DELL - Earnings call transcript Q1 2021

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Operator

Good afternoon, and welcome to the Fiscal Year 2021 First Quarter Results Conference Call for Dell Technologies Inc. I'd like to inform all participants this call is being recorded at the request of Dell Technologies. This broadcast is the copyrighted property of Dell Technologies Inc. Any rebroadcast of this information in whole or part without the prior written permission of Dell Technologies is prohibited.

Following prepared remarks, we will conduct a question-and-answer session. to Investor call Relations. like Williams, to I'd of Head Instructions] turn over the Rob [Operator Mr. Williams, may you begin.

Rob Williams

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

covered In our our section available now before financial call on press today's tables beginning guidance web deck, on are addition QX, additional edited be materials website. to IR will The with prepared release, and remarks call. and the

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

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

Jeff. Now I'll turn over to it

Jeff Clarke

Rob. Thanks,

in all and working are times. living We extraordinary

what fighting Though the understand globe is wishes signs send at of to sense Technologies am than not with to see the quarter, of it yet settling best the recovery. for convention On of positive more our of it the COVID-XX and a and past in reflect I on is I've and and regards we upfront, core, level, ever, I'm our be Let starting my team every the I'm a time team, crisis. the in I but behalf traveling, customers, years. Dell several scale am finishing normal. deeper staying plays scope technology has connected I a more reinforced we been I'm our will to One, with are me has unity. busier going XX the key visiting on unimaginable pandemic, role is been connected. than the partners, ever pandemic. in global never that more working community. That into humanitarian on and around thoughts have untouched. We of little me the virus its world home as a And the with I remote, suppliers the a yet challenged family had in up catalyst through more a day vaccines important. in members, keeps development front-line, new have than and personal know on essential truths lives. what from the is

three, our our people; two, customers through and our customers; the into one, Over and fourth revolution. our will business. and today differentiated into businesses Dell enabled deliver been broad work of result, future, our Technologies' for industrial portfolio to company. and transformation results us crisis on, capabilities the digital then a us QX, accelerate the through And has As will lastly, be our focus and and

of them to our over to remotely. protecting And new essential our virtual-only supporting jobs and team live or work with successfully on-site customers XXX,XXX and customers our and where moved me and one moved events. our is the weekend, and their global we travel be team one. from of and require we Let communities worldwide with health are families are safety members job work pandemic-specific members, The partners start We members. home to team XX% employees with our they restricted protocols. whose

Next, strategies saw our to leaned small corporations flexibility reestablish customers. Consumers literally to learn-from-home and technology partners their City an scale agility implement businesses who to needs customers Consider of had We flight overnight. deliver continuity quality New business provide where example. to to the on quickly IT were and and multinational globally. forced all across at solutions and services as York work-from-home,

professionals care securing to servers, their technology responders, helped ranging team critical from centralized and and the communication manner city's in with storage VMware, department information support Our and implementation. in swift technology a health PCs first all

their receiving shelter-in-place get the issued at needed governments one orders, docks to was no As technology.

environment and areas this and X% and remains the a crisis. intent through uncertain rates notebooks, interest need with ahead or so so they we PPE as And term the demand with directly the they the deferral. people's one-year to be accelerate the this of actions and On decisions added to We get payment we be and proper to monitors did of productive the access face and hybrid This All business. infrastructure. available in rolled though with dynamics can to also program, And prudent an strategy the liquidity, consume we flexibility place social Demand set unprecedented quarter. $X to And Plus, over to line were cash. saw course customers we which beyond which preserve making of Dell we to up So we technology and drive-throughs cost look billion used distancing now, unchanged. manage financing platform We out Dell IT offerings, equipment scale rapidly to with connected. we usage these homes are shipped our year. Technologies in in-quarter includes in third, our made people XXX-day Technologies our accessories up payment can cloud needed cloud program and

opportunity strength, uncertainty, perform focused no differentially, we environment. are are value Despite across in our stakeholders. integrating long-term unique portfolio creating all gaining of on We the a matter share, innovating a have position to and and for we

move growth and order for me for saw specific first demand, quarter. orders a client growth comments operational on more for Let high notebooks. To commercial few single-digit to the we get double-digit

notebook pressure sequentially. in did For according example, This to-date XX% XX.X% have share growth Dell orders from two commercial XX.X%. for to positive five PCs, customers, unit PCs had which on to primarily some number our year-over-year the commercial at for large put worldwide PC for our Latitude profitability. We growth came QX, XX% vendor family grew calendar highest unit IDC. with to government the top year-over-year And move growth position share. We and in and were only worldwide

solutions of expense did so at in but they spending, the lower resulting some spend demand, shifted remote were and to customers there BCRP, highlights. infrastructure As ISG

high-end, we expect and and up saw to services, gain sciences, flat share strength and mainstream saw down, to share IDC growth unstructured for order appliances results government, While XX% we and revenue QX, roughly share expect month. and health purpose-built performance in a our financial care improved we be xXX external customer in servers we in XX% back-up unit though, expect out come standpoint, in banking storage when server arrays. And QX. next calendar From life to each

