Dell Technologies 2026 Q1 Earnings Mixed Results as Net Income Declines 2.7%
Daily EarningsWednesday, Jun 11, 2025 5:04 am ET
57min readDell Technologies (DELL), ranking 187th by market capitalization, reported its fiscal 2026 Q1 earnings on Jun 10th, 2025. The company's revenue for the quarter came in at $23.38 billion, slightly surpassing expectations of $23.14 billion. However, adjusted earnings per share fell short, coming in at $1.55 compared to the anticipated $1.69. Despite this, Dell raised its full-year adjusted earnings forecast to $9.40 per share, up 10 cents from previous guidance, while maintaining its revenue projection at approximately $103 billion. The adjustment reflects the company's confidence in its AI-driven growth prospects.
Revenue
Dell Technologies saw a 5.1% increase in total revenue for Q1 2026, reaching $23.38 billion compared to $22.24 billion in the same quarter the previous year. The Infrastructure Solutions Group contributed significantly, with revenue totaling $10.32 billion, showcasing growth driven by AI-optimized servers. The Client Solutions Group also performed well, generating $12.51 billion in revenue, reflecting recovery in the global PC market. Other corporate revenue amounted to $552 million, rounding out Dell's diverse revenue streams for the quarter.
Earnings/Net Income
Dell Technologies' earnings per share declined slightly by 1.4% to $1.39 in Q1 2026 from $1.41 in Q1 2025. Net income also saw a decrease, falling to $965 million, a 2.7% drop from $992 million in the corresponding quarter of the previous year. These figures indicate a challenging period, with EPS showing mixed results.
Price Action
The stock price of Dell Technologies has edged down 1.35% during the latest trading day. It has edged up 1.21% during the most recent full trading week and has surged 17.70% month-to-date.
Post-Earnings Price Action Review
The strategy of buying Dell Technologies shares following a revenue miss and holding for 30 days has historically yielded impressive returns. Investors saw gains of 454.51%, significantly outperforming the benchmark return of 99.81%. Despite experiencing a maximum drawdown of -60.09%, the strategy demonstrated good risk-adjusted returns, as reflected by a positive Sharpe ratio of 0.86. However, the high volatility of 47.67% may be daunting for risk-averse investors. Nonetheless, the overall performance underscores the strategy's potential for substantial gains following revenue misses, highlighting an intriguing opportunity for those willing to navigate the inherent risks.
CEO Commentary
Jeff Clarke, Vice Chairman and Chief Operating Officer of Dell Technologies, emphasized the company's strong performance driven by unprecedented demand in the AI sector. He noted that the Infrastructure Solutions Group (ISG) experienced significant growth, particularly in AI-optimized servers, which led to a record backlog and revenue increases. Clarke highlighted the importance of strategic investments in AI and the extension of offerings to enterprise customers. He expressed optimism about Dell's positioning to capture growth across all segments, despite challenges in the consumer market, reinforcing a positive outlook for future performance.
Guidance
For the fiscal year 2026, Dell Technologies expects revenue between $101 billion and $105 billion, reflecting an 8% year-over-year growth. The company projects GAAP diluted EPS of $7.85, representing a 23% increase, and non-GAAP diluted EPS of $9.30, marking a 14% rise. In the first quarter of FY26, revenue is anticipated to be between $22.5 billion and $23.5 billion, indicating a 3% year-over-year increase, with GAAP diluted EPS expected at $1.29, down 6%, while non-GAAP diluted EPS is forecasted to increase by 25% to $1.65.
Additional News
In recent weeks, Dell Technologies has made strategic advancements in its AI capabilities, reinforcing its position as a leader in the sector. The company unveiled its next-generation enterprise AI solutions at Dell Technologies World 2025, showcasing new partnerships with AMD, Intel, and Hugging Face to bolster its AI Factory initiative. Additionally, Dell announced a significant increase in its shareholder return strategy, with $2.4 billion spent on share repurchases and dividends during the quarter. These moves reflect Dell's commitment to expanding its AI infrastructure and enhancing shareholder value amid growing demand for AI-driven solutions.
Revenue
Dell Technologies saw a 5.1% increase in total revenue for Q1 2026, reaching $23.38 billion compared to $22.24 billion in the same quarter the previous year. The Infrastructure Solutions Group contributed significantly, with revenue totaling $10.32 billion, showcasing growth driven by AI-optimized servers. The Client Solutions Group also performed well, generating $12.51 billion in revenue, reflecting recovery in the global PC market. Other corporate revenue amounted to $552 million, rounding out Dell's diverse revenue streams for the quarter.
Earnings/Net Income
Dell Technologies' earnings per share declined slightly by 1.4% to $1.39 in Q1 2026 from $1.41 in Q1 2025. Net income also saw a decrease, falling to $965 million, a 2.7% drop from $992 million in the corresponding quarter of the previous year. These figures indicate a challenging period, with EPS showing mixed results.
Price Action
The stock price of Dell Technologies has edged down 1.35% during the latest trading day. It has edged up 1.21% during the most recent full trading week and has surged 17.70% month-to-date.
Post-Earnings Price Action Review
The strategy of buying Dell Technologies shares following a revenue miss and holding for 30 days has historically yielded impressive returns. Investors saw gains of 454.51%, significantly outperforming the benchmark return of 99.81%. Despite experiencing a maximum drawdown of -60.09%, the strategy demonstrated good risk-adjusted returns, as reflected by a positive Sharpe ratio of 0.86. However, the high volatility of 47.67% may be daunting for risk-averse investors. Nonetheless, the overall performance underscores the strategy's potential for substantial gains following revenue misses, highlighting an intriguing opportunity for those willing to navigate the inherent risks.
CEO Commentary
Jeff Clarke, Vice Chairman and Chief Operating Officer of Dell Technologies, emphasized the company's strong performance driven by unprecedented demand in the AI sector. He noted that the Infrastructure Solutions Group (ISG) experienced significant growth, particularly in AI-optimized servers, which led to a record backlog and revenue increases. Clarke highlighted the importance of strategic investments in AI and the extension of offerings to enterprise customers. He expressed optimism about Dell's positioning to capture growth across all segments, despite challenges in the consumer market, reinforcing a positive outlook for future performance.
Guidance
For the fiscal year 2026, Dell Technologies expects revenue between $101 billion and $105 billion, reflecting an 8% year-over-year growth. The company projects GAAP diluted EPS of $7.85, representing a 23% increase, and non-GAAP diluted EPS of $9.30, marking a 14% rise. In the first quarter of FY26, revenue is anticipated to be between $22.5 billion and $23.5 billion, indicating a 3% year-over-year increase, with GAAP diluted EPS expected at $1.29, down 6%, while non-GAAP diluted EPS is forecasted to increase by 25% to $1.65.
Additional News
In recent weeks, Dell Technologies has made strategic advancements in its AI capabilities, reinforcing its position as a leader in the sector. The company unveiled its next-generation enterprise AI solutions at Dell Technologies World 2025, showcasing new partnerships with AMD, Intel, and Hugging Face to bolster its AI Factory initiative. Additionally, Dell announced a significant increase in its shareholder return strategy, with $2.4 billion spent on share repurchases and dividends during the quarter. These moves reflect Dell's commitment to expanding its AI infrastructure and enhancing shareholder value amid growing demand for AI-driven solutions.
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