Dell reported revenue of $43.8 billion for the first quarter of fiscal year 2027, an 88% year-over-year increase, marking a record high. GAAP diluted earnings per share were $5.24, up 282% year-over-year. AI server revenue reached $16.1 billion, surging 757% year-over-year, with total AI orders for the quarter amounting to $24.4 billion. The company raised its full-year AI server revenue guidance to $60 billion and lifted the midpoint of its full-year revenue guidance to $167 billion.
The explosive growth in demand for artificial intelligence infrastructure has driven $Dell Technologies (DELL.US)$ the company to deliver its strongest quarterly results in history, with record-breaking revenue, earnings per share, and operating cash flow, prompting it to significantly raise its full-year guidance.
For the first fiscal quarter of FY2027 (ended May 1, 2026), Dell reported revenue of $43.8 billion, an 88% year-over-year increase. Revenue from AI-optimized servers reached $16.1 billion, surging 757% compared to the same period last year; total AI orders for the quarter amounted to $24.4 billion. GAAP diluted earnings per share stood at $5.24, up 282% year-over-year, while operating cash flow reached $4.1 billion—the highest ever for the same period.
The company promptly raised its full-year outlook, increasing its AI-optimized server revenue forecast to approximately $60 billion, representing a 144% year-over-year increase. The midpoint of its full-year revenue guidance was raised to $167 billion, reflecting an approximate 50% year-over-year growth.
Chief Operating Officer Jeff Clarke stated, "Our AI server revenue outlook has been raised to $60 billion, further underscoring that the AI opportunity shows no signs of slowing down." Chief Financial Officer David Kennedy attributed the quarter’s exceptional performance to "exceptional execution across the board—from supply chain to sales to pricing."
The AI server business, which substantially exceeded expectations, combined with the raised full-year outlook, has reinforced market perception of Dell Technologies as a core supplier of AI infrastructure, sending the company's stock surging 40% in after-hours trading.
Full-year guidance substantially raised; Q2 momentum continues
Dell raised its FY2027 AI server revenue forecast to approximately $60 billion, a 144% year-over-year increase, up from the previous estimate of around $50 billion. Full-year revenue is now expected to be in the range of $165 billion to $169 billion, with a midpoint of $167 billion, representing approximately 47% year-over-year growth, compared to the original guidance of $138 billion to $142 billion.
The midpoint of full-year GAAP diluted earnings per share is now expected to be $17.31, up 99% year-over-year; the midpoint of non-GAAP diluted earnings per share is forecast at $17.90, an increase of 74% year-over-year.
Second-quarter revenue is projected to be between $44 billion and $45 billion, with a midpoint of $44.5 billion, representing approximately 49% year-over-year growth. GAAP diluted earnings per share for Q2 are expected to have a midpoint of $4.48, up 164% year-over-year; non-GAAP diluted earnings per share are forecast at a midpoint of $4.80, an increase of 107% year-over-year.
David Kennedy noted that the company is entering FY27 "with clear momentum," with the midpoint of the full-year revenue guidance reflecting nearly 50% growth over the prior year.
Demand for AI servers surges, with quarterly orders reaching $24.4 billion
AI-optimized server business was the most impactful growth driver this quarter, generating $16.1 billion in revenue—a 757% increase from $1.9 billion in the same period last year—and securing $24.4 billion in new orders, underscoring a robust demand pipeline.
By comparison, revenue from traditional servers and networking totaled $8.5 billion, up 92% year-over-year, while storage business revenue reached $4.3 billion, an 8% increase year-over-year. The scale of the AI server business now overwhelmingly dominates the overall trajectory of the Infrastructure Solutions Group.
In the earnings statement, Jeff Clarke noted that the company continues to accelerate innovation across its full AI stack—including PCs, computing, and storage—adding that 'strong intra-quarter demand' underpinned the record-breaking performance for the quarter.
Both infrastructure and client solutions delivered strong results, with significantly improved profitability across both segments
The Infrastructure Solutions Group (ISG) reported total quarterly revenue of $29.0 billion, up 181% year-over-year, accounting for approximately 66% of the company’s total revenue. ISG operating profit was $3.1 billion, a 206% increase year-over-year, with operating margin improving from 9.7% a year ago to 10.5%. Its share of total reportable segment operating profit rose sharply from 60% to 72%.
The Client Solutions Group (CSG) also delivered solid results. CSG reported total revenue of $14.6 billion, up 17% year-over-year, including a record $13.0 billion in commercial client revenue (up 18% year-over-year) and $1.6 billion in consumer business revenue (up 9% year-over-year). CSG operating profit was $1.2 billion, a 79% increase year-over-year, with operating margin rising substantially from 5.2% to 8.0%.
From a consolidated financial perspective, the company’s GAAP gross margin was 17.8%, down from 21.1% a year ago, primarily reflecting structural shifts due to the significantly higher proportion of AI server products in the mix. Meanwhile, operating expenses as a percentage of revenue declined sharply from 16.1% to 9.5%, demonstrating significant economies of scale.
Cash flow hits a quarterly record high, with strong shareholder returns maintained
In the first quarter, Dell generated $4.1 billion in cash flow from operating activities, up 46% year-over-year, marking a record high for the period; on an adjusted basis,Free cash flowit was $3.2 billion, an increase of 42% year-over-year.
The company returned a total of $2.1 billion to shareholders during the quarter through share repurchases and cash dividends. As of the end of the quarter, cash and cash equivalents stood at approximately $11.6 billion, essentially unchanged from the prior quarter-end.
Accounts receivable increased from $17.6 billion at the end of the prior quarter to $25.9 billion, and inventory rose from $10.4 billion to $15.1 billion. The expansion in balance sheet size primarily reflects the rapid growth of the AI business and the corresponding increase in working capital requirements.
Editor/Stephen