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1 Copyright 2014 EMC Corporation. All rights reserved. Copyright 2014 EMC Corporation. All rights reserved.
EMC Q2 2014 Financial Results Tony Takazawa Vice President, Global Investor Relations July 23, 2014
2 Copyright 2014 EMC Corporation. All rights reserved. Copyright 2014 EMC Corporation. All rights reserved.
Forward-Looking Statements This presentation contains forward-looking statements as defined under the Federal Securities Laws. Actual results could differ materially from those projected in the forward-looking statements as a result of certain risk factors, including but not limited to: (i) adverse changes in general economic or market conditions; (ii) delays or reductions in information technology spending; (iii) the relative and varying rates of product price and component cost declines and the volume and mixture of product and services revenues; (iv) competitive factors, including but not limited to pricing pressures and new product introductions; (v) component and product quality and availability; (vi) fluctuations in VMware, Inc.s operating results and risks associated with trading of VMware stock; (vii) the transition to new products, the uncertainty of customer acceptance of new product offerings and rapid technological and market change; (viii) risks associated with managing the growth of our business, including risks associated with acquisitions and investments and the challenges and costs of integration, restructuring and achieving anticipated synergies; (ix) the ability to attract and retain highly qualified employees; (x) insufficient, excess or obsolete inventory; (xi) fluctuating currency exchange rates; (xii) threats and other disruptions to our secure data centers or networks; (xiii) our ability to protect our proprietary technology; (xiv) war or acts of terrorism; and (xv) other one-time events and other important factors disclosed previously and from time to time in EMCs filings with the U.S. Securities and Exchange Commission. EMC disclaims any obligation to update any such forward-looking statements after the date of this presentation.
This presentation contains non-GAAP financial measures which include, but are not limited to, non-GAAP Gross Margin, non-GAAP Operating Margin, non-GAAP EPS, non-GAAP Net Income, Free Cash Flow and Non-GAAP Income Tax Rate. A reconciliation to GAAP is included within this presentation and in the Current Report on Form 8-K furnished by EMC on July 23, 2014 which can be found at www.EMC.com or www.sec.gov.
