Fiscal Year 2012 Fourth Quarter Financial Statements in PDF format

  • Revenue of $62.1 billion for the fiscal year, $16 billion in Q4
  • Record enterprise solutions and services revenue of $18.6 billion for fiscal year, $4.9 billion in Q4
  • Cash flow from operations of $5.5 billion for fiscal year, $1.8 billion in Q4

Dell’s further expansion as an enterprise solutions and services provider highlighted the company’s most successful financial year ever.

New corporate highs were achieved for a full fiscal year with revenue of $62.1 billion, earnings per share of $1.88 (GAAP) and $2.13 (Non-GAAP), and revenue from enterprise solutions and services of $18.6 billion.

“Our customers think of Dell in much broader terms now, trusting us with their comprehensive IT needs, from the datacenter to the device,” said Michael Dell, chairman and CEO. “We are more committed than ever to both developing and investing in innovative solutions that deliver greater value and better outcomes for our customers.”

“The expanding mix of revenue and earnings from enterprise solutions and services is critical to our future,” said Brian Gladden, Dell chief financial officer. “Our full-year results are a strong reflection of the significant progress we made this year on our strategic priorities.”

Results

  • Revenue in the quarter was $16 billion, a 2 percent increase over the previous year. Dell had an extra week in its fiscal year 2012 that was incorporated into the company’s Q4. Revenue for the 2012 fiscal year was $62.1 billion, a 1 percent increase.
  • GAAP earnings per share in the quarter was 43 cents, down 10 percent from the previous year; non-GAAP EPS was 51 cents, down 4 percent. For the fiscal year, GAAP EPS was $1.88, up 39 percent year over year and Non-GAAP EPS was $2.13, up 34 percent, both records.
  • GAAP operating income for the quarter was $931 million, or 5.8 percent of revenue. Non-GAAP operating income was $1.1 billion, or 7.1 percent of revenue. For the fiscal year, GAAP operating income was $4.4 billion and non-GAAP operating income was $5.1 billion, both records.
  • Cash flow from operations in the quarter was $1.8 billion, and Dell ended Q4 with $18.2 billion in cash and investments. For the fiscal year, Dell spent $2.7 billion to purchase 178 million shares of Dell stock.

Fiscal-Year 2012 Fourth Quarter and Full Year Highlights

                                                                                                          Fourth Quarter                           Fiscal Year

(in millions)FY12FY11ChangeFY12FY11Change
Revenue$16,031$15,6922%$62,071$61,4941%
  
Operating Income (GAAP)$931$1,145(19)%$4,431$3,43329%
Net Income (GAAP)$764$927(18)%$3,492$2,63533%
EPS (GAAP)$0.43$0.48(10)%$1.88$1.3539%
  
Operating Income (non-GAAP)    $1,143$1,286(11)%$5,135$4,14924%
Net Income (non-GAAP)$913$1,018(10)%$3,952$3,10627%
EPS (non-GAAP)$0.51$0.53(4)%$2.13$1.5934%

Information about Dell’s use of non-GAAP financial information is provided under “Non-GAAP Financial Measures” below. Non-GAAP financial information excludes costs related primarily to the amortization of purchased intangibles, severance and facility-action costs, a merger termination fee, certain settlement costs and acquisition-related charges. All comparisons in this press release are year over year unless otherwise noted.

 

 

 

 

 

Strategic Highlights:

  • Dell Services revenue grew 12 percent to $2.2 billion and represented 14 percent of Dell’s business. The transactional services business increased 14 percent with strong attach rates of Dell premium support services and the outsourcing business grew 8 percent. Services backlog increased 11 percent to $15.5 billion.
  • Dell-owned storage grew 33 percent to $463 million, led by offerings based on Dell-owned intellectual property, including Compellent, which had sequential growth of more than 60 percent.
  • Server and networking revenue grew 6 percent.

Business Units and Regions:

  • Large Enterprise had revenue of $4.9 billion in the quarter, a 5 percent increase with broad-based growth across both client and enterprise solutions and services. Services revenue increased 18 percent. Operating income for the quarter was $461 million, or 9.4 percent of revenue. Revenue for the full year was $18.5 billion, up 4 percent from the previous year.
  • Public revenue was $3.9 billion, a 1 percent decrease. The segment was affected by continued weakness in U.S. Federal and Western Europe. Services revenue increased 7 percent and Dell IP storage revenue was up 32 percent. Operating income for the quarter was $327 million, or 8.3 percent of revenue.
  • Small and Medium Business revenue grew 6 percent to $4 billion. Enterprise solutions and services revenue was up 18 percent during the quarter to an all-time high of $1.2 billion. Services growth was 28 percent in the quarter. SMB delivered $412 million in operating income, or 10.3 percent of revenue, driven by the better mix of higher-margin enterprise solutions and services.
  • Consumer revenue was $3.2 billion, a 2 percent decline for the quarter. Operating income was $39 million or 1.2 percent of revenue, a 43 percent decline. Revenue weakness was largely concentrated in the United States, while revenue from non-U.S. countries grew 10 percent.
  • Asia-Pacific and Japan revenue grew 10 percent – including 15 percent growth from China – and EMEA increased 8 percent in the quarter. Americas was down 3 percent. Revenue in Growth Countries – defined as those outside the U.S., Canada, Western Europe and Japan – increased 8 percent in the quarter and 12 percent for the fiscal year. Revenue in the BRIC countries increased 10 percent in the quarter and 15 percent for the fiscal year.

