37 unchanged sentences
Business Trends and Challenges
−Removed: During the first quarter of Fiscal 2027, we executed our strategy and delivered exceptional operating results, generating significant net revenue and operating income growth.
+Added: During the second quarter and first six months of Fiscal 2027, we executed our strategy and delivered exceptional operating results, generating significant net revenue and operating income growth.
The following trends and conditions affected the environment in which we operated:
• Macroeconomic environment:
−Removed: We experienced substantial demand growth across our ISG offerings, resulting in ISG net revenue growth and a continued shift in the mix of the business towards our ISG offerings.
+Added: We continued to experience substantial demand growth across our ISG offerings, resulting in ISG net revenue growth and a continued shift in the mix of the business towards our ISG offerings.
Additionally, the demand environment was significant for our CSG offerings, resulting in CSG net revenue growth.
6 unchanged sentences
• Supply chain:
−Removed: We experienced an increase in input costs, driven primarily by higher component costs.
+Added: We experienced an increase in input costs, driven by higher component costs.
Strong and accelerating industry demand for AI‑optimized solutions, together with current limitations in capacity from memory manufacturers, has resulted in global supply constraints and substantial inflation in memory component costs.
4 unchanged sentences
We have the following expectations regarding our performance for the full fiscal year:
−Removed: Overall, while customers continue to reassess their spending priorities throughout the year in light of the dynamic commodity supply environment, we expect significant ISG and strong CSG net revenue growth.
+Added: Overall, we expect IT environments to enable growth, productivity, and competitive advantage for our customers.
+Added: As a result, we anticipate significant ISG and strong CSG net revenue growth.
We expect ISG net revenue growth will be driven largely by increased demand for our servers and networking offerings and, to a lesser extent, our storage offerings.
−Removed: We anticipate CSG net revenue growth to be driven in part by the continuation of the PC refresh cycle.
• Gross margin:
13 unchanged sentences
To meet the growing demand and increasing complexity of our AI-optimized servers offerings, we have increased our purchases of certain components with suppliers, which has resulted in increased inventory levels, higher purchase obligations, and new working capital dynamics.
−Removed: Additionally, frequent component part updates or transitions create additional challenges in managing demand and supply levels.
−Removed: While we have seen lead times shorten, we anticipate the next generation of these components, for which demand remains high, will be subject to supply constraints.
+Added: Additionally, frequent component part updates or transitions may create additional challenges in managing demand and supply levels.
We expect that growth in data will continue to generate long-term demand for our storage solutions and services.
20 unchanged sentences
Dollar basis.
−Removed: However, we have a large global presence, generating approximately 45% and 50% of our net revenue from sales to customers outside of the United States during the first quarter of Fiscal 2027 and the first quarter of Fiscal 2026, respectively.
+Added: However, we have a large global presence, generating approximately 40% of our net revenue from sales to customers outside of the United States during both the second quarter and first six months of Fiscal 2027 and 40% and 45% during the second quarter and first six months of Fiscal 2026, respectively.
As a result, our operating results can be impacted by fluctuations in foreign currency exchange rates.
20 unchanged sentences
Other companies, including companies in our industry, may calculate non-GAAP financial measures differently than we do, limiting the usefulness of those measures for comparative purposes.
−Removed: Non-GAAP product gross margin, non-GAAP services gross margin, non-GAAP gross margin, non-GAAP operating expenses, non-GAAP operating income, non-GAAP net income, and non-GAAP earnings per share - diluted, as defined by us, exclude amortization of intangible assets, stock-based compensation expense, other corporate (income) expenses and, for non-GAAP net income and non-GAAP earnings per share - diluted, fair value adjustments on equity investments and an aggregate adjustment for income taxes.
+Added: Non-GAAP product gross margin, non-GAAP services gross margin, non-GAAP gross margin, non-GAAP operating expenses, non-GAAP operating income, non-GAAP net income, and non-GAAP earnings per share - diluted, as defined by us, exclude amortization of intangible assets, stock-based compensation expense, other corporate expenses and, for non-GAAP net income and non-GAAP earnings per share - diluted, fair value adjustments on equity investments and an aggregate adjustment for income taxes.
As the excluded items may have a material impact on our financial results, our management compensates for this limitation by relying primarily on our GAAP results and using non-GAAP financial measures supplementally or for projections when comparable GAAP financial measures are not available.
12 unchanged sentences
Although stock-based compensation is an important aspect of the compensation of our employees and executives, we exclude such expense because the fair value of the stock-based awards may fluctuate based on factors unrelated to the operating performance of the business and may bear little resemblance to the actual value realized upon the vesting or future exercise of the related stock-based awards.
−Removed: • Other Corporate (Income) Expenses — Other corporate (income) expenses consist primarily of severance expenses, transaction-related impacts of the sales of businesses, payroll taxes associated with stock-based compensation, incentive charges related to equity investments, and transaction-related expenses.
+Added: • Other Corporate Expenses — Other corporate expenses consist primarily of severance expenses, transaction-related impacts of the sales of businesses, payroll taxes associated with stock-based compensation, incentive charges related to equity investments, and transaction-related expenses.
Severance costs are primarily related to severance and benefits for employees impacted by cost management initiatives.
−Removed: During the first quarter of Fiscal 2027, we recognized $0.2 billion of severance expense related to workforce reduction activities.
−Removed: During the first quarter of Fiscal 2026, we recognized a $0.2 billion gain related to the sale of our subsidiary SecureWorks Corp.
+Added: During the first six months of Fiscal 2027 and Fiscal 2026, we recognized $0.5 billion and $0.3 billion, respectively, of severance expense related to workforce reduction activities.
+Added: During the first six months of Fiscal 2026, we recognized a $0.2 billion gain related to the sale of our subsidiary SecureWorks Corp.
(“Secureworks”).
−Removed: Although we may incur these types of items in the future, we exclude other corporate (income) expenses as they can vary from period to period, are significantly impacted by the timing and nature of these events, and are not used by management in assessing operating performance of the business.
+Added: Although we may incur these types of items in the future, we exclude other corporate expenses, as they can vary from period to period, are significantly impacted by the timing and nature of these events, and are not used by management in assessing operating performance of the business.
• Fair Value Adjustments on Equity Investments — Fair value adjustments on equity investments primarily consist of the gain (loss) on strategic investments, which includes recurring fair value adjustments of investments in publicly-traded companies, as well as those in privately-held companies, which are adjusted for observable price changes and any potential impairments.
−Removed: During the first quarter of Fiscal 2027, we recognized a $0.6 billion gain from our strategic investment portfolio related to a single investee.
+Added: During the first six months of Fiscal 2027, we recognized a $0.6 billion gain from our strategic investment portfolio related to a single investee.
See Note 3 of the Notes to the Condensed Consolidated Financial Statements included in this report for additional information on our strategic investment activity.
