing, energy efficiency and collection, recycling, treatment, transportation, and disposal of electronics products, including restrictions on mercury, lead, cadmium, lithium metal, lithium ion, and other substances. If we fail to comply with applicable rules and regulations regarding the transportation, source, use, and sale of such regulated substances, we could be subject to liability. The costs and timing of costs under environmental and safety laws are difficult to predict, but could have an adverse impact on our business.

In addition, we and our subsidiaries are subject to various anti-corruption laws that prohibit improper payments or offers of payments to foreign governments and their officials for the purpose of obtaining or retaining business, and are also subject to export controls, customs, economic sanctions laws, including those currently imposed on Russia, and embargoes imposed by the U.S. government. Violations of the U.S. Foreign Corrupt Practices Act or other anti-corruption laws or export control, customs, or economic sanctions laws may result in severe criminal or civil sanctions and penalties, and we and our subsidiaries may be subject to other liabilities whichthat could have a material adverse effect on our business, results of operations, and financial condition.

We are subject to various human rights laws, including provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act intended to improve transparency and accountability concerning the supply of minerals originating from the conflict zones of the Democratic Republic of the Congo or adjoining countries. We incur costs to comply with the disclosure requirements of this law and other costs relating to the sourcing and availability of minerals used in our products. Further, we may face reputational harm if our customers or other stakeholders conclude that we are unable to sufficiently verify the origins of the minerals used in our products.

ArmedNatural disasters, terrorism or armed hostilities, terrorism, natural disasters, climate changesuch as the war between Russia and Ukraine, or public health issues, such as those resulting from the COVID-19 pandemic, whether in the United States or in other countries, could cause damage or disruption to us or our suppliers and customers, or could create political or economic instability, any of which impacts could harm our business. For example, tornadoes in Tennessee, wildfires in California, and typhoons in the Phillipines disrupted our operations in those areas in recent periods. Any such events in the future could cause a decrease in demand for our products, make it difficult or impossible to deliver products or for suppliers to deliver components, and create delays and inefficiencies in our supply chain.

The COVID-19 pandemic negatively impacted the global economy, disrupted global supply chains, created significant volatility and disruption in financial markets, and, at times, increased unemployment levels. In addition, the pandemic resulted in temporary closures of many businesses and the institution of various lockdown orders and sheltering in place requirements around the world. The effects of COVID-19 adversely impacted aspects of our business over the last three fiscal years. The full impact of COVID-19 or any other widespread public health issue on our financial condition and results of operations will depend on the duration and scope of an outbreak (including the emergence or re-emergence of variants and their transmissibility, and the success of vaccination programs and treatments), its impact on our consumers and our partners, how quickly normal economic conditions, operations, and the demand for our services and products can resume, and any permanent behavioral changes which the pandemic or other public health issue may cause. These conditions and impacts are highly uncertain and cannot be predicted.

We are subject to risks associated with the long-term effects of climate change on the technologyglobal economy and on the IT industry in particular. The physical risks associated with climate change include the adverse effects of carbon dioxide and other greenhouse gases on global temperatures, weather patterns, and the global economy are unclear. Climatefrequency and severity of natural disasters. Extreme weather and natural disasters within or outside the United States could make it more difficult and costly for us to manufacture and deliver our products to our customers, obtain production materials from our suppliers, or perform other critical corporate functions. For example, tornadoes in Tennessee, wildfires in California, and typhoons in the Philippines disrupted our operations in those areas in recent periods.

The increasing concern over climate change could result in certain typesnew domestic or international legal requirements for us to reduce greenhouse gas emissions and other environmental impacts of natural disasters occurring more frequentlyour operations, improve our energy efficiency, or with more intensity. Such eventsundertake sustainability measures that exceed those we currently pursue. Any such regulatory requirements could affectcause disruptions in the manufacture of our ability to provide servicesproducts and solutions to our customers and could result in reductionsincreased procurement, production, and distribution costs. Our reputation and brand could be harmed if we fail, or are seen as having failed, to respond responsibly and effectively to changes in sales, earnings, or productivity resulting from such potential impacts as production delays or limitations, adverse effects on distributors, supply chain disruptions,legal and reduced accessregulatory measures adopted to facilities.address climate change.

