Dell Reports $95 Billion AI Server Backlog

Dell Technologies reported fiscal second-quarter 2027 revenue of $47.0 billion, up 58% year over year. AI server orders reached $60.9 billion during the period, while recognized AI server revenue totaled $16.4 billion. The company ended the quarter with an AI server backlog of $95.0 billion, though it did not disclose a conversion schedule. Its AI customer base surpassed 6,500 across neocloud, sovereign, and enterprise categories.

Infrastructure Solutions Group revenue increased 89% to $31.8 billion, and operating income rose 225% to $4.8 billion. The segment operating income rate improved to 15.0% from 8.8%. Beyond AI systems, traditional servers and networking revenue climbed 122% to $10.5 billion, while storage revenue grew 26% to $4.9 billion.

Dell raised its fiscal 2027 revenue outlook by $25 billion to $192 billion. It also increased its expected AI-optimized server revenue from $60 billion to $74 billion. However, quarterly cash flow from operating activities decreased 13% to $2.225 billion, bringing first-half operating cash flow to $6.306 billion, up 18%.

Free cash flow declined 47% to $986 million after $1.239 billion of capital expenditures and capitalized software costs net of asset-sale proceeds. Adjusted free cash flow reached $8.149 billion, primarily after adding back a $6.667 billion operating cash flow impact from financing receivables and $496 million related to operating lease equipment. Meanwhile, inventories rose to $21.3 billion from $15.1 billion three months earlier, short-term financing receivables grew to $12.8 billion from $8.2 billion, and accounts payable increased to $49.7 billion from $45.3 billion.