Dell Technologies Inc. (DELL) FY2026 10-K and Q2 FY2027 10-Q Summary

Business

From the Fiscal 2026 Annual Report on Form 10-K, accession 0001571996-26-000008 (fiscal year ended January 30, 2026).

Dell Technologies designs, manufactures, sells and supports a portfolio that runs from client devices and peripherals through servers, networking and storage. It operates in more than 170 countries through a direct sales force plus a global channel-partner network, owns manufacturing facilities in the United States, Malaysia, China, Brazil, India, Poland and Ireland, and uses contract manufacturers elsewhere. Dell Technologies Inc. is a holding company that conducts operations through subsidiaries; headquarters are in Round Rock, Texas.

Two reportable segments.

Infrastructure Solutions Group (ISG) sells advanced infrastructure for multicloud and on-premises environments, plus software, peripherals and services. Because of the scale and growth of the AI server business, Dell disaggregated its servers and networking revenue in the fourth quarter of Fiscal 2026, so ISG now reports three major product categories:

• AI-optimized servers, a specialized portfolio for compute-intensive workloads including

AI model training, fine-tuning and inferencing.

• Traditional servers and networking, general-purpose and mission-critical servers, plus

wide-area network infrastructure, data center and edge switches, and cables and optics.

• Storage, primary, unstructured and data-protection offerings across all-flash,

purpose-built, software-defined and hyper-converged architectures.

About 65% of ISG revenue comes from the Americas.

Client Solutions Group (CSG) sells branded PCs, notebooks, desktops and workstations, branded peripherals (displays, docking stations, keyboards, mice, webcam and audio devices), third-party software and peripherals, and services such as configuration, deployment, support and extended warranties. Its two major categories are commercial and consumer. About 60% of CSG revenue comes from the Americas.

Corporate and other is not a reportable segment. It holds the historical resale of standalone VMware offerings ("VMware Resale") and, through the date of sale, SecureWorks Corp. Dell terminated its Commercial Framework Agreement with VMware on March 25, 2024 following Broadcom's acquisition of VMware, and no longer distributes standalone VMware products, though it continues to support customers who bought resale offerings in prior periods and continues to embed certain VMware products in its VxRail solution (reported within ISG). Secureworks was acquired by Sophos Inc., an affiliate of Thoma Bravo, L.P., on February 3, 2025 in an all-cash transaction at a purchase price of approximately $0.9 billion, of which Dell received total cash consideration of approximately $0.6 billion for the equity interest it held.

Dell Payment Solutions and DFS. Dell offers utility, subscription, as-a-Service, lease, loan and immediate-pay models. Dell Financial Services and its affiliates originate, collect and service the resulting customer receivables. DFS funded $11.9 billion of originations in Fiscal 2026 and held a $14.3 billion global portfolio of financing receivables as of January 30, 2026. These multiyear arrangements are the foundation of what Dell defines as recurring revenue, principally hardware and software maintenance, operating leases, subscription, as-a-Service and usage-based offerings.

Strategic investments and acquisitions. Dell invests through its venture arm, Dell Technologies Capital, in emerging areas including storage, software-defined networking, security, machine learning and AI, analytics, cloud, edge and software development operations. Strategic investments in non-marketable securities were $1.6 billion as of January 30, 2026 ($1.5 billion a year earlier). Dell also states it may make targeted acquisitions.

Backlog and seasonality. Product backlog is the value of unfulfilled manufacturing orders, included in remaining performance obligations to the extent non-cancelable. Rising demand for AI-optimized servers drove backlog growth in both Fiscal 2025 and Fiscal 2026, and in Fiscal 2026 demand for traditional servers and networking also outpaced supply, adding further backlog at year end. Remaining performance obligations were approximately $82 billion as of January 30, 2026, of which Dell expected to recognize roughly 78% as revenue within twelve months and 11% in the following twelve months. Storage sales are typically strongest in the fourth fiscal quarter; Americas sales in the second and fourth quarters; EMEA in the fourth.