While we continue to prioritize debt paydown as part of our overall capital allocation strategy, our level of indebtedness requires significant interest and other debt service payments. As of January 29, 2021,February 3, 2023, we and our subsidiaries had approximately $48.5$29.6 billion aggregate principal amount of indebtedness. As of the same date, we and our subsidiaries also had an additional $5.5$6.0 billion available for borrowing under our revolving credit facilities.

Each share of our Class A Common Stock and each share of our Class B Common Stock has ten votes, while each share of our Class C Common Stock has one vote. Because of these disparate voting rights, Michael Dell and the Susan Lieberman Dell Separate Property Trust (the “MD stockholders”) and certain investment funds affiliated with Silver Lake Partners (the “SLP stockholders”) collectively held common stock representing approximately 94.8%95.2% of the total voting power of our outstanding common stock as of January 29, 2021.February 3, 2023. The limited ability of holders of the Class C Common Stock to influence matters requiring stockholder approval may adversely affect the market price of the Class C Common Stock.

In addition, in 2017,recent years, FTSE Russell and S&P Dow Jones changed their eligibility criteria to exclude new companies with multiple classes of shares of common stock from being added to certain stock indices. FTSE Russell instituted a requirement that new and, beginning in September 2022, existing constituents of its indices have greater than 5% of their voting rights in the hands of public stockholders, as calculated by FTSE Russell, whereas S&P Dow Jones announced that companies with multiple

share classes, such as Dell Technologies, will not be eligible for inclusion in the S&P 500, S&P MidCap 400, and S&P SmallCap 600, which together make up the S&P Composite 1500. Other major stock indices might adopt similar requirements in the future. FTSE Russell’s determination may change at any time. Under the current criteria, at a minimum, our multi-class capital structure makes itour Class C Common Stock ineligible for inclusion in thespecified S&P Dow Jones indices, including those making up the S&P Composite 1500, and, as a result, mutual funds, exchange-traded funds, and other investment vehicles that track these indices will not invest in the Class C Common Stock. It is unclear what effect, if any, exclusion from any indices will havehas on the valuations of the affected publicly-traded companies. It is possible that such policies may depress the valuations of public companies excluded from such indices compared to valuations of companies that are included.

As of January 29, 2021,February 3, 2023, the 383,724,977378,224,977 outstanding shares of Class A Common Stock held by the MD stockholders and the 101,685,21795,350,227 outstanding shares of Class B Common Stock held by the SLP stockholders are convertible into shares of Class C

In addition, as of January 29, 2021, weWe have entered into a registration rights agreement with holders of 383,724,977378,224,977 outstanding shares of Class A Common Stock (which are convertible into the same number of shares of Class C Common Stock), holders of all of the 101,685,21795,350,227 outstanding shares of Class B Common Stock (which are convertible into the same number of shares of Class C Common Stock), and holders of 17,531,449approximately 6,000,000 outstanding shares of Class C Common Stock, pursuant to which we granted such holders and their permitted transferees shelf, demand and/or piggyback registration rights with respect to such shares. Registration of those shares under the Securities Act would permit such holders to sell the shares into the public market.

Further, as of January 29, 2021,February 3, 2023, the MD stockholders and the SLP stockholders collectively beneficially owned 65.2%67.0% of our outstanding common stock. This concentration of ownership together with the disparate voting rights of our common stock may delay or deter possible changes in control of Dell Technologies, which may reduce the value of an investment in the Class C Common Stock. So long as the MD stockholders and the SLP stockholders continue to own common stock representing a significant amount of the combined voting power of our outstanding common stock, even if such amount is, individually or in the aggregate, less than 50%, such stockholders will continue to be able to strongly influence our decisions.

