DELL Q3 Earnings Beat Estimates, Revenues Rise Y/Y, Shares Up

Dell Technologies DELL reported non-GAAP earnings of $2.59 per share in the third quarter of fiscal 2026, beating the Zacks Consensus Estimate by 4.44%. The bottom line increased 17% year over year.Revenues increased 11% year over year to $27.01 billion, but missed the consensus mark by 0.98%. The year-over-year rise was primarily driven by record AI server shipments.After the results were announced, shares of DELL gained 4.53% in pre-market trading.DELL’s Q3 Top-Line DetailsProduct revenues rose 16% year over year to $21.2 billion, missing the Zacks Consensus Estimate by 0.16%. Dell Technologies Inc. Price, Consensus and EPS Surprise Dell Technologies Inc. price-consensus-eps-surprise-chart | Dell Technologies Inc. QuoteServices revenues declined 5% year over year to $5.75 billion, beating the Zacks Consensus Estimate by 3.95%.Infrastructure Solutions Group (ISG) revenues increased 24% year over year to $14.10 billion.The upside can be attributed to servers and networking revenues of $10.12 billion, which grew 37% year over year, driven by demand strength across both AI and traditional servers. Storage revenues decreased 1% year over year to $3.98 billion.In the reported quarter, Dell Technologies’ AI-optimized server momentum saw an increase of $12.3 billion in orders and $30 billion of orders year to date.Dell Technologies shipped $5.6 billion worth of AI servers in the fiscal third quarter, and the AI server backlog remained healthy at $18.4 billion.CSG revenues were $12.47 billion, representing a 3% year-over-year increase. Commercial Client revenues increased 5% year over year to $10.62 billion, while Consumer revenues fell 7% to $1.85 billion.DELL’s Operating DetailsThe company’s fiscal third-quarter non-GAAP gross profit increased 4% year over year to $5.68 billion. The gross margin contracted 140 basis points (bps) year over year to 21.1%.SG&A expenses fell 6% year over year to $2.72 billion. Research and development expenses increased 1% year over year to $752 million in the reported quarter.Non-GAAP operating expenses declined 2% year over year to $3.18 billion. Operating expenses, as a percentage of revenues, contracted 150 bps on a year-over-year basis to 11.8%.The non-GAAP operating income was $2.50 million, up 11% year over year. The operating margin expanded 10 bps year over year to 9.3%.The ISG segment’s operating income jumped 16% year over year to $1.74 billion. The CSG segment’s operating income was $748 million, which was flat year over year.DELL’s Balance Sheet & Cash Flow DetailsAs of Oct. 31, 2025, DELL had $9.56 billion in cash and cash equivalents compared with $8.14 billion as of Aug. 1, 2025.Total debt was $31.24 billion as of Oct. 31, 2025, compared with $28.68 billion as of Aug. 1, 2025.The company generated cash flow from operations of $1.2 billion. The adjusted free cash flow was $1.67 billion in the third quarter of fiscal 2026.In the third quarter of fiscal 2026, Dell Technologies returned $1.6 billion of capital to its shareholders.DELL’s Q4 & FY26 GuidanceFor the fourth quarter of fiscal 2026, revenues are expected to be between $31 billion and $32 billion, with the mid-point of $31.5 billion suggesting 32% year-over-year growth.Dell Technologies anticipates 34% growth at the midpoint for the combined ISG and CSG, with ISG growing in the mid-sixties and CSG growing in the low to mid-single digits.Non-GAAP earnings are expected to be $3.50 per share (+/- 10 cents) at the midpoint, indicating 31% growth year over year.For fiscal 2026, revenues are expected to be between $111.2 billion and $112.2 billion, with the mid-point of $111.7 billion indicating 17% year-over-year growth.Full-year AI server shipments expected to be roughly $25 billion, up more than 150%.Dell Technologies anticipates 20% growth at the mid-point for ISG and CSG combined, with ISG expected to increase in the mid-to-high thirties, with CSG likely to grow in the low to mid-single digits. Non-GAAP earnings are expected to be $9.92 per share (+/- 10 cents) at the midpoint, up 22% year over year.Zacks Rank & Stocks to ConsiderDell Technologies has a Zacks Rank #3 (Hold) at present.Advanced Energy Industries AEIS, Allot ALLT, and Amphenol APH are some better-ranked stocks that investors can consider in the broader Zacks Computer & Technology sector. Each stock sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.Advanced Energy Industries shares have increased 78.1% year to date. The Zacks Consensus Estimate for Advanced Energy Industries' 2025 earnings is pegged at $6.13 per share, up by 7.92% over the past 30 days, implying growth of 65.23% from the year-ago quarter’s reported figure.Allot shares have gained 62.2% year to date. The Zacks Consensus Estimate for Allot 2025 earnings is pegged at 14 cents per share, unchanged over the past 30 days, indicating year-over-year growth of 250%.Amphenol shares have gained 98.5% year to date. The Zacks Consensus Estimate for Amphenol’s 2025 earnings has increased 2.17% to $3.29 per share in the past 30 days, indicating year-over-year growth of 74.07%.Free Report: Profiting from the 2nd Wave of AI ExplosionThe next phase of the AI explosion is poised to create significant wealth for investors, especially those who get in early. It will add literally trillion of dollars to the economy and revolutionize nearly every part of our lives.Investors who bought shares like Nvidia at the right time have had a shot at huge gains.But the rocket ride in the "first wave" of AI stocks may soon come to an end. The sharp upward trajectory of these stocks will begin to level off, leaving exponential growth to a new wave of cutting-edge companies.Zacks' AI Boom 2.0: The Second Wave report reveals 4 under-the-radar companies that may soon be shining stars of AI’s next leap forward.Access AI Boom 2.0 now, absolutely free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Dell Technologies Inc. (DELL): Free Stock Analysis Report Amphenol Corporation (APH): Free Stock Analysis Report Advanced Energy Industries, Inc. (AEIS): Free Stock Analysis Report Allot Ltd. (ALLT): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks