Free cash flow margin has recovered to 2.1% in Q2 FY2027 but remains below the 11.8% peak, while aggressive buybacks of $3.8B in the quarter appear to exceed free cash flow generation of $986M.
Dell Technologies Inc. (DELL) cash flow statement — 13-year operating, investing & financing cash flows
| Metric | TTM | Jan'26 | Jan'25 | Feb'24 | Feb'23 | Jan'22 | Jan'21 | Jan'20 | Jan'19 | Jan'18 | Jan'17 | Jan'16 | Jan'15 | Jan'14 |
|---|
| Cash from Operations | 12.15B | 11.19B | 4.52B | 8.68B | 3.56B | 10.31B | 11.41B | 9.29B | 6.99B | 6.84B | 2.37B | 2.16B | 2.55B | 2.69B |
| Operating CF Margin % | - | 9.85% | 4.73% | 9.81% | 3.48% | 10.19% | 13.16% | 10.95% | 7.71% | 8.66% | 3.81% | 4.25% | 4.73% | 4.76% |
| Operating CF Growth % | 707.89% | 147.4% | -47.89% | 143.37% | -65.41% | -9.64% | 22.77% | 32.9% | 2.16% | 189.1% | 9.48% | -15.25% | -5.03% | - |
| Net Income | 11.38B | 5.94B | 4.58B | 3.37B | 2.42B | 5.71B | 3.5B | 5.53B | -2.18B | -2.93B | -1.16B | -1.1B | -1.22B | -1.71B |
| Depreciation & Amortization | 1.53B | 3.03B | 3.12B | 3.3B | 3.16B | 4.55B | 5.39B | 6.14B | 7.75B | 8.63B | 4.73B | 2.87B | 2.98B | 1.75B |
| Stock-Based Compensation | 354M | 723M | 785M | 878M | 931M | 1.62B | 1.61B | 1.26B | 918M | 835M | 398M | 72M | 72M | 266M |
| Deferred Taxes | 67M | -60M | -208M | -91M | -717M | -365M | -399M | -6.34B | -1.33B | -2.6B | -2.05B | -205M | -465M | 0 |
| Other Non-Cash Items | 1.82B | 714M | 453M | 609M | 961M | -3.13B | -88M | 938M | 756M | 754M | -1.6B | 408M | 459M | 1.27B |
| Working Capital Changes | -2.99B | 843M | -4.21B | 605M | -3.19B | 1.92B | 1.39B | 1.76B | 1.08B | 2.15B | 1.84B | 119M | 729M | 1.1B |
| Change in Receivables | -8.38B | -9.76B | -2.25B | 3.29B | -348M | -2.43B | -1.12B | -1.61B | -2.41B | -3.24B | -2.53B | -134M | -788M | 32M |
| Change in Inventory | -9.6B | -3.99B | -3.52B | 975M | 875M | -2.51B | -243M | 311M | -1.45B | -325M | 1.08B | -5M | 71M | -242M |
| Change in Payables | 10.59B | 12.66B | 1.7B | -498M | -8.55B | 5.74B | 1.6B | 894M | 952M | 3.78B | 751M | -374M | 1.03B | 0 |
| Cash from Investing | -3.72B | -2.06B | -2.21B | -2.78B | -3.02B | 1.31B | -460M | -4.69B | 3.39B | -2.88B | -31.24B | -321M | -355M | -6.99B |
| Capital Expenditures | -2.35B | -2.63B | -2.65B | -2.76B | -3B | -2.8B | -2.08B | -2.59B | -1.57B | -1.74B | -906M | -482M | -478M | -532M |
| CapEx % of Revenue | 1.56% | 2.32% | 2.77% | 3.12% | 2.94% | 2.76% | 2.4% | 3.05% | 1.73% | 2.2% | 1.46% | 0.95% | 0.89% | 0.94% |
| Acquisitions | -84M | 449M | 0 | -126M | -70M | 3.94B | 1.76B | -2.47B | -760M | -658M | -30.74B | 96M | -40M | -9.2B |
