Slide 1: The Essential and Trusted Technology Partner Leading the Way to Digital Transformation
Filed by Dell Technologies Inc. Pursuant to Rule 425 under the Securities Act of 1933 and deemed filed pursuant to Rule 14a-12 of the Securities Exchange Act of 1934 Subject Company: Dell Technologies Inc. (Commission File No. 001-37867) The Essential and Trusted Technology Partner Leading the Way t
Slide 2: 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 3: Important Notices (Cont'd)
IMPORTANT NOTICES (CONT’D) Participants in the Solicitation Dell Technologies and its directors, executive officers and other members of its management and employees, and Silver Lake Technology Management, L.L.C. and its managing partners and employees, may be deemed to be participants in the solici
Slide 4: Today's Speakers
TODAY’S SPEAKERS Tom Sweet Jeff Clarke Chief Financial Officer Vice Chairman, Products & Operations Tyler Johnson Robert Williams Senior Vice President Senior Vice President & Treasurer Investor Relations 4 4 TODAY’S SPEAKERS Tom Sweet Jeff Clarke Chief Financial Officer Vice Chairman, Products & Op
Slide 5: Discussion Topics
DISCUSSION TOPICS TRANSACTION OVERVIEW COMPANY OVERVIEW BUSINESS UNITS FINANCIAL HIGHLIGHTS TRANSACTION SUMMARY 5 5 DISCUSSION TOPICS TRANSACTION OVERVIEW COMPANY OVERVIEW BUSINESS UNITS FINANCIAL HIGHLIGHTS TRANSACTION SUMMARY 5 5
Slide 6: Transaction Overview
TRANSACTION OVERVIEW 6 6 TRANSACTION OVERVIEW 6 6
Slide 7: Transaction Overview
TRANSACTION OVERVIEW n For each Class V share, existing stockholders can elect to receive: ● 1.3665 shares of Dell Technologies Class C common stock, or ● $109 in cash per DVMT share (~29% premium to the Class V share closing price prior to announcement) Class V Stockholder ● Final consideration mix
Slide 8: Company Highlights
COMPANY HIGHLIGHTS 8 8 COMPANY HIGHLIGHTS 8 8
Slide 9: A Digital Revolution
A DIGITAL REVOLUTION The explosion of data and computing power is driving a new wave of IT spend 1 2 3 DEVICES DATA IT SPEND 180 4% 160 CAGR 3.5 IoT 1,000,000 3.4 140 Mobile 3.2 120 10,000 3.1 100 PC 100 80 60 Mainframe 1 40 20 0 0 1985 2011 2020+ 2018 2019 2020 2021 1 2 Market Source: Morgan Stanle
Slide 10: Unmatched Portfolio of Solutions
UNMATCHED PORTFOLIO OF SOLUTIONS The most complete portfolio of technology solutions: Software, Hardware and Services Boomi Cloud Native SW Multi-cloud Server, Client, Software Software Defined Managed Security Development Management Storage, HCI & Peripherals Data Center Services DIGITAL IT WORKFOR
Slide 11: Dell Technologies in Numbers
DELL TECHNOLOGIES IN NUMBERS Unmatched scale and breadth of IT solutions $ $ $ $ 86.8B 10.0B 8.5B+ 12.8B+ Non-GAAP Revenue (TTM) Adjusted EBITDA (TTM) Cash Flow from R&D Invested over 1 2 (16% YoY growth in Q2 FY19) (11.5% of Non-GAAP Operations (TTM) Past 3 Fiscal Years 1 Revenue) # 1 99% 40k+ 85%
Slide 12: Company Highlights
COMPANY HIGHLIGHTS Dramatic transformation since going private INTEGRATED, END -TO-END TECHNOLOGY PROVIDER AT SCALE 1 COMPLEMENTARY PORTFOLIO OF LEADING SOLUTIONS 2 3 BEST-IN-CLASS GO -TO-MARKET MODEL 4 DRIVING OUTPERFORMANCE VS. MARKET SUPERIOR FINANCIAL MODEL 5 W ORLD-CLASS MANAGEMENT TEAM 6 12 12
