Q4 2026 Dell Technologies Inc Earnings Call [BACKUP]

February 26, 2026

[Company Representative] (Dell Technologies): To answer, really, maybe I'll put the bow around this, the pricing actions. Look, we became very proficient during COVID, all of the best practices that we learned during COVID, as I mentioned in the last call, we put in place, we put in place faster. We changed the entire pricing of our server business on 10 December in a couple of days. We had tens of thousands of open quotes in the PC business, changed them all on 6 January. This notion of we recover our costs in two-thirds of it in 90 days, we moved that quickly. That's what we learned in COVID. That's what we put in place here. We made list price changes across the board.

Jeff Clarke: To answer, really, maybe I'll put the bow around this, the pricing actions. Look, we became very proficient during COVID, all of the best practices that we learned during COVID, as I mentioned in the last call, we put in place, we put in place faster. We changed the entire pricing of our server business on 10 December in a couple of days. We had tens of thousands of open quotes in the PC business, changed them all on 6 January. This notion of we recover our costs in two-thirds of it in 90 days, we moved that quickly. That's what we learned in COVID. That's what we put in place here. We made list price changes across the board.

Bow around this the pricing actions.

We became very proficient during COVID-19.

And all of the best practices that we learned during Covid as I mentioned in the last call we put in place and we put in place faster.

We changed the entire pricing of our server business on December the 10th in a couple of days.

We have tens of thousands of open quotes in the PC business and.

And change them all on January six.

This notion of we recover our costs and <unk> two thirds of it 90 days, we moved that quickly that's what we learned in Covid. That's what we put in place here. So we made a list price changes across the board we've.

[Company Representative] (Dell Technologies): We've changed in our vernacular, our internal mechanisms around smart price and margin floors all changed instantaneously. We're moving to discount off list price. We're compressing discounting. Our quotes are valid for the shortest period of time they've ever been, and we're reducing promotions and all sorts of special pricing going forward. That's what we've done. It's been in place. As I mentioned with one of the previous questions, we saw our server business stabilize with the higher input costs. You saw that in the performance of the business in ISG, which was extraordinary. In PCs, we purposely delayed implementing that price move to stay in the hunt, to take share, and to drive growth, which will serve us for the long run. When we made the change on 6 January, it wasn't 90 days later, it was that day we stabilized margins.

Jeff Clarke: We've changed in our vernacular, our internal mechanisms around smart price and margin floors all changed instantaneously. We're moving to discount off list price. We're compressing discounting. Our quotes are valid for the shortest period of time they've ever been, and we're reducing promotions and all sorts of special pricing going forward. That's what we've done. It's been in place. As I mentioned with one of the previous questions, we saw our server business stabilize with the higher input costs. You saw that in the performance of the business in ISG, which was extraordinary. In PCs, we purposely delayed implementing that price move to stay in the hunt, to take share, and to drive growth, which will serve us for the long run. When we made the change on 6 January, it wasn't 90 days later, it was that day we stabilized margins.

We changed in our vernacular our internal mechanisms around smart price and margin, Florida, all changed since it instantaneously.

We're moving to discount off list price were compressing discounting.

Our quotes are valid for the shortest period of time they've ever been.

And we're reducing promotions and all sorts of special pricing.

Going forward, that's what we've done it's been in place as I mentioned was one of the previous questions. We saw our server business stabilize with the higher input costs you saw that in the performance of the business in ISG, which was extraordinary.

<unk>, we purposely.

Delayed implementing that price move to stay in the hunt to take share and to drive growth, which will service for the long run and then when we made the change on January the sixth it wasn't 90 days later it was that day, we stabilized margins.

[Company Representative] (Dell Technologies): I hope that helped. Thanks, Eric.

Jeff Clarke: I hope that helped. Thanks, Eric.

I hope that helped.

Thanks, Eric.

Operator: We'll take our next question from Krish Sankar with TD Cowen.

And we will take our next question from Chris <unk> with TD Cowen.

Krish Sankar: Yeah. Hi, thanks for taking my question, and congrats on the amazing results. Jeff, I had a question on enterprise AI adoption. You kind of said that it's very strong in your server business. Clearly, agentic AI, long-horizon agents, all of them have implications across your server, Dell AI Factory, and your storage business. I'm just wondering, is there a way to break down your AI server orders between enterprise, neocloud, and sovereign? When do you expect enterprise AI adoption to spill over to your storage segment and probably start a new storage cycle?

Yes, hi, Thanks for taking my question and congrats on the amazing resolved before I had a question on enterprise adoption to kind of the very strong in your server business clearly agent alongside the maintenance all of them have implications across the silver delay factoring in fluids business.

Wondering is that a way to breakdown your AI civil orders between enterprise Neil clouds in sovereign and when do you expect enterprise adoption.

Below historic segment, and probably saw the news toric cycle.

[Company Representative] (Dell Technologies): Well, of course, there's a way to parse it. I won't do this on the call, but we absolutely keep track of the health and growth of those three parts, our neoclouds, sovereigns, and enterprise. We try to give you a sense of the enterprise adoption with the number of customers, which is now over 4,000. We gave, I think, some breadcrumbs, if you will, around the buyer base group. It was a record quarter in enterprise revenue in Q4. We're seeing usage models expand. I take a look at our own company, that example that I would give. 2 years ago, we deployed coding assistants, and it used some GPU capacity. Mid last year, we started deploying agents to write the actual software with basically specifications from our software developers and architects. What we saw was an incredible need for more compute power.