7 unchanged sentences
The following table presents a reconciliation of each non-GAAP financial measure to the most directly comparable GAAP measure for the periods indicated:
−Removed: Three Months Ended
−Removed: May 1, 2026 % Change May 2, 2025
+Added: Three Months Ended Six Months Ended
+Added: July 31, 2026 % Change August 1, 2025 July 31, 2026 % Change August 1, 2025
(in millions, except percentages)
10 unchanged sentences
Non-GAAP services gross margin $ 2,753 5 % $ 2,620 $ 5,391 5 % $ 5,129
−Removed: Three Months Ended
−Removed: May 1, 2026 % Change May 2, 2025
+Added: Three Months Ended Six Months Ended
+Added: July 31, 2026 % Change August 1, 2025 July 31, 2026 % Change August 1, 2025
(in millions, except percentages and per share amounts)
21 unchanged sentences
Stock-based compensation expense 184 179 373 369
−Removed: Other corporate (income) expenses 288 (58)
+Added: Other corporate expenses 260 200 548 142
Fair value adjustments on equity investments (73) (4) (704) (21)
5 unchanged sentences
Stock-based compensation expense 0.28 0.26 0.57 0.53
−Removed: Other corporate (income) expenses 0.44 (0.08)
+Added: 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)
10 unchanged sentences
The following table presents a reconciliation of free cash flow and adjusted free cash flow to cash flow from operations for the periods indicated:
−Removed: Three Months Ended
−Removed: May 1, 2026 % Change May 2, 2025
+Added: Three Months Ended Six Months Ended
+Added: July 31, 2026 % Change August 1, 2025 July 31, 2026 % Change August 1, 2025
(in millions, except percentages)
16 unchanged sentences
Unless otherwise indicated, all changes identified for the current-period results represent comparisons to results for the prior corresponding fiscal period.
−Removed: Three Months Ended
−Removed: May 1, 2026 May 2, 2025
−Removed: Dollars % of Net Revenue % Change Dollars % of Net Revenue
+Added: Three Months Ended Six Months Ended
+Added: July 31, 2026 August 1, 2025 July 31, 2026 August 1, 2025
+Added: Dollars % of Net Revenue (a)
+Added: % Change Dollars % of Net Revenue (a)
+Added: Dollars % of Net Revenue (a)
+Added: % Change Dollars % of Net Revenue (a)
(in millions, except percentages and per share amounts)
12 unchanged sentences
Non-GAAP Financial Information
−Removed: Three Months Ended
−Removed: May 1, 2026 May 2, 2025
−Removed: Dollars % of Net Revenue % Change Dollars % of Net Revenue
+Added: Three Months Ended Six Months Ended
+Added: July 31, 2026 August 1, 2025 July 31, 2026 August 1, 2025
+Added: Dollars % of Net Revenue (a)
+Added: % Change Dollars % of Net Revenue (a)
+Added: Dollars % of Net Revenue (a)
+Added: % Change Dollars % of Net Revenue (a)
(in millions, except percentages and per share amounts)
9 unchanged sentences
Adjusted free cash flow $ 8,149 224 % $ 2,518 $ 11,314 138 % $ 4,750
+Added: ____________________
+Added: (a) Totals of net revenue percentages may not foot due to rounding.
Non-GAAP product gross margin, non-GAAP services gross margin, 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 are not measurements of financial performance prepared in accordance with GAAP.
See “Non‑GAAP Financial Measures” for additional information about these non-GAAP financial measures, including our reasons for including these measures, material limitations with respect to the usefulness of the measures, and a reconciliation of each non-GAAP financial measure to the most directly comparable GAAP financial measure.
−Removed: During the first quarter of Fiscal 2027, net revenue increased by 88%, driven by an increase in ISG net revenue and, to a lesser extent, CSG net revenue that was partially offset by a decrease in Corporate and other net revenue.
−Removed: The increase in ISG net revenue was primarily driven by growth in our AI-optimized servers offerings and, to a lesser extent, our traditional servers and networking offerings and our storage offerings.
+Added: During the second quarter and first six months of Fiscal 2027, net revenue increased by 58% and 71%, respectively, driven by an increase in ISG net revenue and, to a lesser extent, CSG net revenue that was partially offset by a decrease in Corporate and other net revenue.
+Added: The increase in ISG net revenue was driven by growth in our AI-optimized servers offerings and, to a lesser extent, our traditional servers and networking offerings and our storage offerings.
The increase in CSG net revenue was primarily attributable to an increase in sales of our commercial offerings.
Corporate and other net revenue declined primarily due to a decrease in VMware Resale revenue, as we no longer act as a distributor of standalone VMware offerings.
−Removed: During the first quarter of Fiscal 2027, operating income and non-GAAP operating income increased by 214% to $3.7 billion and 154% to $4.2 billion, respectively.
−Removed: The increases were primarily attributable to an increase in ISG operating income and, to a lesser extent, CSG operating income.
+Added: During the second quarter of Fiscal 2027, operating income and non-GAAP operating income increased by 204% to $5.4 billion and 160% to $5.9 billion, respectively.
+Added: During the first six months of Fiscal 2027, operating income and non-GAAP operating income increased by 208% to $9.0 billion and 157% to $10.2 billion, respectively.
+Added: The increases were attributable to an increase in ISG operating income and, to a lesser extent, CSG operating income.
The increase in ISG operating income was driven by our servers and networking offerings and, to a lesser extent, our storage offerings.
The increase in CSG operating income was driven primarily by our commercial offerings.
−Removed: During the first quarter of Fiscal 2027, operating income and non-GAAP operating income as a percentage of net revenue increased 330 basis points to 8.3% and 260 basis points to 9.7%, respectively.
−Removed: Operating income as a percentage of net revenue benefited from the favorable impact of a decline in operating expense rate as a result of substantial net revenue growth.
−Removed: The favorable impact of operating expense rate was partially offset by a decline in gross margin rate due to a shift in mix towards our AI-optimized servers offerings.
−Removed: Cash provided by operating activities was $4.1 billion during the first quarter of Fiscal 2027 and was driven by net revenue growth and profitability, partially offset by working capital dynamics.
−Removed: Working capital was primarily affected by increased demand for our AI-optimized servers offerings.
−Removed: During the first quarter of Fiscal 2026, cash provided by operating activities was $2.8 billion and was driven by profitability and similar working capital dynamics as well as by other business impacts, including annual incentive-based personnel-related payments.
+Added: During the second quarter and first six months of Fiscal 2027, operating income as a percentage of net revenue increased 550 basis points to 11.5% and 450 basis points to 10.0%, respectively.
+Added: During the second quarter and first six months of Fiscal 2027, non-GAAP operating income as a percentage of net revenue increased 490 basis points to 12.6% and 380 basis points to 11.2%, respectively.
+Added: Operating income and non-GAAP operating income as a percentage of net revenue benefited from the favorable impact of a decline in operating expense rate as a result of substantial net revenue growth.
+Added: During the second quarter of Fiscal 2027, operating income and non-GAAP operating income rate also benefited from an increase in gross margin rate driven by disciplined pricing.