| Investments | - | - | - | - | - | - | - | - | - | - | - | - | - | - |
| Other Investing | -1.15B | 80M | 180M | 45M | 41M | 62M | 28M | 51M | 30M | 30M | -13M | 85M | 175M | 2.74B |
| Cash from Financing | -5.07B | -1.46B | -5.82B | -7.09B | -1.63B | -16.61B | -5.95B | -4.6B | -14.33B | 403M | 31.82B | -496M | -3.09B | 9.33B |
| Debt Issued (Net) | 5.68B | 6.48B | -1.31B | -3.47B | 2.65B | -6.3B | -4.53B | -1.64B | 1.59B | 2.16B | 29.9B | -490M | -3.12B | 8.47B |
| Equity Issued (Net) | -8.18B | -6.01B | -3.16B | -2.44B | -3.28B | -1.5B | -1.15B | -2.35B | -13.69B | -1.32B | 3.17B | -2M | 28M | 0 |
| Dividends Paid | -1.57B | -1.46B | -1.27B | -1.07B | -964M | 0 | 0 | 0 | -2.13B | 0 | 0 | 0 | 0 | -653M |
| Share Repurchases | -8.16B | -6.01B | -3.17B | -2.45B | -3.28B | -1.84B | -1.6B | -3.56B | -14.49B | -1.83B | -1.42B | -2M | 0 | 0 |
| Other Financing | -1.01B | -478M | -64M | -109M | -39M | -8.81B | -270M | -620M | -104M | -432M | -430M | -4M | -5M | 1.51B |
| Net Change in Cash | 3.28B | 7.89B | -3.69B | -1.39B | -1.19B | -5.1B | 5.03B | -89M | -4.14B | 4.55B | 2.94B | 1.18B | -1.05B | 17.49B |
| Free Cash Flow | 8.56B | 8.55B | 1.87B | 5.92B | 562M | 7.51B | 9.32B | 6.7B | 5.49B | 5.26B | 1.46B | 1.68B | 2.07B | 2.15B |
| FCF Margin % | 5.66% | 7.53% | 1.96% | 6.69% | 0.55% | 7.42% | 10.76% | 7.9% | 6.06% | 6.66% | 2.35% | 3.3% | 3.84% | 3.82% |
| FCF Growth % | 76.13% | 357.57% | -68.43% | 953.38% | -92.52% | -19.45% | 39.1% | 22.02% | 4.41% | 260.16% | -13.04% | -18.96% | -3.76% | - |
| FCF per Share | 13.13 | 12.51 | 2.58 | 8.04 | 0.75 | 9.50 | 12.16 | 8.93 | 7.64 | 7.32 | 2.03 | 2.34 | 2.89 | 5.33 |
| FCF Conversion (FCF/Net Income) | 0.75x | 1.88x | 0.98x | 2.56x | 1.46x | 1.85x | 3.51x | 2.01x | -3.03x | -2.40x | -2.03x | -1.96x | -2.09x | -1.58x |
| Interest Paid | 0 | 1.35B | 1.3B | 1.44B | 1.17B | 1.82B | 2.28B | 2.5B | 2.35B | 2.19B | 1.57B | 585M | 724M | 363M |
| Taxes Paid | 0 | 1.26B | 555M | 1.38B | 1.21B | 1.26B | 1.42B | 1.41B | 747M | 924M | 978M | 264M | 557M | 0 |
Quick answers to the most common questions about buying DELL stock.
Dell Technologies Inc. (DELL) generated $11.19B in net cash from operating activities in 2026. This reflects the cash generated directly from core business operations.
Dell Technologies Inc. (DELL) generated $8.55B in free cash flow in 2026. Free cash flow is the cash left over after capital expenditures, which can be used to pay dividends, repurchase shares, or pay down debt.
Dell Technologies Inc. (DELL) spent $2.63B on capital expenditures in 2026. CapEx represents the cash invested in physical assets like property, plant, and equipment to maintain or grow the business.