Jeff Clarke: Well, of course, there's a way to parse it. I won't do this on the call, but we absolutely keep track of the health and growth of those three parts, our neoclouds, sovereigns, and enterprise. We try to give you a sense of the enterprise adoption with the number of customers, which is now over 4,000. We gave, I think, some breadcrumbs, if you will, around the buyer base group. It was a record quarter in enterprise revenue in Q4. We're seeing usage models expand. I take a look at our own company, that example that I would give. 2 years ago, we deployed coding assistants, and it used some GPU capacity. Mid last year, we started deploying agents to write the actual software with basically specifications from our software developers and architects. What we saw was an incredible need for more compute power.

Of course, there is a way to parse that I won't do this on the call, but we absolutely keep track of the health and growth of those three parts are Neil clouds sovereigns and enterprise. We tried to give you a sense of the enterprise adoption with the number of customers, which is now over 4000.

We gave I think some bread crumbs, if you will around the buyer base grew.

Was a.

A record quarter in enterprise revenue in Q4.

We're seeing usage models.

Expand.

I take a look at our own company that example that I would give two years ago, we deployed coding assistance and used some GPU capacity.

Mid last year, we started deploying agents to write the actual software.

Basically specifications from our software developers and architects.

And what we saw was an incredible need for more compute power.

[Company Representative] (Dell Technologies): The amount of tokens that is required to do that well is significant, that's just one use case in one company. What we believe is we're seeing that broadly in the leading companies who have deployed AI and seeing their tremendous benefit and potential of this technology, that we're going to see AI and enterprise continue to ramp. We'll continue to give you signals of our customer expansion, the revenue going forward. I'd also just make sure that I'm very clear, the enterprise portion of our five-quarter pipeline grew and actually was the fastest-growing portion of the five-quarter pipeline. I hope that helped put some context around it.

Jeff Clarke: The amount of tokens that is required to do that well is significant, that's just one use case in one company. What we believe is we're seeing that broadly in the leading companies who have deployed AI and seeing their tremendous benefit and potential of this technology, that we're going to see AI and enterprise continue to ramp. We'll continue to give you signals of our customer expansion, the revenue going forward. I'd also just make sure that I'm very clear, the enterprise portion of our five-quarter pipeline grew and actually was the fastest-growing portion of the five-quarter pipeline. I hope that helped put some context around it.

The amount of tokens that is required to do that well is significant and thats just one use case and one company.

And what we believe is we're seeing that broadly in the leading companies who have deployed AI and seeing their tremendous benefit and potential of this technology that we're going to see AI and enterprise continue to ramp.

We will continue to give you signals of our customer expansion. The revenue going forward I'd also just to make sure that I am very clear the enterprise portion of our five quarter pipeline grew and actually was the fastest growing portion of the five quarter pipeline.

I hope that helped put some context around it.

Krish Sankar: Thanks, Jeff.

Thanks, Jeff.

[Company Representative] (Dell Technologies): Thanks, Krish.

Jeff Clarke: Thanks, Krish.

Thanks Krish.

Operator: We'll take our next question with Wamsi Mohan, with Bank of America.

And we'll take our next question with <unk> Mohan with Bank of America.

Wamsi Mohan: Yes, thank you so much. Jeff, maybe you can talk a little bit about what you're seeing from a purchasing behavior standpoint as you're implementing these price increases. It sounds like, you know, you deliberately delayed your CSG price increases to take share. Obviously, indicates that that is elastic in that sense. From a server perspective, you did implement, and you've had some time now to look at sort of what the reaction from customers has been. I'm kind of curious to see if you've either seen material elasticity, both on CSG and ISG side. If you could, like, maybe put some bookmarks around that.

Yes. Thank you so much.

Jeff maybe you can talk a little bit about what youre seeing from a purchasing behavior standpoint, as you're implementing these price increases it sounds like.

Are you deliberately delayed <unk> price increases to take share obviously indicates that that is elastic and that sense from a software perspective, you did implement and you've had some time now to look at sort of what the reaction from customers has been I'm kind of curious to see if you're either seeing material elasticity bolt ons.

ESG in ISG side, if you could maybe put some bookmarks around that and also did you see any pull forward we have behavior given that the expectation is that you.

Wamsi Mohan: Also, did you see any pull forward behavior, given that the expectation is that, you know, you shorten sort of, you know, these windows of quote validity, you're talking about continued sort of price escalation from a component standpoint. Are customers worried about supply, and is that creating any change in terms of pull forward across your portfolio? Quickly, if I could, for David, you... The inventory stepped up a fair amount. I'm just kind of wondering if you could break that down for us a little bit on the composition of those things. Thank you.

Shortened sort of these windows of quote volatility you're talking about continued sort of price escalation from a component standpoint, our customers worried about supply and is that creating any change in terms of pull forward across across your portfolio and quickly if I could for David.

Inventory step up a fair amount of them just kind of wondering if you could break that down for us a little bit on the composition of those things. Thank you.

[Company Representative] (Dell Technologies): How about, David, you take the last one first, because it sounds easier. I have a multifaceted question to answer.

Jeff Clarke: How about, David, you take the last one first, because it sounds easier. I have a multifaceted question to answer.