3 Copyright 2014 EMC Corporation. All rights reserved. Copyright 2014 EMC Corporation. All rights reserved.
Joe Tucci Chairman and CEO, EMC Corporation
4 Copyright 2014 EMC Corporation. All rights reserved. Copyright 2014 EMC Corporation. All rights reserved.
Mainframe, Mini Computer Terminals
LAN/Internet Client/Server PC
Mobile Cloud Big Data Social Mobile Devices
MILLIONS OF USERS
THOUSANDS OF APPS
HUNDREDS OF MILLIONS OF USERS
TENS OF THOUSANDS OF APPS
BILLIONS OF USERS
MILLIONS OF OF APPS
Source: IDC, 2012
The World Is Changing
5 Copyright 2014 EMC Corporation. All rights reserved. Copyright 2014 EMC Corporation. All rights reserved.
Information Infrastructure
Data Center Infrastructure
Application & Data Platform
Security
Federation Companies Are Strategically Aligned Our Stack For The 3rd Platform
6 Copyright 2014 EMC Corporation. All rights reserved. Copyright 2014 EMC Corporation. All rights reserved.
Customer Focused Solutions 5 Key Areas Of Future Investment For IT
Next Gen Apps
Traditional Applications
SOFTWARE-DEFINED DATA CENTER
PLATFORM AS A SERVICE
VIRTUAL WORKSPACE
SECURITY ANALYTICS
BUSINESS DATA LAKE
7 Copyright 2014 EMC Corporation. All rights reserved. Copyright 2014 EMC Corporation. All rights reserved.
Converged Infrastructure
Partners
vCloud Hybrid Service
Hybrid Cloud
Proven & Tested In Joint Federation Labs
PLATFORM AS A SERVICE
SOFTWARE-DEFINED DATA CENTER
VIRTUAL WORKSPACE
BUSINESS DATA LAKE
SECURITY ANALYTICS
Next Gen Apps
Traditional Applications
Customer Focused Solutions
8 Copyright 2014 EMC Corporation. All rights reserved. Copyright 2014 EMC Corporation. All rights reserved.
Information Infrastructure
Data Center Infrastructure
Application & Data Platform
Security
Federation Companies Are Free To Build Their Own Ecosystem Our Stack Gives Customers Choice
9 Copyright 2014 EMC Corporation. All rights reserved. Copyright 2014 EMC Corporation. All rights reserved.
Acquisitions/Investments Market Opportunity Revenue Opportunity
Nicira/NSX Software Defined Networking $1B+
AirWatch Mobile Device and Security Management $1B+
Pivotal Big/Fast Data PaaS $1B+
ViPR/ECS Software Defined Storage Elastic Cloud Storage $1B+
XtremIO/ScaleIO Next-Gen, Scale-out Flash/Block Storage $1B+
DSSD New Rack Scale Flash Storage $1B+
Strategic Investments
10 Copyright 2014 EMC Corporation. All rights reserved. Copyright 2014 EMC Corporation. All rights reserved.
David Goulden CEO, EMC Information Infrastructure CFO, EMC Corporation
11 Copyright 2014 EMC Corporation. All rights reserved. Copyright 2014 EMC Corporation. All rights reserved.
EMC Federation
Note: Figures may not foot due to rounding
Q214 Growth Y/Y
Consolidated Revenue $5.88B 5%
Pivotal $0.05B 29%
VMware $1.45B 17%
Information Infrastructure $4.38B 1%
12 Copyright 2014 EMC Corporation. All rights reserved. Copyright 2014 EMC Corporation. All rights reserved.
EMC Consolidated Results
Q214 Growth Y/Y
Consolidated Revenue $5.88B 5%
Non-GAAP EPS $0.43 2%
Free Cash Flow $930M 10%
Refer to the the Appendix for a complete reconciliation of GAAP to non-GAAP.
Note: Free cash flow is a non-GAAP financial measure which is defined as net cash provided by operating activities, less additions to property, plant and equipment and capitalized software development costs. See attached schedules for a reconciliation of net cash provided by operating activities to free cash flow for the three and six months ended June 30, 2014 and 2013.
13 Copyright 2014 EMC Corporation. All rights reserved. Copyright 2014 EMC Corporation. All rights reserved.
EMC Consolidated Results
Q214 Growth Y/Y
North America $3.20B 3%
EMEA $1.67B 12%
APJ $0.80B -4%
Latin America $0.21B 14%
Consolidated $5.88B 5%
BRIC + 13 5%
Note: Figures may not foot due to rounding
14 Copyright 2014 EMC Corporation. All rights reserved. Copyright 2014 EMC Corporation. All rights reserved.
Consolidated Non-GAAP EPS Results Y/Y
Refer to the the Appendix for a complete reconciliation of GAAP to non-GAAP.
$0.42 $0.43
+$0.05
+$0.02
-$0.06
Q2'13 Gross Profit Operating Expense
Non-Operating Expense
Tax Rate Minority Interest
Incremental Dilution
Sharecount Q2'14
15 Copyright 2014 EMC Corporation. All rights reserved. Copyright 2014 EMC Corporation. All rights reserved.
Free Cash Flow, Cash Use & Cash Balance Q214 FCF $930M
Cash Use
EMC ex. VMware Domestic
$3.7B
EMC ex. VMware International
$4.3B
VMware Domestic
$2.0B
VMware International
$4.7B
Q214
EMC Repurchase EMC Shares** $603M
EMC Repurchase VMW Shares -
VMware Purchase VMware Shares $238M
Acquisitions, Net of Cash Acquired $625M
Refer to the the Appendix for a complete reconciliation of GAAP to non-GAAP.
Note: Free cash flow is a non-GAAP financial measure which is defined as net cash provided by operating activities, less additions to property, plant and equipment and capitalized software development costs. See attached schedules for a reconciliation of net cash provided by operating activities to free cash flow for the three and six months ended June 30, 2014 and 2013.
