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Dell Technologies Inc.

DELL
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Business Summary

Dell Technologies is a leader in the global technology industry focused on providing broad and innovative technology solutions for the data and artificial intelligence era, operating globally in over 170 countries . The company designs, deploys, and supports secure, integrated solutions that extend from the edge to the core to the cloud, delivering AI-optimized, software-defined, and cloud native infrastructure solutions across a broad partner ecosystem.

Dell Technologies faces ongoing product and price competition from both branded and generic competitors, including companies that specialize in one or more of its product or service lines, as well as from non-traditional IT companies including large Infrastructure-as-a-Service providers. The company's competitive advantages include its end-to-end solutions portfolio, go-to-market capabilities, supply chain, and global services. During Fiscal 2026, other sales channels generated approximately 40% of net revenue .

Dell Technologies generates revenue through the sale of products and services, organized into two reportable segments: Infrastructure Solutions Group (ISG) and Client Solutions Group (CSG). The company offers customers choice in how they acquire solutions, including utility, subscription, as-a-Service, leases, loans, and immediate pay models, which typically result in multiyear agreements generating recurring revenue streams. Recurring revenue is defined as revenue primarily related to hardware and software maintenance as well as operating leases, subscription, as-a-Service, and usage-based offerings.

The Infrastructure Solutions Group (ISG) provides a comprehensive portfolio of advanced infrastructure solutions including AI-optimized servers, traditional servers and networking, and storage offerings. Approximately 65% of ISG revenue is generated by sales to customers in the Americas . For Fiscal 2026, ISG net revenue was $60.826 billion , with AI-optimized servers contributing $24.683 billion , traditional servers and networking contributing $19.512 billion , and storage contributing $16.631 billion . ISG operating income was $7.111 billion , representing 11.7% of segment net revenue .

The Client Solutions Group (CSG) offers branded personal computers including notebooks, desktops, and workstations, branded peripherals, and third-party software and peripherals, with major product categories being commercial and consumer offerings. Approximately 60% of CSG revenue is generated by sales to customers in the Americas . For Fiscal 2026, CSG net revenue was $50.984 billion , with commercial contributing $44.062 billion and consumer contributing $6.922 billion . CSG operating income was $2.833 billion , representing 5.6% of segment net revenue .

During Fiscal 2026, Dell Financial Services funded $11.9 billion of originations and as of January 30, 2026 maintained a $14.3 billion global portfolio of financing receivables . On February 3, 2025, the sale of Secureworks to Sophos Inc. was completed for a purchase price of approximately $0.9 billion , with Dell Technologies receiving total cash consideration of approximately $0.6 billion and recognizing a gain on sale of $0.2 billion . During Fiscal 2026, the company repurchased approximately 54 million shares of Class C Common Stock for a total purchase price of approximately $6.0 billion and paid $1.5 billion in dividends and dividend equivalents . As of January 30, 2026, the Board of Directors had authorized the repurchase of up to $20 billion of Class C Common Stock , and on February 26, 2026, authorized an additional $10 billion .

For Fiscal 2026, total net revenue was $113.538 billion , an increase of 19% compared to Fiscal 2025. Net income was $5.936 billion , an increase of 30% compared to the prior year. Diluted earnings per share attributable to Dell Technologies Inc. was $8.68 , compared to $6.38 in Fiscal 2025. Cash flow from operations was $11.185 billion , compared to $4.521 billion in the prior year.

Business Outlook

Management expects significant ISG and modest CSG net revenue growth in Fiscal 2027. ISG net revenue growth is expected to be driven by increased demand across servers and networking offerings, largely in AI-optimized servers offerings, and to a lesser extent, storage offerings. Modest CSG net revenue growth is anticipated to be driven in part by the continuation of the PC refresh cycle. Overall, while customers continue to reassess their priorities throughout the year driven by the dynamic commodity supply environment, management anticipates net revenue growth for the full fiscal year.

