Dell Technologies Inc. Q1 FY2026 Earnings Call

· Earnings call transcript and AI-powered summary

Quarter Overview

  • Q1 FY26 revenue was $23.4B, up 5% year-over-year (YoY). This growth was driven by strength across both Infrastructure Solutions Group (ISG) and Client Solutions Group (CSG), each up 8% YoY.
  • Diluted EPS rose 17% YoY to $1.55, growing three times faster than revenue.
  • Record Q1 operating cash flow of $2.8B, driven by profitability improvements and stronger working capital management.
  • Dell returned $2.4B to shareholders through stock repurchases and dividends.

Artificial Intelligence (AI) Momentum

  • AI server orders reached $12.1B in Q1—more than all AI server shipments in FY25—reflecting explosive demand.
  • AI server shipments totaled $1.8B, with backlog now at $14.4B.
  • The five-quarter AI pipeline grew sequentially and is multiple times larger than current backlog; pipeline includes Tier 2 cloud service providers (CSPs), enterprises, and sovereign customers.
  • Dell is designing custom AI systems with partners including NVIDIA, AMD, Meta, Google, Mistral, Cohere, and Hugging Face.
  • Enterprise AI customer base continues to grow across verticals including financial services, manufacturing, WebTech, media/entertainment, and education.
  • Management reiterated AI demand remains nonlinear, driven by customer power availability, cooling infrastructure, and data center readiness.

Business Segment Performance

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Operator: Please standby. Afternoon. And welcome to the Fiscal Year 2026 First Quarter Financial Results Conference Call for Dell Technologies Inc. I'd like to inform all participants this call is being recorded at the request of Dell Technologies. This broadcast is the copyrighted property of Dell Technologies Inc. Any rebroadcast of this information in whole or part without the prior written permission of Dell Technologies is prohibited. Following prepared remarks, we will conduct a question and answer session. If you have a question, simply press star then one on your telephone keypad at any time during the presentation. I'd like to turn the call over to Paul Frantz, Head of Investor Relations. Mister Frantz, you may begin. Paul Frantz: Thanks everyone for joining us. With me today are Jeff Clarke, Yvonne McGill, and Tyler Johnson. Our earnings materials are available on our IR website and I encourage you to review these materials. Also, please take some time to review the presentation, which includes additional content to complement our discussion this afternoon. Guidance will be covered on today's call. During this call, unless otherwise indicated, all references to financial measures refer to non-GAAP financial measures, including non-GAAP gross margin, operating expenses, operating income, net income, that lead to earnings per share, free cash flow, and adjusted free cash flow. A reconciliation of these measures to their most directly comparable GAAP measures can be fo

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