Sequential recovery and strong cash conversion

01 Business drivers

CSG revenue of $12.9 billion was down 16% year on year but up 8% sequentially. ISG at $8.5 billion was down 11% year on year but up 11% sequentially, including $4.3 billion of servers and networking and $4.2 billion of storage.

02 Earnings and comparison basis

On the filed comparative basis, revenue was $22.934 billion, operating income $1.194 billion, operating margin 5.21%, and net income $0.489 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 +2.012 B$ in revenue and +0.063 B$ in operating income.

Against the year-earlier quarter, the absolute changes were -3.491 B$ in revenue and -0.076 B$ in operating income.

Management emphasized cash generation supported by profit and working-capital improvement. Sales recovered sequentially but remained below year-earlier levels. Quarterly OCF of $3.214 billion should not be mechanically annualized as a stable run rate.

03 Cash flow and investment burden

Total quarterly OCF of $3.214 billion less net cash CapEx of $0.624 billion gives common FCF of $2.590 billion. Company FCF was $2.590 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 $8.364 billion, interest-bearing borrowings $27.138 billion and net cash $-18.774 billion. A negative net-cash balance denotes net debt. Liquid assets include cash, cash equivalents and verified short-term investments; total accounting liabilities of $88.335 billion are a different measure from borrowings.

05 Scope of disclosed RPO

Verified contractual RPO was $39.000 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

Yvonne McGill characterized the results as “Our Q2 performance underscores the power of our…”. 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 results provide early evidence of recovery. Sequential growth and cash collection are positive, but the year-on-year contraction and working-capital contribution remain material qualifications.

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.