+Added: Cash provided by operating activities was $6.3 billion during the first six months of Fiscal 2027 and was driven by net revenue growth, profitability, and working capital dynamics, partially offset by higher financing receivables, all of which factors were primarily affected by increased demand for our ISG offerings.
+Added: During the first six months of Fiscal 2026, cash provided by operating activities was $5.3 billion and was driven by net revenue growth, profitability, and similar working capital dynamics.
See “Liquidity, Cash Requirements, and Market Conditions” for additional information about our cash flow metrics.
2 unchanged sentences
As we continue to innovate and modernize our offerings, we believe that Dell Technologies is well-positioned for long-term profitable growth.
−Removed: During the first quarter of Fiscal 2027, net revenue increased 88%, driven by an increase in ISG net revenue and, to a lesser extent, CSG net revenue that was partially offset by a decrease in Corporate and other net revenue.
+Added: During the second quarter and first six months of Fiscal 2027, net revenue increased 58% and 71%, respectively, driven by an increase in ISG net revenue and, to a lesser extent, CSG net revenue that was partially offset by a decrease in Corporate and other net revenue.
See “Business Unit Results” for further information.
• Product Net Revenue — Product net revenue includes revenue from the sale of hardware products and software licenses.
−Removed: During the first quarter of Fiscal 2027, product net revenue increased 117% due to an increase in ISG product net revenue and, to a lesser extent, CSG product net revenue.
+Added: During the second quarter and first six months of Fiscal 2027, product net revenue increased 72% and 91%, respectively, due to an increase in ISG product net revenue and, to a lesser extent, CSG product net revenue.
The increase in ISG product net revenue was primarily driven by growth in our AI-optimized servers offerings and, to a lesser extent, our traditional servers and networking offerings and our storage offerings.
1 unchanged sentence
• Services Net Revenue — Services net revenue includes revenue from our services offerings and support services related to hardware products and software licenses.
−Removed: During the first quarter of Fiscal 2027, services net revenue decreased 1% due to a decline in Corporate and other services net revenue, which was driven by a decrease in VMware Resale revenue.
−Removed: The decline was largely offset by an increase in ISG services net revenue, which was driven by higher AI-optimized servers offerings and support and maintenance associated with products sold in prior periods.
+Added: During both the second quarter and first six months of Fiscal 2027, services net revenue remained flat as a decline in Corporate and other services net revenue was offset by an increase in ISG services net revenue.
A substantial portion of services net revenue is derived from offerings that have been deferred over a period of time.
As a result, reported growth rates for services net revenue will be different than reported growth rates for product net revenue.
−Removed: From a geographical perspective, net revenue increased in the Americas, the Europe, Middle East and Africa region (“EMEA”), and the Asia-Pacific and Japan region (“APJ”) during the first quarter of Fiscal 2027, most notably within the Americas.
−Removed: During the first quarter of Fiscal 2027, gross margin and non-GAAP gross margin increased 58% to $7.8 billion and 57% to $7.9 billion, respectively, primarily due to an increase in ISG gross margin and, to a lesser extent, CSG gross margin.
+Added: From a geographical perspective, net revenue increased in the Americas, the Europe, Middle East and Africa region (“EMEA”), and the Asia-Pacific and Japan region (“APJ”) during the second quarter and first six months of Fiscal 2027, most notably within the Americas.
+Added: During the second quarter of Fiscal 2027, gross margin and non-GAAP gross margin increased 80% to $9.8 billion and 78% to $9.9 billion, respectively.
+Added: During the first six months of Fiscal 2027, gross margin and non-GAAP gross margin increased 70% to $17.6 billion and 68% to $17.9 billion, respectively.
+Added: The increases in gross margin and non-GAAP gross margin were primarily due to an increase in ISG gross margin and, to a lesser extent, CSG gross margin.
The increase in ISG gross margin was driven by growth in our servers and networking offerings and, to a lesser extent, our storage offerings.
The increase in CSG gross margin was primarily driven by growth in our commercial offerings.
−Removed: During the first quarter of Fiscal 2027, gross margin percentage and non-GAAP gross margin percentage decreased 330 basis points to 17.8% and 350 basis points to 18.1%, respectively.
−Removed: The decreases were primarily driven by a shift in mix towards our AI-optimized servers offerings.
−Removed: • Product Gross Margin — During the first quarter of Fiscal 2027, product gross margin and non-GAAP product gross margin increased 112% and 108%, respectively, to $5.3 billion.
+Added: During the second quarter of Fiscal 2027, gross margin percentage and non-GAAP gross margin percentage increased 260 basis points to 20.9% and 240 basis points to 21.1%, respectively, driven by disciplined pricing.
+Added: During the first six months of Fiscal 2027, gross margin percentage and non-GAAP gross margin percentage decreased 10 basis points to 19.4% and 30 basis points to 19.7%, respectively, primarily due to a shift in mix towards our AI-optimized servers offerings, the effect of which was largely offset by disciplined pricing.
+Added: • Product Gross Margin — During the second quarter of Fiscal 2027, product gross margin and non-GAAP product gross margin increased 146% to $7.1 billion and 143% to $7.2 billion, respectively.
+Added: During the first six months of Fiscal 2027, product gross margin and non-GAAP product gross margin increased 130% to $12.4 billion and 127% to $12.5 billion, respectively.
The increases were attributable to an increase in ISG product gross margin and, to a lesser extent, CSG product gross margin.
1 unchanged sentence
The increase in CSG gross margin was primarily attributable to growth in our commercial offerings.
−Removed: During the first quarter of Fiscal 2027, product gross margin percentage and non-GAAP product gross margin percentage decreased 30 basis points to 13.8% and 60 basis points to 13.9%, respectively, primarily due to a shift in mix towards our AI-optimized servers offerings.
−Removed: • Services Gross Margin — During the first quarter of Fiscal 2027, services gross margin and non-GAAP services gross margin increased 3% to $2.5 billion and 5% to $2.6 billion, respectively.
−Removed: The increases were attributable to an increase in ISG services gross margin, which was primarily driven by higher support and maintenance associated with products sold in prior periods and increased demand for our servers and networking offerings.
−Removed: During the first quarter of Fiscal 2027, services gross margin percentage and non-GAAP services gross margin percentage increased 160 basis points to 44.1% and 260 basis points to 46.0%, respectively, primarily driven by a shift in mix, as we no longer act as a distributor of standalone VMware offerings.
+Added: During the second quarter of Fiscal 2027, both product gross margin percentage and non-GAAP product gross margin percentage increased 520 basis points to 17.3% and 17.5%, respectively.
+Added: During the first six months of Fiscal 2027, product gross margin percentage and non-GAAP product gross margin percentage increased 270 basis points to 15.6% and 260 basis points to 15.8%, respectively.
+Added: The increases in product gross margin percentage and non-GAAP product gross margin percentage were primarily due to disciplined pricing.