Customer concentration. One customer accounted for 12% of consolidated net revenue in Fiscal 2026, substantially all of it ISG offerings. No single customer reached 10% in Fiscal 2025 or Fiscal 2024.

Leadership. Michael S. Dell is Chairman and Chief Executive Officer. Jeffrey W. Clarke is Vice Chairman and Chief Operating Officer, directing both ISG and CSG and global operations. David Kennedy became Chief Financial Officer in September 2025. William F. Scannell became President and Chief Customer Officer in January 2026.

Risk factors

Condensed from Item 1A of the Fiscal 2026 Form 10-K, accession 0001571996-26-000008.

Business and industry

• Macroeconomic and geopolitical conditions. Demand for technology products is sensitive to

inflation, interest rates, credit availability and regional economic weakness. Geopolitical volatility (Dell names military conflicts including the Iran conflict), extreme weather, trade protection measures and public health issues can cause shortages, supply-chain disruption, supplier insolvency and higher product costs. Tariffs and trade disputes could raise manufacturing costs, raise prices, reduce demand and impede cross-border movement of goods.

• Competition. Rapid technological change across hardware, software and services, including

AI, cloud and security, means portfolios can become outdated and share can erode quickly. Dell also competes with non-traditional players such as large Infrastructure-as-a-Service providers that buy directly from original design manufacturers; competitive pressure rises if customers move workloads to those providers. Strategic-alliance partners can become competitors.

• Execution of a two-segment strategy. ISG faces on-premises competitors and IaaS pressure

and will require additional investment. CSG depends on notebooks, desktops and workstations, absorbs overhead and provides scaled procurement; it is exposed to declining worldwide PC revenues and a lengthening replacement cycle.

• Vendor and component dependence. Dell obtains many products and all components from third

parties, many outside the United States, and a significant concentration of outsourced assembly sits with a few contract manufacturers, often in single locations in Asia. Dell sells components to those manufacturers, creating large non-trade receivables with collectibility risk. It maintains minimal inventory, so availability disruptions hit order fulfillment directly, and the effect is more acute during periods of rapid demand growth such as the current demand for AI-optimized solutions. Profitability also depends on vendor rebates and marketing funds, whose timing and amount vary.

• Single- or limited-source suppliers. Dell maintains several such relationships, including

with third-party software providers. Even where alternatives exist, qualifying them can cause delays and lost sales.

• The nature of AI demand. To date Dell's AI solutions have been bought primarily by a small

number of larger customers and cloud service providers. Large orders arrive in some periods and not others, are subject to intense competition and pricing pressure that weighs on gross margins, require greater working-capital commitments for component purchases, expose Dell to excess and obsolete inventory on delay or cancellation, and may carry larger credit exposure or longer payment terms than is typical, particularly where supplier payment terms differ from customer terms. A faster component innovation rate may also raise defect and warranty costs.

• Managing AI itself. Use of AI in products and internal processes creates ethical, legal,

intellectual-property and cybersecurity exposure, in an environment where laws and regulations governing AI are proliferating and inconsistent across jurisdictions.

• Quality and product transitions. Undetected quality issues, and mismanaged transitions to

new solutions and offerings amid short product life cycles, can reduce demand and profitability.

• Cost-efficiency execution. Ongoing modernization, employee reorganizations, hiring limits

and other cost measures risk loss of continuity and accumulated knowledge, diminished productivity, operational disruption and retention problems, and may not deliver the expected savings on time.

• Security incidents. Dell states it is targeted by criminal and other threat actors on an

ongoing basis, that it has experienced cyber-attacks leveraging compromised credentials of partners, vendors, employees and customers to gain unauthorized access to Dell, partner and vendor systems and confidential information, and that in some cases these incidents have resulted in successful attacks on its IT environments. Such incidents have caused, and may again cause, disruption to parts of its business and to partners', vendors' and customers' operations, with regulatory, investigative, remediation, contractual and litigation costs. Dell expects attacks by nation-state actors to intensify during periods of geopolitical conflict and expects AI-leveraged attack tactics to increase.