Company Outlook:

The company will continue to prioritize operating income and cash flow. For fiscal 2013, the company expects non-GAAP earnings per share to exceed the record $2.13 it delivered in fiscal 2012 and expects to continue strong execution, with cash flow from operations exceeding net income. For Q1, the company expects revenue to decline approximately 7 percent sequentially, which aligns with normal seasonality adjusted for the fourteenth week.

About Dell

Dell Inc. (NASDAQ: DELL) listens to customers and delivers worldwide innovative technology, business solutions and services they trust and value. For more information, visit www.dell.com. As previously announced, the fourth-quarter analyst call with Michael Dell, chairman and CEO; Brian Gladden, CFO; and, Steve Felice, president and chief commercial officer, will be webcast live today at 4:00 CST and archived at www.dell.com/investor. To monitor highlighted facts from the analyst call, follow on the Dell Investor Relations Twitter account at: http://twitter.com/dellshares or hashtag #DellEarnings. To communicate directly with Dell, go to www.dell.com/dellshares.

Non-GAAP Financial Measures:

This press release includes information about non-GAAP operating income, non-GAAP net income, and non-GAAP earnings per share (collectively with non-GAAP gross margin and non-GAAP operating expenses, the “non-GAAP financial measures”), which are not measurements of financial performance prepared in accordance with U.S. generally accepted accounting principles. In the following tables, Dell has provided a reconciliation of each historical non-GAAP financial measure to the most directly comparable GAAP financial measure under the heading “Reconciliation of Non-GAAP Financial Measures” and has presented a detailed discussion of its reasons for including the non-GAAP financial measures and the limitations associated with those measures under the heading “Use of Non-GAAP Financial Measures.” Dell encourages investors to review the reconciliation and the non-GAAP discussion in conjunction with Dell’s presentation of these non-GAAP financial measures.

Special Note on Forward Looking Statements:

Statements in this press release that relate to future results and events (including statements about Dell’s future financial and operating performance, trends relating to enterprise, solutions and services, anticipated customer demand, global macroeconomic uncertainty, and geographic trends, as well as the financial guidance with respect to revenue, cash flow from operations, net income and non-GAAP earnings per share) are forward-looking statements and are based on Dell's current expectations. In some cases, you can identify these statements by such forward-looking words as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “confidence,” “may,” “plan,” “potential,” “should,” “will” and “would,” or similar expressions. Actual results and events in future periods may differ materially from those expressed or implied by these forward-looking statements because of a number of risks, uncertainties and other factors, including: intense competition; Dell’s cost-cutting measures; Dell’s ability to effectively manage the growth of its distribution capabilities and add to its product and services offerings; Dell’s ability to effectively manage periodic product and services transitions; weak global economic conditions and instability in financial markets; Dell’s ability to generate substantial non-U.S. net revenue; weak economic conditions and additional regulation affecting Dell’s financial services activities; Dell’s ability to achieve favorable pricing from its vendors; Dell’s ability to deliver consistent quality products and services; Dell’s reliance on third-party suppliers for product components, including reliance on several single-sourced or limited-sourced suppliers; successful implementation of Dell’s acquisition strategy; Dell’s product, customer, and geographic sales mix, and seasonal sales trends; access to the capital markets by Dell or its customers; loss of government contracts; the risk of temporary suspension or debarment from contracting with U.S. federal, state and local governments as a result of settlements of an SEC investigation by Dell and Dell’s Chairman and CEO; customer terminations of or pricing changes in services contracts, or Dell’s failure to perform as it anticipates at the time it enters into services contracts; Dell’s ability to obtain licenses to intellectual property developed by others on commercially reasonable and competitive terms; information technology and manufacturing infrastructure disruptions or breaches of data security; Dell’s ability to hedge effectively its exposure to fluctuations in foreign currency exchange rates and interest rates; counterparty default; unfavorable results of legal proceedings; expiration of tax holidays or favorable tax rate structures, or unfavorable outcomes in tax audits and other compliance matters; Dell’s ability to attract, retain, and motivate key personnel; Dell’s ability to maintain strong internal controls; changing environmental and safety laws; the effect of armed hostilities, terrorism, natural disasters, and public health issues; and other risks and uncertainties discussed in Dell’s filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K for its fiscal year ended Jan. 28, 2011. In particular, Dell’s expectations with regard to revenue, cash flow from operations, net income and non-GAAP earnings per share for the full fiscal year ending Feb. 1, 2013 assume, among other matters, that there is no significant decline in economic conditions generally or demand growth specifically, that macroeconomic uncertainties do not materialize into significant economic difficulties, no significant change in product mix patterns, continued geographic customer demand trends, continued successful demand planning and forecasting, no supply chain disruptions, and no significant adverse component pricing or supply movements. Dell assumes no obligation to update its forward-looking statements.

Consolidated statements of income, financial position and cash flows and other financial data follow.
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