What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2025-06-10 compared with 2024-12-10 · 240 added, 260 removed, 397 unchanged (56% of the section changed)

ITEM 2 — MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This management’s discussion and analysis should be read in conjunction with the audited Consolidated Financial Statements and accompanying Notes included in the Company’s Annual Report on Form 10-K for the fiscal year ended February 2, 2024 and the unaudited Condensed Consolidated Financial Statements included in this report.

This management’s discussion and analysis should be read in conjunction with the audited Consolidated Financial Statements and accompanying Notes included in the Company’s Annual Report on Form 10-K for the fiscal year ended January 31, 2025 and the unaudited Condensed Consolidated Financial Statements included in this report.

In addition to historical financial information, the following discussion contains forward-looking statements that reflect our plans, estimates, and beliefs, and that are subject to numerous risks and uncertainties.

3 unchanged sentences

Unless the context indicates otherwise, references in this report to “we,” “us,” “our,” the “Company,” and “Dell Technologies” mean Dell Technologies Inc.

and its consolidated subsidiaries, references to “Dell” mean Dell Inc.

and Dell Inc.’s consolidated subsidiaries, and references to “EMC” mean EMC Corporation and EMC Corporation’s consolidated subsidiaries.

and its consolidated subsidiaries.

Our fiscal year is the 52- or 53-week period ending on the Friday nearest January 31.

We refer to our fiscal year ending January 31, 2025 as “Fiscal 2025” and our fiscal year ended February 2, 2024 as “Fiscal 2024.” Fiscal 2025 and Fiscal 2024 include 52 weeks.

We refer to our fiscal year ending January 30, 2026 as “Fiscal 2026,” and our fiscal year ended January 31, 2025 as “Fiscal 2025.” Fiscal 2026 and Fiscal 2025 include 52 weeks.

Company Overview

Dell Technologies is a global technology company that provides customers with a broad and innovative solutions portfolio to help customers modernize their information technology (“IT”) infrastructure, address workforce transformation, and provide critical solutions that keep people and organizations connected.

With our extensive portfolio and our commitment to innovation, we offer secure, integrated solutions that extend from the edge to the core to the cloud, and we are at the forefront of artificial intelligence (“AI”), software-defined, and cloud native infrastructure solutions.

Dell Technologies is a leader in the global technology industry focused on providing broad and innovative technology solutions for the data and artificial intelligence (“AI”) era.

We build and offer solutions ranging from client devices and peripherals to infrastructure solutions across servers, networking, and storage to meet the evolving needs of our customers and drive better business outcomes.

With our extensive portfolio and our commitment to innovation, we offer secure, integrated solutions that extend from the edge to the core to the cloud, and we are at the forefront of AI, software-defined, and cloud native infrastructure solutions.

Our vision is to become the most essential technology partner.

We intend to realize our vision as we execute our strategy to leverage our strengths to extend our leadership positions and capture new growth.

We intend to realize our vision by executing our strategy of leveraging our strengths to extend our leadership positions and capture new growth.

We are organized into two business units which are also our reportable segments:

Infrastructure Solutions Group and Client Solutions Group.

• Infrastructure Solutions Group (“ISG”) — ISG includes our storage, server, and networking offerings.

Our comprehensive storage portfolio includes modern and traditional storage solutions, including all-flash arrays, scale-out file, object platforms, hyper-converged infrastructure, and software-defined storage.

• Infrastructure Solutions Group (“ISG”) — ISG includes our servers and networking offerings and our storage offerings.

Our server portfolio includes high-performance general-purpose and AI-optimized servers.

Our networking portfolio includes wide area network infrastructure, data center and edge networking switches, and cables and optics.

ISG also offers software, peripherals, and services, including consulting and support and deployment.

2 unchanged sentences

CSG also includes services offerings, such as configuration, support and deployment, and extended warranties.

Our “other businesses” primarily consist of our resale of standalone offerings of VMware LLC (formerly “VMware, Inc.” and individually and together with its subsidiaries, “VMware”), referred to as “VMware Resale,” and offerings of SecureWorks Corp.

(“Secureworks”).

In October 2024, Secureworks announced that it has entered into a definitive agreement pursuant to which Sophos Inc., an affiliate of Thoma Bravo, L.P., a private equity and growth capital firm, will acquire Secureworks in an all-cash transaction for approximately $0.9 billion, subject to certain closing adjustments.

The transaction is expected to close in early 2025, subject to customary closing conditions.

Our other businesses are not classified as reportable segments, either individually or collectively.

Our other businesses primarily consist of our historical resale of standalone offerings of VMware LLC (formerly VMware, Inc.

and individually and together with its subsidiaries, “VMware”), referred to as “VMware Resale,” and offerings of SecureWorks Corp.

(“Secureworks”) through the date of the sale of Secureworks as discussed below.

These businesses are divested businesses or their offerings are no longer actively sold, and are not classified as reportable segments, either individually or collectively.

Their operating results are reported within Corporate and other.

On February 3, 2025, the sale of Secureworks to Sophos Inc., an affiliate of Thoma Bravo, L.P., was completed in an all-cash transaction for a purchase price of approximately $0.9 billion.

We received total cash consideration for the equity interest held in Secureworks of approximately $0.6 billion, resulting in a gain on sale recorded of $0.2 billion recognized in interest and other, net in the Condensed Consolidated Statements of Income during the three months ended May 2, 2025.

For further discussion regarding our current reportable segments, see “Results of Operations — Business Unit Results” and Note 15 of the Notes to the Condensed Consolidated Financial Statements included in this report.

We offer customers choice in how they acquire our solutions, including traditional purchasing and financing offerings provided by Dell Financial Services and its affiliates (“DFS”).

We also offer flexible consumption models that include utility, subscription, and as-a-Service models.

These offerings allow our customers to pay over time and provide them with operational and financial flexibility.

We offer customers choices in how they acquire our solutions, including traditional purchasing and offerings under the Dell Payment Solutions portfolio.

These offerings provide both payment and consumption solutions, including as-a-Service, subscription, utility, leases, and loans, which allow our customers to pay over time and provide them with operational and financial flexibility.

Dell Financial Services and its affiliates (“DFS”) support financing solutions and services as part of the portfolio.

For additional information about our financing arrangements, see Note 4 of the Notes to the Condensed Consolidated Financial Statements included in this report.

Business Trends and Challenges

During the third quarter and first nine months of Fiscal 2025, the following trends and conditions continued to affect the environment in which we operate:

During the first quarter of Fiscal 2026, we executed our strategy with strong operating results, generating overall net revenue and operating income growth.

The following trends and conditions affected the environment in which we operated:

• Macroeconomic environment:

The demand environment continued to remain strong for our servers and networking offerings, which resulted in overall net revenue growth.

Additionally, we began to see modest demand improvement for our commercial offerings.

• Demand for AI-optimized solutions:

Our ISG business continued to benefit from increased demand for AI-optimized solutions as customers continue to adopt and further integrate AI into their operations.

As a result of the continued strong demand for our AI-optimized servers, backlog levels for such offerings remained elevated as we exited the quarter.

• Supply chain:

Notwithstanding the increased demand for AI-optimized solutions, our supply chain continued to operate efficiently.

We experienced an increase in input costs primarily driven by higher logistics costs, the effect of which was partially offset by favorability in component costs.

Compared to the prior quarter, we began to observe an inflationary environment.

Input costs primarily consist of both component and logistics costs.

• Broadcom’s acquisition of VMware:

On November 22, 2023, Broadcom Inc.

(“Broadcom”) completed its acquisition of VMware, leading to changes to our relationship with VMware as described below.

We expect the demand environment will continue to remain strong in our servers and networking offerings, which we expect will result in ISG net revenue growth across our AI-optimized and traditional servers for the fourth quarter of Fiscal 2025.

We expect modest CSG net revenue growth for the fourth quarter of Fiscal 2025 depending on the timing of the anticipated PC refresh cycle and a competitive pricing environment.

Additionally, we expect a continued reduction of our other businesses’ net revenue as we no longer act as a distributor of VMware’s standalone products and services.

We expect input costs to increase during the fourth quarter of Fiscal 2025, principally driven by anticipated inflation for component costs.

The demand environment significantly increased for our AI-optimized server offerings and remained strong for our commercial offerings.

While the demand environment was strong, the pricing environment remained competitive, primarily impacting our CSG gross margin performance.

• Demand of AI-optimized solutions:

Our ISG business continued to benefit from increased demand for AI-optimized solutions as customers continue to adopt and further integrate AI.

As a result of the substantial demand for our AI-optimized servers during the quarter, backlog levels significantly increased when compared to the prior quarter.

Given the scale of the AI opportunities, the varying stages of customer readiness, and the frequency of component part updates or transitions, there is inherent non-linearity in the timing of demand and subsequent shipments for our AI-optimized server offerings, which continues to drive variability in our revenue.

• Technology refresh in core markets:

Within our CSG business, the PC refresh cycle is underway as customers have begun upgrading their devices, which has contributed to increased demand for our commercial offerings and CSG net revenue growth.

Additionally, within our ISG business, we continue to see customers modernize and consolidate their data centers as more customers transition to next-generation products, which drove modest demand within our traditional servers and networking offerings.

• Business modernization initiatives:

We continue to prioritize ongoing modernization initiatives to achieve greater efficiencies and streamline our processes, while also continuing to make strategic investments designed to enable growth and innovation.

These initiatives have resulted in a continued net reduction in our operating expenses.

We expect net revenue growth for the full fiscal year primarily driven by ISG net revenue, and to a lesser extent, CSG net revenue.

We expect demand growth across our servers and networking offerings throughout the remainder of Fiscal 2026, which will result in ISG net revenue growth.

