Dell Technologies Inc.
DELL · NYSE
Next quarter
Expected to report Nov 24, 2026 — estimated from last year’s reporting date.
Consensus is $6.42 EPS for Oct 2026 across 7 estimates, ranging $6.23 to $7.13.
DELL Jul 2026
- 43.22%
- +15.81%
- $4.72
- $6.76
- —
- $46.97B
Reported results
- $46.97B
- 20.93%
- $5.38B
- 11.46%
- $4.13B
- $6.34
Highlights
- AI server demand: Dell booked a record $60.9 billion of AI-optimized server orders, recognized $16.4 billion of revenue, up 100% year over year, and ended the quarter with a record $95 billion backlog.
- Record quarterly result: Revenue reached $47.0 billion, up 58% year over year and 7% from $43.84 billion in the prior quarter; GAAP operating income rose 204% to $5.39 billion and net income rose 255% to $4.13 billion.
- Earnings beat: The supplied earnings comparison shows EPS of $6.76 versus consensus of $4.72, a 43.22% surprise; the release reports GAAP diluted EPS of $6.34 and non-GAAP diluted EPS of $7.04.
- Infrastructure Solutions: ISG revenue climbed 89% year over year to a record $31.8 billion, while operating income rose 225% to $4.8 billion and margin expanded to 15.0% from 8.8%.
- Broadening growth: Traditional servers and networking revenue increased 122% to $10.5 billion, storage rose 26% to $4.9 billion, and Client Solutions revenue grew 20% to $15.0 billion.
- Full-year outlook raised: Dell increased FY27 revenue guidance by $25 billion to $192.0 billion, including $74.0 billion of AI-optimized server revenue, and lifted GAAP EPS guidance to $24.37 from $17.31.
- Strong forward guide: Third-quarter revenue is expected to reach $49.0 billion, up 81% year over year, with GAAP EPS of $6.10 and non-GAAP EPS of $6.50.
- Capital return and investment: Dell returned a record $4.3 billion to shareholders, including $3.8 billion of repurchases and $405 million of dividends, while capital expenditures and capitalized software costs rose to $1.24 billion.
Analysis
Dell’s fiscal second quarter was an AI infrastructure acceleration quarter, with record revenue of $47.0 billion, up 58% year over year and 7% sequentially from $43.84 billion. GAAP operating income increased 204% to $5.39 billion, net income rose 255% to $4.13 billion, and diluted EPS was $6.34 versus $1.70 a year ago and $5.24 in the prior quarter. The supplied earnings comparison reports EPS of $6.76 against consensus of $4.72, or a 43.22% surprise; the release’s non-GAAP EPS figure was $7.04, versus $2.32 a year ago.
The defining driver was ISG, where AI-optimized server revenue doubled to $16.4 billion and orders reached $60.9 billion, producing a $95 billion ending backlog. Growth also broadened beyond AI servers: traditional servers and networking rose 122%, storage grew 26%, and CSG revenue advanced 20%. Profitability scaled sharply, with ISG operating margin expanding to 15.0% and total GAAP operating margin reaching 11.5% from 6.0% a year ago. Dell raised full-year revenue guidance by $25 billion to $192.0 billion and expects third-quarter revenue of $49.0 billion.
AI infrastructure acceleration
AI demand dominated the quarter and continued to expand Dell’s infrastructure opportunity. AI-optimized server orders reached a record $60.9 billion, more than three times the $16.4 billion of recognized quarterly revenue, leaving a $95 billion backlog at quarter-end. AI-optimized server revenue doubled year over year to $16.4 billion and represented roughly 52% of ISG revenue.
- Backlog conversion: The scale of orders relative to recognized revenue points to substantial future delivery activity, although the release does not specify the timing of backlog conversion.
- Broader infrastructure demand: Traditional servers and networking revenue rose 122% to $10.5 billion, while storage increased 26% to $4.9 billion, indicating that spending is extending beyond accelerator-heavy systems.
ISG growth and margins
Infrastructure Solutions Group was the primary earnings engine. Revenue increased 89% year over year to $31.8 billion, up from $16.8 billion, and operating income grew 225% to $4.8 billion. ISG generated 81% of total reportable segment operating income, compared with 65% in the year-ago quarter.
- Margin expansion: ISG operating margin increased to 15.0% from 8.8%, a 620-basis-point improvement, as the much larger AI server business translated into higher segment profitability.
- Sequential contribution: Total company operating income rose 47% from $3.66 billion in the prior quarter to $5.39 billion, with ISG accounting for most of the increase.
Client Solutions resilience
Client Solutions Group provided a meaningful second source of growth rather than remaining a drag on the infrastructure surge. Revenue increased 20% year over year to $15.0 billion, with commercial revenue up 22% to $13.2 billion and consumer revenue up 7% to $1.8 billion. Operating income rose 42% to $1.1 billion, and margin improved to 7.6% from 6.4%.
- Commercial strength: Commercial systems supplied nearly 88% of CSG revenue and grew faster than the overall segment, supporting Dell’s claim that growth is broadening across its portfolio.
- Smaller earnings role: CSG generated 19% of reportable segment operating income, down from 35% a year earlier, because ISG’s profit growth was substantially greater.
Earnings and cash generation
Revenue growth translated into substantial operating leverage. Company gross margin rose to 20.9% from 18.3%, while operating expenses fell to 9.5% of revenue from 12.3%. As a result, GAAP operating margin increased to 11.5% from 6.0%, and net margin rose to 8.8% from 3.9%.
- Cash flow: Operating cash flow was $2.2 billion, down 13% from $2.54 billion a year earlier, while free cash flow declined 47% to $986 million after $1.24 billion of capital expenditures and capitalized software costs.
- Adjusted cash flow: Including changes in financing receivables and equipment under operating leases, adjusted free cash flow was $8.15 billion, up 224% year over year.
- Balance-sheet investment: Inventories reached $21.3 billion at July 31, 2026, versus $10.4 billion at January 30, 2026, consistent with the company scaling production and delivery capacity for AI systems.
Raised fiscal outlook
Dell raised its full-year FY27 revenue outlook to $192.0 billion from $167.0 billion, implying 69% year-over-year growth. The company also increased its AI-optimized server revenue outlook to $74.0 billion from $60.0 billion, and lifted GAAP EPS guidance to $24.37 from $17.31 and non-GAAP EPS guidance to $25.50 from $17.90.
- Third-quarter setup: Revenue guidance of $49.0 billion implies 81% year-over-year growth and about 4% sequential growth from the second quarter; GAAP EPS is guided to $6.10 and non-GAAP EPS to $6.50.
- Shareholder returns: Dell returned $4.3 billion during the quarter through $3.8 billion of repurchases and $405 million of dividends, and declared a quarterly dividend of $0.63 per share payable October 30.
