Slide 1: 2Q FY'19 Performance Review
2Q FY’19 PERFORMANCE REVIEW September 6, 2018
Slide 2: Disclaimer
DISCLAIMER Non-GAAP Financial Measures This presentation includes information about non-GAAP revenue, non-GAAP gross margin, non-GAAP operating expenses, non-GAAP operating income, non-GAAP net income, EBITDA, and Adjusted EBITDA (collectively the “non-GAAP financial measures”), which are not measur
Slide 3: Highlights 2Q FY'19
HIGHLIGHTS 2Q FY’19 TO P L I N E V E L O C IT Y 1 Double-digit revenue growth for all three of our reportable business segments – ISG, CSG and VMware C AS H F L O W 2 Strong cash flow from operations of $2.6B driven by business momentum and working capital discipline D E B T PAY D O W N 3 To date, w
Slide 4: Consolidated GAAP Results
CONSOLIDATED GAAP RESULTS1 2Q FY’19 $ in millions 2Q’18 3Q’18 4Q’18 1Q’19 2Q’19 Y/Y Q/Q • Strong quarter of top-line velocity with momentum in server, client and VMware as Revenue 19,521 19,556 21,963 21,356 22,942 18% 7% well as positive progress in storage Gross Margin 4,968 5,220 5,892 5,878 6,12
Slide 5: Consolidated Non-GAAP Results
CONSOLIDATED NON-GAAP RESULTS1 2Q FY’19 $ in millions 2Q’18 3Q’18 4Q’18 1Q’19 2Q’19 Y/Y Q/Q • Non-GAAP revenue growth of 16% Y/Y was Revenue 19,856 19,851 22,247 21,543 23,122 16% 7% driven primarily by double-digit growth in servers, storage, commercial and consumer client, and VMware Gross Margin
Slide 6: Cash Flow and Adjusted EBITDA
CASH FLOW AND ADJUSTED EBITDA 2Q FY’19 $ in billions 8.5 Fiscal quarter 7.7 TTM 6.8 • Strong cash flow from operations of CASH FLOW FROM $2.6B, driven primarily by business momentum and working capital OPERATIONS 3.1 discipline 2.6 $2.6B 1.8 1.6 1.2 • Trailing twelve months of cash flow from + 45% Y
Slide 7: Capital Structure
CAPITAL STRUCTURE1 2Q FY’19 $ in billions EMC Close 2Q’18 3Q’18 4Q’18 1Q’19 2Q’19 • Cash and investments balance was $21.5B Cash & Investments 15.5 15.2 18.0 20.3 21.7 21.5 • During Q2, we re-paid $2.5B of a legacy EMC Cash & Investments (Excluding Unrestricted Subsidiaries) 6.8 6.0 6.1 8.3 8.1 7.2
Slide 8: Dell Financial Services
DELL FINANCIAL SERVICES 2Q FY’19 $ in billions Fiscal quarter TTM 6.8 7.1 1 5.9 6.3 ORIGINATIONS 5.4 • DFS had another strong quarter as customers continue to benefit from the $1.9B 1.9 1.7 1.9 flexibility it provides through a variety of 1.6 1.6 + 18% Y/Y financing solutions, including flexible con
Slide 9: Results by Business
RESULTS BY BUSINESS 2Q FY’19 Business Segment1 Revenue Mix Operating Income Mix Revenue by Quarter $ in millions 8,954 8,667 9,227 7,467 7,535 $9.2B $1.0B ISG + 24% Y/Y 41% 46% 11.0% of revenue 2Q’18 3Q’18 4Q’18 1Q’19 2Q’19 + 6% Q/Q Y/Y Growth2 +25% +24% 9,866 9,829 10,475 10,271 11,128 $11.1B $425M
Slide 10: Infrastructure Solutions Group 2Q FY'19 Financial Results
INFRASTRUCTURE SOLUTIONS GROUP 2Q FY’19 FINANCIAL RESULTS $ in millions 9,227 8,954 8,667 7,467 7,535 • ISG revenue was a record $9.2B, up 24% Y/Y, driven by double-digit growth REVENUE in both Storage and Servers and Networking $9.2B + 24% Y/Y • Storage revenue of $4.2B was up 13% + 6% Q/Q 2Q’18 3Q
Slide 11: Infrastructure Solutions Group Performance & Product Highlights