While we expect overall ISG net revenue growth, we anticipate potential near-term demand moderation as customers reevaluate IT spending behavior due to uncertainty in the macroeconomic environment.

We expect CSG net revenue growth driven in part by the PC refresh cycle.

Additionally, we expect a continued reduction of our Corporate and other net revenue driven by offerings that are no longer actively sold and businesses that have been divested.

We expect a modest decline in input costs during Fiscal 2026, primarily driven by anticipated deflation for component costs.

Input cost trends are dependent on the strength or weakness of actual end-user demand and supply dynamics, which will continue to fluctuate and ultimately impact our costs, pricing, and operating results.

We remain focused on executing our key strategic priorities, building long-term value creation for our stakeholders, and addressing our customers’ needs while continuing to make prudent decisions in response to the environment.

We remain focused on executing our key strategic priorities, creating long-term value for our stakeholders, and addressing our customers’ needs while continuing to make prudent decisions in response to the environment.

We expect margin growth for the full fiscal year, while balancing anticipated margin rate pressure resulting from a continuing shift in mix towards our AI-optimized servers and a competitive environment.

We look to balance profitability and growth while maintaining disciplined pricing as we navigate through competitive pricing pressures.

We continue to advance our own capabilities to change the way we work and make decisions, improve business outcomes and the customer experience, and reduce costs by leveraging new technology and optimizing business processes.

We remain committed to disciplined cost management in coordination with our ongoing business transformation initiatives and will continue to take certain measures to reduce costs, including limitation of external hiring, employee reorganizations, and other actions to align our investments with our strategic priorities and customer needs.

We anticipate these actions will result in a continued reduction in our overall headcount.

We believe our unique operating advantages provide a foundation to foster growth, drive efficiencies, and continue to position us for long-term success.

Relationship with VMware — On November 22, 2023, VMware was acquired by Broadcom, and subsequently announced changes to its go-to-market approach for VMware offerings that impacted our commercial relationship with VMware.

On March 25, 2024, we terminated our Commercial Framework Agreement with VMware, which provided the framework under which we and VMware continued our commercial relationship following our spin-off of VMware on November 1, 2021.

We no longer act as a distributor of Broadcom’s VMware standalone products and services, though we will continue to support customers that have purchased resale offerings sold in prior periods.

We continue to integrate and embed certain VMware products and services with select Dell Technologies’ offerings to end-users, such as through our VxRail solution.

The results of such offerings are reflected within CSG or ISG, depending upon the nature of the underlying offering sold.

VMware was a related party until the date of its acquisition by Broadcom.

The acquisition terminated the preexisting related party relationship with VMware such that no related party relationship exists with either Broadcom or VMware effective as of November 22, 2023.

For more information regarding the impact of the Broadcom acquisition of VMware and our prior related party transactions with VMware, see Note 15 of the Notes to the Condensed Consolidated Financial Statements included in this report.

ISG — We expect that ISG will continue to be impacted by the evolving nature of the IT infrastructure market and competitive environment.

With our scale and strong solutions portfolio, we believe we are well-positioned to address the ongoing competitive dynamics and trends in technology and customer needs.

Through our collaborative, customer-focused approach to innovation, we strive to deliver new and relevant solutions and software to our customers quickly and efficiently.

We remain committed to disciplined cost management in coordination with our ongoing business modernization initiatives and expect continued reductions in operating expenses as we take certain measures to reduce costs, including limitation of external hiring, employee reorganizations, and other actions to align our investments with our strategic priorities and customer needs.

We anticipate these actions will result in additional reductions in our overall headcount.

We believe our unique operating advantages provide a foundation to foster business growth, enable innovation, drive efficiencies, and continue to position us for long-term success.

Relationship with VMware — On March 25, 2024, we terminated our Commercial Framework Agreement with VMware, whereby we acted as a distributor of Broadcom Inc.’s VMware standalone products and services.

We no longer act as a distributor of such products and services, although we continue to support customers that have purchased resale offerings sold in prior periods.

We continue to integrate and embed certain VMware products and services with our VxRail solution to end-user customers.

The results for this integrated offering are reflected within ISG.

ISG — We expect ISG will continue to be impacted by the evolving nature of the IT infrastructure market and competitive environment.

With our scale and market-leading solutions portfolio, we believe we are well-positioned to address the ongoing competitive dynamics and trends in technology and customer needs.

Through our collaborative, customer-focused approach to innovation, we strive to deliver relevant new and next-generation solutions and software to our customers quickly and efficiently.

We continue to focus on customer base expansion and the lifetime value of customer relationships.

We anticipate that ISG will continue to benefit from technology advancements and customer interest in AI and we are well-positioned to capture growth and support our customers’ needs.

We anticipate ISG will continue to benefit from technology advancements and interest in AI as customers continue to adopt and integrate AI.

The timing of customer purchases reflects the varying stages of adoption of AI by different customer segments and drives variability in our revenue.

To meet the growing demand and increasing complexity of our AI-optimized offerings, we have increased our purchases of certain components with suppliers, which has resulted in increased inventory levels, higher purchase obligations, and new working capital dynamics.

Additionally, frequent component part updates or transitions create additional challenges in managing demand and supply levels.

While we have seen lead times shorten, we anticipate the next generation of these components, for which the demand remains high, will be subject to supply constraints.

We expect that growth in data will continue to generate long-term demand for our storage solutions and services.

3 unchanged sentences

Our storage business is subject to seasonal trends, which may continue to impact ISG results.

CSG — We participate in all segments of the PC market with a focus on commercial and high-end consumer computing devices, as we believe they represent the most stable and profitable markets.

CSG — We participate in all segments of the PC market with a focus on commercial and high-end consumer computing devices, which we believe represent the most stable and profitable markets.

We anticipate that CSG will benefit from advances in AI over the long-term as customers will require PCs with the ability to run their complex AI workloads.

1 unchanged sentence

We are committed to our long-term CSG strategy and will continue to make investments to innovate across the portfolio.

We expect that the CSG demand environment will be subject to seasonal trends as well as the timing of the anticipated PC refresh cycle.

We expect that the CSG demand environment will be subject to seasonal trends and influenced by the timing and scale of the PC refresh cycle.

Recurring Revenue and Consumption Models — We expect that our flexible consumption models will further strengthen our customer relationships and provide a foundation for growth in recurring revenue.

2 unchanged sentences

The technologies or products these companies have under development are typically in the early stages and may never have commercial value, which could result in a loss of a substantial part of our investment in the companies.

In addition to these investments, we may also make disciplined acquisitions of businesses that advance our strategic objectives and accelerate our innovation agenda.

In addition to these investments, we may also make targeted acquisitions of businesses that advance our strategic objectives and accelerate our innovation agenda.

Foreign Currency Exposure — We manage our business on a U.S.

Dollar basis.

However, we have a large global presence, generating approximately half of our net revenue from sales to customers outside of the United States during the third quarter and first nine months of Fiscal 2025 and Fiscal 2024.

However, we have a large global presence, generating approximately half of our net revenue from sales to customers outside of the United States during the first quarter of Fiscal 2026 and Fiscal 2025.

As a result, our operating results can be, and particularly in recent periods have been, impacted by fluctuations in foreign currency exchange rates.

We utilize a comprehensive hedging strategy intended to mitigate the impact of foreign currency volatility over time, and we adjust pricing when possible to further minimize foreign currency impacts.

Other Macroeconomic Risks and Uncertainties — The impacts of trade protection measures, including increases in tariffs and trade barriers, changes in government policies and international trade arrangements, geopolitical volatility, and global macroeconomic conditions (including those in China) may affect our ability to conduct business in some non-U.S.

We monitor and seek to mitigate these risks with adjustments to our manufacturing, supply chain, and distribution networks.

Other Macroeconomic Risks and Uncertainties — During the first quarter of Fiscal 2026, a number of countries, including the United States, imposed or proposed tariffs on imports, and may continue to do so.

The impacts of trade protection measures, including increases or changes in tariffs and trade barriers, changes in government policies and international trade arrangements, geopolitical volatility, and global macroeconomic conditions, or uncertainty regarding the impact of proposed or future trade protection measures, may affect our results of operations in some markets.

We leveraged the agility and scale of our world-class supply chain to mitigate impacts of tariffs during the quarter, and will continue to respond to changing market conditions as needed.

NON-GAAP FINANCIAL MEASURES

17 unchanged sentences

Non-GAAP product gross margin, non-GAAP services gross margin, non-GAAP gross margin, non-GAAP operating expenses, non-GAAP operating income, non-GAAP net income, and non-GAAP earnings per share attributable to Dell Technologies Inc.

- diluted, as defined by us, exclude amortization of intangible assets, stock-based compensation expense, other corporate expenses and, for non-GAAP net income and non-GAAP earnings per share attributable to Dell Technologies Inc.

- diluted, as defined by us, exclude amortization of intangible assets, stock-based compensation expense, other corporate (income) expenses and, for non-GAAP net income and non-GAAP earnings per share attributable to Dell Technologies Inc.

- diluted, fair value adjustments on equity investments and an aggregate adjustment for income taxes.

7 unchanged sentences

• Amortization of Intangible Assets — Amortization of intangible assets primarily consists of the amortization of customer relationships, developed technology, and trade names.

In connection with our acquisition by merger of EMC, referred to as the “EMC merger transaction,” and the acquisition of Dell Inc.

by Dell Technologies Inc., referred to as the “going-private transaction,” all of the tangible and intangible assets and liabilities of EMC and Dell Inc.

and their consolidated subsidiaries, respectively, were accounted for and recognized at fair value on the transaction dates.

In connection with our acquisition by merger of EMC Corporation in 2016, all of the tangible and intangible assets and liabilities were accounted for and recognized at fair value on the transaction date.

