A：Dell's financial highlights for the fiscal year 2026 fourth quarter include record full year revenue and EPS, with revenue reaching $25.2 billion and EPS growing. They generated a record annual cash flow of over $14 billion and returned $14 billion to shareholders through share repurchases. AI orders closed at $64.1 billion, with a strong AI demand across customer segments, evidenced by a record $43 billion in AI backlog.

A：Dell's AI opportunity signifies meaningful growth and a transformative effect on the company. With $64.1 billion in AI orders closed in FY 26, $25.2 billion shipped, and a record $43 billion in AI backlog, it indicates the success of Dell's engineering leadership and differentiated solutions. The company is executing with discipline and speed, gaining share in the PC business, and strengthening its position in traditional servers and storage while preparing for the AI era.

A：In the quarter, AI orders booked reached $5 billion, with $3 billion shipped and a continued growth in the AI business even after converting $1 billion of orders, indicating sustained momentum. AI orders totaled $64.1 billion, and the customer base expanded with growth across new clouds, sovereigns, and enterprises, reflecting broadening demand across all customer types.

A：Dell's traditional server business performed exceptionally well, with strong double-digit demand growth across every region and an acceleration throughout the quarter as customers prioritized compute access for critical workloads. Unit sales increased, the active buyer base grew, and there was a richer mix of platforms, with customers shifting to dense high-performance configurations. This performance is supported by the ROI of refreshing from older to latest platforms, a compelling script-to-script consolidation, and a substantial opportunity to modernize, improve performance, and lower the cost of ownership.

A：Dell's storage revenue grew significantly, with continued outperformance from the Dell IP portfolio. There was double-digit demand growth in Dell IP, and the primary mid-range platform achieved its seventh consecutive quarter of double-digit growth. Profitability improved due to a higher Dell IP mix. The parallel file solution remains on track for general availability in the first half of the year with early customer engagement, and CSG revenue grew 14%, gaining share and broadening the portfolio.

A：In response to the highly dynamic supply chain and component cost environment, Dell has implemented several measures. They have introduced shorter quote validity periods, more dynamic pricing, and a closer alignment between supply chain and sales. Although repricing to reflect multiple cost changes takes longer to flow through, Dell's strong operating model, scale, direct model, world-class supply chain, and long-standing supplier relationships are advantages in this environment.

A：Entering fiscal year 2027, Dell is in a strong position with momentum, a robust backlog and pipeline, and a proven operating model. ISG is at record levels with accelerating AI demand, traditional servers are growing sharply with supply outpacing demand, Dell IP storage continues to outperform the market, and CSG is gaining momentum with share gains. The company has achieved lower operating expenses alongside meaningful double-digit revenue growth, making it more agile in the commodity environment.

A：Dell's ISG revenue was a record $19.6 billion, marking seven consecutive quarters of double-digit revenue growth. Server and networking revenue was $5.9 billion (27% of total revenue), and storage revenue was $4.8 billion, up 50% reflecting strong demand across the Dell IP portfolio. ISG's operating expenses were up, reflecting the growth and scale of the business.

A：The financial results for the recent quarter included a record income of $2.9 billion, a 41% increase. Revenue grew 14% to $13.5 billion, with CSG (Commercial and Storage Group) revenue up 14%. Operating margin was 14.8%, up 240 basis points sequentially. CSG revenue was up 14% to $13.5 billion, and operating income was $0.6 billion, or 4.7% of revenue.

A：The company generated a record cash flow from operations of $4.75 billion and ended the quarter with $13.3 billion in cash and investments, up $1.9 billion sequentially.

A：The company returned $1 billion to shareholders, repurchasing 40 million shares at an average price of $125 per share and paying a dividend of approximately $0.53 per share. They also announced a 20% increase in the annual dividend to $2.52 per share and a $10 billion increase in their share repurchase authorization.

A：For the upcoming fiscal year, the company expects to build on the record year with another exceptional year, supported by continued demand for AI and success with the AI value proposition. They foresee $50 billion in AI revenue, 1% growth year over year, and total revenue between $138 billion and $142 billion. ISG is expected to grow in the mid-40s, traditional servers and storage up mid single digits, with more emphasis in the first half, and CSG to grow roughly 1%.

A：The company is maintaining pricing discipline, and the transition to Dell P storage is expected to be accretive to margins, excluding the impact of AI mix. They anticipate gross margin rates to be up year over year, operating expense dollars up low single digits, and operating income rates for ISG and CSG at the lower end of their long-term framework. The company expects operating income growth of about 18% and diluted non-GAAP earnings per share of $9.90 plus or minus 25% at the midpoint.

A：For the upcoming quarter, the company expects revenue between $13.5 billion and $14.7 billion, with a midpoint at $14.2 billion, supported by over 1% growth in ISG and approximately 2% growth in CSG. They foresee operating expenses to be down low single digits, operating income up roughly 60%, and diluted share count of roughly 664 million shares. The expected diluted non-GAAP earnings per share is $2.90, plus or minus 10 cents, up 87% at the midpoint.

A：AI servers have experienced faster growth compared to traditional servers because the demand for AI servers is outpacing traditional servers. Traditional servers still grew double digits across all use cases and geographic regions but did not grow as fast as AI servers. Le haoha from Daiwa suggested that AI servers have faster growth due to the deployment of inference on AI servers rather than traditional servers, although David mentioned that AI servers and traditional servers have experienced double-digit growth.

A：AI is being adopted by advanced enterprises and is being deployed broadly across numerous use cases within these enterprises, including software development, scientific computing, and financial trading with sophisticated algorithms. Additionally, inference use cases are also being targeted by AI deployment.