direct consumer small We demand business. saw in single-digit also strong solid demand and double-digit very high in

sales most saw medium as we transportation. retail, did quarter and orders demand quickly in by flexible our us. quarter shelter-in-place unmatched over sectors agility, this the These differentiators however, and given consumption advantaged including been lean manufacturing, can opportunities the capabilities, impacted business, and that truly force, progressed for governments. breadth soften drop have scale. with our global the into direct energy our our of We and the demand pivot Throughout including the leadership. For We models online and exist small are various time,

driven were and us by We networks. pivoted take and delltechnologies.com hundreds new visits embrace off in of for customer to for access and learnings home all SD-WAN nimble and VDI stress quarter. work Our interest In apart. And site remote to April, of interactions motion. our offerings PC to in teams solutions thousands successfully corporate with virtual sales had business be e-commerce ranging largely the the virtual quick-start bundles XX% quickly a engagements from sets to services, up

strength challenges orders the flexibility strategies manage Another used production partnerships needs. resiliency, several and years. and We've its our our which to is all enable possible, as logistics different past footprint to as and through quickly to fulfill customers' supply the chain, global scale global over sourcing, many our meet the needed exploring

We continue workforce. to drive remote a innovation and excellence in largely engineering with

game This a now Our and including which These a the introduced scalability customers services our squarely engineers in help customers’ advancements on-premise world. home. And included us executing is Cloud The Xx storage. Dell couple and way world. up the and compute a stack Tanzu, previous of environment Cloud build, arrays. private week, Dell services bring VMware including a decade, Also launched we are pipeline interest. evolution application simplify Google and largest faster Foundation, run on The featured has core place critical and vRealize public step-level across vSAN that is we're storage. Cloud clouds mid-range center releases feedback that few needs our than of innovation combines building. performance This The customers Operations responsive just the strategy. the cloud software. products and we our examples with at market. fantastic. And Xx of is of continue several Cloud, solutions and of our product our software shipping for OneFS for in major transform management us portfolio all solutions seeing that and It's leading to teams infrastructure Technologies a Cloud. Cloud's to updates to Isilon in and analytics past improvement how multi-cloud in our portfolio from Google more the new of months, across changer delivering NSX-T, of customers' is unprecedented Technologies in PowerStore March, to and to were and been VMware delivered enterprises powers are from several the VMware Last the vSphere manage public

I the work signs, from moved This in hopeful response is seeing Kids and phase rapid three we largely home, As including world the are response. new learning Phase to Organizations phases. possible to from to the Phase starts home. have recovery, behind are it X, vaccine. pivot X, normal. us. see from

destination, a can realizing us we rather isn't anywhere, work it's a As are of do society, many anytime. something that

what Technologies supply and we virtual, great We are we into plan of Dell existence, the business insights of do to and conversations glean create. businesses, how to online vast the data performance an to role this new solving Artificial our is differentiation changed a big backdrop, and digital future. then resiliency. win And to an the customer positioned business again do and paramount automated, play intelligent machine uniquely with amount for making meaningful evolving opportunities. now our learning secure remotely have phase, in digital the issues continuity. existence chain QX volumes this success, accelerated customer High intelligence from and from will do third highlights

never our efforts, we've even turning increasingly summarize, when customers with help able been our breadth to customers execute this and to to need trusted emerge our deep us and innovation and So stronger solutions, strength pandemic has to been lot But speed and strategy and of they and upended unprecedented an there lives there's and tremendous ahead. excuse of in There our more for, – heroism partner important, of our our hopeful most. a of team this scale Thanks from with is have challenged also scope, and competitive has as lot be matter everything position. billions to collaboration, weeks. This opportunity is a me, a people's a in pandemic humanity. or incredible changed

Tom turn at a to it financials. for deeper I'll Now over our look

Tom Sweet

points. COVID-XX this our am also quarter first support CSG due was the movement, the and flat basis The continue global and Revenue of partners their created own Brazil FX of customers quarter. $XX.X for pandemic many to They the particularly and environment customers Overall, that strong around X% commercial solutions, but effects our Jeff. battling navigate, during large months Demand mentioned. organizations first personal learn-from-home government along the continuity created China, margin responsibilities. while challenging two in which or headwind work this lower zone, the especially team to $X.X for and managing to quarter, XXX shift performance solutions and frontline and growth year-over-year. a impacting was Thanks, the gross was needs business proud was by billion, billion of of the down with was globe. a strong Gross euro members XX.X% Jeff mix I to margin and to revenue. approximately

travel Given XXX(k) measures our and, freeze, the allowing protect a the to global to decision in are costs, adjust. global actions most environment, we proactively and majority during included the The These contractor took the match. reduction consulting position hiring quarter us to our cost variable, company. recently, and costs suspend quickly of restrictions

