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Good afternoon, and welcome to the Fiscal Year 2026 Fourth Quarter Financial Results Conference Call for Dell Technologies Inc. I would like to inform all participants this call is recorded at the request of Dell Technologies Inc. This broadcast is the copyrighted property of Dell Technologies Inc. Any rebroadcast of this information, in whole or in part, without the prior written permission of Dell Technologies Inc. is prohibited. Following prepared remarks, we will conduct a question-and-answer session. At any time during the presentation, I would like to turn the call over to Paul Frantz, Head of Investor Relations. Mr. Frantz, you may begin. Thanks, everyone, for joining us. With me today are Jeffrey W. Clarke, David Kennedy, and Tyler Johnson.

Our earnings materials are available on our IR website, and I encourage you to review these materials. Also, please take some time to view the presentation, which includes additional content to complement our discussion this afternoon. Guidance will be covered on today's call. During this call, unless otherwise indicated, all references to financial measures refer to non-GAAP financial measures, including non-GAAP gross margin, operating expenses, operating income, net income, diluted earnings per share, free cash flow, and adjusted free cash flow. A reconciliation of these measures to their most directly comparable GAAP measures can be found in our web deck and our press release. Growth percentages refer to year-over-year change unless otherwise specified. Statements made during this call that relate to future results and events are forward-looking statements based on current expectations. Actual results and events could differ materially from those projected due to a number of risks and uncertainties, which are discussed in our web deck and our SEC filings. We assume no obligation to update our forward-looking statements. I will now turn it over to Jeffrey W. Clarke. Thanks, Paul, and thanks, everyone, for joining us. FY 2026 was a defining year in our company's history. We delivered record full-year revenue and EPS. Revenue reached $113,500,000,000, up 19%, and EPS grew 27% to $10.30.

We converted that performance into record annual cash flow, over $11,000,000,000, and returned $7,500,000,000 to shareholders, including 54,000,000 shares repurchased, more than double last year. The AI opportunity is meaningfully growing and transforming the company. In FY 2026, we closed $64,100,000,000 in AI orders, shipped $25,200,000,000, and exited with a record $43,000,000,000 in AI backlog—powerful proof points that our engineering leadership and differentiated solutions are winning. We are executing with discipline and speed. We are gaining share in our PC business and strengthening ISG with strong margins—traditional servers and storage—all while positioning the company for the AI era. It was a monumental year. We exit with strong momentum, and I could not be more proud of this team. With that, let me turn to the key highlights for the quarter. We delivered a record quarter. Q4 revenue was $33,400,000,000, up 39%, and earnings per share was $3.89, up 45%, driven by disciplined execution and demand for our AI solutions. While operating in a dynamic environment, we saw record cash flow generation and above-trend capital returns for shareholders. Now let's move to AI. We capped an already strong year with an exceptional quarter for AI—record orders and broad-based demand. In Q4, we booked $34,100,000,000 in AI orders, evidence that demand is accelerating as customers deploy AI at scale. We shipped $9,500,000,000 in AI servers in the quarter. We exited Q4 with a record $43,000,000,000 in AI backlog, and our pipeline continued to grow sequentially even after converting $34,100,000,000 of orders, a clear sign of sustained momentum. For the full year, AI orders reached $64,100,000,000. Our customer base surpassed 4,000, with growth across neo clouds, sovereigns, and enterprise customers—evidence that demand is broadening across all customer types. We are winning for the reasons we have outlined all year: engineering for performance and time to market while optimizing TCO for AI workloads; deployment and installation at speed and scale; ongoing lifecycle support that keeps clusters up and running; and DFS financing. We are doing this with discipline. Profitability is in line with our mid-single-digits operating margin target. We like our position, the line of sight we have with our backlog and pipeline, and the advantages our scale and supply chain bring. Moving to traditional servers, demand significantly outpaced supply in Q4, with strong double-digit demand growth across every region, and momentum accelerated through the quarter as customers prioritized access to compute for critical workloads. We