Surging demand for AI-optimized servers pushed Dell $DELL Technologies to record first-quarter revenue of $43.84 billion — an 88% jump from a year earlier — marking a pace of expansion the company has not seen since going public.
Against LSEG consensus estimates of $2.94 per share and $35.43 billion in revenue, Dell delivered adjusted EPS of $4.86, according to CNBC. Shares surged nearly 39% in after-hours trading following the report.
The Infrastructure Solutions Group, Dell's division covering servers and data center equipment, generated $29 billion in revenue, a 181% increase. AI server revenue within that segment reached $16.1 billion, the company said, reflecting a 757% year-over-year gain. Dell also booked $24.4 billion in AI orders during the quarter.
Sales at Dell's Client Solutions Group, covering both consumer and commercial PC lines, climbed 17% to reach $14.6 billion, the company said.
On a net basis, Dell earned $3.44 billion, or $5.24 per diluted share, compared with $965 million, or $1.37 per share, in the same quarter a year ago — more than a threefold increase. Cash flow from operations reached $4.1 billion, and Dell returned $2.1 billion to shareholders through dividends and share repurchases during the quarter.
Looking ahead to the full fiscal year, Dell lifted its AI server revenue target to approximately $60 billion — a figure that would amount to 144% growth year over year — after previously projecting $50 billion, the company said. Annual revenue guidance was revised upward to a range of $165 billion to $169 billion from an earlier outlook of $138 billion to $142 billion, according to The Wall Street Journal, while adjusted EPS expectations for the year rose sharply to $17.90 from a prior target of $12.90.
Second-quarter guidance calls for revenue in the $44 billion to $45 billion range and adjusted EPS of $4.80 — well above the $34.97 billion in revenue and $2.98 per share that LSEG-surveyed analysts had projected, according to CNBC.
Broad price increases across Dell's lineup were described by COO Jeff Clarke as a response to surging costs for memory, processors, and other inputs. "We're repricing, it feels like, every day, and I'm sure our customers feel that pain," Clarke said on a conference call with analysts, according to Reuters.
The company's AI server customer base has grown to more than 5,000, spanning cloud providers, sovereign governments, and large enterprises, Dell said. The company's Infrastructure Solutions Group operating income rose 206% to $3.1 billion for the quarter.