Dell reports record demand for AI-optimized servers

By Sean Kinney, Editor in Chief August 30, 2024

Collected at: https://www.rcrwireless.com/20240830/network-infrastructure/dell-reports-record-demand-for-ai-optimized-servers

In Q2 Dell saw an 80% year-over-year increase in AI-optimized server revenue with a strong backlog and pipeline

As enterprise build out the infrastructure necessary for the AI era, Dell this week reported a beat-beat in Q2 against strong demand for its AI-optimized server hardware. The quarter brought AI server revenue of $3.1 billion, up 80% year-over-year, with more than $6 billion shipped in the last four quarter. The company further reported record AI server orders at $3.2 billion, up 23% quarter-over-quarter, and a backlog of $3.8 billion “with our pipeline being several multiples of our backlog.” 

“Our AI momentum accelerated in Q2, and we’ve seen an increase in the number of enterprise customers buying AI solutions each quarter,” COO Jeff Clarke said in a statement. “AI-optimized server demand was $3.2 billion, up 23% sequentially, and $5.8 billion year to date. Backlog was $3.8 billion, and our pipeline has grown to several multiples of our backlog.”

Dell reported Q2 revenue  of $25 billion, up 9% year-over-year with record revenue of $11.6 billion for the Infrastructure Solutions Group (ISG), which was up 38% year-over-year. The Client Solutions Group (CSG) was down 4% year-over-year to $12.4 billion; revenue on the commercial client side was flat at $10.6 billion.

Operating income was $1.3 billion in the quarter, up 15% year-over-year. Cash flow from operations was $1.3 billion, and Dell returned $1 billion to shareholders through share repurchases and dividends. “In Q2 our combined ISG and CSG revenue was $24.1 billion, up 12% year-over-year, positioning us well for the second half of the year and beyond,” CFO Yvonne McGill said in a statement. “Our momentum in ISG is a significant tailwind.” 

Full financial details are available here. And here’s a bit of color from Michael Dell at Dell Technologies World earlier this year.