saw broad-based strength with units up, a larger active buyer base, and a richer mix of our 16th and 17th generation as customers shifted to dense, high-performance configurations. The ROI to refresh is compelling. Even at higher ASPs, customers see a 7:1 consolidation when upgrading from the 14th generation to our latest platforms. The runway is substantial. A majority of the install base remains on 14th generation or older servers, creating a significant opportunity to modernize, improve performance, and lower the cost of ownership. Traditional x86 is benefiting from AI infrastructure build-outs. While many AI workloads rely on specialized GPUs, traditional compute remains essential for orchestration, data processing, and inference support. As customers deploy AI, they are modernizing broader IT estates, refreshing and expanding general-purpose environments. Turning to storage, revenue was up 2% with continued outperformance from our Dell IP portfolio. We saw double-digit demand growth in Dell IP with momentum across PowerMax, PowerStore, PowerScale, ObjectScale, and data protection. All-flash arrays delivered their third consecutive quarter of double-digit growth. PowerStore, our primary midrange platform, posted its seventh consecutive quarter of double-digit growth. Profitability improved, supported by our higher Dell IP mix. Lightning, our parallel file solution, remains on track for general availability in the first half of the year with early customer deployments already underway. Turning to CSG. Revenue grew 14%, and we gained share as the October momentum carried through November and December. We leaned into share and expanded our buyer base, broadening the portfolio to reach more of the market—including the lower end of the commercial market, emerging markets, consumer and education—and by targeting strategic accounts. These actions expand our install base and position us for future refresh cycles. As we leaned into growth, we saw a higher mix of competitive large bids and customer expansion than planned, and higher-than-normal industry channel inventory levels, which delayed price increases. We have already taken actions to address each of these. We implemented pricing moves effective January 6 to reflect our higher input costs. Orders margins improved and are the basis for all new orders. We remain confident we can operate CSG within our long-term value creation profitability framework. Commercial revenue grew 16%, our sixth consecutive quarter of growth, with demand up for the eighth quarter. We are seeing growth across geographies, strong large enterprise demand, and traction in the lower end of commercial we set to expand. The refresh cycle remains a meaningful opportunity, given the large installed base of devices that are over four and five years old. Consumer revenue was roughly flat, with demand up for the second consecutive quarter, supported by strength in gaming. Before I wrap up, a quick update on the supply chain and component cost. Across the industry, the environment remains highly dynamic, with unprecedented AI demand creating sustained supply tightness and frequent pricing resets. In Q4, we did what we said we would do—shorter quote validity periods, more dynamic pricing, and a tighter alignment between our supply chain, sales, and pricers. We saw the benefit of this in ISG and expect it to extend to CSG. Given CSG's higher transactional volume and deal velocity, repricing to reflect multiple cost changes takes longer to flow through. We are executing our operating model with urgency, securing supply as the first priority. Our scale, direct model, world-class supply chain, and long-standing supplier relationships are a real advantage, and they become even more visible in periods of disruption. We are managing this environment in real time, applying lessons learned from prior cycles to improve resilience and to strengthen our position. In closing, FY 2026 is a pivotal year for Dell Technologies Inc. We delivered record performance, converted it into record cash generation, and returned significant capital to shareholders, all while building a stronger company. We out-executed across the portfolio. ISG is at record levels with accelerating AI demand. Traditional servers are growing sharply with demand outpacing supply. Dell IP storage continues to outperform the market, and CSG is gaining momentum with share gains in Q4. We are operating with discipline—lower OpEx alongside meaningful double-digit revenue growth. We have made the company more agile, which is on display in this commodity environment. Bottom line, we enter FY 2027 with momentum, a strong backlog and pipeline, and a proven operating model. I am excited about the road ahead and proud of our team's execution. With that, let me turn it over to David to walk through the financials and our outlook.

