Dell Technologies Inc.

Good afternoon and welcome to the fiscal year 2022 first quarter results conference call for Dell Technologies Incorporated. I'd like to inform all participants that 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 prepared remarks, we will conduct a question and answer session. If you have a question, simply press star, then one on your telephone keypad at any time during the presentation. I'd now like to turn the call over to Rob Williams, Head of Investor Relations. Mr. Williams, you may begin.

Thanks, Jamaria, and thanks, everyone, for joining us. With me today are our Vice Chairman and COO, Jeff Clark, our CFO, Tom Sweet, and our Treasurer, Tyler Johnson. Our press release, financial tables, web deck, prepared remarks, and additional materials are available on our IR website. The guidance section will be covered on today's call. During this call, unless we otherwise indicate, all references to financial measures refer to non-GAAP financial measures including non-GAAP revenue, gross margin, operating expenses, operating income, net income, earnings per share, EBITDA, adjusted EBITDA, and adjusted free cash flow. A reconciliation of these measures to their most directly comparable GAAP 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. Additionally, I'd like to remind you that all statements made during this call that relate to future events and results 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 and SEC filings. We assume no obligation to update our forward-looking statements. Now I'll turn it over to Jeff.

Thanks, Rob. Hi, everyone. Thanks for joining us today. We are coming off a strong first quarter in a successful Dell Technologies world. where we connected with more than 60,000 customers, partners, and stakeholders. We made important announcements on APEX, our edge strategy, and social impact and sustainability commitments, and the response was fantastic. We are energized by the positive feedback on our strategy, innovation, and opportunity. One of the real silver linings of last year is that digital transformation has been accelerated. Our world is running on data highways now, and we're experiencing everything technology makes possible, deeper data-driven insights, connectivity, and even a deeper human connection. Technology is no longer the IT department. It's the entire organization. It's how you enable everything to deliver better business outcomes. And customers are looking to Dell Technologies as their strategic partner. to help run their business, deliver their outcomes, capture their opportunities in the data era. For example, a large Fortune 500 retailer made VxRail and VMware Cloud Foundation the hybrid cloud standard for workloads in their data centers. Another example is Honeywell, who is helping its customers transform day-to-day business operations through software-as-a-service solutions for the industrial sector. Built on Dell infrastructure, Honeywell Forge Connect is the edge interface for Honeywell Forge Enterprise performance management. Turning to the financial results, we started the year strong, delivering record revenue in Q1 of $24.5 billion, up 12%. These results are driven by the do-anything-from-anywhere economy, where technology enables connectivity and outcomes for all of us. Instead of going to work, school, entertainment, or shopping, it all comes to us through our PCs. That need for connectivity was demonstrated in the record demand last year and has continued into this year. Our client solutions group delivered record revenue for the first quarter of $13.3 billion, up 20%. In our infrastructure solutions group, we are seeing improved demand as customers invest in the solutions they need to power our do-from-anywhere world. The improvement we saw at the end of last year continued into Q1 with revenue growing 5% to $7.9 billion. We saw growth in Q4 for servers and mid-range storage, and the momentum continued into Q1 with PowerEdge orders up 7% and mid-range storage orders up 23%. Our VMware business also had a strong quarter with revenue of $3 billion up 9%. Our partnership continues to expand and our ongoing strategic relationship has been formalized with the commercial agreement announced last month. For example, we have a framework in place to identify new areas of first and best joint innovation. Our unique partnership will continue to deliver highly differentiated, integrated solutions that are multi-cloud and accelerate digital transformation. We are pleased with the quarter and we are even more excited about the opportunities ahead and the long-term value proposition for Dell Technologies and our stakeholders. With a $4 trillion total IT market, we are only servicing a portion of that total surface area today. Our value creation framework is focused on four key areas that expand that surface area for a serviceable market. We do that by focusing on our core markets, the broader ecosystem, new growth opportunities, and our corporate and capital structures. I'll cover the first three today, and then Tom will cover the fourth. Our strategy begins with growing and modernizing our core businesses. Our serviceable or addressable market is expanding. In 2019, the serviceable TAM for the broader client ecosystem was approximately $600 billion. And looking out to calendar year 2025, it jumps to a projected $750 billion. This expansion in TAM is driven by increased systems per household, faster refresh rates with higher notebook mix, and investments in a hybrid and remote workforce. Our investments are focused on making the PC more personal and intelligent. But it's just not about the PC. It's about providing technology to deliver an experience to customers that allows them to be connected, productive, and effective no matter where they are, and that's increasingly about software. A few recent examples. We continue to innovate with our built-in AI software, Dell Optimizer, that learns, responds, and improves the way you work. We recently updated Dell Hybrid Client that gives users access to their applications and data whether delivered from the public cloud, private cloud, or on the device. and we introduced the new safe shutter on selected devices, the industry's first automatic webcam that knows when to open or close by syncing to your video conferencing applications. It's all of