Dell Technologies: Fiscal 2Q27 Financial Results
Generating $47 billion, up 7.3% QoQ and up 58% YoY
This is a Press Release edited by StorageNewsletter.com on September 3, 2026 at 2:01 pmSummary:
- Record revenue of $47.0 billion, up 58% YoY
- Record diluted earnings per share (EPS) of $6.34, up 273% YoY, and record non-GAAP diluted EPS of $7.04, up 203%
- Cash flow from operations of $2.2 billion
- Full-year FY27 revenue guidance of $192.0 billion, up 69% YoY
- Full-year FY27 EPS guidance of $24.37 and non-GAAP EPS guidance of $25.50, up 181% and 148% YoY, respectively
Dell Technologies announces financial results for its fiscal 2027 second quarter and provides guidance for its fiscal 2027 third quarter and full year.
“IT environments have shifted from cost centers to value drivers that fuel growth and competitive advantage, and customers are investing accordingly – creating opportunity across our portfolio,” said Jeff Clarke, vice chairman and COO, Dell Technologies. “That’s clearest in our AI server business where we booked a record $60.9 billion in orders, recognized a record $16.4 billion in revenue and exited the quarter with a record $95 billion backlog. We’re seeing broader revenue growth as well, with traditional servers and networking up 122%, storage up 26% and our client solutions up 20% YoY. Our second quarter results underscore the compounding benefits of our competitive advantages, the breadth of our portfolio and the strength of our operating model.”
“In our second quarter, we delivered record revenue of $47 billion, record EPS and a record $4.3 billion returned to shareholders,” said David Kennedy, CFO, Dell Technologies. “Our advantages reinforce one another, and throughout the quarter we used these strengths to drive growth, share gains, profitability and cash generation. With AI momentum accelerating and our opportunity expanding across the portfolio, we’re raising our full-year FY27 revenue outlook by $25 billion to $192 billion, up nearly 70% YoY.”
Infrastructure Solutions Group (ISG)
- Record revenue: $31.8 billion, up 89% YoY
- Record AI-Optimized Servers revenue: $16.4 billion, up 100% YoY
- Record Traditional Servers and Networking revenue: $10.5 billion, up 122% YoY
- Record second-quarter Storage revenue: $4.9 billion, up 26% YoY
- Record operating income: $4.8 billion, up 225% YoY
Client Solutions Group (CSG)
- Revenue: $15.0 billion, up 20% YoY
- Record Commercial Client revenue: $13.2 billion, up 22% YoY
- Consumer revenue: $1.8 billion, up 7% YoY
- Operating income: $1.1 billion, up 42% YoY
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Comments
Dell reported Q2 FY2027 results delivering record revenue of $47.0B, up 58% YoY but just above 7% QoQ, fueled by growth across every core business line and all accounting metrics are strongly positive.
ISG posted record revenue of $31.8B, up +89% YoY, with margin expanding to 15.0% of ISG revenue despite the AI server mix. AI-Optimized Servers revenue doubled to $16.4B, on record orders of $60.9B (trailing-twelve-month orders of $131.7B) and an exiting backlog of $95.0B, the pipeline reportedly continues to expand and remains "multiples" of backlog. Traditional Servers and Networking grew 122% YoY to $10.5B, driven by data-center modernization and demand outpacing supply, with Dell citing over 10 points of share gain in mainstream servers over the past two quarters according to IDC.
Storage revenue reached a record $4.9B, up 26% YoY and up 12% sequentially, the sixth consecutive quarter in which Dell-IP demand growth outpaced the broader market. But this result is just $53M above 4Q26 number. Dell reiterates its #1 position across all major storage categories: external RAID (high-end and midrange), unstructured/scale-out (PowerScale, ObjectScale), and purpose-built backup appliances (PowerProtect DataDomain), citing roughly four points of external RAID share gain in calendar Q1 2026 according to IDC. Storage profitability is also improving as the Dell-IP mix (PowerStore, PowerMax, PowerFlex, PowerScale, PowerProtect) grows relative to lower-margin resale/OEM lines. That said, storage remains structurally the slowest-growing segment in the portfolio with a pretty stable "small" contribution of 10% of the global revenue and 15% for ISG: 26% trails AI servers (100%), traditional servers (122%), and even Client Solutions (20%). Guidance for Q3 and full-year FY27 pegs storage growth at only "mid-teens" — again the lowest rate guided across any business line, even as ISG overall is guided toward ~120-145% growth, almost entirely an AI-server effect.
CSG revenue grew 20% to $15.0B, with Commercial up 22% YoY, the strongest commercial growth in over four years, and operating income up 42% to $1.1B, helped by pricing discipline and scale. Dell describes CSG as its most capital-efficient segment and a key source of cash generation.
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Dell's results underscore an AI-infrastructure supercycle reshaping the portfolio's growth mix, AI servers alone are now guided to ~$74B for FY27, roughly 3x prior year. Storage, while a genuine bright spot in absolute revenue, share position, and margin trajectory, is increasingly a stable, high-margin anchor rather than a growth engine, and risks being overshadowed in investor narrative by the AI server and traditional server storylines, even as its leadership position (competing against NetApp, HPE, Pure Storage, and Hitachi Vantara) remains intact and arguably strengthening on a relative-share basis. Dell Storage revenue for the fiscal year should reach $20B which represents a critical threshold.
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