Our actions X% down drive and X% year-over-year $X.X cost down rapid billion. helped operating sequentially expenses to

evaluate We $X.X revenue. certain slightly to even transactions income business dollar products of Current managed billion in and quarter. for for to as are as a Loss, of quarter. impacted adjusted costs additional work the or in application impacts in from chain-related Credit moving to necessary. accounting mix the were standard continue impacts the CECL, impacted We strong we pricing. actions was costs receivable by $XXX large home, environment a was government prepared commercial Profitability we Operating from multiple of reserves the also X% the Profitability through was expedite by lower Expected higher to strong down of we X.X% this take approximately new and the as also or for and as recorded components dynamics were and higher mix increased million. demand related Supply

billion, XX Adjusted income $X.X billion our notebooks X% X%. $XX.X Solutions the billion, as up results. of EBITDA from mobile revenue X%, double-digit and Consumer X%. $X.XX, Group trailing for shifted down was delivered order in revenue X% business XX.X% unit growth net was billion was of months. $XX.X consolidated workstations. $X.X supply direct down was Commercial commercial $X.X we and to to including EPS revenue billion, Shifting Our revenue was Client billion, down or $X.X retail. up and

in notebook were XX%, normal The particularly chain while income saw supply million operating Our to or extended learning turning nearly strong consumer and impacts. $XXX revenue. The was a retail down consumer solutions performance. job commercial direct orders lead client profitability strong We levels. mobile orders up for now the through team CSG back did to but was by were government down compared drove demand and was down deflationary working remote more component of are higher and costs XX%. commercial a times, mix $X.X less solutions, for work these of revenue X.X% CSG solid nice revenue demand in customers $X.X ago. billion, X%. billion, unstructured billion, by storage. saw our high-end networking solution PowerMax was in other core double-digit and storage, impacted large X%. growth and and $X.X was year down demand offset VxRail Servers in and a XX%. Storage softness areas ISG of revenue We

or see However, of down was income share to we did $XXX this in million for improved servers ISG gain and operating basis expect mainstream orders X.X% which XX was category. points. revenue, results

quarter it quarter throughout storage for as first the lightest typically The is ISG, year. our historically particularly builds

results, XX% revenue. VMware's service Black revenue and computing, triple-digit grew and stand-alone vSAN subscription which a as strong XX%, XX.X% revenue well on rate. VeloCloud VMware product billion, end up or of offerings a on $XXX AWS, million revenue Our of grew had VMware NSX business unit $X.X had operating quarter, Based of with delivering Cloud strongest income Both user revenue XX%. a performance and growth and Carbon over the from bookings as as

billion $X.XX to from includes with cash sheet structure. in issued of the This and billion by Dell quarter. the cash ended $XX.X $X issued VMware investments. of the We Turning billion and capital and first Technologies quarter our the by balance notes

use $X.XX use the at billion down month, pay in pay the months. due expect Tech the Earlier offerings we As the proceeds August in the Dell this of of announced, XXXX. of VMware coming did is to the from billion level, to debt And down proceeds primary in of $X.XX repayment these debt. note

debt receivables. ended debt is Our by of total majority the debt is to $XX.X $X.X ended core company the balance the backed which quarter the at Core of and at quarter and billion, billion DFS-related billion. high-quality $XX.X debt, nonrecourse excludes

properly evidenced the securitization as asset-backed We are by the capitalized focused customers DFS $X.X support fixed-term billion we on in did ensuring is to our quarter.

capital, free which higher fourth collections normalize a receivable accounts principally cash capital Adjusted related expect P&L coming cash managing million billion from and bonus and flow in very approximately COVID environment. of effectively $XXX challenging inventory, timing $XXX annual by a are coming operations our seasonality had to payout, flow We QX of a to off of of impacted this million, quarters. We to working impact normal use was we in quarter. the working of in strong approximately negative $X.X

Our first XX was On in free impacts. flow adjusted basis, $X.X given seasonality regards generation trailing quarter to our tends cash cash a normal to month be billion. weakest

the share In we call. for QX the approximately repurchase first suspended have million. announced $XXX approximately We shares the on did million program repurchase quarter, X

Our on position of sheet in a and liquidity the undrawn revolver billion $X.X balance capacity draw repaying cash excess strong is after with partial QX.

structure, We capital support are our including growth. our ability comfortable with to DFS

to debt debt $XXX June, have out We the amortization this plus maturity due $XXX worked million of smooth for towers with million approximately only our year.

we and financial current the economic were are reflect company of differentiated that I industry than years just three As in results prior on set broad the we any different and opportunities, that we certainly capabilities than were a within assembled different Today, are model. of I'm have ago a drive slowdowns. attractive we and an future reminded most

traditional demand solutions, a customer view which broad behavior our and we our have of We model. diversification direct of a portfolio allows are software all hybrid across customer to similarly, across cloud multibillion-dollar our given diversification have and which and trends And base, technologies infrastructure, service businesses. broad us

