Dell Technologies

EX-99.1 2 exhibit991earnings8kq2fy27.htm EX-99.1 DocumentExhibit 99.1 Dell Technologies Delivers Second Quarter Fiscal 2027 Financial ResultsROUND ROCK, Texas Sept. 1, 2026 Dell Technologies (NYSE DELL) announces financial results for its fiscal 2027 second quarter and provides guidance for its fiscal 2027 third quarter and full year. Second-Quarter Summary Record revenue of $47.0 billion, up 58% year over year Record diluted earnings per share (EPS) of $6.34, up 273% year over year, and record non-GAAP diluted EPS of $7.04, up 203% Cash flow from operations of $2.2 billion Full-year FY27 revenue guidance of $192.0 billion, up 69% year over year Full-year FY27 EPS guidance of $24.37 and non-GAAP EPS guidance of $25.50, up 181% and 148% year over year, respectively IT environments have shifted from cost centers to value drivers that fuel growth and competitive advantage, and customers are investing accordingly creating opportunity across our portfolio, said Jeff Clarke, vice chairman and chief operating officer, Dell Technologies. That s clearest in our AI server business where we booked a record $60.9 billion in orders, recognized a record $16.4 billion in revenue and exited the quarter with a record $95 billion backlog. We re seeing broader revenue growth as well, with traditional servers and networking up 122%, storage up 26% and our client solutions up 20% year over year. Our second quarter results underscore the compounding benefits of our competitive advantages, the breadth of our portfolio and the strength of our operating model. In our second quarter, we delivered record revenue of $47 billion, record EPS and a record $4.3 billion returned to shareholders, said David Kennedy, chief financial officer, Dell Technologies. Our advantages reinforce one another, and throughout the quarter we used these strengths to drive growth, share gains, profitability and cash generation. With AI momentum accelerating and our opportunity expanding across the portfolio, we re raising our full-year FY27 revenue outlook by $25 billion to $192 billion, up nearly 70% year over year. Infrastructure Solutions Group (ISG) Record revenue $31.8 billion, up 89% year over year Record AI-Optimized Servers revenue $16.4 billion, up 100% year over year Record Traditional Servers and Networking revenue $10.5 billion, up 122% year over year Record second-quarter Storage revenue $4.9 billion, up 26% year over year Record operating income $4.8 billion, up 225% year over yearClient Solutions Group (CSG) Revenue $15.0 billion, up 20% year over year Record Commercial Client revenue $13.2 billion, up 22% year over year Consumer revenue $1.8 billion, up 7% year over year1 Operating income $1.1 billion, up 42% year over yearCapital ReturnDell Technologies returned a record $4.3 billion to shareholders in the second quarter through share repurchases and dividends. Additionally, on Sept. 1 the company s board of directors declared a quarterly cash dividend of $0.63 per common share, which will be payable on Oct. 30 to shareholders of record as of Oct. 20.Guidance Summary(in billions, except percentages and per share amounts)Third-Quarter Guidance Q3FY27 (% Y Y) Revenue $ 49.0 81 % GAAP diluted EPS $ 6.10 168 % Non-GAAP diluted EPS $ 6.50 151 % Full-Year Guidance FY27 Previous FY27 Updated (% Y Y) Revenue $ 167.0 $ 192.0 69 % AI-Optimized Servers revenue $ 60.0 $ 74.0 200 % GAAP diluted EPS $ 17.31 $ 24.37 181 % Non-GAAP diluted EPS $ 17.90 $ 25.50 148 % 2Second Quarter Fiscal 2027 Financial Results Three Months Ended Six Months Ended July 31, 2026 August 1, 2025 Change July 31, 2026 August 1, 2025 Change (in millions, except per share amounts and percentages unaudited) Net revenue $ 46,971 $ 29,776 58% $ 90,813 $ 53,154 71% Operating income $ 5,385 $ 1,773 204% $ 9,041 $ 2,938 208% Net income $ 4,133 $ 1,164 255% $ 7,571 $ 2,129 256% Change in cash from operating activities $ 2,225 $ 2,543 (13)% $ 6,306 $ 5,339 18% Earnings per share diluted $ 6.34 $ 1.70 273% $ 11.58 $ 3.07 277% Non-GAAP