Dell Technologies Inc.

Q2 total revenue was $47 billion, up 58% year over year. Diluted non-GAAP EPS was $7.04, up 203%; net income was $4.6 billion, up 189%; operating income was $5.9 billion, up 160%; gross margin dollars were $9.9 billion, up 78%; and gross margin rate was 21.1%. ISG revenue was $31.8 billion, up 89%, with ISG operating income of $4.8 billion and a 15% operating margin. CSG revenue was $15 billion, up 20%, with CSG operating income of $1.1 billion and a 7.6% margin. Cash flow from operations was $2.2 billion, adjusted free cash flow was $8.1 billion, and Dell returned a record $4.3 billion to shareholders. For Q3, Dell guided to revenue of $49 billion midpoint, diluted non-GAAP EPS of $6.50 midpoint, ISG growth of roughly 145% with $19 billion in AI server revenue, and CSG growth of roughly 15%. For the full year, Dell raised revenue guidance to $192 billion midpoint and diluted non-GAAP EPS to $25.50, with ISG growth of roughly 120%, AI server revenue of $74 billion, traditional servers up just over 100%, storage up mid-teens, and CSG up mid-teens; OpEx is expected to be about 8% of revenue and I&O between $1.4 billion and $1.5 billion.

Jeff Clarke framed the quarter as evidence that Dell is compounding advantages from its broad portfolio, engineering, supply chain, and deployment capabilities. He emphasized that customers are modernizing data centers for both AI and non-AI workloads, and said Dell is seeing demand exceed supply across AI, traditional servers, storage, and PCs. His tone was highly confident and upbeat, with repeated references to record orders, backlog, and a strong second half.

David Kennedy highlighted the financial leverage in the model: gross margin dollars rose to $9.9 billion, gross margin rate was 21.1%, OpEx was $4 billion or 8.5% of revenue, and operating income reached $5.9 billion. He pointed to $2.2 billion of operating cash flow, $8.1 billion of adjusted free cash flow, $14.2 billion of cash and investments, and a 0.8x core leverage ratio. He also emphasized capital returns, including the record $4.3 billion returned to shareholders, 9.5 million shares repurchased at an average price of $401, and a dividend of about $0.63 per share.

Analysts pressed on whether the sharp growth in traditional servers and storage was mostly pricing and prebuys versus real demand. Management said the growth was driven primarily by modernization, aging installed base refreshes, security/resiliency requirements, and new AI/agentic workloads, while also acknowledging some inflation and price increases. Questions also focused on customer mix, supply constraints, financing receivables, and whether storage attach to AI deployments is becoming more material; Dell said enterprise demand is accelerating, supply remains tight across many components, financing receivables simply reflect business growth, and Lightning storage is still early and in beta with several customers.