Slide 13: Integrated, End-to-End Technology Provider at Scale
1 | INTEGRATED, END-TO-END TECHNOLOGY PROVIDER AT SCALE Unmatched scale and breadth of IT solutions $ 87B $ 81B $ 57B $ 49B $ 47B $ 6B $ 31B Client Storage Server Networking Virtualization Cybersecurity Cloud Platform Source: TTM Non-GAAP revenue presented for all companies based on most recent fili
Slide 14: Complementary Portfolio of Leading Solutions
2 | COMPLEMENTARY PORTFOLIO OF LEADING SOLUTIONS Leverage leading positions across all solutions to create cross selling opportunities External Storage Storage Servers PBBA/Backup Total Revenue All-flash Arrays and Units Sector Size Sector Size # # x86 Servers 1 1 Integrated $ $ 26B 76B Infrastructu
Slide 15: Best-in-Class Go-to-Market Model
3 | BEST-IN-CLASS GO-TO-MARKET MODEL Sales force is comprised of over 40k individuals across 72 countries complemented by a growing partner program with approximately 150k partners across 180 countries Successful Integration One-stop-shop for technology solutions across software, hardware and servic
Slide 16: Driving Outperformance vs. Market
4 | DRIVING OUTPERFORMANCE VS. MARKET Our ability to deliver differentiated and integrated IT solutions has driven significant revenue growth and share gains 1 2 3 EXTERNAL STORAGE REVENUE MAINSTREAM SERVER REVENUE HYPERCONVERGED SYSTEMS REVENUE 61.7% 119.0% 116.1% 31.1% 28.2% 20.8% 43.1% 18.0% 20.7
Slide 17: Superior Financial Model
5 | SUPERIOR FINANCIAL MODEL Company positioned to achieve sustainable, long-term growth and share gain with a focus on cash flow Focus on Long-Term Industry-Leading Free Best-in-Class Unit Efficient Capital Growth and Share Gain Cash Flow Conversion Economics with High Attach Structure and Signific
Slide 18: World-Class Management Team
6 | WORLD-CLASS MANAGEMENT TEAM Committed and highly-experienced management team, with an average of 24 years of experience successfully navigating technology changes in the IT industry DELL TECHNOLOGIES Karen Quintos Allison Dew Howard Elias Marius Haas Bill Scannell Michael Dell Jeff Clarke Tom Sw
Slide 19: Business Unit Overview
BUSINESS UNIT OVERVIEW 19 19 BUSINESS UNIT OVERVIEW 19 19
Slide 20: How We Are Organized
HOW WE ARE ORGANIZED Infrastructure Client Solutions VMware Other Aligned Solutions Group Group Businesses Dell Financial Services Go-to-Market Global Services & Support 34k+ 165+ >40 95% 7 87 Dell EMC Countries Supported Languages Customer Global Command Technical Services Professionals Worldwide S
Slide 21: Client Solutions Group (CSG)
CLIENT SOLUTIONS GROUP (CSG) Revenue (TTM) Operating Income (TTM) Highlights $ $ Increased worldwide PC unit 41.7B 2.1B share year-over-year for 1 22 consecutive quarters Dell continues to outgrow industry in PCs and flat panel monitors 3 4 Workstation Units Displays 2 PC Revenue # # # 40.7% Share 2
Slide 22: CSG Industry Trends
CSG INDUSTRY TRENDS WORLDWIDE PC REVENUE FORECAST ($B) PC UNIT SHARE TREND (UNITS SOLD) 75% 65% $250 2% 1 55% CAGR $200 45% 35% $150 Top 3 Vendors (Dell, HP, Lenovo) All Others 25% 1Q'12 2Q'13 3Q'14 4Q'15 1Q'17 2Q'18 $100 DELL Y/Y CHANGE IN GLOBAL PC UNIT SHARE (BPS) $50 22 consecutive quarters of Y