these things combined, devices, software, services and peripherals, and a higher profitability profile that have us excited about the future opportunity. The serviceable TAM for our infrastructure business is also growing. from approximately $150 billion in 2019 to a projected $200 billion by 2025. That means growth in areas like servers, storage, and networking where we are strong, and growth in areas like hyper-converged infrastructure where we are innovating for the future. Just a few weeks ago, we launched software updates to PowerStore improving workload performance by up to 25% by automating data processes We are saving customers money while lowering latency by 15%. We also introduced the cost-effective entry-level PowerStore 500 to the lineup. PowerStore now serves all mid-range price bands. PowerStore is the industry's first modern mid-range storage architecture in a decade. It's a container-based microservice software allows for rapid deployment of new capabilities with no disruption. It continues to ramp faster than any new architecture we've ever released and accelerates our opportunity and mid-range storage. We recently launched a new line of AI-enabled PowerEdge servers that help customers meet the challenge of digital transformation with a secure infrastructure that supports modern workloads. We are leading with innovation and taking share where we are strong, but we also know long-term success means doing more than just winning in the consolidation. It also means delivering a leading customer experience, including modernized consumption. This is where APEX comes in, to deliver the scale of the cloud with the ease of as a service. It's a critical component to how we modernize and grow our core businesses, grow private and hybrid cloud, and win the edge. Building on our long history of offering IT as a service, Earlier this month at Dell Technologies World, we launched the new APEX portfolio offerings, data storage services, cloud services, and custom solutions. APEX helps customers simplify digital transformation by increasing IT flexibility, agility, and control via a cloud-based service model. We are seeing increased customer interest. Customers like GE are turning to Dell for an as-a-service approach that assists the industrial giant in delivering solutions that make the world work more efficiently, reliably, and safely. And Magellan Health, looking for better control of their infrastructure to help serve patients faster and more effectively. And we're building the technology ecosystem of the future. We are innovating and integrating with VMware and our partner ecosystems to create an automated, intelligent infrastructure for 5G and the data era. This includes our better together solutions with VMware that customers have embraced, such as VxRail, VMware Cloud on Dell EMC, VeloCloud SD-WAN, as well as our security and end-user computing. With Dell Technologies and VMware, customers have consistent infrastructure and operations from the public cloud to the private cloud, co-locations, and the edge. It's estimated that 75% of data will be processed outside of a traditional data center or cloud by 2025, and that data will be generated in the real world at the edge. One of the ways we're helping customers make decisions at the edge in real time is with our streaming data platform. This is an open platform that offers powerful real-time analytics at the edge with a smaller footprint. By putting compute, storage, and analytics at the edge where the data is created, we deliver insights in real-time and create new opportunities for business. We also continue to support customer choice through an ecosystem of value-added partnerships. like what we're doing with PTC ThingWorx for smart manufacturing at the edge and with Equinix for hybrid cloud and as-a-service offerings. And next month, we'll announce an open network ecosystem that brings together infrastructure technology, partners, and services to create a more agile and profitable ways for communication service providers to transform their operations and modernize to an open, cloud-native 5G networks. Together with VMware and our partner ecosystem, we are the hybrid and multi-cloud platform for the digital future, and we'll deliver it all through a consistent cloud model and as a service with APEX. As we think about future areas of growth, we'll leverage our leading capabilities, our relationship with VMware, and the broader partner ecosystem to capitalize on new large addressable markets and emerging technology spaces. Multi-billion dollar markets today that are projected to grow exponentially by 2025. Here we will pursue logical and closely adjacent opportunities where we have the unique opportunity to win. In areas such as hybrid cloud, edge, telco, as a service and data management to drive high value growth. We are confident in our ability to drive high value growth for two reasons. One, our differentiated strategy. grow and modernize the core with software, leading with our unique VMware partnership, innovate, integrate, and partner to build the technology ecosystem of the future, win the next technology frontier at the edge, deliver the scale of the cloud with ease of as-a-service with APEX, and two, our competitive operational advantages, our direct sales force and customer intimacy, our global services capability, Dell Financial Services, and industry-leading scale and supply chain. Combined, we have a more focused business with the right formula to consistently deliver annual revenue growth in the GDP or better range over the long term with strong profitability and predictable cash flow. It's an incredible time to be in the business of delivering technology solutions that deliver experiences, insights, and outcomes. We are optimistic about the opportunities ahead. Before I turn it over to Tom for a closer look at the financials, a quick comment on the global supply situation that extends well beyond IT hardware. As we have mentioned, the pandemic accelerated the adoption of digital technology in every industry. And when coupled with an improving global economy with greater demand for everything, there is an overall shortage of semiconductors. We are executing our strategy as we work through this environment. just as you've seen us do before and what you've come to expect from us. Now, over to Tom.