Dell Technologies (DELL) Financials

Dell Technologies’ latest results show a sharp acceleration in revenue and profitability. Q2 fiscal 2027 revenue reached $46.97 billion, up from $29.78 billion in Q2 fiscal 2026 and more than double the $22.93 billion reported in Q2 fiscal 2024. The recent growth trend is also visible sequentially, with revenue rising 7.1% from $43.84 billion in Q1 fiscal 2027.

Profitability has improved alongside sales. Q2 fiscal 2027 gross profit was $9.83 billion, producing a gross margin of approximately 20.9%, compared with about 18.3% a year earlier. Operating income increased to $5.39 billion from $1.77 billion, while net income rose to $4.13 billion from $1.16 billion. Diluted earnings per share increased to $6.34 from $1.70 in Q2 fiscal 2026.

Cash generation remains positive but has become more uneven. Operating cash flow was $2.23 billion in Q2 fiscal 2027, down from $2.54 billion in the comparable quarter and $4.08 billion in Q1 fiscal 2027. The primary pressure came from a $2.78 billion use of cash tied to operating assets and liabilities, reversing the modest working-capital benefit recorded in Q1.

Dell’s balance sheet has expanded substantially as the business has grown. Total assets increased to $127.39 billion in Q2 fiscal 2027 from $89.18 billion in Q2 fiscal 2026, led by higher receivables, inventory and note and lease receivables. However, total liabilities of $128.82 billion exceeded assets, leaving reported common equity negative at $1.43 billion.

• Strong top-line momentum: Q2 fiscal 2027 revenue increased approximately 58% year over year and 7% sequentially, extending the company’s multi-year recovery from the lower revenue levels reported during fiscal 2024 and fiscal 2025.
• Significant margin expansion: Gross margin improved to approximately 20.9% from 18.3% a year earlier, while operating margin rose to roughly 11.5% from 6.0%.
• Rapid earnings growth: Q2 net income increased approximately 255% year over year, and diluted EPS rose to $6.34 from $1.70. EPS has also climbed from $1.37 in Q1 fiscal 2026 to $6.34 in the latest quarter.
• Ongoing capital returns: Dell repurchased $3.80 billion of common stock and paid $405 million in dividends during Q2 fiscal 2027. The reduced share count over time has helped support per-share results.
• Positive operating cash flow: Dell generated $2.23 billion from operations in the latest quarter and has produced positive operating cash flow in every reported quarter provided, despite significant working-capital swings.
• Elevated investment spending: Capital expenditures rose to $1.24 billion in Q2 fiscal 2027, compared with $675 million a year earlier. This may support future growth, but it also reduced free cash flow in the near term.
• Working-capital volatility: Inventory increased to $21.29 billion from $15.05 billion in Q1 fiscal 2027, while accounts receivable remained high at $22.92 billion. These balances may reflect growth-related demand, but they require careful monitoring for cash-conversion risks.
• Negative reported equity: Total equity was negative $1.43 billion in Q2 fiscal 2027, continuing a pattern of negative equity in the recent balance sheets. Large treasury-stock balances from share repurchases are a major contributor, but the figure reduces balance-sheet flexibility.
• Liabilities exceed assets: Total liabilities reached $128.82 billion, slightly above total assets of $127.39 billion. This leaves little book-value cushion for shareholders if asset values decline.
• Higher leverage and supplier obligations: Short- and long-term debt totaled approximately $34.5 billion in Q2 fiscal 2027, up from about $28.7 billion in Q2 fiscal 2026. Accounts payable also rose to $49.72 billion, while financing activity included a $4.39 billion debt issuance, suggesting Dell is using additional external financing as it expands.

Overall, Dell’s income statement is the strongest part of the recent financial picture. Revenue growth, operating leverage and EPS have improved considerably, supporting a constructive earnings outlook. The main risks are the company’s negative equity position, rising financing needs and the possibility that elevated receivables and inventory could constrain cash flow if growth slows.