INFRASTRUCTURE SOLUTIONS GROUP 2Q FY’19 PERFORMANCE & PRODUCT HIGHLIGHTS #1 STORAGE SHARE1 – Dell EMC continued its commitment to investment and • In storage, we expect we will again outperform the innovation in its midrange storage solutions, announcing major software operating system industry and
Slide 12: Client Solutions Group 2Q FY'19 Financial Results
CLIENT SOLUTIONS GROUP 2Q FY’19 FINANCIAL RESULTS $ in millions 10,475 11,128 9,866 9,829 10,271 • CSG revenue grew on double-digit REVENUE growth across both Commercial and Consumer $11.1B + 13% Y/Y • Record Commercial revenue of $8.1B, up 13% Y/Y due to strong growth in + 8% Q/Q 2Q’18 3Q’18 4Q’18
Slide 13: Client Solutions Group Performance & Product Highlights
CLIENT SOLUTIONS GROUP 2Q FY’19 PERFORMANCE & PRODUCT HIGHLIGHTS #1 WORKSTATION SHARE2 – Dell announced the world’s most powerful 1U rack • In calendar Q2, we gained 110 bps of worldwide workstation and new tower workstations designed for companies of all sizes and budgets to access powerful, afford
Slide 14: VMware 2Q FY'19 Financial Results
VMWARE 2Q FY’19 FINANCIAL RESULTS $ in millions • VMware segment had another strong REVENUE 2,259 2,194 quarter, delivering $2.2B of revenue, which was up 11% Y/Y 2,028 1,984 $2.2B 1,933 • VMware segment operating income was + 11% Y/Y $736M, or 33.5% of revenue + 8% Q/Q • Based on VMware’s standalon
Slide 15: VMware Performance & Product Highlights
VMWARE 2Q FY’19 PERFORMANCE & PRODUCT HIGHLIGHTS VMWARE CLOUD – At VMworld, Amazon Web Services and VMware announced Based on VMware’s standalone results1: Amazon Relational Database Service on VMware; the service will make it easy for • Total revenue, plus the sequential change in total customers t
Slide 16: Other Businesses 2Q FY'19 Financial Results
OTHER BUSINESSES1 2Q FY’19 FINANCIAL RESULTS PIVOTAL2 – Provides a leading cloud-native platform that makes software development and IT operations a strategic advantage for customers; the company reports standalone Q2 FY’19 results on September 12, 2018 REVENUE $574M SECUREWORKS3 – Reported standalo
Slide 17: Our Vision and Strategy
O U R V I S I O N To become the essential infrastructure company – from the edge to the core to the cloud – not only for today’s applications, but for the cloud-native world we’re entering. O U R S T R AT E G Y Lead the transformation of business through Digital, IT, Workforce and Security transform
Slide 18: Dell Technologies
Slide 19: Appendix A: Debt Summary
APPENDIX A DEBT SUMMARY 19
Slide 20: Debt Summary
DEBT SUMMARY1 As of EMC 6 $ in billions 2Q’18 3Q’18 4Q’18 1Q’19 2Q’19 As of Today Close Revolver 2.0 — — —Term Loan A 9.4 5.7 5.9 5.6 5.5 5.5 4.9 Term Loan B 5.0 5.5 5.0 5.0 5.0 5.0 5.0 Investment Grade Notes 20.0 20.0 20.0 20.0 20.0 20.0 20.0 DFS Allocated Debt (1.0) (1.8) (1.7) (1.9) (1.4) (1.6) (
Slide 21: Appendix B: Supplemental Non-GAAP Measures
APPENDIX B SUPPLEMENTAL NON-GAAP MEASURES 21
Slide 22: Supplemental Non-GAAP Measures
SUPPLEMENTAL NON-GAAP MEASURES1 $ in millions 2Q’18 3Q’18 4Q’18 1Q’19 2Q’19 Consolidated GAAP net loss (739) (851) (133) (538) (461) Adjustments: Interest and other, net 545 682 554 470 455 Income tax provision (benefit) (471) (241) (490) (85) (7) Depreciation and amortization 2,142 2,137 2,143 1,91
Slide 23: Supplemental Non-GAAP Measures