+Added: During the first six months of Fiscal 2027, the increases were partially offset by a shift in mix towards our AI-optimized servers offerings.
+Added: • Services Gross Margin — During the second quarter of Fiscal 2027, services gross margin and non-GAAP services gross margin increased 6% to $2.7 billion and 5% to $2.8 billion, respectively.
+Added: During the first six months of Fiscal 2027, both services gross margin and non-GAAP services gross margin increased 5% to $5.2 billion and $5.4 billion, respectively.
+Added: The increases were primarily attributable to an increase in ISG services gross margin.
+Added: During the second quarter of Fiscal 2027, services gross margin percentage and non-GAAP services gross margin percentage increased 240 basis points to 46.2% and 210 basis points to 47.0%, respectively.
+Added: During the first six months of Fiscal 2027, services gross margin percentage and non-GAAP services gross margin percentage increased 210 basis points to 45.2% and 240 basis points to 46.5%, respectively, primarily driven by a shift in mix, as we no longer act as a distributor of standalone VMware offerings.
Vendor Programs
6 unchanged sentences
We monitor our component costs and seek to address the effects of any changes to terms that might arise under our vendor rebate programs.
−Removed: Our gross margins for the first quarter of Fiscal 2027 were not materially affected by any changes to the terms of our vendor rebate programs, as the amounts we received under these programs were generally stable relative to our total net cost.
+Added: Our gross margins for the second quarter and first six months of Fiscal 2027 were not materially affected by any changes to the terms of our vendor rebate programs, as the amounts we received under these programs were generally stable relative to our total net cost.
We are not aware of any significant changes to our vendor rebate programs that will materially impact our results in the near term.
1 unchanged sentence
The following table presents information regarding our operating expenses for the periods indicated:
−Removed: Three Months Ended
−Removed: May 1, 2026 May 2, 2025
−Removed: Dollars % of Net Revenue % Change Dollars % of Net Revenue
+Added: Three Months Ended Six Months Ended
+Added: July 31, 2026 August 1, 2025 July 31, 2026 August 1, 2025
+Added: Dollars % of Net Revenue (a)
+Added: % Change Dollars % of Net Revenue (a)
+Added: Dollars % of Net Revenue (a)
+Added: % Change Dollars % of Net Revenue (a)
(in millions, except percentages)
3 unchanged sentences
Total operating expenses $ 4,445 9.5 % 21 % $ 3,674 12.3 % $ 8,571 9.4 % 15 % $ 7,446 14.0 %
−Removed: Three Months Ended
−Removed: May 1, 2026 May 2, 2025
−Removed: Dollars % of Net Revenue % Change Dollars % of Net Revenue
+Added: Three Months Ended Six Months Ended
+Added: July 31, 2026 August 1, 2025 July 31, 2026 August 1, 2025
+Added: Dollars % of Net Revenue (a)
+Added: % Change Dollars % of Net Revenue (a)
+Added: Dollars % of Net Revenue (a)
+Added: % Change Dollars % of Net Revenue (a)
(in millions, except percentages)
Non-GAAP operating expenses $ 4,000 8.5 % 22 % $ 3,288 11.0 % $ 7,712 8.5 % 15 % $ 6,679 12.6 %
−Removed: During the first quarter of Fiscal 2027, total operating expenses increased 9% due to an increase in research and development (“R&D”) expenses and selling, general, and administrative (“SG&A”) expenses.
−Removed: • Selling, General, and Administrative — During the first quarter of Fiscal 2027, SG&A expenses increased 6%, principally due to an increase in employee compensation and benefits expense related primarily to an increase in variable compensation.
−Removed: • Research and Development — R&D expenses increased 22% during the first quarter of Fiscal 2027, principally due to an increase in employee compensation and benefits expense related primarily to an increase in variable compensation.
−Removed: As a percentage of net revenue, R&D expenses for the first quarter of Fiscal 2027 and Fiscal 2026 were 2.2% and 3.5%, respectively.
−Removed: The decline in R&D expense as a percentage of revenue was driven by an increase in net revenue.
−Removed: We continue to support R&D initiatives to innovate and introduce new and enhanced solutions into the market.
−Removed: During the first quarter of Fiscal 2027, non-GAAP operating expenses increased 9%, principally due to an increase in employee compensation and benefits expense related primarily to an increase in variable compensation.
+Added: ____________________
+Added: (a) Totals of net revenue percentages may not foot due to rounding.
+Added: During the second quarter and first six months of Fiscal 2027, total operating expenses increased 21% and 15%, respectively, due to an increase in research and development (“R&D”) expenses and selling, general, and administrative (“SG&A”) expenses.
+Added: • Selling, General, and Administrative — During the second quarter and first six months of Fiscal 2027, SG&A expenses increased 15% and 11%, respectively, principally due to an increase in employee compensation and benefits expense related primarily to an increase in variable compensation.
+Added: • Research and Development — During the second quarter and first six months of Fiscal 2027, R&D expenses increased 41% and 31%, respectively, principally due to an increase in employee compensation and benefits expense related primarily to an increase in variable compensation.
+Added: During the second quarter and first six months of Fiscal 2027, non-GAAP operating expenses increased 22% and 15%, respectively, principally due to an increase in employee compensation and benefits expense related primarily to an increase in variable compensation.
We continue to make strategic investments designed to enable growth and innovation, while balancing our efforts to drive cost efficiencies in the business.
1 unchanged sentence
Operating Income
−Removed: During the first quarter of Fiscal 2027, operating income and non-GAAP operating income increased by 214% to $3.7 billion and 154% to $4.2 billion, respectively.
−Removed: The increases were primarily attributable to an increase in ISG operating income and, to a lesser extent, CSG operating income.
+Added: During the second quarter of Fiscal 2027, operating income and non-GAAP operating income increased by 204% to $5.4 billion and 160% to $5.9 billion, respectively.
+Added: During the first six months of Fiscal 2027, operating income and non-GAAP operating income increased by 208% to $9.0 billion and 157% to $10.2 billion, respectively.
+Added: The increases were attributable to an increase in ISG operating income and, to a lesser extent, CSG operating income.
The increase in ISG operating income was driven by our servers and networking offerings and, to a lesser extent, our storage offerings.
The increase in CSG operating income was driven primarily by our commercial offerings.
−Removed: During the first quarter of Fiscal 2027, operating income and non-GAAP operating income as a percentage of net revenue increased 330 basis points to 8.3% and 260 basis points to 9.7%, respectively.
−Removed: Operating income as a percentage of net revenue benefited from the favorable impact of a decline in operating expense rate as a result of substantial net revenue growth.
−Removed: The favorable impact of operating expense rate was partially offset by a decline in gross margin rate due to a shift in mix towards our AI-optimized servers offerings.
+Added: During the second quarter and first six months of Fiscal 2027, operating income as a percentage of net revenue increased 550 basis points to 11.5% and 450 basis points to 10.0%, respectively.
