How did Dell perform versus the prior-year quarter?

Revenue grew 11% to a record $27.0 billion and operating income rose 23% to $2.1 billion. GAAP diluted EPS increased 39% to $2.28, and non-GAAP diluted EPS increased 17% to $2.59. Growth was concentrated in ISG, where Servers and Networking revenue rose 37%, while CSG revenue grew only 3%.

What is the outlook for the rest of fiscal 2026?

Management raised full-year FY26 revenue guidance to $111.2–$112.2 billion (up about 17% at the midpoint) and expects roughly $25 billion in AI server shipments. Full-year GAAP diluted EPS is guided to $8.38 at the midpoint and non-GAAP diluted EPS to $9.92. For Q4, revenue is expected at $31.0–$32.0 billion and non-GAAP EPS at about $3.50 at the midpoint.

Why did gross margin decline, and is it a concern?

Consolidated gross margin fell to 20.7% from 22.0% in the prior-year quarter, as revenue mix shifted toward lower-margin AI servers and products grew faster than services, which declined 5%. Investors should monitor whether AI-driven growth continues to dilute margins, since the company's profit growth relies on higher volume rather than margin expansion.

How is Dell's balance sheet and cash generation trending?

Total debt rose to about $31.2 billion from $24.6 billion at fiscal year-end, and the stockholders' deficit widened to $(2.6) billion. Quarterly operating cash flow was $1.2 billion (down 25%), but nine-month operating cash flow of $6.5 billion was up 65%, and adjusted free cash flow was $6.4 billion year to date. Dell returned $5.3 billion to shareholders year to date, including over 39 million shares repurchased.

What is the significance of the AI backlog and orders?

Dell reported record Q3 AI server orders of $12.3 billion, $30 billion in orders year to date, and an $18.4 billion AI backlog. Management said its five-quarter pipeline is a multiple of that backlog, spanning neocloud, sovereign, and enterprise customers. These figures support the AI shipment guidance, but they are company-reported indicators, and actual revenue depends on execution and delivery timing.

DELL 8-K: Earnings & Results

01—Abstract

Summary

Summary of the 8-K filed November 25, 2025. Cited figures are marked; the original filing is the authoritative source.

Dell Technologies reported fiscal Q3 2026 (quarter ended October 31, 2025) results that were record-setting on revenue and profitability, driven almost entirely by its Infrastructure Solutions Group (ISG) and AI server demand.

Revenue rose 11% year over year to a record $27.0 billion^a, GAAP diluted EPS rose 39% to $2.28, and non-GAAP diluted EPS rose 17% to $2.59. ISG revenue grew 24% to a record $14.1 billion, with Servers and Networking up 37% to $10.1 billion, while Client Solutions Group (CSG) revenue grew 3% to $12.5 billion with flat operating income. Management reported record Q3 AI server orders of $12.3 billion, $30 billion in AI orders year to date, and an $18.4 billion backlog.

Management raised full-year FY26 guidance: revenue of $111.2^b–$112.2 billion (midpoint $111.7 billion, up 17%), AI server shipments of roughly $25 billion (up over 150%), and non-GAAP EPS of $9.92 at the midpoint (up 22%). Fourth-quarter revenue is guided to $31.0–$32.0 billion (midpoint up 32%), with non-GAAP EPS of $3.50 at the midpoint. The company also named David Kennedy permanent CFO and returned $1.6 billion to shareholders in the quarter ($5.3 billion year to date).

Investors should weigh the strong AI-driven growth against several watch items visible in the filing: consolidated gross margin fell to 20.7% from 22.0%, Services revenue declined 5%, Storage revenue fell 1%, Consumer revenue fell 7%, and total debt rose meaningfully (short-term debt $7.4 billion^c and long-term debt $23.8 billion versus $5.2 billion and $19.4 billion at fiscal year-end). Stockholders' deficit widened to $(2.6) billion.

Operating cash flow of $1.2 billion^d in the quarter was down 25%, though nine-month operating cash flow of $6.5 billion was up 65%. Much of the upside depends on the pace of AI server deliveries and their lower-margin mix.

02—Key points

Key Highlights

Record Q3 FY26 revenue of $27.0B (+11% YoY); GAAP diluted EPS of $2.28 (+39%) and non-GAAP diluted EPS of $2.59 (+17%).
ISG revenue hit a record $14.1B (+24%), led by Servers and Networking at $10.1B (+37%); ISG operating income rose 16% to $1.7B.
AI momentum: record Q3 AI server orders of $12.3B, $30B in orders year to date, and an $18.4B backlog; FY26 AI shipment guidance raised to ~$25B (up over 150%).
FY26 guidance raised: revenue of $111.2–$112.2B (midpoint +17%) and non-GAAP EPS of $9.92 at the midpoint (+22%); Q4 revenue guided to $31.0–$32.0B (midpoint +32%).
Margin pressure: consolidated gross margin declined to 20.7% from 22.0%, and CSG operating income was flat at $748M on 3% revenue growth.
Balance sheet and leverage: total debt rose to roughly $31.2B from $24.6B at fiscal year-end, and stockholders' deficit widened to $(2.6)B despite $1.6B in quarterly shareholder returns.
Leadership: David Kennedy named permanent Chief Financial Officer.

03—Questions

Frequently Asked Questions

How did Dell perform versus the prior-year quarter?
Revenue grew 11% to a record $27.0 billion and operating income rose 23% to $2.1 billion. GAAP diluted EPS increased 39% to $2.28, and non-GAAP diluted EPS increased 17% to $2.59. Growth was concentrated in ISG, where Servers and Networking revenue rose 37%, while CSG revenue grew only 3%.
What is the outlook for the rest of fiscal 2026?
Management raised full-year FY26 revenue guidance to $111.2–$112.2 billion (up about 17% at the midpoint) and expects roughly $25 billion in AI server shipments. Full-year GAAP diluted EPS is guided to $8.38 at the midpoint and non-GAAP diluted EPS to $9.92. For Q4, revenue is expected at $31.0–$32.0 billion and non-GAAP EPS at about $3.50 at the midpoint.
Why did gross margin decline, and is it a concern?
Consolidated gross margin fell to 20.7% from 22.0% in the prior-year quarter, as revenue mix shifted toward lower-margin AI servers and products grew faster than services, which declined 5%. Investors should monitor whether AI-driven growth continues to dilute margins, since the company's profit growth relies on higher volume rather than margin expansion.
How is Dell's balance sheet and cash generation trending?
Total debt rose to about $31.2 billion from $24.6 billion at fiscal year-end, and the stockholders' deficit widened to $(2.6) billion. Quarterly operating cash flow was $1.2 billion (down 25%), but nine-month operating cash flow of $6.5 billion was up 65%, and adjusted free cash flow was $6.4 billion year to date. Dell returned $5.3 billion to shareholders year to date, including over 39 million shares repurchased.
What is the significance of the AI backlog and orders?
Dell reported record Q3 AI server orders of $12.3 billion, $30 billion in orders year to date, and an $18.4 billion AI backlog. Management said its five-quarter pipeline is a multiple of that backlog, spanning neocloud, sovereign, and enterprise customers. These figures support the AI shipment guidance, but they are company-reported indicators, and actual revenue depends on execution and delivery timing.

04—Continue

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