operating income $ 5,929 $ 2,284 160% $ 10,164 $ 3,950 157% Non-GAAP net income $ 4,591 $ 1,591 189% $ 7,781 $ 2,677 191% Adjusted free cash flow $ 8,149 $ 2,518 224% $ 11,314 $ 4,750 138% Non-GAAP earnings per share diluted $ 7.04 $ 2.32 203% $ 11.90 $ 3.86 208% Information about Dell Technologies non-GAAP financial measures is provided under Non-GAAP Financial Measures below. All comparisons in this press release are year over year unless otherwise noted.Operating Segments Results Three Months Ended Six Months Ended July 31, 2026 August 1, 2025 Change July 31, 2026 August 1, 2025 Change (in millions, except percentages unaudited) Infrastructure Solutions Group (ISG) Net revenue AI-Optimized Servers $ 16,401 $ 8,208 100% $ 32,533 $ 10,090 222% Traditional Servers and Networking 10,531 4,736 122% 19,074 9,175 108% Storage 4,850 3,856 26% 9,184 7,852 17% Total ISG net revenue $ 31,782 $ 16,800 89% $ 60,791 $ 27,117 124% Operating income ISG operating income $ 4,781 $ 1,470 225% $ 7,836 $ 2,468 218% % of ISG net revenue 15.0 % 8.8 % 12.9 % 9.1 % % of total reportable segment operating income 81 % 65 % 77 % 63 % Client Solutions Group (CSG) Net revenue Commercial $ 13,192 $ 10,781 22% $ 26,212 $ 21,827 20% Consumer 1,842 1,722 7% 3,431 3,185 8% Total CSG net revenue $ 15,034 $ 12,503 20% $ 29,643 $ 25,012 19% Operating income CSG operating income $ 1,142 $ 803 42% $ 2,312 $ 1,456 59% % of CSG net revenue 7.6 % 6.4 % 7.8 % 5.8 % % of total reportable segment operating income 19 % 35 % 23 % 37 % 3Conference call informationAs previously announced, the company will hold a conference call to discuss its performance and financial guidance on Sept. 1 at 3 30 p.m. CST. Prior to the start of the conference call, prepared remarks and a presentation containing additional financial and operating information may be downloaded from investors.delltechnologies.com. The conference call will be presented live over the internet and can be accessed at https investors.delltechnologies.com news-events upcoming-events. For those unable to listen to the live presentation, the final remarks and presentation with additional financial and operating information will be available following the presentation, and an archived version will be available at the same location for one year.About Dell TechnologiesDell Technologies (NYSE DELL) helps organizations and individuals build their digital future andtransform how they work, live and play. The company provides customers with the industry s broadestand most innovative technology and services portfolio for the AI era.ContactsInvestors Investor_Relations Dell.comMedia Media.Relations Dell.com # # #Copyright 2026 Dell Inc. or its subsidiaries. All Rights Reserved. Dell Technologies, Dell, EMC and Dell EMC are trademarks of Dell Inc. or its subsidiaries. Other trademarks may be trademarks of their respective owners. Non-GAAP Financial Measures This press release presents information about non-GAAP gross margin, non-GAAP operating expenses, non-GAAP operating income, non-GAAP net income, non-GAAP earnings per share diluted, free cash flow, and adjusted free cash flow, all of which are non-GAAP financial measures provided as a supplement to the results provided in accordance with generally accepted accounting principles in the United States of America ( GAAP ). A reconciliation of each non-GAAP financial measure to the most directly comparable GAAP financial measure is provided in the attached tables for each of the fiscal periods indicated.Special Note on Forward-Looking Statements Statements in this press release that relate to future results and events are forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934 and Section 27A of the Securities Act of 1933 and are based on Dell Technologies current expectations. In some cases, you can identify these statements by such forward-looking words as anticipate, believe, confidence, could, estimate, expect, guidance, intend, may, objective, outlook, plan, project, possible, potential, should, will and would, or