This a volatile as times. We base, service billion a than business software security recurring and strong and a more revenue during characteristics. revenue stable have $XX creates with particularly that's

recurring amortization, revenue, $XX.X deferred service billion deferred billion, Our revenue XX% our models, and year-over-year. as is utility includes $X quarter, year-over-year, which revenue total now approximately up a is up a XX%

aligned value growing over on focused faster than revenue are to creation all term time. long- by than our commitment shareholders and competitors, strong for We faster generating EPS flow cash maximize growing

me the on we're let of year. thinking how touch the about Now rest

in issued direct withdrew demand fiscal previously end-user March, first we did month relationships. strong know, of XXXX given you during in but As quarter last and demand guidance our financial soften and saw we see February model the We the quarter. the

to data been we result, to expected challenging a than and be prior first has decline global revenue a excluding to is to pointing XXXX; quarter. As telecom, typically latest the which environment, X% to with X% The IT expect lower XX%. sequentially QX down seasonally to from X% up years, between be to to X% spending, X% GDP in

committed the to of and While our on this position prudently strong is so it's spending, other are predict to delevering business in we the the a shape difficult our and We and the that resultant remain job ratings. investment-grade recovery impact side on to slowdown achieving IT crisis. of the manage

addition the this business by Our approximately performance. intent may issuance, debt core related in be though QX macro by $X.X the repayment the to fiscal debt associated reduce remains influenced and billion to with XXXX, in

are as of emerge times for long-term for Dell essential world is positioned in looking focus. from and This a strategy data but infrastructure that for technology resiliency, stakeholders. to company reliability is all to Technologies are the Technologies the the close, and unprecedented time and increasingly winning Dell uniquely technology So we future these moving across innovation, our innovating era. this positioned. And the integrating is create forward, consolidation, creating to well are value and

So it Rob back with Q&A. to that, I'll to begin turn

Rob Williams

Tom. Thanks,

many you to participant ask one Let's the Q&A. possible. could you question? We introduce that as Erica, get question each please of to allow as ask first

Operator

question from first Fargo. our Aaron with take Rakers Wells We'll

Aaron Rakers

Yes. Thanks for question. taking the

component forward and space. how of particularly server you're you. pull looks you May kind currently this maybe thinking environment, saw the Thank like demand quickly, activity in and talk and Can around about you pricing thus the environment? what real and pipeline seeing about quarter, in Just characterizing last demand the the far how

Jeff Clarke

we the the side, the business month, referenced and the that earlier. demand during one lastly, the the – minus business. well P&L saw commented then as say quarter, We pull-in the areas demand of of that, Tom that a And is our I our as sequential the color throughout was saw XX% year's side, the was were couple say, at improvement saw, the any financial products, we the environment. saw I performance was server in We same Tom, saw government Aaron, of business the add wouldn't and us about of business, and the earlier, quarter from in performance of I'll we we that from had as mentioned I'll large and or look sciences an strength it impacted they all demand. cost or medium ask server from QX. I But Sure. X%. If From see demand side saw to mainstream and let numbers care the perspective, down third quarter. you'll our a improvement environment, should things. on. is demand and think year's segments Tom in things demand minus space, health the to the services indications, referenced, in that and I – certainly last we an small I answer saw. you for The and you I that our that the then have space throughout some order life last we in

Tom Sweet

of it framework Tom. that. focus. what work-from-home, of more it’s Obviously, I Jeff echo quarter learn-from-home Hey, and would this wouldn't pull-in anything Yes. a I as or characterize was said. the customer

would I as talking overall ex perspective that's coming minus demand add we we said have a comment the from on so Jeff's in points, see softness did quarter. or weakness on demand ISG than a into more was anticipated global also X% that we China. our the there would And is –

to on want you're clear make sure just I So that.

Jeff Clarke

servers… For

Tom Sweet

from but I in sort And a a rational navigating of we've the quarter. yes, look, And – pricing the well. say, but environment job this think than servers, team want The seen to more cost? perspective I'll past comment thought And demand servers. through the For very then, for you what I environment slightly component the team nice was, on competitive. did Jeff, still navigated

Jeff Clarke

Yes. On component QX environment, a saw deflationary. cost we

outlook inflationary it's year. balance an inflationary environment, QX of is for Our think moves and the the to we

Rob Williams

okay. Perfect,

and Just we’ll question. the a mind person, for to reminder, move don’t Erica, next question one each if you

Operator

We'll from take next with question Sacconaghi Toni our Bernstein.

