A maker of computers and data-center gear, Dell Technologies builds PCs, laptops, workstations, servers, storage, and networking equipment for homes, businesses, and the AI era. It was founded in 1984 when 19-year-old Michael Dell started assembling and selling IBM-compatible PCs from his University of Texas dorm room, originally under the name PC's Limited before taking his own surname. In 2016 the company merged with storage giant EMC in what was then the largest tech acquisition ever, creating today's Dell Technologies.
Q1 FY2027 revenue rose 87.5% to $43.8B on a 757% increase in AI-optimized server sales
AI-optimized server sales drove a 757% increase, reshaping the quarter. rose 87.5% to $43.8B and rose 282.5% to $5.24 as ISG revenue climbed 181% to $29.0B, while fell 3.4 points to 17.8% from the lower-margin mix. The company is scaling AI infrastructure fast, with margin pressure now the defining trade-off.
Key takeaways
Consolidated net grew 87.5% to $43.8B, led by a 181% increase in revenue to $29.0B, with up 757% to $16.1B.
percentage declined 330 to 17.8%, pressured by the mix shift toward lower-margin even as total gross margin dollars grew 58%.
increased 213.8% to $3.7B as a 660-basis-point decline in the from growth more than offset the rate decline.
Section summaries
Management's Discussion and Analysis
Total net revenue surged 88% to $43.8B, driven by a 757% jump in AI-optimized server sales, while operating income rose 214% to $3.7B.
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Consolidated net grew 88% to $43.8B, led by a 181% increase in ISG revenue to $29.0B, with up 757% to $16.1B.
net rose 17% to $14.6B, driven by an 18% increase in commercial offerings from higher average selling prices and unit volumes.
was $4.1B and the company returned $2.1B to shareholders via $1.6B in and $0.5B in dividends.
Management expects continued ISG and CSG full-year growth with persistent component cost inflation and margin rate pressure from the AI server mix shift.
What changed
FY2026 10-K flagged watching FY2027 against 20.0% as AI-server mix and component inflation pressure continue; Q1 gross margin fell to 17.8%, down 3.4 points .
FY2026 10-K flagged whether ISG's 40% growth moderates as AI-server demand scales; Q1 ISG rose 181% to $29.0B, up from 40% for the full year and 12% in Q1 FY2026.
FY2026 10-K flagged recovery of quarterly after Q3 FY2026 fell to $0.5B; Q1 was $4.1B, up from $0.5B in that quarter and $2.8B in Q1 FY2026.
FY2026 10-K flagged CSG commercial and consumer trend after 8% commercial rise and 8% consumer decline; Q1 CSG commercial rose 18% while consumer was not separately stated as declining.
Q3 FY2026 flagged Q4 recovery; Q1 FY2027 of $4.1B and free cash flow of $3.1B show the working-capital build normalizing from the $0.5B Q3 low.
What to watch
Q2 FY2027 ISG growth rate to see if the 181% increase holds or moderates as AI-optimized server mix scales.
trajectory against 17.8% as component cost inflation and AI-server mix pressure persist.
CSG commercial average selling prices and unit volumes after the 18% commercial rise in Q1.
of $3.1B sustainability as AI-server and normalize.
CSG net rose 17% to $14.6B, driven by an 18% increase in commercial offerings due to higher average selling prices and unit volumes.
percentage declined 330 to 17.8%, pressured by a mix shift toward lower-margin , despite total gross margin dollars growing 58%.
increased 214% to $3.7B, as a 660-basis-point decline in the from growth more than offset the rate decline.
was $4.1B, and the company returned $2.1B to shareholders via $1.6B in share repurchases and $0.5B in dividends.
Management expects significant ISG and strong CSG full-year growth, with persistent component cost inflation and margin rate pressure from the AI server mix shift.
Quantitative and Qualitative Disclosures About Market Risk
For quantitative and qualitative disclosures about market risk affecting us, see “Part II — Item 7A — Quantitative and Qualitative Disclosures About Market Risk” in our Annual Report on Form 10-K for the fiscal year ended January 30, 2026. Our exposure to market risks has not ch…
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For quantitative and qualitative disclosures about market risk affecting us, see “Part II — Item 7A — Quantitative and Qualitative Disclosures About Market Risk” in our Annual Report on Form 10-K for the fiscal year ended January 30, 2026. Our exposure to market risks has not changed materially from that set forth in such Annual Report on Form 10-K.
The information required by this item is incorporated herein by reference to the information set forth under the caption “Legal Matters” in Note 10 of the Notes to the Condensed Consolidated Financial Statements included in Part I of this report.
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The information required by this item is incorporated herein by reference to the information set forth under the caption “Legal Matters” in Note 10 of the Notes to the Condensed Consolidated Financial Statements included in Part I of this report.
In addition to the risks and uncertainties set forth in this report, the risks discussed in “Part I — Item 1A — Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended January 30, 2026 could materially affect our business, operating results, financial condition…
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In addition to the risks and uncertainties set forth in this report, the risks discussed in “Part I — Item 1A — Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended January 30, 2026 could materially affect our business, operating results, financial condition, or prospects. The risks described in such Annual Report on Form 10-K and our subsequent SEC reports are not the only risks facing us. There are additional risks and uncertainties not currently known to us or that we currently deem to be immaterial that also may materially adversely affect our business, operating results, financial condition, or prospects.