But David you take the last one first because it sounds easier I have a multifaceted question to answer yes, sure I think look if you look at our cash conversion cycle minus 32 days, that's actually flat quarter on quarter and Thats. The improvement of one day year on year. So if you think building on the expansion of our AI business and shipments that we've done.

[Company Representative] (Dell Technologies): Yeah, sure. I think, look, if you look at our cash conversion cycle, minus 32 days, that's actually flat quarter-over-quarter, and that's the improvement of a day year-over-year. If you think building on the expansion of our AI business and shipments that we've done to maintain our cash conversion cycle in that position shows the diligence that we have from a working capital perspective. We have guided to $13 billion in Q1 of AI shipments. That results in reality in February and March, we're shipping billions of dollars of gear. Obviously we're positioning inventory to do that. It's purely a function of the size and scale and growth we're seeing in the business that we've got.

David Kennedy: Yeah, sure. I think, look, if you look at our cash conversion cycle, minus 32 days, that's actually flat quarter-over-quarter, and that's the improvement of a day year-over-year. If you think building on the expansion of our AI business and shipments that we've done to maintain our cash conversion cycle in that position shows the diligence that we have from a working capital perspective. We have guided to $13 billion in Q1 of AI shipments. That results in reality in February and March, we're shipping billions of dollars of gear. Obviously we're positioning inventory to do that. It's purely a function of the size and scale and growth we're seeing in the business that we've got.

To maintain our cash conversion cycle in that position shows the diligence that we have from a working capital perspective, we.

We have guided to $13 billion in Q1 of AI shipments.

That results in reality in February and March were shipping billions of dollars of gear.

And obviously, we're positioning inventory to do that so it's purely a function of the size and scale and growth we're seeing in the business that we've got.

[Company Representative] (Dell Technologies): Hey, Wamsi, I'm gonna take a run at all the parts to that question. How are customers doing, reacting? I mean, clearly, early on, there was a wide range of emotions as it wasn't completely understood. And there's a dynamic that I think it's important for me to communicate, a different reaction in PCs versus infrastructure. I'm gonna talk initially about infrastructure, then I'll pivot to PCs. In infrastructure, after the sticker shock and our customers began to understand the gravity of the situation, the conversations quickly turned to access to supply. It was not literally a light switch, but it was in pretty quick order after the emotions of price increases. It was, Oh, this is real. As you know, over the course of the quarter, the understanding of this situation became better understood.

Jeff Clarke: Hey, Wamsi, I'm gonna take a run at all the parts to that question. How are customers doing, reacting? I mean, clearly, early on, there was a wide range of emotions as it wasn't completely understood. And there's a dynamic that I think it's important for me to communicate, a different reaction in PCs versus infrastructure. I'm gonna talk initially about infrastructure, then I'll pivot to PCs. In infrastructure, after the sticker shock and our customers began to understand the gravity of the situation, the conversations quickly turned to access to supply. It was not literally a light switch, but it was in pretty quick order after the emotions of price increases. It was, Oh, this is real. As you know, over the course of the quarter, the understanding of this situation became better understood.

<unk> San will take a run at all the parts of that question. So how our customers doing react Jamie clearly early on there was a wide range of emotions.

As it wasn't completely understood and there is a.

Dynamic that I think it's important for me to communicate a different reaction in Pcs versus infrastructure, So I'm going to talk initially about infrastructure.

<unk> and.

In infrastructure after the sticker shock.

Our customers began to understand the gravity of the situation the conversations quickly turned to access to supply.

It was.

Not literally.

A light switch, but it was in pretty quick order after the emotions of price increases. It was Oh. This is real and as you know over the course of the quarter. The understanding of this situation became better understood customers began to see that.

[Company Representative] (Dell Technologies): Customers began to see that, the largest customers in the world, the most sophisticated customers in the world, began to move aggressively to protect their infrastructure build-outs. We saw that over the course of the quarter in AI servers and in traditional servers and in storage. PCs was a little different because you had inflated in-inventory positions in the channel. The cost did not hit that inventory, which is another reason why we stayed in price position for growth. When we began to see it in PCs was in large bits, where they would be fulfilled over the course of the year, course of the first half, and what have you. Customers began to see the reality that this was going to be high, costs were going to go up. Depending on when you wanted product and delivery, there was an associated cost with it.

Jeff Clarke: Customers began to see that, the largest customers in the world, the most sophisticated customers in the world, began to move aggressively to protect their infrastructure build-outs. We saw that over the course of the quarter in AI servers and in traditional servers and in storage. PCs was a little different because you had inflated in-inventory positions in the channel. The cost did not hit that inventory, which is another reason why we stayed in price position for growth. When we began to see it in PCs was in large bits, where they would be fulfilled over the course of the year, course of the first half, and what have you. Customers began to see the reality that this was going to be high, costs were going to go up. Depending on when you wanted product and delivery, there was an associated cost with it.

And large the largest customers in the world. The most sophisticated customers in the world began to move aggressively to protect their infrastructure build outs.

And we saw that over the course of the quarter in AI.

Sir ended traditional servers and in storage.

<unk> was a little different because you had inflated inventory positions in the channel.

So the cost did not hit that inventory, which is another reason why we stayed in price positioned for growth.

And when we began to see at Mpc's was in large bids where they would be fulfilled over the course of the year of course over the first half and what have you.