Toni Sacconaghi

thank are wanted far demand follow to you you. linearity Yes, it I May. just planning to the you did what – you What so question. for sounds up have seen like in on And get worse.

business you enterprise, You comments, highlighted that That's with your sounds period. GDP crisis, and interpret should spend. to Or if guess are spending May. the GDP now? you your around going and during much I going IT that worse is down correlated to that one given think then the to more the changes during it outlook that is better? fell about kind your April your linearity highlight is in than IT So revenues spend gets you're that it framework down do be really that on Is XX% particularly of it X% could like suggest down. how GDP. financial I actually you And be better question get around thinking and to XX%. was growth, long-winded before

Tom Sweet

Hey, Toni, Well. it’s Tom.

we And what the I came through perspective a May. we the It's global immune start. tried not to really macro do mean you early is quarter. demand saw me Let give environment. as we on for in to obviously we're what

get QX. back we in weaker the growth, the They to stronger May trends what right positive just it's back to clearly and storage now look, really or server are forecast soft don't forecasting actually, And at I look comment in half of do is this – their year. the then on or the of with So XXXX given it as of demand softening IDC terms in calendar want at quarter. in in forecast. But you point to if in growth where

and So instances, through globe environment. that to – back in they're In coming be just we're navigating our trying some way or framework to through think work-from-home we prudent still the the customers instances. across in other a work, businesses we're are as

around mean, XXXX, point, set think get And diversified given now then it, I our look, about as second crisis perspective are our how we XXXX, your the solutions, environment give I so to different we company a you as broad you maybe? was But on think of the comment I the thought quarter. recurring until comment we to navigate the your want Jeff, from revenue you through streams. demand then, tried give And to the financial guidance of we about through we some do

Jeff Clarke

operate relative in. be at think those that Tom, That thing think share segments that will segments the on environment certainly we're share I whatever we take done to taking business the relative demand QX. QX, we've we that, to We task driving in add is, its how to market One have that hand share, way in the running perform. running is in business the the

Toni Sacconaghi

Okay.

Rob Williams

think next go I the to we’ll Now please. question,

Operator

Daryanani next We'll take Amit question from with our Evercore.

Amit Daryanani

historically? that's your but you, July the think. I for as muted perhaps I the guess, I to XXXX, way about today? historical quarter fiscal maybe specifically, commentary, think X%, think that it you've this it heard of And read guys. Thanks less up, X% way for question up be right being towards still I Tom, putting my said? terms the Do seen and the a number, to do margins talk is XXXX end even And comparable expectation what flow? then margins margins, to cash we you about being how fiscal op is the Is lot right of than more about to versus in should interpret that free what

Tom Sweet

pricing From not the look, going that, So, other We'll rest overall holds right through do of part best happens a I environment quarter. the and would Right mix depend component now, we up perspective, that go to then is is we guidance step the this how the be demand as environment margin think component And is gave of the through relative again, I'm business. we you tell that that as of going costs what going the tell would year view you on see look, the Well. changes. dynamic looks what about part inflationary we the the year. guidance. cost to Tom how we I and – Hey, environment the within we demand you this is our as upon to whether parse the the margin and with just to framework like. the environment expect see now the

we think forward, through as as seasonal given strength ramped so typically that, had margin And impacts of with have has as business those have dynamics, go of our we now, the will right ISG sort QX. go the year, you that that I in typically

got you margin the contemplation that dynamics about think we're at. that So in looking to to

So softer – that do to I other we think expect specifics you historical to get into little I'm see on than mean, how not we it going again, QX than I bit tell a be to norms.

And we're how revenue so business perspective. a that's thinking now P&L right from the about

Rob Williams

Amit. Thanks, right. All

Amit Daryanani

Thank you.

Operator

We’ll Wamsi of Bank with Mohan America. take question from our next

Wamsi Mohan

quarter, totality efforts? has maybe much is of you. realized? think a sort Tom, we thank Can be the much about how And already noted of through around Yes, if saves. bunch initiatives us of flowed cost- size saving any? OpEx help to in And magnitude the how of You your should that you left trajectory? how cost

Tom Sweet

environment – look, members. to the as moves to thoughtful do and about and Yes. our prudent, business customers I think it the The trying the team that making sure demand the our is, we're business; about protect what I we're protect care in way taking to uncertainty relative make while of liquidity, Hey, would our Wamsi. is think

and QX, of all wasn't clearly actions consulting in of And listed reduction hiring global a quarter around so spend items I impact. those but had impact full positive it today that freeze, other the

about were late April. you place As most all things to think – those of put mid into into March, early

EBITDA And expect we What build of that the to make of would OpEx consolidated go through generation sure to you so at we're savings trying level. company you the year. a protect those is the as also

to making going convey stewards that to is the give what or pulling, that I'm impact And be thoughtful OpEx want want levers we liquidity not while to of frame position make to we're overall the and of the I crisis. so while you company the coming properly. cash protect of the properly out we we this position necessary business the make business, sure And that sure also investments

good know we – we decisions, decisions feel available continue these the think have what the levers but I if hard made I the so with and need available other we it. we'll business, appropriate we've And are And look at about – to today.

Jeff Clarke

across is with the to – showcased integration Dell Xth, that have and aligned core and our solutions. those now that which And innovation, storage, consolidate we've on of in: Technologies strategy, is operate and innovation protected coverage; R&D Yes. with PowerStore the things drive launch we the invested our in which that's build-out and May capacity to decisions it is the our differentiated to the businesses build companies and

Rob Williams

All right. Thanks, Wamsi.

Operator

Morgan take Katy Huberty We’ll from our with next question Stanley.