Thanks, Jeff. It was a record year for Dell Technologies Inc., and as Jeff mentioned, we are very excited about what is ahead. The team executed extremely well this quarter, delivering record revenue, EPS, and cash flow with strong returns to shareholders. Total revenue was up 39% to $33,400,000,000. Gross margin dollars increased 18% to $6,800,000,000. Gross margin rate was slightly better than anticipated at 20.5% and reflected a mix shift to AI servers with AI revenue up more than 4x year over year and improved profitability in storage. Operating expenses were up 5% to $3,300,000,000, primarily from variable compensation tied to outperformance. We continue to drive meaningful scale within the P&L, with OpEx down 320 bps to 9.9% of revenue. Operating income grew 32% to $3,500,000,000, or 10.6% of revenue, primarily driven by higher revenue. Net income was up 36% to $2,600,000,000, primarily driven by stronger operating income, and our diluted EPS increased 45% to $3.89, a record. Moving to ISG, ISG revenue was a record $19,600,000,000, up 73%, marking eight consecutive quarters of double-digit revenue growth. Before I get into the categories, we are now breaking out AI server revenue from the overall server and networking line, reflecting the scale of the business and growth we expect to see going forward. AI server demand remained exceptional. We had records across the board. We had $34,100,000,000 in orders, $9,500,000,000 in shipments, $9,000,000,000 in revenue, and an ending backlog of $43,000,000,000. In traditional servers, demand improved throughout the quarter, outpacing revenue with stable profitability. Traditional server and networking revenue was $5,900,000,000, up 27%. Storage revenue was $4,800,000,000, up 2%, with strong demand across the Dell IP portfolio. Dell IP demand outpaced market growth, and PowerStore remained a bright spot with eight consecutive quarters of growth, seven of which were double digit. ISG operating income was a record $2,900,000,000, up 41%, marking seven consecutive quarters of double-digit growth. This was driven primarily by higher revenue. Operating margin was 14.8%, up 240 basis points sequentially. The sequential improvement was driven by scaling and strong storage profitability due to a higher mix of Dell IP. Turning to CSG, CSG revenue was up 14% to $13,500,000,000. Commercial revenue grew for the sixth consecutive quarter, up 16% to $11,600,000,000, while consumer revenue was roughly flat at $1,900,000,000. CSG operating income was $600,000,000, or 4.7% of revenue. As Jeff mentioned, profitability reflects strategic share capture in a highly competitive market. This is building our installed base and expanding our services and attach opportunities, positioning us well for the refresh cycle ahead. Moving to cash and the balance sheet, we delivered a record cash quarter, with cash flow from operations of $4,700,000,000. This was primarily driven by higher profitability and sequential revenue growth. We ended the quarter with $13,300,000,000 in cash and investments, up $1,900,000,000 sequentially. Our core leverage ratio is at 1.4x, in line with our target. We returned $2,200,000,000 to shareholders this quarter, including repurchasing 14,900,000 shares at an average price of $125 per share and paying a dividend of approximately $0.53 per share. For the year, we returned $7,500,000,000 and repurchased roughly 54,000,000 shares, more than double the amount of shares we repurchased in FY 2025. Looking ahead to FY 2027, we are raising our annual dividend by 20% to $2.52 per share, well above our long-term value creation framework. Additionally, the Board of Directors approved a $10,000,000,000 increase in our share repurchase authorization. These actions reflect our confidence in the business and our ability to generate strong cash flow in any environment. Next, to guidance. Looking ahead to FY 2027, we expect to build on a record FY 2026 and deliver another exceptional year. AI demand continues to accelerate, and our value proposition is resonating with customers and driving continued wins and success. This is demonstrated by $10,000,000,000 in shipments in FY 2025 and 150% year-over-year growth to $25,000,000,000 in FY 2026, with an exiting backlog of $43,000,000,000. For FY 2027, expect $50,000,000,000 in AI revenue, about 100% growth year over year. This outlook reflects the composition of our existing backlog, customer readiness, and delivery schedules. Across the rest of the business, customers are assessing their needs and priorities in an environment where component demand is outpacing supply, which is elevating input costs and extending lead times. We have priced to offset these pressures, and our guidance incorporates a prudent view of second-half demand navigating this dynamic environment. For the full year, we expect revenue of $138,000,000,000 to $142,000,000,000, up 23% at the midpoint of $140,000,000,000. ISG is expected to grow, in the 100% growth in AI revenue. Traditional servers and storage are expected to be up mid-single digits, with growth concentrated in traditional servers and more weighted towards the first half. CSG is expected to grow roughly 1%. Margin rate expansion remains a priority. We are maintaining pricing discipline, and our transition to Dell IP storage is accretive to margins. Excluding the impact of AI mix, our gross margin rates are up year over year. We expect operating expense dollars up low single digits, delivering significant operating leverage as we continue to invest and modernize—simplifying, standardizing, automating, and enhancing our operating model with AI. We expect ISG and CSG operating income rates to be at the lower end of our long-term framework, reflecting the rapid mix shift to AI and the near-term CSG margin dynamics we discussed earlier. Operating income is expected to grow approximately 18%. INO is expected to be between $1,400,000,000 and $1,500,000,000. Diluted non-GAAP earnings per share is expected to be $12.90, plus or minus $0.25, up 25% at the midpoint. You are seeing the operating model at work with strong EPS growth driven by significant expansion of our AI business, growth and improving profitability across the rest of the portfolio, meaningful OpEx scaling, and EPS leverage from our share repurchase program. We are leveraging our strength in a dynamic environment. For Q1, we expect revenue of $34,700,000,000 to $35,700,000,000, up 51% at the midpoint of $35,200,000,000. ISG is expected to grow over 100%, supported by $13,000,000,000 of AI server revenue, and CSG is expected to be up roughly 2%. Operating expenses are expected to be down low single digits. We expect operating income to be up roughly 60% with sequential improvements in CSG operating income rate. We anticipate a diluted share count of roughly 664,000,000 shares. Diluted non-GAAP earnings per share is expected to be $2.90, plus or minus $0.10, up 87% at the midpoint. In closing, we delivered an extraordinary year with record revenue, EPS, cash flow, and capital returns. Revenue reached $113,500,000,000, up 19%. EPS grew 27% to $10.30. We generated over $11,000,000,000 in cash and returned $7,500,000,000 to shareholders. Our focus is clear: drive durable shareholder value through consistent execution, profitable growth, and robust cash generation through any cycle or environment. I am excited about the year ahead. We have the portfolio, operating model, discipline, and multiple levers to deliver growth that exceeds our long-term value creation framework. Thank you to the team for their outstanding work, and thank you all for your time. I will now turn back to Paul to begin Q&A.

