Dell (DELL) 29 Aug 242025 Q2 Earnings call transcript

[Operator Instructions]. Good afternoon, and welcome to the Fiscal Year 2025 Second Quarter Financial Results Conference Call for Dell Technologies Inc. I'd like to inform all participants this call is being recorded at the request of Dell Technologies. This broadcast is the copyrighted property of Dell Technologies Inc. Any rebroadcasting of this information in whole or part without the prior written permission of Dell Technologies is prohibited. Instructions]. [Operator turn to to of Williams, call Relations. Investor the like Rob over Head I'd Mr. begin. may you Williams,

Thanks, us. for McGill everyone, joining and Clarke, are Tyler Yvonne Jeff Johnson. With me today

and materials and call. covered presentation are our available our Our to additional on the you Guidance discussion earnings these IR today's this which materials afternoon. website, review to I content on complement includes encourage be will

and references margin, to measures this press expenses, financial these refer A directly indicated, call, measures be most our During income, financial gross unless reconciliation comparable their to share free can net release. in income, found all non-GAAP per and operating deck otherwise operating non-GAAP of earnings our cash in to GAAP measures diluted measures adjusted flow. web

due of specified. results to no obligation web during our could materially and SEC assume events deck refer year-over-year made We to our from that to on otherwise based statements. filings. and Actual forward-looking statements unless a and change current in future Statements uncertainties those risks relate percentages and expectations. events are to which results discussed call this Growth number differ projected our are forward-looking -- and update

it to turn I'll Now over Jeff.

up operations Diluted networking for cash and was with Rob, of and and billion, $X.XX, I'm Revenue another from executed our performance. servers joining really record was our business. team thanks, Thanks, X%, $X.X and well up everyone, $XX flow was proud We for us. in QX, EPS and billion. X%, our

the again orders positioned our demonstrate and to and and intelligence. . In server uniquely ISG, that are accelerated shipments benefits momentum Our artificial in outlook QX, results increased of AI help sequentially. customers leverage AI we our

with deliver with and for combined Our leading-edge networking and ecosystem storage services and to cool performance and and resonate partners customers. tuned continues servers, support rack world-class maximum at optimized level, node leading and air unique liquid the AI to capability

billion, number AI primarily continue Enterprise $X.X cloud still of as was early the providers. AI demand Encouragingly, Tier see adoption. opportunity a enterprise remains X us solutions quarter. of for service buying driven stages the Orders in in by many are to customers increase significant we an each

excited given also to QX. position around opportunity the with the AI in We which billion servers are plays emerging our We of sovereign our about world. shipped $X.X strengths AI governments

expanded -- to and CSPs the AI X remains backlog exited exciting, several healthy we grown Most As billion. customers server pipeline at of now quarter, and has across multiples our QX in Tier and our our AI again backlog. $X.X Enterprise both server

begin we -- the across year, As the small better customer focus both on opportunities large and second our half geographies. we to coverage and and AI of segments and optimized have sales CSPs

design center both and to demand in In including as addition, these substantial continues AI server capabilities, and fifth pursuits. QX, engineering we data consecutive networking customers Traditional traditional third added support quarter sequentially our of saw consecutive growth demand strong again quarter and and our improve, invest AI in infrastructure. to have we

and pursue year. PowerStore year. PCs, consumer PC operating PowerProtect domain the saw healthy we CSG, sign in the the gaming profitability, move commercial we In high-end quarter, on second positive share growth of half CSG, expect attach strong In core in profitable the data quarter with with in and our commercial a to the demand, PowerScale, we growth second the focusing we of storage motion. and continue double IP into PowerMax, demand half modest grew Dell including digits as

XX the reaches later end and We base AI-enabled applications next are age, coming in about optimistic installed and advancements life continue. refresh year PC continues to cycle architectures the as significant the of Windows

lean and strengths are we like our to into extend our positions closing, leadership new In AI. leveraging opportunities

and build, how of control train intelligence. and run flexibility artificial and choice, a where customers they offering are We

We is Tier are sovereign X with enterprise CSP's in AI and customers in emerging the still immense. early our opportunity innings

is view supported XX% few hardware billion and over years. TAM the CAGR an $XXX AI at Our next billion, services by growing a of up from $XXX

in deals customers and Progress at with always feedback early are AI are the of the quarter. linear new in stages, we scale. the acquiring customers from We winning all big deployments but winning competing are in be not significant every strong will repeat market while

optimizing right our this We opportunity. to come, to services capture we and the with portfolio more have once-in-a-generation sales AI the right capabilities coverage are

