Dell Technologies (DELL) Q4 FY2026 Earnings Call — February 26, 2026

Source: Motley Fool transcript (published Feb 26, 2026) + Dell Q4 FY2026 press release.

Jeff Clarke (Vice Chairman & COO): FY 2026 was a defining year in our company's history. We delivered record full-year revenue and EPS. Revenue reached $113.5 billion, up 19%, and EPS grew 27% to $10.30. We converted that performance into record annual cash flow of over $11 billion and returned $7.5 billion to shareholders, including 54 million shares repurchased, more than double last year.

The AI opportunity is meaningfully growing and transforming the company. In FY 2026, we closed $64.1 billion in AI orders, shipped $25.2 billion, and exited with a record $43 billion in AI backlog. We delivered a record quarter. Q4 revenue was $33.4 billion, up 39%, and earnings per share was $3.89, up 45%. In Q4, we booked $34.1 billion in AI orders, shipped $9.5 billion in AI servers, and exited with a record $43 billion in AI backlog.

Our customer base surpassed 4,000, with growth across neo clouds, sovereigns, and enterprise customers. Demand is broad-based, and enterprise AI is growing significantly.

Moving to traditional servers, demand significantly outpaced supply in Q4, with strong double-digit demand growth across every region. We saw the ROI to refresh is compelling — a 7:1 consolidation upgrading from the 14th generation to our latest platforms. Storage revenue was up 2% with continued outperformance from our Dell IP portfolio. All-flash arrays delivered their third consecutive quarter of double-digit growth. CSG revenue grew 14%, and we gained share.

Across the industry, the environment remains highly dynamic, with unprecedented AI demand creating sustained supply tightness and frequent pricing resets. We are executing our operating model with urgency, securing supply as the first priority.

For FY 2027, we expect $50 billion in AI revenue, about 100% growth year over year. For the full year, we expect revenue of $138 billion to $142 billion, up 23% at the midpoint, with non-GAAP EPS of $12.90, plus or minus $0.25, up 25% at the midpoint.

David Kennedy (CFO): Total revenue was up 39% to $33.4 billion. Gross margin rate was slightly better than anticipated at 20.5%, reflecting a mix shift to AI servers. Operating expenses were up 5%, with OpEx down 320 bps to 9.9% of revenue. Operating income grew 32% to $3.5 billion, or 10.6% of revenue. Diluted EPS increased 45% to $3.89, a record.

ISG revenue was a record $19.6 billion, up 73%, with AI server revenue of $9 billion, $34.1 billion in AI orders, $9.5 billion in shipments, and $43 billion in ending backlog. Traditional server and networking revenue was $5.9 billion, up 27%. Storage revenue was $4.8 billion, up 2%. ISG operating income was a record $2.9 billion, up 41%, with an operating margin of 14.8%, up 240 basis points sequentially. CSG revenue was up 14% to $13.5 billion.

We delivered record cash with cash flow from operations of $4.7 billion in the quarter, ending the quarter with $13.3 billion in cash and investments. We returned $2.2 billion to shareholders, including 14.9 million shares repurchased at an average price of $125.

We are raising our annual dividend by 20% to $2.52 per share, and the Board approved a $10 billion increase in our share repurchase authorization. For Q1 FY27, we expect ISG to grow over 100%, supported by $13 billion of AI server revenue, CSG up roughly 2%, and non-GAAP EPS of $2.90, plus or minus $0.10, up 87% at the midpoint. For FY27, we expect revenue of $138-142 billion, non-GAAP EPS of $12.90, plus or minus $0.25, up 25%, with AI revenue of $50 billion.

Q&A Highlights (condensed from full transcript)

• Q (Tim Long, Barclays): AI orders + profitability? A: Extraordinary quarter ($34B orders); five-quarter pipeline grew, not drained, across CSPs, sovereigns, neo clouds, and enterprise (4,000+ customers); AI operates at mid-single-digit operating income; inference driving token growth.
• Q (Mark Newman, Bernstein): AI server profitability and memory prices? A: Maintain mid-single-digit AI operating margins with $43B backlog; pricing changes began Dec 10 (servers) and Jan 6 (CSG); memory spot DRAM up ~5.5x, NAND up ~4x over six months.
• Q (Amit Daryanani, Evercore): Rubin cycle vs Blackwell? A: Smoother transition expected — lessons learned from Grace Blackwell (manufacturing, test); Vera Rubin in the five-quarter pipeline, not the backlog; expect it to ship in the second half of the year.
• Q (Ben Reitzes, Melius): Storage turning? A: Dell IP portfolio grew double digits; PowerStore seventh consecutive quarter of double-digit growth; all-flash third consecutive quarter; storage is a growing margin contributor.
• Q (Eric Woodring, Morgan Stanley): Memory assumptions / pricing? A: Spot DRAM up nearly 5.5x ($2.39/gigabit), NAND up ~4x; LTAs and capacity agreements in place; pricing discipline — quote validity shortened, discount-off-list, margin floors.
• Q (Krish Sankar, TD Cowen): Enterprise AI split? A: We don't parse it on the call, but enterprise is the fastest-growing portion of the five-quarter pipeline; record enterprise revenue in Q4; 4,000+ customers.
• Q (Wamsi Mohan, BofA): Customer behavior on price? A: Infrastructure customers quickly moved to securing supply after sticker shock; PCs saw channel inventory cushion; pull-ahead is happening, IT budgets fixed; some replacement cycles elongated.
• Q (Samik Chatterjee, JPM): $43B backlog composition? A: Overwhelmingly Grace Blackwell; no Vera Rubin in backlog; x86 Blackwell rising in pipeline (air-cooled, enterprise).
• Q (Aaron Rakers, Wells Fargo): Shipments vs revenue difference? A: $9.5B shipped vs $9.0B revenue is simply in-transit timing.
• Q (David Vogt, UBS): Structural PC share gains? A: Dell excelled during the last shortage and took share; we believe we can do the same in servers and storage; pricing posture deliberate.