NVIDIA's revenue doubles, beating expectations; is the AI trade narrative making a comeback?
戴尔科技2027财年Q2业绩直播
Key Takeaways (AI-Generated)
Financial Performance
- Record revenue of $47 billion, up 58% year-over-year with earnings per share of $7.04, up 203%
- Gross margin dollars grew 78% to $9.9 billion with 21.1% gross margin rate
- Operating income increased 160% to $5.9 billion, representing 12.6% of revenue
- ISG revenue surged 89% to record $31.8 billion with 15% operating margin
Business Highlights
- Booked record $60.9 billion in AI server orders with $16.4 billion AI server revenue recognized
- AI backlog reached record $95 billion with customer count exceeding 6,500
- Traditional server revenue up 122% driven by strong data center modernization demand
- Returned record $4.3 billion to shareholders including $3.8 billion in share repurchases
Financial Guidance
- Q3 revenue expected at $49 billion midpoint, up roughly 80% year-over-year
- Full year revenue guidance raised $25 billion to $192 billion, up roughly 70%
- Q3 diluted EPS expected at $6.50, up over 150% year-over-year
- Full year AI server revenue expected at $74 billion, up 3X year-over-year
Opportunities
- AI market expected to represent 75% of data center demand by 2030
- Trillion-dollar market opportunity with 200 gigawatts of additional power requirements
- First to ship rack systems on NVIDIA Vera Rubin platform
- Multi-year modernization journey driving greater operational efficiency and scale benefits
Risks
- Supply constraints across DRAM, NAND, CPUs, disk drives and semiconductor components
- AI supply chain running at red line capacity with ongoing operational disruptions
- Spotty CPU shortages creating additional supply chain challenges
- Component availability issues may impact future production capabilities
Full Transcript (AI-Generated)
Operator
Please stand by. Good afternoon and welcome to the Fiscal Year 2027 Second Quarter Financial Results Conference Call for Dell Technologies, Inc. I'd like to inform all participants this call is being recorded at the request of Dell Technologies. This broadcast is the copyrighted property of Dell Technologies Inc. Any rebroadcast of this information in whole or part without the prior written permission of Dell Technologies is prohibited.
Following prepared remarks, we will conduct a question and answer session. If you have a question, simply press * then one on your telephone keypad anytime during the presentation. I'd like to turn the call over to Paul Franz, Head of Investigations. Mr. Franz, you may begin.
Paul Franz
Thanks everyone for joining us. With me today are Jeff Clark, David Kennedy and Tyler Johnson. Our earnings materials are available on our IR website and I encourage you to review these materials. Also, please take some time to review the presentation, which includes additional content to compliment our discussion this afternoon.
During this call, unless otherwise indicated, all references to financial measures refer to non-GAAP financial measures including non gap, gross margin, operating expenses, operating income and income, diluted earnings per share, free cash flow and adjusted free cash flow. A reconciliation of these measures to their most directly comparable GAAP measures can be found in our web deck and our press release.
Growth percentages referred to year over year change unless otherwise specified. Statements made during this call that relate to future results and events are forward-looking statements based on current expectations. Actual results and events could differ materially from those projected due to a number of risks and uncertainties which are discussed in our web deck and our SEC filings. We assume no obligation to update our forward-looking statements. Now I'll turn it over to Jeff.
Jeff Clark
Thanks, Paul, and thanks everyone for joining us. Another outstanding quarter. I am proud of how our team executed across the business, delivering record revenue and record earnings per share. Revenue was $47 billion, up 58% and earnings per share was $7.04, up 203%. These results reflect the compounding benefits of our competitive advantages, the breadth of our portfolio and the strength of our operating model.
Our modernization efforts are driving greater efficiency and significant operating leverage, enabling us to grow earnings faster than revenue. Customers no longer see IT environment simply as cost centers, but as value drivers that enable growth, productivity and competitive advantage. As a result, they are expanding and reallocating budgets to support continued investment.
This is creating opportunities across our portfolio from infrastructure to client devices. Our world class supply chain and ability to serve customers across their IT environments are helping us meet more of their needs and gain share. Our deployment and service capabilities are helping customers integrate solutions across their IT environment and capture more value quickly.
The proof is in our results. Over the past 12 months, we have booked more than $130 billion in AI server orders. In just the past two quarters, we have generated almost as much revenue from traditional servers and networking as we have in any prior full year in company history. Storage return to growth and share gain with strong demand for Dell IP storage products and CSG revenue is growing at the fastest rate in five years.
