Dell warns of 'cautious customer behaviour' in Q2 results

The computer giant decline has seen a decline in demand and is facing a shortage of parts

Dell recorded growth in its second quarter results, despitr witnessing a decline in demand and facing ongoing shortages.

The computer giant has revealed its financial results for its fiscal 2023 second quarter, with revenue up nine per cent to $26.4bn.

It also generated an operating income of $1.3bn, a 25 per cent increase on the year before, and a non-GAAP operating income of $2bn, up four per cent.

"Another quarter of record revenue, together with our operating income of $1.3 billion and nonGAAP operating income of $2 billion, affirms our industry strength and competitive position," said Tom Sweet, chief financial officer of Dell.

"We remain focused on what we can control, staying flexible and opportunistic, and delivering revenue and EPS growth with strong free cash flow to our shareholders over time."

This comes despite Dell seeing less demand throughout the quarter, with the company having observed more cautious customer behaviour.

It comes amid a changing and challenging macro environment, with Dell still facing a shortage of parts and embedded integrated circuits.

This includes power supplies and NICs.

In an earnings call transcribed by Seeking Alpha, Jeff Clarke, vice chairman and co-chief operating officer, said the Q2 and second half macro dynamics "have become more challenging".

While he praised Dell's supply chain execution as being "excellent" throughout the quarter, he said: "Customers are taking a more cautious view of their needs given the uncertainty.

"We have responded swiftly by managing inventories down and reducing our expenditures."

Dell says its revenue was driven by continued growth across client and infrastructure business units, with both delivering record revenues.

"We delivered strong CSG and ISG growth and profitability - with revenue up 12 per cent and 9 per cent respectively - although we observed more cautious customer behaviour as the quarter progressed," said Chuck Whitten, co-chief operating officer.

"Customers continue to prioritise advanced technology solutions to compete and succeed in the years ahead, and we are confident in our long-term opportunities."