David, let's get to Q&A. In order to ensure we get to as many of you as possible, please ask one concise question. Operator, let's go to the first question.

We will take our first question from Tim Long with Barclays.

Thank you. Yes, I will try to be concise. I did want to just follow up on the AI servers. Obviously, pretty huge order number there, really good performance. Just curious if you could kind of provide us a little color. Clearly, given the demand backdrop, it seems like you are not really seeing any, you know, memory price impacts on that business. But I am curious, as the business scales continually, it seems like you are maintaining that mid-single-digit operating margin, which is excellent. But as we see scale and all the diversification you are talking about, maybe you could just provide a little color on other opportunities either on the margin front or pull-through of other business as that business reaches, you know, a much broader, more diversified customer base. Thank you.

Yeah. Tim, I will take the question. I mean, let's start with we had an extraordinary quarter taking $34,000,000,000 worth of orders. And I think equally important, and we tried to call this out, the five-quarter pipeline grew as well. We did not drain it. We actually grew it. And we grew it across all customer types—CSPs, sovereigns, neo clouds as we call CSPs, and enterprise. Enterprise in particular, I would call out. In Q4, demand is very strong. We now have over 4,000 customers. We saw our enterprise AI business grow significantly quarter over quarter, and very encouraging. And we are seeing AI deployed across many use cases in enterprise. So the backdrop of demand continues to be strong. And you called it out. We tried to call it out as well. We operated throughout the quarter and over the course of the year in that mid-single-digit operating income. What we see in front of us—there is no reason to change that. That is our guidance of where we can operate this business, and we are going to continue to grow it. It is exciting to say that we can grow it twice than it was this year. We grew orders six times over the previous year, and we are excited about the prospects of growth. Probably a backdrop from a technology perspective, as we see inference ramp. Inference is driving more tokens; tokens drive more compute capacity and intensity. And ultimately that is good for the revenue stream of the company.

Okay. Thank you.

And we will take our next question from Mark Newman with Bernstein.

Thanks so much for taking the question. Great numbers, very impressive numbers on AI servers. I wonder if you could talk about the profitability of AI servers given the huge numbers you are posting. Any change—any change in directionally versus previous quarter? And going forward that we may anticipate given the huge upside on the top line. And then, and similarly, I guess we will get to this later in the call, but a little bit more explanation on how rising memory prices are impacting profitability in CSG and traditional servers would be appreciated. Thanks very much.

So two questions. The first one, I will reemphasize what we just talked about. We maintain throughout the quarter and in the guidance that David just talked about that we can operate AI at the velocity we are seeing in the mid single digits. We have a significant technology transition in front of us. We see our ability to work our way through that and maintain mid single digits. We clearly have a lot of backlog to clear with $43,000,000,000 in backlog. Backlog will ship at mid single digits. So hopefully, those are three data points of backlog, future demand, and technology transition that are, and in our guide, that we can maintain the profitability that we have talked about. When we look at the other two businesses, traditional servers and CSG that you called out, I think we are operating at a high level of proficiency changing our price as our input costs are rapidly changing. We began to change price, most notably in servers, in mid-December—December 10 to be specific—and we saw our margins stabilize with higher input costs coming our way. CSG, we purposely, we were deliberate in delaying moving price because we leaned into a share position. We began that in October. We gained momentum in October, November, and December. You saw that in the share results. Our business grew 18% in a market that grew 10%. We took 100 basis points of share. We chose not to take our foot off the accelerator. We saw a change in the composition of the business in December in particular, with a higher bid mix of large deals, as well as acquisition pricing of new customers. We grew our customer base in CSG. And then we made a price change on January 6. When we made a price change on January 6, our business normalized. Margins stabilized, and they are where they need to be so we can operate within the proper profitability framework that we have committed to. I hope that was clear enough.

Great. Thanks a lot. Actually really appreciate that.

And our next question comes from Louis Massocca from Daiwa.

Hey, thanks for taking my question and great numbers, guys. If you look at traditional servers, obviously, you are growing exceptionally well in the AI ones. Some of our checks suggested faster growth in that area. I guess I am just trying to understand, you know, why numbers are not higher for that, more into the solid double-digit range. And are you only seeing inference deployed on AI servers and not yet as much on traditional servers? Thank you.

Louis, let me try to break that down, and I will ask for David's help on sort of the forward guide. In the quarter, I think we were very outspoken about demand outpaced supply, and traditional servers grew double digits. And we saw that across all use cases and small business, medium business, large multinationals, across all geographies. We saw the continuation of the consolidation that we talked about and modernization that we have talked about in traditional data centers, where you get incredible efficiency upgrading old technology. For example, our 14Gs converted to a 17G converts at six to one to seven to one. So you are getting incredible efficiencies in power, space, and cooling, and that continued throughout the quarter. We are projecting that to continue into fiscal 2027. Additionally, we are seeing AI workloads on x86 pick up. I think that is significant. And we saw that in enterprises. A phrase that we use inside the company is AI-forward. So the most advanced enterprises that are really adapting AI are moving quickly, and we saw them use that across a large number of use cases—whether that be software development, scientific computing, whether that be some of the financial traders that are using very sophisticated algorithms, we are seeing that deployed broadly as well as in some inference use cases. I will let David take the guide.

Yeah. So to build on that, Jeff, like you said, demand far outweighs supply in relation to the Q4 results. Q1 guide—strong reflection. We see that momentum continuing as strong double-digit growth in Q1. We have moderated that slightly as we go into the back half of the year. There are a lot of dynamics out there as we watch the supply-demand dynamics. Part of that will be us out there looking for more supply. But if this demand continues, obviously, there is the potential for growth. But you are going to see in Q1 we are guiding to a particularly strong quarter similar to Q4. Thanks,

And our next question comes from Amit Daryanani with Evercore.

Thanks a lot for taking my question. Clearly, you folks did not get the memo that you are supposed to miss numbers, by the way, when memory prices go up. But it is good to see these results. And I am hoping you folks can talk about, as we shift to Rubin, could you just contrast how you think the Rubin cycle plays out in '27 versus the Blackwell cycle? I am really hoping you can touch on: a) do you think operating margins will be much more smoother through Rubin, or will it have the same cadence that we saw with Blackwell? And then b) do you think the revenue lumpiness could be less severe as you have a much more diverse customer base, perhaps? So I would love to just contrast those things. And then, David, perhaps I missed this, free cash flow expectations of fiscal 2027 would be appreciated as well. Thank you.