It is clear why demand for our solutions is exceeding available supply. Our results and guidance demonstrate the strength of our position as customers entering new era of infrastructure modernization. Customers are modernizing their data Centers for both AI and non AI workloads, and that benefits are meaningful.
AI is an important catalyst, but the opportunity extends well beyond AI optimized infrastructure. AI requires modern, disaggregated architectures that keep data accessible and in motion across compute, storage, and networking. It is also accelerating investment across traditional IT environments as customers see greater performance, efficiency and resiliency.
Our AI server momentum continues to accelerate. We booked $60.9 billion of AI orders in this quarter, the most in our history. We are also seeing AI related tailwinds in traditional servers and networking along with early signs of increased storage demand as customers prepare, manage and protect growing volumes of data.
Deployment methods are evolving as well. On Prem and edge infrastructure offers attractive token economics for the right workloads while giving customers greater control over their data and intellectual property. Our portfolio, global reach and deep customer relationships position us to help customers design, deploy the right solutions for their performance, cost and security requirements.
Together, these trends are expanding our addressable market and driving demand across compute, networking, storage and PCs. This represents a significant long term opportunity for us. It plays directly to our strengths and expands the value we can deliver across the entire IT environment.
Now on to the results. Starting with ISG, revenue increased 89% to a record $31.8 billion with operating income of $4.8 billion and an operating income rate of 15%. AI demand continues to accelerate. In Q2, we booked a record $60.9 billion in AI orders and a recognized $16.4 billion in AI server revenue.
We exit the quarter with a record $95 billion of AI backlog and our pipeline continue to grow sequentially and remains multiples of our backlog even after converting $131.7 billion into orders over the past 12 months. Demand is broadening across new clouds, sovereigns and enterprise customers, and our customer count has surpassed 6500.
The scale and complexity of these deployments reinforce why customers choose us. AI infrastructure requires much more than assembling and delivering components. These opportunities demand significant engineering, design and deployment expertise, with some engagements requiring to upwards of 50 unique designs.
As customers optimize for workload performance, power, cooling and the data center environment, this complexity plays to our strength. Our engineering capabilities, broad portfolio, global supply chain and ability to deploy and support infrastructure at scale globally differentiate us, enable customers to move from design to production more quickly.
We demonstrated those capabilities again by becoming the first to ship a rack systems engineered on the NVIDIA Vera Rubin platform. The AI market is evolving rapidly and we are focused on expanding our platforms and capabilities, solving increasingly complex customer challenges and innovating across the infrastructure stack. With accelerating demand and a growing pipeline and differentiated capabilities, we are well positioned to capture the opportunity ahead.
Moving to traditional servers, revenue was up 122% as demand remains exceptionally strong, supported by multiple vectors of growth. First and majority of our growth is coming from existing customers as they continue to refresh and modernize their data centers to support traditional workloads. Heightened security and resiliency requirements are also creating incremental demand as customers modernize their infrastructure.
Second, we are seeing a growing trend of customers that require meaningful CPU compute capacity to support AI and agentic workflows. These workloads are creating incremental demand for traditional servers. We are executing very well against both opportunities and gaining share. Over the past two quarters, we have gained more than 10 points of traditional server share and we expect to gain share again this quarter.
With the majority of the installed base still on 14th generation or older servers, we see a significant and durable refresh opportunity ahead. The strength and breadth of demand combined with our continued share gains demonstrate the competitiveness of our portfolio and the consistency of our execution.
Turning to storage, revenue is up 26% as strong demand for our Dell IP portfolio translated into revenue growth and improved storage profitability. Dell IP delivered another record demand growth quarter, making this our 6th consecutive quarter of demand growth above market demand remains broad based.
Enterprises continue to modernize their storage environments as data growth increases the importance of keeping data available and secure. At the same time, we are beginning to see incremental demand from AI workloads, which require customers to prepare, manage and move increasingly large volumes of data.
We saw strong growth across Power Flex, Power Store, Power Protect and Power Vault, with Power Store posting double digit demand growth for the 9th consecutive quarter. Power Scale and Object Scale also drove another exceptional quarter in unstructured storage, which has now grown at double digit or better for three consecutive quarters.
