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Dell Technologies DELL reported non-GAAP earnings of $1.55 per share in first-quarter fiscal 2026, missing the Zacks Consensus Estimate by 9.88%. The bottom line increased 17% year over year.
Revenues increased 5% year over year to $23.38 billion and surpassed the consensus mark by 1.04%. The rise was primarily driven by growth across all its core segments.
After the results were announced, shares of DELL plunged 0.84% in pre-market trading.
DELL’s Q1 Top-Line Details
Product revenues rose 9% year over year to $17.59 billion, beating the Zacks Consensus Estimate by 4.43%.
Dell Technologies Inc. Price, Consensus and EPS Surprise
Dell Technologies Inc. price-consensus-eps-surprise-chart | Dell Technologies Inc. Quote
Services revenues declined 6% year over year to $5.77 billion missing the Zacks Consensus Estimate by 2.40%.
Infrastructure Solutions Group (ISG) revenues increased 12% year over year to $10.31 billion.
The upside can be attributed to servers and networking revenues of 6.32 billion, which grew 16% year over year, with demand strength across AI and traditional servers. Storage revenues increased 6% year over year to $3.99 billion.
In the reported quarter, Dell Technologies’ AI-optimized server momentum saw an increase of $12.1 billion in orders. The flagship PowerEdge XE9680 experienced strong demand, contributing to the momentum in the AI space.
Dell Technologies shipped $1.8 billion worth of AI servers in the fiscal first quarter, and the AI server backlog remained healthy at $14.4 billion.
CSG revenues were $12.50 billion, up 5% year over year. Commercial Client revenues increased 9% year over year to $11.04 billion, while Consumer revenues fell 19% to $1.46 billion.
DELL’s Operating Details
The company’s fiscal first-quarter non-GAAP gross profit increased 1% year over year to $5.05 billion. The gross margin contracted 80 basis points (bps) year over year to 21.6%.
SG&A expenses fell 5% year over year to $2.96 billion. Research and development expenses increased 6% year over year to $808 million in the reported quarter.
Non-GAAP operating expenses declined 2% year over year to $3.39 billion. Operating expenses, as a percentage of revenues, contracted 110 bps on a year-over-year basis to 14.5%.
The non-GAAP operating income was $1.66 billion, up 10% year over year. The operating margin expanded 30 bps year over year to 7.1%.
The ISG segment’s operating income jumped 36% year over year to $998 million. The CSG segment’s operating income was $653 million, down 16% year over year.
DELL’s Balance Sheet & Cash Flow Details
As of May 2, 2025, DELL had $7.70 billion in cash and cash equivalents compared with $3.63 billion as of Jan. 31, 2025.
Total debt was $28.78 billion as of May 2, 2025, compared with $24.57 billion as of Jan. 31, 2025.
The company generated a cash flow from the operation of $2.8 billion. The adjusted free cash flow was $2.23 billion in first-quarter fiscal 2026.
Dell Technologies returned $2.4 billion of capital to its shareholders through $2 billion of share repurchases and paid out $396 million in dividends.