Dell Technologies Inc. (DELL): Results of Operations and Financial Condition
Dell Technologies Inc. (DELL) filed an SEC Form 8-K — Results of Operations and Financial Condition. Exhibit 99.1 Dell Technologies Delivers Second Quarter Fiscal 2027 Financial Results ROUND ROCK, Texas — Sept. 1, 2026 — Dell Technologies (NYSE: DELL) announces financial results for its fiscal 2027 second quarter and provides guidance for its fiscal 2027 third quarter and full
How this was made
The 30-second read
Why it matters
The earnings beat and guidance raise expectations for AI‑driven hardware demand, likely boosting related stocks.
Market read
Dell’s results are a catalyst for the broader tech sector, especially AI‑related hardware and services.
What to watch
Potential supply‑chain constraints and macro‑economic slowdown could temper the upside.
Record $47.0 billion revenue rose 58% year over year, driven by ISG growth and record $16.4 billion AI-Optimized Servers revenue; Dell raised FY27 revenue guidance to $192.0 billion.
Revenue, operating income, net income and diluted EPS all increased sharply year over year, ISG operating income more than tripled, and Dell raised its FY27 revenue, AI-Optimized Servers revenue, GAAP EPS and non-GAAP EPS outlooks.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| Total net revenueGAAP | $ 46,971 million | – | 58% |
| Products net revenueGAAP | $ 41,112 million | – | 72% |
| Services net revenueGAAP | $ 5,859 million | – | —% |
| Total cost of revenueGAAP | $ 37,141 million | – | 53% |
| Gross marginGAAP | $ 9,830 million | – | 80% |
| Gross margin as a percentage of total net revenueGAAP | 20.9 % | – | – |
| Selling, general, and administrative expenseGAAP | $ 3,336 million | – | 15% |
| Research and development expenseGAAP | $ 1,109 million | – | 41% |
| Total operating expensesGAAP | $ 4,445 million | – | 21% |
| Operating incomeGAAP | $ 5,385 million | – | 204% |
| Operating income as a percentage of total net revenueGAAP | 11.5 % | – | – |
| Interest and other, netGAAP | $ (254) million | – | 24% |
| Income before income taxesGAAP | $ 5,131 million | – | 256% |
| Income tax expenseGAAP | $ 998 million | – | 262% |
| Income tax rateGAAP | 19.5 % | – | – |
| Net incomeGAAP | $ 4,133 million | – | 255% |
| Net income as a percentage of total net revenueGAAP | 8.8 % | – | – |
| Earnings per share — basicGAAP | $ 6.41 | – | 273% |
| Earnings per share — dilutedGAAP | $ 6.34 | – | 273% |
| Weighted average shares — dilutedGAAP | 652 million | – | (5)% |
| Non-GAAP gross marginnon-GAAP | $ 9,929 million | – | 78% |
| Non-GAAP gross margin as a percentage of net revenuenon-GAAP | 21.1 % | – | – |
| Non-GAAP operating expensesnon-GAAP | $ 4,000 million | – | 22% |
| Non-GAAP operating incomenon-GAAP | $ 5,929 million | – | 160% |
| Non-GAAP operating income as a percentage of net revenuenon-GAAP | 12.6 % | – | – |
| Non-GAAP net incomenon-GAAP | $ 4,591 million | – | 189% |
| Non-GAAP diluted earnings per sharenon-GAAP | $ 7.04 | – | 203% |
| Cash flow from operationsGAAP | $ 2,225 million | – | (13)% |
| Free cash flownon-GAAP | $ 986 million | – | (47)% |
| Adjusted free cash flownon-GAAP | $ 8,149 million | – | 224% |
| Capital expenditures and capitalized software development costsother | $ (1,239) million | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Infrastructure Solutions Group (ISG)AI-Optimized Servers, Traditional Servers and Networking, and Storage revenue increased year over year; ISG operating income was $ 4,781 million, up 225% year over year, and represented 15.0 % of ISG net revenue. | $ 31,782 million | – | 89% |
| AI-Optimized ServersDell booked a record $60.9 billion in AI server orders and exited the quarter with a record $95 billion backlog. | $ 16,401 million | – | 100% |
| Traditional Servers and NetworkingRecord revenue. | $ 10,531 million | – | 122% |
| StorageRecord second-quarter revenue. | $ 4,850 million | – | 26% |
| Client Solutions Group (CSG)Commercial and Consumer revenue increased year over year; CSG operating income was $ 1,142 million, up 42% year over year, and represented 7.6 % of CSG net revenue. | $ 15,034 million | – | 20% |
| CommercialRecord Commercial Client revenue. | $ 13,192 million | – | 22% |
| ConsumerConsumer revenue increased year over year. | $ 1,842 million | – | 7% |
Q3FY27 and FY27 outlook
- RevenueQ3FY27: $ 49.0 billion; FY27 updated: $ 192.0 billion
- NoteQ3FY27 GAAP diluted EPS: $ 6.10, 168 % Y/Y
- NoteQ3FY27 non-GAAP diluted EPS: $ 6.50, 151 % Y/Y
- NoteFY27 AI-Optimized Servers revenue updated: $ 74.0 billion, 200 % Y/Y
- NoteFY27 GAAP diluted EPS updated: $ 24.37, 181 % Y/Y
- NoteFY27 non-GAAP diluted EPS updated: $ 25.50, 148 % Y/Y
- NoteFY27 previous revenue guidance: $ 167.0 billion
- NoteFY27 previous AI-Optimized Servers revenue guidance: $ 60.0 billion
- NoteFY27 previous GAAP diluted EPS guidance: $ 17.31
- NoteFY27 previous non-GAAP diluted EPS guidance: $ 17.90
Capital returns
- Dell Technologies returned a record $4.3 billion to shareholders in the second quarter through share repurchases and dividends.