Slide 23: Dell Maintains the Highest PC Profits in the Industry
DELL MAINTAINS THE HIGHEST PC PROFITS IN THE INDUSTRY Premium enterprise & consumer products Services Best-in-class peripherals and display offerings Global Services Full suite of industry-leading Peripherals support services Financial Flexible financing packages ™ Services Superior direct salesforc
Slide 24: Infrastructure Solutions Group (ISG)
INFRASTRUCTURE SOLUTIONS GROUP (ISG) Revenue (TTM) Operating Income (TTM) Highlights $ $ Simplified the ISG organization, aligning 34.4B 3.9B leaders and product categories #1 in major storage categories including all-flash array, hyper- converged infrastructure, high-end, Hyperconverged All-Flash A
Slide 25: ISG Industry Trends
ISG INDUSTRY TRENDS Dell Technologies is the clear leader in x86 Servers, External Storage, and Hyperconverged Infrastructure HYPERCONVERGED # # # x86 SERVERS EXTERNAL STORAGE INFRASTRUCTURE 1 1 1 (Revenue, in $B) (Revenue, in $B) (Revenue, in $B) All-Flash Array 27% CAGR $10.1 9% CAGR 0% CAGR 44% $
Slide 26: Servers: Strong Performance and Taking Share
SERVERS: STRONG PERFORMANCE AND TAKING SHARE 1 2 STRONG FINANCIAL PERFORMANCE LEADING SHARE POSITION (REVENUE $B) (x86 SERVERS) Highlights Strong momentum since 2H FY18 – double-digit growth in units and revenue 20.8% for both Q1 and Q2 FY19 70% $5.1 Leading innovator at the forefront of handling wo
Slide 27: Storage: Business Acceleration 2018 and Beyond
STORAGE: BUSINESS ACCELERATION 2018 AND BEYOND One Team Roadmap to Portfolio Investing in Go-to-Market Focus Innovation & Simplification Innovation Improvements Enhancements Significant Progress Made with a Roadmap in Place for Further Enhancements 27 27 27 STORAGE: BUSINESS ACCELERATION 2018 AND BE
Slide 28: Storage: Success to Date & Next Steps
STORAGE: SUCCESS TO DATE & NEXT STEPS SIGNIFICANT PROGRESS POINTS ROADMAP & FUTURE INITIATIVES Executing plan to grow revenue and take share Triple Y/Y Storage Revenue Digit Growth Simplifying the portfolio roadmap 12% Growth for In Both the VxRail 1H FY19 while enhancing R&D focus 1 & VxRack Offeri
Slide 29: VMware
VMWARE 1 1 Revenue (TTM) Operating Income (TTM) Highlights $ $ 8.4B 2.8B Double-digit license bookings growth across all major product categories in Q2 FY19 At the forefront of Software-Defined #1 500k+ 99% Data Center, Hybrid Cloud, and End User Computing Fortune 500 2 Leader in Virtualization Glob
Slide 30: VMware Innovation & Integration Across Dell Technologies Portfolio
VMWARE INNOVATION & INTEGRATION ACROSS DELL TECHNOLOGIES PORTFOLIO Unmatched level of partnership and integration INTEGRATED SOLUTIONS BENEFITS FOR DELL TECHNOLOGIES Software Defined Storage Well-positioned as the one-stop shop in the industry $ Software Defined Networking 400M Significantly expande
Slide 31: Winning Together in FY18
WINNING TOGETHER IN FY18 $ $ 400M 491M +60% Booking Revenue Y/Y Referral Synergies ACV Growth +1.5k +128% +70% +63% Y/Y Enterprise Y/Y Growth in New Partner Origination Cloud Orders Growth Sell Through Opportunities Customers Revenue 31 31 WINNING TOGETHER IN FY18 $ $ 400M 491M +60% Booking Revenue