• International revenue. Sales outside the United States were approximately 45% of

consolidated net revenue in Fiscal 2026, exposing Dell to local economic and labor conditions, political instability, regulatory and tax change, trade barriers, intellectual-property risk, copyright levies and currency volatility.

• Mix and seasonality. Profit margins vary by product, service, customer and geography;

changes in mix, and seasonal patterns, can depress overall profitability in a given period.

• Sales channels. Dell relies on value-added resellers, system integrators, distributors and

retailers alongside its direct force; weakening channel financial condition, reduced ordering, or channel perception of conflict with Dell's direct initiatives can cost revenue and margin.

• Acquisitions and dispositions. Deals may not return their cost, may create integration and

retention difficulties, may require substantial cash, equity or debt financing with restrictive covenants, and may bring unexpected liabilities, charges, adverse tax consequences or write-downs. Divestitures consume management attention and can produce losses on disposition or continued financial involvement through indemnification.

• Capital-markets access. Dell uses debt and capital markets to finance customers and fund

general corporate needs; volatility, a credit-rating downgrade or deteriorating performance could raise funding costs or limit securitization capacity. Some customers themselves depend on market access, which could force Dell to self-fund or forgo transactions.

• Financial services. DFS activity is exposed to loan delinquencies and defaults, requiring

larger reserves, and to new or newly applied financial-services regulation.

• Counterparty default on cash and investment deposits, interest rate swaps and foreign

currency option and forward contracts.

• Goodwill and intangibles. Combined carrying value was $24.1 billion as of January 30, 2026, roughly 24% of total consolidated assets, and an impairment would materially affect results.
• ISG contract economics. Multiyear consumption contracts let customers terminate for service-

level failures, request rate reductions, reduce usage or terminate early on payment of agreed fees; cost estimates set at inception can prove wrong; and customers can default.

• Government contracts, a significant source of business, are subject to funding, termination

for convenience or non-appropriation, and to spending pressure, notably in recent periods by U.S. federal agencies. Violations could bring suspension or debarment.

• Intellectual property, infrastructure disruption, hedging effectiveness, **tax law

change (including OECD Pillar One and Pillar Two, and the expiry of tax holidays), portfolio investment impairment, legal proceedings, sustainability and ESG expectations amid conflicting regulatory views across jurisdictions, climate-related and transition risks, environmental and safety compliance, and anti-corruption, sanctions, export-control and human-rights compliance**.

• Key-person dependence. Dell describes itself as highly dependent on Michael S. Dell, founder,

Chief Executive Officer and largest stockholder, and on Jeffrey W. Clarke and other executives.

• Indebtedness. Dell and its subsidiaries had approximately $31.5 billion of indebtedness as of

January 30, 2026, with capacity for up to $5.0 billion of commercial paper and $5.9 billion of additional revolver borrowing. A substantial portion of operating cash flow services interest and debt, reducing funds available for other purposes and limiting flexibility. Existing debt terms generally do not restrict incurring additional unsecured debt.

Ownership and governance of the Class C Common Stock

• Multi-class structure. Class A and Class B shares carry ten votes each; Class C carries one.

As of March 9, 2026 the MD stockholders (Michael Dell and the Susan Lieberman Dell Separate Property Trust) and the Silver Lake-affiliated SLP stockholders together held common stock representing approximately 91.7% of total voting power, and beneficially owned 53.8% of outstanding common stock. The MD stockholders can approve any matter submitted to a single-class vote, controlling director elections, organizational-document amendments and significant transactions. Multi-class structures have in the past led to exclusion from certain stock indices.

• Controlled company. Because the MD stockholders hold more than 50% of the voting power for

director elections, Dell is a "controlled company" under NYSE rules and may elect not to comply with requirements for a majority-independent board and fully independent compensation and nominating committees.

• Conflicts of interest. The certificate provides that the MD stockholders, the MSD Partners

stockholders, the SLP stockholders and their affiliates (other than Michael Dell) have no duty to refrain from competing business activities, and may pursue acquisition opportunities not made available to Dell.