The ISG business is expected to continue benefiting from technology advancements and interest in AI as customers continue to adopt and integrate AI. The timing of customer purchases reflects the varying stages of adoption of AI by different customer segments and drives variability in revenue. To meet growing demand and increasing complexity of AI-optimized servers offerings, the company has increased purchases of certain components with suppliers, resulting in increased inventory levels, higher purchase obligations, and new working capital dynamics. While lead times have shortened, management anticipates the next generation of these components, for which demand remains high, will be subject to supply constraints.

Management expects margin growth in Fiscal 2027, while balancing anticipated margin rate pressure resulting from a continuing shift in mix towards AI-optimized servers offerings. Notable inflation for component costs is anticipated in Fiscal 2027. The company continues to monitor the rapidly evolving commodity supply environment, leverage the agility and scale of its supply chain, and seek to balance profitability and growth while maintaining disciplined pricing.

The company remains committed to disciplined cost management in coordination with ongoing business modernization initiatives and expects to continue to scale operating expenses as it takes targeted measures to reduce costs, including employee reorganizations, limitation of external hiring, and other actions to align investments with strategic priorities and customer needs. As of January 30, 2026, the company had approximately 97,000 employees .

Total R&D expenses were $3.1 billion for both Fiscal 2026 and Fiscal 2025 and $2.8 billion for Fiscal 2024 . Capital expenditures and capitalized software development costs, net were $2.630 billion in Fiscal 2026. As of January 30, 2026, the Board of Directors had authorized the repurchase of up to $20 billion of Class C Common Stock , and on February 26, 2026, subsequent to the close of Fiscal 2026, authorized an additional $10 billion . Following the February 26, 2026 approval, approximately $15.2 billion of authorized shares remained for repurchase . On February 26, 2026, the company announced a 20% increase in the dividend rate to $0.63 per share per fiscal quarter beginning in the first quarter of Fiscal 2027.

The company expects a continued reduction of Corporate and other net revenue due to offerings that are no longer actively sold and businesses that have been divested. The impacts of trade protection measures, including changes in tariffs and trade barriers, changes in government policies and international trade arrangements, geopolitical volatility associated with terrorism, military conflicts (including the Iran conflict), and other events, and global macroeconomic conditions may affect results of operations in some markets.

The company faces risks from adverse global economic conditions that may negatively affect customer demand and could result in postponed or decreased spending amid customer concerns over elevated inflation and interest rates. Competitive pressures may adversely affect industry unit share position, revenue, and profitability, and the company faces aggressive competition from a variety of competitors in all areas of its business, including companies that specialize in one or more of its product or service lines.

Risk Factors

The company faces material risks from adverse global economic conditions that may negatively affect customer demand and result in postponed or decreased spending, which could harm net revenue and profitability. Competitive pressures from rapid technological advances in hardware, software, and services offerings, including AI, cloud, and security-related offerings, may adversely affect industry unit share position, revenue, and profitability. The nature of demand for AI solutions presents risks, as to date these solutions have been purchased primarily by a small number of larger customers and cloud service providers, and large orders may cause fluctuations in results of operations and require greater commitments of working capital. The company's reliance on single-source or limited-source suppliers, including for critical components for AI-optimized servers, may adversely affect product availability, delivery, reliability, and cost. As of January 30, 2026, goodwill and intangible assets, net had a combined carrying value of $24.1 billion , representing approximately 24% of total consolidated assets , and any material impairment could materially and adversely affect results of operations and financial condition.

Management Priorities

Management's message emphasizes that Dell Technologies executed its strategy and delivered exceptional operating results in Fiscal 2026, generating significant net revenue and operating income growth. The key themes include benefiting from significant demand for AI-optimized servers offerings and strong demand for traditional servers and networking offerings, resulting in ISG net revenue growth and a shift in business mix. Management expects significant ISG and modest CSG net revenue growth in Fiscal 2027, with ISG growth driven by increased demand across servers and networking offerings, largely in AI-optimized servers offerings, and modest CSG growth driven in part by the continuation of the PC refresh cycle. The strategic priorities emphasized are: continuing to advance capabilities to change the way the company works and makes decisions, improve business outcomes and the customer experience, and reduce costs by leveraging new technology and optimizing business processes; remaining committed to disciplined cost management in coordination with ongoing business modernization initiatives; and continuing to scale operating expenses as the company takes targeted measures to reduce costs, including employee reorganizations, limitation of external hiring, and other actions to align investments with strategic priorities and customer needs.