Slide 32: Dell Technologies Go-to-Market Capability by the Numbers
DELL TECHNOLOGIES GO-TO-MARKET (GTM) CAPABILITY BY THE NUMBERS Largest worldwide IT sales network Direct sellers in 72 countries 150k+ partner network in all countries 34k+ Dell EMC services professionals in 165 countries 180 Countries Covered Captive financing arm (Dell Financial Services) enabling
Slide 33: Targeted, Top to Bottom Coverage of a Segmented & Evolving IT Market
TARGETED, TOP TO BOTTOM COVERAGE OF A SEGMENTED & EVOLVING IT MARKET ADDRESSABLE MARKET COVERAGE MODEL ELEMENTS OPPORTUNITY Typical Rev. % of Total Architectural Outcome-based Outside-led Inside-led Inbound Channel E-commerce 1 per account ($) ($ spend) advisory solution selling relationship relatio
Slide 34: Building Dell Technologies' Go-to-Market
BUILDING DELL TECHNOLOGIES’ GO-TO-MARKET PHASE 0: Identifying Opportunity Pre-merger <20% commonality in respective top 5k revenue accounts Significant revenue synergy opportunity DT Select & Global Accounts PHASE 1: Initial Guiding Principles Two complementary sales orgs & leaders Enterprise Custom
Slide 35: Financial Overview
FINANCIAL OVERVIEW 35 35 FINANCIAL OVERVIEW 35 35
Slide 36: Attractive Financial Model
ATTRACTIVE FINANCIAL MODEL Focus on Long-Term Industry Leading Free Efficient Capital Growth and Share Gain Cash Flow Conversion Structure and Significant Financial Flexibility 36 36 ATTRACTIVE FINANCIAL MODEL Focus on Long-Term Industry Leading Free Efficient Capital Growth and Share Gain Cash Flow
Slide 37: Strong Business Momentum
STRONG BUSINESS MOMENTUM… Dell’s Share Gain Driving Above Market Growth ($ in billions) NON-GAAP REVENUE (TTM) LEVERED FREE CASH FLOW (TTM) $ 86.8 $ 7.0 $ 83.5 $ 6.1 $ 80.3 $ 5.3 Q4 FY2018 Q1 FY2019 Q2 FY2019 Q4 FY2018 Q1 FY2019 Q2 FY2019 Source: Dell Technologies public filings. Note: See supplemen
Slide 38: Across All Business Units
… ACROSS ALL BUSINESS UNITS ($ in billions) INFRASTRUCTURE SOLUTIONS CLIENT SOLUTIONS GROUP 1 VMW ARE (TTM REVENUE) GROUP (TTM REVENUE) (TTM REVENUE) $ $ 41.7 34.4 $ 8.4 $ 40.5 $ 32.6 $ 8.2 $ 39.2 $ 30.9 $ 8.0 Q4 FY18 Q1 FY19 Q2 FY19 Q4 FY18 Q1 FY19 Q2 FY19 Q4 FY18 Q1 FY19 Q2 FY19 97% of our top 500
Slide 39: Investing to Sustain Long Term Growth
INVESTING TO SUSTAIN LONG TERM GROWTH GUIDING PRINCIPLES CONTINUED FOCUS AREAS SALES COVERAGE § Disciplined Approach: Investment decisions based on maximizing ROI Focus on Improve Expand High-Value Coverage Regional § Long Term Focus: Invest to strengthen Customer Model Coverage Tranches long term b
Slide 40: Cash Flow Generation Is Our Priority
CASH FLOW GENERATION IS OUR PRIORITY TTM LEVERED FREE CASH FLOW ($ in billions) Favorable working capital dynamics, enabled by efficient supply chain: -53 day cash conversion cycle (best-in-class) $ 7.0 $ 6.1 $ 5.3 Expanding recurring revenue, $22.5B 1 deferred revenue , +11% YoY Q4 FY18 Q1 FY19 Q2
Slide 41: Strong Balance Sheet and Financial Flexibility
STRONG BALANCE SHEET AND FINANCIAL FLEXIBILITY ~$13.7B gross debt paid down since the acquisition of EMC DELL TECHNOLOGIES CORE PRO FORMA LIQUIDITY PROFILE DEBT TRAJECTORY $48.8 1 ($ in billions) § ~$9.9B of cash and investments on balance sheet 2 § $6.7B of cash and investments excluding publicly t