On Vera Rubin, look, we are excited about the technology that is in front of us. We have a significant technology transition to go through. There have been a lot of lessons learned from the Grace Blackwell implementations. We are expecting a smoother transition. We are expecting all of the manufacturing lessons and lessons around test that are implemented into the next architecture to allow us to ramp up more velocity and speed. So that is—we believe that is the case.

We have our early engineering samples. We are working with customers now on designs.

Very encouraged with what we are seeing thus far.

When I look in terms of operating margins, the question, I guess, will be consistent here. We believe we can operate in the mid single digits with the backlog at hand.

With the new orders that we will take on over the course of the year, which will include Vera Rubin, and that is our outlook and guidance and what we have implied in the numbers that David has given.

And I think it is a smoother transition. We have learned a lot.

We are more enabled,

More skilled. We have invested in more engineering capability. Our forward-deployed engineers, again, are working with customers right now on advanced designs. And

I like what we are doing.

And I expect it to ship in the second half of the year because we know Vera Rubin is in production.

And to touch on cash, I mean, obviously, we are coming off the back of a very strong FY 2026—$4,700,000,000 of cash flow from operations. That totaled up to $11,200,000,000 for the full year and allowed us to maintain our commitments to our shareholders, to return over 80% of our adjusted free cash flow back, repurchasing over 54,000,000 shares in the year. And while we do not guide to cash, look, what I can say is we expect another really strong cash quarter, or cash year ahead. Our net income to adjusted free cash flow will be at or slightly ahead of our commitment in our long-term value creation framework. And that consistency and ability to reward the shareholders will be strong. Again, you can see that with our dividend commitment today—20% growth in our dividend per share. That is the fourth year in a row of double-digit increase in our dividend per share. That, with our execution on the share buyback program, means we should have a very strong and stable working capital year ahead.

Alright. Thanks, Amit.

Our next question comes from Ben Reitzes with Melius Research.

Hey, thanks a lot. Nice execution here, guys. I will echo that. My question is on storage. It sounds like, you know, it is turning a little bit. You know, you beat the Street by a little bit, 2%. And then you said, I believe, that it will grow in the mid singles for the year, and it looks like it may outgrow servers in the back half of the year. So can you just talk about what is really going on with storage, your highest-margin business? Is it really turning? Is it going to be a contributor to mix in the upcoming year that allows you to keep gross margins pretty flat for the year in a tough component environment? Thanks a lot.

Sure, Ben. Look, we are excited about our storage business.

Again, we are reporting that on an orders basis, our Dell IP portfolio grew double digits.

That is the entire portfolio. PowerMax, PowerStore, PowerScale, ObjectScale, and our Data Domain platforms all grew double-digit demand. Our all-flash drove double-digit demand. It grew in all regions, and we acquired new customers.

PowerStore grew its eighth consecutive quarter, seven of those last seven double digit. Half of those new customers that we are winning are new to PowerStore, and nearly 30% are new to Dell buying storage. We saw tremendous demand for our products as AI inference and AI continues to grow. Our Dell IP portfolio is now a greater percentage of the mix year over year. We expect it to grow FY 27 over '26. It will be a greater percentage of mix next year than this year. That is part of the profit contribution that David has outlined in our guidance. And we are entering an era, in my humble opinion, where architecture matters. So where we have the leading data reduction rate—five to one—with our PowerStore product, we are going to increase customers’ effective storage capacity. We are the leader there.

You take our data protection product where we have up to 75 to one compression and dedupe.

We are going to help customers through this memory crisis—shortage, whatever you want to call it—with advanced architectures that require fewer servers and fewer drives to back up customers’ information.

That architecture difference, we believe, is fuel that will continue to serve our Dell IP portfolio well in FY 2027. I would also add there, Ben—I think you asked about the contribution and the margin that we see going forward—where we see it today, the results from Q4 illustrate that in relation to the uplink performance of the ISG P&L, which was tremendous. As we look into the guidance, particularly in the back half of the year, we talk about mid-single-digit between traditional server and storage—maybe a smidgen more on the traditional server side—but growth nonetheless. So hope that helps. Thanks, Ben.

And our next question comes from Eric Woodring with Morgan Stanley.

Hey, thank you for taking my question. Really impressive guide. Jeff or David, I guess the question is, can you maybe just help us understand what kind of memory price inflation you are assuming in your 2027 outlook? And since you are talking about margin rates improving year over year, maybe just help us also understand what you are doing different this cycle versus past cycles to protect your profitability. Thank you very much.

Yeah. A few questions in there. I think, you know, if you go line by line in terms of the business—so we talk CSG in relation to guidance—your current assessment of the market is double digit, probably in around that minus 11%, minus 12% range as we look at the year ahead, probably more acute in the second half. So obviously, we believe our guide, which is 1% growth in revenue for the year ahead, is a prudent guide to start with, aligned with a commitment to manage and maintain our margin rates within that portfolio. So you can see the difference between the units and the revenue there. We do and will take share just like we did in Q4. We will obviously learn as we go. The price increases have been there. Costs will continue to go up to a certain degree. We will make quick and decisive decisions and execute. Jeff outlined earlier the ability and the execution of the team, particularly on the server side, in relation to Q4. We are already seeing the signs of that for Q1. So all the actions we discussed around time validity of quotes, moving at speed, increasing list prices, moving to discount-off-list pricing, limiting to little or no promotions—all of those actions are strong operational execution levers we have got to work the business as we kind of move forward into the guidance.