With and in our position our I the coming cycle recovery hardware hand. IT AI, really like

the Yvonne financials. over Now for to

Jeff. Thanks,

ISG, Then our I'll position results well of year performance. the us ISG of Let's delivered the by of I'm beyond. and start strong we quarter, overview an we're In cash guidance and the specifics flow, generating DFS solid second leading and into dive CSG, momentum with of forward. for going the in AI great half second which both the with way. encouraged operating

billion, resell billion revenue. This XXX exit $XX points a VMware from the our $X.X and optimized The $X.X due to an was basis ISG the And was to revenue. billion or mix increase is more pricing including and competitive down Our of CSG server grew revenue our X% business. total XX.X% AI or XX.X% environment. Operating gross down business in our headwinds of of X% was margin expense to combined XX%. up --

reduction position term. is business $XXX for drive and in business effort continue our year line our long the end, part over expect big growth me AI To optimization workforce half long took productivity. term. charge as in to to a even our processes second for to structure we our cost of the competitiveness of reimagine we we this solid that the leveraging continue A higher as the top we to million enhance QX, Let optimize emphasize,

was Now let's look by and or lower decline margin by a expenses, gross in We at to higher operating X.X% partially increase delivered a driven X% operating billion This income. of revenue. rate. our $X revenue offset

$X.XX. driven EPS by operating stronger and billion, income our diluted $X.XX to primarily QX up net was to Finally, X% up income X% was

the a that's look whole. So at

about was again. data portfolio, of server in see Storage was demand We growth grew by at and optimized another was specifics, with across the talk demand strong starting and shipments and performance. PowerStore record ISG, up to our to billion, record of PowerProtect across strong PowerMax, domain. AI partner we strong $X.X revenue where Server X% storage demand down revenue IP sequentially double-digit storage PowerScale, headwinds let's a of portfolio. our ISG mix traditional pleased was servers AI revenue $X networking our billion. continues the Now core up outpace with and HCI XX%. This XX%. portion performance $XX.X billion, the delivered growth Server offset were including

was due revenue AI large gross income growth billion, $X.X XX% operating part up to associated ISG to and in dollars. optimized margin server

basis and to points was XX% Our income of storage server the rate of expense operating higher improvement operating up This rate revenue. profitability. ISG by XXX revenue scaling result sequentially was driven

We We Dell the storage in scale had sequential better more profitability. mix growth. and sequential activity. a America with higher X% North pleased improvement revenue IP with geographic more storage We're solutions of our were a gained We with in pricing. disciplined mix

we the to year. rate our operating the margin half last in second ISG As quarter, expect of improve to continue mentioned we

was revenue pricing was environment. In down billion. more operating $X.X $XX.X billion. due revenue was revenue competitive to CSG down $XXX X.X% million of at a flat XX% while was consumer CSG, income revenue to to Commercial or billion, $XX.X X%

We the PC particularly impact The the will quarter. the PC expect refresh the for the create and half year, of of cycle second in growth longer-term fourth in AI tailwinds coming market.

portfolio and both Strength up resale Dell in in $X.X business -- QX. exit billion offset the VMware We were Financial of to client from increasing sale customer Normalizing X Services solutions. revolving the interest X% ISG were in XX%, financing originations our and our QX for payment consumer our originations last of of -- in year. and impacts, proof than more up these DFS

sequential and growth move This let's sheet. balance operations to was driven from working was billion. Now and offset flow capital. cash primarily by by flow QX cash profitability, the revenue partially $X.X

-- increase server primarily Our by and cycle days negative our cash X days, linearity. in XX conversion and driven order sequentially the AI AI business was up

and share paydown paid and $X.X $X We X.X ratio investments, our returned capital [ an sequentially. 'XX, price -- $XXX.XX and With during billion down a program We our stock of and FY ended X.Xx. was with quarter, of capital This billion dividend. core beginning per billion debt million Since is in the leverage returns $X quarter. at shareholders $X.XX our $X we've the result the ] through repurchased net additional average of reduction return the increased to of and quarter began shares this $X dividends. at of profitability debt and repurchases of billion billion cash stock

revenue 'XX year. $XX.X $XX.X the in to to second backdrop, range indicators a we $XX the expect to towards in or with of guidance. billion Technologies' Turning million growth midpoint Dell growth. FY XX% the continue Against that of be and billion of point half

grow by revenue momentum ongoing XX%, in server ISG business. traditional expect roughly to primarily We AI driven our and

CSG expect revenue for single to year. the be low to We digits flat

expect grow CSG at midpoint. combined We the and business the ISG XX% to

gross a inflationary environment AI roughly decline and the points rate margin optimized our input expect costs, to basis We to XXX servers. due higher competitive of mix

to the be in for continue expense single expect the business year. We drive operating down to will low and efficiencies digits

to both be our the We X%, XX% to ISG for to financial rates CSG and year, full expect X% operating and long-term framework margin within XX% respectively.

