10-QPeriod: Q2 FY2026

Dell Technologies Inc. Quarterly Report for Q2 Ended May 2, 2025

Filed June 10, 2025For Securities:DELL

Summary

Dell Technologies Inc. reported a 5% increase in total net revenue for the first quarter of Fiscal Year 2026, reaching $23.4 billion, driven by a strong performance in its Infrastructure Solutions Group (ISG) and, to a lesser extent, its Client Solutions Group (CSG). The ISG segment saw a significant 12% revenue jump, largely fueled by demand for AI-optimized servers and continued strength in storage solutions. The CSG segment experienced a 5% increase in revenue, primarily from commercial offerings, though consumer demand saw a decline. Profitability showed robust improvement, with operating income increasing by 21% year-over-year to $1.2 billion. This was supported by an increase in ISG operating income and disciplined cost management across the company. Despite a slight decrease in overall net income due to higher income tax expenses, non-GAAP net income saw a healthy 13% increase. The company also demonstrated strong cash flow generation, with cash from operations increasing significantly to $2.8 billion, bolstered by working capital dynamics and strong AI-driven demand. Dell Technologies continues to focus on returning capital to shareholders through share repurchases and dividends, with substantial remaining authorization for its stock repurchase program.

Financial Highlights

54 data points
Beta

Revenue

$23.38B

21.1% Gross Margin

Net Income

$965.00M

4.1% Net Margin

EPS (Diluted)

$1.37

Total Assets

$86.87B

Cash & Equivalents

$7.70B

Free Cash Flow

$2.23B

Financial Statements
Beta
Revenue$23.38B
Cost of Revenue$18.44B
Gross Profit$4.94B
R&D Expenses$808.00M
SG&A Expenses$2.96B
Operating Expenses$3.77B
Operating Income$1.17B
Net Income$965.00M
EPS (Basic)$1.39
EPS (Diluted)$1.37
Shares Outstanding (Basic)692.00M
Shares Outstanding (Diluted)702.00M

Key Highlights

  • 1Total net revenue increased by 5% to $23.4 billion, driven by ISG and CSG growth.
  • 2Infrastructure Solutions Group (ISG) revenue grew 12% to $10.3 billion, powered by AI-optimized servers and storage solutions.
  • 3Client Solutions Group (CSG) revenue increased 5% to $12.5 billion, primarily due to commercial offerings.
  • 4Operating income surged 21% to $1.2 billion, reflecting strong ISG performance and cost management.
  • 5Net income slightly decreased to $965 million, impacted by higher income tax expenses, but non-GAAP net income rose 13% to $1.1 billion.
  • 6Cash flow from operations significantly increased to $2.8 billion, benefiting from working capital improvements.
  • 7The company repurchased approximately $2.0 billion of Class C Common Stock during the quarter.

Frequently Asked Questions

Revenue growth was primarily driven by Dell's Infrastructure Solutions Group (ISG), which saw a 12% increase year-over-year. This growth was particularly fueled by strong demand for AI-optimized servers and continued strength in storage solutions. The Client Solutions Group (CSG) also contributed positively with a 5% revenue increase, mainly from its commercial offerings.

Dell Technologies demonstrated improved profitability, with operating income rising 21% to $1.2 billion. This enhancement was supported by the strong performance of the ISG segment and effective cost management initiatives. While net income saw a slight decrease due to higher income tax expenses, the non-GAAP net income increased by 13%, indicating underlying operational strength.

The company continues to experience significant demand for its AI-optimized server offerings, which has led to a substantial increase in backlog levels. While this demand is a key growth driver for ISG, Dell notes that the timing of revenue recognition for these solutions can be non-linear due to customer readiness and component supply dynamics. Despite potential near-term moderation in overall IT spending due to macroeconomic uncertainty, the long-term trend for AI solutions remains strong.

Dell generated robust cash flow from operations, increasing to $2.8 billion, driven by profitability and positive working capital dynamics, particularly related to increased AI-optimized server demand. The company continues to prioritize returning capital to shareholders through share repurchases and dividend payments. Dell has significant authorization remaining under its stock repurchase program, indicating a continued focus on shareholder returns.