I mean, Eric, you asked about memory assumptions. Obviously, our price is proprietary. I am not going to share our specific percentages, but look at the spot market. I mean, the spot market for a gigabit of DRAM over the last six months is up nearly five and a half times at $2.39 a gigabit. If you were to look at NAND, the cost is $0.20 a gigabyte. That is up nearly four times over the last six months. The industry analysts have Q2 up over Q1 in a range of 20% to 50%, they have Q3 5% to 15%, Q4 5% to 10%. Those are estimates. Those are probably in ballparks where things are. So we have not changed anything. We continue to work with our long-term partners. We have had LTAs in place. We have had capacity agreements in place. We know how to budgetary price. I mean, David's team has our best estimate of cost for Q2, Q3, and Q4 and how our pricing deals today are working with our memory partners to be as flexible and as agile as possible. We are working through things of how do we minimize our complexity, how do we improve our mix, how do we sell what is coming, how do we improve our designs to take whatever parts that are available. And then to answer, really to maybe put the bow around this, the pricing actions. Look, we became very proficient during COVID. And all of the best practices that we learned during COVID, as I mentioned in the last call, we put in place, and we put in place faster. We changed the entire pricing of our server business on December 10. In a couple of days. We had tens of thousands of open quotes in the PC business and changed them all on January 6. This notion of we recover our cost in two-thirds of it in 90 days—we moved that quickly. That is what we learned in COVID. That is what we put in place here. So we made list price changes across the board. We changed, in our vernacular, our internal mechanisms around smart price and margin floors—all changed instantaneously. We are moving to discount-off-list price. We are compressing discounting. Our quotes are valid for the shortest period of time they have ever been. And we are reducing promotions and all sorts of special pricing going forward. That is what we have done. It has been in place. As I mentioned with one of the previous questions, we saw our server business stabilize with the higher input cost. You saw that in the performance of the business in ISG, which was extraordinary. And PCs—we purposely delayed implementing that price move to stay in the hunt to take share and to drive growth, which will service for the long run. And then when we made the change on January 6, it was not 90 days later; it was that day we stabilized margins. I hope that helped.

Thanks, Eric.

And we will take our next question from Krish Sankar with TD Cowen.

Yes. Hi, thanks for taking my question and congrats on the amazing results. Jeff, I had a question on enterprise AI adoption. You kind of said that it is very strong in your server business. Clearly, DKI, long-horizon agents, all of them have implications across your server, Dell AI Factory, and your storage business. Just wondering, is there a way to break down your AI server orders between enterprise, neo clouds, and sovereign? And when do you expect enterprise AI adoption to spill over to your storage segment and probably start a new storage cycle?

Well, of course there is a way to parse it. I will not do this on the call. But we absolutely keep track of the health and growth of those three parts—our neo clouds, sovereigns, and enterprise.

We try to give you a sense of the enterprise adoption with the number of customers, which is now over 4,000. We gave, I think, some breadcrumbs, if you will, around the buyer base growth. It was a record quarter in enterprise revenue in Q4. We are seeing usage models expand. I take a look at our own company. An example that I would give—two years ago, we deployed coding assistance and used some GPU capacity. Middle of last year, we started deploying agents to write the actual software with basically specifications from our software developers and architects, and what we saw was an incredible need for more compute power. The amount of tokens that is required to do that well is significant. And that is just one use case in one company. And what we believe is we are seeing that broadly in the leading companies who have deployed AI and are seeing the tremendous benefit and potential of this technology that we are going to see AI in enterprise continue to ramp. We will continue to give you signals of our customer expansion and the revenue going forward. I would also just make sure that I am very clear—the enterprise portion of our five-quarter pipeline grew and actually was the fastest-growing portion of the five-quarter pipeline. I hope that helped put some context around it.

Thanks, Jeff.

Thanks, Krish.

And we will take our next question with Wamsi Mohan with Bank of America.

Yes. Thank you so much. Jeff, maybe you can talk a little bit about what you are seeing from a purchasing behavior standpoint as you are implementing these price increases. It sounds like you deliberately delayed your CSG price increases to take share. Indicates that that is elastic in that sense. From a server perspective, you did implement, and you had some time now to look at sort of what the reaction from customers has been. I am kind of curious to see if you have either seen material elasticity both on CSG and ISG side. If you could like maybe put some bookmarks around that and also did you see any pull forward behavior given that the expectation is that, you know, you shortened, sort of, you know, these windows of quote validity, you are talking about continued, sort of, price escalation from a component standpoint. Are customers worried about supply, and is that creating any change in terms of pull forward across your portfolio? And quickly, if I could for David, the inventory stepped up a fair amount. I am just kind of wondering if you could break that down for us a little bit on the composition of those things. Thank you.

Yes, sure. I think, look, if you look at our cash conversion cycle, minus 32 days, that is actually flat quarter on quarter and actually an improvement of a day year on year. So if you think—building on the expansion of our AI business and shipments that we have done—to maintain our cash conversion cycle in that position shows diligence that we have from a working capital perspective. We have guided to $13,000,000,000 in Q1 of AI shipments. That results in reality in February and March—we are shipping billions of dollars of gear. And, obviously, we are positioning inventory to do that. So it is purely a function of the size and scale and growth we are seeing in the business that we have got.

