We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Dell Technologies (DELL - Free Report) reported non-GAAP earnings of $1.89 per share in second-quarter fiscal 2025, beating the Zacks Consensus Estimate by 8.62%. The bottom line increased 9% year over year.
Revenues, on a non-GAAP basis, increased 9% year over year to $25 billion and beat the consensus mark by 3.03%. The upside was driven by exceptional performance in AI servers and a return to growth in the commercial PC business.
DELL shares have surged 49% year to date compared with the Zacks Computer & Technology sector’s increase of 20.3%.
Considering impressive second-quarter performance, DELL initiated a strong fiscal 2025 guidance for both revenues and earnings which is expected to boost share price momentum.
Dell Technologies Inc. Price, Consensus and EPS Surprise
Product revenues rose 12% year over year to $18.9 billion, beating the Zacks Consensus Estimate by 6.41%.
Services revenues moved up 1% year over year to $6.07 billion, missing the Zacks Consensus Estimate by 2.97%.
Infrastructure Solutions Group (ISG) revenues increased 38% year over year to $11.6 billion.
The upside can be attributed to servers and networking revenues of 7.6 billion, which grew 80% year over year, with demand strength across AI and traditional servers. However, Storage revenues declined 5% year over year to $3.9 billion.
In the reported quarter, Dell’s AI-optimized server momentum saw an increase of $3.2 billion in orders. The flagship PowerEdge XE9680 experienced strong demand, contributing to the momentum in the AI space.
Dell shipped $3.1 billion worth of AI servers in the second quarter and the AI server backlog remained healthy at $3.8 billion.
Client Solutions Group (CSG) revenues were $12 billion, declining 4% year over year. Commercial Client revenues were flat year over year to $10.5 billion. Consumer revenues fell 22% to $1.85 billion.
DELL’s Operating Details
Dell’s fiscal second-quarter non-GAAP gross profit dropped 1% year over year to $5.46 billion. The gross margin contracted 230 basis points (bps) year over year to 21.8%.
SG&A expenses fell 6.3% year over year to $2.74 billion. Research and development expenses increased 9.1% year over year to $682 million in the reported quarter.
Non-GAAP operating expenses declined 4% year over year to $3.43 billion. Operating expenses, as a percentage of revenues, contracted 180 bps on a year-over-year basis to 13.7%.
The non-GAAP operating income was $2.03 billion, up 3% year over year. The operating margin contracted 50 bps year over year to 8.1%.
The ISG segment’s operating income surged 22% year over year to $1.2 billion. The CSG segment’s operating income was $767 million, down 21% year over year.
DELL’s Balance Sheet Details
As of Aug. 2, 2024, DELL had $4.55 billion in cash and cash equivalents compared with $5.83 billion as of May 3, 2024.
Total Debt was $24.5 billion as of Aug. 2, 2024, compared with $25 billion as of May 3, 2024.
The company generated a cash flow from the operation of $1.3 billion and the adjusted free cash flow was $1.28 billion in second-quarter fiscal 2025.
Dell returned $712 million to its shareholders through share repurchases and paid $316 million in dividends, resulting in a total capital return of $1 billion.
DELL’s Raised Fiscal 2025 Guidance
For the third quarter of fiscal 2025, revenues are expected to be between $24 billion and $25 billion, with a midpoint of $24.5 billion, reflecting 10% growth.
Dell anticipates 14% growth at the midpoint for the combined ISG and CSG, with ISG expected to increase in the low thirties.
Earnings are expected to be 2 cents per share (+/- 10 cents).
For the fiscal 2025, revenues are expected to be between $95.5 billion and $98.5 billion, with a midpoint of $97 billion, reflecting 10% growth.
Dell anticipates 13% growth at the midpoint for the combined ISG and CSG, with ISG expected to increase roughly 30% and CSG to be flat to up low single digits.
Earnings are expected to be $7.80 per share (+/- 25 cents), up 9% at the midpoint.
Zacks Rank & Other Stocks to Consider
Dell Technologies has a Zacks Rank #3 (Hold) at present.
Adobe (ADBE - Free Report) , Daktronics (DAKT - Free Report) and Smartsheet are some better-ranked stocks that investors can consider in the broader sector.
Image: Bigstock
DELL Beats Q2 Earnings Estimates: Will Higher FY25 View Lift Shares?
Dell Technologies (DELL - Free Report) reported non-GAAP earnings of $1.89 per share in second-quarter fiscal 2025, beating the Zacks Consensus Estimate by 8.62%. The bottom line increased 9% year over year.