In addition, the MD stockholders and the SLP stockholders, respectively, have the right to nominate a number of individuals for election as Group I Directors (who constitute all but one of our directors), which is equal to the percentage of the total voting power for the regular election of directors beneficially owned by the MD stockholders or by the SLP stockholders multiplied by the number of directors then on the boardBoard of directorsDirectors who are not members of the audit committee, rounded up to the nearest whole number. Further, so long as the MD

In the ordinary course of their business activities, the MD stockholders, certain investment funds affiliated with an investment firm formed by principals of the firm that manages the capital of Michael Dell and his family (the “MSD Partners stockholders”), and the SLP stockholders and their respective affiliates may engage in activities in which their interests conflict with our interests or those of other stockholders. Our certificate of incorporation provides that none of the MD stockholders, the MSD Partners stockholders, the SLP stockholders, nor any of their respective affiliates or any director or officer of the Company who is also a director, officer, employee, managing director, or other affiliate (other than Michael Dell) have any duty to refrain from engaging, directly or indirectly, in the same business activities or similar business activities or lines of business in which we operate. The MD stockholders, the MSD Partners stockholders, and the SLP stockholders also may pursue acquisition opportunities that may be complementary to our business and, as a result, those acquisition opportunities may not be available to us. In addition, such stockholders may have an interest in pursuing acquisitions, divestitures, and other transactions that, in their judgment, could enhance the value of their investment in Dell Technologies, even though such transactions might involve risks to other stockholders.

We are a “controlled company” within the meaning of NYSEthe rules of the New York Stock Exchange (the “NYSE”) because the MD stockholders hold common stock representing more than 50% of the voting power in the election of directors. As a controlled company, we may elect not to comply with certain corporate governance requirements under NYSE rules, including the requirements that we have a board composed of a majority of “independent directors,” as defined under NYSE rules, and that we have a compensation committee and a nominating/corporate governance committee each composed entirely of independent directors. Although we currently maintain a board composed of a majority of independent directors, we currently utilize the exemptions relating to committee composition and expect to continue to utilize those exemptions. As a result, none of the committees of the boardBoard of directors,Directors, other than the audit committee, consists entirely of independent directors. Further, we may decide in the future to change our board membership so that the board is not composed of a majority of independent directors. Accordingly, holders of Class C Common Stock do not have the same protections afforded to stockholders of companies that are subject to all of the NYSE’s corporate governance requirements.

Under our certificate of incorporation, unless we consent in writing to the selection of an alternative forum, the sole and exclusive forum will be, to the fullest extent permitted by law, a state court located within the State of Delaware (or, if no state court located within the State of Delaware has jurisdiction, the federal district court for the District of Delaware) for:

None.

Our principal executive offices and global headquarters are located at One Dell Way, Round Rock, Texas.

As of January 29, 2021,February 3, 2023, as shown in the following table, we owned or leased 30.721.3 million square feet of office, manufacturing, and warehouse space worldwide:

____________________

As of January 29, 2021,February 3, 2023, our facilities consisted of business centers, which include facilities that contain operations for sales, technical support, administrative, and support functions; manufacturing operations; and research and development centers. For additional information about our facilities, including the location of certain facilities, see “Item 1 — Business — Manufacturing and Materials.”

Because of the interrelation of the products and services offered in each of our segments, we generally do not designate our properties to any segment. With limited exceptions, each property is used at least in part by allboth of our segments, and we retain the flexibility to make future use of each of the properties available to each of the segments. Of our properties as of January 29, 2021, approximately 6.2 million square feet of space that house executive and administrative offices, research and development, sales and marketing functions, and data centers were used solely by our VMware segment.

We believe that our existing properties are suitable and adequate for our current needs, and weneeds. We will continue to assess our facilities requirements considering the increased numberas part of employees who are adopting flexible work arrangements under our Connected Workplace programs. This evolution may result in an overall reduction in square footage of our facilities over the next three fiscal years.normal business operations.

Not applicable.

PART II

Our Class C Common Stock is listed and traded on the New York Stock Exchange under the symbol “DELL.” The Class C Common Stock began trading on the NYSE on a regular-way basis on December 28, 2018.

There is no public market for our Class A Common Stock or Class B Common Stock. No shares of our Class D Common Stock were outstanding as of January 29, 2021.February 3, 2023.

As of March 23, 2021,27, 2023, there were 4,4253,982 holders of record of our Class C Common Stock, eightsix holders of record of our Class A Common Stock, and six holders of record of our Class B Common Stock. The number of record holders does not include individuals or entities that beneficially own shares of any class of our common stock, but whose shares are held of record by a broker, bank, or other nominee.