Katy Huberty

cross-selling think do up opened opportunities Jeff, gains that with Dell share supply chain hear even catch the up as you. the saw quarter competitors the own you you the across sustainable how first love any and you backlog clearly And managed their Thank than supply I'd are that disruption? think in better to portfolio. chain peers.

Jeff Clarke

our at we to the speed operate that of quickly. of in; the into supply the ranges saw very scale component companies the question, to really pivoting chain of which capability I and quality, made largest Thanks execution remarks we customers level saw they coined multinational to we to third to our able which could that around saw that decisions partners the provide reinforces assessments We the our think It who representative our the navigate then and of and superior it chain. breadth We can We services second of during end-to-end pivoting supply and the served around flight and base, the made to products. think, this quarter, and difficult facilities supply really quality. globe. one portfolio of companies the were things from need well. well: the across of is Katy. And pivoting level I think capabilities flight in that move all this I we that for us the I company, the Look, quite smaller environment,

in units the gain PC our we'll were through the and demonstrated I in share, QX. to continues think only think into QX performance. that And We we and We mainstream. revenue in OEM and mentioned, in think it's QX I grow as in servers year.

our is for and heart this lots taking of talk transformation we taken well. we've us. performing; of an supply digital it very supply think things our that we've move I way our is The the look about supply again source predictive side; differentiation inside a chain we digital served I logistics analytics us And to automated we chain; and of transparency a the position notion where where our we've planning, that that manufacturing chain differentiated that supply where data that movements have quickly. end-to-end how customers then visibility introduced think and to anticipate our done and across across we've and allow chain our of very a we've to in procurement, made can us at very

sustainable. that's think I

that differentiated. it's think businesses And forward. our of I quite serve I going well believe will all

Rob Williams

Thanks, Katy. right. All

Operator

We'll take Ong with Jeriel from question our Bank. next Deutsche

Jeriel Ong

for you Thanks harp do over. future ask terms trends, letting predict revenue but line have OpEx line, tough future the in to control understand to want I the a me question. I guys it's good that of back Yes. the

sense of your your are For operating down. just trends the sustained year. Thanks. generating where about leverage the for year guys year-on-year. can that OpEx be quarter, latest X% that wondering through was full of you Total it rest is the I'm the expense whether down model and are

Tom Sweet

XXX(k) the generation that within to is think think protecting for is The very suspension, date we that we're it’s P&L relative And we we we the actions do have I related actions that – Tom. control I trends we along obviously there modeling impacts OpEx. we're the about date, today. the can it. in good of know ensuring OpEx – leverage and feel that Jeriel, with ranges. and do decision something what thoughtful scenarios on around that P&L with the to recent are the demand to EBITDA the obviously, being Look, about to match different the Hey taken liquidity and

So the I think there. is leverage

in continue our thinking the very be I And P&L. efficiency demand the the while to about appropriate properly. it, see out the take we're the we'll if and the environment of to business. position protecting we're to how we'll that capabilities customers turns business serving different sure then actions preserving think than We're making

but… know add anything, I if Jeff, So don't you'd

Jeff Clarke

Spot on.

Rob Williams

Thanks, Jeriel.

Operator

from Goldman take with Hall Rod question our Sachs. We’ll next

Rod Hall

I But, the I well Tom, of see to Thanks. into dig into million receivables on from year? at of become allow million a out, $XXX be then composition components? and a is the inventory receivables. wanted you just more saying as thing you're or flow more the as we the little pay the that you accounts all through people structural a change slower specific. called know the dig to one-off? for change bit for that if how that inventory, see Thanks is question. change Or wondering more – you the hi. as did you Yes, to the the on And us? just of could the receivable Can accounting COVID, capital working inventory, that change $XXX cash

Tom Sweet

in. me let let start, Rod, I'll and then jump Tyler also Hey

that working items, really COVID-related and of to of the our that with quite reaching their they situation, in inventory. them the team shut of I capturing, And because a businesses the being this collections working make we frankly, their agencies and in in nice I proactive, unusual to that to did or, home, we job not our where disbursing disburse. of in in a it fact the just quarter. government work-from-home many think And allow did that activity customers, were impact process wanted have out from cycles was the capital On perspective, were out dealing many them down had called been principally sure which we from saw given fact, were

job turns do to we And made progress little our expect the debt pretty of finished hands fact, so I a the unrealistic dynamics as think it good the it as we of that we'll dynamic, with slower that around that's receivable $XXX way structural. on saying long-winded what May. I a we into of thought quarter. won't. impact time we don't quarter. to a that think we I into of we I bad saw COVID. continue look significant bit our did like in think sort I don't I be But but see to good I million payment. turn think in And ended a putting a aging to that of it'd some we expect be mean, do creep And expect

that in we'll it's supply more satisfied side. our structural, the on opinion, And on was receivables the we available my inventory So customers' make that for it side, not way – around having then to work demand, our sure and work about the go we we sense really second that that. address through in maybe generation you and broader Rod's Tyler, quarter. as asking the cash maybe that the question flow of think through how the And cash – then, could

