About the Company

Dell Technologies is a renowned technology and services company, known for its innovative solutions in computer hardware and software. The company was formed by the merger of Dell Inc. and EMC Corporation It is particularly prominent in the areas of artificial intelligence-optimized servers and infrastructure solutions, with a constant focus on technological advancement and improving the performance of its products and services. In addition, it specializes in providing solutions in storage systems and cloud technologies. It has undergone significant growth and transformation in recent years, constantly innovating and responding to dynamic market demands.

Economic results have exceeded expectations

Recently released results for the second quarter of the 2025 financial year (period from 4 May to 2 August 2024) show solid growth and beat LSEG (London Stock Exchange) expectations. Total revenue reached USD 25 billion with a 9% year-on-year increase, beating expectations which were at USD 24.53 billion. This figure was underpinned by a strong performance in the Infrastructure Solutions Group (ISG) division, which achieved record revenues of US$11.6 billion. Revenue from server and networking solutions grew 80% to $7.7 billion from the comparable period last year, driven primarily by growing demand for AI-optimised servers. These contributed $3.2 billion in the past quarter. Net income grew 85% year-over-year to $841 million, with adjusted earnings per share of $1.89, ahead of expectations of $1.71. [1]*

The future looks promising, but not smooth

On the back of such strong results, Dell raised revenue forecasts for the full fiscal year 2025, largely due to steadily growing demand for AI-optimized servers using NVIDIA chips. It now expects annual revenue in the range of $95.5 billion to $98.5 billion, with adjusted earnings per share of $7.80. [2] [1] The company's stock market value is up more than 50% since the beginning of the year. However, it is currently facing challenges such as $328 million in employee layoff costs or debt, which as of August 2024 was approximately $24.5 billion. [3]* At the same time, it is focused on returning value to shareholders through share buybacks and dividend payments, for which it spent $1 billion in the most recent quarter. Although the company raised its revenue outlook for 2025, its declining PC sales and lower cash flow may be indicators of potential problems in the coming quarters. [4]

Dell Technologies share price evolution over the last 5 years. (Source: Google Finance)*

Continued efforts to sell SecureWorks

In order to reduce its debt, Dell has been trying to sell its cybersecurity business SecureWorks for some time. In 2011, it acquired a majority stake in the company in a deal that was worth $612 million at the time. The current total value of SecureWorks is approximately USD 800 million. Dell owns 79.2% of all Class B shares and has majority voting rights. SecureWorks has faced challenges for several years, given the high competition in the cybersecurity industry. . It plans to release its second-quarter earnings results on September 5. According to Reuters, Dell has been exploring options to sell the company as early as 2019 and, according to the latest reports, they are still ongoing.

Conclusion

Dell Technologies demonstrated a strong performance in the most recent quarter, highlighted by record revenue growth in AI-optimized servers, and as a result raised its forecasts for the full fiscal year 2025. If it manages to sell its stake in SecureWorks, this could help improve its financial stability. The results show that Dell is able to adapt to a dynamic and constantly evolving technology market. [1]  However, some indicators point to possible future problems and therefore a warning finger should be raised. [2]

Adam Austera, Principal Analyst at Ozios

* Past performance is no guarantee of future results

[1], [2] Forward-looking statements are based on assumptions and current expectations, which may be inaccurate, or on the current economic environment, which may change. Such statements are not guarantees of future performance. They involve risks and other uncertainties that are difficult to predict. Results may differ materially from those expressed or implied by any forward-looking statements.

[1] https://www.investing.com/news/stock-market-news/exclusivedell-attempts-to-sell-cybersecurity-firm-secureworks-again-sources-say-3594023

[1] https://www.cnbc.com/2024/08/29/dell-earnings-report-q2-2025.html

[2] https://www.investing.com/news/economy-news/dell-beats-secondquarter-revenue-estimates-on-strong-ai-server-demand-3594105

[3] https://finbox.com/NYSE:DELL/explorer/total_debt/

[4] https://investors.delltechnologies.com/static-files/0359ca58-7732-4b34-b738-c2434c1f3f5e