• Future sales. As of March 9, 2026 there were approximately 318 million Class C shares

outstanding, while 277 million Class A and 51 million Class B shares were convertible into Class C on a one-to-one basis, and registration rights exist over substantially all of them.

• Exclusive forum provisions, dividend discretion, and **variability in the pace and size

of share repurchases**.

Legal matters. On January 28, 2026 a putative class action, Lowbruck et al. v. Dell Technologies Inc., et al., was filed in the U.S. District Court for the Western District of Texas against the company, its Board and the Dell Benefits Administration Committee, alleging breaches of ERISA fiduciary duties in connection with the Dell 401(k) Plan and seeking damages, fees and costs in an unspecified amount. Dell intends to defend the action vigorously. Dell also received an IRS Revenue Agent's Report in June 2023 covering fiscal 2018–2019 proposing significant adjustments primarily relating to business-integration transactions, which it has protested. As of January 30, 2026 Dell did not believe a material loss exceeding amounts already accrued was reasonably possible across all matters.

Management's discussion, Fiscal 2026

From Item 7 of the Fiscal 2026 Form 10-K, accession 0001571996-26-000008 (fiscal year ended January 30, 2026).

Consolidated results. Net revenue rose 19% to $113,538 million. Product revenue rose 27% to $90,405 million; services revenue fell 4% to $23,133 million. Gross margin rose 7% to $22,707 million but gross margin percentage fell 220 basis points to 20.0%; non-GAAP gross margin rose 6% to $23,159 million, with the percentage down 240 basis points to 20.4%. Operating expenses fell 3% to $14,558 million. Operating income rose 31% to $8,149 million (7.2% of revenue); non-GAAP operating income rose 17% to $9,991 million. Net income rose 30% to $5,936 million and non-GAAP net income rose 20% to $7,046 million. Diluted EPS was $8.68, up 36%; non-GAAP diluted EPS was $10.30, up 27%. Cash flow from operations was $11,185 million, up 147%; free cash flow was $8,555 million and adjusted free cash flow $11,508 million.

What drove the year. Growth came from ISG and, to a lesser extent, CSG, offset by declining Corporate and other revenue. Product gross margin percentage fell 210 basis points to 13.7%, driven by the mix shift toward AI-optimized servers, the central margin story of the year. Services gross margin percentage rose 340 basis points to 44.8%, principally a mix effect from no longer distributing standalone VMware offerings. The services revenue decline was itself a Corporate and other effect: lower VMware Resale revenue and, to a lesser extent, the Secureworks sale, partly offset by growth in ISG and CSG services. SG&A fell 4% on lower employee compensation and benefits from reduced headcount.

ISG. Net revenue rose 40% to $60,826 million. AI-optimized servers revenue rose 166% to $24,683 million, driven by units sold; traditional servers and networking rose 9% to $19,512 million on higher average selling prices from richer configurations, partly offset by lower unit volumes; storage rose 1% to $16,631 million. ISG operating income rose 27% to $7,111 million, but operating margin fell 110 basis points to 11.7% because the gross margin rate decline, from the AI-optimized mix shift, outpaced the operating expense rate decline.

CSG. Net revenue rose 5% to $50,984 million. Commercial rose 8% to $44,062 million on higher units and richer configurations, partly offset by lower average selling prices; consumer fell 8% to $6,922 million on lower selling prices and units. CSG operating income fell 5% to $2,833 million and operating margin fell 50 basis points to 5.6% on a mix-driven gross margin decline.

Business trends management identified. Significant demand for AI-optimized servers and strong demand for traditional servers and networking, shifting the business mix toward ISG; customers modernizing and consolidating data centers; an underway PC refresh cycle supporting commercial CSG; and business modernization initiatives producing a net reduction in operating expenses. Management flagged inherent non-linearity in the timing of AI-optimized server demand and shipments, a function of the scale of the opportunity, varying customer readiness, and the frequency of component updates and transitions, as a continuing source of revenue variability. It also said increased component purchasing to meet AI demand had produced higher inventory, higher purchase obligations and new working capital dynamics.

