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42m ago

Dell Beats on Q2 and Lifts Full-Year Targets as Shares Fall on Soft Q3 EPS Guide

Margin pressure from costly AI builds alongside softer storage tempered the outlook.

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Semiconductor chips are seen on a circuit board of a computer in this illustration picture taken February 25, 2022. REUTERS/Florence Lo/Illustration/File Photo
Dell logo is seen in this illustration taken August 19, 2025. REUTERS/Dado Ruvic/Illustration

Overview

  • Adjusted EPS came in at $2.32 on revenue of $29.78 billion, topping LSEG estimates on both metrics.
  • Dell guided third-quarter EPS to $2.45 versus the $2.55 consensus, while projecting revenue of $26.5 billion to $27.5 billion above expectations.
  • The company raised its full-year outlook to $105 billion–$109 billion in revenue and to $9.55 in adjusted EPS at the midpoint, yet the stock fell over 5% after hours and nearly 6% premarket.
  • Servers and Networking revenue jumped 69% year over year to $12.9 billion as AI systems accelerated, with $10 billion in AI servers shipped over the past two quarters and a plan to ship $20 billion in fiscal 2026.
  • Storage revenue declined 3% to $3.86 billion and adjusted gross margin rate missed forecasts at 18.7% versus 19.6% expected, with Dell citing storage seasonality for profit concentration later in the year and reporting $1.3 billion in buybacks and dividends.