Dell Technologies Reports Fiscal Year 2018 Third Quarter

Dell Technologies Reports Fiscal Year 2018 Third Quarter Financial Results

This list of risks, uncertainties, and other factors is not complete. Dell Technologies discusses some of these matters more fully, as well as certain risk factors that could affect the Dell Technologies' business, financial condition, results of operations, and prospects, in its reports filed with the Securities and Exchange Commission, including Dell Technologies' Annual Report on Form 10-K for the fiscal year ended February 3, 2017, quarterly reports on Form 10-Q, and current reports on Form 8-K. These filings are available for review through the Securities and Exchange Commission's website at www.sec.gov. Any or all forward-looking statements Dell Technologies makes may turn out to be wrong and can be affected by inaccurate assumptions Dell Technologies might make or by known or unknown risks, uncertainties and other factors, including those identified in this press release. Accordingly, you should not place undue reliance on the forward-looking statements made in this press release, which speak only as of its date. Dell Technologies does not undertake to update, and expressly disclaims any duty to update, its forward-looking statements, whether as a result of circumstances or events that arise after the date they are made, new information, or otherwise.

DELL TECHNOLOGIES INC.
Condensed Consolidated Statements of Income (Loss) and Related Financial Highlights
(in millions, except per share amounts and percentages; unaudited)

	Three Months Ended			Nine Months Ended
	November 3, 2017	October 28, 2016	Change	November 3, 2017	October 28, 2016	Change
Net revenue:
Products	$ 14,680	$ 12,366	19 %	$ 42,003	$ 33,510	25 %
Services	4,930	3,881	27 %	14,722	8,058	83 %
Total net revenue	19,610	16,247	21 %	56,725	41,568	36 %

Cost of net revenue:
Products	12,369	10,562	17 %	36,206	28,856	25 %
Services	2,078	1,786	16 %	6,245	4,284	46 %
Total cost of net revenue	14,447	12,348	17 %	42,451	33,140	28 %

Gross margin	5,163	3,899	32 %	14,274	8,428	69 %

Operating expenses:
Selling, general, and administrative	4,625	4,556	2 %	13,989	8,647	62 %
Research and development	1,071	855	25 %	3,297	1,365	142 %
Total operating expenses	5,696	5,411	5 %	17,286	10,012	73 %

Operating loss	(533)	(1,512)	65 %	(3,012)	(1,584)	(90)%

Interest and other, net	(682)	(794)	14 %	(1,800)	(1,362)	(32)%
Loss from continuing operations before income taxes	(1,215)	(2,306)	47 %	(4,812)	(2,946)	(63)%
Income tax benefit	(274)	(669)	59 %	(1,510)	(623)	(142)%
Net loss from continuing operations	(941)	(1,637)	43 %	(3,302)	(2,323)	(42)%
Income (loss) from discontinued operations, net of income taxes	—	(438)	100 %	—	875	(100)%
Net loss	(941)	(2,075)	55 %	(3,302)	(1,448)	(128)%
Less: Net loss attributable to non-controlling interests	(4)	(11)	64 %	(85)	(12)	(608)%
Net loss attributable to Dell Technologies Inc.	$ (937)	$ (2,064)	55 %	$ (3,217)	$ (1,436)	(124)%

Earnings (loss) per share attributable to Dell Technologies Inc. - basic:
Continuing operations - Class V Common Stock - basic	$ 1.10	$ 0.79		$ 2.50	$ 0.79
Continuing operations - DHI Group - basic	$ (2.05)	$ (3.62)		$ (6.57)	$ (5.70)
Discontinued operations - DHI Group - basic	$ —	$ (0.88)		$ —	$ 2.01

Earnings (loss) per share attributable to Dell Technologies Inc. - diluted:
Continuing operations - Class V Common Stock - diluted	$ 1.09	$ 0.78		$ 2.46	$ 0.78
Continuing operations - DHI Group - diluted	$ (2.05)	$ (3.63)		$ (6.58)	$ (5.70)
Discontinued operations - DHI Group - diluted	$ —	$ (0.88)		$ —	$ 2.01

Weighted-average shares outstanding:
Basic - Class V Common Stock	202	222		204	222
Diluted - Class V Common Stock	202	222		204	222
Basic - DHI Group	567	497		567	436
Diluted - DHI Group	567	497		567	436

*Percentage of Total Net Revenue:*
Gross margin	26 %	24 %		25 %	20 %
Selling, general, and administrative	24 %	28 %		25 %	21 %
Research and development	5 %	5 %		6 %	3 %
Operating expenses	29 %	33 %		30 %	24 %
Operating loss	(3)%	(9)%		(5)%	(4)%
Loss from continuing operations before income taxes	(6)%	(14)%		(8)%	(7)%
Net loss from continuing operations	(5)%	(10)%		(6)%	(6)%

Income tax rate	23 %	29 %		31 %	21 %

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