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Outbyte PC Repair FREEClear out junk files and repair common Windows errorsFree Scan →Outbyte Driver Updater FREEScan for outdated or missing drivers - takes under a minuteDriver Scan →Dell Technologies reported record quarterly revenue of $29.776 billion for fiscal 2026’s second quarter, up 19% from $25.026 billion a year earlier. The quarter ended August 1, 2025, and Dell announced the results on August 28. The increase was driven overwhelmingly by infrastructure—especially AI-oriented servers and networking—not by a broad recovery across every Dell business.
Dell’s release identifies Yvonne McGill as chief financial officer (CFO), not chief technology officer. It also reports that consumer revenue fell 7% year over year, correcting the 2% decline cited in some coverage.
The headline financial results
The figures below are unaudited year-over-year comparisons from Dell’s earnings release. GAAP measures follow generally accepted accounting principles; non-GAAP measures exclude specified items and supplement, rather than replace, GAAP results.
| Metric | Q2 FY2026 | Year-over-year change |
|---|---|---|
| Revenue | $29.776 billion | +19% |
| GAAP operating income | $1.773 billion | +27% |
| GAAP net income | $1.164 billion | +32% |
| GAAP diluted EPS | $1.70 | +38% |
| Non-GAAP operating income | $2.284 billion | +10% |
| Non-GAAP net income | $1.591 billion | +13% |
| Non-GAAP diluted EPS | $2.32 | +19% |
| Cash flow from operations | $2.543 billion | +90% |
| Adjusted free cash flow | $2.518 billion | +96% |
Revenue growth was concentrated in products. Product revenue was $23.935 billion, up 26%, while services revenue was $5.841 billion, down 4%, according to Dell’s official earnings release.
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AI infrastructure powered the record
Dell’s Infrastructure Solutions Group (ISG) generated $16.800 billion, up 44%. That is roughly 56% of Dell’s reportable-segment revenue. Within ISG, servers and networking produced $12.944 billion, up 69%, making that category the clearest driver of the company-wide increase.
Dell said it shipped $10 billion of AI solutions during the first six months of fiscal 2026—more than it shipped in all of fiscal 2025—and raised its full-year AI-server shipment guidance to $20 billion. These are Dell-defined commercial categories and shipment guidance; they are not the same as pure GPU revenue, recognized profit, or the value of AI workloads ultimately run by customers.
Storage revenue tells a more qualified story: it was $3.856 billion, down 3%. Thus, even inside infrastructure, demand was uneven. The result is best described as an AI-server-led record rather than uniform growth across Dell’s portfolio.
Revenue rose faster than some profit measures
Absolute profit increased, but the margin profile became less favorable as the mix shifted toward large infrastructure systems. Dell’s non-GAAP gross margin was 18.7%, down from 22.0% a year earlier. ISG operating income rose 14% to $1.470 billion, while ISG operating margin fell to 8.8% from 11.0%.
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The difference between GAAP and non-GAAP growth is also important. GAAP operating income increased 27%, but non-GAAP operating income increased 10%; GAAP diluted EPS was $1.70 versus non-GAAP diluted EPS of $2.32. Readers comparing results should not substitute one measure for another.
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Lower margins can occur when systems contain expensive components that are passed through to customers. Dell’s shipment figures demonstrate strong demand and execution, but they do not establish the long-term return on capital from AI systems. Future economics depend on component costs, supplier availability, competition, customer build-out cycles and Dell’s ability to deliver systems profitably.
PC growth was limited and uneven
| Client Solutions Group category | Q2 FY2026 revenue | Year-over-year change |
|---|---|---|
| Total CSG | $12.503 billion | +1% |
| Commercial clients | $10.781 billion | +2% |
| Consumer | $1.722 billion | -7% |
Client Solutions Group (CSG) operating income was $803 million, down 2%. Commercial demand was comparatively resilient, but consumer revenue declined 7%. That split means the quarter should not be read as evidence of a broad consumer-PC recovery. Dell’s overall result was shaped by enterprise infrastructure, while consumer PCs remained a weak spot.
Cash generation and shareholder returns
Dell reported $2.543 billion in cash flow from operations and $2.518 billion in adjusted free cash flow. These are different measures: operating cash flow reflects cash generated by operations, while adjusted free cash flow is Dell’s non-GAAP presentation after specified adjustments. Dell returned $1.3 billion to shareholders during the quarter through share repurchases and dividends.
What Dell guided for the rest of fiscal 2026
The following numbers were management forecasts issued with the August 28 results, not achieved results:
| Guidance period | Revenue | EPS guidance |
|---|---|---|
| Q3 FY2026 | $26.5 billion–$27.5 billion; $27.0 billion midpoint, implying 11% midpoint growth | GAAP $2.07 midpoint; non-GAAP $2.45 midpoint |
| Full-year FY2026 | $105.0 billion–$109.0 billion; $107.0 billion midpoint, up 12% year over year | GAAP $7.98 midpoint; non-GAAP $9.55 midpoint |
| Full-year AI-server shipments | $20 billion target | Shipment guidance, not recognized revenue |
Dell cautions that actual results can differ materially from forward-looking statements. Its stated risks include supplier relationships and component availability, changing AI demand, competition, trade disruption and execution. The central investor question is therefore not whether customers want AI infrastructure—they clearly did in this quarter—but whether Dell can sustain that demand at durable margins.
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What the quarter says about Dell’s business
Nearly all year-over-year revenue growth came from ISG. CSG still grew 1%, and commercial clients grew 2%, but those gains were small beside the 44% ISG increase and 69% increase in servers and networking. Storage declined, services revenue fell, and consumer PCs contracted.
Dell is consequently becoming more dependent on enterprise infrastructure and AI-system spending. That concentration can accelerate growth when customers are building data-center capacity, but it also increases exposure to GPU and other supplier constraints, large customer project timing, competitive pricing and a possible slowdown after major AI build-outs. Record sales alone do not resolve those risks; margin and cash conversion need to be monitored alongside revenue.
Source and accuracy notes
Dell’s fiscal Q2 FY2026 covered the three months ended August 1, 2025; the comparable quarter ended August 2, 2024. The company’s earnings release provides the segment figures, reconciliations of non-GAAP measures and forward-looking-statement risks. Dell’s quarterly filing is available in its Form 10-Q.
Two details commonly repeated in the original coverage should be corrected: Yvonne McGill was Dell’s CFO, and consumer revenue fell 7% year over year, not 2%.
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