DELL TECHNOLOGIES INC.
Reconciliation of Selected Non-GAAP Financial Measures
(in millions, except percentages; unaudited; continued on next page)

Three Months Ended

Six Months Ended

August 4, 2023

July 29, 2022

Change

August 4, 2023

July 29, 2022

Change

Gross margin

$       5,387

$       5,439

(1) %

$     10,405

$     11,223

(7) %

Non-GAAP adjustments:

Amortization of intangibles

84

105

163

209

Impact of purchase accounting

—

—

—

2

Stock-based compensation expense

37

37

75

75

Other corporate expenses

28

69

57

82

Non-GAAP gross margin

$       5,536

$       5,650

(2) %

$     10,700

$     11,591

(8) %

Operating expenses

$       4,222

$       4,169

1 %

$       8,171

$       8,403

(3) %

Non-GAAP adjustments:

Amortization of intangibles

(125)

(139)

(245)

(278)

Impact of purchase accounting

(4)

(3)

(8)

(10)

Transaction-related (income) expenses

(3)

(3)

(6)

(8)

Stock-based compensation expense

(186)

(199)

(373)

(393)

Other corporate expenses

(345)

(127)

(414)

(210)

Non-GAAP operating expenses

$       3,559

$       3,698

(4) %

$       7,125

$       7,504

(5) %

Operating income

$       1,165

$       1,270

(8) %

$       2,234

$       2,820

(21) %

Non-GAAP adjustments:

Amortization of intangibles

209

244

408

487

Impact of purchase accounting

4

3

8

12

Transaction-related expenses

3

3

6

8

Stock-based compensation expense

223

236

448

468

Other corporate expenses

373

196

471

292

Non-GAAP operating income

$       1,977

$       1,952

1 %

$       3,575

$       4,087

(13) %

Net income

$          455

$          506

(10) %

$       1,033

$       1,575

(34) %

Non-GAAP adjustments:

Amortization of intangibles

209

244

408

487

Impact of purchase accounting

4

3

8

12

Transaction-related (income) expenses

60

(4)

59

(6)

Stock-based compensation expense

223

236

448

468

Other corporate expenses

372

212

471

308

Fair value adjustments on equity investments

29

255

44

241

Aggregate adjustment for income taxes

(69)

(186)

(225)

(385)

Non-GAAP net income

$       1,283

$       1,266

1 %

$       2,246

$       2,700

(17) %