Dell Technologies (NYSE: DELL) reported its fiscal 2026 first-quarter earnings, showing a revenue increase of 5% year-over-year to $23.4 billion. The company is experiencing growth across its core markets and is in a stable condition with a notable rise in demand for AI-optimized servers.

For the first quarter, Dell’s operating income reached $1.7 billion, a 10% increase compared to the same period last year. The net income for the quarter came in at $1.1 billion, representing a 13% rise year-over-year. The diluted earnings per share (EPS) also rose by 17%, reaching $1.55, which grew three times faster than revenue.

Sales for Dell’s Infrastructure Solutions Group (ISG) surged to $10.3 billion, marking a 12% increase. Within this segment, servers and networking revenue hit a record of $6.3 billion, up 16%. Storage revenue rose 6% to $4.0 billion. The operating income for ISG was $1.0 billion, an increase of 36% from the previous year.

The Client Solutions Group (CSG) generated $12.5 billion in revenue, reflecting a 5% year-over-year increase. However, consumer revenue saw a decline of 19% to $1.5 billion, while commercial revenue rose by 9% to $11.0 billion. CSG’s operating income was $653 million, down 16% from last year.

The company’s gross margin was reported at $5.1 billion or 21.6% of revenue, decreasing by 80 basis points. Operating expenses were reduced by 2% to $3.4 billion, representing 14.5% of the revenue. The strong cash flow from operations for the quarter was recorded at $2.8 billion, a considerable increase from $1.0 billion in the prior year.

Dell has provided guidance for the second quarter, expecting revenue between $28.5 billion and $29.5 billion, which translates to a mid-point increase of approximately 16% year-over-year. The anticipated diluted non-GAAP EPS for Q2 will be around $2.25, up 15% compared to the same quarter last year.

For the full fiscal year, Dell reiterated its revenue forecast, expecting between $101 billion and $105 billion, which indicates an 8% rise at the midpoint. The company anticipates a significant increase in AI server shipments, projected at over $15 billion. Adjusted diluted non-GAAP EPS for the fiscal year is expected to reach $9.40, an increase of 15% at the midpoint.

In summary, Dell Technologies showed a robust performance in Q1 with notable revenue and profit increases, driven by a strong demand for AI solutions and an effective operating structure.