XX%. $X.X other non-GAAP and billion X% annual and the is Diluted be tax plus expected roughly We of EPS at $X.XX $X.XX expect or interest an to to rate midpoint. be up and minus non-GAAP

to ISG operating to of up be the low midpoint, to CSG fiscal billion, at and we sequentially. For 'XX, to low QX ISG with of single flat digits. expect billion the and We range -- grow single at digits $XX the We low up $XX of in XX% we to businesses anticipate billion in the expect $XX.X midpoint the CSG combined down XXs XX%. expenses be revenue up

in to income we continue rate ISG. drive Our operating to is profitability improve expected as

shares. share QX non-GAAP be Diluted XXX between $X million is be $X.XX. minus XXX million or to EPS expected count diluted plus should and

and said, optimistic this hardware will be one beyond. refresh for close -- the business are in what In FY cycle echo coming we positioned our industry and Dell. out, IT I'll is about to tailwinds and 'XX no than very Jeff better AI the

content management benefits realize own We're business. software customer development, experiences our using artificial We across and our using AI chain. our to to sales, realize and we're of themselves. our And and services, benefits for experiences help to it in beginning member and supply team are turn, customers the intelligence improve applying

retire. for after it Q&A, Rob to I to Before turn that share to at decided Dell, I'd years back has Rob like XX

Rob's be For He's Dell seen We has held continue at earnings share Dell last This Corporate Treasury the know, personally Rob not final grow graduate in may all attending the transform then many to those while X his news with over decades. and XXXX since will in who to began cycle. school. wanted career today. you roles and

at Paul you Frantz going to you last finance all name familiar lead a like ensure of transition. few will so Rob over contributed has forward. IR thank is smooth to been to I'd and Dell's Paul longtime working the many years. to a Dell Paul and closely success years many leader Rob, of you. a for over

go greatly will missed. I'll extended can later. bid for be my You save thank you

it I'd now, turn to few for back over a For to minutes. Rob like

Thanks, kind words, Paul. congrats Yvonne, and to for those thanks and

Let's to allow as to ask as each question get that of many get ask to to you Q&A. X possible. We participant us

to question. first the go Let's

question We'll Daryanani from take from Amit our Evercore. first

step QX really despite growth [ ] guess to I in question quarter sequential XX% really X% this in from retirement. around my [indiscernible] the up margins to XX% [indiscernible]. is in ISG

trying you really enabling are the AI on struggling now. kind of this can feel with a lot margins, are -- of server because with expansion to I talk side struggling peers what's So about right . just the margin

for kind I'd to back of year, inputs then we love XX% what think full half as this building of of to expansion? are in target year? enabling about margin together the So understand blocks critically, this And the the key what's the XX%

on that Amit. one. will Thanks, get I started

quarter-over-quarter. as rate portfolio. mean very That in And was entire helped scale was persist first, XX%, up I were not we by we QX. up really did the XXX second driven basis into operating quarter the the which P&L. across QX income pleased points drive improvement with revenue saw quarter-over-quarter, we expected, headwinds XX%, So in the within saw of the

enterprise. IP price had was Dell saw own we We're storage, disciplined. America and in In mixed towards very strength which our helpful We more North storage offerings, scale.

through do that still traditional say, expect we environment ISG long-term XX% expect to FY that the within portfolio In some we continued we're in in portfolio server mix the -- I'd we our demand as as mix. year move more that do storage and as continue that profitability we'll growing to of to AI we seeing and competitive had although see finish the year. second shipments each framework space, pressures. do customers with And to half 'XX operating strong towards improved enterprise our servers, the improve, XX% and we income

points core basis, PowerScale up Yes, Amit, demand improved I storage. data One, are our discipline each of IP PowerMax, that as maybe the that in data X price noting We was mentioned. protection through the PowerStore, worth additional Yvonne margins Dell the it double said, our a improvement. quarter-over-quarter digits. On our PowerProtect think Yvonne and categories,

add more that discipline, is and level portfolio. the did one, add very our the And the from bringing specific I with deployment. the and to our beyond same we engineering of the which but value expansion the price to second we we're AI the value think that And of important, margins importantly, technical node improved sort customers rack

to ability these ability to system deployment, cable at help networking, site, is extension and allowing ability us up to XX our our engineer in things value at the or into AI extract the capabilities scale and XX So our them testing deploy deployments. customer to solution validation additional add expert the the

with comes question Research. next Ben Melius Our Reitzes from

Congrats, Rob.

