Dell hits record figures in Second Quarter Fiscal 2025 due to AI server sales
Dell’s latest quarterly results have shown an uptick for the hardware giant, with AI server sales continuing to grow.
The results, which cover the three months ending on 3 August this year, saw revenue rise to $25 billion, an increase of 9% compared to the same quarter last year. Operating income hit $1.5 billion, a year-on-year jump of 15%.
Dell noted that its servers-and-networking unit, known as the Infrastructure Solutions Group or ISG, hit $11.6 billion in revenue over the quarter. It’s a record figure for ISG and a 38% rise compared to a year ago.
The unit’s growth is being driven by demand for both AI and traditional servers, according to Dell CEO Jeff Clarke, with the latter accounting for around $3.2 billion in revenue over the quarter. The company’s AI server backlog now stands at $3.8 billion.
While tier 2 cloud service providers are doing most of the buying when it comes to AI servers, more and more enterprises are joining them, Clarke told analysts.
Dell has seen particularly strong growth in industries such as life sciences, higher education and financial services. “We have added substantial engineering capabilities, including data centre networking and design, to support these AI pursuits,” Clarke added.
Mixed fortunes elsewhere for Dell
Storage, which is also part of Dell’s ISG unit, didn’t fare as well. Storage revenue dropped to $4 billion – a fall of 5% year on year – despite growing demand for Dell’s own-brand, more profitable storage.
The company’s PC business, known as the Client Solutions Group or CSG, also showed a dip in revenue to $12.4 billion. The figure was down 4% compared to the prior year, due to what Clarke described as a “more competitive pricing environment”. However, the quarter saw “modest commercial PC demand growth”, according to the CEO.
The company expects CSG to return to growth in the second half of the year as the PC refresh cycle kicks in thanks to the coming end-of-life for Windows 10, as well as new machines increasingly including artificial intelligence. Dell said it will be focusing on gaming and high-end consumer machines, as well as corporate hardware, as it seeks to drive growth.
Meanwhile, Dell’s financial services business showed growth. According to the company, customers took out $2.4 billion of financing over the quarter, a rise of around 5%.
Dell has also taken a look into its crystal ball to predict its performance for the rest of the financial year, which ends in April 2025. Dell expects ISG’s revenue for the full financial year to be around 30% up compared to the year before, driven largely by in a rise in server shipments. CSG revenue, however, is expected to either remain flat or grow in low single digits.
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