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

Strategic Highlights:

• Dell Enterprise Solutions and Services revenue grew 6 percent year over year to $4.9 billion and comprised 34 percent of Dell’s consolidated revenue and more than 50 percent of its margin. This business is now approaching a $20 billion annual run rate.
• Server and networking revenue grew 14 percent.
• Revenue of Dell-owned storage increased 6 percent.
• Dell Services revenue was $2.1 billion, up 3 percent, with new signings of more than $1 billion in the first half of the year, and $1.8 billion over the last 12 months.
• Year to date Dell has announced six acquisitions and closed five, all of which will help drive a higher-value mix of solutions with more predictable revenue and margin streams. The company expects to close the pending acquisition of Quest Software in the second half of the third quarter.

Business Units and Regions:

• Large Enterprise revenue was $4.5 billion in the quarter, a 3 percent decline. Operating income was $433 million, or 9.5 percent of revenue. Enterprise Solutions and Services revenue increased 9 percent on 17 percent growth in server and networking revenue and 5 percent increase in services.
• Public revenue was $4.1 billion, a 6 percent decrease. Operating income for the quarter was $379 million, or 9.3 percent of revenue. Server and networking revenue increased 4 percent.
• Small and Medium Business revenue was $3.3 billion, a 1 percent decline. Operating income was $382 million, or 11.7 percent of revenue. Enterprise solutions and services grew 15 percent led by an increase of 27 percent in services revenue and 16 percent in servers and networking.
• Consumer revenue was $2.6 billion, a 22 percent decline. Operating income was $14 million or 0.5 percent of revenue.
• Revenue in Americas was down 6 percent; EMEA was down 7 percent, and Asia-Pacific and Japan revenue was down 12 percent. Revenue in BRIC countries was down 15 percent.

Company Outlook:

Dell expects continued solid growth in Enterprise Solutions, Services and Software and also a challenging end-user computer environment in the second half of the year. Given the uncertain economic environment, competitive dynamics and soft Consumer business, Dell expects third-quarter revenue to be down 2-5 percent from second-quarter levels. In addition, the company is modifying its full-year earnings outlook to at least $1.70 per share on a non-GAAP basis, which includes a 2-to-3 cent dilutive impact from its pending acquisition of Quest Software.

About Dell

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

Segment Realignment:

In the first quarter of Fiscal 2013, Dell made certain segment realignments in order to conform to the way Dell internally manages segment performance. These realignments affected all of Dell's operating segments, but primarily consisted of the transfer of small office business customers from the Small and Medium Business segment to the Consumer Segment. Dell has recast prior period amounts to provide visibility and comparability. None of these changes impacts Dell's previously reported consolidated net revenue, gross margin, operating income, net income, or earnings per share.

Non-GAAP Financial Measures:

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