Storage is becoming a more meaningful contributor to our growth and profitability. IP continues to increase as a percentage of our storage mix and margins continue to improve, supporting overall ISG profitability. Our share gains, expanding Dell IP mix and accelerating pace of product development give us confidence in the opportunity ahead.
Turning to CSG, revenue grew 20% with demand growth across all regions and verticals. Commercial revenue grew 22%, our 8th consecutive quarter of growth with demand up for the tenth quarter. Large enterprise customers continue to refresh their PC installed base driving double digit growth across all regions. More cost sensitive customers are extending their upgrade cycles. This is increasing the number of older devices in the install base and expanding the long term refresh opportunity for CSG.
Consumer revenue was up 7%, the 4th consecutive quarter of demand growth. CSG profitability remains strong, benefiting from price discipline and greater scale.
In closing, we delivered record revenue and EPS with continued strong cash flow and record capital returned to shareholders. Our results reflects several reinforcing factors. First, infrastructure demand is growing structurally driven by data center modernization, AI adoption and attractive economics of deploying workloads on Prem.
Second, our broad based portfolio across AI infrastructure, traditional servers and networking, storage and PCs enable us to serve the full range of our customers needs. And lastly, we delivered value at scale through our engineering and deployment expertise, supply chain scale and fast discipline operating model.
Our full year operating expense rate guidance of approximately 8% of revenue is the lowest in our company's 42 year history demonstrates the operating leverage this model can deliver. These advantages reinforce one another. They are driving growth, share gains, profitability and cash generation. By creating more value for our customers, we compound our advantages and create durable cash flow and long term value for our shareholders.
I'm proud of our team's performance. We enter the second-half of strong momentum and confidence in our position. With that, let me turn it over to David to walk through the financials and our outlook.
David Kennedy
Thanks, Jeff. We delivered another record quarter, capping a very strong first half of the year. The team executed exceptionally well, driving record revenue, record EPS and record shareholder returns. Total revenue was up 58% to $47 billion. Gross margin dollars grew 78% to $9.9 billion. Gross margin rate was 21.1%, driven by an improvement in ISG margin rate and a higher mix of ISG revenue.
Operating expenses were up 22% to $4 billion, primarily from variable compensation tied to our outperformance. Building on last quarter. We continue to drive significant scale in the PNL with OpEx down 250 basis points to 8.5% of revenue. Operating income grew 160% to $5.9 billion or 12.6% of revenue driven by higher revenue scale and price discipline across servers, storage and CSG.
Net income was up 189% to $4.6 billion, primarily driven by strong operating income. Diluted EPS increased 203% to $7.04, a record.
Moving to ISG, ISG delivered record revenue of $31.8 billion, up 89%, marking the 10th consecutive quarter of double digit or better revenue growth. AI server momentum accelerated and we set records across the board, including $60.9 billion in orders, 16.4 billion in revenue and 95 billion in ending backlog.
Traditional server or networking revenue was $10.5 billion, up 122% as demand continued to outpace supply. Storage revenue was $4.9 billion, up 26%, with strong demand across the Dell IP portfolio driving revenue growth and significant margin contribution. Dell IP storage demand has grown above market for six consecutive quarters.
Unstructured storage remained one of our fastest growing solutions with broader strength across the rest of the portfolio. ISG operating income was to a record $4.8 billion of 225%, marking the 9th consecutive quarter of double digit or better growth, primarily driven by higher revenue across the business. Operating margin was 15%, up 620 basis points.
Looking at the key drivers of margin performance, a number of factors came together and went our way this quarter. The demand environment was strong, mix and rates were favorable and the team executed with discipline. While we would not expect every benefit to continue at this level, the quarter also reflects meaningful structural improvements in the business, which is reflected in our second-half guidance.
Looking more closely at the drivers, first, we are realizing the benefits of our multi year modernization journey. That work is driving greater efficiency and strong operating leverage resulting in significant scale. Second, storage profitability was up with a higher mix of Dell IT and rate expansion across the solutions. And 3rd, we maintain strong operational price discipline in a dynamic environment, reflecting our team's strong execution and continued focus on supporting our customers.
Turning to CSG, CSG revenue was up 20% to $15 billion. Commercial revenue grew for the 8th consecutive quarter, up 22% to $13.2 billion and consumer revenue increased 7% to $1.8 billion. CSG operating income was $1.1 billion or 7.6% of revenue, driven by pricing discipline and the benefits of scale in the PNL.