We exclude amortization charges for the amortization of intangible assets as they do not reflect our current operating performance and charges are significantly impacted by the timing and magnitude of our acquisitions and, as a result, may vary in amount from period to period.

3 unchanged sentences

Although stock-based compensation is an important aspect of the compensation of our employees and executives, we exclude such expense because the fair value of the stock-based awards may fluctuate based on factors unrelated to the operating performance of the business and may bear little resemblance to the actual value realized upon the vesting or future exercise of the related stock-based awards.

• Other Corporate Expenses — Other corporate expenses consist primarily of severance expenses, payroll taxes associated with stock-based compensation, transaction-related expenses, facility action costs, impairment charges, and incentive charges related to equity investments.

Severance costs are primarily related to severance and benefits for employees terminated pursuant to cost management initiatives.

During the first nine months of Fiscal 2025 and Fiscal 2024, we recognized $0.6 billion and $0.4 billion of severance expense related to workforce reduction activities.

Transaction-related expenses typically consist of acquisition, integration, and divestitures related costs, primarily representing costs for legal, banking, consulting, and advisory services, and are expensed as incurred.

Although we may incur these types of expenses in the future, we exclude other corporate expenses as they can vary from period to period, are significantly impacted by the timing and nature of these events, and are not used by management in assessing operating performance of the business.

• Other Corporate (Income) Expenses — Other corporate (income) expenses consist primarily of transaction-related gains on the sales of businesses, severance expenses, payroll taxes associated with stock-based compensation, incentive charges related to equity investments, transaction-related expenses, facility action costs, and impairment charges.

During the first quarter of Fiscal 2026, we recognized a $0.2 billion gain related to the sale of Secureworks.

Although we may incur these types of expenses in the future, we exclude other corporate (income) expenses as they can vary from period to period, are significantly impacted by the timing and nature of these events, and are not used by management in assessing operating performance of the business.

• Fair Value Adjustments on Equity Investments — Fair value adjustments on equity investments primarily consist of the gain (loss) on strategic investments, which includes recurring fair value adjustments of investments in publicly-traded companies, as well as those in privately-held companies, which are adjusted for observable price changes and any potential impairments.

2 unchanged sentences

• Aggregate Adjustment for Income Taxes — The aggregate adjustment for income taxes is the estimated combined income tax effect for the adjustments described above and determined based on the tax jurisdictions where those adjustments were incurred, as well as an adjustment for discrete tax items.

During the first nine months of Fiscal 2025, the aggregate adjustment for income taxes included discrete tax benefits of $0.4 billion related to changes in uncertain tax benefits resulting from the expiration of certain statutes of limitations and $0.2 billion related to stock-based compensation.

During the first quarter of Fiscal 2025, the aggregate adjustment for income taxes included discrete tax benefits of $0.4 billion related to changes in uncertain tax benefits resulting from the expiration of certain U.S.

statutes of limitations and $0.2 billion related to stock-based compensation.

We exclude these benefits or charges for purposes of calculating non-GAAP net income due to the variability in recognition of discrete tax items from period to period.

1 unchanged sentence

See Note 11 of the Notes to the Condensed Consolidated Financial Statements included in this report for additional information about our income taxes.

Beginning in Fiscal 2025, our non-GAAP income tax is calculated using a fixed estimated annual tax rate which is determined based on historical trends and projections for the current fiscal year.

Our non-GAAP income tax was calculated using a fixed estimated annual tax rate that is determined based on historical trends and projections for the current fiscal year.

We may adjust our estimated annual tax rate during the fiscal year to take into account events that would significantly impact our income tax expense, including significant changes resulting from tax legislation, material changes in geographic mix of revenue and expenses, changes to our corporate structure, and other significant events.

The following table presents a reconciliation of each non-GAAP financial measure to the most directly comparable GAAP measure for the periods indicated:

Three Months Ended Nine Months Ended

November 1, 2024 % Change November 3, 2023 November 1, 2024 % Change November 3, 2023

Three Months Ended

May 2, 2025 % Change May 3, 2024

(in millions, except percentages)

22 unchanged sentences

Non-GAAP operating expenses $ 3,391 (2) % $ 3,473

Three Months Ended Nine Months Ended

November 1, 2024 % Change November 3, 2023 November 1, 2024 % Change November 3, 2023

Three Months Ended

May 2, 2025 % Change May 3, 2024

(in millions, except percentages and per share amounts)

9 unchanged sentences

Stock-based compensation expense 190 210

Other corporate expenses 166 36 665 566

Other corporate (income) expenses (58) 170

Fair value adjustments on equity investments (17) 30

6 unchanged sentences

Stock-based compensation expense 0.27 0.29

Other corporate expenses 0.23 0.04 0.92 0.77

Other corporate (income) expenses (0.08) 0.24

Fair value adjustments on equity investments (0.02) 0.04

12 unchanged sentences

The following table presents a reconciliation of free cash flow and adjusted free cash flow to cash flow from operations for the periods indicated:

Three Months Ended Nine Months Ended

November 1, 2024 % Change November 3, 2023 November 1, 2024 % Change November 3, 2023

Three Months Ended

May 2, 2025 % Change May 3, 2024

(in millions, except percentages)

10 unchanged sentences

(a) Capital expenditures and capitalized software development costs, net includes proceeds from sales of facilities, land, and other assets.

(b) Financing receivables represent the operating cash flow impact from the change in DFS financing receivables.

(c) Equipment under operating leases represents the net impact of capital expenditures and depreciation expense for DFS leases and contractually embedded leases identified within flexible consumption arrangements.

(b) Financing receivables represent the operating cash flow impact from the change in financing receivables.

(c) Equipment under operating leases represents the net impact of capital expenditures and depreciation expense for leases and contractually embedded leases identified within flexible consumption arrangements.

RESULTS OF OPERATIONS

2 unchanged sentences

Unless otherwise indicated, all changes identified for the current-period results represent comparisons to results for the prior corresponding fiscal period.

Three Months Ended Nine Months Ended

November 1, 2024 November 3, 2023 November 1, 2024 November 3, 2023

Dollars % of Net Revenue % Change Dollars % of Net Revenue Dollars % of Net Revenue % Change Dollars % of Net Revenue

Three Months Ended

May 2, 2025 May 3, 2024

Dollars % of Net Revenue % Change Dollars % of Net Revenue

(in millions, except percentages and per share amounts)

12 unchanged sentences

Non-GAAP Financial Information

Three Months Ended Nine Months Ended

November 1, 2024 November 3, 2023 November 1, 2024 November 3, 2023

Dollars % of Net Revenue % Change Dollars % of Net Revenue Dollars % of Net Revenue % Change Dollars % of Net Revenue

Three Months Ended

May 2, 2025 May 3, 2024

Dollars % of Net Revenue % Change Dollars % of Net Revenue

(in millions, except percentages and per share amounts)

11 unchanged sentences

See “Non‑GAAP Financial Measures” for additional information about these non-GAAP financial measures, including our reasons for including these measures, material limitations with respect to the usefulness of the measures, and a reconciliation of each non-GAAP financial measure to the most directly comparable GAAP financial measure.

During the third quarter and first nine months of Fiscal 2025, net revenue increased by 10% and 8%, respectively, driven by an increase in ISG net revenue that was partially offset by a decrease in other businesses net revenue and, to a lesser extent, CSG net revenue.

During the first quarter of Fiscal 2026, net revenue increased by 5%, driven by an increase in ISG net revenue and, to a lesser extent, CSG net revenue that was partially offset by a decrease in Corporate and other net revenue.

The increase in ISG net revenue was driven by growth in our servers and networking offerings.

Other businesses net revenue declined primarily due to a decrease in VMware Resale revenue as we no longer act as a distributor of standalone VMware offerings.

The decline in CSG net revenue was attributable to a decrease in sales of our consumer offerings.

During the third quarter of Fiscal 2025, both operating income and non-GAAP operating income increased by 12%, to $1.7 billion and $2.2 billion, respectively.

During the first nine months of Fiscal 2025, operating income and non-GAAP operating income increased by 6% to $3.9 billion and 3% to $5.7 billion, respectively.

During both the third quarter and first nine months of Fiscal 2025, the increases in operating income and non-GAAP operating income were primarily attributable to an increase in ISG operating income driven by our servers and networking offerings, which was largely offset by a decrease in CSG operating income.

During the third quarter of Fiscal 2025, operating income and non-GAAP operating income as a percentage of net revenue increased 10 basis points to 6.8% and increased 20 basis points to 9.0%, respectively.

During the first nine months of Fiscal 2025, operating income and non-GAAP operating income as a percentage of net revenue decreased 10 basis points to 5.5% and 40 basis points to 8.0%, respectively.

Operating income and non-GAAP operating income as a percentage of net revenue during both the third quarter and first nine months of Fiscal 2025 were impacted by a decline in gross margin as a percentage of net revenue due to a shift in mix towards AI-optimized server offerings and a competitive CSG pricing environment.

The decline in gross margin as a percentage of net revenue was offset by the favorable impact of a decrease in operating expense rate that was driven by strong ISG net revenue growth coupled with continued disciplined cost management.

Cash provided by operating activities was $3.9 billion during the first nine months of Fiscal 2025, and was driven by profitability, partially offset by working capital dynamics.

Working capital was primarily impacted by AI dynamics, which led to higher inventory, accounts receivable, and accounts payable levels.

During the first nine months of Fiscal 2024, cash provided by operating activities was $7.1 billion, which was primarily driven by profitability and working capital management as we reduced inventory, demonstrated strong cash collections performance, and benefited from the timing of purchases and payments to vendors.

Cash provided by operating activities also reflected the impact of the $0.9 billion net payment to settle the Class V transaction litigation and $0.4 billion in proceeds from the sale of our U.S.

consumer revolving customer receivables portfolio.