similar words or expressions that refer to future events or outcomes.Forward-looking statements include, among others, any statements regarding Dell Technologies expectations for third-quarter and full-year fiscal 2027 revenue, GAAP diluted earnings per share and non-GAAP diluted earnings per share, and for full-year fiscal 2027 AI-optimized servers revenue, as well as any other statements regarding Dell Technologies prospects and its future operations, financial condition, volumes, cash flows, expenses or other financial items, including management s plans or strategies and objectives for any of the foregoing and any assumptions, expectations or beliefs underlying any of the foregoing. Dell Technologies results or events in future periods could differ materially from those expressed or implied by these forward-looking statements because of risks, uncertainties, and other factors that include, but are not limited to, the following adverse global economic conditions competitive pressures Dell Technologies ability to successfully execute its strategy Dell Technologies relationships with third-party suppliers for products and components Dell Technologies use of single-source or limited-source suppliers effects on Dell Technologies operating performance related to demand for AI solutions management of Dell Technologies AI solutions and use of AI in internal functions and operations Dell Technologies ability to deliver high-quality products, software, and services and to manage solutions and products and services transitions in an effective manner Dell Technologies ability to successfully implement its cost efficiency plans security incidents, including cyber-attacks Dell Technologies foreign operations and ability to generate substantial non-U.S. net revenue Dell Technologies product, services, customer, and geographic sales mix, and seasonal sales trends the performance of Dell Technologies sales channel partners Dell Technologies ability to successfully execute on strategic initiatives including acquisitions and divestitures access to the capital markets by Dell Technologies or its customers weak economic conditions, changing customer mix, and the effect of additional regulation on Dell Technologies financial services activities counterparty default risks material impairment of the value of 4goodwill or intangible assets the loss by Dell Technologies of any contracts for ISG services and solutions and its ability to perform such contracts at their estimated costs loss by Dell Technologies of government contracts Dell Technologies ability to develop and protect its proprietary intellectual property or obtain licenses to intellectual property developed by others on commercially reasonable and competitive terms disruptions in Dell Technologies infrastructure Dell Technologies ability to hedge effectively its exposure to fluctuations in foreign currency exchange rates and interest rates adverse legislative or regulatory tax changes, expiration of tax holidays or favorable tax rate structures, or unfavorable outcomes in tax audits and other tax compliance matters declines in fair value or impairment of portfolio investments unfavorable results of legal proceedings evolving and varied expectations and regulatory requirements relating to sustainability issues the effect of global climate change and related legal, regulatory or market measures compliance with environmental and safety laws compliance requirements of anti-corruption laws, economic sanctions and other trade laws, human rights laws, or other laws regulating its international operations Dell Technologies dependence on the services of Michael Dell and key employees Dell Technologies level of indebtedness and business and financial factors and legal restrictions affecting continuation of Dell Technologies quarterly cash dividend policy and dividend rate.This list of risks, uncertainties, and other factors is not complete. Dell Technologies discusses some of these matters more fully, as well as certain risk factors that could