Dell Technologies Inc.

Good afternoon and welcome to the fiscal year 2020 first quarter financial results conference call for Dell Technologies Incorporated. I'd like to inform all participants this call is being recorded at the request of Dell Technologies. This broadcast is the copyrighted property of Dell Technologies Incorporated. Any rebroadcast of this information in whole or part without the prior written permission of Dell Technologies is prohibited. Following the prepared remarks, we will conduct a question and answer session. If you have a question, simply press star then number one on your telephone keypad at any time during the presentation. I'd like to turn the call over to Rob Williams, Head of Investor Relations. Mr. Williams, you may begin.

Thanks, Ian, and thanks for joining us. With me today are our Vice Chairman, Jeff Clark, our CFO, Tom Sweet, and our Treasurer, Tyler Johnson. During this call, we will reference non-GAAP financial measures, including non-GAAP revenue, gross margin, operating expenses, operating income, net income, EPS, EBITDA, adjusted EBITDA, and adjusted free cash flow. A reconciliation of these measures to their most directly comparable gap measures can be found in our web deck and press release. Please also note that all growth percentages refer to year-over-year change unless otherwise specified. Finally, I'd like to remind you that all statements made during this call that relate to future results and events are forward-looking statements based on current expectations. Actual results and events could differ materially from those projected due to a number of risks and uncertainties which are discussed in our web deck. We assume no obligation to update our forward-looking statements. Now I'll turn it over to Jeff.

Thanks, Rob. Good afternoon, everyone. I would like to cover three topics before Tom goes through the financial results. our view on the IT spending environment, second, new solutions we have introduced, and third, the current demand backdrop. We are in the midst of a technology-led investment cycle that is accelerating digital transformation. The latest IDC forecast for IT spending through 2022, excluding telecom, supports this view with projected growth to be more than 2x real GDP. That investment is fueled by exponential increase in data, and data-centric workloads that are driving better business outcomes alongside an increasingly diverse and mobile workforce. Our investments in solutions and innovations are pointed directly at this opportunity. We have a differentiated portfolio that is delivering solutions from the edge to the core to the cloud, and our customers are taking advantage of the value that Dell technology provides. This was all clear earlier this month when we hosted 15,000 customers, partners, and industry experts at Dell Technologies World. At this event, we unveiled the Dell Technologies Cloud, a new set of cloud infrastructure solutions to make hybrid cloud environments simpler to deploy and manage as customers continue to move towards hybrid cloud environments. We announced a new data center as a service offering. This fully managed solution brings the simplicity of public cloud service consumption to an on-premise environment. This service can be combined with Dell Technologies cloud platforms or public cloud on Dell Technology solutions like VMC on AWS to create a singular and seamless management experience across the edge, core, and cloud environments. In addition, Michael, Satya Nadella, and Pat Gelsinger announced an expanded partnership with Microsoft to enable our customers to extend their on-premise VMware cloud environments to Azure. And earlier in the quarter, we announced the industry's first jointly engineered hybrid cloud infrastructure stack that brings together VxRail and VMware Cloud Foundation to facilitate compute storage and network virtualization delivering the fastest ramp to the Dell Technologies Cloud. All of these solutions represent breakthroughs in cloud innovation that enables a flexible range of IT and management options with tight integration and a single vendor experience for purchasing, deployment, services, and financing. They provide customers an operational hub for their hybrid clouds on-premise with consistent cloud infrastructure across all cloud types. To advance customers' workforce transformation, we announced Dell Technologies Unified Workspace that helps our customers fundamentally change the way they deploy, secure, manage, and support their devices. Unified Workspace provides a full PC lifecycle experience and provisioning strategy all powered by the cloud. By integrating VMware's Workspace ONE, which enables customers to access any application on any device, anytime, SecureWorks threat intelligence and detection to prevent and detect and respond to potential security issues, and Dell provisioning and deployment services honor our award-winning commercial PCs. These examples best demonstrate how Dell Technologies is innovating and collaborating across the physical and virtual infrastructure, cloud, PCs, security, and services to deliver highly integrated solutions for our customers. and we are just getting started as we build on our leading positions in software-defined data center, enterprise hardware, security, and PCs. Shifting gears to the current demand environment, our external storage business is healthy, delivering solid year-over-year orders growth. Our sales teams remain optimistic about our portfolio and positioning as we head into Q2 and beyond. In addition, software-defined data center solutions and HCI continue to grow at a healthy clip, with VxRail growing triple digits again in Q1. Turning to servers, the industry saw unprecedented growth last year. We planned for slower growth this year, but the Q1 demand environment was softer than we and the industry expected. We were consciously more selective on larger server deals during the quarter, particularly in China, and we focused on acquiring new customers and balancing top-line and bottom-line results across the entire server business. The result, a decline in revenue but with higher profitability. We have built a business to be successful in any environment, whether the market expands or contracts. we expect to outperform the industry. And when IDC releases calendar Q1 share data later in Q2, we anticipate gaining share again in servers. You should expect us to continue to balance growth and profitability. We did that in Q1, and you should expect us to focus on balance in Q2. Switching to our client business, we are seeing continued strength in commercial PCs driven in part by increased coverage in small and medium business and the Windows 10 refresh, In a growing market, we gained 220 basis points of share according to IDC in calendar Q1. We gained worldwide PC share for the 25th consecutive quarter according to IDC with share up 80 basis points. Longer term, we remain optimistic about IT spending as organizations continue to invest in software-defined data center as well as IT infrastructure to support their edge and cloud strategies. and no one is better positioned than Dell Technologies to help our customers with these needs. With that, I'd like to turn it over to Tom to talk about the Q1 results. Thanks, Jeff.