Dell’s Fiscal 2024 revenues take a hit but expects AI to power its growth

Dell has posted its latest set of financials, with both full-year and fourth-quarter revenue taking a hit – although the last quarter numbers and growth in AI hardware give the hardware giant reasons for optimism.

Last week, Dell announced its Full Year Fiscal 2024 Financial Results. That is, for the fiscal year that ended 2 February 2024. The company announced revenue of $88.4 billion, down 14% on the previous year (Fiscal 2023). It was a similar picture for its fourth-quarter 2024 results, with revenue down 11% year-on-year to $22.3 billion.

However, across both sets of results net income is looking up. The fourth quarter saw a 91% increase in net income year-on-year, reaching $1.2 billion. Full-year growth, meanwhile, was 32% year-on-year, with net income hitting $3.2 billion.

Dell looks on the positive side of Full Year Fiscal 2024 results

Jeff Clarke, Dell’s COO, told an investor call that there are some green shoots to be seen although the market appears muted: “We saw positive signs in the business as we exited the year, but enterprise and large customers remain cautious with their spend,” he said.

The biggest contraction for the company was seen in the Consumer division of its Client Solutions Group, where full-year revenue was down 28% year-on-year to $9.1 billion. Revenue in the Commercial division of the group fell by 13% over the same period, dropping year-on-year to $39.8 billion. Full-year operating income was down 8% year-on-year to $3.5 billion.

Clarke added the company “remains optimistic” about the PC refresh cycle, citing the upcoming end-of-life for Windows 10, as well as an ageing installed base of PCs. It’s also hoping consumers and businesses will take to more AI-focused machines in the longer term, with the day-to-day use of artificial intelligence chiefly happening on PCs.

Dell’s Infrastructure Solutions Group pinning hopes on AI

Dell’s Infrastructure Solutions Group also reported a significant decline in revenue: servers and networking revenue fell 14% year-on-year over to $17.6 billion, while storage dropped 9% to around $16.3 billion. Full-year operating income was down to $4.3 billion, a fall of 15%.

However, traditional server demand was up year-on-year for the fourth quarter, the company noted, marking the third consecutive quarter of growth.

The company also talked up the potential of its AI server line. “FY ’24 was one of those years that didn’t go as planned. But I really like how we navigated it. We showed our grit and determination by quickly adapting to a dynamic market, focusing on what we can control and extending our model into the high-growth AI opportunity,” Clarke said.

The company has released a number of AI-optimised servers, which clocked up sales of nearly $800 million during the last quarter of the year, a rise of 40% compared to the prior quarter. Notably, Dell was the first company to announce it was ready to take orders for AMD’s Instinct MI300 AI accelerators when these launched in December 2023.

The company expects to return to growth in full year 2025.