affect Dell Technologies business, financial condition, results of operations, and prospects, in its reports filed with the SEC, including Dell Technologies annual report on Form 10-K for the fiscal year ended January 30, 2026, quarterly reports on Form 10-Q, and current reports on Form 8-K. These filings are available for review through the SEC s website at www.sec.gov. Any or all forward-looking statements Dell Technologies makes may turn out to be wrong and can be affected by inaccurate assumptions Dell Technologies might make or by known or unknown risks, uncertainties, and other factors, including those identified in this press release. Accordingly, you should not place undue reliance on the forward-looking statements made in this press release, which speak only as of its date. Dell Technologies does not undertake to update, and expressly disclaims any duty to update, its forward-looking statements, whether as a result of circumstances or events that arise after the date they are made, new information, or otherwise.5DELL TECHNOLOGIES INC.Condensed Consolidated Statements of Income and Related Financial Highlights(in millions, except per share amounts and percentages unaudited) Three Months Ended Six Months Ended July 31, 2026 August 1, 2025 Change July 31, 2026 August 1, 2025 Change Net revenue Products $ 41,112 $ 23,935 72% $ 79,217 $ 41,534 91% Services 5,859 5,841 % 11,596 11,620 % Total net revenue 46,971 29,776 58% 90,813 53,154 71% Cost of net revenue Products 33,990 21,044 62% 66,842 36,160 85% Services 3,151 3,285 (4)% 6,359 6,610 (4)% Total cost of revenue 37,141 24,329 53% 73,201 42,770 71% Gross margin 9,830 5,447 80% 17,612 10,384 70% Operating expenses Selling, general, and administrative 3,336 2,889 15% 6,479 5,853 11% Research and development 1,109 785 41% 2,092 1,593 31% Total operating expenses 4,445 3,674 21% 8,571 7,446 15% Operating income 5,385 1,773 204% 9,041 2,938 208% Interest and other, net (254) (333) 24% 38 (415) 109% Income before income taxes 5,131 1,440 256% 9,079 2,523 260% Income tax expense 998 276 262% 1,508 394 283% Net income $ 4,133 $ 1,164 255% $ 7,571 $ 2,129 256% Earnings per share Basic $ 6.41 $ 1.72 273% $ 11.70 $ 3.11 276% Diluted $ 6.34 $ 1.70 273% $ 11.58 $ 3.07 277% Weighted average shares Basic 645 678 (5)% 647 685 (6)% Diluted 652 686 (5)% 654 694 (6)% Percentage of Total Net Revenue Gross margin 20.9 % 18.3 % 19.4 % 19.5 % Selling, general, and administrative 7.1 % 9.7 % 7.1 % 11.0 % Research and development 2.4 % 2.6 % 2.3 % 3.0 % Operating expenses 9.5 % 12.3 % 9.4 % 14.0 % Operating income 11.5 % 6.0 % 10.0 % 5.5 % Income before income taxes 10.9 % 4.8 % 10.0 % 4.7 % Net income 8.8 % 3.9 % 8.3 % 4.0 % Income tax rate 19.5 % 19.2 % 16.6 % 15.6 % Amounts are based on underlying data and may not visually foot due to rounding.6DELL TECHNOLOGIES INC.Condensed Consolidated Statements of Financial Position(in millions unaudited) July 31, 2026 January 30, 2026 ASSETS Current assets Cash and cash equivalents $ 11,569 $ 11,528 Accounts receivable, net of allowance of $56 and $77 22,918 17,585 Short-term financing receivables, net of allowance of $186 and $121 12,805 8,458 Inventories 21,290 10,437 Other current assets 11,965 9,594 Total current assets 80,547 57,602 Property, plant, and equipment, net 7,417 6,676 Long-term investments 2,679 1,730 Long-term financing receivables, net of allowance of $128 and $92 7,625 5,822 Goodwill 19,448 19,547 Intangible assets, net 4,347 4,533 Other non-current assets 5,330 5,376 Total assets $ 127,393 $ 101,286 LIABILITIES AND SHAREHOLDERS EQUITY Current liabilities Short-term debt $ 8,481 $ 7,990 Accounts payable 49,723 33,630 Accrued and other 10,738 8,315 Short-term deferred revenue 14,761 13,334 Total current liabilities 83,703 63,269 Long-term debt 25,985 23,513 Long-term deferred revenue 14,957 13,596 Other non-current liabilities 4,175 3,378 Total liabilities 128,820 103,756 Shareholders equity (deficit) Common stock and capital in excess of $0.01 par value 9,277 9,457 Treasury stock