This quarter, we executed very well, achieving growth across our core markets and experiencing unprecedented demand for our AI-optimized servers. Our revenue reached $23.4 billion, up 5%, driven by growth across all of our core markets. ISG and CSG were up 8%.
— Jeff Clarke
03Detailed Report
DELL
Company DELL
Period
Q1 2026
CurrencyUSD
Report TypeQuarterly Earnings
GeneratedMay 21, 2026
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Executive Summary
Dell Technologies delivered a solid QQ1 2026 performance, underscored by a robust AI server demand cycle and a diversified revenue mix across ISG and CSG. Revenue rose 5% YoY to $23.38 billion, supported by double-digit growth in ISG and continued solid performance in storage and Dell IP. The AI narrative dominated the quarter, with $12.1 billion of AI server orders and a year-to-date pipeline that remains multiples of backlog, signaling a multi-quarter runway for AI deployments. Management reaffirmed full-year revenue guidance and raised non-GAAP EPS guidance, highlighting confidence in AI-driven growth and ongoing profitability improvements across segments. The quarter also delivered record cash generation, with $2.8 billion of operating cash flow and $2.23 billion in free cash flow, funding shareholder returns while preserving liquidity. However, the balance sheet shows elevated leverage and negative equity, reflecting a capital-intensive business with significant asset and debt levels that will require ongoing balance sheet discipline and optimization of capital structure. Looking ahead, the key investment thesis centers on Dell’s AI factories, expanded storage architecture (Dell IP), and ecosystem partnerships (NVIDIA, Google Gemini on-prem, Cohere), which collectively support a durable AI- and data-centric growth trajectory while macro volatility and competitive dynamics warrant ongoing vigilance.
Key Performance Indicators
Revenue
Increasing
23.38B
QoQ: -2.31% | YoY: 5.10%
Gross Profit
Increasing
4.94B
21.12% margin
QoQ: -15.26% | YoY: 2.73%
Operating Income
Increasing
1.17B
QoQ: -49.50% | YoY: 26.63%
Net Income
Increasing
965.00M
QoQ: -41.66% | YoY: 0.52%
EPS
Increasing
1.39
QoQ: -36.82% | YoY: 2.21%
Revenue Trend
Margin Analysis
Financial Highlights
Revenue and profitability
- Total revenue: $23.378 billion, up 5.10% YoY and -2.31% QoQ (per earnings metrics).
- Gross profit: $4.937 billion, up 2.73% YoY but down 15.26% QoQ, gross margin 21.12% (vs. 21.18% prior-year).
- Operating income: $1.165 billion, up 26.63% YoY, down 49.50% QoQ; operating margin 4.98% vs. 7.11% prior year QoQ changes reflect seasonality and mix.
- Net income: $0.965 billion, up 0.52% YoY, down 41.66% QoQ; diluted EPS $1.39 (non-GAAP/GAAP reconciliation provided in deck).
- EPS (diluted): $1.37-$1.55 guidance context; YoY EPS up 2.21%, QoQ down 36.82%.
Segment highlights
- ISG revenue: $10.3 billion, +12% YoY; Servers and Networking revenue record at $6.3 billion, +16% YoY. AI server orders: $12.1 billion; AI server shipments: $1.8 billion; ISG operating income: $1.0 billion, +36% YoY; ISG operating margin 9.7% (up ~170 bps YoY).
- CSG revenue: $12.5 billion, +5% YoY; Commercial revenue +9% YoY; Consumer revenue -19% YoY. CSG operating income: $0.7 billion, 5.2% of revenue.
Cash flow and liquidity
- Operating cash flow: $2.8 billion; free cash flow: $2.228 billion.
- Cash and investments: $9.3 billion; cash at end of period: $7.853 billion; debt levels remain elevated with total debt $28.781 billion and net debt $21.081 billion.
- Shareholder return: $2.4 billion returned via buybacks and dividends; total capital returned since FY2023: $13.2 billion.
Guidance and cadence
- FY2026 revenue guidance reiterated: $101-$105 billion, midpoint $103 billion, up 8% YoY; ISG to grow in the high-teens; AI server shipments expected >$15 billion for the year; combined ISG+CSG growth about 10% at the midpoint.
- Q2 guidance: revenue expected $28.5-$29.5 billion; diluted non-GAAP EPS $2.25 +/- $0.10; OpEx down low single digits YoY; ISG+CSG growth about 19% at the midpoint; Q2 AI server shipments targeted around $7 billion; ISG profitability anticipated to improve with AI mix and Dell IP storage contribution.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
23.38B
5.10%
-2.31%
Gross Profit
4.94B
2.73%
-15.26%
Operating Income
1.17B
26.63%
-49.50%
Net Income
965.00M
0.52%
-41.66%
EPS
1.39
2.21%
-36.82%
Key Financial Ratios
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