The increase in CSG net revenue was attributable to an increase in sales of our commercial offerings.

Corporate and other net revenue declined primarily due to a decrease in VMware Resale revenue as we no longer act as a distributor of standalone VMware offerings.

During the first quarter of Fiscal 2026, operating income and non-GAAP operating income increased by 21% to $1.2 billion and 10% to $1.7 billion, respectively.

The increases in operating income and non-GAAP operating income were primarily attributable to an increase in ISG operating income that was driven by our storage offerings.

During the first quarter of Fiscal 2026, operating income and non-GAAP operating income as a percentage of net revenue increased 70 basis points to 5.0% and 30 basis points to 7.1%, respectively.

The increases were driven by the favorable impact of a decrease in operating expense rate as a result of strong net revenue growth coupled with continued disciplined cost management.

The favorable impact of a decrease in operating expense rate was partially offset by a decline in gross margin as a percentage of net revenue due to a competitive CSG pricing environment and a shift in geographical mix within our servers and networking offerings coupled with a shift in mix between our ISG offerings.

Cash provided by operating activities was $2.8 billion during the first quarter of Fiscal 2026 and was driven by profitability and working capital dynamics.

Working capital was primarily impacted by increased demand for our AI-optimized server offerings, which led to higher accounts payable, other current assets, and inventory levels, as well as other business impacts, including annual incentive-based personnel-related payments and strong cash collections performance.

During the first quarter of Fiscal 2025, cash provided by operating activities was $1.0 billion, and was primarily driven by profitability and working capital dynamics, including a shift in mix of the business, the timing of purchases and payments to vendors, annual incentive-based personnel-related payments, and strong cash collections performance.

See “Liquidity, Cash Requirements, and Market Conditions” for additional information about our cash flow metrics.

2 unchanged sentences

As we continue to innovate and modernize our offerings, we believe that Dell Technologies is well-positioned for long-term profitable growth.

During the third quarter and first nine months of Fiscal 2025, net revenue increased 10% and 8%, respectively, primarily driven by an increase in ISG net revenue that was partially offset by a decrease in other businesses net revenue and, to a lesser extent, CSG net revenue.

During the first quarter of Fiscal 2026, net revenue increased 5%, primarily driven by an increase in ISG net revenue and, to a lesser extent, CSG net revenue that was partially offset by a decrease in Corporate and other net revenue.

See “Business Unit Results” for further information.

• Product Net Revenue — Product net revenue includes revenue from the sale of hardware products and software licenses.

During the third quarter of Fiscal 2025, product net revenue increased 13% due to an increase in ISG product net revenue driven by growth in our servers and networking offerings.

The increase was partially offset by a decline in CSG product net revenue as a result of a decrease in units sold within our consumer offerings, as well as a decline in other businesses product net revenue as we no longer act as a distributor of standalone VMware offerings.

During the first nine months of Fiscal 2025, product net revenue increased 11% due to an increase in ISG product net revenue driven by growth in our servers and networking offerings.

The increase was partially offset by a decrease in CSG product net revenue as a result of a decrease in the average selling prices of our CSG offerings and, to a lesser extent, a decline in units sold within our consumer offerings, as well as a decline in other businesses product net revenue as we no longer act as a distributor of standalone VMware offerings.

During the first quarter of Fiscal 2026, product net revenue increased 9% due to an increase in ISG product net revenue and, to a lesser extent, an increase in CSG product net revenue.

The increase in ISG product net revenue was driven by growth in our servers and networking offerings and, to a lesser extent, our storage offerings.

The increase in CSG product net revenue was driven by growth in our commercial offerings, partially offset by lower demand for our consumer offerings.

• Services Net Revenue — Services net revenue includes revenue from our services offerings and support services related to hardware products and software licenses.

During the third quarter and first nine months of Fiscal 2025, services net revenue increased 1% and 2%, respectively, driven primarily by growth within services net revenue attributable to CSG and, to a lesser extent, services net revenue attributable to ISG, partially offset by a decline in other businesses services net revenue.

The increase in services net revenue was primarily attributable to CSG third-party software support and maintenance and, to a lesser extent, support and maintenance associated with products sold in prior periods within both ISG and CSG.

Other businesses services net revenue declined as we no longer act as a distributor of standalone VMware offerings.

During the first quarter of Fiscal 2026, services net revenue decreased 6% due to a decline in Corporate and other services net revenue, as we no longer act as a distributor of standalone VMware offerings.

A substantial portion of services net revenue is derived from offerings that have been deferred over a period of time, and, as a result, reported growth rates for services net revenue will be different than reported growth rates for product net revenue.

From a geographical perspective, net revenue increased in the Americas and, to a lesser extent, the Asia Pacific and Japan (“APJ”) and Europe, the Middle East and Africa (“EMEA”) regions during the third quarter of Fiscal 2025.

Net revenue increased in both the Americas and APJ and decreased in EMEA during the first nine months of Fiscal 2025.

During the third quarter of Fiscal 2025, both gross margin and non-GAAP gross margin increased 3%, to $5.3 billion and $5.4 billion, respectively, driven by an increase in ISG gross margin that was largely offset by a decrease in CSG gross margin.

During the first nine months of Fiscal 2025, both gross margin and non-GAAP gross margin decreased 1%, to $15.4 billion and $15.8 billion, respectively, driven by a decrease in CSG gross margin that was largely offset by an increase in ISG gross margin.

The increase in ISG gross margin during both the third quarter and first nine months of Fiscal 2025 was primarily attributable to growth in our AI-optimized server offerings.

The decrease in CSG gross margin during both the third quarter and first nine months of Fiscal 2025 was primarily attributable to a competitive pricing environment.

During the third quarter of Fiscal 2025, gross margin and non-GAAP gross margin percentage decreased 130 basis points to 21.8% and 140 basis points to 22.3%, respectively.

During the first nine months of Fiscal 2025, gross margin and non-GAAP gross margin percentage decreased 200 basis points to 21.5% and 210 basis points to 22.1%, respectively.

The decreases in gross margin percentage and non-GAAP gross margin percentage during both the third quarter and first nine months of Fiscal 2025 were primarily driven by a shift in mix towards AI-optimized server offerings and a competitive CSG pricing environment.

• Product Gross Margin — During the third quarter of Fiscal 2025, both product gross margin and non-GAAP product gross margin increased 2%, to $2.7 billion and $2.8 billion, respectively, primarily driven by an increase in ISG product gross margin that was largely offset by a decrease in CSG product gross margin.

During the first nine months of Fiscal 2025, both product gross margin and non-GAAP product gross margin decreased 4% to $8.0 billion and $8.2 billion, respectively, primarily driven by a decrease in CSG product gross margin that was partially offset by an increase in ISG product gross margin.

The increase in ISG product gross margin during both the third quarter and first nine months of Fiscal 2025 was primarily attributable to growth in our AI-optimized server offerings.

The decline in CSG product gross margin during both the third quarter and first nine months of Fiscal 2025 was primarily attributable to a competitive pricing environment.

During the third quarter of Fiscal 2025, both product gross margin percentage and non-GAAP product gross margin percentage decreased 160 basis points, to 15.0% and 15.5%, respectively.

During the first nine months of Fiscal 2025, product gross margin percentage and non-GAAP product gross margin percentage decreased 220 basis points to 15.0% and 240 basis points to 15.4%, respectively.

The declines during both the third quarter and first nine months of Fiscal 2025 were primarily attributable to a shift in mix towards our AI-optimized server offerings and a competitive CSG pricing environment.

• Services Gross Margin — During the third quarter of Fiscal 2025, services gross margin and non-GAAP services gross margin increased 4% to $2.6 billion and 5% to $2.6 billion, respectively.

During the first nine months of Fiscal 2025, services gross margin and non-GAAP services gross margin increased 2% to $7.4 billion and 3% to $7.6 billion, respectively.

During both the third quarter and first nine months of Fiscal 2025, services gross margin and non-GAAP services gross margin benefited from an increase in support and maintenance associated with products sold in prior periods within both ISG and CSG and, to a lesser extent, an increase CSG third-party software support and maintenance.

During the third quarter of Fiscal 2025, services gross margin percentage and non-GAAP services gross margin percentage increased 120 basis points to 42.1% and 160 basis points to 43.0%, respectively.

During the first nine months of Fiscal 2025, services gross margin percentage and non-GAAP services gross margin percentage increased 10 basis points to 40.7% and 50 basis points to 41.8%, respectively.

From a geographical perspective, net revenue increased in EMEA and APJ and decreased in the Americas during the first quarter of Fiscal 2026.

During the first quarter of Fiscal 2026, gross margin and non-GAAP gross margin increased 2% to $4.9 billion and 1% to $5.1 billion, respectively, driven by an increase in ISG gross margin.

The increase in ISG gross margin was primarily attributable to growth in our storage offerings.

During the first quarter of Fiscal 2026, gross margin and non-GAAP gross margin percentage decreased 70 basis points to 21.1% and 80 basis points to 21.6%, respectively.

The decreases in gross margin percentage and non-GAAP gross margin percentage were primarily driven by a competitive CSG pricing environment and a shift in geographical mix within our servers and networking offerings coupled with a shift in mix between our ISG offerings.

• Product Gross Margin — During the first quarter of Fiscal 2026, both product gross margin and non-GAAP product gross margin increased 3% to $2.5 billion.

The increases were primarily attributable to an increase in ISG product gross margin due to growth in our storage offerings.

During the first quarter of Fiscal 2026, product gross margin percentage and non-GAAP product gross margin percentage decreased 80 basis points to 14.1% and 90 basis points to 14.5%, respectively.