Customers began to see the reality that this was going to be.

Costs were going to go up.

Depending on when you wanted product and delivery there was an associated costs with it and then when you started having conversations what's it's going to cost me in the first half versus today and you've given answer I don't know its certainly heightens a buyer's awareness.

[Company Representative] (Dell Technologies): When you started having conversations, what's this gonna cost me in the first half versus today? You give an answer, I don't know. It certainly heightens a buyer's awareness and understanding the cost today is likely better than the price it will be tomorrow, the next day, and so on. That clearly has driven some amount of pull-ahead. I don't know how to quantify that. What we do know is IT budgets are generally fixed at the beginning of the year. This pull-in is going to obviously drain those IT budgets to some degree. That's sort of what we put into our guide, our best understanding of that, and why you saw some of the numbers around our PC business and traditional server business. Clearly, technology has to be replaced.

Jeff Clarke: When you started having conversations, what's this gonna cost me in the first half versus today? You give an answer, I don't know. It certainly heightens a buyer's awareness and understanding the cost today is likely better than the price it will be tomorrow, the next day, and so on. That clearly has driven some amount of pull-ahead. I don't know how to quantify that. What we do know is IT budgets are generally fixed at the beginning of the year. This pull-in is going to obviously drain those IT budgets to some degree. That's sort of what we put into our guide, our best understanding of that, and why you saw some of the numbers around our PC business and traditional server business. Clearly, technology has to be replaced.

And understanding the cost today is likely better than the price it will be tomorrow. The next day and so on so that clearly has driven some amount.

A pull ahead I don't know how to quantify that what we do know is it budgets are generally fixed at.

At the beginning of the year.

So this Poland is going to obviously train those budgets to some degree that's sort of what we've put into our guide our best understanding of that.

And why you saw some of the numbers around RPC business and traditional server business, but.

But clearly.

Technology has to be replaced if budgets aren't sufficient this year that just means replacement cycles will be elongated and extended.

[Company Representative] (Dell Technologies): If budgets aren't sufficient this year, that just means replacement cycles will be elongated and extended. I think the result over the next couple of years is we'll see product bought early, but we'll also see the replacement of some technology extend over time. I hope that answered the multi-parted question. Yeah. Thanks, Jeff. Yeah. Thanks, Wamsi. Thanks.

Jeff Clarke: If budgets aren't sufficient this year, that just means replacement cycles will be elongated and extended. I think the result over the next couple of years is we'll see product bought early, but we'll also see the replacement of some technology extend over time. I hope that answered the multi-parted question.

And I think the results over the next couple of years as we will see.

Product bought early but we'll also see the replacement of some technology extend over time.

That answered the multipart question.

Wamsi Mohan: Yeah. Thanks, Jeff.

Yes, Thanks, Jeff.

Jeff Clarke: Yeah. Thanks, Wamsi. Thanks.

Thanks, a lot.

Okay.

Operator: Our next question comes from Samik Chatterjee with J.P. Morgan.

Operator: Our next question comes from Samik Chatterjee with J.PMorgan.

And our next question comes from Selman <unk> with J P. Morgan.

Samik Chatterjee: Hi. Thanks for taking my question, and congrats on the outlook as well. Jeff, maybe, just want to get sort of any more color that you can share on the AI order backlog of $43 billion. How does it break down between Blackwell and Vera Rubin, and what are the implications of when some of that backlog ships, based on the backlog mix? You're now guiding to $50 billion of revenue on that front. How should we think about capacity? You're doubling sort of revenue, but, if to the extent that demand is high, or how should we think about your ability to add capacity over time? Thank you.

Hi, Thanks for taking my question and congrats on the outlook as well, Jeff maybe just wanted to get sort of any more color that you can share on the order backlog of 43 billion, how does it breakdown between Blackwell and Vera Rubin and what are the implications of when some of that backlog ships based on those.

The backlog mix and you're now guiding to $50 billion of revenue on that front, how should we think about capacity youre doubling sort of revenue but.

To the extent of the demand is high or how should we think about your ability to add capacity over time. Thank you.

[Company Representative] (Dell Technologies): On the $43 billion backlog, Samik, it is predominantly, overwhelmingly Grace Blackwell. There is no Vera Rubin in the backlog. There is Vera Rubin in the five-quarter pipeline.

Jeff Clarke: On the $43 billion backlog, Samik, it is predominantly, overwhelmingly Grace Blackwell. There is no Vera Rubin in the backlog. There is Vera Rubin in the five-quarter pipeline.

So on the $43 billion backlog, so Mike it is predominantly <unk>.

Overwhelmingly great platform.

There is no Vera Rubin and the backlog.

There is very Aruba, and the five quarter pipeline.

Samik Chatterjee: Okay.

Okay.

[Company Representative] (Dell Technologies): The largest percentage of our five-quarter pipeline is a combination of Grace Blackwell and Blackwell, where we're seeing a rise in x86 Blackwell in the five-quarter pipeline, driven primarily by enterprise deployment, AI being the number one consideration. The second consideration that's driving that demand in the five-quarter pipeline tends to be around some of the scientific work and some of the, as I mentioned in one of the earlier questions, some of the financial trading models and algorithms, the high-frequency traders, and using some of the x86 air-cooled solutions to meet their AI needs. I think that's sort of the composition of both the backlog and the ability to convert that five-quarter pipeline. That is clearly our job, is to take that five-quarter pipeline and convert the potential into POs. The corresponding next part of that is we'll go find parts to match the POs.