here. the to about talk I maybe into it's looks that. wondering the I like a for was was can guidance, us. also to Yvonne. with more equates wondering the looks then was was of -- Street in The it print And quantify to layoffs And how you trying million they that wondering the And I we what the loaded if just vis-a-vis like so if and than has I'm to then $XXX if have thinking. your the reconcile the and Street follow-up. of raise $X I where what savings. has XQ think do can you were. the listen, there of XQ that was reconcile savings just And timing And savings, kind And should It

And then, progressing margins Q-to-Q? AI server with the had backlog mention know you think and if what we Jeff, how about if you mind, are just should could flat the don't pass should answer I But you'll be lot flat a I was a since sales. Rob, maybe there. all. give great them in congratulated me there backlog concern? But know a the I and you

] X greatest the was That X seen. I've question [indiscernible] [ that

That classic Ben. was the

have Rob/ We may may have -- we

see if at we'll through first we those questions, start. can Yvonne least the Well, of get part Ben, we'll let

All right.

but QX. year-over-year. $XX.X -- for the and I let second are about talking XX%, revenue So half, me up combined at at start XX% midpoint to billion, Total grow with right? We're could the of going talk CSG to ISG so

XX% billion $XX year-over-year. for $XX So ISG in ISG, up billion CSG, total.

there momentum driven So servers continued performance very, as very primarily continued impressive well AI traditional by as servers. in

margin we're CSG, see expecting to the gross slightly So to in rates expecting flat digits to quarter, to single third we're up low quarter-over-quarter. up that. expecting be be

quarter as on, competitive the say, expecting actually second which remember continued a OpEx and have we're be that we've you to well question holistically, as somewhat that inflationary quarter. think third that last a will half OpEx holistically I that the down. in I'd did already We in environment And a guided environment/

we about that down X% So quarter-over-quarter. expect be to

traditional and well an server holistically. performing from OpEx then our driven as long-term within framework standpoint, mix there and by improvement ISG expecting storage continued And as

if quarter know go year. the don't on the I add there's full third we into as to anything

fourth third expect perspective think quarter are the sequentially So a waiting that to tradition. in higher from your question quarter the towards we quarter? the on continue and I historical more fourth We're than

half in the the towards And second quarter. expecting We weighted more your also a recovery CSG a you'd then fourth quarter. quarter from to fourth largest that have natural storage in begin are perspective

the So well momentum you'll performance profitability that storage as in CSG that, see would that both the momentum reflected be as and in in the period.

start offer AI our our level. to of Amit sequentially. margins, discussed We were again, there margins the proposition to expanding extract the customers of offer. server up beyond to questions, to our able the then the our rack And X were extract AI the I'll what -- We we out AI value our summarizing box is on out by able value were value with

allowing to our the ability ways that the more at networking on to ability us extract sell our to of largest box, continue LXX the help the solution to services differentiated going factory for to integration to our focus on-site continue and and around to ability our sell call sell think what AI of is configure So customers LXX find customers deployment, and and these and competition, ability which scale we're scale. network to it as we testing to value capabilities, deploy at integration,

line of working improved to to into delivery just equipment In terms customers the shipments through I important data the to think and our first is for of their of the the nearly doubled accept last we billion still customers AI on would for billion. us the point quarter-over-quarter. dates, integrate customers think months, you're their infrastructure demand an with with I shipped under mean $X.X seeing on thing What I working their backlog, $X.X still it XX And is over to that's on centers. supply thing ability

worried about not the I'm well. backlog as

of before I think X-quarter we've pipeline. our made reference

Our X-quarter pipeline healthy. remains

I our think of backlog. made that I multiples reference at several

coming pretty it's significant We convert have and . the our a job quarters. to visibility pipeline, to over that

us. Ben, opportunity clearly think, for I driving it's

Woodring our We'll with question Erik next move from to Morgan Stanley.

is what just Great talk everyone Rob, saying. guys. And to

comments optimized the on your Tier Thanks pipeline over years. all enterprise. in Is increasing that missed. detail AI appreciate I your be the enterprises within customer expand pipeline those in bit? really understanding within CSPs base expanding all that's servers number provided just makeup just for and of there your X of the And AI-optimized remarks Jeff, for server is I'm You backlog on help your prepared you that you trying changing for get to way a better concentration spending you. can any the what a your on of how and maybe

Sure.

is with grow do of experimenting that. vast specifically start pipeline that Yvonne amount of about I The see of of at see the Obviously, in enterprise Let's and I me signals size our technology Enterprise where earlier. of cases to multiples the pipeline which customers some the number that things, the of growing backlog. composition of and talked to growing, number is revenue customers, a the -- the from to use do is encouraging now growing, is moving piloting are customers mentioned to continuing that

the So enterprise these customers models growing enterprise a the of of of number revenue pipeline CSP X the deployments, we're the large large backlog, by encouraged customers our foundational still a percentage are training by represents. of We're number Clearly, in pipeline. Tier quarter-over-quarter. of some encouraged large and the that percentage

but of And expansion cetera, just of financial across growth life I whether think sciences, et the we're higher services, I seeing again, national very that encouraging, education, the enterprise, that's think we in the seeing be continued some which labs, very, scale, the are is enterprise.