Since the listingDuring Fiscal 2023, our Board of Directors adopted a dividend policy providing for our Class C Common Stock on the NYSE on December 28, 2018, the Company has not paid or declaredpayment of quarterly cash dividends on its common stock. The Company does not currently intend to pay cash dividends on itsour common stock at a rate of $0.33 per share per fiscal quarter beginning in the foreseeable future. Any future determination to declare cash dividends will be made atfirst quarter of Fiscal 2023. During Fiscal 2023, the discretion ofCompany paid the Company’s board of directors and will depend upon the Company’s results of operations, financial condition and business prospects, limitations on the payment of dividends under the Company’s certificate of incorporation, the terms of its indebtedness and applicable law, and such other factors as the board of directors may deem relevant.following dividends:

DuringOn March 2, 2023, we announced that the fourthBoard of Directors approved a 12% increase in the quarterly dividend rate to a rate of $0.37 per share per fiscal quarter beginning in the first quarter of Fiscal 2021, we issued2024.

The dividend policy and the declaration and payment of each quarterly cash dividend will be subject to employees a totalthe continuing determination by the Board of 12,658 sharesDirectors that the policy and the declaration of dividends thereunder are in the Class C Common Stock for an aggregate purchase pricebest interests of approximately $194 thousand pursuantour stockholders and are in compliance with applicable law. The Board of Directors retains the power to exercises of stock options granted undermodify, suspend, or cancel the Dell Inc. Amendeddividend policy in any manner and Restated 2002 Long-Term Incentive Plan. The foregoing transactions were effected without registration in reliance on the exemption from registration under the Securities Act of 1933 afforded by Rule 701 thereunder as transactions pursuant to compensatory benefit plansat any time that it may deem necessary or contracts relating to compensation as provided under such rule.appropriate.

The following graph compares the cumulative total return on the Company’s Class C Common Stock for the period from December 28, 2018, the date on which the Class C Common Stock began trading on the NYSE, through January 29, 2021,February 3, 2023, with the total return over the same period on the S&P 500 Index and the S&P 500 Systems SoftwareInformation Technology Index. The graph assumes that $100 was invested on December 28, 2018 in the Class C Common Stock and in each of the foregoing indices and assumes reinvestment of dividends, if any. The comparisons in the graph are based on historical data.

Dell Technologies helps organizations and individuals build their digital futurefutures and individuals transform how they work, live, and play. We provide customers with one of the industry’s broadest and most innovative technology and servicessolutions portfolio for the data era, spanning bothincluding traditional infrastructure and emergingextending to multi-cloud technologies. We continue to seamlessly deliverenvironments. Our differentiated and holistic IT solutions benefit our results and enable us to our customers, which has driven significantcapture revenue growth and share gains.as customer spending priorities evolve.

Dell Technologies’ integrated solutions help customers modernize their IT infrastructure, manage and operate in a multi-cloudmulticloud world, address workforce transformation, and provide critical solutions that keep people and organizations connected, which has proven even more important in this current time of disruption caused by the coronavirus pandemic.connected. We are helping customers accelerate their digital transformations to improve and strengthen business and workforce productivity. With our extensive portfolio and our commitment to innovation, we offer secure, integrated solutions that extend from the edge to the core to the cloud, and we are at the forefront of the software-defined and cloud native infrastructure era. As further evidence of our commitment to innovation, in Fiscal 2021 we announced our plan to evolve and expand our IT as-a-Service and cloud offerings through Apex. Apex will provide our customers with greater flexibility to scale IT to meet their evolving business needs and budgets.solutions.

Dell Technologies’ end-to-end portfolio isTechnologies operates globally in approximately 180 countries, supported by a world-class organization with unmatched size and scale. We operate globally in 180 countries across key functional areas, including technology and product development, marketing, sales, financial services, and global services. We have a number of durable competitive advantages that provide a critical foundation for our success. Our go-to-market engine includes a 39,000-person31,000-person direct sales force and a global network of over 200,000approximately 240,000 channel partners. Dell Financial Services and its affiliates (“DFS”) offer customer payment flexibility and enables synergies across the business. DFS funded $9 billion of originations in Fiscal 2021 and maintains a $10 billion global portfolio of high-quality financing receivables. We employ 34,000approximately 35,000 full-time service and support professionals and maintain more than 2,400approximately 2,200 vendor-managed service centers. We manage a world-class supply chain that drives long-term growth and operating efficiencies, with approximately $70 billion in annual procurement expenditures and over 750 parts distribution centers. Together, these elements provide a critical foundation for our success.