Jeff Clarke: The largest percentage of our five-quarter pipeline is a combination of Grace Blackwell and Blackwell, where we're seeing a rise in x86 Blackwell in the five-quarter pipeline, driven primarily by enterprise deployment, AI being the number one consideration. The second consideration that's driving that demand in the five-quarter pipeline tends to be around some of the scientific work and some of the, as I mentioned in one of the earlier questions, some of the financial trading models and algorithms, the high-frequency traders, and using some of the x86 air-cooled solutions to meet their AI needs. I think that's sort of the composition of both the backlog and the ability to convert that five-quarter pipeline. That is clearly our job, is to take that five-quarter pipeline and convert the potential into POs. The corresponding next part of that is we'll go find parts to match the POs.

Largest percentage of our five quarter pipeline is a combination of Grace Blackwell and Blackwell, where we're seeing a rise in X 86, Blackwell and the five quarter pipeline drill.

Driven primarily by enterprise deployment air being the number one consideration the second consideration, that's driving that demand and the five quarter pipeline tends to be around some of the scientific work.

And some of the as I mentioned, one of the earlier questions some of the.

Financial trading models and algorithms to high frequency traders and using some of the X 86 air cooled solutions to meet their needs.

So I think that's sort of the composition of both the backlog and the ability to.

Convert that five quarter pipeline.

That is clearly our job is to take that five quarter pipeline and convert the potential into <unk>.

Corresponding next part of that is we'll go find parts to match the <unk> the.

[Company Representative] (Dell Technologies): The $50 billion guidance that we gave is the alignment of what we believe at this point in time, four weeks into the fiscal year, of our best understanding of our customers' deployments and build-out of buildings and power and infrastructure, the availability of DRAM and E1.S drives and E3.S drives. Our ability to deliver that yields the $50 billion number that David gave. Leading the operational part of the organization, we're out looking for more parts. Our job is, again, those orders get converted to be able to fulfill our customers' needs and to do that in a timely fashion. That's what we're working on.

Jeff Clarke: The $50 billion guidance that we gave is the alignment of what we believe at this point in time, four weeks into the fiscal year, of our best understanding of our customers' deployments and build-out of buildings and power and infrastructure, the availability of DRAM and E1.S drives and E3.S drives. Our ability to deliver that yields the $50 billion number that David gave. Leading the operational part of the organization, we're out looking for more parts. Our job is, again, those orders get converted to be able to fulfill our customers' needs and to do that in a timely fashion. That's what we're working on.

The $50 billion guidance that we gave is the alignment of what we believe at this point in time four weeks into the fiscal year.

Of our best understanding of our customers deployments and build out of buildings and power and infrastructure the availability of DRAM in <unk> drives in east re drives our ability to deliver that yields the $50 billion number that David gave.

But leading the operational part of the organization where outlook for more parts. Our job is again those orders get converted to be able to fulfill our customers' needs and to do that in the timely fashion. That's what we're working on.

Krish Sankar: Correct. Thank you.

Samik Chatterjee: Correct. Thank you.

Got it thank you.

[Company Representative] (Dell Technologies): Thanks, David.

Jeff Clarke: Thanks, Samik.

Thanks, Chris.

Operator: We'll go to our next question from Aaron Rakers with Wells Fargo.

And we'll go to our next question from Aaron Rakers with Wells Fargo.

Aaron Rakers: Yeah, thanks for taking the question. Also, my congrats on the quarter. I guess one just housekeeping thing. When I look at the, you know, slide deck, and you talk about $9.5 billion of AI shipments, you're now disclosing an AI, you know, revenue number that's a little bit different, right? $8.95 versus $9.5. Can you help me understand what that difference is, number 1? Number 2, on the traditional server side, I'm just curious, Jeff, you know, with all of the pricing stuff going on, it sounds like a very healthy demand backdrop. How do I take the context of mid-single-digit growth and maybe separate that between what that underpins in terms of unit growth versus what I would assume to be a pretty healthy ASP uplift environment through the course of this year?

Yes, thanks for taking the question I'll offer my congrats on the quarter I guess, one just housekeeping thing when I look at the slide deck. When you talk about $9 5 billion of AI shipments.

<unk> now disclosing an AI revenue number that's a little bit different right 895 versus 95.

Can you help me understand what the differences number one and then number two on the traditional server side I'm just curious Jeff.

With all of the pricing stuff going on it sounds like a very healthy demand backdrop, how do I take the context of mid single digit growth and maybe separate that between what that underpins in terms of unit growth versus what I would assume to be a pretty healthy asps.

Uplift environment through the course of this year.

[Company Representative] (Dell Technologies): Yeah. Look, the first piece that I had in relation to shipments versus revenue, normally, in any given quarter, they'll be close to the same number. It's simply in transit. As we ship out $9.5 billion, some of that obviously would have been happening time-wise, right at the end of January. Literally just in transit, it will show up, you know, days later from a P&L perspective. Just normal run the business there in relation to that piece.

