Dell Technologies (DELL) Q2 2027 earnings summary

Executive summary

• Achieved record Q2 revenue of $47.0 billion, up 58% year over year, with growth across all core businesses and record diluted EPS of $6.34, up 273% year over year; non-GAAP diluted EPS was $7.04, up 203%.

• AI server demand surged, with $60.9 billion in Q2 orders, $16.4 billion in revenue, and a $95 billion backlog; over 6,500 customers now buying AI Factory solutions.

• Strong execution and broad-based growth across ISG, CSG, and storage, driven by infrastructure modernization and AI adoption.

• Cash flow from operations was $2.2 billion for the quarter, with record $4.3 billion returned to shareholders via share repurchases and dividends.

• Opportunity pipeline expanded sequentially, with rapid acceleration in enterprise AI adoption.

Financial highlights

• Quarterly net revenue: $47.0 billion (up 58% year over year); operating income: $5.4 billion (up 204%); net income: $4.13 billion (up 255%).

• Gross margin for Q2 was $9.83 billion, up 80% year over year, with a gross margin rate of 20.9% (non-GAAP: 21.1%).

• Adjusted free cash flow for Q2 was $8.15 billion, up 224% year over year.

• Returned a record $4.3 billion to shareholders, including share repurchases and dividends.

• Ended quarter with $14.2 billion in cash and investments.

Outlook and guidance

• FY27 revenue guidance raised by $25 billion to $192 billion, up ~69% year over year; non-GAAP diluted EPS guidance is $25.50, up ~148%.

• Q3 FY27 revenue guidance is $49.0 billion, up 81% year over year; non-GAAP diluted EPS guidance is $6.50.

• FY27 AI Server revenue expected at $74 billion, nearly 3x year over year.

• Operating expenses to be approximately 8% of revenue, the lowest in company history.

• Margin growth expected, but ongoing margin rate pressure from mix shift to AI-optimized servers and component inflation.