Slide 42: Capital Allocation Strategy and Financial Policy
CAPITAL ALLOCATION STRATEGY AND FINANCIAL POLICY Committed to a disciplined framework as we re-emerge in the public equity markets SINCE CLOSE OF EMC ACQUISITION MEDIUM TERM FOCUS n Prioritize disciplined investments in the business $1.4B to drive long term sustained free cash flow $3.5B n Continued
Slide 43: Financial Guidance
FINANCIAL GUIDANCE LONG TERM TARGETS AT CURRENT MARKET PROJECTIONS FY19 GUIDANCE Revenue Performance vs. Market (Orders Basis) TOTAL $90.5B – 92.0B 4% – 6% CAGR Grow at a premium to market in all major product categories NON- ISG Mainstream Server: 5-7pts growth premium vs. market GAAP 14% – 18% 3%
Slide 44: Class V Transaction Overview
CLASS V TRANSACTION OVERVIEW 44 44 CLASS V TRANSACTION OVERVIEW 44 44
Slide 45: Protecting and Maximizing Value for Class V Holders
PROTECTING AND MAXIMIZING VALUE FOR CLASS V HOLDERS THOROUGH PROCESS LED BY INDEPENDENT SPECIAL COMMITTEE 1 n Special Committee created and composed of two highly qualified, independent directors and granted full latitude to negotiate with Dell Board n Transaction irrevocably conditioned upon the ap
Slide 46: Opportunity for DVMT Stockholders
OPPORTUNITY FOR DVMT STOCKHOLDERS PROPOSED TRANSACTION UNMATCHED ASSET PORTFOLIO 1 $109 CASH / SHARE DVMT Tracking Stock 100% | ISG / CSG 2 81% % Premium n Tracks the economic performance of ~61% of Dell 65% Technologies' economic 86% 30% interest in VMW, equivalent 29% to ~50% of VMW 100% OR outsta
Slide 47: Class V Transaction Offers a Significant Premium to Historical Trading
CLASS V TRANSACTION OFFERS A SIGNIFICANT PREMIUM TO HISTORICAL TRADING S&P² 24% $ 120.00 DVMT² $109 Class V Offer Price 142% $ 100.00 DVMT Opening 07-Sep-16 Price: $45.07 st 1 DVMT Offer Premium¹ $ 80.00 Trading Day 142% DVMT Close Price: 02-Jul-18 $84.58 (prior to $ 60.00 announcement) Class V Tran
Slide 48: Attractive Pro Forma Valuation
ATTRACTIVE PRO FORMA VALUATION CY17 – CY18E REVENUE GROWTH TTM EQUITY VALUE / LEVERED FREE CASH FLOW P eer Medi an: 10.9x Discount to Median 13.6% 17.3x (55)% (90)% 16.6x 3 57.9x 9.8% 10.9x 10.9x 6.6% 9.6x 6.3% 3.6% 4.9x 2.2% 1.1x 2 Excl. Excl. Public Subs, Public At Market Implied 1 4 Subs Price TT
Slide 49: Comparing the Storage Leaders (Dell, HPE, NetApp)
COMPARING THE STORAGE LEADERS (DELL, HPE, NETAPP) ($ in billions) TTM NON-GAAP REVENUE & BUSINESS MIX KEY METRICS $87 CY17 – CY18E Revenue 3.6% 6.6% 13.6% 1 Growth $31 External Storage Revenue 14.8% 20.8% 31.1% Growth YoY² $6 Mainstream Server Revenue 18.0% - 43.1% Growth YoY³ Hyperconverged Systems
Slide 50: Capital Intensity – Dell vs. HPE
CAPITAL INTENSITY – DELL VS. HPE CATEGORY DELL (EX. PUBLIC SUBS) HPE CapEx as % of Non- CapEx as % of CapEx as % of EBITDA CapEx as % of EBITDA GAAP Revenue Revenue 3 Capital Intensity 1.6% 17.7% 9.4% 54.7% ~3x higher than Dell DFS originates financings through Capital Leases², with the HPFS origina
Slide 51: Overview of Pro Forma Governance
