The company's strategy of focusing on AI-optimized solutions continues to drive growth, particularly within the ISG segment. Management anticipates continued long-term demand for these solutions and is increasing component purchases to meet demand.

Dell Technologies terminated its Commercial Framework Agreement with VMware, impacting its ability to act as a distributor for VMware's standalone products and services. This is expected to reduce Corporate and other net revenue in Fiscal 2026.

Dell Technologies will continue to evaluate opportunities for strategic investments through its venture capital arm, Dell Technologies Capital, with a focus on emerging technology areas relevant to its business. These investments are typically in early-stage companies and may not have commercial value.

Management's disciplined cost management initiatives contributed to operating income growth, particularly in the ISG segment. These initiatives included limiting external hiring and employee reorganizations.

Despite increased demand for Al-optimized solutions, the company's supply chain operated efficiently. However, demand for Al-optimized servers outpaced the supply of GPUs, resulting in elevated backlog levels.

Dell Technologies is making significant changes to modernize the way it works and makes decisions, improve business outcomes and the customer experience, and reduce costs by leveraging new technology and optimizing business processes.

Global economic uncertainty adversely affected the demand for products and services as some larger customers exhibited caution in their IT spending. Weak or unstable global or regional economic conditions could harm the business.

The company faces numerous sophisticated and evolving cyber threats, including attacks from nation states and state-sponsored organizations. These attacks could result in the compromise of networks, systems, and assets, and the breach or loss of proprietary, personal, or confidential information.

While Dell expects the buyer base for Al solutions to continue to expand, to date Al solutions have been purchased primarily by a small number of larger customers and cloud service providers. Sales of Al to large customers may cause fluctuations in results of operations, as such large orders may occur in some periods and not others and are generally subject to intense competition and pricing pressure.

Dell operates in an industry with rapid technological advances and faces aggressive competition from various competitors in all areas of its business, including companies that specialize in one or more of its product or service lines. Competitors may provide offerings that are less costly, perform better, or include additional features.

The company's ability to respond to technological advances and changing demand, and evolve its business to keep pace with the demands of current and prospective customers, is critical to its continued success and competitive advantage.

Companies with which Dell has strategic alliances may become competitors in other product areas, or current competitors may enter into new strategic relationships with new or existing competitors, all of which may further increase competitive pressures.

Dell continues to make significant changes to modernize its operations and reduce costs by leveraging new technology and optimizing business processes. These plans involve disciplined cost management and measures to reduce costs, including limitation of external hiring, employee reorganizations, and other actions.

The company's supply chain operated efficiently, but demand for Al-optimized servers outpaced the supply of graphics processing units (GPUs), resulting in elevated backlog levels for such offerings as it exited the fiscal year.

Dell's gross margin is affected by its ability to achieve favorable pricing from vendors and contract manufacturers, including through negotiations for vendor rebates, marketing funds, and other vendor funding received in the normal course of business.

Research and development (R&D) expenses increased 9% during Fiscal 2025, primarily due to an increase in R&D-related employee compensation and benefits expense. The company is focusing on developing innovative solutions that incorporate desirable features and capabilities at competitive prices.

Dell's software engineers are focused on developing the next generation of innovative solutions, simplifying complex processes through automation and increasingly leveraging artificial intelligence and machine-learning technology.

The use of Al in Dell's products and services presents ethical and legal risks to its business, financial condition, and results of operations. Controversial use of Al could lead to loss of user trust, brand or reputational harm, competitive injury, or legal liability.

Dell's overall capital allocation strategy includes continued debt paydown, returning capital to stockholders through share repurchase programs and dividend payments, and using remaining available cash to drive growth and maintain its investment-grade credit rating.

The Board of Directors approved an 18% increase in the dividend rate to $0.525 per share per fiscal quarter beginning in the first quarter of the fiscal year ending January 30, 2026.

The Board of Directors authorized additional shares for repurchase under the stock repurchase program of $5 billion and $10 billion, respectively, subsequent to the close of Fiscal 2025. Following the approval, the company had approximately $11.5 billion of authorized shares remaining under the program.

Dell Technologies' ESG commitments focus on embedding circularity principles throughout its value chain, mitigating climate change, and creating a digital future that works for all.

Dell is actively addressing climate change by managing greenhouse gas emissions across its operations, supply chain, and product lifecycle, with a goal to achieve net zero emissions across scopes 1, 2, and 3 by 2050.

Upholding and advancing respect for fundamental human rights is core to Dell's business strategy, purpose, and commitment. The company is committed to responsible, ethical, inclusive, and sustainable business practices.

Dell continues to view emerging markets outside of the United States, Western Europe, Canada, and Japan as a long-term growth opportunity and is pursuing the development of technology solutions that meet the needs of these markets.

Dell's sales can be affected by seasonal trends. Within ISG, storage sales are typically stronger in the fourth fiscal quarter. Sales within the Americas are typically stronger in the second and fourth fiscal quarters, while sales in EMEA are typically stronger during the fourth fiscal quarter.

Trade policies and disputes could result in increased tariffs and other trade restrictions and protectionist measures, which could increase manufacturing costs, increase prices of and reduce demand for products, limit ability to sell to certain customers, hamper procurement of components or raw materials, or impede or slow the movement of goods across borders.