Hey, Wamsi. I am going to take a run at all the parts of that question. So how are customers reacting? I mean, early on, there was a wide range of emotions, as it was not completely understood. And there is a dynamic that I think is important for me to communicate—a different reaction in PCs versus infrastructure. So I am going to talk initially about infrastructure, then I will pivot to PCs. In infrastructure, after the sticker shock and our customers began to understand the gravity of the situation, the conversations quickly turned to access to supply. It was not literally a light switch, but it was in pretty quick order after the emotions of price increases. It was, oh, this is real. And as you know, over the course of the quarter, the understanding of this situation became better understood. Customers began to see that, and the largest customers in the world, the most sophisticated customers in the world, began to move aggressively to protect their infrastructure build-outs. And we saw that over the course of the quarter in AI, servers, and in traditional servers, and in storage. PCs was a little different, because you had inflated inventory positions in the channel. So the cost did not hit that inventory, which is another reason why we stayed in price position for growth. And when we began to see it in PCs was in large bids, where they would be filled over the course of the year, course of the first half, and what have you. Customers began to see the reality that this was going to be tight, costs were going to go up depending on when you wanted product and delivery. There was an associated cost with it. And then when you started having conversations—what is this going to cost me in the first half versus today?—and you give an answer, I do not know. It certainly heightens the buyer's awareness. And understanding the cost today is likely better than the price it will be tomorrow, the next day, and so on. So that clearly has driven some amount of pull ahead. I do not know how to quantify that. What we do know is IT budgets are generally fixed at the beginning of the year. So this pull-in is going to obviously drain those IT budgets to some degree. That is, sort of, what we put into our guide—our best understanding of that and why you saw some of the numbers around our PC business and server business. But clearly, technology has to be replaced. If budgets are not sufficient this year, that just means replacement cycles will be elongated and extended. And I think the result over the next couple of years is we will see product bought early, but we will also see the replacement of some technology extend over time. I hope that answered the multiparty question.

Yeah. Thanks, Jeff.

Thanks, Wamsi.

And our next question comes from Samik Chatterjee with JPMorgan.

Hi. Thanks for taking my question and congrats on the outlook as well. Jeff, maybe just wanted to get, sort of, any more color that you can share on the AI order backlog of $43,000,000,000. How does it break down between Blackwell and Vera Rubin, and what are the implications of when some of that backlog ships based on the backlog mix? And you are now guiding to $50,000,000,000 of revenue on that front. How should we think about capacity? You are doubling, sort of, revenue, but to the extent that demand is higher, how should we think about your ability to add capacity over time? Thank you.

So on the $43,000,000,000 backlog, Samik, it is predominantly—overwhelmingly—Grace Blackwell. There is no Vera Rubin in the backlog.

There is Vera Rubin in the five-quarter pipeline. The largest percentage of our five-quarter pipeline is a combination of Grace Blackwell and Blackwell, where we are seeing a rise in x86 Blackwell in the five-quarter pipeline—driven primarily by enterprise deployment, air cooling being the number one consideration. The second consideration that is driving that demand in the five-quarter pipeline tends to be around some of the scientific work and some of the, as I mentioned in one of the earlier questions, some of the financial trading models and algorithms—the high-frequency traders—and using some of the x86 air-cooled solutions to meet their AI needs. So I think that is, sort of, the composition of both the backlog and the ability to convert that five-quarter pipeline. That is clearly our job—to take that five-quarter pipeline and convert the potential into POs. The corresponding next part of that is we will go find parts to match the POs. The $50,000,000,000 guidance that we gave is the alignment of what we believe at this point in time, four weeks into the fiscal year, of our best understanding of our customers' deployments and build-out of buildings and power and infrastructure; the availability of DRAM and E1 drives and E3 drives; our ability to deliver—that yields the $50,000,000,000 number that David gave, but leading the operational part of the organization, we are out looking for more parts. Our job is to get those orders converted to be able to fulfill our customers' needs and to do that in a timely fashion. That is what we are working on.

Got it. Thank you.

Thanks, Samik.

And we will go to our next question from Aaron Rakers with Wells Fargo.

Yes. Thanks for taking the question. Also, my congrats on the quarter. I guess one just housekeeping thing. When I look at the slide deck and you talk about $9,500,000,000 of AI shipments, you are now disclosing an AI revenue number that is a little bit different, right—$8.95 versus $9.05. Can you help me understand what that difference is, number one? And then number two, on the traditional server side, I am just curious, Jeff, you know, with all of the pricing stuff going on, it sounds like a very healthy demand backdrop. How do I take the context of mid-single-digit growth and maybe separate that between what that underpins in terms of unit growth versus what I would assume to be a pretty healthy ASP uplift environment through the course of this year?

Yes. So, look, the first piece of that in relation to shipments versus revenue—normally, in any given quarter, they will be close to the same number. It is simply in-transit. So as we ship out $9,500,000,000, some of that obviously would have been happening time-wise right at the January. So literally just in transit, it will show up, you know, days later from a P&L perspective. So just normal run-the-business there in relation to that piece.

