Speaker 1: Bloomberg Audio Studios, podcasts, radio news.
Speaker 2: Dell a lot of stories within this one, David, you'll
Speaker 2: tell me it's a strong quarter. I think the market
Speaker 2: right now is staring at the outlook for the fiscal
Speaker 2: year ending January twenty seven, the one hundred and sixty
Speaker 2: seven billion dollars of sales, sixty billion of that being
Speaker 2: AI servers. Something in there is new, In fact, twenty
Speaker 2: seven billion dollars of something in there is new in
Speaker 2: the outlook. What is it?
Speaker 1: Yeah, afternoon, Ed, look at a tremendous start to the quarter.
Speaker 1: Obviously in the year ahead, eighty eight percent revenue growth,
Speaker 1: your two hundred and fourteen percent EPs growth, and record
Speaker 1: cash flows. You're built on real, durable and accelerating globally.
Speaker 1: The amount of infrastructure that's needed out there. If you
Speaker 1: look at this, you know, really production at scale. All
Speaker 1: of those things have given us confidence, as you say,
Speaker 1: to add to that full year guide, adding twenty seven
Speaker 1: billion dollars to the revenue one hundred and sixty sixty
Speaker 1: seven billion dollars now almost fifty percent increase year on year.
Speaker 1: EPs is seventeen dollars and ninety cents. Really strong, and
Speaker 1: you know, really looking forward to the year ahead.
Speaker 2: David, is this coming from sort of one single hyperscala customer.
Speaker 2: Is it the neo clouds or is there more sort
Speaker 2: of granularity you can give me about what is actually happening.
Speaker 1: In the world.
Speaker 2: Completely acknowledge that the CPU server is back, right, that's
Speaker 2: clear in the quarter gone, But there must be something
Speaker 2: more happening under the surface here.
Speaker 1: Yes, this is more broad based and more prevalent across
Speaker 1: the ecosystem and our solutions. So CSG growth seventeen percent
Speaker 1: growth in Q one, we're guiding almost similar in Q
Speaker 1: two you mentioned the traditional server networking business s grow
Speaker 1: ninety two percent, and Q one we're expecting a strong
Speaker 1: guide to go to the year. Obviously, we've taken up
Speaker 1: our AI storage guide, our server guide sixty billion dollars
Speaker 1: and storage will grow every single quarter to go to
Speaker 1: the year. So it's more prevalent across our products, across
Speaker 1: our verticals, across our customer base. It's really more broad based.
Speaker 1: And you know AI demand if you like, beyond the
Speaker 1: GPU in terms of the opportunities ahead.
Speaker 2: Can you quantify that the AI demand but beyond the GPU.
Speaker 1: Yeah, if you look at our guide it's up twenty
Speaker 1: seven billion dollars. We've taken our AI guide up ten
Speaker 1: billion dollars from fifty billion to sixty billion. So obviously
Speaker 1: the rest is in our core business, and it's more
Speaker 1: prevalent across c ISG, traditional server and the storage market.
Speaker 1: So you know, strong across the board.
Speaker 2: Been under the working assumption for quite a while. Now
Speaker 2: that the US government's your biggest customer, I think the
Speaker 2: world was a little bit surprised yesterday. I was a
Speaker 2: little bit surprised about the ten billion dollar defense deal
Speaker 2: basically two billion dollars per year for five years. What
Speaker 2: is that I'm trying to understand. Is Dell in the
Speaker 2: software game here in that deal or what does it
Speaker 2: represent to you?
Speaker 1: David? Now, look, we're historically selling software over many years.
Speaker 1: We obviously support all the federal agencies in the US,
Speaker 1: but it's also more prevalent across the globe and all
Speaker 1: the government agencies. So this is just another mark, if
Speaker 1: you like, in terms of the broad solutions. When any customer,
Speaker 1: whether it be federal or whether it be enterprise based,
Speaker 1: is looking for us to help them in their technology
Speaker 1: needs and the solutions, we're there to help them we
Speaker 1: have those long standing relationships and this isn't just another
Speaker 1: example of that.
Speaker 2: And can I just double check something mechanically speaking? The
Speaker 2: nine point seven billion dollar deal is that reflected in
Speaker 2: the updated outlook you gave like it was something that
Speaker 2: was baked in.
Speaker 1: Well, again, if you think of that the guide, we're
Speaker 1: up twenty seven billion dollars for the year. That contract
Speaker 1: is nine billion over five years, you know, and most
Speaker 1: it's a billion less than a billion dollars for this year.
Speaker 1: So again a very small part of what's a broad
Speaker 1: based discussion around broad technology opportunities, solutions that our customers
Speaker 1: are looking for and making sure we can fulfill as
Speaker 1: many customer needs as we can in this environment.
Speaker 2: Some people might say, in this environment, what's a billion
Speaker 2: dollars here? Are there in any given cords or balance
Speaker 2: of financial year. I think the sense the analysts are
Speaker 2: trying to get from the call is the staying power
Speaker 2: of this demand, how sustainable it is. But I think
Speaker 2: another way of looking at it, David, is have you
Speaker 2: set yourself a new baseline going forward of what the
Speaker 2: world is like for particularly the AI server business.
Speaker 1: Yeah, I think it goes beyond the AI server business.
Speaker 1: I think it's AI demand and total across the solution
Speaker 1: and infrastructure stack that's there. If you look at the
Speaker 1: broad based opportunities that are appearing, I think as we
Speaker 1: move from training models into inferencing, those inferencing workloads are
Speaker 1: creating a net new environment, a net new tim if
Speaker 1: you like, that's there to go attack and go balance.
Speaker 1: From a customer perspective, we're seeing that and those education
Speaker 1: elements are coming in as part of the opportunity that's
Speaker 1: in front of us. We're excited by that, and I
Speaker 1: think that makes it a more broad based, durable growth
Speaker 1: over the long term for us as we see that.
Speaker 2: I appreciate the You've outlined twice that it's broad based.
Speaker 2: Was there one big customer or even sector in the
Speaker 2: court of gone or one big customer sector for the
Speaker 2: outlook in the year that has changed the trajectory for you.
Speaker 1: No, it's again more broad based. If you look at
Speaker 1: our segments neoclouds, Sovereign, those enterprise customers you'll have meant
Speaker 1: heard and spoke with Michael last week in relation to
Speaker 1: our five thousand customers in the enterprise side in relation
Speaker 1: to AI. As we broad based out those AI factories,
Speaker 1: you know there's growing. If you look at our five
Speaker 1: quarter pipeline, all individual verticals are growing in their own
Speaker 1: right and it shows again that the scale and the
Speaker 1: opportunity that's both geo and virtual based