- Repurchases of common stock: $ (3,796) million; prior year: $ (940) million.
- Payments of dividends and dividend equivalents: $ (405) million; prior year: $ (366) million.
- The board declared a quarterly cash dividend of $0.63 per common share on Sept. 1, payable on Oct. 30 to shareholders of record as of Oct. 20.
What drove it
- Record AI server orders of $60.9 billion, record AI-Optimized Servers revenue of $16.4 billion, and a record $95 billion AI server backlog.
- ISG revenue increased 89%, including 122% growth in Traditional Servers and Networking and 26% growth in Storage.
- CSG revenue increased 20%, led by 22% growth in Commercial revenue.
- Products net revenue increased 72%, while Services net revenue was $ 5,859 million compared with $ 5,841 million.
- GAAP gross margin increased to 20.9 % of total net revenue from 18.3 %, while GAAP operating expenses were 9.5 % of total net revenue versus 12.3 %.
Concerns
- Cash flow from operations declined 13% year over year to $ 2,225 million.
- Free cash flow declined 47% year over year to $ 986 million.
- Capital expenditures and capitalized software development costs were $ (1,239) million, compared with $ (675) million in the prior-year quarter.
- Inventories increased to $ 21,290 million at July 31, 2026 from $ 10,437 million at January 30, 2026.
- Short-term debt increased to $ 8,481 million and long-term debt increased to $ 25,985 million at July 31, 2026 from $ 7,990 million and $ 23,513 million, respectively, at January 30, 2026.
What to watch
- Conversion of the record $95 billion AI server backlog into revenue.
- Delivery against Q3FY27 revenue guidance of $ 49.0 billion and GAAP diluted EPS guidance of $ 6.10.
- Progress toward FY27 updated AI-Optimized Servers revenue guidance of $ 74.0 billion.
- Cash flow from operations and free cash flow following their year-over-year declines in the second quarter.
- Inventory, financing receivables, and debt levels reported at July 31, 2026.
Balance sheet and cash flow
- Cash and cash equivalents at July 31, 2026: $ 11,569 million; January 30, 2026: $ 11,528 million.
- Short-term debt at July 31, 2026: $ 8,481 million; January 30, 2026: $ 7,990 million.
- Long-term debt at July 31, 2026: $ 25,985 million; January 30, 2026: $ 23,513 million.
- Inventories at July 31, 2026: $ 21,290 million; January 30, 2026: $ 10,437 million.
- Accounts receivable, net at July 31, 2026: $ 22,918 million; January 30, 2026: $ 17,585 million.
- Short-term financing receivables, net at July 31, 2026: $ 12,805 million; January 30, 2026: $ 8,458 million.
- Cash flow from operations: $ 2,225 million, compared with $ 2,543 million in the prior-year quarter.
- Proceeds from debt: $ 4,386 million; repayments of debt: $ (1,017) million.
- Cash, cash equivalents, and restricted cash at end of the period: $ 11,737 million; prior year: $ 8,291 million.
Analysis
Dell reported record second-quarter revenue of $ 46,971 million, up 58% year over year, with products net revenue up 72% to $ 41,112 million. ISG was the principal growth engine: revenue rose 89% to $ 31,782 million, led by AI-Optimized Servers revenue of $ 16,401 million, up 100%, and Traditional Servers and Networking revenue of $ 10,531 million, up 122%. CSG also expanded, with revenue up 20% to $ 15,034 million, driven by 22% growth in Commercial revenue.