Tyler Johnson

look, it about capital it mean, you call are of Tom out $X.X billion think our we as the terms So year working from good I that to the important impact, right? with said thought still cash. was in Yes. I look, the and started a news is, I down, we're think paying down, perspective, focused thinking excess cash that we pay on the debt

more back. you capital full year will year. If versus quarter focus we'll get have in cash, on working just a later cash come proceeds that of RSA. in we The Obviously, the benefit

feel where we you So we and then flow debt, pay necessary over that down at left generation to good if free look are. cash what's the

calling point of So really I think was out. really that main that the

Tom Sweet

QX, is or typically build again quarter, through sequentially revenues some generally QX of that which as remember saw way historically go our we we the to P&L to Rod, the cash-generation then right? the And the cash been that lowest – payouts quarter. QX seasonally has we year. this it given bonus, And down Yes. And related

about And you so from need that some cash think there's as dynamics perspective. generation seasonality well to a

Tyler Johnson

maybe one at you're about And the compare. final point, looking just as thinking year-over-year

pretty QX a had saw into working working and capital improvements, dramatic about reminder, going in as QX last benefit we we last Just from capital year. as year. a talked were We

seeing we're obviously, of this year. the bit So a opposite little

So the impacts definitely that year-over-year compare.

Rod Hall

Great.

you. thank Okay,

Tyler Johnson

Rod. thanks Yes,

Operator

next from our Cross Shannon with take Research. question Cross We'll

Shannon Cross

customer Jeff, Thank think how much. feedback, now very talk give you you it's you you. PowerStore a initial out, about share to anything us? can you the going bit since can through, Thank is roll opportunity,

Jeff Clarke

touted hardware, it's relative where the for out new Thanks rapidly. setting reception pipeline basis. about The some stands reviews, the as We've the benchmark is product The PowerStore, it. a being has that high – assessments in our mind Shannon. growing for talk the really opportunity my great in Sure. pretty The of development one seen industry. expectations. is the is storage excited on important data We're some about to exceeded most

already over in on storage of started May our turned XX% specialists we in have our launched April, pipeline. started had formally We of recall, storage specialists have we shipping PowerStore. sales the that April. – have for just on X, already pipeline We And and force XX%

my architecture from marketplace. that time said the heard efficiency. this you've differentiated. three the that We've has it's excited container-based scalability in that storage mind, and this a demand architecture. we very we're our a optimizes built. rest anything it that It again, that our like seeing me indicates with performance, really in features, talk of data-centric main this it sessions, is isn't marketplace. what the system clearly built about me, We customers time the For it differentiates from There We're product have and in have around

product, And we've to and products. is the have differentiation this very it's what's performance or the we flexible Xx a architecture biggest ultimate array rate. us, of the engine then range form For just similar We've got in It PowerMax X:X marketplace scale the makes what to our it of and lower up, and on today. data-to-reduction intelligence, the on while we out, really it in, automation Xx done into in does going previous and scale AI that so than drive guaranteeing this lastly, run an think, flexibility IOPS to which the adaptability applications latency built really leader the the itself.

it have, entire with our simplified, we offer wrap take wrap migration; you and have that or You capture end-to-end the portfolio put future-proof you around now that portfolio around modernized. the broad around we that, – the that the seamless upgrade, anytime

position Next powering of second-to-none another in Unstructured.NEXT, with then of storage the It delivered. we've external Technology various the add in the Demand, couple On done a minutes, has Dell ability work the portfolio and the models. have month, service – be up take a consumption to will marketplace. as we if a of I you last And what this to

to way consume modern in products and very very, a IT have We marketplace. digest the best with the very

prospects regain excited the to we're share. So midrange pretty about

Rob Williams

Jeff. next Shannon. thanks right, All Thanks Erica, question?

Operator

take Kvaal Nomura. We’ll with our next question from Jeff

Jeff Kvaal

your certainly in headed Yes, where very I gentlemen. about much, may caution thank offering quantitative quarter. be the appreciate makes about you view much business upcoming That sense.

and you more what the April. expect February through us compare I us think help another specifically trajectory to understand be then guide way business of and we might that a to bit to might help the with March little from and maybe

anything able us certainly you're the previously grateful. you that be with to about would softness characterized, share I If

Tom Sweet

Tom. it's Jeff, Hey,

various the principally That's around home. and the do our business. I of quarters shut is the to and companies So where, where America decisions four and saw demand from early three look, accelerated, week tell globe transparent hit or the the to most quarter in of think generally to we businesses us weeks that our are like a CSG governments and normal accelerated started in on work environment, we Europe saw once appropriate, the we we COVID trying for North two then obviously, down acceleration the made you as in as February, March crisis be, literally sort period would and last of and

those was in from – generally from I'll month surge there of orders, March, demand learning, significant pretty fulfilling a work-from-home that dynamics. So learn say of fulfilling that, distance

to the quite softened infrastructure spend, work-from-home operating April. As where were a CSG tends we April within little And continued how where, But to ramp a get frankly, what through be saw we with And typical saw up quite sort norms. was April. focus stepped do it quarter bit optimize that the ramp will bit a environment, from was, we and we It linearity then not into just companies in that trying did you people and in environment. of again, historical on that initial seasonality surge then in what April, the a got surge to there's at but continue.

