10-Q · June 9, 2026
Dell Technologies reported exceptional first-quarter results with revenue of $43.84 billion, an 88% increase year-over-year, and diluted EPS of $5.24, marking a 282% increase from the same period last year. The strong…
Earnings analysis · 10-Q
DELL earnings analysis
Filed September 8, 2026 · Our reading of the company's report
The latest report
Dell delivered exceptional second-quarter growth, with revenue up 58% to $46.971 billion, GAAP diluted EPS of $6.34, and operating margin expanding to 11.5%. AI infrastructure was the primary driver, with ISG revenue up…
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Dell delivered exceptional second-quarter growth, with revenue up 58% to $46.971 billion, GAAP diluted EPS of $6.34, and operating margin expanding to 11.5%. AI infrastructure was the primary driver, with ISG revenue up 89% and AI-optimized server revenue doubling to $16.401 billion, while CSG also grew 20%. The principal concerns are sharply higher inventory, financing receivables, purchase commitments, debt, and capital intensity as Dell scales to meet AI demand. Management’s qualitative outlook remains positive, but it flags nonlinear AI demand, memory constraints, component inflation, and mix-related margin pressure.
Gross and operating margin
How much of each revenue dollar the business keeps.
One point per quarterly or annual filing. Both margins are shares of that report's revenue.
From revenue to operating profit
Where each $100 of revenue went in this report.
Cost of sales, operating expenses, and what remained. Figures are rounded to whole dollars.
Where revenue came from
The business segments reported by the company.
Shares of the segments disclosed in this filing, largest first.
How we read each report
Our analysis across the last few reports.
Our model's reading of each filing, not the share price or the market's reaction. Annual and quarterly reports each occupy one position.
Reported figures
- Earnings per share
- $6.34
What stood out
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Revenue and EPS surged year over year
Second-quarter revenue increased 58% year over year to $46.971 billion, while GAAP diluted EPS increased 273% to $6.34 from $1.70. Non-GAAP diluted EPS was $7.04 versus $2.32.
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Disciplined pricing lifted margins
GAAP gross margin rose 260 basis points to 20.9%, and operating margin increased 550 basis points to 11.5% from 6.0%. Operating income increased 204% to $5.385 billion.
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AI infrastructure drove ISG growth
ISG revenue grew 89% to $31.782 billion, led by AI-optimized servers revenue of $16.401 billion, up 100%, and traditional servers and networking revenue of $10.531 billion, up 122%. ISG operating margin expanded to 15.0% from 8.8%.
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CSG delivered broad-based growth
CSG revenue increased 20% to $15.034 billion, driven by commercial revenue growth of 22% to $13.192 billion. CSG operating margin improved to 7.6% from 6.4%.
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Operating cash flow remained strong
Six-month operating cash flow increased 18% to $6.306 billion from $5.339 billion. Six-month free cash flow was $4.104 billion, while capital expenditures and capitalized software costs increased to $2.202 billion from $1.243 billion.
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Large contracted revenue base
Remaining performance obligations were approximately $132 billion as of July 31, 2026, with approximately 77% expected to be recognized as revenue within the next twelve months.
What to watch
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Inventory and supply-chain exposure
Inventory increased to $21.290 billion from $10.437 billion at January 30, 2026, while management reported higher component costs and memory supply constraints. Purchase obligations totaled $34.8 billion, including $24.6 billion payable within twelve months.
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AI demand and customer concentration
Management stated that AI-optimized server demand is nonlinear because of customer readiness and frequent component transitions. A relatively small number of large customers and cloud providers accounted for a substantial portion of AI-server purchases, increasing concentration risk; accounts receivable rose to $22.918 billion.
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Growing financing and credit exposure
Net financing receivables increased to $20.430 billion from $14.280 billion, and the principal charge-off rate was 0.5% in the quarter versus 0.1% a year earlier. The allowance for financing receivable losses increased to $314 million from $213 million.
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Debt and refinancing obligations
Total debt principal increased $2.984 billion to $34.747 billion, including $5.351 billion of maturities in the remaining six months of Fiscal 2027. Variable-rate debt also exposes the company to future interest-cost volatility.
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Higher capital intensity reduced FCF
Free cash flow declined 47% year over year to $986 million in the quarter, as capital expenditures and capitalized software costs reached $1.239 billion versus $675 million. Six-month capital spending was $2.202 billion, including $1.6 billion for assets in customer contracts.
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Component inflation may pressure margins
Management expects component-cost inflation to persist through the remainder of Fiscal 2027 and anticipates continued margin-rate pressure from the mix shift toward AI-optimized servers, despite expecting gross-margin growth.
Management's outlook
The 10-Q provides qualitative expectations but no new numeric revenue or EPS guidance. Management anticipates significant ISG and strong CSG revenue growth, expects gross-margin growth despite mix pressure from AI-optimized servers, and expects component-cost inflation to persist through the remainder of Fiscal 2027.
Earlier filings 4
10-K · March 16, 2026
Dell positions itself as an end-to-end provider for the data & AI era, emphasizing AI-optimized servers, software-defined infrastructure, and flexible consumption models. Fiscal 2026 shows large-scale AI-driven demand…
10-Q · December 9, 2025
Dell reported a solid quarter with net revenue of $27,005 million (Q vs. prior-year $24,366 million), driven by product strength while services softened. Gross margin dollars rose to $5,593 million and operating income…
10-Q · September 8, 2025
Dell reported quarterly net revenue of $29,776 million, up $4,750 million (19.0%) year-over-year, driven by a 26.3% YoY increase in Products revenue. Diluted EPS was $1.70 (net income $1,164 million), operating income…
This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.