On traditional servers, outlook reconciling unit growth of the industry, TRU expansion. We clearly saw TRU expansion in Q4. Customers are continuing to migrate towards our 16th and 17th generation servers and buying them with a lot of DRAM and a lot of storage. That is part of the consolidation play—replacing five to one if it is a 16G, seven to one if it is a 17G—and we will continue to see that behavior of buying servers with more CPU capability, more memory, more storage. Our best estimate in demand for units next year—or I guess the year we are in, sorry, excuse me—in FY 2027, calendar 2026, is units are clearly down, while TRUs are up. To reconcile the difference of that spread of prices increasing, I think what we tried to outlay in our guidance—and David can chime in here—is the uncertainty. We are being prudent in our planning and our guidance to you because of the uncertainty associated with the second half.

We try to put that in our best reflection in our guidance. And that is how you can reconcile between what we talked about in Q4—that demand was out ahead of supply, double-digit growth, TRU expansion—clearly seeing that in Q1. But as we go into the second half of the year, we are trying to describe that uncertainty. And, again, just to dovetail on that, again, it is linked to the articulation. So as we enter the year, we have sufficient supply to support and meet the guide that we have laid out. Obviously, demand, as far as stripping supply right now—if that continues, like Jeff operationally said, we will, and he will be out hunting for more parts to try and find that. But right now, I think it is a good guide. We see the strength—double-digit growth for Q1—and then we will take care of the rest of the year as we go.

Thanks, Aaron.

And we will take our next question from Asiya Merchant with Citi.

Great, thank you for squeezing me in here. If I could, just, you know, if you could provide any incremental color on the attach rate that you are seeing as you are shipping out these AI servers. You know, are you seeing a better attach rate, perhaps, than what you have? And any other further color on that—on what else we can attach to those AI servers that you are shipping? Thank you.

Well, clearly the attached items for us around an AI server—think along three distinct groups. Storage, and given the enterprise momentum, we are seeing more storage with enterprise customers. Networking—our networking business continues to grow. And the third bucket would be around all of the types of services—installation, deployment services, break-fix services—which are proven to be a huge source of differentiation for us in the marketplace.

Our ability to deploy and install these very complex customers is unmatched in the marketplace today. Our uptimes are the best in the industry. And then our ability to maintain them with Dell-badged employees on-site taking care of any challenge, any miscue—again, is a differentiated capability that we have in the marketplace. So those are the three areas that we focus on in attach. We are seeing continued growth and acceptance of that, and we are optimistic that will continue into FY 2027.

Thanks, Asiya.

And we will do one more question before we have Jeff close the call.

We will now take our final question from David Vogt with UBS.

Paul, thanks for squeezing me in. Jeff, just a quick question on the structural share gains in PCs. Is it, sort of, the premise here that your ability to dynamically adjust price and steer demand based on your supply chain availability and your relative to maybe some of the smaller competitors, puts you in a position to structurally have a better sort of CSG backdrop in fiscal 2027, calendar 2026, and more likely than not in fiscal 2028, as we think about where you are positioned? Is that really where you are going to see share gains? I am just trying to get a sense for how you are going to outgrow a market that is going to be down double digits. I get the pricing umbrella that is going to happen, but just want to get a better sense for where the gains are going to come from.

David, I could not have said it better myself. If you look at the last industry-wide shortage, Dell excelled and took share across the board, most notably in its PC business. Our long-term relationships, supply agreements with our partners, we believe, position us to take share in all of our businesses, and in particularly PCs. Again, which is, again, reinforcing the point why we did not back off on the pricing position and the posture that we had during the quarter. We believe we are entering and changing the trajectory of the business. We had lost share for three years. We exited the year with tremendous momentum. You saw it in the Q4 results—14% revenue growth, IDC number was 18% unit growth for Q4, calendar Q4 to be specific.

That momentum is important to us. We grew customers, and we are going to continue to focus on driving and winning in that business. And we think there is a structural share gain opportunity for us certainly over the next couple of years, as our supply chain team has positioned us quite well.

I believe we can do that in servers, and I believe we can do that in storage as well.

Perfect. I appreciate it. Thanks, guys.

Jeff, go right ahead.

We closed FY 2026—a defining year for the company—with record results and strong execution. And we are entering FY 2027 with clear momentum. We have tremendous AI traction entering the year, with $43,000,000,000 in AI backlog. The supply environment is as tight as we have ever seen, and input costs are moving higher. Our priorities are straightforward. First, secure supply. Next, price to protect our margin rates. You have seen this in ISG. CSG will follow with improvements beginning in Q1 and continuing through the year. In Q4, our gross margin rate came in slightly better than anticipated. Excluding AI mix, we are guiding FY 2027 gross margin rate up on a year-over-year basis. The operating model we have executed for the past four decades allows us to move fast and adjust as demand evolves, with a broad portfolio and several levers at our disposal. Our FY 2027 guide reflects that—23% revenue growth at the midpoint, and 25% EPS growth. Driven by the expansion of our AI business, growth and improving profitability across the rest of the portfolio, meaningful OpEx scaling, and EPS leverage from our share repurchase program. We are positioned for another record year. Thank you for your time today.