We will continue to balance customer demand with availability of supply to drive profitable share gain. CSG remains an integral part of the business. It provides scale across our supply chain and manufacturing completes our end to end portfolio with the essential productivity device. It is our most capitally efficient business. Together these strengths make CSG a significant source of cash generation and helps fund growth across Dell and capital returns to our shareholders.
Moving to cash and the balance sheet, we delivered another strong cash quarter with cash flow from operations of $2.2 billion and adjust a free cash flow of 8.1 billion. This is primarily driven by sequential revenue growth and higher profitability.
We returned an all time record $4.3 billion to shareholders this quarter including repurchasing 9.5 million shares at an average price of $401.00 per share and paying a dividend of approximately $0.63 per share. This acceleration in shareholder return of 2.2 billion dollars quarter on quarter reflects our agility and commitment to capital deployment as we generate more significant adjusted free cash flow as well as our confidence in our long term value creation.
We ended the quarter with $14.2 billion in cash and investments of 0 point $2 billion sequentially and our core leverage ratio is at 0.8 X. Overall, our strong cash generation and healthy balance sheet, further validated by positive credit rating actions during the quarter provide significant flexibility to invest in the business and continue returning capital to shareholders.
Turning to guidance, we've had a strong first half of the year and we expect the second-half to be stronger. The momentum we've seen continues and we are raising our expectations across every line of business. Our second-half gross margin rate outlook has improved over the past 90 days and we continue to drive significant operating leverage and scale.
For Q3, we expect revenue to be $49 billion at the midpoint, up roughly 80% year on year. We expect ISG to grow roughly 145%, supported by $19 billion in AI server revenue. CSG revenue is expected to be up roughly 15%. Operating expenses are expected to be down low single digit sequentially. Operating income is expected to grow roughly 120%.
We expect ISG operating income rate to be up just over a point year over year even as AI server revenue more than triples year over year. We expect CSG operating income rate to moderate to roughly 6% as we balance demand, share and profitability. We anticipate A diluted share count of approximately 651 million shares Diluted non GAAP earnings per share is expected to be $6.50, up over 150% at the midpoint.
For the full year, we are raising our revenue guide by 25 billion to 192 billion at the midpoint up roughly 70% with diluted non GAAP EPS of $25.50, up approximately 150%. We expect ISG to grow roughly 120% driven by AI server revenue up 3X year over year to $74 billion. We expect traditional servers to grow just over 100%, storage up in the mid teens and CSG revenue to grow in the mid teens.
Excluding the mix impact of AI servers, gross margin rate are up year over year. Our modernization efforts are paying off, simplifying, standardizing, automating and enhancing our operating model with AI delivering significant operating leverage with operating expenses to be approximately 8% of revenue, the lowest level in the company's 42 year history.
With gross margin improvement and the benefits of significant scale, operating income is expected to grow approximately 120% with over 2 points of rate improvement year over year. I and O is expected to be between 1.4 and $1.5 billion. Diluted non GAAP earnings per share is expected to be $25.50, up approximately 150% at the midpoint.
In closing, we've delivered another exceptional quarter capping our record first half of the year. Over the past two quarters, revenue was 90.8 billion, up 71%. EPS grew 208% to $11.90. We generated record cash flow from operations of 6.3 billion and returned an all time record 6.3 billion to shareholders.
The team executed exceptionally well across the business. The second quarter provided further evidence that AI momentum is accelerating with 60.9 billion in orders, 16.4 billion in revenue and a backlog approaching 100 billion. At the same time, traditional servers, storage and CSG all contributed, reinforcing the breadth and balance of our portfolio.
Beyond the numbers, I would highlight the operating discipline. The modernization work we've invested in over several years is showing up in scale, in margin structure and in our ability to execute in a dynamic supply environment. We're entering the second-half from a position of strength and we'll continue to balance growth with discipline to drive long term shareholder value.
You are seeing the compounding benefits of our durable competitive advantages, differentiated operating model and operational discipline. We're excited about the second-half and confident in our long term value creation. Thank you to the team for their execution and thank you all for your time today. Now I'll turn it back to Paul to begin Q&A.
Paul Franz
Thanks, David. And let's get the Q&A. In order to ensure we get to as many of you as possible, please ask one concise question. Let's go with the first question.
Operator
Thank you. Our first question come from Amit Daryani with Evercore.