Jeff Clarke: Yeah. Look, the first piece that I had in relation to shipments versus revenue, normally, in any given quarter, they'll be close to the same number. It's simply in transit. As we ship out $9.5 billion, some of that obviously would have been happening time-wise, right at the end of January. Literally just in transit, it will show up, you know, days later from a P&L perspective. Just normal run the business there in relation to that piece.

Yes.

The first piece of that in relation to shipments versus revenue normally in any given quarter that would be close to the same number.

It's simply in transit so as we ship out $9 $5 billion. Some of that obviously would have been happening time wise right at the end of January so literally just in trends and it will show up days later from a P&L perspective, so just normal run the business there in relation to that piece.

[Company Representative] (Dell Technologies): On traditional servers, outlook, reconciling, unit growth of the industry, TRU expansion. We clearly saw TRU expansion in Q4. Customers are continuing to migrate towards our 16G and 17G server and buying them with a lot of DRAM and a lot of storage. That's part of the consolidation play, replacing 5 to 1 if it's a 16G, 7 to 1 if it's a 17G. We'll continue to see that behavior of buying servers with more CPU capability, more memory, more storage. Our best estimate in demand for units next year, or I guess the year we're in, sorry, excuse me, in FY27, calendar 2026, is units are clearly down, while TRUs are up.

Jeff Clarke: On traditional servers, outlook, reconciling, unit growth of the industry, TRU expansion. We clearly saw TRU expansion in Q4. Customers are continuing to migrate towards our 16G and 17G server and buying them with a lot of DRAM and a lot of storage. That's part of the consolidation play, replacing 5 to 1 if it's a 16G, 7 to 1 if it's a 17G. We'll continue to see that behavior of buying servers with more CPU capability, more memory, more storage. Our best estimate in demand for units next year, or I guess the year we're in, sorry, excuse me, in FY27, calendar 2026, is units are clearly down, while TRUs are up.

On traditional servers outlook reconciling unit growth of the industry Tru expansion, we clearly saw expansion in Q.

Q4 customers are continuing to migrate towards our 16, and 17, <unk> server and buying them with a lot of DRAM and a lot of storage as part of the consolidation play, replacing five to one if it's a <unk> seven.

<unk> seven to one if it is 17 G and we will continue to see that behavior of buying servers with more CPU capability.

Or memory more storage.

Our best estimate.

Demand for units next year.

I guess that your rent sorry, excuse me in FY 'twenty seven calendar 'twenty six.

As units are clearly down.

While tiara user up.

[Company Representative] (Dell Technologies): To reconcile the difference of that spread of prices increasing, I think what we tried to outlay in our guidance, and David can chime in here, is the uncertainty. We're being prudent in our planning, in our guidance to you. Because of the uncertainty associated with the second half, we try to put that in our best reflection in our guidance. That's how you can reconcile between what we talked about in Q4, that demand was out ahead of supply, double-digit growth, TRU expansion, clearly seeing that into Q1, but as we see go into the second half of the year, we're trying to describe that uncertainty.

Jeff Clarke: To reconcile the difference of that spread of prices increasing, I think what we tried to outlay in our guidance, and David can chime in here, is the uncertainty. We're being prudent in our planning, in our guidance to you. Because of the uncertainty associated with the second half, we try to put that in our best reflection in our guidance. That's how you can reconcile between what we talked about in Q4, that demand was out ahead of supply, double-digit growth, TRU expansion, clearly seeing that into Q1, but as we see go into the second half of the year, we're trying to describe that uncertainty.

To reconcile the difference of that spread of prices increasing.

I think what we tried to outlay in our guidance and David can chime in here is <unk>.

The uncertainty we're being prudent in our planning.

And our guidance to you because of the uncertainty associated with the second half.

We tried to.

Put that in our best reflection in our guidance and that's how you can reconcile between.

Well, we've talked about in Q4 that demand was out ahead of supply double digit growth Tru expansion clearly seeing that in Q1, but as we see go into the second half of the year.

We're trying to describe that uncertainty.

[Company Representative] (Dell Technologies): Again, just to dovetail on that, again, it's linked to the articulations. If we enter the year, we have sufficient supply to support and meet the guide that we've laid out. Obviously, demand is far outstripping supply right now. If that continues, like Jeff operationally said, he'll be out hunting for more parts to try and find that. Right now, I think it's a good guide. We see this trend, double-digit growth for Q1 and then we'll take care of the rest of the year as we go.

Jeff Clarke: Again, just to dovetail on that, again, it's linked to the articulations. If we enter the year, we have sufficient supply to support and meet the guide that we've laid out. Obviously, demand is far outstripping supply right now. If that continues, like Jeff operationally said, he'll be out hunting for more parts to try and find that. Right now, I think it's a good guide. We see this trend, double-digit growth for Q1 and then we'll take care of the rest of the year as we go.Thanks, Aaron.

And again just to dovetail on that again, it's linked to.

The articulation. So if we entered the year, we have sufficient supply to support and meet the guy that we've laid out obviously demand is far outstripping supply right now if that continues.

Jeff operationally set.

And he'll be out hunting for more parts to try and find that.

But right now I think it's a good guy who we see this trend.

Double digit growth for Q1, and then we'll take care of the rest of the year as we go.

[Company Representative] (Dell Technologies): Thanks, Aaron.

Thanks, Darren Thank you.

Aaron Rakers: Thank you.

Operator: We'll take our next question from Asiya Merchant with Citi.