+Added: During the second quarter and first six months of Fiscal 2027, non-GAAP operating income as a percentage of net revenue increased 490 basis points to 12.6% and 380 basis points to 11.2%, respectively.
+Added: Operating income and non-GAAP operating income as a percentage of net revenue benefited from the favorable impact of a decline in operating expense rate as a result of substantial net revenue growth.
+Added: During the second quarter of Fiscal 2027, operating income and non-GAAP operating income rate also benefited from an increase in gross margin rate driven by disciplined pricing.
Interest and Other, Net
−Removed: The following table presents information regarding interest and other, net for the periods indicated:
−Removed: Three Months Ended
−Removed: May 1, 2026 May 2, 2025
−Removed: (in millions)
−Removed: Investment income, primarily interest $ 81 $ 31
−Removed: Gain on investments, net 631 17
−Removed: Interest expense (391) (354)
−Removed: Foreign exchange (17) (5)
−Removed: Gain on disposition of businesses and assets — 236
−Removed: Other (12) (7)
−Removed: Total interest and other, net $ 292 $ (82)
−Removed: During the first quarter of Fiscal 2027, the change in interest and other, net was favorable primarily due to gains recognized within our strategic investments portfolio, partially offset by the gain on the sale of Secureworks recognized during the first quarter of Fiscal 2026.
+Added: During the second quarter and first six months of Fiscal 2027, interest and other, net decreased by 24% to $254 million of expense and 109% to $38 million of income, respectively.
+Added: The favorable changes were primarily attributable to gains recognized within our strategic investments portfolio.
Income and Other Taxes
−Removed: The following table presents information regarding our income and other taxes for the periods indicated:
−Removed: Three Months Ended
−Removed: May 1, 2026 May 2, 2025
−Removed: (in millions, except percentages)
−Removed: Income before income taxes $ 3,948 $ 1,083
−Removed: Income tax expense $ 510 $ 118
−Removed: Effective income tax rate 12.9 % 10.9 %
−Removed: For the first quarter of Fiscal 2027 and Fiscal 2026, our effective income tax rates were 12.9% and 10.9%, respectively.
−Removed: The changes in our effective income tax rates for Fiscal 2027 as compared to Fiscal 2026 were primarily attributable to discrete tax items.
−Removed: For the first quarter of Fiscal 2027 and Fiscal 2026, we recorded discrete tax benefits of $0.2 billion and $0.1 billion, respectively, related to stock-based compensation.
+Added: For the second quarter of Fiscal 2027 and Fiscal 2026, our effective income tax rates were 19.5% on pre-tax income of $5.1 billion and 19.2% on pre-tax income of $1.4 billion, respectively.
+Added: For the first six months of Fiscal 2027 and Fiscal 2026, our effective income tax rates were 16.6% on pre-tax income of $9.1 billion and 15.6% on pre-tax income of $2.5 billion, respectively.
See Note 11 of the Notes to the Condensed Consolidated Financial Statements included in this report for additional information about our income and other taxes.
−Removed: During the first quarter of Fiscal 2027, net income increased 256% to $3.4 billion primarily due to an increase in operating income and, to a lesser extent, a favorable change in interest and other, net, the effects of which were partially offset by higher income tax expense.
−Removed: During the first quarter of Fiscal 2027, non-GAAP net income increased 194% to $3.2 billion, primarily due to an increase in operating income, partially offset by higher income tax expense.
+Added: During the second quarter of Fiscal 2027, net income and non-GAAP net income increased 255% to $4.1 billion and 189% to $4.6 billion, respectively.
+Added: During the first six months of Fiscal 2027, net income and non-GAAP net income increased 256% to $7.6 billion and 191% to $7.8 billion, respectively.
+Added: The increases in net income and non-GAAP net income for both periods were primarily due to an increase in operating income, partially offset by higher income tax expense.
Business Unit Results
3 unchanged sentences
The following table presents net revenue and operating income attributable to ISG for the periods indicated:
−Removed: Three Months Ended
−Removed: May 1, 2026 % Change May 2, 2025
+Added: Three Months Ended Six Months Ended
+Added: July 31, 2026 % Change August 1, 2025 July 31, 2026 % Change August 1, 2025
(in millions, except percentages)
7 unchanged sentences
% of segment net revenue 15.0 % 8.8 % 12.9 % 9.1 %
−Removed: Net Revenue — During the first quarter of Fiscal 2027, ISG net revenue increased 181%, driven by strength in our AI-optimized servers offerings and, to a lesser extent, our traditional servers and networking offerings and our storage offerings.
−Removed: AI-optimized servers net revenue increased 757% during the first quarter of Fiscal 2027, primarily driven by an increase in units sold as a result of significant increased demand for these offerings.
−Removed: In addition to unit demand growth that exceeded supply, traditional servers and networking net revenue increased 92% during the first quarter of Fiscal 2027, primarily due to an increase in the average selling price of these offerings, driven by disciplined pricing as we navigated the macroeconomic environment and, to a lesser extent, richer configurations.
−Removed: During the first quarter of Fiscal 2027, storage net revenue increased 8% primarily due to growth in demand for our Dell-IP storage offerings.
−Removed: From a geographical perspective, ISG net revenue increased in the Americas, EMEA, and APJ during the first quarter of Fiscal 2027, most notably within the Americas.
−Removed: Operating Income — During the first quarter of Fiscal 2027, ISG operating income as a percentage of net revenue increased 80 basis points to 10.5%, due to a decline in operating expense rate that outpaced the decline in gross margin rate.
+Added: Net Revenue — During the second quarter and first six months of Fiscal 2027, ISG net revenue increased 89% and 124%, respectively, driven by strength in our AI-optimized servers offerings and, to a lesser extent, our traditional servers and networking offerings and our storage offerings.
+Added: AI-optimized servers net revenue increased 100% and 222% during the second quarter and first six months of Fiscal 2027, respectively, primarily driven by an increase in units sold as a result of significant increased demand for our AI-optimized servers offerings, and, to a lesser extent, an increase in the average selling prices of these offerings.
+Added: The increase in average selling prices was driven by richer configurations and, to a lesser extent, disciplined pricing.
+Added: Traditional servers and networking net revenue increased 122% and 108% during the second quarter and first six months of Fiscal 2027, respectively, primarily driven by an increase in the average selling price of these offerings, driven by disciplined pricing and, to a lesser extent, richer configurations.
+Added: During the second quarter and first six months of Fiscal 2027, storage net revenue increased 26% and 17%, respectively, primarily due to growth in demand for our Dell-IP storage offerings and disciplined pricing.
+Added: From a geographical perspective, ISG net revenue increased in the Americas, EMEA, and APJ during the second quarter and first six months of Fiscal 2027, most notably within the Americas.
+Added: Operating Income — During the second quarter of Fiscal 2027, ISG operating income as a percentage of net revenue increased 620 basis points to 15.0% due to a decline in operating expense rate and an increase in gross margin rate.