Profit growth outpaced revenue growth. GAAP gross margin increased 80% to $ 9,830 million and reached 20.9 % of total net revenue, compared with 18.3 % in the prior-year quarter. Total operating expenses rose 21% to $ 4,445 million, below revenue growth, lifting GAAP operating income 204% to $ 5,385 million and its margin to 11.5 % from 6.0 %. ISG operating income rose 225% to $ 4,781 million and accounted for 81 % of total reportable segment operating income, compared with 65 % a year earlier.
GAAP net income increased 255% to $ 4,133 million and diluted EPS increased 273% to $ 6.34. Non-GAAP operating income increased 160% to $ 5,929 million, non-GAAP net income increased 189% to $ 4,591 million, and non-GAAP diluted EPS increased 203% to $ 7.04. The company also reported diluted weighted average shares of 652 million, compared with 686 million in the prior-year quarter.
Cash conversion was weaker on the reported GAAP and standard non-GAAP free-cash-flow measures. Cash flow from operations declined 13% to $ 2,225 million, and free cash flow declined 47% to $ 986 million, while capital expenditures and capitalized software development costs were $ (1,239) million. Adjusted free cash flow, which adds back financing receivables and equipment under operating leases, increased 224% to $ 8,149 million. Dell returned a record $4.3 billion to shareholders through repurchases and dividends, including $ (3,796) million of common-stock repurchases and $ (405) million of dividend and dividend-equivalent payments.
Management raised FY27 revenue guidance to $ 192.0 billion from $ 167.0 billion and AI-Optimized Servers revenue guidance to $ 74.0 billion from $ 60.0 billion. It also raised FY27 GAAP diluted EPS guidance to $ 24.37 from $ 17.31 and non-GAAP diluted EPS guidance to $ 25.50 from $ 17.90. Q3FY27 guidance calls for revenue of $ 49.0 billion, GAAP diluted EPS of $ 6.10, and non-GAAP diluted EPS of $ 6.50. The key reported operating datapoints are the $60.9 billion of record AI server orders, the $95 billion record backlog, sustained growth across traditional infrastructure and clients, and the year-over-year declines in operating cash flow and free cash flow.
Management, verbatim
That’s clearest in our AI server business where we booked a record $60.9 billion in orders, recognized a record $16.4 billion in revenue and exited the quarter with a record $95 billion backlog.
Jeff Clarke, vice chairman and chief operating officer, Dell Technologies
We’re seeing broader revenue growth as well, with traditional servers and networking up 122%, storage up 26% and our client solutions up 20% year over year.
Jeff Clarke, vice chairman and chief operating officer, Dell Technologies
With AI momentum accelerating and our opportunity expanding across the portfolio, we’re raising our full-year FY27 revenue outlook by $25 billion to $192 billion, up nearly 70% year over year.
David Kennedy, chief financial officer, Dell Technologies
Not in the filing
stated, not guessed- Prior-quarter comparisons for all reported second-quarter metrics were not provided.
- Q3FY27 gross-margin, operating-expense, and tax-rate guidance were not provided.
- FY27 gross-margin, operating-expense, and tax-rate guidance were not provided.
- A previous-release outlook was not provided; therefore, no actual-versus-prior-guidance comparison is included.
- Total debt was not reported as a single line item.
- Quarterly dividend yield was not provided.
AlphaAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.
Background
Dell’s 8‑K filing provides the first public disclosure of its FY27 Q2 results and updated guidance.
Ticker impact
Dell posted record Q2 FY27 revenue of $47.0 B and raised full‑year FY27 revenue guidance to $192.0 B.
Expect near‑term upside pressure; price could rise 3‑5% on the day of release.
Revenue up 58% YoY, EPS up 273%, and FY guidance raised ~70% signal robust demand and margin expansion.
Market effects
AI‑server and data‑center equipment sector likely to see broader rally as Dell’s growth validates demand.
U.S. technology stocks may gain; European hardware peers could see spillover buying.
Global AI hardware supply chain benefits from Dell’s record orders, supporting worldwide tech indices.
Counterpoint
If guidance proves overly optimistic, a pull‑back could trigger a correction once quarterly details emerge.
Key entities
- companyDell Technologies Inc.
U.S. technology firm reporting FY27 Q2 results.
- executiveJeff Clarke
Vice Chairman and COO, quoted on AI server demand.
