XML 37 R25.htm IDEA: XBRL DOCUMENT v3.21.2
SEGMENT INFORMATION
 9 Months Ended
Oct. 29, 2021
Segment Reporting [Abstract]  
SEGMENT INFORMATION
NOTE 16 — SEGMENT INFORMATION

The Company has three reportable segments that are based on the following business units: Infrastructure Solutions Group (“ISG”); Client Solutions Group (“CSG”); and VMware.

ISG enables the digital transformation of the Company’s customers through its trusted multi-cloud and big data solutions, which are built upon a modern data center infrastructure. The ISG comprehensive portfolio of advanced storage solutions includes traditional as well as next-generation storage solutions (such as all-flash arrays, scale-out file, object platforms, and software-defined solutions), while the Company’s server portfolio includes high-performance rack, blade, tower, and hyperscale servers. The ISG networking portfolio helps business customers transform and modernize their infrastructure, mobilize and enrich end-user experiences, and accelerate business applications and processes. ISG also offers attached software, peripherals, and services, including support and deployment, configuration, and extended warranty services.

CSG includes sales to commercial and consumer customers of branded hardware (such as desktops, workstations, and notebooks) and branded peripherals (such as displays and projectors), as well as services and third-party software and peripherals. CSG also offers attached software, peripherals, and services, including support and deployment, configuration, and extended warranty services.

VMware works with customers in the areas of hybrid and multi-cloud, virtual cloud networking, digital workspaces, modern applications, and intrinsic security, helping customers manage their IT resources across private clouds and complex multi-cloud, multi-device environments. VMware enables its customers to digitally transform their operations as they ready their applications, infrastructure, and employees for constantly evolving business needs.

As described in Note 1 and Note 18 of the Notes to the Condensed Consolidated Financial Statements, the Company completed the VMware Spin-off on November 1, 2021, subsequent to the close of the third quarter of Fiscal 2022. Beginning in the fourth quarter of Fiscal 2022, the Company’s Consolidated Statements of Income will be recast to reflect VMware results as discontinued operations. As such, VMware will no longer be identified as a reportable segment. Pursuant to the CFA, Dell Technologies will continue to integrate VMware, Inc.’s products and services with Dell Technologies’ offerings and sell them to end users. The results of those transactions will be reflected within CSG and ISG, based on the nature of the underlying offering sold. Dell Technologies will also continue to act as a distributor, purchasing VMware, Inc.’s standalone products and services for resale to end-user customers. The results of this business will be reflected in Other businesses. The Company's prior period segment results will be recast to reflect the change.

The reportable segments disclosed herein are based on information reviewed by the Company’s management to evaluate the business segment results. The Company’s measure of segment revenue and segment operating income for management reporting purposes excludes the impact of Other businesses, unallocated corporate transactions, the impact of purchase accounting, amortization of intangible assets, transaction-related expenses, stock-based compensation expense, and other corporate expenses, as applicable. The Company does not allocate assets to its reportable segments for internal reporting purposes.
The following table presents a reconciliation of net revenue by the Company’s reportable segments to the Company’s consolidated net revenue as well as a reconciliation of consolidated segment operating income to the Company’s consolidated operating income for the periods indicated:
 Three Months EndedNine Months Ended
 October 29, 2021October 30, 2020October 29, 2021October 30, 2020
 (in millions)
Consolidated net revenue:   
Infrastructure Solutions Group$8,428 $8,024 $24,771 $23,800 
Client Solutions Group16,546 12,286 44,114 34,593 
VMware3,178 2,893 9,317 8,556 
Reportable segment net revenue28,152 23,203 78,202 66,949 
Other businesses (a)251 314 829 1,288 
Unallocated transactions (b)2 4 6 4 
Impact of purchase accounting (c)(11)(39)(34)(129)
Total consolidated net revenue$28,394 $23,482 $79,003 $68,112 
Consolidated operating income:
Infrastructure Solutions Group$892 $882 $2,650 $2,587 
Client Solutions Group1,147 1,002 3,232 2,309 
VMware837 837 2,527 2,504 
Reportable segment operating income2,876 2,721 8,409 7,400 
Other businesses (a)(9)3 (17)105 
Unallocated transactions (b)1 1 1 (1)
Impact of purchase accounting (c)(17)(49)(62)(165)
Amortization of intangibles(694)(845)(2,114)(2,547)
Transaction-related expenses (d)(311)(52)(422)(211)
Stock-based compensation expense (e)(472)(436)(1,406)(1,219)
Other corporate expenses (f)(25)(214)(293)(395)
Total consolidated operating income$1,349 $1,129 $4,096 $2,967 
____________________
(a)Secureworks and Virtustream constitute Other businesses and do not meet the requirements for a reportable segment, either individually or collectively. The results of Other businesses are not material to the Company’s overall results. On September 1, 2020, the Company completed the sale of RSA Security. On October 1, 2021, the Company completed the sale of Boomi. Prior to the divestitures, Boomi and RSA Security’s results were included within Other businesses. See Note 1 of the Notes to the Condensed Consolidated Financial Statements for more information about the divestitures of Boomi and RSA Security.
(b)Unallocated transactions includes other corporate items that are not allocated to Dell Technologies’ reportable segments.
(c)Impact of purchase accounting includes non-cash purchase accounting adjustments that are primarily related to the EMC merger transaction.
(d)Transaction-related expenses includes acquisition, integration, and divestiture related costs.
(e)Stock-based compensation expense consists of equity awards granted based on the estimated fair value of those awards at grant date.
(f)Other corporate expenses includes impairment charges, incentive charges related to equity investments, severance, facilities action, and other costs.
The following table presents the disaggregation of net revenue by reportable segment, and by major product categories within the segments for the periods indicated:
 Three Months EndedNine Months Ended
 October 29, 2021October 30, 2020October 29, 2021October 30, 2020
 (in millions)
Net revenue:   
Infrastructure Solutions Group:
Servers and networking$4,533 $4,164 $13,104 $12,118 
Storage3,895 3,860 11,667 11,682 
Total ISG net revenue8,428 8,024 24,771 23,800 
Client Solutions Group:
Commercial12,292 8,783 32,668 25,456 
Consumer4,254 3,503 11,446 9,137 
Total CSG net revenue16,546 12,286 44,114 34,593 
VMware:
Total VMware net revenue3,178 2,893 9,317 8,556 
Total segment net revenue$28,152 $23,203 $78,202 $66,949