Revenues, on a non-GAAP basis, increased 9% year over year to $25 billion and beat the consensus mark by 3.03%. The upside was driven by exceptional performance in AI servers and a return to growth in the commercial PC business.
DELL shares have surged 49% year to date compared with the Zacks Computer & Technology sector’s increase of 20.3%.
Considering impressive second-quarter performance, DELL initiated a strong fiscal 2025 guidance for both revenues and earnings which is expected to boost share price momentum.
Dell Technologies Inc. Price, Consensus and EPS Surprise
Dell Technologies Inc. price-consensus-eps-surprise-chart | Dell Technologies Inc. Quote
DELL’s Q2 Top-Line Detail
Product revenues rose 12% year over year to $18.9 billion, beating the Zacks Consensus Estimate by 6.41%.
Services revenues moved up 1% year over year to $6.07 billion, missing the Zacks Consensus Estimate by 2.97%.
Infrastructure Solutions Group (ISG) revenues increased 38% year over year to $11.6 billion.
The upside can be attributed to servers and networking revenues of 7.6 billion, which grew 80% year over year, with demand strength across AI and traditional servers. However, Storage revenues declined 5% year over year to $3.9 billion.
In the reported quarter, Dell’s AI-optimized server momentum saw an increase of $3.2 billion in orders. The flagship PowerEdge XE9680 experienced strong demand, contributing to the momentum in the AI space.
Dell shipped $3.1 billion worth of AI servers in the second quarter and the AI server backlog remained healthy at $3.8 billion.
Client Solutions Group (CSG) revenues were $12 billion, declining 4% year over year. Commercial Client revenues were flat year over year to $10.5 billion. Consumer revenues fell 22% to $1.85 billion.
DELL’s Operating Details
Dell’s fiscal second-quarter non-GAAP gross profit dropped 1% year over year to $5.46 billion. The gross margin contracted 230 basis points (bps) year over year to 21.8%.
SG&A expenses fell 6.3% year over year to $2.74 billion. Research and development expenses increased 9.1% year over year to $682 million in the reported quarter.
Non-GAAP operating expenses declined 4% year over year to $3.43 billion. Operating expenses, as a percentage of revenues, contracted 180 bps on a year-over-year basis to 13.7%.
The non-GAAP operating income was $2.03 billion, up 3% year over year. The operating margin contracted 50 bps year over year to 8.1%.
The ISG segment’s operating income surged 22% year over year to $1.2 billion. The CSG segment’s operating income was $767 million, down 21% year over year.
DELL’s Balance Sheet Details
As of Aug. 2, 2024, DELL had $4.55 billion in cash and cash equivalents compared with $5.83 billion as of May 3, 2024.
Total Debt was $24.5 billion as of Aug. 2, 2024, compared with $25 billion as of May 3, 2024.
The company generated a cash flow from the operation of $1.3 billion and the adjusted free cash flow was $1.28 billion in second-quarter fiscal 2025.
Dell returned $712 million to its shareholders through share repurchases and paid $316 million in dividends, resulting in a total capital return of $1 billion.
DELL’s Raised Fiscal 2025 Guidance
For the third quarter of fiscal 2025, revenues are expected to be between $24 billion and $25 billion, with a midpoint of $24.5 billion, reflecting 10% growth.
Dell anticipates 14% growth at the midpoint for the combined ISG and CSG, with ISG expected to increase in the low thirties.
Earnings are expected to be 2 cents per share (+/- 10 cents).
For the fiscal 2025, revenues are expected to be between $95.5 billion and $98.5 billion, with a midpoint of $97 billion, reflecting 10% growth.
Dell anticipates 13% growth at the midpoint for the combined ISG and CSG, with ISG expected to increase roughly 30% and CSG to be flat to up low single digits.
Earnings are expected to be $7.80 per share (+/- 25 cents), up 9% at the midpoint.
Zacks Rank & Other Stocks to Consider
Dell Technologies has a Zacks Rank #3 (Hold) at present.
Adobe (ADBE - Free Report) , Daktronics (DAKT - Free Report) and Smartsheet are some better-ranked stocks that investors can consider in the broader sector.
Adobe, Daktronics and Smartsheet each carry a Zacks Rank 2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Adobe’s shares have declined 4.5% year to date. ADBE is scheduled to release third-quarter fiscal 2024 results on Sept. 12.
Daktronics shares have gained 72.3% year to date. DAKT is set to report its first-quarter fiscal 2025 results on Sept. 4.
Smartsheet shares have surged 2.2% year to date. SMAR is scheduled to release second-quarter fiscal 2025 results on Sept. 5.