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Dell Technologies (NYSE: DELL) announces financial results for its fiscal 2024 second quarter. Revenue was$22.9 billion, down 13% year-over-year and up 10% sequentially. The company generated operating income of$1.2 billion and non-GAAP operating income of$2 billion, down 8% and up 1% year-over-year, respectively. Diluted earnings per share was$0.63, and non-GAAP diluted earnings per share was$1.74, down 7% and up 4% year-over-year, respectively. Cash flow from operations for the second quarter was$3.2 billion, driven by working capital improvements, sequential growth and profitability. The company has generated$8.1 billion of cash flow from operations throughout the last 12 months.
Dell ended the quarter with remaining performance obligations of$39 billion, recurring revenue of$5.6 billion, up 8% year-over-year, and deferred revenue of$30.3 billion, up 8% year-over-year, primarily due to increases in service and software maintenance agreements. Cash and investments were$9.9 billion, and the company returned$525 million to shareholders in the second quarter through share repurchases and dividends.
"Our Q2 performance underscores the power of our model to generate cash in a sequential growth environment," said Yvonne McGill, chief financial officer, Dell Technologies. "Revenue grew 10% sequentially to$22.9 billion, with strong cash flow from operations of$3.2 billion in Q2 and$8.1 billion over the last 12 months. We continue to deliver value to shareholders and have flexibility to increase our return of capital going forward."
Second Quarter Fiscal 2024 Financial Results
| Three Months Ended |
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| Six Months Ended |
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| August 4, 2023 |
| July 29, 2022 |
| Change |
| August 4, 2023 |
| July 29, 2022 |
| Change |
| (in millions, except per share amounts and percentages; unaudited) | ||||||||||
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Total net revenue | $22,934 |
| $26,425 |
| (13)% |
| $43,856 |
| $52,541 |
| (17)% |
Operating income | $1,165 |
| $1,270 |
| (8)% |
| $2,234 |
| $2,820 |
| (21)% |
Net income | $455 |
| $506 |
| (10)% |
| $1,033 |
| $1,575 |
| (34)% |
Earnings per share - diluted | $0.63 |
| $0.68 |
| (7)% |
| $1.42 |
| $2.06 |
| (31)% |
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Non-GAAP net revenue | $22,934 |
| $26,425 |
| (13)% |
| $43,856 |
| $52,541 |
| (17)% |
Non-GAAP operating income | $1,977 |
| $1,952 |
| 1% |
| $3,575 |
| $4,087 |
| (13)% |
Non-GAAP net income | $1,283 |
| $1,266 |
| 1% |
| $2,246 |
| $2,700 |
| (17)% |
Adjusted EBITDA | $2,595 |
| $2,449 |
| 6% |
| $4,799 |
| $5,058 |
| (5)% |
Non-GAAP earnings per share - diluted | $1.74 |
| $1.68 |
| 4% |
| $3.05 |
| $3.52 |
| (13)% |
Information about Dell Technologies' use of non-GAAP financial information is provided under "Non-GAAP Financial Measures" below. All comparisons in this press release are year-over-year unless otherwise noted.
Infrastructure Solutions Groupdelivered second quarter revenue of$8.5 billion, down 11% year-over-year and up 11% sequentially. Storage revenue was$4.2 billion, with continued demand growth in PowerStore, the company's leading midrange storage array, and PowerFlex, the company's software-defined storage. PowerFlex has now grown eight consecutive quarters with second quarter demand more than doubling year-over-year. Servers and networking revenue was$4.3 billion, with continued demand growth in AI-optimized servers. Operating income was$1 billion, approximately 12.4% of Infrastructure Solutions Group revenue.
Client Solutions Groupdelivered second quarter revenue of$12.9 billion, down 16% year-over-year and up 8% sequentially. Commercial client revenue was$10.6 billion, with demand growth in workstations, which help organizations run complex AI workloads locally. Consumer revenue was$2.4 billion. Operating income was$969 million, or approximately 7.5% of Client Solutions Group revenue.
"With a better demand environment and strong execution, we delivered extraordinary Q2 results," said Jeff Clarke, vice chairman and chief operating officer, Dell Technologies. "We continue to focus on the most profitable segments of the market where we have a leading position. Demand for our proprietary software-defined storage solution has now grown eight consecutive quarters. Our client solutions group business was up 8% sequentially with strong attach rates. And AI is already showing it's a long-term tailwind, with continued demand growth across our portfolio."
Dell expanded on its May announcement of Project Helix and introducedDell Generative AI Solutions, which spans IT infrastructure, PCs and professional services to simplify the adoption of full-stack generative AI with large language models on premises.
Operating Segments Results
| Three Months Ended |
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| Six Months Ended |
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| August 4, 2023 |
| July 29, 2022 |
| Change |
| August 4, 2023 |
| July 29, 2022 |
| Change |
| (in millions, except percentages; unaudited) | ||||||||||
Infrastructure Solutions Group (ISG): |
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Net revenue: |
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Servers and networking | $4,274 |
| $5,209 |
| (18)% |
| $8,111 |
| $10,257 |
| (21)% |
Storage | 4,187 |
| 4,327 |
| (3)% |
| 7,943 |
| 8,564 |
| (7)% |
Total ISG net revenue | $8,461 |
| $9,536 |
| (11)% |
| $16,054 |
| $18,821 |
| (15)% |
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Operating Income: |
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ISG operating income | $1,049 |
| $1,046 |
| -% |
| $1,789 |
| $2,128 |
| (16)% |
% of ISG net revenue | 12.4 % |
| 11.0 % |
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| 11.1 % |
| 11.3 % |
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% of total reportable segment operating income | 52 % |
| 52 % |
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| 49 % |
| 50 % |
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Client Solutions Group (CSG): |
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Net revenue: |
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Commercial | $10,554 |
| $12,141 | <
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