Operating expense rate declined primarily due to substantial ISG net revenue growth.
+Added: The increase in gross margin rate was primarily driven by disciplined pricing.
+Added: During the first six months of Fiscal 2027, ISG operating income as a percentage of net revenue increased 380 basis points to 12.9% due to a decline in operating expense rate that outpaced the decline in gross margin rate.
+Added: Operating expense rate declined primarily due to substantial ISG net revenue growth.
Gross margin rate decreased primarily as the result of a shift in mix towards our AI-optimized servers offerings.
1 unchanged sentence
The following table presents net revenue and operating income attributable to CSG for the periods indicated:
−Removed: Three Months Ended
−Removed: May 1, 2026 % Change May 2, 2025
+Added: Three Months Ended Six Months Ended
+Added: July 31, 2026 % Change August 1, 2025 July 31, 2026 % Change August 1, 2025
(in millions, except percentages)
5 unchanged sentences
% of segment net revenue 7.6 % 6.4 % 7.8 % 5.8 %
−Removed: Net Revenue — During the first quarter of Fiscal 2027, CSG net revenue increased 17%, primarily driven by strength in our commercial offerings and, to a lesser extent, our consumer offerings.
−Removed: During the first quarter of Fiscal 2027, commercial net revenue increased 18% primarily due to an increase in the average selling prices of our commercial offerings and an increase in units sold.
−Removed: Consumer net revenue increased 9% during the first quarter of Fiscal 2027 due to an increase in the average selling prices of our consumer offerings, partially offset by a decline in units sold.
−Removed: The increase in the average selling prices of our CSG offerings was primarily attributable to disciplined pricing as we navigated the macroeconomic environment.
−Removed: From a geographical perspective, CSG net revenue increased in EMEA, APJ, and the Americas during the first quarter of Fiscal 2027, most notably in EMEA.
−Removed: Operating Income — During the first quarter of Fiscal 2027, CSG operating income as a percentage of net revenue increased 280 basis points to 8.0%.
−Removed: The increase in operating income rate during the first quarter of Fiscal 2027 was due to an increase in gross margin rate primarily driven by disciplined pricing as we navigated the macroeconomic environment and, to a lesser extent, a decline in operating expense rate driven by CSG net revenue growth.
+Added: Net Revenue — During the second quarter and first six months of Fiscal 2027, CSG net revenue increased 20% and 19%, respectively, primarily driven by strength in our commercial offerings.
+Added: During the second quarter and first six months of Fiscal 2027, commercial net revenue increased 22% and 20%, respectively, primarily due to an increase in the average selling prices of our commercial offerings.
+Added: During the second quarter of Fiscal 2027, the increase was partially offset by a decrease in units sold.
+Added: Consumer net revenue increased 7% and 8% during the second quarter and first six months of Fiscal 2027, respectively, due to an increase in the average selling prices of our consumer offerings, partially offset by a decline in units sold.
+Added: The increase in the average selling prices of our CSG offerings was primarily attributable to disciplined pricing.
+Added: From a geographical perspective, CSG net revenue increased in the Americas, EMEA, and APJ during the second quarter and first six months of Fiscal 2027, most notably in the Americas.
+Added: Operating Income — During the second quarter and first six months of Fiscal 2027, CSG operating income as a percentage of net revenue increased 120 basis points to 7.6% and 200 basis points to 7.8%, respectively, driven by an increase in gross margin rate and, to a lesser extent, a decline in operating expense rate.
+Added: The increase in gross margin rate was primarily driven by disciplined pricing.
+Added: The decline in operating expense rate was primarily due to CSG net revenue growth.
OTHER BALANCE SHEET ITEMS
1 unchanged sentence
We sell products and services directly to customers and through a variety of sales channels, including retail distribution.
−Removed: Our accounts receivable, net was $25.9 billion and $17.6 billion as of May 1, 2026 and January 30, 2026, respectively.
+Added: Our accounts receivable, net was $22.9 billion and $17.6 billion as of July 31, 2026 and January 30, 2026, respectively.
The increase in accounts receivable, net was primarily driven by an increase in net revenue largely due to our AI-optimized servers offerings.
1 unchanged sentence
The allowance for expected credit losses is an estimate based on an analysis of historical loss experience, current receivables aging, and management’s assessment of current conditions, as well as specific identifiable customer accounts considered at risk or uncollectible.
−Removed: As of both May 1, 2026 and January 30, 2026, the allowance for expected credit losses was $77 million.
+Added: As of July 31, 2026 and January 30, 2026, the allowance for expected credit losses was $56 million and $77 million, respectively.
Based on our assessment, we believe that we are adequately reserved for expected credit losses.
3 unchanged sentences
To support financing solutions and services as part of the portfolio, DFS originates, collects, and services customer receivables primarily related to the purchase of our product and services solutions.
−Removed: New financing originations were $2.8 billion and $1.6 billion for the first quarter of Fiscal 2027 and Fiscal 2026, respectively.
+Added: New financing originations were $7.5 billion and $2.4 billion for the second quarter of Fiscal 2027 and Fiscal 2026, respectively, and $10.3 billion and $4.0 billion for the first six months of Fiscal 2027 and Fiscal 2026, respectively.
+Added: The increase in our new financing originations was primarily attributable to increased demand for our ISG offerings.
Our leases are generally classified as sales-type leases or operating leases.
3 unchanged sentences
We recognize product revenue and depreciation expense, classified as cost of net revenue, over the contract term.
−Removed: As of May 1, 2026 and January 30, 2026, our financing receivables, net were $14.0 billion and $14.3 billion, respectively .
+Added: As of July 31, 2026 and January 30, 2026, our financing receivables, net were $20.4 billion and $14.3 billion, respectively .
+Added: The increase in financing receivables, net was primarily attributable to increased demand for our ISG offerings .
We maintain an allowance to cover expected financing receivables credit losses and evaluate credit loss expectations based on our total portfolio.
−Removed: The principal charge-off rate for our financing receivables portfolio was 0.3% for both the first quarter of Fiscal 2027 and Fiscal 2026.
+Added: The principal charge-off rate for our financing receivables portfolio was 0.5% and 0.1% for the second quarter of Fiscal 2027 and Fiscal 2026, respectively, and 0.4% and 0.2% for the first six months of Fiscal 2027 and Fiscal 2026, respectively.
The credit quality of our financing receivables remains strong due to the mix of high-quality commercial accounts in our portfolio.
4 unchanged sentences
We retain a residual interest in equipment leased under our lease programs.
−Removed: As of May 1, 2026 and January 30, 2026, the residual interest recorded as part of financing receivables was $196 million and $198 million, respectively.
+Added: As of both July 31, 2026 and January 30, 2026, the residual interest recorded as part of financing receivables was $0.2 billion.
The amount of the residual interest is established at the inception of the lease based upon estimates of the value of the equipment at the end of the lease term using historical studies, industry data, and future value-at-risk demand valuation methods.