Amit Daryani
Yep, thanks a lot. Good afternoon everyone and Congrats on a really nice Sprint here. I want to spend some time on the non AI part of ISG And you know, if I look at a traditional silver growth of 122% was actually faster than AI compute and storage grew 26% as well. I think a worry folks will have is, is this driven by a combination of pricing and pre buys rather than real demand.
So I don't know if you can spend some time just talking about, you know, what do you think is driving this demand and it is a way to think about pricing demand versus share gains and you know, really any color on what workloads or use cases are you seen as infrastructure going into and the durability of it would be helpful. Thank you.
Jeff Clark
Sure, Amit, let let me let me try a little bit. So if you look at traditional servers and what we're seeing, which is the vast majority of the growth that we saw in the quarter, it's a consistent theme that I think we talked about last quarter. One, there's a modernization in the data center. That modernization continues to drive consolidation. It is increasing space, driving power efficiency and cooling, and it's obviously driving demand and demand for new servers that have more cores, new servers that have more DRAM, the new servers that have more storage in them as we consolidate and aged install base.
Secondly, that's probably the next big opportunity for us. As much as we've modernized and to give you a sense that it's not an end near or it's a one time thing, we still have 1.2 million assets that are 14G or older in the installed base. They have to be upgraded. They're going to have to be consolidated with new technology, whether it's our 17G in the consolidation ratios or 6 to 8 to 1 or a new 18G. They'll begin shipping next month where we see consolidation rates in the 12 to 14 servers per new 18G server.
That is going to happen and a forcing function is going to be the security environment that we live in today. So we think about what's happening in the world of security and driving increased resilience and new requirements like post quantum cryptography coming online. Old infrastructure has to be updated and then increasingly we're seeing enterprises, Dr. AI workloads, specifically agentic workloads.
I know your question was specifically the non ones, but it's complemented by growth there and storage. We see a very similar dynamic. We have the dynamic of our products are very, very competitive in the marketplace. Data continues to grow. So regardless of the inflationary environment that exists, more data is being created on the planet at the edge and data centers in the cloud and that data has to be stored, it has to be encrypted and protected and those are the opportunities that we see, which is why we believe our Dell IP portfolio is has a pretty significant tailwind.
Think about it. I think if we blend Q1 and Q2 together, we grew storage 17% in the first half of the year. We continue to see our Dell IP storage growing ahead of the market for six consecutive quarters on a demand basis. We could run off a bunch of fun numbers. Power stores now grown up grown 10 consecutive quarters in a row. We have power scale five quarters in a row, object scale four quarters in a row, data domain 3/4 in a row are all flash arrays have grown now 10 quarters in a row.
So there is inherent demand. Our products are more competitive and we're seeing that play out in the marketplace from the largest enterprise customers down to small and medium sized businesses. And then there there's also the opportunity to grow with AI, which is driven by agents and KV cash and new techniques and the AI world. I hope that helps.
David Kennedy
Maybe to add, Jeff, I think it's part of the durability of that growth and demand. Again, we see as part of our guide our second-half growth rates maintaining what you've seen in the first half. So Jeff mentioned the 17% growth in storage, pretty similar mid teens for the second-half. We'll continue to guide to traditional server growing triple digits again for the second-half as we drive that through. So we continue to see pipelines build. You continue to see the use cases that Jeff mentioned and it all points to a more broad based, more durable ecosystem.
Operator
Thanks Allen. And the next question will come from Ben Rightsys with Melius Research.
Ben Rightsys
Hey guys, thanks and I'll echo pretty, pretty impressive quarter and guide there. Wanted to ask about a little longer term your your partner in AI servers talked about growing 70% next year in overall revenue. You, you guys are growing faster than that your backlog just surged. I was and you also have these CPU racks that are new adding to traditional servers.
So would you be willing to you know, should you grow kind of in line with with NVIDIA for next year? You know, you, you guys are really part of the AC IE segment they have or do you see that kind of growth rate in your future or anything you want to kind of say about your long term growth rate given it so much better than expected? I would be appreciated. Thanks.
David Kennedy
Thanks Ben. Look, I think if you anchor in on our second-half trajectory building on the last question, you can see you know we like to position in relation to the durability that we see in the demand. We see it across the portfolio and that's giving us tremendous measures leverage as we continue to grow. That scale that we get in the P&L again offers us the opportunity to continue to find scale and and growth in the business as the second-half grows, which is 68% is pretty much a mirror image to the first half 71%.