Fiscal 2027 expectations set in the annual report. Significant ISG and modest CSG revenue growth, with ISG driven largely by AI-optimized servers; continued Corporate and other decline; margin growth balanced against margin rate pressure from the AI-optimized mix shift; notable component cost inflation in Fiscal 2027; and continued disciplined cost management.

Balance sheet and cash. Accounts receivable, net rose to $17.6 billion from $10.3 billion, on AI-optimized server revenue. Financing receivables, net rose to $14.3 billion from $11.2 billion; the principal charge-off rate was 0.2% (0.6% in Fiscal 2025). Equipment under operating leases, net was $2.5 billion. Cash and cash equivalents rose $7.9 billion to $11,528 million; with $5.9 billion of remaining revolver availability, total liquidity was $17,414 million. Total debt principal was $31.8 billion, of which core debt was $17.0 billion (up from $13.0 billion), the increase driven mainly by Senior Notes issuance and, to a lesser extent, DFS debt. Purchase obligations were $18.8 billion, with $16.8 billion payable within twelve months. Capital expenditures and capitalized software were $2.6 billion. Investing activities used $2.1 billion; financing activities used $1.5 billion.

Capital returns. Dell repurchased approximately 54 million Class C shares for approximately $6.0 billion in Fiscal 2026 (22 million for $2.6 billion in Fiscal 2025) and paid $1.5 billion of dividends and dividend equivalents at $0.525 per share per quarter. Subsequent to the close of Fiscal 2026, on February 26, 2026, the Board authorized an additional $10 billion of repurchases, bringing cumulative authorization to $30 billion with approximately $15.2 billion remaining, and approved a 20% increase in the quarterly dividend rate to $0.630 per share beginning in the first quarter of Fiscal 2027. Dell also repaid the remaining $0.5 billion principal of its 6.02% Senior Notes due June 2026 after fiscal year end.

Taxes. The changes in the effective tax rate versus Fiscal 2025 were primarily attributable to discrete tax items and a change in the jurisdictional mix of income. Fiscal 2025 had included discrete tax benefits of $0.4 billion from expiring U.S. statutes of limitations and $0.2 billion related to stock-based compensation. The One Big Beautiful Bill Act, enacted July 4, 2025, brought immediate expensing of domestic R&D, restored 100% bonus depreciation and an EBITDA-based interest limitation effective for Fiscal 2026; Dell reported no material impact for Fiscal 2026 and does not currently anticipate a material impact from the Fiscal 2027 international-framework changes.

Current quarter, second quarter of Fiscal 2027 (ended July 31, 2026)

From the Form 10-Q for the quarter ended July 31, 2026, accession 0001571996-26-000046, and the earnings release furnished as Exhibit 99.1 to the Form 8-K dated September 1, 2026, accession 0001571996-26-000039.

Consolidated results. Net revenue rose 58% to $46,971 million for the quarter and 71% to $90,813 million for the six months. Product revenue rose 72% to $41,112 million in the quarter; services revenue was essentially flat at $5,859 million, as a decline in Corporate and other services was offset by growth in ISG services. Gross margin rose 80% to $9,830 million and gross margin percentage rose 260 basis points to 20.9%; on a six-month basis gross margin percentage fell 10 basis points to 19.4%. Operating expenses rose 21% to $4,445 million (SG&A up 15% to $3,336 million, R&D up 41% to $1,109 million, both principally on higher variable compensation). Operating income rose 204% to $5,385 million, and operating margin rose 550 basis points to 11.5%. Net income rose 255% to $4,133 million and diluted EPS rose 273% to $6.34. Non-GAAP operating income rose 160% to $5,929 million, non-GAAP net income 189% to $4,591 million, and non-GAAP diluted EPS 203% to $7.04.

Two things separate the quarter from the prior year's margin pattern. First, the quarterly gross margin rate rose, which management attributes to disciplined pricing, a reversal of the mix-driven compression that defined Fiscal 2026, though on a six-month basis the AI-optimized mix shift still weighs on the rate and is only largely offset by pricing. Second, the operating margin gain came substantially from operating leverage: the operating expense rate fell as revenue grew far faster than costs.

