Today at the Dell Technologies Securities Analyst Meeting, I shared our new long-term value creation framework and reinforced our commitment to long-term, sustainable value for shareholders.
For more than four decades, Dell has thrived by embracing innovation and leading waves of technology transformation. From the rise of PCs to server virtualization and now the AI revolution, we’ve consistently identified new avenues for growth and delivered on our commitments.
Today, AI is unlocking unprecedented possibilities for human progress, and we are actively shaping the future of AI infrastructure. We are uniquely positioned for this moment – for translating our customers’ hunger for AI into growth and value creation for our shareholders.
A proven track record: delivering consistent value creation
Our financial strategy is built on three core priorities:
- Driving revenue growth
- Increasing earnings per share (EPS) at a rate faster than revenue
- Generating strong cash flow that is largely returned to our shareholders
This has led to several key achievements:
- EPS Growth: Since FY21, we have achieved 14% EPS growth, and we have more than doubled our revenue and EPS growth framework.
- Adjusted Free Cash Flow: Since 2021, we’ve averaged approximately $4.9 billion of annual adjusted free cash flow. It’s the fuel that drives capital return.
- Shareholder Return: Since initiating our dividend, we’ve returned $14.5B to shareholders, outperforming our 80%+ target, averaging roughly 100% return.
Our success stems from our financial discipline, strategic differentiators and unique operating model.
Here’s what makes Dell different:
- Leading End-to-End Solutions: We hold leadership positions across our portfolio, from client devices to storage, servers and cutting-edge AI solutions, serving our customers’ IT needs end-to-end.
- Unmatched Go-to-Market (GTM) Engine: Our direct relationships and GTM engine provide unparalleled customer insights.
- World-Class Supply Chain: Our supply chain is a proven strategic asset, demonstrating resilience and efficiency time and again.
- Global Services: We have the unique ability to service our customers’ needs anywhere in the world.
Raising the bar: increasing our value creation framework
Building on our strong foundation, we are raising our long-term financial targets to reflect the immense growth opportunities ahead:
- Revenue growth of 7-9%, up from 3-4%, driven by continued strength in AI. This is underpinned by 2-3% growth in CSG and 11-14% growth in ISG.
- Non-GAAP diluted EPS growth of 15% or better, up from 8%. Over the past five years, we have roughly doubled EPS. With this increased target, we expect to double EPS again.
- Net income to adjusted free cash flow conversion of 100% or better. We are relentlessly focused on working capital with our differentiated negative cash conversion cycle.
- A continued target to return over 80% of adjusted free cash flow to shareholders, which we achieve through programmatic and opportunistic share repurchases.
- An extension of our dividend growth commitment of 10% or more annually through fiscal year 2030.
The future is now: leading in the AI era
The foundation we’ve built over decades has prepared us to lead in the AI era. We’re enabling our customers to harness AI while integrating AI into our own operations to further strengthen and differentiate our unique operating model.
The world is generating data at an exponential pace, and that data is fueling AI. This requires even more compute and spurs more demand for the data center and edge solutions we provide. We are uniquely positioned to shape our AI future.
To learn more, please watch the Dell Technologies Securities Analyst Meeting replay and access the meeting materials here.
