Dell Technologies Inc. reported record revenue of $27.0 billion for fiscal 2026’s third quarter, a 11% year‑over‑year increase from $24.4 billion in Q3 FY2025. The company’s non‑GAAP diluted earnings per share rose to $2.59, beating the consensus estimate of $2.48 by $0.11. While the revenue figure was a record for the company, it fell short of the $27.27 billion consensus estimate, marking a slight miss of $0.27 billion.
Revenue growth was driven primarily by the Infrastructure Solutions Group (ISG), which generated $14.1 billion—up 24% YoY—thanks to a 37% jump in Servers and Networking revenue. The Client Solutions Group (CSG) added $12.5 billion, a modest 3% increase, with commercial client revenue up 5% and consumer revenue down 7%. The mix shift toward higher‑margin AI‑optimized servers helped offset a 18% rise in cost of revenues, which compressed the gross margin to 20.7% from 20.9% in the prior year.
The EPS beat was largely a result of disciplined cost management and a favorable product mix. The company’s focus on AI‑optimized servers, which carry higher margins, helped maintain profitability even as overall cost of revenues climbed. Operating expenses were kept in line with revenue growth, and the company’s share‑repurchase program contributed to the strong earnings figure. The slight revenue miss, however, reflects the narrow gap between actual sales and analyst expectations, indicating that while demand remains robust, there is still some pressure on top‑line growth.
Dell raised its full‑year revenue guidance to a range of $111.2 billion to $112.2 billion, up from the previous $107 billion range, and lifted its adjusted non‑GAAP EPS outlook to $9.92 for FY2026, reflecting confidence in continued AI server demand. Management highlighted a record $25 billion in AI shipments for the year and a backlog that is multiple times the current orders, underscoring the company’s strong position in the AI infrastructure market.
Chief Financial Officer David Kennedy noted that the quarter delivered “record Q3 revenue and profitability, strong cash generation, and a $1.6 billion capital return.” Vice Chairman and COO Jeff Clarke emphasized that AI momentum is accelerating, citing record AI server orders of $12.3 billion and a $30 billion year‑to‑date order book. Market reaction was mixed: after‑hours trading saw a modest uptick, while regular and aftermarket sessions reflected investor caution over the revenue miss.
The company’s performance signals a solid trajectory in AI infrastructure, but the revenue miss and margin compression highlight ongoing headwinds such as competitive pricing pressure and supply‑chain cost increases. Nonetheless, the raised guidance and robust backlog suggest that Dell remains well‑positioned to capitalize on the growing demand for AI‑optimized data‑center solutions, while maintaining a disciplined approach to cost and capital allocation.
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