And we will take our next question from <unk> merchant with Citi.

Asiya Merchant: Great. Thank you for squeezing me in here. If I could just, you know, declare if you could provide any incremental color on the attach rate that you're seeing as you're shipping out these AI servers? You know, are you seeing a better attach rate perhaps than what you have, and any other further color on what else we can attach to those AI servers that you're shipping? Thank you.

Great. Thank you for squeezing me in here if I could.

If you could provide any incremental color on the attach rate that you're seeing as you're shipping out. These AI servers are you seeing better attach rate, perhaps than what you have and any other further color on that on what else. We can attach to those AI servers that youre shipping.

[Company Representative] (Dell Technologies): Well, clearly, the attach items for us around an AI server, I think, lie in three distinct groups: storage, and given the enterprise momentum, we're seeing more storage with enterprise customers. Networking, our networking business continues to grow. The third bucket would be around all of the types of services, installation, deployment services, break-fix services, which are proven to be a huge source of differentiation for us in the marketplace. Our ability to deploy and install these very complex customers is unmatched in the marketplace today. Our uptimes are the best in the industry, and then our ability to maintain them with Dell-badged employees on-site, taking care of any challenge, any miscue, again, is a differentiated capability that we have in the marketplace. Those are the three areas that we focus on in attach.

Jeff Clarke: Well, clearly, the attach items for us around an AI server, I think, lie in three distinct groups: storage, and given the enterprise momentum, we're seeing more storage with enterprise customers. Networking, our networking business continues to grow. The third bucket would be around all of the types of services, installation, deployment services, break-fix services, which are proven to be a huge source of differentiation for us in the marketplace. Our ability to deploy and install these very complex customers is unmatched in the marketplace today. Our uptimes are the best in the industry, and then our ability to maintain them with Dell-badged employees on-site, taking care of any challenge, any miscue, again, is a differentiated capability that we have in the marketplace. Those are the three areas that we focus on in attach.

Well clearly the attach items for us around in AI server I think lion.

Three distinct groups storage.

And given the enterprise momentum, we're seeing more storage with enterprise customers networking.

Our networking business continues to grow.

And the third bucket would be around all of the types of services.

Installation and deployment services break fix services, which are which are proven to be a huge source of differentiation for us in the marketplace.

Our ability to deploy and install these very complex customers is unmatched in the marketplace today.

Our up times are the best in the industry.

And then our ability to maintain them with.

Dell Badged employees onsite, taking care of any challenge any miscue again as a differentiated capability that we have in the marketplace. So those are the three areas that we focus on and attach.

[Company Representative] (Dell Technologies): We're seeing continued growth and acceptance of that. We're optimistic that will continue into FY27.

Jeff Clarke: We're seeing continued growth and acceptance of that. We're optimistic that will continue into FY27.

<unk> continued growth and acceptance of that and we're optimistic that will continue into FY 'twenty seven.

[Company Representative] (Dell Technologies): Thanks, Asiya. We'll do one more question before we have Jeff close out.

Paul Frantz: Thanks, Asiya. We'll do one more question before we have Jeff close out.

Thanks Assia.

We'll do one more question before we have Jeff close call.

Operator: We'll now take our final question from David Vogt with UBS.

We will now take our final question from David <unk> with UBS.

David Vogt: Thanks, Paul, for squeezing me in. Jeff, just a quick question on the structural share gains in PCs. Is it sort of the premise here that your ability to dynamically adjust price and steer demand based on your supply chain availability and your expertise relative to maybe some of the smaller competitors, puts you in a position to structurally have a better sort of CSG backdrop in FY27, calendar 2026, and more likely than not in FY28 as we think about where you're positioned? Is that really where you're gonna see share gains? I'm just trying to get a sense for how you're gonna outgrow a market that's gonna be down double digits. I get the pricing umbrella that's gonna happen, but just wanna get a better sense for where that's the gains are gonna come from.

Thanks, Paul for squeezing me and Jeff just a quick question on the structural share gains in Pcs is.

Is it sort of the premise here that your ability to dynamically adjust price in steel demand based on your supply chain availability and your expertise relative to maybe some of the smaller competitors put you in a position to structurally have a better sort of CST backdrop in fiscal 'twenty seven calendar, 'twenty, six and more likely than not.

Fiscal 'twenty and as we think about where your position is that really where youre going to see share gains I'm, just trying to get a sense for how you're going to outgrow the market that's going to be down double digits I get the pricing umbrella that's going to happen, but just wanted to get a better sense around where the gains are going to come from.

[Company Representative] (Dell Technologies): David, I couldn't have said it better myself. If you look at the last industry-wide shortage, Dell excelled and took share across the board, most notably in its PC business. Our long-term supply agreements with our partners, we believe position us to take share in all of our businesses, and in particularly PCs. Which is, again, reinforcing point why we didn't back off on the pricing position and the posture that we had during the quarter. We believe we are entering and changed the trajectory of the business. We had lost share for three years. We exited the year with tremendous momentum. You saw it in the Q4 results, 14% revenue growth. IDC number was 18% unit growth for Q4, calendar Q4 to be specific. That momentum is important to us.