When I today, that are to that composition available the are between. and that look parts in from backlog available everything at the in future and the technology of parts ranges

ship helpful? the can extends same Eric, we pipeline color? represents things Our that can Was QX. backlog represents was And in into we -- thing, that next next year. which that a year. QX X-quarter obviously, into And that ship things in enough

Thanks appreciate I the perfect. for that. detail. that's Yes,

And to Bernstein. Sacconaghi, next our move from question we'll Toni

on And retirement. Yes. Rob, your congratulations

terms on to you. QX and improving miss -- on of operating did just percentage from server then clearly I or servers AI will just significant QX profit dollars, wanted improve profits have between gross QX confirmation AI AI OpEx there a servers materially was in question gross X profitability in QX, because profit We -- to I improvement?

is to The short that both answer improved.

IP then growing more about year-over-year. because I a yet was X% storage and businesses was you And hoping talked the digits dynamics little maybe the double just Okay. you down on storage business Dell could provide color

by enormous maybe So hyperconverged is or pull some other of to in we equation your huge else amount. business can numbers be to part help able there that you a that together. either that is Were dimension piece an suggests make what need down was those that

provide can color little So more perhaps that. on you a

previously, a I'll as we I'll Dell good team and had We to portfolio try referenced that QX, data Yvonne mentioned in Sure. had we our on products, margin IP mentioned mid-range look products, to see. this, as the with, tag growth point protection at partner earlier. a than the double-digit was the if success basis demand of Yvonne start products Those products. instruction IP it contribution view but the high-end and you I the greater the significantly and are from references across products

improved which better when if in I've margins, So and businesses are mentioned with growth was core leverage ultimately The got, think operating themselves. some I will will, quarter, both Yvonne was that in the we significant. improvement gross discipline primarily that and storage. but that the make the to of growing, thing you margin as And its geography those products questions, by just the America margin from North in price the driven well mix mentioned earlier, driven way previous their for as rates by

shifted for Dell then increasingly your And was IP IP and our correct. products. mix more less down profitable partner That's Their the towards conclusion business us quarter-over-quarter. obviously, is

mean, I sorry Yes, about ahead. that. go

double-digit so you the -- -- were seeing businesses? and was the growth just growth that in those I sequential

quarter-over-quarter. ISG revenue up was growth XX%

. up was Yes, The Toni. growth core comment that year-over-year, correct. right. about here Yes, was double-digit

I [indiscernible]. whole, the mean. But

Yes.

of a data the got specifically, is out decline part of was area infrastructure, broken business. is you've where a but converged and in we and And it protection a be a haven't obviously hyperconverged bit year-over-year. -- the So would decline other it there it large

offset businesses increases those X the we other X mentioned. in the So

question Citi. next Asiya comes Merchant with from Our

little very On growth And for may, here again, few little 'XX. Great. over help click give last the about some all you a we and Rob, Maybe us the if about you growth thank you're as support double if and bit well. that in calendar seeing you If confidence CSG, gives you the the that sound in I pipeline could a could enter years, we quarter. what guidance we'll fourth optimistic on indicators just just on CSG. I or demand bit that talk the miss in as

the a about I we is Yvonne remain can Sure. at mean, refresh. in all optimistic the more think that think the year. end of heading I'll thought that run of the the of of the know your take the we is thing into I than it's at help I maybe 'XX. have towards year mean towards come done you then shifting middle and I the over end indicate supply-based 'XX, our guidance we exit same would refresh refresh top. reflected

that suggests start, important refresh to is the because as what's And steps back not is the takes moving. XX faster longer date Windows it end-of-life about history

a date. end-of-life we have So XX Windows

coming. machines We to have applications bought products AI more are all built and the AI during base an aging with around COVID of exciting installed mounting era, be refreshed new

is the has recovery. new productivity optimistic remain difficult. timing end we're applications we users corner. about is closer. coming, exciting installed a around of the products The are Calling life is bigger around the and with older, base that But And corner, end been the to help quarter

if is immense of out what opportunity these to running think and that edge you AI us. will, that's to the you amazing way, when and helping on personal you be inferencing PCs, about a PC do if language things about footprints larger will along the your, edge on screened, in And on small edge done inferencing, as on have all well think models of front the the the extension you and memory of your agent on

we're see we very little it's our little add? a further a would we Yvonne, called out. you So a and calling that. remain recovery performance, from can optimistic today, you had anything Obviously, about earlier, that

think you I No, had it, Joe.

