Dell Technologies (NYSE:DELL) said fiscal 2026 was a “defining year,” highlighting record full-year revenue, earnings, and cash flow as demand for AI infrastructure accelerated and the company increased capital returns to shareholders.
Record fiscal 2026 results and a strong fourth quarter
For the full fiscal year, CEO Jeff Clarke said Dell delivered record revenue of $113.5 billion, up 19%, and non-GAAP EPS of $10.30, up 27%. The company generated more than $11 billion in annual cash flow and returned $7.5 billion to shareholders, including repurchases of roughly 54 million shares.
AI infrastructure growth drives ISG; backlog reaches $43 billion
Dell emphasized that AI demand is “meaningfully growing and transforming the company.” Clarke said fiscal 2026 AI orders totaled $64.1 billion, with $25.2 billion shipped during the year. The company exited the year with a record $43 billion AI backlog.
In the fourth quarter alone, Dell booked $34.1 billion in AI orders and shipped $9.5 billion of AI servers. Kennedy added that the company generated $9.0 billion in AI server revenue in the quarter and said Dell is now breaking out AI server revenue within its server and networking reporting due to the scale of the business.
Management reiterated that AI server profitability is tracking to its mid-single-digit operating margin target, and Clarke said the company expects to maintain that level as it works through a technology transition and converts backlog. In response to questions, Clarke also said the company’s five-quarter AI pipeline grew even after the surge in quarterly orders, and he highlighted strength in enterprise AI demand.
On backlog composition, Clarke said the $43 billion AI backlog is “predominantly, overwhelmingly” tied to Grace Blackwell, with no Vera Rubin included in backlog. He said Vera Rubin is represented in the five-quarter pipeline and that Dell expects Rubin-based systems to ship in the second half of the year.
Traditional servers and storage: demand outpaces supply; Dell IP mix lifts margins
Dell said demand in traditional servers “significantly outpaced supply” in the fourth quarter, with strong double-digit demand growth across regions. Clarke said customers are moving to denser, high-performance configurations, pointing to a “compelling” refresh ROI and estimating a 7-to-1 consolidation when upgrading from 14th-generation to the latest platforms. He also said traditional x86 compute is benefiting from AI infrastructure deployments because it remains essential for orchestration, data processing, and inference support.
Infrastructure Solutions Group (ISG) revenue rose 73% to a record $19.6 billion in the quarter. Traditional server and networking revenue was $5.9 billion, up 27%, while storage revenue increased 2% to $4.8 billion. Kennedy said ISG operating income was a record $2.9 billion, up 41%, with operating margin improving sequentially to 14.8%, helped by scaling and higher profitability in storage tied to a greater mix of Dell IP offerings.
Clarke and Kennedy said Dell IP storage demand grew double digits, citing momentum across PowerMax, PowerStore, PowerScale, ObjectScale, and data protection. Clarke noted all-flash arrays posted a third straight quarter of double-digit growth and said PowerStore delivered another quarter of double-digit growth. He also said “Lightning,” Dell’s parallel file solution, remains on track for general availability in the first half of the year, with early customer deployments underway.
PC business gains share, but margins pressured by competitive environment and costs
In Client Solutions Group (CSG), revenue increased 14% to $13.5 billion. Commercial revenue rose 16% to $11.6 billion, marking the sixth consecutive quarter of growth, while consumer revenue was roughly flat at $1.9 billion, with Clarke citing gaming strength.
CSG operating income was $0.6 billion, or 4.7% of revenue. Management attributed margin pressure to strategic share capture, a higher mix of competitive large bids, customer expansion activity, and elevated industry channel inventory that delayed price increases. Clarke said Dell implemented pricing moves effective January 6 to reflect higher input costs and said order margins improved as those changes took effect.
On pricing and supply constraints, executives described an industry environment characterized by “unprecedented” AI-driven component demand, tight supply, and frequent price resets. Clarke said Dell tightened quote validity, adopted more dynamic pricing, and aligned sales, supply chain, and pricing teams, noting the company changed pricing in servers on December 10 and repriced open PC quotes on January 6.
Capital returns, cash generation, and fiscal 2027 outlook
Dell reported cash flow from operations of $4.7 billion in the fourth quarter and ended the period with $13.3 billion in cash and investments. The company’s core leverage ratio was 1.4x, in line with its target. During the quarter, Dell returned $2.2 billion to shareholders, including repurchases of 14.9 million shares at an average price of $125 and a dividend of approximately $0.53 per share.
For fiscal 2027, management guided to revenue of $138 billion to $142 billion (midpoint $140 billion, up 23%) and non-GAAP EPS of $12.90 ± $0.25 (up 25% at the midpoint). The company expects:
- $50 billion in AI revenue in fiscal 2027, approximately 100% growth year over year
- ISG growth in the mid-40% range, with traditional servers and storage up mid-single digits
- CSG revenue growth of roughly 1%
For the first quarter, Dell guided to revenue of $34.7 billion to $35.7 billion (midpoint $35.2 billion, up 51%), including ISG growth of over 100% supported by $13 billion of AI server revenue, and CSG growth of about 2%. Non-GAAP EPS for Q1 is expected to be $2.90 ± $0.10.
Separately, Dell said it will raise its annual dividend by 20% to $2.52 per share and that the board approved a $10 billion increase in share repurchase authorization. Kennedy added that while Dell does not provide free cash flow guidance, the company expects another strong cash year and said its net income to adjusted free cash flow conversion should be “at or slightly ahead” of its long-term framework.
About Dell Technologies (NYSE:DELL)
Dell Technologies Inc is a multinational technology company that designs, manufactures and sells a broad range of information technology products, solutions and services. Its offerings span client computing devices (consumer and commercial laptops and desktops), enterprise infrastructure (servers, storage systems and networking equipment), software and cloud infrastructure, and a variety of professional services such as IT consulting, deployment, managed services and financing solutions. The company serves organizations of all sizes as well as individual consumers, with products and services aimed at enabling digital transformation and modern IT environments.
Founded by Michael Dell in 1984, the company grew from a direct-to-consumer PC business into a diversified IT provider through organic expansion and strategic acquisitions.