*Note: Figures may not foot due to rounding
EMC Consolidated $14.6B
Cash & Investments Balance *
**Note: Total amount: $595M, Paid in cash: $603M
16 Copyright 2014 EMC Corporation. All rights reserved. Copyright 2014 EMC Corporation. All rights reserved.
EMC Federation Wins Customer Value Proposition Federation Products and Services
European Telecom Federation solution combines virtualized infrastructure with tools for real-time intelligence Vblock, Backup/Recovery, Pivotal Spring and HAWQ
Global Agricultural Federation supports strategy to start private and evolve to public and hybrid clouds Vblock, VCAC, vCloud
Suite, Pivotal, Pivotal CF
US Security Firm Chose Federation for resilient converged infrastructure, cross-functional coordination and roadmap to cloud VNX, VPLEX, RecoverPoint,
VMware
Global Industrial Federation offers best-of-breed Big Data PaaS via multi-cloud- capable, globally deployable model Vblock, Backup/Recovery,
RSA, Pivotal Global Business Consulting Firm
Partner used Federation to build client a truly scalable and flexible IT infrastructure with a multi-sourcing strategy Vblock and VCAC
Global Pharmaceutical
Federations hybrid cloud toolset delivers application and workload mobility at a cost comparable to public cloud Vblock, vCHS, Pivotal
US Retail Consultant
Federations scalable technology makes the most of Big Data assets for new market intelligence service
Pivotal Greenplum DB, Pivotal HD, Isilon
US SaaS Company Federation provides health information exchange means to build and scale its next-gen SaaS solution
VNX, Data Domain, RecoverPoint, vCHS, Pivotal opportunity
17 Copyright 2014 EMC Corporation. All rights reserved. Copyright 2014 EMC Corporation. All rights reserved.
EMC Federation Wins Customer Value Proposition Federation Products and Services
European Telecom Federation solution combines virtualized infrastructure with tools for real-time intelligence Vblock, Backup/Recovery, Pivotal Spring and HAWQ
Global Agricultural Federation supports strategy to start private and evolve to public and hybrid clouds Vblock, VCAC, vCloud
Suite, Pivotal, Pivotal CF
US Security Firm Chose Federation for resilient converged infrastructure, cross-functional coordination and roadmap to cloud VNX, VPLEX, RecoverPoint,
VMware
Global Industrial Federation offers best-of-breed Big Data PaaS via multi-cloud- capable, globally deployable model Vblock, Backup/Recovery,
RSA, Pivotal Global Business Consulting Firm
Partner used Federation to build client a truly scalable and flexible IT infrastructure with a multi-sourcing strategy Vblock and VCAC
Global Pharmaceutical
Federations hybrid cloud toolset delivers application and workload mobility at a cost comparable to public cloud Vblock, vCHS, Pivotal
US Retail Consultant
Federations scalable technology makes the most of Big Data assets for new market intelligence service
Pivotal Greenplum DB, Pivotal HD, Isilon
US SaaS Company Federation provides health information exchange means to build and scale its next-gen SaaS solution
VNX, Data Domain, RecoverPoint, vCHS, Pivotal opportunity
18 Copyright 2014 EMC Corporation. All rights reserved. Copyright 2014 EMC Corporation. All rights reserved.
EMC Federation Wins Customer Value Proposition Federation Products and Services
European Telecom Federation solution combines virtualized infrastructure with tools for real-time intelligence Vblock, Backup/Recovery, Pivotal Spring and HAWQ
Global Agricultural Federation supports strategy to start private and evolve to public and hybrid clouds Vblock, VCAC, vCloud
Suite, Pivotal, Pivotal CF
US Security Firm Chose Federation for resilient converged infrastructure, cross-functional coordination and roadmap to cloud VNX, VPLEX, RecoverPoint,
VMware
Global Industrial Federation offers best-of-breed Big Data PaaS via multi-cloud- capable, globally deployable model Vblock, Backup/Recovery,
RSA, Pivotal Global Business Consulting Firm
Partner used Federation to build client a truly scalable and flexible IT infrastructure with a multi-sourcing strategy Vblock and VCAC
Global Pharmaceutical
Federations hybrid cloud toolset delivers application and workload mobility at a cost comparable to public cloud Vblock, vCHS, Pivotal
US Retail Consultant
Federations scalable technology makes the most of Big Data assets for new market intelligence service
Pivotal Greenplum DB, Pivotal HD, Isilon
US SaaS Company Federation provides health information exchange means to build and scale its next-gen SaaS solution