The declines were primarily attributable to a competitive CSG pricing environment and a shift in geographical mix within our servers and networking offerings coupled with a shift in mix between our ISG offerings.

• Services Gross Margin — During the first quarter of Fiscal 2026, both services gross margin and non-GAAP services gross margin remained flat at $2.5 billion.

During the first quarter of Fiscal 2026, services gross margin percentage and non-GAAP services gross margin percentage increased 250 basis points to 42.5% and 240 basis points to 43.4%, respectively.

The increases in services gross margin percentage and non-GAAP services gross margin percentage were primarily driven by a shift in mix, as we no longer act as a distributor of standalone VMware offerings.

7 unchanged sentences

We monitor our component costs and seek to address the effects of any changes to terms that might arise under our vendor rebate programs.

Our gross margins for the third quarter and first nine months of Fiscal 2025 were not materially affected by any changes to the terms of our vendor rebate programs, as the amounts we received under these programs were generally stable relative to our total net cost.

Our gross margins for the first quarter of Fiscal 2026 were not materially affected by any changes to the terms of our vendor rebate programs, as the amounts we received under these programs were generally stable relative to our total net cost.

We are not aware of any significant changes to our vendor rebate programs that will materially impact our results in the near term.

1 unchanged sentence

The following table presents information regarding our operating expenses for the periods indicated:

Three Months Ended Nine Months Ended

November 1, 2024 November 3, 2023 November 1, 2024 November 3, 2023

Dollars % of Net Revenue % Change Dollars % of Net Revenue Dollars % of Net Revenue % Change Dollars % of Net Revenue

Three Months Ended

May 2, 2025 May 3, 2024

Dollars % of Net Revenue % Change Dollars % of Net Revenue

(in millions, except percentages)

3 unchanged sentences

Total operating expenses $ 3,772 16.1 % (3) % $ 3,886 17.5 %

Three Months Ended Nine Months Ended

November 1, 2024 November 3, 2023 November 1, 2024 November 3, 2023

Dollars % of Net Revenue % Change Dollars % of Net Revenue Dollars % of Net Revenue % Change Dollars % of Net Revenue

Three Months Ended

May 2, 2025 May 3, 2024

Dollars % of Net Revenue % Change Dollars % of Net Revenue

(in millions, except percentages)

Non-GAAP operating expenses $ 3,391 14.5 % (2) % $ 3,473 15.6 %

During the third quarter and first nine months of Fiscal 2025, total operating expenses decreased 1% and 3%, respectively, due to a decline in selling, general, and administrative expenses.

• Selling, General, and Administrative — During the third quarter and first nine months of Fiscal 2025, selling, general, and administrative expenses decreased 3% and 6%, respectively, driven by a decrease in employee compensation and benefits expense, principally due to a decline in overall headcount.

During the first quarter of Fiscal 2026, total operating expenses decreased 3% due to a decline in selling, general, and administrative (“SG&A”) expenses.

• Selling, General, and Administrative — During the first quarter of Fiscal 2026, SG&A expenses decreased 5%, driven by a decrease in employee compensation and benefits expense, principally due to a decline in overall headcount.

• Research and Development — Research and development (“R&D”) expenses are primarily composed of personnel-related expenses incurred in connection with product development.

R&D expenses increased 8% and 10%, respectively, during the third quarter and first nine months of Fiscal 2025, principally due to an increase in R&D-related employee compensation and benefits expense.

As a percentage of net revenue, R&D expenses for both the third quarter of Fiscal 2025 and Fiscal 2024 were 3.1% and for both the first nine months of Fiscal 2025 and Fiscal 2024 were 3.2%.

R&D expenses increased 6% during the first quarter of Fiscal 2026, principally due to continued support of R&D initiatives.

As a percentage of net revenue, R&D expenses for the first quarter of Fiscal 2026 and Fiscal 2025 were 3.5% and 3.4%, respectively.

We continue to support R&D initiatives to innovate and introduce new and enhanced solutions into the market.

During the third quarter and first nine months of Fiscal 2025, non-GAAP operating expenses decreased 2% and 3%, respectively, driven by a decline in employee compensation and benefits expense, primarily resulting from a decline in overall headcount.

During the first quarter of Fiscal 2026, non-GAAP operating expenses decreased 2%, driven by a decline in employee compensation and benefits expense, primarily resulting from a decline in overall headcount.

The decline in employee compensation and benefits expense was partially offset by continued support of R&D initiatives.

2 unchanged sentences

Operating Income

During the third quarter of Fiscal 2025, both operating income and non-GAAP operating income increased by 12%, to $1.7 billion and $2.2 billion, respectively.

During the first nine months of Fiscal 2025, operating income and non-GAAP operating income increased by 6% to $3.9 billion and 3% to $5.7 billion, respectively.

During the first nine months of Fiscal 2025, operating income and non-GAAP operating income as a percentage of net revenue decreased 10 basis points to 5.5% and 40 basis points to 8.0%, respectively.

During the first quarter of Fiscal 2026, operating income and non-GAAP operating income increased by 21% to $1.2 billion and 10% to $1.7 billion, respectively.

The increases in operating income and non-GAAP operating income were primarily attributable to an increase in ISG operating income that was driven by our storage offerings.

During the first quarter of Fiscal 2026, operating income and non-GAAP operating income as a percentage of net revenue increased 70 basis points to 5.0% and 30 basis points to 7.1%, respectively.

The increases were driven by the favorable impact of a decrease in operating expense rate as a result of strong net revenue growth coupled with continued disciplined cost management.

Interest and Other, Net

The following table presents information regarding interest and other, net for the periods indicated:

Three Months Ended Nine Months Ended

November 1, 2024 November 3, 2023 November 1, 2024 November 3, 2023

Three Months Ended

May 2, 2025 May 3, 2024

(in millions)

4 unchanged sentences

Foreign exchange (5) (38)

Gain on disposition of businesses and assets 236 —

Other (7) (16)

Total interest and other, net $ (82) $ (373)

During both the third quarter and first nine months of Fiscal 2025, the change in interest and other, net was favorable, primarily due to a reduction in interest expense and gains recognized within our strategic investments portfolio, partially offset by a decline in interest income on investments.

During the first quarter of Fiscal 2026, the change in interest and other, net was favorable primarily attributable to the gain on the sale of Secureworks and, to a lesser extent, the gains recognized within our strategic investments portfolio.

Income and Other Taxes

The following table presents information regarding our income and other taxes for the periods indicated:

Three Months Ended Nine Months Ended

November 1, 2024 November 3, 2023 November 1, 2024 November 3, 2023

Three Months Ended

May 2, 2025 May 3, 2024

(in millions, except percentages)

Income before income taxes $ 1,083 $ 592

Income tax expense $ 265 $ 176 $ 5 $ 562

Income tax expense (benefit) $ 118 $ (400)

Effective income tax rate 10.9 % (67.6) %

For the third quarter of Fiscal 2025 and Fiscal 2024, our effective income tax rate was 19.0% and 14.9%, respectively.

For the first nine months of Fiscal 2025 and Fiscal 2024, our effective income tax rate was 0.2% and 21.6%, respectively.

The changes in our effective income tax rate were primarily driven by discrete tax items.

For the first nine months of Fiscal 2025, we recorded discrete tax benefits of $0.4 billion related to changes in uncertain tax benefits resulting from the expiration of certain statutes of limitations and $0.2 billion related to stock-based compensation.

For the first quarter of Fiscal 2026 and Fiscal 2025, our effective income tax rates were 10.9% and (67.6)%, respectively.

The change in our effective tax rates for Fiscal 2026 as compared to Fiscal 2025 was primarily attributable to discrete tax items.

For the first quarter of Fiscal 2026, we recorded discrete tax benefits of $0.1 billion related to stock-based compensation.

For the first quarter of Fiscal 2025, we recorded discrete tax benefits of $0.4 billion related to changes in uncertain tax benefits resulting from the expiration of certain U.S.

statutes of limitations and $0.2 billion related to stock-based compensation.

Our effective income tax rate can fluctuate depending on the geographic distribution of our worldwide earnings, as our foreign earnings are generally taxed at lower rates than in the United States.

6 unchanged sentences

Many of these tax holidays and reduced tax rates may be extended when certain conditions are met or may be terminated early if certain conditions are not met or as a result of changes in tax legislation.

As of November 1, 2024, we were not aware of any matters of non-compliance.

As of May 2, 2025, we were not aware of any matters of non-compliance.

Many countries, including Singapore, a country in which we have a tax holiday, have enacted or are in the process of enacting laws based on the Pillar Two proposal relating to a global minimum tax issued by the Organisation for Economic Co-operation and Development (“OECD”).

While we expect our effective income tax rate and cash income tax payments will increase in future years as a result of the global minimum tax, we do not expect the tax will have a material impact on our Fiscal 2025 consolidated results of operations.

While our effective income tax rate and cash income tax payments may increase in future years as a result of the global minimum tax, we do not expect it will have a material impact for Fiscal 2026.

Our assessment could be affected by legislative guidance and future enactment of additional provisions within the Pillar Two framework.

For further discussion regarding tax matters, including the status of income tax audits, see Note 11 of the Notes to the Condensed Consolidated Financial Statements included in this report.

During the third quarter of Fiscal 2025, net income and non-GAAP net income increased 12% to $1.1 billion and 11% to $1.5 billion, respectively, due to an increase in operating income.

During the first nine months of Fiscal 2025, net income and non-GAAP net income increased 43% to $2.9 billion and 5% to $3.8 billion, respectively.

Net income increased primarily due to a reduction in income tax expense and, to a lesser extent, an increase in operating income.

Non-GAAP net income increased primarily due to an increase in operating income.

