DELL Q4 Earnings Beat Estimates, Revenues Rise Y/Y, Shares Up

Dell Technologies DELL reported non-GAAP earnings of $3.89 per share in the fourth quarter of fiscal 2026, beating the Zacks Consensus Estimate by 9.92%. The bottom line increased 45% year over year.

Revenues increased 39% year over year to $33.4 billion, which surpassed the consensus mark by 4.61%. The year-over-year rise was primarily driven by record AI server shipments.

After the results were announced, shares of DELL have rallied 11.98% in pre-market trading.

DELL’s Q4 Top-Line Details

Product revenues rose 53% year over year to $27.6 billion, beating the Zacks Consensus Estimate by 10.41%. 

Dell Technologies Inc. Price, Consensus and EPS Surprise

Dell Technologies Inc. price-consensus-eps-surprise-chart | Dell Technologies Inc. Quote

Services revenues declined 2% year over year to $5.76 billion, missing the Zacks Consensus Estimate by 11.88%.

Infrastructure Solutions Group (ISG) revenues increased 73% year over year to $19.60 billion, marking eight consecutive quarters of double-digit growth.

The upside can be attributed to servers and networking revenues of $5.85 billion, which grew 27% year over year, driven by demand strength across both AI and traditional servers. Storage revenues increased 2% year over year to $4.79 billion. AI-optimized server revenue increased 342% year over year to $9 billion.

In the fourth quarter, Dell Technologies’ AI-optimized server momentum saw an increase of $34.1 billion in orders. For fiscal 2026, the company achieved more than $64 billion in AI-optimized server orders, with $25.2 billion in shipments.

Dell Technologies’ shipped $9.5 billion worth of AI-optimized servers in the fourth quarter of fiscal 2026, leading to a total of $25.2 billion in shipments for fiscal 2026. The company exited the reported quarter with an AI backlog of $43 billion, indicating strong demand and future growth potential. For fiscal 2026, Dell Technologies’ closed $64.1 billion in AI orders and shipped $25.2 billion in AI products.
  
CSG revenues were $13.5 billion, representing a 14% year-over-year increase. Commercial Client revenues increased 16% year over year to $11.61 billion, while Consumer revenues were in line at $1.88 billion. Dell Technologies’ gained market share in the PC business, growing its unit sales by 18% in a market that grew 10%.

DELL’s Operating Details

The company’s fiscal fourth-quarter non-GAAP gross profit increased 18% year over year to $6.84 billion. The gross margin contracted 380 basis points (bps) year over year to 20.5%.

SG&A expenses increased 3% year over year to $2.84 billion. Research and development expenses increased 3% year over year to $797 million in the reported quarter.

Non-GAAP operating expenses increased 5% year over year to $3.30 billion. Operating expenses, as a percentage of revenues, contracted 320 bps on a year-over-year basis to 9.9%.

The non-GAAP operating income was $3.53 million, up 32% year over year. The operating margin contracted 60 bps year over year to 10.6%.

The ISG segment’s operating income jumped 41% year over year to $2.90 billion. The CSG segment’s operating income was $629 million, which was flat year over year.

DELL’s Balance Sheet & Cash Flow Details

As of Jan. 30, 2026, DELL had $11.52 billion in cash and cash equivalents compared with $9.56 billion as of Oct. 31, 2025.

Total debt was $31.50 billion as of Jan. 30, 2026, compared with $31.24 billion as of Oct. 31, 2025.

The company generated cash flow from operations of $4.67 billion. The adjusted free cash flow was $5.08 billion in the fourth quarter of fiscal 2026.

In the fourth quarter of fiscal 2026, Dell Technologies returned $2.2 billion of capital to its shareholders.

DELL’s Q1 & FY27 Guidance

For the first quarter of fiscal 2027, revenues are expected to be between $34.7 billion and $35.7 billion, with the mid-point of $35.2 billion suggesting 51% year-over-year growth.

Dell Technologies anticipates 53% year-over-year growth at the midpoint for the combined ISG and CSG, with ISG expected to grow more than 100%, supported by $13 billion of AI server revenue, and CSG is expected to be up roughly 2%. 

Non-GAAP earnings are expected to be $2.90 per share (+/- 10 cents) at the midpoint, indicating 87% growth year over year.

For fiscal 2027, revenues are expected to be between $138 billion and $142 billion, with the mid-point of $140 billion, indicating 23% year-over-year growth.

Full-year AI server shipments are expected to be roughly $50 billion, up 103% year over year.

Dell Technologies anticipates 25% year-over-year growth at the mid-point for ISG and CSG combined, with ISG expected to increase in the mid-forties, with CSG likely to grow roughly 1% year over year.

Non-GAAP earnings are expected to be $12.90 per share (+/- 25 cents) at the midpoint, up 25% year over year.

DELL’s Zacks Rank & Stocks to Consider

Dell Technologies has a Zacks Rank #3 (Hold) at present.

Some better-ranked stocks in the broader Zacks Computer and Technology sector are ATN International ATNI, Broadcom AVGO, and Credo Technology CRDO. While Credo Technology sports a Zacks Rank #1 (Strong Buy), ATN International and Broadcom carry a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

ATN International is set to report fourth-quarter 2025 results on March 5. ATN International shares have surged 76.9% in the trailing six-month period.

Broadcom is slated to report first-quarter fiscal 2026 results on March 4. Broadcom shares have gained 4.2% in the trailing six-month period.

Credo Technology is set to report third-quarter fiscal 2026 results on March 2. Credo Technology shares have lost 13.2% in the trailing six-month period.

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