at cost (20,010) (14,533) Retained earnings 10,065 3,325 Accumulated other comprehensive loss (759) (719) Total shareholders' equity (deficit) (1,427) (2,470) Total liabilities and shareholders' equity $ 127,393 $ 101,286 7DELL TECHNOLOGIES INC.Condensed Consolidated Statements of Cash Flows(in millions unaudited) Three Months Ended Six Months Ended July 31, 2026 August 1, 2025 July 31, 2026 August 1, 2025 Cash flows from operating activities Net income $ 4,133 $ 1,164 $ 7,571 $ 2,129 Adjustments to reconcile net income to net cash provided by operating activities (1,908) 1,379 (1,265) 3,210 Change in cash from operating activities 2,225 2,543 6,306 5,339 Cash flows from investing activities Purchases of investments (211) (28) (335) (125) Maturities and sales of investments 89 28 90 59 Capital expenditures and capitalized software development costs (1,239) (675) (2,202) (1,243) Divestitures of businesses and assets, net 533 Other 24 20 43 33 Change in cash from investing activities (1,337) (655) (2,404) (743) Cash flows from financing activities Repurchases of common stock (3,796) (940) (5,424) (2,920) Repurchases of common stock for employee tax withholdings (18) (5) (555) (357) Payments of dividends and dividend equivalents (405) (366) (869) (762) Proceeds from debt 4,386 962 6,851 7,270 Repayments of debt (1,017) (1,114) (3,805) (3,424) Debt-related costs and other, net (32) (2) (34) (35) Change in cash from financing activities (882) (1,465) (3,836) (228) Effect of exchange rate changes on cash, cash equivalents, and restricted cash (22) 15 (35) 104 Change in cash, cash equivalents, and restricted cash (16) 438 31 4,472 Cash, cash equivalents, and restricted cash at beginning of the period 11,753 7,853 11,706 3,819 Cash, cash equivalents, and restricted cash at end of the period $ 11,737 $ 8,291 $ 11,737 $ 8,291 8DELL TECHNOLOGIES INC.Segment Information(in millions, except percentages unaudited continued on next page) Three Months Ended Six Months Ended July 31, 2026 August 1, 2025 Change July 31, 2026 August 1, 2025 Change Infrastructure Solutions Group (ISG) Net revenue AI-Optimized Servers $ 16,401 $ 8,208 100% $ 32,533 $ 10,090 222% Traditional Servers and Networking 10,531 4,736 122% 19,074 9,175 108% Storage 4,850 3,856 26% 9,184 7,852 17% Total ISG net revenue $ 31,782 $ 16,800 89% $ 60,791 $ 27,117 124% Operating income ISG operating income $ 4,781 $ 1,470 225% $ 7,836 $ 2,468 218% % of ISG net revenue 15.0 % 8.8 % 12.9 % 9.1 % % of total reportable segment operating income 81 % 65 % 77 % 63 % Client Solutions Group (CSG) Net revenue Commercial $ 13,192 $ 10,781 22% $ 26,212 $ 21,827 20% Consumer 1,842 1,722 7% 3,431 3,185 8% Total CSG net revenue $ 15,034 $ 12,503 20% $ 29,643 $ 25,012 19% Operating income CSG operating income $ 1,142 $ 803 42% $ 2,312 $ 1,456 59% % of CSG net revenue 7.6 % 6.4 % 7.8 % 5.8 % % of total reportable segment operating income 19 % 35 % 23 % 37 % Amounts are based on underlying data and may not visually foot due to rounding.9DELL TECHNOLOGIES INC.Segment Information(in millions unaudited continued) Three Months Ended Six Months Ended July 31, 2026 August 1, 2025 July 31, 2026 August 1, 2025 Reconciliation to consolidated net revenue Reportable segment net revenue $ 46,816 $ 29,303 $ 90,434 $ 52,129 Corporate and other (a) 155 473 379 1,025 Total consolidated net revenue $ 46,971 $ 29,776 $ 90,813 $ 53,154 Reconciliation to consolidated operating income Reportable segment operating income (b) $ 5,923 $ 2,273 $ 10,148 $ 3,924 Corporate and other (a) 6 11 16 26 Amortization of intangibles (c) (96) (125) (193) (251) Stock-based compensation expense (d) (184) (179) (373) (369) Other corporate expenses (e) (264) (207) (557) (392) Total consolidated operating income (f) $ 5,385 $ 1,773 $ 9,041 $ 2,938 _________________(a)Corporate and other includes VMware Resale and other items that are managed at the corporate level and are not allocated to reportable segments.