Dell Technologies (DELL) Q2 2025 earnings summary

Executive summary

• Q2 FY25 revenue reached $25.0 billion, up 9% year-over-year, driven by record ISG performance and strong AI-optimized server demand, while CSG declined 4% due to lower consumer sales.

• Diluted EPS was $1.17, up 86% year-over-year; non-GAAP diluted EPS was $1.89, up 9%.

• Operating income rose 15% to $1.3 billion, with net income up 85% to $841 million, reflecting improved profitability and lower tax expense.

• AI-optimized server orders revenue grew 23% sequentially to $3.2 billion, with a $3.8 billion backlog and a significantly expanding pipeline.

• $1 billion was returned to shareholders via buybacks and dividends in Q2.

Financial highlights

• Q2 FY25 revenue: $25.0 billion (+9% YoY); ISG: $11.6 billion (+38% YoY); CSG: $12.4 billion (–4% YoY).

• Net income: $841 million (+85% YoY); non-GAAP net income: $1.37 billion (+7% YoY); diluted EPS: $1.17 (+86% YoY); non-GAAP EPS: $1.89 (+9% YoY).

• Gross margin: $5.3 billion (21.2% of revenue, down 230 bps YoY); non-GAAP gross margin: $5.5 billion (21.8% of revenue).

• Operating income: $1.3 billion (+15% YoY); non-GAAP operating income: $2.03 billion (+3% YoY).

• Cash flow from operations was $1.3 billion for Q2; adjusted free cash flow was $1.28 billion.

Outlook and guidance

• FY25 revenue expected at $95.5–$98.5 billion (midpoint $97 billion, 10% growth).

• ISG revenue projected to grow ~30%, driven by AI and traditional server momentum; CSG expected to be flat to low single digits.

• FY25 diluted non-GAAP EPS expected at $7.80 ± $0.25, up 9% at midpoint.

• Q3 revenue guidance: $24–$25 billion (midpoint $24.5 billion, up 10%); ISG up low 30s%, CSG flat to low single digits.

• Gross margin rate to decline ~180 bps due to input costs, competition, and AI server mix.