A：The company is guiding towards a particularly strong upcoming quarter in Q1 with growth similar to the previous quarter, indicating strong double-digit growth in the demand for AI results, which has moderated in the back half of the year due to supply and demand dynamics.

A：The speaker is excited about the technology transition and expects a smoother transition through the Rubin cycle, citing lessons learned from the Grace Blackwell implementations. The expectation is to operate in the mid single digits with the current backlog and new orders, including Vera Rubin, which will be reflected in the operating margins.

A：The company had a very strong fiscal year with significant cash flow from operations, allowing for share repurchases and dividend payments. For the upcoming fiscal year, the company expects another strong cash flow year, with net income adjusted to free cash flow being at or slightly ahead of their commitments in their long-term value creation framework.

A：The storage business is performing well, with double-digit growth in the Dell IP portfolio and across all product lines. The Power Store product line grew for eight consecutive quarters, and the company acquired new customers. The storage business is expected to grow significantly in the upcoming fiscal year, contributing to the profitability outlined in the guidance.

A：The storage business is expected to contribute to keeping gross margins pretty flat for the year despite a tough component environment. This is because the company's architecture, such as the Power Store product, is anticipated to increase customers' effective storage capacity, helping manage the impact of the memory crisis and contributing to profit margins.

A：The company's guidance assumes double-digit growth in revenue at a rate of approximately -11 to -12%. To protect profitability, the company is focusing on quick and decisive decisions, operational execution, and managing costs, including line-by-line analysis of the business and taking actions like share management, cost control, and pricing strategies. The company continues to work with long-term partners and budget for price increases, applying lessons learned during Covid to navigate the situation effectively.

A：The server business pricing was changed on December 10, and then all open quotes in the PC business were changed on January 6. The company learned from experiences during Covid to recover two-thirds of their costs quickly, which influenced these pricing adjustments.

A：The server business stabilized with the higher input costs following the price change. In contrast, the PC business intentionally delayed the price increase to stay competitive, take market share, and drive growth for the long run. After implementing the price change on January 6, margins in the PC business stabilized.

A：The company keeps track of the health and growth of AI server orders in three segments: Neo Clouds, sovereign, and enterprise. The exact breakdown between these segments is not provided, but the company provides insights into enterprise adoption through the number of customers and revenue growth in the latest quarter.

A：The company deliberately delayed price increases in certain areas to take market share, indicating some elasticity in those markets. They observed a range of customer reactions, with some initially resistant but ultimately understanding the necessity of the increases. For both the CSG and ISG segments, the company saw no significant change in purchasing behavior related to price escalation due to supply concerns. After the sticker shock, customers focused on ensuring supply access, and large, sophisticated customers began protecting their infrastructure build-outs across AI, traditional servers, and storage. In PCs, the cost increase did not impact inventory due to inflated inventory positions in the channel, allowing the company to maintain prices for growth.

A：The $43 billion AI order backlog is predominantly comprised of Grace Blackwell orders with no Ver order pipeline. The majority of the Ed quarter pipeline is a combination of Grace Blackwell and Ver, with a rise in x 86 Blackwell driven by enterprise deployments. The company aims to convert the Ed quarter pipeline into bookings and ensure they have the necessary parts and resources to meet the anticipated demand. The corresponding revenue from these orders is expected to be $50 billion, based on current knowledge of customer deployments and the availability of necessary components. The company is continuously looking for more parts to fulfill customer needs in a timely manner.

A：The exact difference between AI shipments and AI revenue figures is not provided in the transcript. However, the figures likely represent different metrics: AI shipments could refer to the physical products being shipped, while AI revenue would pertain to the financial value generated from those shipments. The context of the metrics and how they are measured would differ, with revenue accounting for factors like pricing and customer segmentation.

A：The impact of pricing changes on the traditional server business is not explicitly detailed in the transcript. However, with the various pricing adjustments mentioned, and the inference of a healthy demand backdrop, it can be implied that the business experienced a positive effect from these changes, possibly in terms of unit growth and/or an advantageous price environment.

A：The speaker indicates that shipments and revenue are closely related and tend to be close to the same number in a given quarter, with any discrepancy explained by products being in transit during the shipping period.

A：The discrepancy between the growth in units demanded and the supply is explained by the expectation of a decrease in units for the fiscal year 2027 (FY 26 calendar), while TURs (Thousand Unit Restats) are up. The guidance provided accounts for the uncertainty in the second half of the year due to the anticipated gap between demand and supply.

A：The speaker indicates that the company has a sufficient supply to support the guided expectations for the year. However, demand is currently outstripping supply. The company is actively searching for more components to meet demand, and the guide provided is based on the belief that this trend of double-digit growth will continue into the second half of the year.

A：The company's efforts in terms of AI server attachments are focused on three main groups: storage, networking, and various services including installation, deployment, and break services. These areas are seen as key points of differentiation in the market, with continued growth and acceptance anticipated through fiscal year 2023 (FY23).

A：The company plans to achieve structural share gains in PCs by dynamically adjusting prices and steering demand based on its supply chain availability and expertise. Long-term relationships and supply agreements with partners are considered key to taking market share, especially in the wake of the industry-wide shortage that allowed Dell to excel and take share across all businesses, including PCs.

A：The company closed the fiscal year with record results and strong execution. It enters the new fiscal year with AI traction, a $43 billion backlog, and a robust supply environment. The priorities for the upcoming year include securing supply, protecting margins, and growing AI business profitability. The company expects to deliver record results for the new fiscal year.