(b)Depreciation expense directly attributable to each reportable segment is included in the operating results of each segment. However, the Chief Operating Decision Maker does not evaluate depreciation expense by operating segment, and therefore such expense is not separately presented.(c)Amortization of intangibles includes non-cash purchase accounting adjustments that are primarily related to the EMC merger transaction completed in September 2016.(d)Stock-based compensation expense consists of equity awards granted based on the estimated fair value of those awards at grant date.(e)Other corporate expenses includes severance expenses, payroll taxes associated with stock-based compensation, incentive charges related to equity investments, transaction-related expenses, and impairment charges.(f)Income and expenses within Interest and other, net, is not allocated to the reportable segments. Therefore, the company only reports reportable segment operating income.10SUPPLEMENTAL SELECTED NON-GAAP FINANCIAL MEASURESThese tables present information about the company s non-GAAP gross margin, non-GAAP operating expenses, non-GAAP operating income, non-GAAP net income, non-GAAP earnings per share - diluted, free cash flow and adjusted free cash flow, all of which are non-GAAP financial measures provided as a supplement to the results provided in accordance with generally accepted accounting principles in the United States of America ( GAAP ). A detailed discussion of Dell Technologies reasons for including certain of these non-GAAP financial measures, the limitations associated with these measures, the items excluded from these measures, and the company s reason for excluding those items are presented in Management s Discussion and Analysis of Financial Condition and Results of Operations Non-GAAP Financial Measures in the company s periodic reports filed with the SEC. Dell Technologies encourages investors to review the non-GAAP discussion in these reports in conjunction with the presentation of non-GAAP financial measures.11DELL TECHNOLOGIES INC.Selected Financial Measures(in millions, except per share amounts and percentages unaudited) Three Months Ended Six Months Ended July 31, 2026 August 1, 2025 Change July 31, 2026 August 1, 2025 Change Net revenue $ 46,971 $ 29,776 58% $ 90,813 $ 53,154 71% Non-GAAP gross margin $ 9,929 $ 5,572 78% $ 17,876 $ 10,629 68% % of net revenue 21.1 % 18.7 % 19.7 % 20.0 % Non-GAAP operating expenses $ 4,000 $ 3,288 22% $ 7,712 $ 6,679 15% % of net revenue 8.5 % 11.0 % 8.5 % 12.6 % Non-GAAP operating income $ 5,929 $ 2,284 160% $ 10,164 $ 3,950 157% % of net revenue 12.6 % 7.7 % 11.2 % 7.4 % Non-GAAP net income $ 4,591 $ 1,591 189% $ 7,781 $ 2,677 191% % of net revenue 9.8 % 5.3 % 8.6 % 5.0 % Non-GAAP earnings per share diluted $ 7.04 $ 2.32 203% $ 11.90 $ 3.86 208% Amounts are based on underlying data and may not visually foot due to rounding.12DELL TECHNOLOGIES INC.Reconciliation of Selected Non-GAAP Financial Measures(in millions, except percentages unaudited continued on next page) Three Months Ended Six Months Ended July 31, 2026 August 1, 2025 Change July 31, 2026 August 1, 2025 Change Gross margin $ 9,830 $ 5,447 80% $ 17,612 $ 10,384 70% Non-GAAP adjustments Amortization of intangibles 31 39 57 80 Stock-based compensation expense 43 37 87 76 Other corporate expenses 25 49 120 89 Non-GAAP gross margin $ 9,929 $ 5,572 78% $ 17,876 $ 10,629 68% Operating expenses $ 4,445 $ 3,674 21% $ 8,571 $ 7,446 15% Non-GAAP adjustments Amortization of intangibles (65) (86) (136) (171) Stock-based compensation expense (141) (142) (286) (293) Other corporate expenses (239) (158) (437) (303) Non-GAAP operating expenses $ 4,000 $ 3,288 22% $ 7,712 $ 6,679 15% Operating income $ 5,385 $ 1,773 204% $ 9,041 $ 2,938 208% Non-GAAP adjustments Amortization of intangibles 96 125 193 251 Stock-based compensation expense 184 179 373 369 Other corporate expenses 264 207 557 392 Non-GAAP operating income $ 5,929 $ 2,284 160% $ 10,164 $ 3,950 157% Net income $ 4,133 $ 1,164 255% $ 7,571 $ 2,129 256% Non-GAAP adjustments Amortization of intangibles 