During the first quarter of Fiscal 2026, net income decreased 3% to $1.0 billion primarily due to higher income tax expense, largely offset by a favorable change in interest and other, net and an increase in operating income.

During the first quarter of Fiscal 2026, non-GAAP net income increased 13% to $1.1 billion primarily due to an increase in operating income.

Business Unit Results

3 unchanged sentences

The following table presents net revenue and operating income attributable to ISG for the periods indicated:

Three Months Ended Nine Months Ended

November 1, 2024 % Change November 3, 2023 November 1, 2024 % Change November 3, 2023

Three Months Ended

May 2, 2025 % Change May 3, 2024

(in millions, except percentages)

5 unchanged sentences

% of segment net revenue 9.7 % 8.0 %

Net Revenue — During the third quarter and first nine months of Fiscal 2025, ISG net revenue increased 34% and 31%, respectively, driven by strength in our servers and networking offerings.

Net revenue from sales of servers and networking increased 58% and 61%, respectively, during the third quarter and first nine months of Fiscal 2025.

The increase in servers and networking net revenue was driven by growth in our AI-optimized server offerings and, to a lesser extent, our traditional server and networking offerings.

Storage net revenue increased 4% and remained flat, respectively, during the third quarter and first nine months of Fiscal 2025.

During the third quarter of Fiscal 2025, storage net revenue increased primarily due to an increase in net revenue of our hyper-converged infrastructure offerings.

From a geographical perspective, net revenue attributable to ISG increased in the Americas and, to a lesser extent, in APJ and EMEA during the third quarter and first nine months of Fiscal 2025.

Operating Income — During the third quarter of Fiscal 2025, ISG operating income as a percentage of net revenue increased 70 basis points to 13.3%, due to a decline in operating expense as a percentage of net revenue that outpaced the decline in gross margin rate.

Operating expense as a percentage of net revenue declined due to strong ISG net revenue growth coupled with continued disciplined cost management.

Gross margin rate decreased primarily as the result of a shift in mix towards AI-optimized server offerings.

During the first nine months of Fiscal 2025, ISG operating income as a percentage of net revenue decreased 70 basis points to 10.9%, due to a decline in gross margin rate that outpaced the decline in operating expense as a percentage of net revenue.

Gross margin rate decreased primarily as the result of a shift in mix towards AI-optimized server offerings.

Net Revenue — During the first quarter of Fiscal 2026, ISG net revenue increased 12%, driven primarily by strength in our servers and networking offerings and, to a lesser extent, our storage offerings.

Net revenue from sales of servers and networking increased 16% during the first quarter of Fiscal 2026.

The increase in servers and networking net revenue was driven by growth in both our traditional server and networking offerings and our AI-optimized server offerings.

Storage net revenue increased 6% during the first quarter of Fiscal 2026 primarily due to an increase in our core storage offerings.

From a geographical perspective, net revenue attributable to ISG increased in EMEA and APJ and decreased in the Americas during the first quarter of Fiscal 2026.

Operating Income — During the first quarter of Fiscal 2026, ISG operating income as a percentage of net revenue increased 170 basis points to 9.7% due to a decline in operating expense as a percentage of revenue that outpaced the decline in gross margin rate.

Operating expense as a percentage of net revenue declined primarily due to strong ISG net revenue growth coupled with continued disciplined cost management.

Gross margin rate decreased primarily as the result of a shift in geographical mix within our servers and networking offerings coupled with a shift in mix between our ISG offerings.

Client Solutions Group

The following table presents net revenue and operating income attributable to CSG for the periods indicated:

Three Months Ended Nine Months Ended

November 1, 2024 % Change November 3, 2023 November 1, 2024 % Change November 3, 2023

Three Months Ended

May 2, 2025 % Change May 3, 2024

(in millions, except percentages)

5 unchanged sentences

% of segment net revenue 5.2 % 6.5 %

Net Revenue — During the third quarter of Fiscal 2025, CSG net revenue declined 1% primarily due to a decrease in units sold, partially offset by an increase in the average selling prices of our offerings.

During the first nine months of Fiscal 2025, CSG net revenue declined 2% principally due to a decrease in units sold and, to a lesser extent, a decline in the average selling prices of our offerings.

Commercial net revenue increased 3% and 2%, respectively, during the third quarter and first nine months of Fiscal 2025, principally due to an increase in units sold.

Consumer net revenue decreased 18% and 19%, respectively, during the third quarter and first nine months of Fiscal 2025, principally due to a decline in units sold.

During the first nine months of Fiscal 2025, consumer net revenue also declined as a result of a decline in the average selling prices of our consumer offerings.

From a geographical perspective, net revenue attributable to CSG decreased in APJ and EMEA and increased in the Americas during the third quarter of Fiscal 2025.

During the first nine months of Fiscal 2025, net revenue attributable to CSG decreased in APJ and the Americas and increased in EMEA.

Operating Income — During the third quarter and first nine months of Fiscal 2025, CSG operating income as a percentage of net revenue decreased 180 basis points to 5.7% and 150 basis points to 6.0%, respectively, primarily due to a decline in gross margin rate, partially offset by a decrease in operating expenses as a percentage of net revenue.

Net Revenue — During the first quarter of Fiscal 2026, CSG net revenue increased 5%, driven primarily by strength in our commercial offerings, partially offset by lower demand for our consumer offerings.

Commercial net revenue increased 9% during the first quarter of Fiscal 2026, primarily as the result of an increase in units sold.

Consumer net revenue decreased 19% during the first quarter of Fiscal 2026, primarily due to a decline in units sold.

From a geographical perspective, net revenue attributable to CSG increased across all regions during the first quarter of Fiscal 2026, most notably in the Americas.

Operating Income — During the first quarter of Fiscal 2026, CSG operating income as a percentage of net revenue decreased 130 basis points to 5.2%, primarily due to a decline in gross margin rate.

The decline in gross margin rate was primarily the result of a competitive pricing environment.

The decline in operating expenses as a percentage of net revenue was due to continued disciplined cost management.

OTHER BALANCE SHEET ITEMS

1 unchanged sentence

We sell products and services directly to customers and through a variety of sales channels, including retail distribution.

Our accounts receivable, net, was $11.2 billion and $9.3 billion as of November 1, 2024 and February 2, 2024, respectively.

Accounts receivable, net, was elevated due to growth in our AI-optimized server offerings and the timing of cash receipts.

Our accounts receivable, net was $9.8 billion and $10.3 billion as of May 2, 2025 and January 31, 2025, respectively.

Accounts receivable, net declined due to strong cash collections performance.

We maintain an allowance for expected credit losses to cover receivables that may be deemed uncollectible.

The allowance for expected credit losses is an estimate based on an analysis of historical loss experience, current receivables aging, and management’s assessment of current conditions and its reasonable and supportable expectation of future conditions, as well as specific identifiable customer accounts that are deemed at risk.

As of November 1, 2024 and February 2, 2024, the allowance for expected credit losses was $62 million and $71 million, respectively.

As of May 2, 2025 and January 31, 2025, the allowance for expected credit losses was $82 million and $63 million, respectively.

Based on our assessment, we believe that we are adequately reserved for expected credit losses.

Dell Financial Services and Financing Receivables

We offer or arrange various financing options and services for our customers globally, including through captive financing operations.

DFS originates, collects, and services customer receivables primarily related to the purchase of our product, software, and services solutions.

We further strengthen customer relationships through flexible consumption models, including utility, subscription, and as-a-Service models, which enable our customers the option to pay over time to provide them with financial and operational flexibility.

New financing originations were $1.6 billion and $1.8 billion for the third quarter of Fiscal 2025 and Fiscal 2024, respectively, and $5.9 billion and $6.0 billion for first nine months of Fiscal 2025 and Fiscal 2024, respectively.

We offer or arrange a portfolio of payment and consumption solutions and services for our customers globally, including as-a-Service, subscription, utility, leases, and loans designed to match customers' consumption and financing preferences.

We believe these options provide operational and financial flexibility and strengthen our customer relationships.

To support financing solutions and services as part of the portfolio, DFS originates, collects, and services customer receivables primarily related to the purchase of our product and services solutions.

New financing originations were $1.6 billion and $1.9 billion for the first quarter of Fiscal 2026 and Fiscal 2025, respectively.

Our leases are generally classified as sales-type leases or operating leases.

3 unchanged sentences

We recognize product revenue and depreciation expense, classified as cost of net revenue, over the contract term.

As of November 1, 2024 and February 2, 2024, our financing receivables, net were $10.9 billion and $10.5 billion, respectively .

As of May 2, 2025 and January 31, 2025, our financing receivables, net were $11.4 billion and $11.2 billion, respectively .

We maintain an allowance to cover expected financing receivables credit losses and evaluate credit loss expectations based on our total portfolio.

The principal charge-off rate for our financing receivables portfolio was 1.4% and 0.6% for the third quarter of Fiscal 2025 and Fiscal 2024, respectively, and 0.8% and 0.6% for the first nine months of Fiscal 2025 and Fiscal 2024, respectively.

For both the first quarter of Fiscal 2026 and Fiscal 2025, the principal charge-off rate for our financing receivables portfolio was 0.3%.

The credit quality of our financing receivables remains strong due to the mix of high-quality commercial accounts in our portfolio.

We continue to monitor broader economic indicators and their potential impact on future credit loss performance.

We have an extensive process to manage our exposure to customer credit risk, including active management of credit lines and our collection activities.

We have an extensive process to manage our exposure to customer credit risk that includes active management of credit lines and collection activities.

We also sell selected fixed-term financing receivables without recourse to unrelated third parties on a periodic basis, primarily to manage certain concentrations of customer credit exposure.

1 unchanged sentence

We retain a residual interest in equipment leased under our lease programs.