And it's obvious we're seeing signs where the data center is turning in from this cost center approach to a. A value creator and the ecosystem of the enterprise customers that we're seeing are starting to embrace that. You know, there's lots of complexity and execution. I think right now really keen to execute a strong second-half, continue that great momentum as we go through the second-half of the year. I think we'll be in a great position at that point and we'll continue to look for the growth going forward.
Jeff Clark
And then maybe some more context around that. Our five quarter pipeline grew sequentially. That's after booking $131.7 billion of orders over the past four quarters. I think that gives you a sense of what's happening today. And then if I look at the longer term trends, I know you're a believer of this, but as we see it, agentic demand is reshaping the data center in the underlying infrastructure inferences, past training and it's pure demand in our industry.
We think the tokens that inference drives is going to grow 87 times the 3600 quadrillion tokens by 2030. Training demand grows 5X to 850 Zeta flops by 2030. Enterprise to Gentek is expected to be the single largest workload by 2028. We're expecting AI to be 75% of all data center demand by 2030, adding 200 gigawatts of power over that same time frame. And half of that we believe is right in our sweet spot with our customers, the Neo Cloud, sovereigns and enterprises.
And if you look at that math, we think the opportunity in front of us is more than a trillion dollars over that time frame. And we believe we're well positioned. We believe that our model is differentiated, that our engineering is differentiating ourselves with every customer that we interact with. The scale of our deployment capabilities is unmatched globally.
We believe what we're doing on the support side is equally important, helping customers ramp, getting to that first token faster than anyone else and then keeping it running. And then the DFS component that we have to help customers in that bridge point from an order to that first token is something that we believe is differentiating us and we're going to continue to focus on that.
And then if you believe that demand is there, it drives more servers in the agentic workload and it drives more data around that agentic workload, growing each of those areas for us as well.
Operator
Thanks, Ben. And our next question will come from Mark Newman with Bernstein.
Mark Newman
Thanks very much. Congrats again on the fantastic numbers. A few more details on the huge strength you're seeing in both traditional and AI servers as first of all, for traditional servers, this has been traditionally almost all enterprise customers and I believe you're lumping in the CPU racks that are Gentek AI servers. That are CPU racks in there, I believe is, is this traditional server category still almost all enterprise or are you seeing a portion of that from say new clouds or CSUCSPS?
And then similarly for the AI server customer mix, both revenue and orders, I know majority in the past has been near clouds or Tier 2 CSPS. Is, is, is that still the same? I wondered if you could give us any hints in terms of the relative growth rate between enterprise versus other larger customers in the AI server mix, because previously you said enterprise had been growing faster and I just wondered if that is still the case given the huge step up, particularly in the orders. Thanks very much.
Jeff Clark
You bet, Mark traditional server, the 122% growth, it's primarily our historical enterprise customers. I'd stressed demand outstrips supply. A demand was even greater than the results that we published there. We are supply constrained, but demand is from our traditional enterprise customers. That's where the vast majority of the workloads are. That's where the modernization is occurring. That's where the aged installed base is. That's where the heightened awareness around security and resiliency is been driving demand.
I introduced last quarter that we are beginning to see and AAI servers and when I talked about that and it would be the same that happened. This past quarter that there are Neo clouds buying that some of our high frequency trader customers are buying those types of servers as well as very advanced and their AI deployments are largest and most sophisticated enterprise customers.
So vast majority of that 122% growth are traditional customers across all segments, all geos, AI servers are beginning to show up with that set of customers, which is exciting to see. That grew quarter over quarter. It grew across Neil Clouds, it grew across our HFT customers as well as our enterprise customers. So that's exciting to see.
And then the mix inside our traditional AI business is exciting and something that we've talked about and I think we mentioned in our remarks, we now have more than 6500 customers buying Dell AI Factory. 3300 of them have happened in the last three quarters. That took us eight quarters to get to the 1st 3200. That acceleration is enterprise.
Enterprise customers grew quarter over quarter, year over year. Repeat buyers grew quarter over quarter and year over year. Enterprise revenue grew quarter over quarter and year over year and the pipeline of enterprise customers grew sequentially as well. So we are seeing more enterprise customers. The the mix didn't necessarily change because we are still winning on the sovereign side as well as the large Neil cloud side, but the momentum with enterprise.
