Dell Technologies 2026 Q3 Earnings Net Income Surges 32.3% Amid Strong Revenue Growth

Dell Technologies (DELL) delivered a robust third quarter, surpassing revenue expectations with a 10.8% year-over-year increase to $27 billion. The company raised its full-year guidance, reflecting confidence in sustained demand for AI infrastructure and disciplined cost management.

Revenue

Dell’s total revenue climbed to $27 billion, driven by a 24% surge in Infrastructure Solutions Group (ISG) to $14.11 billion, fueled by a 37% rise in servers and networking. The Client Solutions Group added $12.48 billion, while corporate and other segments contributed $420 million. ISG’s storage revenue, though down 1%, remained a key growth driver amid AI server momentum.

Earnings/Net Income

Despite a 67.6% decline in EPS to $0.54, net income surged 32.3% to $1.55 billion, underscoring improved profitability in AI and storage. The EPS dip was offset by strong top-line growth and operational efficiency.

Post-Earnings Price Action Review

The strategy of buying Dell shares post-earnings underperformed the market, with a 2.94% CAGR, 56.18 percentage points below the benchmark. A Sharpe ratio of 0.11 and 0.00% maximum drawdown indicated low risk but modest returns, highlighting market skepticism despite revenue gains.

CEO Commentary

Jeffrey Clarke highlighted record AI server orders ($12.3 billion) and a $18.4 billion backlog, emphasizing Dell’s rapid deployment capabilities. He expressed confidence in navigating AI demand and maintaining profitability through operational discipline.

Guidance

Dell projected Q4 revenue of $31–$32 billion and FY26 revenue of $111.7 billion, with non-GAAP EPS of $9.92. The company anticipates $9.4 billion in AI server shipments for Q4, reflecting sustained growth.

Additional News

Dell named David Kennedy as permanent CFO, signaling stability in leadership. The company returned $1.6 billion to shareholders via buybacks and dividends in Q3, with $5.3 billion returned year-to-date. M&A activity remains dormant, but strategic focus on AI infrastructure and supply chain efficiency continues to drive long-term value.

Revenue

Dell’s Infrastructure Solutions Group (ISG) led the way with $14.11 billion in revenue, a 24% increase driven by a 37% jump in servers and networking. The Client Solutions Group contributed $12.48 billion, with commercial sales rising 5% to $10.6 billion, while consumer revenue declined 7% to $1.9 billion. Storage revenue dipped 1% to $3.98 billion, but AI server demand offset this with record orders. Corporate and other segments added $420 million, maintaining a steady contribution.

Earnings/Net Income

Net income surged 32.3% to $1.55 billion in Q3, despite a 67.6% drop in EPS to $0.54, reflecting improved profitability in AI and storage. The EPS decline was primarily due to higher share counts, while net income growth highlighted strong cost controls and margin expansion.

Post-Earnings Price Action Review

The post-earnings trading strategy underperformed the market, with a 2.94% compound annual growth rate (CAGR) and a Sharpe ratio of 0.11. The strategy’s maximum drawdown of 0.00% indicated low volatility but limited upside, trailing the benchmark by 56.18 percentage points. Analysts attributed this to market skepticism about AI margin sustainability and competitive pressures.

Guidance

Dell raised FY26 revenue guidance to $111.7 billion, with non-GAAP EPS of $9.92, up 22% year-over-year. Q4 revenue is expected between $31–$32 billion, with AI server shipments projected at $9.4 billion. The company emphasized disciplined capital returns and operational scaling to maintain profitability.

Additional News

Dell’s recent leadership changes include naming David Kennedy as permanent CFO, reinforcing financial stability. Shareholder returns accelerated in Q3, with $1.6 billion in buybacks and dividends, totaling $5.3 billion year-to-date. The company remains focused on AI infrastructure, leveraging its supply chain and engineering expertise to secure large-scale deployments. No major M&A activity was announced, but strategic partnerships with AI firms like xAI and CoreWeave highlight its market positioning.