The outfit posted non-GAAP earnings of $2.59 per share in the third quarter of fiscal 2026, beating the cocaine nose jobs of Wall Street's estimate by about four per cent and rising 17 per cent on the year.
Dell vice chairman and chief operating officer Jeff Clarke said: “AI momentum is accelerating in the second half of the year, leading to record AI server orders of $12.3 billion and an unprecedented $30 billion in orders year to date.”
Revenues rose 11 per cent to $27.01 billion, although they still missed the analysts’ mark by a whisker. The lift came from record AI server shipments that continue to do the heavy lifting for Dell’s wider operation.
Chief financial officer David Kennedy said: “In the third quarter, we delivered record Q3 revenue of $27 billion, record Q3 profitability, strong cash generation and above trend capital return of $1.6 billion.”
Shares climbed more than four per cent in pre-market trading after the figures landed.
Product revenues increased 16 per cent to $21.2 billion, which was still marginally below consensus. Services revenues dropped five per cent to $5.75 billion, although they managed to beat Wall Street's guess.
Infrastructure Solutions Group revenues climbed 24 per cent to $14.10 billion. Servers and networking dragged in $10.12 billion, a 37 per cent rise, as buyers filled their racks with both AI and traditional kit. Storage slipped a per cent to $3.98 billion.
The Grey Box Shifter said AI optimised server orders hit $12.3 billion in the quarter and $30 billion for the fiscal year so far. It shipped $5.6 billion in AI servers, and the backlog stood at a healthy $18.4 billion.
CSG revenues were $12.47 billion for a three per cent lift. Commercial client sales rose five per cent to $10.62 billion while consumer revenues fell seven per cent to $1.85 billion.
Non-GAAP gross profit increased four per cent to $5.68 billion, although margins narrowed to 21.1 per cent. SG and A costs fell six per cent to $2.72 billion while R and D nudged up to $752 million. Operating expenses dropped two per cent to $3.18 billion. Operating income climbed 11 per cent to $2.50 billion with a margin of 9.3 per cent.
For the fourth quarter of fiscal 2026, Dell expects revenues between $31 billion and $32 billion with about 32 per cent growth at the midpoint. It thinks ISG and CSG combined will grow 34 per cent, with ISG surging in the mid sixties and CSG pottering along in the low to mid single digits. Non-GAAP earnings should land at roughly $3.50 per share at the midpoint for about 31 per cent yearly growth.
For fiscal 2026, the Grey Box Shifter sees revenues between $111.2 billion and $112.2 billion, with the midpoint suggesting 17 per cent growth. AI server shipments should hit about $25 billion, which is up more than 150 per cent. ISG and CSG together are expected to rise about 20 per cent, with ISG up in the mid to high thirties and CSG in the low to mid single digits. Non-GAAP earnings should reach $9.92 per share for a 22 per cent rise on the year.