But that's measured by number of customers. The number of customers that are buying repeatedly is all up and the indicators are strong and they tend to buy more storage and they tend to buy more networking when they engage with us a more complete solution. I hope that helped.
Operator
Thanks, Mark. Yeah, thanks very much. And we'll take a question from.
Jeff Clark
Depending on what type of customer you are, there's compliance and regulatory requirements about how long that's got to be retained and what the protection policies are with that. So you have another new source of growth for storage. You see the same happening with KB Cash and how it's being used and driving more efficient inference. So we see multiple new lines or new paths for storage growth in our businesses.
If we think about this across and gentic workloads as we head towards physical AI and what's going to happen in manufacturing and IoT sensors and robotics, which Dr. tremendous amount of multimodal unstructured data, Arthrolexicolla unstructured repositories. There's a lot of structured data and databases. The growth of that is immense and we actually see it accelerating, not slowing down.
And that bodes well for someone that's in the storage business, which we absolutely are and equally important in the data business and how do we start helping customers with forms of data management. We talk about this internally around creating a data semantic layer, a layer of intelligence that helps make something of all of that data to feed the AI engines to make sure that they can actually produce something even more worthwhile, to help the agents be more efficient, etcetera, to help training that virtuous cycle we believe is just starting.
And as we understand it today, we're very optimistic about the growth of storage going forward in the AI world. And we're positioned quite well across all of our storage assets. We protect data, we store all forms of data. And as we build more of our data automation platform, we think about our data management work. I think we have a huge opportunity to grow and to be even more important to our customers as their data needs grow.
Operator
Thanks, Eric. And our next question will come from Asia Merchant with Citi.
Asia Merchant
Great. Thanks for taking my question and great results here. Can I just ask a little bit about supply? Jeff, I know you mentioned supply constraints. Maybe if you can just help us understand where the supply constraints have anything changed from the last quarter. You know clearly some of the component makers are talking about supply agreements that have been signed. How do you think about your supply going ahead and what we should think about where some of the incremental supply constraints are perhaps relative to last quarter in order to meet the demand durability, you know that you're talking about even going into next year. Thank you.
Jeff Clark
You betcha. How I think about supply, as I'm often reminded by our sales force, it's not enough. So we are doing everything we can to get more supply in today's environment. That's a very difficult task. What we've been doing is I think optimizing the bits and bytes that we have coming in, whether that be with configuration that be building match sets to maximize the output of the corporation out of the factories.
Our ability to increase guidance by the $25 billion is a direct reflection of our ability to optimize what's coming in, shaping demand planning and accordingly and getting it out the door. One of the things that we did earlier this year as we saw the PC market showing signs of softening in the second-half, we optimize the bits and bytes we have towards the infrastructure business. There's a lead time associated with that. We're working through that lead time, which is part of why the second-half looks a little better. We've been able to realize greater shipments as a result of that.
The constraints remain the same, DRAM, DRAM, DRAM followed by Nan, nan, Nan. We have spotty, spotty CPU shortages. There are shortages with disk drives if you go further down in the supply chain just about every product going through a leading node is constrained. But sure nodes that are building Mosfets, power ICS, microcontrollers, drivers are constrained or shortages of ABF substrate tea glass, all of which we monitor their shortages and optical.
These AI supply chain is working red line all out to build CD us power racks. Welcome to the life of a supply chain person at Dell. This is what we do, chasing parts. We love it. Trying to optimize the outcomes for the company. Company, I think we've done largely a good job of that with the second-half guide up and we'll continue to focus on trying to get more supply and take the supply we have and optimize the output.
Operator
Thanks, asya. And the next question will come from Aaron Rakers with Wells Fargo.
Michael Stettinoff
Hi guys. This is Michael Stettinoff on behalf of Aaron. Thanks so much for letting me ask a question. I wanted to ask on on the storage business obviously very strong within that, you know, within that you mentioned several, several, you know, solidly performing Dell IP portfolio products. One of which I wanted to ask about is Lightning. How is that contributing at this point and kind of what level of attach are you seeing to those cloud AI server deals
Jeff Clark
well Lightning our parallel file systems? Zeneko, sorry, parallel file system designed for native AI use cases. We continue to have the product out in the field. We continue to see interest. It's still a relatively new product. It's in beta at several customers. We're in run offs against other competitors with the product that will continue and as it builds momentum, I'm, I'm certain we'll give you an update in the future, but that's where Lightning is at the moment.