so those And we are went we dynamics as sort the the through of quarter. saw

visibility think, the that's sequentials, back the that perspective, or you And to to are we from look QX, how as don't into you it looks at year. going about of don't revenue about you want and our to what as So thoughtful think to normal bit as the be a historical think our We QX a today have right? about comment hold. you And we that, I are our is environment add through prudently. that's that like And the sequentials we'll half of just it's directed run know – sort you'd think demand to our business we that into But comments highlighted. Jeff, quarter so we to guidance today if go just to don't on demand believe you. and anything at continue I the the do business the we seasonality we profile we great of

Jeff Clarke

still movement in occurring, this to We term, see through is a see I near What fact, crisis. after hit but the hybrid in Tom. think to accelerate through accelerating all continuing extend multi-cloud after the we points, digital Not you crisis. high this and would and transformation

fourth learning, see the to outcomes the industrial of automation, the path continue more revolution more that. amount we intelligence, artificial a this a for data immense coming more the of where We autonomous as more see need and towards machine result

will is speak work, I to again, X.X there'll health home the in create the care do how think how don't We do changed the are provided that, units. people will how work. way future. tremendous of to about the know think in what just a demand fundamentally billion be working you What how of next it's people going educate be the where can't to in be as think forward. how I from result work work know. medicine this people today do be of will or we We where youth We PC quarter, in changing changes And we people I provided think there's Tom base opportunity. have mentioned, be in going opportunity has installed that a a world going our

half any very Tom or a long-term. units Zoom well. or all session roughly well high those What said Teams are need have of You bode spot-on. quality. Skype that running in time technology a a characteristics Those of of near-term bode the But for technology, of incapable the opportunities about the was

Rob Williams

All question. right, thanks Jeff. one Erica, last

Operator

final from Citigroup. with Jim We'll take our question Suva

Jim Suva

fitting $X.X $X.X of billion Can kind down upon but mentioned Hey, guy, the pay program not in. you sounds buyback. about it hesitancy of then you much, get goal billion, you you're the the you'd markets seems behind just understand back capital like looking and us the or the it, the but investment the to rating removed it overall, is about, at changed, are program? is your just It like metrics overall or suspended. Thank then isn't turn debt suspended you. stock for timing? depend Can talk or handsome being stock joking. to the on thanks variables you've And now me guy laid With looking capital most maybe I’m the said, guys what it that that smartest I’m stock so but there buyback deployment or out, returns? some buyback features the help

Tom Sweet

wanting come and There capital Tom, how to around we're the imagine, how We uncertainty on But might and changed. we you some has again, don't uncertainty terms the to make the you're jump a we to we're We our through focus It's us going capital we hearing it's hey, the buyback. perspective. Tyler to Obviously, in as have navigate for given the nothing did really sure to decision let the in a and our are thinking liquidity, source. our you march have remainder investment look, that quarters. we intention business has think can Jim, I to structure prudent our as going Look, framework, about Hey, on it to thought changed. as principal demand the and or back we liquidity that's But just the was dependency committed year, where various thoughtful. to that I But as suspend environment debt we're from and performs trying look, position given We of share we – coming make we our that pay preserved in. of the still to generation. of some hasn't grade changed to business down use usage focus Jim, we through And the to how I'll where say, back want they talked, grade. cash of billion. capital is investment job the be being but investment rating decision. – $X.X put are agencies. in the grade And sort committed be and anything

Tyler Johnson

said business ability add hesitancy have to how this not Yes. conversations commitment, sure pay the than quarters. evolves over see other feel about I the and $X.X to billion. rating the I of to have as with kind coming there's more point, We terms I our no mean, the those just I the we look, agencies. down obviously in have continue But I'm good of earlier, at to

Tom Sweet

thinking to of work inputs year. RSA Tyler, the – the framework – point, we'll us call, for some earlier this outlined – remember, in with we'll we cash. of at generation billion how the seems I and have other looks $X.X Jim, realistic were towards and the the the to sort sale mean, about cash Yes. and that's just of

Rob Williams

All us. for question, right. Hey, joining thanks, the everyone and Thanks thanks, Jim. for

events Jeff – be participating our segments leaders XX:XX mid-month We've will the Just Time. the Bank be frame. also doing Technology and of keynote participating in he in next our time throughout of our Michael business Daylight a will and virtually Central reminder, a various quick this also of business Tom events segments the month. of got We've week, in got solution in later at June and Conference America

connecting all you So look of number the of in frame. throughout with forward Thanks we virtually June activities time again. to a

Operator

conference We concludes call. This today's your participation. appreciate

now may disconnect. You

Dell (DELL) 28 May 202021 Q1 Earnings call transcript