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Dell sails into profitability despite pandemic

Dell Technologies said it “effectively navigated” the pandemic in its first quarter with “broad capabilities, a flexible supply chain and resilient global workforce”. The claim is significant considering the three month period goes up to 1 May, taking in part of the peak of the crisis for most Western markets.

First quarter revenue was stagnant at $21.9bn, but the company noticeably managed to increase its operating income 28% to $702m when compared to the same quarter last year. This is indeed significant when compared to rival HPE's latest quarterly results, which saw the firm tumble into the red as result of supply chain problems and order backlog deployments.

Dell's net income was $182m and the adjusted EBITDA was $2.6bn. “Customers need essential technology now more than ever to put business continuity, remote working and learning plans into practice,” said Jeff Clarke, vice chairman and chief operating officer at Dell Technologies.

“In Q1, we saw orders with banking and financial services, government, healthcare and life sciences customers up 15 to 20% – all to meet immediate needs of their customers, communities and patients. As the world pivots from response to recovery, we’ll continue to put our broad capabilities to work to deliver differentiated results for our customers and our company,” said Clarke.

Recurring revenue, which includes deferred revenue amortisation, utility and as-a-service delivered as part of Dell Technologies on Demand, is now around $6bn a quarter, up 16% year-over-year.

Client Solutions Group [PCs] revenue for the first quarter was $11.1bn, up 2% annually. Operating income was $592m. Infrastructure Solutions Group [servers and storage ] revenue for the first quarter was $7.6bn, an 8% decrease year-over-year, with “customers directing more spend towards remote work and business continuity solutions”, said Dell. Operating income in the segment was $732m.

The VMware subsidiary revenue was $2.8bn - up 12%, with an operating income of $773m.