Dell Technologies Inc. Q3 FY2026 Earnings Call

· Earnings call transcript and AI-powered summary

Quarter Highlights

  • Record Q3 revenue of $27 billion, up 11% year over year (YoY).
  • Record non-GAAP EPS of $2.59, up 17% YoY.
  • AI server momentum surged with $12.3 billion in quarterly orders and $30 billion year-to-date (YTD), both records.
  • AI server shipments reached $5.6 billion in Q3; backlog hit an all-time high of $18.4 billion.
  • Strong performance across ISG and CSG with improved profitability, particularly in AI servers and Dell IP storage.
  • Cash flow from operations was $1.2 billion; Dell returned $1.6 billion to shareholders in the quarter.

Business Segment Performance

Infrastructure Solutions Group (ISG)
  • Revenue: $14.1 billion, up 24% YoY — seventh consecutive quarter of double-digit growth.
  • Servers & Networking: $10.1 billion, up 37% YoY and 43% YTD.
  • AI Servers:
    • Orders: $12.3 billion (record).
    • Shipments: $5.6 billion.
    • Backlog: $18.4 billion (record).
    • Shift in mix toward newer GB300 configurations.
  • Traditional servers saw double-digit demand growth, with stronger mix in high-performance compute setups.
  • Storage revenue: $4 billion, down 1% YoY; however, Dell IP storage saw strong double-digit demand for PowerStore, PowerScale, PowerFlex, and PowerMax.

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Operator: Please stand by. Good afternoon. And welcome to the fiscal year 2026 third 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 a 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 1 on your telephone keypad at any time during the presentation. I'd now like to turn the call over to Paul Frantz, Head of Investor Relations. Mr. Frantz? You may begin. Thanks everyone for joining us. With me today are Jeff Clark, David Kennedy, and Howard 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, includes additional content to complement our discussion this afternoon. Guidance will be covered on today's call. all references to financial measures During this call, unless otherwise indicated, refer to non GAAP financial measures. Including non GAAP gross margin, operating expenses, operating income net income, diluted 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 found in our web deck an

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