As of November 1, 2024 and February 2, 2024, the residual interest recorded as part of financing receivables was $169 million and $157 million, respectively.

As of May 2, 2025 and January 31, 2025, the residual interest recorded as part of financing receivables was $178 million and $168 million, respectively.

The amount of the residual interest is established at the inception of the lease based upon estimates of the value of the equipment at the end of the lease term using historical studies, industry data, and future value-at-risk demand valuation methods.

2 unchanged sentences

Further, the lease agreement defines applicable return conditions and remedies for non-compliance to ensure that the leased equipment will be in good operating condition upon return.

No expected losses were recorded related to residual assets during the third quarter and first nine months of Fiscal 2025 and Fiscal 2024.

As of both November 1, 2024 and February 2, 2024, equipment under operating leases, net was $2.2 billion.

No expected losses were recorded related to residual assets during the first quarter of Fiscal 2026 and Fiscal 2025.

As of May 2, 2025 and January 31, 2025, equipment under operating leases, net was $2.3 billion and $2.2 billion, respectively.

We assess the carrying amount of the equipment under operating leases for impairment whenever events or circumstances may indicate that an impairment has occurred.

No material impairment losses were recorded related to such equipment during the third quarter and first nine months of Fiscal 2025 and Fiscal 2024.

No material impairment losses were recorded related to such equipment during the first quarter of Fiscal 2026 and Fiscal 2025.

DFS offerings are initially funded through cash on hand at the time of origination, most of which is subsequently replaced with asset-backed financing.

For DFS offerings which qualify as sales-type leases, the initial funding of financing receivables is reflected as an impact to cash flows from operations and is largely subsequently offset by cash proceeds from financing.

For DFS operating leases, the initial funding is classified as a capital expenditure and reflected as an impact to cash flows used in investing activities.

For offerings that qualify as sales-type leases, the initial funding of financing receivables is reflected as an impact to cash flows from operations and is largely subsequently offset by cash proceeds from financing.

For offerings that qualify as operating leases, the initial funding is classified as a capital expenditure and reflected as an impact to cash flows used in investing activities.

See Note 4 of the Notes to the Condensed Consolidated Financial Statements included in this report for additional information about our financing receivables and the associated allowances, and equipment under operating leases.

5 unchanged sentences

Our strategy is to deploy capital from any potential source, whether internally generated cash or debt, depending on the adequacy and availability of that source of capital and whether it can be accessed in a cost-effective manner.

We believe that our current cash and cash equivalents, together with cash that will be provided by future operations and borrowings and issuances expected to be available under our revolving credit facility and commercial paper program, respectively, will be sufficient over the next twelve months and for the foreseeable future thereafter to meet our material cash requirements, including funding of our operations, debt-related payments, capital expenditures, and other corporate needs.

As part of our overall capital allocation strategy, we intend to return capital to our stockholders through both share repurchase programs and dividend payments and use the remaining available cash to drive growth and maintain our investment grade credit rating.

We believe that our current cash and cash equivalents, together with cash that will be provided by future operations and borrowings and issuances expected to be available under our revolving credit facility and commercial paper program, will be sufficient over the next twelve months and for the foreseeable future thereafter to meet our material cash requirements, including funding of our operations, debt-related payments, capital expenditures, and other corporate needs.

As part of our overall capital allocation strategy, we intend to continue returning capital to our stockholders through both share repurchase programs and dividend payments and to use the remaining available cash to drive growth and maintain our investment grade credit rating.

The following table presents our cash and cash equivalents as well as our available borrowings as of the dates indicated:

November 1, 2024 February 2, 2024

May 2, 2025 January 31, 2025

(in millions)

3 unchanged sentences

Total cash and cash equivalents, and available borrowings $ 13,698 $ 9,632

During the first nine months of Fiscal 2025, cash and cash equivalents decreased by $2.1 billion primarily due to the return of capital to our stockholders, capital expenditures, net repayment of Senior Notes and DFS debt, and payments to settle employee tax withholdings on stock-based compensation, the effect of which was partially offset by cash flows from operations.

As of November 1, 2024, our revolving credit facility had a maximum capacity of $6.0 billion.

During the first quarter of Fiscal 2026, cash and cash equivalents increased by $4.1 billion primarily due to an increase in net debt from the issuance of Senior Notes and DFS debt, cash flows from operations, and the proceeds from the sale of Secureworks, the effects of which were partially offset by the return of capital to our stockholders, capital expenditures, and payments to settle employee tax withholdings on stock-based compensation.

As of May 2, 2025, our revolving credit facility had a maximum capacity of $6.0 billion.

Available borrowings under this facility are reduced by draws on the facility and outstanding letters of credit.

As of November 1, 2024, there were no borrowings outstanding under the facility and remaining available borrowings totaled approximately $6.0 billion.

As of May 2, 2025, there were no borrowings outstanding under the facility and remaining available borrowings totaled approximately $6.0 billion.

The revolving credit facility also acts as a backstop to provide liquidity support for our commercial paper program.

We maintain a commercial paper program under which we may issue unsecured notes in a maximum aggregate face amount of $5.0 billion outstanding at any time, with maturities up to 397 days from the date of issue.

As of November 1, 2024, we had no outstanding issuances under the program.

We maintain a commercial paper program under which we may issue unsecured notes in a maximum aggregate face amount of $5.0 billion outstanding at any time, with maturities of up to 397 days from the date of issue.

As of May 2, 2025, we had no outstanding issuances under the program.

We may regularly use our available borrowings from the revolving credit facility and issuances under the commercial paper program, generally on a short-term basis, for general corporate purposes.

1 unchanged sentence

The following table presents our outstanding debt as of the dates indicated:

November 1, 2024 Change February 2, 2024

May 2, 2025 Change January 31, 2025

(in millions)

11 unchanged sentences

Total debt, carrying value $ 28,781 $ 4,214 $ 24,567

The outstanding principal amount of our debt decreased $1.0 billion to $25.3 billion as of November 1, 2024, driven primarily by net repayments of our Senior Notes and DFS debt.

The outstanding principal amount of our debt increased $4.2 billion to $29.0 billion as of May 2, 2025, driven primarily by an increase in net debt from the issuance of Senior Notes.

We define core debt as the total principal amount of our debt, less DFS related debt and other debt.

Our core debt was $13.8 billion and $14.9 billion as of November 1, 2024 and February 2, 2024, respectively.

Our core debt was $17.0 billion and $13.0 billion as of May 2, 2025 and January 31, 2025, respectively.

See Note 6 of the Notes to the Condensed Consolidated Financial Statements included in this report for additional information about our debt.

1 unchanged sentence

Our risk of loss under these programs is limited to transferred lease and loan payments and associated equipment, as the credit holders have no recourse to Dell Technologies.

To fund expansion of the DFS business, we balance the use of the securitization and structured financing programs with other sources of liquidity.

We approximate the amount of our core debt used to fund the DFS business by applying a 7:1 debt-to-equity ratio to the sum of our financing receivables balance and equipment under operating leases, net.

To fund the expansion of our DFS business, we balance the use of the securitization and structured financing programs with other sources of liquidity.

The debt-to-equity ratio is based on the underlying credit quality of the assets.

See Note 4 of the Notes to the Condensed Consolidated Financial Statements included in this report for additional information about our DFS debt.

The following table presents DFS owned assets as of the dates indicated:

May 2, 2025 January 31, 2025

(in millions)

Financing receivables, net

$ 11,423 $ 11,231

Equipment under operating leases, net

DFS owned assets

$ 13,695 $ 13,416

We believe we will continue to be able to make our debt principal and interest payments, including payment of short-term maturities, from existing and expected sources of cash, primarily from operating cash flows.

Cash used for debt principal and interest payments may include short-term borrowings under our commercial paper program, our revolving credit facility, or other borrowings.

Cash used for debt principal and interest payments also may include short-term borrowings under our commercial paper program, our revolving credit facility, or other borrowings.

Under our variable-rate debt, we could experience variations in our future interest expense from potential fluctuations in applicable reference rates, or from possible fluctuations in the level of DFS debt required to meet future demand for customer financing.

1 unchanged sentence

The following table presents a summary of our Condensed Consolidated Statements of Cash Flows for the periods indicated:

Nine Months Ended

November 1, 2024 November 3, 2023

Three Months Ended

May 2, 2025 May 3, 2024

(in millions)

5 unchanged sentences

Change in cash, cash equivalents, and restricted cash $ 4,034 $ (1,545)

Operating Activities — Cash provided by operating activities was $3.9 billion during the first nine months of Fiscal 2025, and was driven by profitability, partially offset by working capital dynamics.

Working capital was primarily impacted by AI dynamics, which led to higher inventory, accounts receivable, and accounts payable levels.

Cash provided by operating activities also reflected the impact of the $0.9 billion net payment to settle the Class V transaction litigation and $0.4 billion in proceeds from the sale of our U.S.

consumer revolving customer receivables portfolio.

Investing Activities — Investing activities primarily consist of cash used to fund capital expenditures for property, plant, and equipment inclusive of equipment under DFS operating leases and equipment used to support our as-a-Service offerings, which we refer to collectively as assets in a customer contract.

Additional activities may include capitalized software development costs, acquisitions and divestitures, and the maturities, sales, and purchases of investments.

Cash used in investing activities was $1.5 billion and $2.1 billion during the first nine months of Fiscal 2025 and Fiscal 2024, respectively, and was primarily applied to capital expenditures.

Operating Activities — Cash provided by operating activities was $2.8 billion during the first quarter of Fiscal 2026 and was driven by profitability and working capital dynamics.

Investing Activities — Investing activities primarily consist of cash used to fund capital expenditures for property, plant, and equipment inclusive of equipment under operating leases and equipment used to support our as-a-Service offerings, which we refer to collectively as assets in a customer contract.