2 unchanged sentences
Further, the lease agreement defines applicable return conditions and remedies for non-compliance to ensure that the leased equipment will be in good operating condition upon return.
−Removed: No expected losses were recorded related to residual assets during the first quarter of Fiscal 2027 and Fiscal 2026.
−Removed: As of May 1, 2026 and January 30, 2026, equipment under operating leases, net was $2.7 billion and $2.5 billion, respectively.
+Added: No expected losses were recorded related to residual assets during the second quarter and first six months of Fiscal 2027 and Fiscal 2026.
+Added: As of July 31, 2026 and January 30, 2026, equipment under operating leases, net was $3.2 billion and $2.5 billion, respectively.
We assess the carrying amount of the equipment under operating leases for impairment whenever events or circumstances may indicate that an impairment has occurred.
−Removed: No material impairment losses were recorded related to such equipment during the first quarter of Fiscal 2027 and Fiscal 2026.
+Added: No material impairment losses were recorded related to such equipment during the second quarter and first six months of Fiscal 2027 and Fiscal 2026.
See Note 4 of the Notes to the Condensed Consolidated Financial Statements included in this report for additional information about our financing receivables and the associated allowances, and equipment under operating leases.
6 unchanged sentences
We believe that our current cash and cash equivalents, together with cash that will be provided by future operations and borrowings and issuances expected to be available under our revolving credit facility and commercial paper program, will be sufficient over the next twelve months and for the foreseeable future thereafter to meet our material cash requirements, including funding of our operations, debt-related payments, capital expenditures, and other corporate needs.
−Removed: As part of our overall capital allocation strategy, we intend to continue returning capital to our stockholders through both share repurchase programs and dividend payments and to use the remaining available cash to drive growth and maintain our investment grade credit rating.
+Added: As part of our overall capital allocation strategy, we intend to continue returning capital to our shareholders through both share repurchase programs and dividend payments and to use the remaining available cash to drive growth and maintain our investment grade credit rating.
The following table presents our cash and cash equivalents as well as our available borrowings as of the dates indicated:
−Removed: May 1, 2026 January 30, 2026
+Added: July 31, 2026 January 30, 2026
(in millions)
−Removed: Cash and cash equivalents, and available borrowings:
Cash and cash equivalents $ 11,569 $ 11,528
1 unchanged sentence
Total cash and cash equivalents, and available borrowings $ 17,453 $ 17,414
−Removed: During the first quarter of Fiscal 2027, cash and cash equivalents increased by $0.1 billion primarily due to cash flows from operating activities, the effects of which were largely offset by the return of capital to our stockholders, capital expenditures, payments to settle employee tax withholdings on stock-based compensation, and our net debt repayments.
−Removed: As of May 1, 2026, our revolving credit facility had a maximum capacity of $6.0 billion.
+Added: During the first six months of Fiscal 2027, cash and cash equivalents was flat as the cash flows from operating activities and net proceeds from the issuance of debt were largely offset by the return of capital to our shareholders and capital expenditures.
+Added: As of July 31, 2026, our revolving credit facility had a maximum capacity of $6.0 billion.
Available borrowings under this facility are reduced by draws on the facility and outstanding letters of credit.
−Removed: As of May 1, 2026, there were no borrowings outstanding under the facility and remaining available borrowings totaled approximately $5.9 billion.
+Added: As of July 31, 2026, there were no outstanding borrowings pursuant to draws on the facility and remaining available borrowings totaled approximately $5.9 billion.
The facility also acts as a backstop to provide liquidity support for our commercial paper program.
We maintain a commercial paper program under which we may issue unsecured notes in a maximum aggregate face amount of $5.0 billion outstanding at any time, with maturities of up to 397 days from the date of issue.
−Removed: As of May 1, 2026, we had no outstanding issuances under the program.
+Added: As of July 31, 2026, we had no outstanding issuances under the program.
We may regularly use our available borrowings from the revolving credit facility and issuances under the commercial paper program, generally on a short-term basis, for general corporate purposes.
1 unchanged sentence
The following table presents our outstanding debt as of the dates indicated:
−Removed: May 1, 2026 Change January 30, 2026
+Added: July 31, 2026 Change January 30, 2026
(in millions)
7 unchanged sentences
Total DFS related debt 20,660 6,014 14,646
+Added: Other 104 5 99
Total debt, principal amount 34,747 2,984 31,763
1 unchanged sentence
Total debt, carrying value $ 34,466 $ 2,963 $ 31,503
−Removed: During the first quarter of Fiscal 2027, the outstanding principal amount of our total debt decreased $0.4 billion to $31.4 billion, driven primarily by net repayments of our Senior Notes.
+Added: During the first six months of Fiscal 2027, the outstanding principal amount of our total debt increased $3.0 billion to $34.7 billion, driven primarily by an increase in net debt from the issuance of Senior Notes.
We define core debt as the total principal amount of our debt, less DFS related debt and other debt.
−Removed: Our core debt was $16.7 billion and $17.0 billion as of May 1, 2026 and January 30, 2026, respectively.
+Added: Our core debt was $14.0 billion and $17.0 billion as of July 31, 2026 and January 30, 2026, respectively.
See Note 6 of the Notes to the Condensed Consolidated Financial Statements included in this report for additional information about our debt.
6 unchanged sentences
The following table presents DFS owned assets as of the dates indicated:
−Removed: May 1, 2026 January 30, 2026
+Added: July 31, 2026 January 30, 2026
(in millions)
9 unchanged sentences
The following table presents a summary of our Condensed Consolidated Statements of Cash Flows for the periods indicated:
−Removed: Three Months Ended
−Removed: May 1, 2026 May 2, 2025
+Added: Six Months Ended
+Added: July 31, 2026 August 1, 2025
(in millions)
5 unchanged sentences
Change in cash, cash equivalents, and restricted cash $ 31 $ 4,472
−Removed: Operating Activities — Cash provided by operating activities was $4.1 billion during the first quarter of Fiscal 2027 and was driven by net revenue growth and profitability, partially offset by working capital dynamics.
−Removed: Working capital was primarily affected by increased demand for our AI-optimized servers offerings.
−Removed: During the first quarter of Fiscal 2026, cash provided by operating activities was $2.8 billion and was driven by profitability and similar working capital dynamics as well as by other business impacts, including annual incentive-based personnel-related payments.
+Added: Operating Activities — Cash provided by operating activities was $6.3 billion during the first six months of Fiscal 2027 and was driven by net revenue growth, profitability, and working capital dynamics, partially offset by higher financing receivables, all of which factors were primarily affected by increased demand for our ISG offerings.
+Added: During the first six months of Fiscal 2026, cash provided by operating activities was $5.3 billion and was driven by net revenue growth, profitability, and similar working capital dynamics.
Investing Activities — Investing activities primarily consist of cash used to fund capital expenditures for property, plant, and equipment inclusive of equipment under operating leases and equipment used to support our as-a-service offerings, which we refer to collectively as assets in a customer contract.