OVERVIEW OF PRO FORMA GOVERNANCE 50% OF BOARD COMPOSED OF COMPARISON OF CERTAIN STATUS QUO & PRO FORMA STOCKHOLDER RIGHTS STRONG INDEPENDENT DIRECTORS David Dorman Selected Stockholder Rights Status Quo Pro Forma Founder, Centerview Capital Technology Former Chairman & CEO, AT&T X Aligned economic i
Slide 52: Appendix: Supplementary Materials
Appendix: Supplementary Materials 52 52 Appendix: Supplementary Materials 52 52
Slide 53: Capital Structure
1 CAPITAL STRUCTURE Q2 FY19 ($ in billions) EMC Close Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 Cash & Investments $ 15.5 $ 15.2 $ 18.0 $ 20.3 $ 21.7 $ 21.5 Cash & Investments (excluding Unrestricted Subsidiaries) 6.8 6.0 6.1 8.3 8.1 7.2 2 Core Secured Debt 35.4 29.3 29.1 28.7 29.1 28.9 Core Unsecured Debt 13.4
Slide 54: GAAP to Non-GAAP Reconciliation
GAAP TO NON-GAAP RECONCILIATION Dell Technologies Consolidated (Quarterly) ($ in Millions) Q1 FY18 Q2 FY18 Q3 FY18 Q4 FY18 FY18 Q1 FY19 Q2 FY19 YTD FY19 GAAP Net revenue 18,000 19,521 19,556 21,963 79,040 21,356 22,942 44,298 Impact of purchase accounting 355 335 295 284 1,269 187 180 367 Non-GAAP N
Slide 55: GAAP to Non-GAAP Reconciliation: Summary Overview
GAAP TO NON-GAAP RECONCILIATION Summary overview Ex. Public Subs VMW PVTL SCWX Dell Technologies Consolidated Ex. Public Subs VMW PVTL SCWX Dell Technologies Consolidated Q2 FY19 TTM ($ in Millions) As Reported10-Q / 10-K Calculated Core Dell As Reported 10-Q / 10-K ($ in millions) Calculated Core D
Slide 56: GAAP to Non-GAAP Reconciliation (Cont'd)
GAAP TO NON-GAAP RECONCILIATION (CONT’D) Dell Technologies Consolidated Q2 FY19 TTM ($ in Millions) FY18 +Q2 FY19 YTD -Q2 FY18 YTD Q2 FY19 TTM ($ in millions) FY18 + YTD FY19 - YTD FY18 TTM GAAP Net revenue 79,040 44,298 37,521 85,817 Impact of purchase accounting 1,269 367 690 946 Non-GAAP Net reve
Slide 57: GAAP to Non-GAAP Reconciliation (Cont'd): SecureWorks
GAAP TO NON-GAAP RECONCILIATION (CONT’D) SecureWorks Q2 FY19 TTM ($ in Millions) FY18 +Q2 FY19 YTD -Q2 FY18 YTD Q2 FY19 TTM ($ in millions) FY18 + YTD FY19 - YTD FY18 TTM GAAP Net revenue 468 255 230 493 Impact of purchase accounting - - - Non-GAAP Net revenue 468 255 230 493 GAAP Operating income /
Slide 58: GAAP to Non-GAAP Reconciliation (Cont'd): Pivotal
GAAP TO NON-GAAP RECONCILIATION (CONT’D) Pivotal Q2 FY19 TTM ($ in Millions) FY18 +Q2 FY19 YTD -Q2 FY18 YTD Q2 FY19 TTM ($ in millions) FY18 + YTD FY19 - YTD FY18 TTM GAAP Net revenue 509 320 247 582 Impact of purchase accounting - - - - Non-GAAP Net revenue 509 320 247 582 GAAP Operating income / (
Slide 59: GAAP to Non-GAAP Reconciliation (Cont'd): VMware
GAAP TO NON-GAAP RECONCILIATION (CONT’D) VMware Q2 FY19 TTM ($ in Millions) FY18 +Q2 FY19 YTD -Q2 FY18 YTD Q2 FY19 TTM ($ in millions) FY18 + YTD FY19 - YTD FY18 TTM GAAP Net revenue 7,862 4,183 3,698 8,347 Impact of purchase accounting - - - - Non-GAAP Net revenue 7,862 4,183 3,698 8,347 GAAP Opera
Slide 60: GAAP to Non-GAAP Reconciliation (Cont'd): Derived Core Dell
GAAP TO NON-GAAP RECONCILIATION (CONT’D) Derived “Core Dell” (Excluding Public Subsidiaries) Q2 FY19 TTM ($ in Millions) FY18 +Q2 FY19 YTD -Q2 FY18 YTD Q2 FY19 TTM ($ in millions) FY18 + YTD FY19 - YTD FY18 TTM GAAP Net revenue 70,201 39,540 33,346 76,395 Impact of purchase accounting 1,269 367 690