ISG. Net revenue rose 89% to $31,782 million in the quarter (up 124% to $60,791 million for six months). AI-optimized servers revenue rose 100% to $16,401 million, on higher units and, to a lesser extent, higher average selling prices from richer configurations and disciplined pricing. Traditional servers and networking rose 122% to $10,531 million, driven principally by higher average selling prices from disciplined pricing and richer configurations. Storage rose 26% to $4,850 million on Dell-IP storage demand and disciplined pricing. ISG operating income rose 225% to $4,781 million and ISG operating margin rose 620 basis points to 15.0%, on both a lower operating expense rate and a higher gross margin rate. For the six months, ISG operating margin rose 380 basis points to 12.9%, and there the gross margin rate still declined on the AI-optimized mix shift, the operating expense rate decline more than offset it.

CSG. Net revenue rose 20% to $15,034 million. Commercial rose 22% to $13,192 million on higher average selling prices, partly offset by lower units; consumer rose 7% to $1,842 million, also on price rather than volume. CSG operating income rose 42% to $1,142 million and margin rose 120 basis points to 7.6%, mainly on gross margin rate from disciplined pricing.

Corporate and other net revenue fell to $155 million from $473 million, on continued VMware Resale decline.

Costs and supply. Management identified a new trend not present in the annual report: input costs rose on higher component costs, and strong and accelerating industry demand for AI-optimized solutions combined with capacity limits at memory manufacturers has produced global supply constraints and substantial inflation in memory component costs. Management expects the notable inflationary environment for components to persist through the remainder of Fiscal 2027. Severance charges were $261 million in the quarter and $488 million for the six months, against $204 million and $334 million a year earlier.

Below the operating line. Interest and other, net was $254 million of expense in the quarter, a 24% improvement, and $38 million of income for the six months, the favorable change driven by strategic investment gains, including a $0.6 billion six-month gain related to a single investee. The effective tax rate was 19.5% on $5.1 billion of pre-tax income for the quarter and 16.6% on $9.1 billion for the six months, against 19.2% and 15.6% a year earlier.

Working capital and balance sheet. Inventories roughly doubled to $21,290 million from $10,437 million at January 30, 2026. Accounts receivable, net rose to $22.9 billion from $17.6 billion. Financing receivables, net rose to $20.4 billion from $14.3 billion, and equipment under operating leases to $3.2 billion from $2.5 billion, so DFS owned assets reached $23,612 million. New financing originations were $7.5 billion in the quarter, against $2.4 billion a year earlier. The principal charge-off rate was 0.5% for the quarter versus 0.1% a year earlier. Amounts confirmed as valid under the Supply Chain Finance Program and sitting in accounts payable rose to $3.1 billion from $2.0 billion. Purchase obligations reached $34.8 billion, of which $24.6 billion is payable within twelve months, up from $18.8 billion at fiscal year end, and Dell says it expects component purchases to keep increasing, including committed purchases under long-term strategic supplier agreements at prices to be mutually agreed at a future date. Dell continues to carry a shareholders' equity deficit, which narrowed by roughly $1.0 billion to $(1,427) million at July 31, 2026 from $(2,470) million at January 30, 2026, as retained earnings rose to $10,065 million from $3,325 million, partly offset by treasury stock at cost rising to $20,010 million from $14,533 million.

Cash and debt. Cash flow from operations was $2,225 million for the quarter, down 13%, and $6,306 million for the six months, up 18%. Free cash flow was $986 million for the quarter, down 47%, as capital expenditures and capitalized software rose to $1,239 million from $675 million; adjusted free cash flow, which excludes financing receivables and equipment under operating leases, was $8,149 million for the quarter, up 224%, and $11,314 million for the six months, the gap against free cash flow principally reflecting a $6,667 million quarterly operating cash flow impact from the change in financing receivables. Cash and cash equivalents were essentially flat at $11,569 million, with $5.9 billion of remaining revolver availability. Total debt principal rose $3.0 billion to $34,747 million, driven by Senior Notes issuance; core debt fell to $13,983 million from $17,018 million while DFS-related debt rose to $20,660 million from $14,646 million, reflecting the DFS allocation against the larger financing-receivable book. Investing activities used $2.4 billion and financing activities used $3.8 billion for the six months.