VNX, Data Domain, RecoverPoint, vCHS, Pivotal opportunity
19 Copyright 2014 EMC Corporation. All rights reserved. Copyright 2014 EMC Corporation. All rights reserved.
EMC Federation Wins Customer Value Proposition Federation Products and Services
European Telecom Federation solution combines virtualized infrastructure with tools for real-time intelligence Vblock, Backup/Recovery, Pivotal Spring and HAWQ
Global Agricultural Federation supports strategy to start private and evolve to public and hybrid clouds Vblock, VCAC, vCloud
Suite, Pivotal, Pivotal CF
US Security Firm Chose Federation for resilient converged infrastructure, cross-functional coordination and roadmap to cloud VNX, VPLEX, RecoverPoint,
VMware
Global Industrial Federation offers best-of-breed Big Data PaaS via multi-cloud- capable, globally deployable model Vblock, Backup/Recovery,
RSA, Pivotal Global Business Consulting Firm
Partner used Federation to build client a truly scalable and flexible IT infrastructure with a multi-sourcing strategy Vblock and VCAC
Global Pharmaceutical
Federations hybrid cloud toolset delivers application and workload mobility at a cost comparable to public cloud Vblock, vCHS, Pivotal
US Retail Consultant
Federations scalable technology makes the most of Big Data assets for new market intelligence service
Pivotal Greenplum DB, Pivotal HD, Isilon
US SaaS Company Federation provides health information exchange means to build and scale its next-gen SaaS solution
VNX, Data Domain, RecoverPoint, vCHS, Pivotal opportunity
20 Copyright 2014 EMC Corporation. All rights reserved. Copyright 2014 EMC Corporation. All rights reserved.
The EMC Federation Strategically Aligned, Focused And Free To Execute On Their Mission
AD
VAN
CED
SEC
URIT
Y
INFORMATION INFRASTRUCTURE
BIG DATA: Big-data Analytics, Cloud Foundry
SDDC, Hybrid-Cloud, End-User Computing
21 Copyright 2014 EMC Corporation. All rights reserved. Copyright 2014 EMC Corporation. All rights reserved.
EMC Information Infrastructure
EMC Information Infrastructure $4.38B 1%
High-End $1.03B -14%
Unified & Backup/Recovery $1.57B 6%
Emerging Storage $0.47B 52%
Storage Other & PS $0.90B -6%
RSA $0.24B 6%
IIG $0.16B 4%
Q214 Growth Y/Y
Note: Figures may not foot due to rounding
22 Copyright 2014 EMC Corporation. All rights reserved. Copyright 2014 EMC Corporation. All rights reserved.
Converged Infrastructure
Partners
vCloud Hybrid Service
Hybrid Cloud
Proven & Tested In Joint Federation Labs
PLATFORM AS A SERVICE
SOFTWARE-DEFINED DATA CENTER
VIRTUAL WORKSPACE
BUSINESS DATA LAKE
SECURITY ANALYTICS
Next Gen Apps
Traditional Applications
Customer Focused Solutions
23 Copyright 2014 EMC Corporation. All rights reserved. Copyright 2014 EMC Corporation. All rights reserved.
EMC 2014 Non-GAAP Business Outlook
Refer to the the Appendix for a complete reconciliation of GAAP to non-GAAP.
Note: All dollar amounts and percentages presented on this slide should be considered to be approximations.
2014
Revenue $24.6B
Operating Income (% of Revenue) 24.0-24.5%
Income Tax Rate 23.5%
Weighted Average Shares, Diluted 2.05B
EPS $1.91
24 Copyright 2014 EMC Corporation. All rights reserved. Copyright 2014 EMC Corporation. All rights reserved.
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