move with we'll Samik to Chatterjee our JPMorgan. next And from question

to pipeline congrats. back about that And about are excited like but seeing guess, curious side, more of AI you of you're terms that what you you're I matter? customers seeing attach what what go from is clearly, Enterprise the to that seeing demand. building server storage enterprise or if your Jeff, to when do just you're of customers in opportunity in that I in, Enterprise services for terms come just understand, Rob, comments giving either

margins. much of should Xs? doing with how on work think what when doing, you're lead gross the compare about to And we the Does Tier differential that you to how the sort you're

that Sure. at this. least an about think Maybe order I -- and

believe we we're the they of AI all, call what Enterprise in thousands is. have customers. they stages, First what we determine you journey. in what this pretty enterprise. we've And of where very early their And as understanding of know that And think X going and innings deployment we as in good of still our surveyed if to truly are in strategy we are do, X, Stage they're and trying to a their

the the of excited coverage force that into they businesses that down reaching business have And largest where small or multinationals, commercial enterprises pulse and I have and journey. everything a technology, in up understanding large market broad with large of given sales opportunity. really see pretty a gets all And in a our think state. And we percentage of that our good us that pretty we that customers to are are good customers the

the it, And moving think to to brings technology advantage build about customers experimenting, it with are help how piloting take actually model here, get help you. advantages it. the a Many progress professional they implement adopt opportunities and do they of ultimately exactly things them or in productivity what have opportunity. then servers advantage the so so, make strategy, scale to X or an need services We've customer the tremendous of doing us to can or they to it deploy customers it the and built drive really

services built that. around We've

these. then We integrate continue to engineer the scale to are our very systems these ability complex that to and customers because capability. help And

flexibility be put what at architecture complex. You to new efficiency and to the There into systems network have The subsystems do. in run many the this center. storage be it cooling, space. cases, is It has kind requires That's we power, high high-speed systems just really very can't data scale of to performance. X-tier interconnect a with and requires forms of

to We be able at and about and exciting. opportunity enormous is get excited run implementation extend strategy from that these to really a scale capability help to customers to advantage take of this to

productivity, if cases, language coming. generally use models And agents models. millions just industry opportunity agents our take about going of in of talking the around large a That's scratched agent what's help individual's of us. language are use And help like of today. help and already We're to today you each think to about we've the provide them. is the specific are are an automate and then front businesses processes cases are in which Small how buzzword surface technologies that with the skills,

think we'll the of calls call the each the customers. selling enterprises this again, value to several we And I provide are say And that's continue upon. margin largest better to the we'll to margins than last said and and we've continue to selling our build

I think I made well. reference to this as

and the skills capability specialized team important an tuned have to I was pursuits sales think then a largest our is specialty organization the many model, with have that engagement. go-to-market the force engineering and a covers largest CSP thing. each dedicated and thousands overlay We've lot. for every our behind I AI where of win we know a this very enterprise we down it customers them that

think covered I the I questions.

from Sachs. Goldman our to question with Ng Michael And we'll next move

I have just if extend I could. X questions, to my also congratulations I wanted Rob. to

AI the to about What bit quarter, is guidance happen Yvonne, assuming revenue? the talk upcoming ISG which revenue implies just First, terms revenue low of more XX% down for for the ISG you could on of to ask you for sequentially. little quarter-on-quarter drivers servers in that? a are -- And wanted I

all? drive part into into it does latter these your an as PowerScale. of Should the are inflection storage that partnerships? change in we a wondering strategy And Jeff, much in the help some how and I of then was the the just certification little last second talk you could about if the Dell partnerships announced NVIDIA Nutanix new for months, of in And How the next?, storage if the certification, partnership hyperconverged SuperPOD bit head for couple year revenues at material

Yes. Mike, I'll start your with off, question.