Jeff Clarke: David, I couldn't have said it better myself. If you look at the last industry-wide shortage, Dell excelled and took share across the board, most notably in its PC business. Our long-term supply agreements with our partners, we believe position us to take share in all of our businesses, and in particularly PCs. Which is, again, reinforcing point why we didn't back off on the pricing position and the posture that we had during the quarter. We believe we are entering and changed the trajectory of the business. We had lost share for three years. We exited the year with tremendous momentum. You saw it in the Q4 results, 14% revenue growth. IDC number was 18% unit growth for Q4, calendar Q4 to be specific. That momentum is important to us.

David I couldn't have said it better myself.

If you look at the last industry wide shortage.

Delek cells and took share across the board most notably in its PC business.

Our long term relationships.

<unk> agreements with our partners, we believe position us to take share in all of our businesses.

And in particularly Pcs.

Again, which is again reinforcing why we didn't back off on the pricing position in the posture that we had during the quarter.

We believe we are entering and change the trajectory of the business. We had lost share for three years, we exited the year with tremendous momentum you saw it in the Q4 results, 14% revenue growth IDC number was 18% unit growth for Q4 calendar Q4 to be specific.

That momentum is important to us.

[Company Representative] (Dell Technologies): We grew with customers, and we're gonna continue to focus on driving and winning in that business. We think there is a structural share gain opportunity for us, certainly over the next couple of years as our supply chain team has positioned us quite well. Believe we can do that in servers, and I believe we can do that in storage as well.

Jeff Clarke: We grew with customers, and we're gonna continue to focus on driving and winning in that business. We think there is a structural share gain opportunity for us, certainly over the next couple of years as our supply chain team has positioned us quite well. Believe we can do that in servers, and I believe we can do that in storage as well.

Grew customers and we're going to continue to focus on driving and winning in that business and we think there is a structural share gain opportunity for us.

Over the next couple of years as our supply chain team has positioned us quite well.

I believe we can do that in servers and I believe we can do that in storage as well.

David Vogt: Perfect. I appreciate it. Thanks, guys.

Perfect I appreciate it thanks guys.

Okay.

[Company Representative] (Dell Technologies): Jeff, go right ahead. Sure. We closed FY26, a defining year for the company, with record results and strong execution. We are entering FY27 with clear momentum. We have tremendous AI traction entering the year with $43 billion in AI backlog. The supply environment is tight as we've ever seen. Input costs are moving higher. Our priorities are straightforward. First, secure supply. Next, price to protect our margin rates. You've seen this in ISG. CSG will follow with improvements beginning in Q1 and continuing through the year. In Q4, our gross margin rate came in slightly better than anticipated. Excluding AI mix, we are guiding FY27 gross margin rate up on a year-over-year basis.

Paul Frantz: Jeff, go right ahead.

Hi, Jeff go right ahead sure we closed FY 'twenty six a defining year for the company with record results and strong execution and we are entering FY 'twenty seven with clear momentum.

Jeff Clarke: Sure. We closed FY26, a defining year for the company, with record results and strong execution. We are entering FY27 with clear momentum. We have tremendous AI traction entering the year with $43 billion in AI backlog. The supply environment is tight as we've ever seen. Input costs are moving higher. Our priorities are straightforward. First, secure supply. Next, price to protect our margin rates. You've seen this in ISG. CSG will follow with improvements beginning in Q1 and continuing through the year. In Q4, our gross margin rate came in slightly better than anticipated. Excluding AI mix, we are guiding FY27 gross margin rate up on a year-over-year basis.

We have tremendous AI traction entering the year with $43 million 1 billion.

AI backlog the supply environment as tight as we've ever seen in input cost are moving higher or priorities are straightforward first secure supply.

Next price to protect our margin rates you've seen this in ISG <unk> will follow with improvements beginning in Q1 and continuing through the year in.

In Q4, our gross margin rate came in slightly better than anticipated.

Excluding AI mix, we're guiding FY 'twenty seven gross margin rate up on a year over year basis.

[Company Representative] (Dell Technologies): The operating model we've executed for the past four decades allows us to move fast and adjust as demand evolves with a broad portfolio and several levers at our disposal. Our FY27 guide reflects that, 23% revenue growth at the midpoint and 25% EPS growth, driven by the expansion of our AI business, growth and improving profitability across the rest of the portfolio, meaningful OPEX scaling, and EPS leverage from our share repurchase program. We are positioned for another record year. Thanks for your time today.

Jeff Clarke: The operating model we've executed for the past four decades allows us to move fast and adjust as demand evolves with a broad portfolio and several levers at our disposal. Our FY27 guide reflects that, 23% revenue growth at the midpoint and 25% EPS growth, driven by the expansion of our AI business, growth and improving profitability across the rest of the portfolio, meaningful OPEX scaling, and EPS leverage from our share repurchase program. We are positioned for another record year. Thanks for your time today.

The operating model, we've executed for the past four decades allows us to move fast and adjust as demand involves.

With a broad portfolio and several levers at our disposal.

Our FY 'twenty seven guide reflects at 23% revenue growth at the midpoint and 25% EPS growth driven by the expansion of our AI business growth and improving profitability across the rest of the portfolio meaningful opex scaling and EPS leverage from our share repurchase program.

We're positioned for another record year. Thanks for your time today.

Operator: This concludes today's conference call. We appreciate your participation. You may now disconnect at this time.

This concludes today's conference call. We appreciate your participation you may now disconnect at this time.

Q4 2026 Dell Technologies Inc Earnings Call [BACKUP]

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