Financing actions during the quarter. On June 10, 2026 Dell entered a new senior unsecured revolving credit agreement maturing June 10, 2031 with JPMorgan Chase Bank, N.A. as administrative agent, providing $6.0 billion of revolving commitments and a $500 million letter-of-credit sub-facility; the existing November 1, 2021 credit agreement was repaid in full and terminated the same day. On June 16, 2026 subsidiaries Dell International L.L.C. and EMC Corporation completed a public offering of $3.0 billion of senior notes: $1.0 billion of 4.750% notes due 2031, $750 million of 5.000% notes due 2034 and $1.25 billion of 5.250% notes due 2037.

Redomestication. Following shareholder approval at the 2026 annual meeting, Dell Technologies Inc. changed its jurisdiction of incorporation from Delaware to Texas effective July 1, 2026, each outstanding Class A, Class B and Class C share converting into one share of the corresponding class of the Texas corporation. Dell states the conversion did not change its headquarters, business, management, assets, liabilities or net worth other than the costs of the conversion. The Class C Common Stock continues to trade on the New York Stock Exchange under "DELL."

Capital returns in the quarter. Dell repurchased approximately 20 million Class C shares for approximately $5.4 billion during the six months (30 million for $2.9 billion a year earlier) and paid quarterly dividends of $0.630 per share, $410 million in the first quarter and $404 million in the second. The company reported returning a record $4.3 billion to shareholders in the second quarter through repurchases and dividends. Approximately $15.2 billion remained authorized for repurchase. Class C shares outstanding were 319 million at July 31, 2026 against 323 million at January 30, 2026, and total shares outstanding across classes fell to 640 million from 652 million, with approximately 8 million Class B shares converted into Class C during the six months.

Guidance. In the September 1, 2026 earnings release Dell guided third-quarter Fiscal 2027 revenue of $49.0 billion (up 81% year over year), GAAP diluted EPS of $6.10 and non-GAAP diluted EPS of $6.50. It raised full-year Fiscal 2027 revenue guidance by $25 billion, from $167.0 billion to $192.0 billion (up 69% year over year); raised AI-optimized servers revenue guidance from $60.0 billion to $74.0 billion (up 200%); and raised GAAP diluted EPS guidance from $17.31 to $24.37 and non-GAAP diluted EPS guidance from $17.90 to $25.50. In the same release management stated the AI server business booked a record $60.9 billion in orders during the quarter and exited it with a record $95 billion backlog. In the 10-Q itself, management's full-year expectations are stated qualitatively: significant ISG and strong CSG revenue growth, margin growth balanced against margin rate pressure from the continuing AI-optimized mix shift, persistent component-cost inflation, and continued disciplined cost management.

Subsequent events

The subsequent-events note to the Form 10-Q for the quarter ended July 31, 2026 (accession 0001571996-26-000046, Note 16) states that there were no known events occurring after July 31, 2026 and up to the date the report was issued that would materially affect the information presented. Dell reported no post-period acquisitions, divestitures, financings or litigation outcomes in that note.

One post-period action is disclosed in the earnings release furnished as Exhibit 99.1 to the Form 8-K dated September 1, 2026 (accession 0001571996-26-000039): on September 1, 2026 the Board of Directors declared a quarterly cash dividend of $0.630 per common share, payable October 30, 2026 to shareholders of record as of October 20, 2026. The third-quarter and revised full-year Fiscal 2027 guidance summarized above was also issued on that date.

For reference, the subsequent-events note to the Fiscal 2026 Form 10-K (accession 0001571996-26-000008, Note 22) likewise stated that no known events occurring after January 30, 2026 and up to that report's issuance would materially affect the information presented; the February 26, 2026 dividend increase, the additional $10 billion repurchase authorization and the repayment of the remaining $0.5 billion of 6.02% Senior Notes due June 2026 are disclosed elsewhere in that annual report and are described above.