SUPPLEMENTAL NON-GAAP MEASURES1 $ in millions 2Q’18 3Q’18 4Q’18 1Q’19 2Q’19 Consolidated GAAP net loss (739) (851) (133) (538) (461) Non-GAAP Adjustments: Amortization of intangibles 1,740 1,734 1,730 1,522 1,526 2 Impact of purchase accounting 406 366 351 222 215 Transaction costs3 138 86 87 166 10
Slide 24: Supplemental Non-GAAP Measures
SUPPLEMENTAL NON-GAAP MEASURES1 $ in millions 2Q’18 3Q’18 4Q’18 1Q’19 2Q’19 Consolidated GAAP revenue 19,521 19,556 21,963 21,356 22,942 Non-GAAP Adjustments: Impact of purchase accounting2 335 295 284 187 180 Non-GAAP revenue 19,856 19,851 22,247 21,543 23,122 1 GAAP results will include substantia
Slide 25: Supplemental Non-GAAP Measures
SUPPLEMENTAL NON-GAAP MEASURES1 $ in millions 2Q’18 3Q’18 4Q’18 1Q’19 2Q’19 Consolidated GAAP gross margin 4,968 5,220 5,892 5,878 6,123 Non-GAAP Adjustments: Amortization of intangibles 920 914 910 710 718 Impact of purchase accounting 2 348 307 292 193 185 Transaction costs 3 10 5 2 116 21 Other c
Slide 26: Supplemental Non-GAAP Measures
SUPPLEMENTAL NON-GAAP MEASURES1 $ in millions 2Q’18 3Q’18 4Q’18 1Q’19 2Q’19 Consolidated GAAP operating expenses 5,633 5,630 5,961 6,031 6,136 Non-GAAP Adjustments: Amortization of intangibles (820) (820) (820) (812) (808) Impact of purchase accounting 2 (58) (59) (59) (29) (30) Transaction costs 3
Slide 27: Supplemental Non-GAAP Measures
SUPPLEMENTAL NON-GAAP MEASURES1 $ in millions 2Q’18 3Q’18 4Q’18 1Q’19 2Q’19 Consolidated GAAP operating income (loss) (665) (410) (69) (153) (13) Non-GAAP Adjustments: Amortization of intangibles 1,740 1,734 1,730 1,522 1,526 Impact of purchase accounting 2 406 366 351 222 215 Transaction costs 3 13
Slide 28: Appendix C: ASC Recast P&L Summary
APPENDIX C ASC 606 RECAST P&L SUMMARY 28
Slide 29: Recast GAAP P&L Summary
RECAST GAAP P&L SUMMARY $ in millions FY’17 1Q’18 2Q’18 3Q’18 4Q’18 FY’18 1Q’19 2Q’19 Revenue 62,164 18,000 19,521 19,556 21,963 79,040 21,356 22,942 Products 51,057 13,634 15,102 15,120 17,395 61,251 16,671 18,149 Services 11,107 4,366 4,419 4,436 4,568 17,789 4,685 4,793 Cost of Revenue 48,515 13,
Slide 30: Recast Non-GAAP P&L Summary
RECAST NON-GAAP P&L SUMMARY $ in millions FY’17 1Q’18 2Q’18 3Q’18 4Q’18 FY’18 1Q’19 2Q’19 Revenue 63,316 18,355 19,856 19,851 22,247 80,309 21,543 23,122 Products 51,357 13,689 15,152 15,153 17,427 61,421 16,688 18,167 Services 11,959 4,666 4,704 4,698 4,820 18,888 4,855 4,955 Cost of Revenue 45,835
Slide 31: Recast Summary by Business Unit
RECAST SUMMARY BY BUSINESS UNIT $ in millions FY’17 1Q’18 2Q’18 3Q’18 4Q’18 FY’18 1Q’19 2Q’19 Revenue CSG 36,509 9,048 9,866 9,829 10,475 39,218 10,271 11,128 ISG 22,070 6,961 7,467 7,535 8,954 30,917 8,667 9,227 VMw are 3,543 1,818 1,984 1,933 2,259 7,994 2,028 2,194 Reportable Segment Net Revenue
Slide 32: Important Notices
IMPORTANT NOTICES No Offer or Solicitation This communication does not constitute an offer to sell or a solicitation of an offer to sell or a solicitation of an offer to buy any securities or a solicitation of any vote or approval, nor shall there be any sale of securities in any jurisdiction in whi
Slide 33: Important Notices Continued
IMPORTANT NOTICES CONTINUED Participants in the Solicitation Dell Technologies and its directors, executive officers and other members of its management and employees may be deemed to be participants in the solicitation of proxies from its stockholders in favor of the proposed merger and the other t