We design, develop, manufacture, market, sell, and support a wide range of comprehensive and integrated solutions, products, and services. We are organized into the followingtwo business units, referred to as Infrastructure Solutions Group and Client Solutions Group, which are our reportable segments: Infrastructure Solutions Group; Client Solutions Group; and VMware.segments.

DFS supports our businesses by offering and arranging various financing options and services for our customers primarily in North America, Europe, Australia, and New Zealand.globally. DFS originates, collects, and services customer receivables primarily related to the purchase or use of our product, software, and services solutions. We also arrange financing for some of our customers in various countries where DFS does not currently operate as a captive. DFScaptive entity. We further strengthens ourstrengthen customer

As part of our strategy, we will continue to evaluate opportunities for strategic investments through our venture capital investment arm, Dell Technologies Capital, with a focus on emerging technology areas that are relevant to all segments of our business and that will complement our existing portfolio of solutions. Our investment areas include storage, software-defined networking, management and orchestration, security, machine learning and artificial intelligence, Big Data and analytics, cloud, Internet of Things (“IoT”),edge computing, and software development operations. The technologies or products these companies have under development are typically in the early stages and may never have commercial value, which could result in a loss of a substantial part of our investment in the companies.

In addition to these investments, we also may make disciplined acquisitions targeting businesses that advance our strategic objectives. As of January 29, 2021objectives and January 31, 2020, Dell Technologies held strategic investments of $1.4 billion and $0.9 billion, respectively.accelerate our innovation agenda.

As the fiscal year progressed, we experienced rapidly evolving macroeconomic conditions which impacted the overall demand environment, the availability and globally,cost of components and logistics, and the foreign currency environment. In response to these conditions, we took certain measures intended to mitigate impacts to our operations, profitability, and liquidity while continuing to proactively address our customers’ demands. Such measures included disciplined pricing as well as, beginning in the second fiscal quarter, actions to decrease operating expenses, including travel banslimiting both discretionary spending and, restrictions, shelter-in-place orders, limitationsas announced on February 6, 2023, a decision to reduce our workforce by approximately 5% to align our investments more closely with our previously discussed strategic and closures of non-essential businesses, and social distancing requirements in efforts to slow down and control the spread of the virus.customer priorities.

The healthchange in the macroeconomic environment had the greatest effect on CSG, which was impacted by industry-wide demand declines beginning in the first half of Fiscal 2023 that worsened throughout the remainder of the year. Such dynamics impacted CSG net revenue growth when compared to Fiscal 2022, during which we experienced continued strong demand as a result of global economic recovery. Within ISG, demand for our employees,server offerings began to moderate in the second quarter of Fiscal 2023, with a decline beginning in the third fiscal quarter as customers business partners, and communities remains our primary focus. During Fiscal 2021, we took numerous actionsexercised caution in response to COVID-19, includingthe macroeconomic conditions.

The impact of the macroeconomic environment caused a swift implementationshift in component availability as the year progressed. For the first half of Fiscal 2023, we continued to be affected by industry-wide constraints in the supply of limited-source components, primarily within ISG. These constraints began to diminish during the third quarter of Fiscal 2023, primarily as a result of the aforementioned declines in the overall demand environment as well as improving supply positions. As a result, during Fiscal 2023, we lowered our business continuity plans. Our crisis management team is actively engagedbacklog across both CSG and ISG from previously elevated levels.

In addition to respondimpacts to changesboth supply and demand, our input costs, which include logistics and component costs, were also impacted throughout the fiscal year. Component costs were deflationary for Fiscal 2023. Although logistics costs remained elevated during the first half of Fiscal 2023, we experienced a significant reduction in our environment quickly and effectively, andthese costs during the second half of Fiscal 2023 as we began to ensuresee declining rate costs coupled with a reduction in the need to utilize expedited shipments. We expect that our ongoing response activities are aligned with recommendationslogistics costs will continue to decline as we enter Fiscal 2024.