96 125 193 251 Stock-based compensation expense 184 179 373 369 Other corporate expenses 260 200 548 142 Fair value adjustments on equity investments (73) (4) (704) (21) Aggregate adjustment for income taxes (a) (9) (73) (200) (193) Non-GAAP net income $ 4,591 $ 1,591 189% $ 7,781 $ 2,677 191% ____________________(a)The company s non-GAAP income tax is calculated using a fixed estimated annual tax rate.13DELL TECHNOLOGIES INC.Reconciliation of Selected Non-GAAP Financial Measures(unaudited continued) Three Months Ended Six Months Ended July 31, 2026 August 1, 2025 Change July 31, 2026 August 1, 2025 Change Earnings per share diluted $ 6.34 $ 1.70 273 % $ 11.58 $ 3.07 277 % Non-GAAP adjustments Amortization of intangibles 0.15 0.19 0.29 0.36 Stock-based compensation expense 0.28 0.26 0.57 0.53 Other corporate expenses 0.39 0.29 0.84 0.21 Fair value adjustments on equity investments (0.11) (0.01) (1.08) (0.03) Aggregate adjustment for income taxes (a) (0.01) (0.11) (0.30) (0.28) Non-GAAP earnings per share diluted $ 7.04 $ 2.32 203 % $ 11.90 $ 3.86 208 % ____________________(a)The company s non-GAAP income tax is calculated using a fixed estimated annual tax rate.14DELL TECHNOLOGIES INC.Reconciliation of Selected Non-GAAP Financial Measures(in millions, except percentages unaudited continued) Three Months Ended Six Months Ended July 31, 2026 August 1, 2025 Change July 31, 2026 August 1, 2025 Change Cash flow from operations $ 2,225 $ 2,543 (13) % $ 6,306 $ 5,339 18 % Non-GAAP adjustments Capital expenditures and capitalized software development costs, net (a) (1,239) (675) (2,202) (1,243) Free cash flow $ 986 $ 1,868 (47) % $ 4,104 $ 4,096 % Free cash flow $ 986 $ 1,868 (47) % $ 4,104 $ 4,096 % Non-GAAP adjustments Financing receivables (b) 6,667 592 6,404 569 Equipment under operating leases (c) 496 58 806 85 Adjusted free cash flow $ 8,149 $ 2,518 224 % $ 11,314 $ 4,750 138 % ____________________(a)Capital expenditures and capitalized software development costs, net includes proceeds from sales of facilities, land, and other assets.(b)Financing receivables represent the operating cash flow impact from the change in financing receivables.(c)Equipment under operating leases represents the net impact of capital expenditures and depreciation expense for leases and contractually embedded leases identified within flexible consumption arrangements.15DELL TECHNOLOGIES INC.Reconciliation of Non-GAAP Financial Measures in Summary Guidance(unaudited) Three Months Ending Fiscal Year Ending October 30, 2026 January 29, 2027 Previous Updated Earnings per share diluted $ 6.10 $ 17.31 $ 24.37 Non-GAAP adjustments Amortization of intangibles (a) 0.15 0.59 0.60 Stock-based compensation 0.29 1.16 1.16 Other corporate expenses (b) 0.45 0.84 Fair value adjustments on equity investments (c) (0.97) (1.08) Aggregate adjustment for income taxes (d) (0.04) (0.64) (0.39) Non-GAAP earnings per share diluted $ 6.50 $ 17.90 $ 25.50 ____________________(a)Amortization of intangibles represents an estimate for acquisitions completed as of July 31, 2026 and does not include estimates for potential acquisitions, if any, during fiscal 2027.(b)Consists primarily of severance expenses, payroll taxes associated with stock-based compensation, transaction-related expenses, impairment charges, and incentive charges related to equity investments. No estimate is included for severance expense as such expense cannot be reasonably estimated at this time.(c)No estimates are included for potential fair value adjustments on strategic investments given the potential volatility of either gains or losses on those equity investments.(d)The fiscal 2027 aggregate adjustment to reconcile non-GAAP income tax expense to GAAP income tax expense is approximately $0.3 billion. The aggregate adjustment for income taxes is the estimated combined income tax effect for the adjustments shown above as well as an adjustment for discrete tax items. The company s non-GAAP income tax is calculated using a fixed estimated annual tax rate.16