Feb 29, 2024

Dell Technologies has reported its FY24 financial results, revealing a revenue of $88.4 billion, an operating income of $7.7 billion, and an EPS of $7.13. Despite a decrease in revenue, the company demonstrated impressive earnings per share and robust cash flow. In Q4, Dell’s revenue reached $22.3 billion, marking an 11% decrease, yet it managed to maintain strong gross margins and reduced operating expenses. The company’s AI-optimized server portfolio, especially the PowerEdge XE9680, experienced high demand, making it the most rapidly adopted solution in Dell’s history.

The quarter ended with Dell holding $9 billion in cash and investments. Its Dell Financial Services origination amounted to $8.4 billion for the year and $2.5 billion in Q4. Since the initiation of its dividend, the company has returned $7 billion to its shareholders and announced a 20% hike in its annual dividend to $1.78 per share.

Looking ahead, Dell anticipates its FY25 revenue to fall between $91 and $95 billion, indicating a 5% growth. It forecasts a return to growth exceeding its long-term framework in FY25, with its Infrastructure Solutions Group (ISG) expected to see mid-teens growth and its Client Solutions Group (CSG) predicted to experience low single-digit growth. However, Dell predicts a drop in gross margin rates by approximately 100 basis points due to the increased mix of AI-optimized servers, inflationary input costs, and the prevailing competitive landscape.

Dell has effectively positioned itself within the AI market and is beginning to reap the benefits of the momentum in this sector. The company has seen robust demand for its AI-optimized server portfolio, particularly the PowerEdge XE9680, which is the fastest adopted solution in Dell’s history. Dell also forecasts more opportunities in AI, especially with wider enterprise adoption and the expected growth in unstructured data. Moreover, Dell has announced its plans to offer the most extensive range of commercial AI PCs in the industry, with its new XPS systems featuring built-in AI acceleration thanks to the addition of the neural processing unit (NPU), which enhances performance, productivity, and collaboration. The company has also reported strong interest and orders for AI-optimized servers equipped with the latest generation of AI GPUs, including the Nvidia H200 and AMD MI300X.