Commercial PCs and servers grow while cash flow turns negative

01 Business drivers

CSG grew 17% to $15.6 billion, with commercial PCs at $12.0 billion, up 22%, and consumer PCs at $3.6 billion, up 3%. ISG increased 16% to $9.3 billion as servers and networking rose 22% to $5.0 billion and storage rose 9% to $4.2 billion.

02 Earnings and comparison basis

On the filed comparative basis, revenue was $26.116 billion, operating income $1.550 billion, operating margin 5.94%, and net income $1.072 billion. Non-operating items and tax can separate net earnings from operating profit; the table distinguishes absolute changes from margin-point changes.

Against the previous quarter, the absolute changes were -1.876 B$ in revenue and -0.059 B$ in operating income.

Despite sales and operating-profit growth, quarterly OCF was negative $0.269 billion and company FCF was negative $0.959 billion. Approximately $1.75 billion was returned to shareholders in the quarter. Growth, cash receipts and shareholder distributions thus occurred on different schedules.

03 Cash flow and investment burden

Total quarterly OCF of $-0.269 billion less net cash CapEx of $0.690 billion gives common FCF of $-0.959 billion. Company FCF was $-0.959 billion. Cumulative cash-flow subtraction uses the same fiscal-year start and business perimeter; acquisition consideration is excluded from CapEx.

Dell company FCF measures cash after net capital investment and differs from adjusted FCF excluding DFS financing receivables and operating-lease equipment effects. Consolidated cash flow including financing services is not standalone AI-server cash flow.

04 Liquidity and borrowings

Quarter-end liquid assets were $6.654 billion, interest-bearing borrowings $27.122 billion and net cash $-20.468 billion. A negative net-cash balance denotes net debt. Liquid assets include cash, cash equivalents and verified short-term investments; total accounting liabilities of $90.761 billion are a different measure from borrowings.

05 Scope of disclosed RPO

Verified contractual RPO was $42.000 billion. It represents transaction price allocated to unsatisfied performance obligations, not a demand pipeline, cancellable order backlog or ARR. Revenue timing, profit and cash collection require separate assessment, and other backlog measures must not be added to it.

06 Management remarks in the earnings release

Tom Sweet characterized the results as “In our first quarter, we returned $1.75 billion…”. This brief quotation records management’s assessment in the original release; it does not establish review of conference-call Q&A.

07 CFO assessment

The main checkpoint is cash conversion rather than demand alone. Strong commercial demand is encouraging, but negative FCF alongside capital returns requires subsequent working-capital recovery to ease the funding burden.

Quarterly results · CY-aligned view

CY denotes the calendar quarter with the greatest overlap with the fiscal period. If the first period has no start date, 89 days before its end is used only for calendar mapping. Financial values are not recalculated into calendar quarters. Incomplete years show totals of included quarters; cash, liabilities, borrowings and net cash use the last period-end balance. QoQ and YoY show absolute changes; margin changes are percentage points. Dashes indicate missing evidence or incomparable periods or definitions. Total liabilities never substitute for borrowings.

Definitions and evidence coverage

A dash means unavailable or undisclosed, not zero. Company-defined FCF may differ from total operating cash flow less common-basis CapEx. Total liabilities are accounting liabilities, not interest-bearing debt.

This report reviews the quarter and comparative figures in official earnings releases and financial filings. Segment descriptions and guidance retain their original announcement-date scope. It does not imply completion of a full conference-call and Q&A review.