We expect that the macroeconomic environment will continue to impact our consolidated financial results in Fiscal 2024. We currently anticipate a decline in net revenue for the full fiscal year, notably in the first half of the WHO and the U.S. Centers for Disease Control and Prevention, and with governmental regulations. We are adjusting restrictions previously implemented as new information becomes available, governmental regulations are updated, and vaccines become more widely distributed. Most of our employees were previously equipped with remote work capabilities over the past several years,year, which enabled us to quickly establish a work-from-home posture for the majority of our employees. Further, we implemented pandemic-specific protocols for our essential employees whose jobs require them to be on-site or with customers. We are deploying return-to-site processes in certain regions basedmay put pressure on ongoing assessments of local conditions by our management team.operating margins. We will continue to actively monitor regional conditionsglobal events and utilize remote work practicesmake prudent decisions to ensure the health and safety ofnavigate this environment. We believe our employees, customers, and business partners.durable competitive advantages continue to position us for long-term success.

Our key performance metrics areinclude net revenue, operating income, adjusted EBITDA, and cash flows from operations, which are discussed elsewhere in this management’s discussion and analysis.

In this management’s discussion and analysis, we use supplemental measures of our performance which are derived from our consolidated financial information but which are not presented in our consolidated financial statements prepared in accordance with GAAP. These non-GAAP financial measures include non-GAAP product net revenue; non-GAAP services net revenue; non-GAAP net revenue; non-GAAP product gross margin; non-GAAP services gross margin; non-GAAP gross margin; non-GAAP operating expenses; non-GAAP operating income; non-GAAP net income; earnings before interest and other, net, taxes, depreciation, and amortization (“EBITDA”); and adjusted EBITDA. The non-GAAP financial measures are not meant to be considered as indicators of performance in isolation from or as a substitute for net revenue, gross margin, operating expenses, operating income, or net income from continuing operations prepared in accordance with GAAP, and should be read only in conjunction with financial information presented on a GAAP basis.

We use non-GAAP financial measures to supplement financial information presented on a GAAP basis. Management considers these non-GAAP measures in evaluating our operating trends and performance. Moreover, we believe these non-GAAP financial measures provide our stakeholders with useful and transparent information to help them evaluate our operating results by facilitating an enhanced understanding of our operating performance and enabling them to make more meaningful period to period comparisons. There are limitations to the use of the non-GAAP financial measures presented in this report. Our non-GAAP financial measures may not be comparable to similarly titled measures of other companies. Other companies, including companies in our industry, may calculate non-GAAP financial measures differently than we do, limiting the usefulness of those measures for comparative purposes.

Non-GAAP product net revenue, non-GAAP services net revenue, non-GAAP net revenue, non-GAAP product gross margin, non-GAAP services gross margin, non-GAAP gross margin, non-GAAP operating expenses, non-GAAP operating income, and non-GAAP net income, as defined by us, exclude amortization of intangible assets, the impact of purchase accounting, transaction-related expenses, stock-based compensation expense, other corporate expenses and, for non-GAAP net income, fair value adjustments on equity adjustments and an aggregate adjustment for income taxes. As the excluded items have a material impact on our financial results, our management compensates for this limitation by relying primarily on our GAAP results and using non-GAAP financial measures supplementally or for projections when comparable GAAP financial measures are not available. The non-GAAP financial measures are not meant to be considered as indicators of performance in isolation from or as a substitute for net revenue, gross margin, operating expenses, operating income, or net income prepared in accordance with GAAP, and should be read only in conjunction with financial information presented on a GAAP basis.

Reconciliations of each non-GAAP financial measure to its most directly comparable GAAP financial measure are presented below. We encourage you to review the reconciliations in conjunction with the presentation of the non-GAAP financial measures for each of the periods presented. The discussion below includes information on each of the excluded items as well as our reasons for excluding them from our non-GAAP results. In future fiscal periods, we may exclude such items and may incur income and expenses similar to these excluded items. Accordingly, the exclusion of these items and other similar items in our non-GAAP presentation should not be interpreted as implying that these items are non-recurring, infrequent, or unusual.

The following is a summary of the items excluded from the most comparable GAAP financial measures to calculate our non-GAAP financial measures: