Dell Technologies Inc. Q2 FY2027 Earnings Call

· Earnings call transcript and AI-powered summary

Overall Financial Highlights (vs. Q2 FY2026)

  • Revenue: $47 billion, +58% YoY (record).
  • Non-GAAP Gross Margin: $9.9 billion (+78% YoY), rate 21.1% (improved ISG margins and higher ISG mix).
  • Operating Expenses: $4 billion (+22% YoY), but down 250 bps to 8.5% of revenue (significant operating leverage).
  • Operating Income: $5.9 billion (+160% YoY), margin 12.6%.
  • Net Income: $4.6 billion (+189% YoY).
  • Diluted EPS: $7.04 (+203% YoY, record).
  • Over past 12 months: $130+ billion AI server orders booked.

ISG (Infrastructure Solutions Group) Performance (vs. Prior Year)

  • Revenue: $31.8 billion (+89% YoY, record; 10th consecutive quarter of double-digit+ growth).
  • Operating Income: $4.8 billion (+225% YoY), margin 15% (+620 bps YoY).
  • AI Servers: Record $60.9 billion orders, $16.4 billion revenue; backlog $95 billion (record). Customer count >6,500.
  • Traditional Servers & Networking: $10.5 billion (+122% YoY); gained >10 points share over past 2 quarters.
  • Storage: $4.9 billion (+26% YoY); Dell IP portfolio demand growth above market for 6th straight quarter. Strong growth in PowerStore (10th consecutive double-digit quarter), PowerScale, ObjectScale.
  • Key Drivers: Data center modernization, AI/agentic workloads, security/resiliency upgrades; 1.2M+ 14G-or-older assets still in installed base.

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Operator: Good afternoon, and welcome to the Fiscal Year 2027 Second Quarter Financial Results Conference Call for Dell Technologies Inc. I'd like to inform all participants this call is being recorded at the request of Dell Technologies. This broadcast is the copyrighted property of Dell Technologies Inc. Any rebroadcast of this information in whole or part without the prior written permission of Dell Technologies is prohibited. [Operator Instructions] I'd like to turn the call over to Paul Frantz, Head of Investor Relations. Mr. Frantz, you may begin. Paul Frantz: Thanks, everyone, for joining us. With me today are Jeff Clarke, David Kennedy and Tyler Johnson. Our earnings materials are available on our IR website, and I encourage you to review these materials. Also, please take some time to review the presentation, which includes additional content to complement our discussion this afternoon. During this call, unless otherwise indicated, all references to financial measures refer to non-GAAP financial measures, including non-GAAP gross margin, operating expenses, operating income, net income, diluted earnings per share, free cash flow and adjusted free cash flow. A reconciliation of these measures to their most directly comparable GAAP measures can be found in our web deck and our press release. Growth percentages refer to year-over-year change unless otherwise specified. Statements made during this call that relate to future results and events are forward-looking statemen

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