Additional activities may include capitalized software development costs, the maturities, sales, and purchases of investments, and acquisitions and divestitures.
−Removed: Cash used in investing activities was $1.1 billion during the first quarter of Fiscal 2027 and primarily consisted of cash used for capital expenditures.
−Removed: Cash used in investing activities was $0.1 billion during the first quarter of Fiscal 2026 and consisted of cash used for capital expenditures, largely offset by cash proceeds from the sale of Secureworks.
−Removed: Financing Activities — Financing activities primarily consist of the proceeds and repayments of debt and return of capital to our stockholders.
−Removed: Cash used in financing activities was $3.0 billion during the first quarter of Fiscal 2027 and primarily consisted of repurchases of common stock, inclusive of payments to settle employee tax withholdings on stock-based compensation, the payment of quarterly dividends, and our net debt repayments.
−Removed: Cash provided by financing activities was $1.2 billion during the first quarter of Fiscal 2026 and primarily consisted of net proceeds from the issuance of Senior Notes and DFS debt, partially offset by repurchases of common stock, inclusive of payments to settle employee tax withholdings on stock-based compensation, and the payment of quarterly dividends.
+Added: Cash used in investing activities was $2.4 billion during the first six months of Fiscal 2027 and primarily consisted of cash used for capital expenditures.
+Added: Cash used in investing activities was $0.7 billion during the first six months of Fiscal 2026 and consisted of cash used for capital expenditures, partially offset by cash proceeds from the sale of Secureworks.
+Added: Financing Activities — Financing activities primarily consist of the proceeds and repayments of debt and return of capital to our shareholders.
+Added: Cash used by financing activities was $3.8 billion and $0.2 billion during the first six months of Fiscal 2027 and Fiscal 2026, respectively, and primarily consisted of repurchases of common stock, inclusive of payments to settle employee tax withholdings on stock-based compensation, and the payment of quarterly dividends, the effects of which were partially offset by net proceeds from the issuance of Senior Notes and DFS debt.
DFS Cash Flow Impacts — DFS offerings are initially funded through cash on hand at the time of origination, some of which is subsequently replaced with financing.
1 unchanged sentence
For offerings that qualify as operating leases, the initial funding is classified as a capital expenditure and reflected as cash flows used in investing activities.
−Removed: DFS new financing originations were $2.8 billion during the first quarter of Fiscal 2027 and $1.6 billion during the first quarter of Fiscal 2026.
−Removed: As of May 1, 2026, we had $14.0 billion of total net financing receivables and $2.7 billion of equipment under operating leases, net.
+Added: DFS new financing originations were $10.3 billion and $4.0 billion during the first six months of Fiscal 2027 and Fiscal 2026, respectively.
+Added: As of July 31, 2026, we had $20.4 billion of total net financing receivables and $3.2 billion of equipment under operating leases, net.
Supply Chain Finance Program — We maintain a Supply Chain Finance Program (the “SCF Program”) that enables eligible suppliers to sell receivables due from us to a third-party financial institution at the suppliers’ sole discretion.
4 unchanged sentences
Capital Commitments and Other Cash Requirements
−Removed: Capital Expenditures — We spent $1.0 billion and $0.6 billion during the first quarter of Fiscal 2027 and Fiscal 2026, respectively, on property, plant, and equipment and capitalized software development costs.
−Removed: Of total expenditures incurred, funding of assets in a customer contract totaled $0.7 billion and $0.3 billion during the first quarter of Fiscal 2027 and Fiscal 2026, respectively.
+Added: Capital Expenditures — We spent $2.2 billion and $1.2 billion during the first six months of Fiscal 2027 and Fiscal 2026, respectively, on property, plant, and equipment and capitalized software development costs.
+Added: Of total expenditures incurred, funding of assets in a customer contract totaled $1.6 billion and $0.7 billion during the first six months of Fiscal 2027 and Fiscal 2026, respectively.
Product demand, product mix, the use of contract manufacturers, and ongoing investments in operating and information technology infrastructure influence the level and prioritization of our capital expenditures.
2 unchanged sentences
Following the February 26, 2026 approval, we had approximately $15.2 billion of authorized shares remaining under the program.
−Removed: During the first quarter of Fiscal 2027, we repurchased approximately 11 million shares of Class C Common Stock for a total purchase price of approximately $1.6 billion.
−Removed: During the first quarter of Fiscal 2026, we repurchased approximately 22 million shares of Class C Common Stock for a total purchase price of approximately $2.0 billion.
−Removed: Dividend Payments — During the first quarter of Fiscal 2027 and Fiscal 2026, we paid $0.5 billion and $0.4 billion in dividends and dividend equivalents, respectively, at a rate of $0.630 and $0.525 per share per fiscal quarter, respectively.
+Added: During the first six months of Fiscal 2027, we repurchased approximately 20 million shares of Class C Common Stock for a total purchase price of approximately $5.4 billion.
+Added: During the first six months of Fiscal 2026, we repurchased approximately 30 million shares of Class C Common Stock for a total purchase price of approximately $2.9 billion.
+Added: Dividend Payments — During the first six months of Fiscal 2027 and Fiscal 2026, we paid $0.9 billion and $0.8 billion in dividends and dividend equivalents, respectively, at a rate of $0.630 and $0.525 per share per fiscal quarter, respectively.
Purchase Obligations — Purchase obligations are contractual obligations that are enforceable and legally binding on us to purchase goods or services and that specify all significant terms, including fixed or minimum quantities to be purchased;
8 unchanged sentences
We expect our purchases of those components will continue to increase, including committed purchases under long-term strategic supplier agreements at prices to be mutually agreed upon at a future date.
−Removed: As of May 1, 2026, we had purchase obligations of $20.8 billion, of which $17.3 billion is payable within twelve months.
+Added: As of July 31, 2026, we had purchase obligations of $34.8 billion, of which $24.6 billion is payable within twelve months.
Market Conditions
3 unchanged sentences
We monitor credit risk associated with our financial counterparties using various market credit risk indicators such as credit ratings issued by nationally recognized credit rating agencies and changes in market credit default swap levels.
−Removed: To date, the majority of revenue from our AI‑optimized solutions has involved purchases by a relatively small number of large customers and cloud service providers.
+Added: To date, the majority of revenue from our AI‑optimized servers offerings has involved purchases by a relatively small number of large customers and cloud service providers.
Such purchases generally involve larger amounts of credit, and could impact our overall credit risk in trade and financing receivables.
21 unchanged sentences
The following table presents summarized results of operations information for the Obligor Group for the period indicated:
−Removed: Three Months Ended
+Added: Six Months Ended
+Added: July 31, 2026
(in millions)
8 unchanged sentences
The following table presents summarized balance sheet information for the Obligor Group as of the dates indicated:
−Removed: May 1, 2026 January 30, 2026
+Added: July 31, 2026 January 30, 2026
(in millions)
14 unchanged sentences
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.