In 2026, Dell Technologies Inc. (DELL) returned $1.46B to shareholders via cash dividends and spent $6.01B on share repurchases. This shows the company's commitment to returning capital to its equity investors.
Key Metrics
Top Statement Risk
AI server mix diluting margins
Metrics are mathematically derived from official filings.
Earnings Quality Volatile, Cash Conversion Unstable
Dell's cash conversion ratio has been highly erratic, swinging from 0.38x in Q4 FY2025 to 2.90x in Q1 FY2026, indicating that reported net income is a poor proxy for underlying cash generation due to significant working capital swings and non-cash adjustments.
The wide dispersion in the OCF/NI ratio suggests that Dell's earnings quality is heavily influenced by timing of collections and inventory builds, not just operational profitability. In quarters like Q4 FY2025, where operating cash flow was just $585 million against $1.5 billion in net income, the disconnect implies that accruals and working capital outflows absorbed a substantial portion of reported profits, a pattern investors should monitor for sustainability.
FCF Margin Recovery Masked by Volatility
After a negative FCF margin of -0.6% in Q4 FY2025, Dell's free cash flow margin has recovered to 2.1% in Q2 FY2027, but this remains well below the 11.8% peak in Q4 FY2026, suggesting the AI-driven revenue surge has not yet translated into proportionally stronger free cash generation.
The FCF trajectory shows a company in transition, where massive revenue growth is being partially offset by rising capital expenditures and inconsistent working capital benefits. The fact that FCF margin in the latest quarter is less than a fifth of its recent peak indicates that the capital intensity of scaling AI infrastructure is consuming a significant portion of the incremental cash flow, limiting shareholder returns.
Rising Capital Intensity to Fund AI Scale
Capital expenditures have increased from $596 million in Q1 FY2025 to $1.2 billion in Q2 FY2027, with the CapEx/Revenue ratio stabilizing around 2.2-2.6%, indicating a sustained investment cycle to support the infrastructure required for AI server production and delivery.
The doubling of quarterly CapEx over two years reflects a strategic commitment to expanding manufacturing and supply chain capacity for high-demand AI hardware. This level of investment appears necessary to capture the AI server backlog but raises questions about the return on this capital, especially if the lower-margin AI server mix persists and compresses overall profitability.
Working Capital Swings Drive Cash Flow Volatility
Working capital changes have been a primary driver of cash flow volatility, with a massive $2.1 billion outflow in Q4 FY2025 followed by a $1.2 billion inflow in Q4 FY2026, suggesting that Dell's cash generation is highly sensitive to the timing of inventory builds and receivables collection.
The erratic pattern in working capital indicates that Dell's operational cash flow is not purely a function of profitability but is heavily influenced by supply chain dynamics and customer payment terms. The large negative swings, particularly in quarters with strong revenue growth, suggest that the company may be building inventory ahead of anticipated demand, which ties up cash and creates near-term liquidity pressure.
Aggressive Buybacks Offset by Cash Generation Limits
Dell has consistently deployed capital toward share repurchases, spending $3.8 billion in Q2 FY2027 alone, which represents a significant portion of its $986 million in free cash flow and suggests a reliance on balance sheet capacity to fund shareholder returns.
The scale of buybacks relative to FCF indicates that Dell is returning more capital than it generates from operations, a practice that may be sustainable in the short term but raises questions about long-term financial flexibility. This aggressive return of capital, combined with dividend payments, appears to prioritize near-term shareholder returns over deleveraging or strategic investment, which could constrain future options if cash generation weakens.
Cash Flow Statement Obscures True Capital Needs
The cash flow statement does not fully capture the economic reality of Dell's business model, as the activities of Dell Financial Services and the treatment of deferred revenue can create significant disconnects between reported cash flows and underlying operational performance.
Dell Financial Services essentially provides customer financing for its own products, which can inflate operating cash flow by accelerating revenue recognition while creating off-balance-sheet credit risk. Additionally, the large deferred revenue balance from multi-year support contracts smooths reported revenue but obscures the true timing of cash receipts, making it difficult to assess the quality of earnings from the cash flow statement alone.