Dell Technologies reported fourth-quarter revenue of $23.9 billion, falling short of analysts' expectations of $24.55 billion. However, the company surpassed earnings estimates, posting adjusted earnings per share (EPS) of $2.68, compared to Wall Street’s forecast of $2.53.
Figures
- Infrastructure Solutions Group (server business) sales rose 22% to $11.35 billion, slightly below the $11.7 billion StreetAccount estimate.
- Client Solutions Group (PCs and laptops) revenue increased 5% to $11.88 billion, missing the expected $11.98 billion due to a weak laptop market.
Dell has been a major beneficiary of the rising demand for artificial intelligence (AI) infrastructure, particularly Nvidia-powered AI servers.
- $4.1 billion in backlogged AI server orders as of January.
- $10 billion in AI server sales recorded in fiscal 2025.
- $15 billion in AI system revenue projected for the current fiscal year.
- Fiscal 2026 revenue forecast: Between $101 billion and $105 billion, close to analysts’ estimate of $103.17 billion.
- Full-year EPS expected at $9.30, slightly above the estimated $9.23.
- Net income for the quarter: $1.53 billion ($2.15 per share), up from $1.21 billion ($1.66 per share) in the previous year.
Looking ahead
In response to its solid performance, Dell raised its dividend by 18% and announced a $10 billion share repurchase program. These moves signal confidence in the company’s long-term growth potential and commitment to returning value to shareholders.
However, Dell also revealed an accounting issue related to supplier credits that were either not recorded or recorded at incorrect times.
While the company stated that the impact was not material, it restated prior financial statements for 2024 and 2025.
Dell’s investigation found that the issue overstated the cost of goods sold by approximately $200 million in fiscal 2024 and $148 million for the first nine months of fiscal 2025.
Despite these challenges, Dell remains optimistic about its AI-driven growth strategy, positioning itself as a key player in the AI infrastructure market while maintaining stable financial performance.