Additional activities may include capitalized software development costs, the maturities, sales, and purchases of investments, and acquisitions and divestitures.

Cash used in investing activities was $0.1 billion during the first quarter of Fiscal 2026 and consisted of cash used for capital expenditures, largely offset by cash proceeds from the sale of Secureworks.

Cash used in investing activities was $0.5 billion during the first quarter of Fiscal 2025 and was primarily applied to capital expenditures.

Financing Activities — Financing activities primarily consist of the proceeds and repayments of debt and return of capital to our stockholders.

Cash used in financing activities was $4.4 billion during the first nine months of Fiscal 2025 and primarily consisted of repurchases of common stock, inclusive of payments to settle employee tax withholdings on stock-based compensation, net repayments of our Senior Notes and DFS debt, and the payment of quarterly dividends.

During the first nine months of Fiscal 2024, cash used in financing activities was $5.3 billion and primarily consisted of principal repayments of our Senior Notes, repurchases of common stock, inclusive of payments to settle employee tax withholdings on stock-based compensation, and the payment of quarterly dividends.

Cash provided by financing activities was $1.2 billion during the first quarter of Fiscal 2026 and primarily consisted of net proceeds from the issuance of Senior Notes and DFS debt, partially offset by repurchases of common stock, inclusive of payments to settle employee tax withholdings on stock-based compensation, and the payment of quarterly dividends.

Cash used in financing activities was $2.1 billion during the first quarter of Fiscal 2025 and primarily consisted of repurchases of common stock, inclusive of payments to settle employee tax withholdings on stock-based compensation, net repayments on DFS debt, and the payment of quarterly dividends.

DFS Cash Flow Impacts — DFS offerings are initially funded through cash on hand at the time of origination, most of which is subsequently replaced with asset-backed financing.

For DFS offerings that qualify as sales-type leases, the initial funding of financing receivables is reflected as an impact to cash flows from operations and is largely subsequently offset by cash proceeds from financing.

For operating leases, the initial funding is classified as a capital expenditure and reflected as cash flows used in investing activities.

DFS new financing originations were $5.9 billion and $6.0 billion during the first nine months of Fiscal 2025 and Fiscal 2024, respectively.

As of November 1, 2024, we had $10.9 billion of total net financing receivables and $2.2 billion of equipment under operating leases, net.

For offerings that qualify as operating leases, the initial funding is classified as a capital expenditure and reflected as cash flows used in investing activities.

DFS new financing originations were $1.6 billion and $1.9 billion during the first quarter of Fiscal 2026 and Fiscal 2025, respectively.

As of May 2, 2025, we had $11.4 billion of total net financing receivables and $2.3 billion of equipment under operating leases, net.

Supply Chain Finance Program — We maintain a Supply Chain Finance Program (the “SCF Program”) that enables eligible suppliers to sell receivables due from us to a third-party financial institution at the suppliers’ sole discretion.

4 unchanged sentences

Capital Commitments and Other Cash Requirements

Capital Expenditures — We spent $1.9 billion and $2.0 billion during the first nine months of Fiscal 2025 and Fiscal 2024, respectively, on property, plant, and equipment and capitalized software development costs.

Of total expenditures incurred, funding of assets in a customer contract totaled $1.0 billion and $0.9 billion during the first nine months of Fiscal 2025 and Fiscal 2024, respectively.

Capital Expenditures — We spent $0.6 billion during both the first quarter of Fiscal 2026 and Fiscal 2025 on property, plant, and equipment and capitalized software development costs.

Of total expenditures incurred, funding of assets in a customer contract totaled $0.3 billion during both the first quarter of Fiscal 2026 and Fiscal 2025.

Product demand, product mix, the use of contract manufacturers, and ongoing investments in operating and information technology infrastructure influence the level and prioritization of our capital expenditures.

Repurchases of Common Stock — Effective as of September 23, 2021, our Board of Directors approved a stock repurchase program with no fixed expiration date under which we are authorized to repurchase up to $5.0 billion of shares of our Class C Common Stock, exclusive of any fees, commissions, or other expenses related to such repurchases.

Effective as of October 5, 2023, the Board of Directors approved the repurchase of an additional $5.0 billion of shares of the Class C Common Stock with no fixed expiration date.

Following the additional approval, we had approximately $5.7 billion in cumulative authorized amount remaining under the stock repurchase program.

During the first nine months of Fiscal 2025, we repurchased approximately 16 million shares of Class C Common Stock for a total purchase price of approximately $1.8 billion.

During the first nine months of Fiscal 2024, we repurchased approximately 22 million shares of Class C Common Stock for a total purchase price of approximately $1.3 billion.

Dividend Payments — On February 29, 2024, we announced that the Board of Directors approved a 20% increase in the dividend rate to $0.445 per share per fiscal quarter beginning in the first quarter of Fiscal 2025.

During the first nine months of Fiscal 2025 and Fiscal 2024, the Company paid $1.0 billion and $0.8 billion in dividends and dividend equivalents at a rate of $0.445 and $0.37 per share per fiscal quarter, respectively.

Repurchases of Common Stock — On September 23, 2021, our Board of Directors approved a stock repurchase program with no fixed expiration date under which we were authorized to repurchase up to $5 billion of shares of Class C Common Stock, exclusive of any fees, commissions, or other expenses related to such repurchases.

On October 5, 2023 and February 27, 2025, our Board of Directors authorized additional shares for repurchase under the stock repurchase program of $5 billion and $10 billion, respectively.

Following the February 27, 2025 approval, we had approximately $11.5 billion of authorized shares remaining under the program.

During the first quarter of Fiscal 2026, we repurchased approximately 22 million shares of Class C Common Stock for a total purchase price of approximately $2.0 billion.

During the first quarter of Fiscal 2025, we repurchased approximately 7 million shares of Class C Common Stock for a total purchase price of approximately $0.7 billion.

Dividend Payments — During the first quarter of Fiscal 2026 and Fiscal 2025, the Company paid $0.4 billion and $0.3 billion in dividends and dividend equivalents at a rate of $0.525 and $0.445 per share per fiscal quarter, respectively.

Purchase Obligations — Purchase obligations are defined as contractual obligations to purchase goods or services that are enforceable and legally binding on us.

6 unchanged sentences

Consistent with industry practice, we acquire raw materials or other goods and services, including product components, by issuing to suppliers authorizations to purchase based on our projected demand and manufacturing needs.

Additionally, to meet the growing demand and increasing complexity of our AI-optimized offerings, we have increased our purchases of certain components with suppliers, which has resulted in increased purchase obligations.

These purchase orders are typically fulfilled within 30 days and are entered into during the ordinary course of business in order to establish best pricing and continuity of supply for our production.

Purchase orders are not included in purchase obligations, as they typically represent our authorization to purchase rather than binding purchase obligations.

As of November 1, 2024, the Company had purchase obligations of $8.1 billion, of which $6.9 billion was payable within 12 months.

As of May 2, 2025, we had purchase obligations of $7.4 billion, of which $5.8 billion was payable within twelve months.

Market Conditions

3 unchanged sentences

We monitor credit risk associated with our financial counterparties using various market credit risk indicators such as credit ratings issued by nationally recognized credit rating agencies and changes in market credit default swap levels.

We perform periodic evaluations of our positions with these counterparties and may limit exposure to any one counterparty in accordance with our policies.

We monitor and manage these activities depending on current and expected market developments.

Our AI-optimized solutions to date have been purchased primarily by a small number of larger customers and cloud service providers.

Such purchases generally involve larger amounts of credit, and could impact overall credit risk in trade and financing receivables.

We perform periodic evaluations of our positions with counterparties and may limit exposure to any one counterparty in accordance with our policies.

We monitor and manage our positions based on current and expected market developments.

We use derivative instruments to hedge certain foreign currency exposures.

2 unchanged sentences

See Note 7 of the Notes to the Condensed Consolidated Financial Statements included in this report for additional information about our use of derivative instruments.

We are exposed to interest rate risk related to our variable-rate debt portfolio.

We are exposed to interest rate risk related to our investment and variable-rate debt portfolios.

In the normal course of business, we follow established policies and procedures to manage this risk, including monitoring of our asset and liability mix and the use of derivative instruments.

12 unchanged sentences

The following table presents summarized results of operations information for the Obligor Group for the period indicated:

Nine Months Ended

November 1, 2024

Three Months Ended

(in millions)

Net revenue (a) $ 6,171

Gross margin (b) 2,995

Operating income (c) 360

Interest and other, net (d) (3,044)

Net revenue $ 2,049

Gross margin 940

Operating income 126

Interest and other, net (1,006)

Loss before income taxes $ (880)

Net loss attributable to Obligor Group $ (1,916)

Net loss attributable to Obligor Group (a) $ (627)

____________________

(a) Includes net revenue from Non-Obligor Subsidiaries of $247 million.

(b) Includes cost of net revenue from the resale of solutions purchased from Non-Obligor Subsidiaries of $808 million.

(d) Includes interest expense on intercompany loan payables of $2,370 million.

(a) Includes net loss from intercompany transactions with Non-Obligor Subsidiaries of $1,218 million, which primarily consists of interest expense, shared services, and the resale of solutions.

The following table presents summarized balance sheet information for the Obligor Group as of the dates indicated:

November 1, 2024 February 2, 2024

May 2, 2025 January 31, 2025

(in millions)

1 unchanged sentence

Intercompany receivables — 175

Short-term intercompany loan receivables 230 92

Total current assets 3,042 3,307

6 unchanged sentences

Long-term debt 19,796 15,824

Intercompany loan payables 41,645 41,617

Long-term intercompany loan payables 44,524 44,516

Other non-current liabilities 3,233 3,339

1 unchanged sentence

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis