10-QPeriod: Q3 FY2026

Dell Technologies Inc. Quarterly Report for Q3 Ended Aug 1, 2025

Filed September 8, 2025For Securities:DELL

Summary

Dell Technologies Inc. reported strong financial results for the quarter and six months ended August 1, 2025, demonstrating significant top-line growth and improved profitability. Total net revenue saw a substantial increase driven by robust performance in the Infrastructure Solutions Group (ISG), particularly from AI-optimized servers. The Client Solutions Group (CSG) also contributed positively with growth in commercial offerings, reflecting a continued PC refresh cycle. The company's operating income and net income showed considerable year-over-year growth, supported by revenue expansion and disciplined cost management. Despite a decrease in gross margin percentage due to a richer product mix skewed towards AI-optimized servers, overall profitability benefited from lower operating expenses as a percentage of revenue. Dell Technologies generated substantial cash flow from operations, reinforcing its strong liquidity position and its ability to return capital to shareholders through dividends and share repurchases.

Financial Highlights

55 data points
Beta

Revenue

$27.00B

20.7% Gross Margin

Net Income

$1.55B

5.7% Net Margin

EPS (Diluted)

$2.28

Total Assets

$87.48B

Cash & Equivalents

$9.57B

Free Cash Flow

$2.37B

Financial Statements
Beta
Revenue$27.00B
Cost of Revenue$21.41B
Gross Profit$5.59B
R&D Expenses$752.00M
SG&A Expenses$2.72B
Operating Expenses$3.47B
Operating Income$2.12B
Net Income$1.55B
EPS (Basic)$2.31
EPS (Diluted)$2.28
Shares Outstanding (Basic)671.00M
Shares Outstanding (Diluted)680.00M

Key Highlights

  • 1Total net revenue increased by 19% year-over-year for the quarter and 12% for the six-month period, driven by strong ISG performance.
  • 2Infrastructure Solutions Group (ISG) revenue surged by 44% for the quarter and 30% for the six months, largely due to high demand for AI-optimized servers and networking solutions.
  • 3Operating income grew by 27% for the quarter and 25% for the six months, indicating improved profitability.
  • 4Net income attributable to Dell Technologies Inc. increased by 32% for the quarter and 14% for the six months.
  • 5The company generated $5.3 billion in cash from operating activities for the six-month period, a significant increase from the prior year.
  • 6Dell Technologies announced an 18% increase in its quarterly dividend, signaling confidence in its financial health and commitment to shareholder returns.
  • 7The company repurchased approximately $2.9 billion of its Class C Common Stock during the six months, alongside continuing dividend payments.

Frequently Asked Questions

The substantial revenue growth in ISG was primarily driven by a surge in demand for AI-optimized servers and networking solutions. This trend is further supported by customers modernizing and consolidating their data centers with next-generation products.

While the shift towards AI-optimized servers contributed to higher overall revenue and ISG performance, it also led to a decrease in the gross margin percentage. This is because AI-optimized servers typically have a different cost structure and potentially lower initial gross margins compared to traditional offerings. However, the company's disciplined cost management and strong revenue growth helped to offset this impact on overall operating income.

Dell Technologies maintains a strong liquidity position with substantial cash and cash equivalents and available borrowings. The company is committed to returning capital to shareholders through ongoing share repurchase programs and dividend payments. For the six months ended August 1, 2025, the company repurchased approximately $2.9 billion of its stock and paid $0.8 billion in dividends. They also issued Senior Notes and DFS debt, managing their debt levels strategically.

The report notes the dynamic nature of the IT infrastructure market and competitive landscape as ongoing factors. Specifically, managing supply chain for AI-optimized components, potential supply constraints for next-generation components, and the non-linearity of AI demand and shipments are mentioned. The company also faces risks associated with macroeconomic conditions, foreign currency fluctuations, and ongoing legal and tax matters, though they believe they are adequately reserved for known contingencies.