For XXs full are line the ISG low in will servers grow that QX, business we the storage and Servers digits. single historical in low and the year-over-year low single XXs revenue in in see. storage to grow the in sequential year we Traditional expect be digits for down with also. roughly will the do

normal sequential. that's So relatively

So that would down imply that AI quarter-over-quarter. servers are

growing. said, multiple backlog And is that orders, The sitting pipeline Jeff backlog. up the is talked Now about, has shipments billion. were billion. second are at pipeline, to enterprise as quarter The of a $X.X $X.X all customers and already that in

would motivated embedded that guidance. all and we with what's ready, have is the and AI in quarter, but if we're more say the customers fully the are in our GPUs third ready that said, So ship I servers to

Well said.

what's Let me happening. I to way my and partners the see if question can work

think simplicity really and are there AI, it they One, think meant to of think category room for X don't that if I our customers if they gear in. make products customers, a drive small, of need as solely a view, is category, about to in They single things. are to bringing Enterprise particularly distinct customers, And a you create from Enterprise AI ease about use HCI It's at have for space. really fact, case. hypervisor. large as need think use They least you almost with of and what space.

a product in of described. choice that to we that and continue tool a to HCI a be Red do And So business. there's VxRail, Azure you traditional added give to foot customers product that. wonderful Nutanix product is Hat and consolidation we'll consolidate with good to our product the applications, we And our able with to clearly with have

workloads think all certainly, modern more is performance, computing accelerated is interesting more really around are demanding scale, these new and I more those what flexibility, Probably more efficiency.

I new architectures are before, said need in have think to up data, I've and These high-performance to this data feed gobble demanding you from feed they the the it way. you beast.

able about FXXX why very environment, meets the scale -- that workloads. that's a the and the of we're announcement certification the work be flexibility scale can demands forward, out. think with We the going high PowerScale up, is announcement. in our our and best demand bringing best products think We that We we FXXX performance. essential needed to is it can high talking SuperPOD through to efficiency to of the We drive and can we getting X-tier made drive can company these We new way do the and since architecture.

storage, quite Project In opportunity expand past to around about position in quarter expand May, that's this earlier around high-speed as file system our what's GPUs margin our another to storage because and around Lightning bringing frankly, in AI. happening parallel a and the well opportunity forefront

Mohan comes question with Wamsi America. of from next Bank Our

in Rob, And as quarter-on-quarter well. you revenues. server said Yvonne, congrats AI decline just

reflective backlog quarter acceleration liquid-cooled is an then quarters? several really offerings AI in of And And backlog that your next the that -- for we XEXXXXL? backlog over like Your include Blackwell does the just in should expect delays? flat is servers.

you Enterprise And us maybe will Enterprise models in fit Sovereign Tier also XXXX and Jeff, And you where higher consistently. you on also in noted think primarily comment which CSPs? X margins Can that? help with you can versus drive might do at Sovereign

on question. me killing are all the You multiple

We mean mean or X on ]. X question, you Rob, is X X question X [ question.

see me that. way can I if my through Let work

clearly So when and opportunity an and of QX I I for in that then backlog of next limbs, and customers quarter think into at next implies deliveries year, then think Blackwell. the

our architecture aligned a to most number customers. We have sold of Blackwell advanced to

HXXXs sold have We and HXXX and availability.

demand make in the Yvonne didn't a More product, shipment reflecting She a is made guidance. statement. what to She importantly, customer availability take our which is statement.

of can. quickly multiples our That that pipeline So is around converting backlog in a HXXX, orders vast with NVIDIA. well backlog opportunities demand other the architectures, and of Intel. as AMD NVIDIA, into X-quarter majority is as of with we HXXX I and converting that vast Blackwell opportunity majority is all described couple But that the as now the sorts is that or as

as the availability our get enterprise to has to is the needs -- chain improve. -- order, supply backlog then So opportunity convert get work and get team that the continues our can to pipeline to team and order into a into obviously which improved pursuits into selling the parts,

Jason made will reference I that availability yesterday to improve. continue think that to

So be the that will deploy. have ready deploy customers customers to help to and

through. the obviously, that. talked about Yvonne of we're guidance today. the reflection that's what you And interpreting those best Sovereign. improve about that is into we're that And trying That's -- we to working asked signals what know

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comes Rakers Wells next Our with from Aaron Fargo. question

Paul. my X congrats and you call, your guess side. question the stick on is server AI. last It's and to question Rob, the not I'll I on to actually traditional

Looking you've of opportunity would a just the of curious quarter. how of it, pipeline traditional traditional you're that like seen outside characterize, the at kind numbers, for it seeing market uptick potential seeing of the you cycle I'll in call that the of of kind good thinking duration server last AI Just you're pretty about I'm looks in in these demand? that this servers. servers recovery

Thanks. Sure. Great question, Aaron.

of in sequential So couple year-over-year X quarters reinforce maybe growth, X is seeing growth. we're in a row quarters to of of a momentum things now row a the

We are unit growth. seeing

servers i.e., course more think things today. cores, are We more storage. in are I seeing TRU And memory, driving more the X demands expansion,

old. quarters, digestion was linked old. of we the is to is more installed we're first or conversation that, to what room. to might make AI is there's moments efficient occur is that's years. ever. And And than made technologies X for it's It said a infrastructure. important be their period room customers put what consolidation because replacing just coming incredibly do into as today X consolidation are you I years new think to X base beginning X looking out ago, The the longest I The aged, are And that to that a