View Source Annual Report on SEC.gov ↗

References

  1. [1] Item 1, Business — Company Overview
  2. [2] Item 1, Business — Sales and Marketing
  3. [3] Item 1, Business — Products and Services
  4. [4] Item 7, MD&A — Business Unit Results
  5. [5] Item 7, MD&A — Business Unit Results
  6. [6] Item 7, MD&A — Business Unit Results
  7. [7] Item 7, MD&A — Business Unit Results
  8. [8] Item 7, MD&A — Business Unit Results
  9. [9] Item 7, MD&A — Business Unit Results
  10. [10] Item 1, Business — Products and Services
  11. [11] Item 7, MD&A — Business Unit Results
  12. [12] Item 7, MD&A — Business Unit Results
  13. [13] Item 7, MD&A — Business Unit Results
  14. [14] Item 7, MD&A — Business Unit Results
  15. [15] Item 7, MD&A — Business Unit Results
  16. [16] Item 1, Business — Dell Payment Solutions
  17. [17] Item 1, Business — Dell Payment Solutions
  18. [18] Item 7, MD&A — Introduction
  19. [19] Item 7, MD&A — Introduction
  20. [20] Item 7, MD&A — Introduction
  21. [21] Item 7, MD&A — Material Capital Commitments and Cash Requirements
  22. [22] Item 7, MD&A — Material Capital Commitments and Cash Requirements
  23. [23] Item 7, MD&A — Material Capital Commitments and Cash Requirements
  24. [24] Item 7, MD&A — Material Capital Commitments and Cash Requirements
  25. [25] Item 8, Consolidated Statements of Income
  26. [26] Item 8, Consolidated Statements of Income
  27. [27] Item 8, Consolidated Statements of Income
  28. [28] Item 8, Consolidated Statements of Income
  29. [29] Item 8, Consolidated Statements of Cash Flows
  30. [30] Item 8, Consolidated Statements of Cash Flows
  31. [31] Item 1, Business — Human Capital Management
  32. [32] Item 1, Business — Research and Development
  33. [33] Item 1, Business — Research and Development
  34. [34] Item 7, MD&A — Non-GAAP Financial Measures
  35. [35] Item 7, MD&A — Material Capital Commitments and Cash Requirements
  36. [36] Item 7, MD&A — Material Capital Commitments and Cash Requirements
  37. [37] Item 7, MD&A — Material Capital Commitments and Cash Requirements
  38. [38] Item 5, Market for Registrant's Common Equity — Dividends
  39. [39] Item 1A, Risk Factors
  40. [40] Item 1A, Risk Factors
  41. [41] Item 8, Consolidated Statements of Income
  42. [42] Item 8, Consolidated Statements of Income
  43. [43] Item 8, Consolidated Statements of Income
  44. [44] Item 8, Consolidated Statements of Income
  45. [45] Item 8, Consolidated Statements of Income
  46. [46] Item 8, Consolidated Statements of Income
  47. [47] Item 8, Consolidated Statements of Income
  48. [48] Item 8, Consolidated Statements of Income
  49. [49] Item 8, Consolidated Statements of Income
  50. [50] Item 7, MD&A — Consolidated Results
  51. [51] Item 8, Consolidated Statements of Income
  52. [52] Item 7, MD&A — Consolidated Results
  53. [53] Item 8, Consolidated Statements of Cash Flows
  54. [54] Item 8, Consolidated Statements of Cash Flows
  55. [55] Item 7, MD&A — Non-GAAP Financial Measures
  56. [56] Item 7, MD&A — Non-GAAP Financial Measures
  57. [57] Item 7, MD&A — Debt
  58. [58] Item 8, Consolidated Statements of Financial Position
  59. [59] Item 7, MD&A — Introduction
  60. [60] Item 7, MD&A — Business Unit Results
  61. [61] Item 7, MD&A — Business Unit Results
  62. [62] Item 7, MD&A — Business Unit Results
  63. [63] Item 7, MD&A — Business Unit Results

Analysis on 6/8/2026