Dell Technologies Inc.

Good afternoon, ladies and gentlemen, and welcome to the fiscal year 2023 third quarter financial results conference call for Dell Technologies Incorporated. I'd like to inform all participants that this call is being recorded at the cross of Dell Technologies. This broadcast is the copyrighted property of Dell Technologies Incorporated. Any reprodcast of this information, whole or part, without prior written permission of Dell Technologies is prohibited. Following prepared remarks, we will conduct a question and answer session. If you'd like to ask a question, simply press star then one on your telephone keypad at any time during the presentation. I would now like to turn the call over to Rob Williams, Head of Investor Relations. Mr. Williams, you may begin.

Thanks, everyone, for joining us. With me today are Jeff Clark, Chuck Witten, Tom Sweet, and Tyler Johnson. Our earnings materials are available on our IR website, and I encourage you to review our materials and presentation, which includes additional content to complement our discussion this afternoon. Guidance will be covered on today's call. During this call, unless otherwise indicated, all references to financial measures refer to non-GAAP financial measures, including non-GAAP revenue, gross margin, operating expenses, operating income, net income, and diluted earnings per share. A reconciliation of these measures to their most directly comparable GAAP measures can be found in our web deck and our press release. Growth percentages refer to year-over-year change unless otherwise specified. 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 and our SEC filings. We assume no obligation to update our forward-looking statements. Now, I'll turn it over to Chuck.

Thanks, Rob. We delivered very good results, including strong ISG revenue with record profitability and good CSG profitability, despite the difficult demand environment that we highlighted in our last earnings call. The net of our disciplined execution was Q3 revenue of $24.7 billion, down 6% with record operating income of $2.4 billion and record diluted EPS of $2.30. ISG revenue was $9.6 billion, up 12%, while CSG was $13.8 billion, down 17%. From a macro perspective, Q3 played out as we previewed last quarter, soft underlying PC demand and slowing infrastructure demand, though storage did hold up fairly well relative to servers with growth in multiple storage types, including high-end and power store. Our Q3 performance underscores our strategic focus the advantages of our model, and our ability to deliver differentiated results in any market environment. Our unique sales model provides direct, real-time feedback from customers of all sizes and across geographies and industries, which allows us to see the demand environment shift faster than the rest of the industry. And as the demand environment changed, we reacted quickly and decisively, which showed in our results. We took actions to reduce costs, decreasing our operating expense 3% sequentially in Q2 and another 6% sequentially in Q3. We have now reduced quarterly operating expense by over $300 million since Q1. We reduced server backlog consistent with our Q2 commentary and delivered strong profitability as our model allowed us to access component cost deflation faster than the rest of the industry. And we stayed focused on relative performance in the most profitable segments of the market. Despite some expected distortions in the PC market given elevated competitor backlog, we continue to gain commercial PC unit share in Q3 and have now gained share in 35 of the last 39 quarters. In ISG, we expect to extend our industry-leading share positions in servers and storage when Q3 IDC results are announced in December. And we executed on all of the above without compromising our innovation agenda with 30 infrastructure launches in the last 13 weeks, including six new Dell apex offerings in strategic areas like multi-cloud edge and subscription. And as a service, we're excited about the launch of project frontier, our initiative to deliver an edge operations software platform focused on unifying edge operations across infrastructure and applications for a broad set of industries. And earlier today, we announced the availability of PowerFlex, our flagship software-defined storage solution on AWS. With a cloud-first design point, PowerFlex on AWS is the first of Dell's industry-leading storage offerings available in the public cloud as part of Project Alpine. Our effort to bring our industry-leading storage software to public clouds to provide multi-cloud data mobility and simplify data management. It will enable customers to use Dell's storage software capabilities and APIs wherever their data resides without the need for purpose-built or specialized public cloud infrastructure. Our new Project Alpine-related SaaS offerings will add to our growing portfolio of APEX solutions while enabling our customers to harness the power of multi-cloud. Stepping back, the near-term market remains challenged and uncertain. On one hand, we are seeing some customers delay IT purchases. Other customers continue to move ahead with Dell, given the criticality of technology to their long-term competitiveness and a growing need to drive near-term productivity through IT. The world continues to digitally transform, data continues to grow exponentially, and customers continue to look to technology to drive their business forward, no matter the economic climate. As the market leader in commercial PCs and infrastructure, We are well positioned whether a customer is seeking to drive growth, productivity and efficiencies, or a combination. We're trusted advisors to our customers, and we have a business model that allows us to adjust quickly to meet their needs. So we are very confident in our ability to adapt and deliver results despite the near-term uncertainty. Q3 was proof of our underlying advantages and ability to execute no matter the environment. As always, we'll continue to focus on what we can control. taking care of our customers, driving differentiated relative performance, delivering against our innovation agenda, managing our cost position, maintaining pricing discipline, and building a unique and winning culture with our team. This is the playbook that has served us well across multiple cycles, and no matter the backdrop, we intend to accelerate our strategic position as we did in Q3. Now I'll turn it over to Tom for the financials.