XX% product today, today X a a it. in shipped and because power space years has power servers X at going a look server our XX% to is and to was XXG It's ago to I occur a we shipped X needed. Xx plus if single more more to XXG product we XXG can rack. replace on cores efficient XXG to that that is X.Xx example, to Consolidation For

and about think the reference the made in cloud. repatriate, on point the lastly, back they are we've as and past. to. X things on-prem be Those would to storage. They're some Workloads as repatriating then I'd they And go servers it, got coming I coming back They're somewhere. to from this

you that. Thanks, here. Aaron. I pulling in We appreciate us with appreciate

next . move question. Let's the to

next comes from Our David question Vogt UBS. with

year. some backlog faster revenue. exit service about you're And resolved I'm year year? that that through some in terms next the fiscal some as on thinking you would does and Is AI and to at reconciled we the of gating Obviously, question Paul, GPU I again as mean side. gets and are how that still at And What delivery a how GPU congrats. availability? grow clear factors going as until next to more to congrats well. this move were are But convert the stick we the imagine about? Rob, clip your X continue that's about backlog year, we to thinking into going to point ability point, at see you're expect you and constraints orders to the to should it constraints

or thought they any So hope would.

we what hope Deployments is improving. I manage. conveyed are deliveries we in to scheduled to have is Supply to improving. customers What supply is

cooling of this water readiness power, of much center, complex of Readiness a the again, have data deployments. ability So data if is readiness in to cooling center. it's the liquid very of direct

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that year, . If will year. it's that picking go need next next clearly be technology can a Urgent they're available into need

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on. Our orders. it converts and pursuit as have to teams into improving are orders that's that convert what to and into supply we out work situation, working

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get we to we'll you as And year. next expectations. closer on about excited really it, update our we're so And

question next from comes Our with Raymond Leopold Simon James.

thoughts stick the wanted on I the congratulations. see as unpack well. it you AI. to Congratulations trend to to X your storage to a question I'm well. as to Rob, as bit And Paul could if little going relates

I lagged effect business. side you talk to a about talked terms could of benefit storage timing. of wondering the I'm think compute behind past, in in about you've if you expect and the the degree how

storage our is consistent lots consume previous fast. opportunity I've today discussions It's with data it and vast. language need think highlight tried Well, they large large. and of the for I is these models what to Again,

unstructured. here. the is categories us IOPs more interesting in to are category data for performance, most our customers fastest-growing opportunity is the The improving that rearchitecting, So

the at own When storage, our Dell from you look storage what more is doing structured in are IP. proprietary in apart we unstructured space, investing

of types Our both moving Lightning, scale, that from parallel FXXX, GPU a images rich XD engines Project help system. as today customers customers Enterprise to forms future. our the the media audio, FXXX, buy The video that that's our building and that subsystems text complex largest opportunity different what storage for the And these is sets opportunity an that from on I to customers file example, for. into form hope helps. data data and of that other high-performance in provide building like us, buy we're huge modalities, like to that,

X going question get in quick. last Simon. real We're and to Thanks, try here.

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you wondering if Just could summarize it.

making assumption AI? I'm GPU? I'm to going In In so an clarify.

mean. I Actually,

the Our portfolio. broadly across infrastructure is

just yes, Yes, strategically...

traditional that our our always whether has entrants competitive. or not categories. I to new -- if expect do that industry that's of exist change, Well, competitors you with been each in

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it's I over than the XX think past different years. been

be same growth. is or the consumer, commercial would true market relative a there. lagging the And its of in market to consumer there. competitors performance of competitive The larger terms in number it's its a environment

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coverage our is model. One

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at of look advantages our chain. the I supply

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products. thing services care before, companies That's in in to we're who strategy companies help We We fourth and to infrastructure and customers, That's and the mentioned across we the largest I makes And the expanding the we and scale. service the as then with help the different going that of lastly, own our those to to we're special in. adopt AI, us help we it take define think deploy smallest in ultimately is implement them broadly what are. in world. world, to do invest that our

As us those to about our we're it's in do we that better. driving efficiencies the think allow to organization,

restful that a weeks. Yvonne Citi seeing week Well, after over I be could weekend. at Michael will road will appreciate week, about that, Day be Jeff of forward ask couple Thank and Jeff. the next next good the you. on was Goldman have for, Labor close as everyone at as and look a out I the We to that.

This call. We appreciate conference participation. today's your concludes

at disconnect time. may You this