Dell Technologies Inc. Q4 FY2026 earnings call

FY26 was pivotal with record revenue, EPS, and cash flow. AI opportunity growing sharply with $64.1 billion orders, $25.2 billion shipped, and $43 billion AI backlog. ISG at record levels with AI demand accelerating. Traditional servers growing sharply with demand outpacing supply. Dell IP storage outperforming. CSG gaining momentum in Q4. Managed supply chain dynamically in dynamic environment.

ISG: Q4 revenue was a record $19.6 billion, up 73%. AI orders in Q4 were $34.1 billion, shipped $9.5 billion, and ended with a record $43 billion AI backlog. Traditional server demand outpaced supply in Q4 with double-digit growth across regions. Storage revenue was $4.8 billion, up 2% with strong demand across Dell IP portfolio. CSG: Q4 revenue was $13.5 billion, up 14%. Commercial revenue grew 16% for sixth consecutive quarter, consumer revenue was roughly flat.

FY27 expected $50 billion in AI revenue, ~100% y-o-y growth. Full year revenue $138B - $142B, up 23% midpoint. Q1 revenue $34.7B - $35.7B, up 51% midpoint. ISG expected mid-40s growth driven by AI. CSG expected ~1% growth. Margin rate expansion priority.

Industry environment highly dynamic with AI demand causing sustained supply tightness and frequent pricing resets. Component demand outpacing supply elevating input costs and extending lead times.

Q: Follow up on AI servers color.

A: $34B orders in Q4, five - quarter pipeline grew, over 4,000 customers, mid - single digit operating margin maintained.

Q: Profitability of AI servers and impact of memory prices.

A: Maintain mid single digits with backlog, technology transition, and guide. Changed prices in servers and CSG to stabilize margins.

Q: Traditional servers growth.

A: Demand outpaced supply in quarter, grew double digits, seeing AI workloads on x86 in enterprises, Q1 guide strong.

Q: Vera Rubin transition.

A: Expect smoother transition, learned from Blackwell, working with customers, mid single digit margins expected.

Q: Storage performance.

A: Dell IP portfolio grew double digits, PowerStore grew eighth consecutive quarter, IP portfolio to be greater mix in FY27.

Q: Memory price inflation and margin protection.

A: Assessed market, took pricing actions, server business stabilized, PC delayed price move to take share.

Q: Enterprise AI adoption and storage spillover.

A: Enterprise AI adoption strong with over 4,000 customers, enterprise revenue record in Q4, storage to benefit.

Q: Purchasing behavior and price increases.

A: Customers reacted differently in infrastructure and PCs, pull - ahead in some cases.

Q: AI backlog breakdown and capacity.

A: Backlog predominantly Grace Blackwell, five - quarter pipeline has x86 growth, $50B guidance based on customer needs.

Q: Attach rate on AI servers.

A: Attach to storage, networking, and services like installation, deployment, break - fix.

Q: Structural share gains in PCs.

A: Positioned to take structural share gains in PCs with long - term relationships and supply agreements.