Operator
Thank you. Thank you. And our next question will come from Joseph Cardosa with JP Morgan.
Joseph Cardosa
Hi guys and Congrats on the results here and thanks for the question. Maybe can you guys and I know you guys had talked about the traditional business not here in the land, but maybe just curious if we break down the growth that you're seeing on the traditional server and storage side between volume and pricing. You know, relative to your earlier view, how much of the outside is coming from each of those vectors? And maybe more importantly, as you think about going forward in the momentum you're seeing in the business, you know, how are you thinking about headroom for customers to keep on digesting these higher prices? And are you in your customer discussions? Are you starting to see any push back there? Thank you.
Jeff Clark
Parsing servers and storage by revenue and growth. Let me try. So if I if I look at servers and what we're seeing in traditional servers, we're seeing again this notion of modernization that's driving higher core count, more DRAM and more storage. Those products are those configurations are part of this modernization or consolidation and they continue to grow rapidly. They cost more than they did last quarter in the quarter before and the quarter before. So there's a notion of inflation inside our growth, but the underlying demand for the technology is significant.
I think about the new use cases, that's all new use cases, all new growth, which is being driven by agentic AI essentially running the harness, if that makes sense. And we continue to be optimistic about the prospects. Again, demand outran supply last quarter, demand outran supply this quarter. The pipeline remains robust. David just gave an update on guidance of the server business, which is very healthy. And clearly there's a component of that driven by the price increases as our input costs continue to go up.
Storage is a very similar story as I, I think I mentioned one of the earlier questions, as we see a ramp down of our partner IP portfolio, it's being offset by more units in our Dell IP portfolio that come with higher revenue and higher margin rates. We're seeing a greater use of our storage products in AI applications, which is good to see, most notably with our unstructured products which had unprecedented growth again.
But I rattled off a bunch of numbers earlier about every category of our traditional or core Dell IP portfolio growing multiple quarters. Now the Dell IP stack has grown 6 consecutive quarters now ahead of the marketplace. We expect to take share again. And clearly, some of that is uplifted by the increased cost of the underlying material. Our software defined products are doing well in the storage portfolio, which is incremental business for us. So I hope that gave some color.
Operator
Thanks. And we'll take one more question before we go to a close and that question will come from David Vogt with UBS.
David Vogt
Great. Thanks guys for squeezing me in. Maybe for Jeff and David, can you help us understand sort of the long term margin differentials? As customers, you know, modernize to next Gen. servers off of older generation servers like 14 on the way to like 7G17G18G. And how much of the margin uplift that you're seeing in ISG comes from a like for like margin lift as we modernize data centers versus sort of your efficiency improvements and scale economics that you're seeing just for more volume going through the supply chain? Thanks.
David Kennedy
Yeah, I mean, if you look at our Q2 results here, ISG up in 15 points, obviously tremendous performance. Jeff outlined it earlier. The number one driver here is a scale conversation. Given the growth that we're seeing, an accelerated growth that we're seeing that for the IG business was the driver of just over 400 basis points for the full year guide, it's worth over 650 basis points. You see the leverage that we can adopt into the ecosystem.
Outside of that, you then as you do your storage growth and again as we drive that 13% guide or 5015% guide, excuse me, for the full year, that $2.5 billion of incremental storage is a huge drag in terms of revenue dollars that we we push through. As you look at our guide for the second-half of the year, then for ISG, you'll see it's up over a point in the second-half and you'll see it grow from Q3 to Q4. Also even with the expansion of AI, which is over 3X growth year on year at the $74 billion guide.
So all that's kind of contributing to a robust portfolio. And then across the rest of the portfolio, it's really about mix, product mix, Geo mix and just traditional execution, pricing discipline and operational rigor across our supply chain, engineering and and sales teams.
Jeff Clark
All right, we'll move it over to Jack to close this out. Sure, Thanks, Paul. Thanks everyone for joining us today. Our advantages are compounding. Our adjustable opportunity is expanding and our differentiated OPERA operating model is delivering significant leverage with our full year OpEx rate at a 42 year low. We raised our full year guide by $25 billion to $192 billion with $25.50 of EPS. We are optimistic about a stronger second-half and the momentum we carry into next year. Thanks everyone for your time today.
Operator
Thank you. That does conclude today's conference. We do thank you for your participation and have an excellent day.
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