Published
# Dell Technologies Inc. (NYSE: DELL) — Business, Risks and Management's Discussion
Dell's fiscal year is the 52- or 53-week period ending on the Friday nearest January 31. The
company calls the year ended January 30, 2026 "Fiscal 2026" and the year ending January 29,
2027 "Fiscal 2027"; both are 52-week years. The most recent completed quarter is the second
quarter of Fiscal 2027, ended July 31, 2026.
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## 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.