Paul Frantz — VP of Investor Relations, Dell Technologies
Thanks, Yvonne. Let's get to Q and A. In order to ensure we get to as many of you as possible, please ask one concise question. Let's go to the first question.
Aaron Rakers — Managing Director, Wells Fargo
Yeah, thanks for taking the question. I guess. Jeff, kind of just hitting on the AI discussion out of the gate, you've raised your full year target to $20 billion plus, up from $15 billion last quarter. You've got a Grace Blackwell Ultra product cycle with the GB300 kind of kicking in. I'm curious, given that you did $8.2 billion this last quarter, I guess implying, call it $5 billion-$6 billion± throughout the next couple of quarters, what is your ability to kind of flex upward in the capacity to see continued upside to even that $20 billion? Thank you.
Jeff Clarke — Vice Chairman and COO, Dell Technologies
Sure. Maybe to bridge from our discussion, 90 days ago we said $15 billion was sounding like a plus of the capital P, L, U, S. I think we delivered upon that in our guide at $20 billion. It's an exciting category. You've heard us talk about the numbers, but I always sit back and like to reflect on so far through the first half of the year, we've sold $17.7 billion of AI infrastructure and we shipped $10 billion of that, which would imply we'll ship about $10 billion in the second half, equal to the $20 billion. The five quarter pipeline continues to grow. Exciting in that pipeline as we saw the sovereign opportunities and the enterprise opportunities grow double digits.
There is complexity here and the complexity lies in these are large scale deployments, many have scheduled deliveries and those scheduled deliveries are dependent on things like buildings being ready, power being installed, cooling being installed, and we're managing a very complex supply chain. A transition, as you called out, to Blackwell Ultra. We're excited about Blackwell Ultra as we are about the rest of our NVIDIA portfolio. The demand continues to be, I think we've said this every quarter, continues to come in lumpy, it's nonlinear, and our guide is the best estimate that we have at this time. I'll tell you, we're not slowing down. We have every intention to convert that very large pipeline into incremental orders we're going to run through. Our goal is to run through the $20 billion and it feels like a plus.
We have more than adequate capacity to take that through our manufacturing network to be able to deliver upon that as we work to convert those orders in time. I hope that helped.
Aaron Rakers — Managing Director, Wells Fargo
Yeah. Thanks, Jeff.
Jeff Clarke — Vice Chairman and COO, Dell Technologies
Thanks.
Wamsi Mohan — Analyst, Bank of America
Yes, thank you so much. Nice to see the upward revision and momentum in AI servers. When I look through your third quarter and implied fourth quarter guidelines, it seems like the profit flow through will improve quite significantly as you go into the fourth quarter. I was hoping maybe you can help us think through the components of change as we go from second to third and third to fourth from a profitability standpoint, because it feels like a meaningfully higher step up in the fourth quarter. Thank you so much.
Yvonne McGill — CFO, Dell Technologies
Sure. Wamsi, why don't I take a run at that CSG for the second half. I'll talk about second half holistically and then we can talk about the fourth quarter. CSG is expected to be slightly higher for the second half versus the first half. We plan to focus on execution, driving revenue and share gains while improving profitability. Continuing that focus, we expect AI servers to be balanced between the first half and the second half. Jeff just alluded that we'll do more if we can, but that's what's implied in our guide. With about $10 billion of revenue with improved margin rates from a storage perspective, storage is expected to perform better sequentially in the second half with more Dell IP as well as normal seasonal acceleration in the fourth quarter.
That acceleration in fourth quarter, that storage weighting is what's driving a significant amount of that expected profitability that's implied in. Our fourth quarter guidelines.
Traditional servers are expected to grow in the second half, and of course we expect our operating expenses to continue to come down as well. Net net, we expect to be able to deliver more profitability in the second half, and you see that again weighted into the fourth quarter.
Wamsi Mohan — Analyst, Bank of America
Okay, thanks so much, Yvonne.
Jeff Clarke — Vice Chairman and COO, Dell Technologies
Thanks, Wamsi.
Erik Woodring — Managing Director and Equity Research, Morgan Stanley
Hey guys, thanks so much for taking my question. I just wanted to, Jeff, maybe touch on the storage market. You know, we heard from some of your peers last night about a strengthening data center monetization opportunity. Revenue is down 3% for you guys and you're guiding that business flat now. I think 90 days ago you expected to grow 3%+ for the year. I'd love to just know from the Dell perspective kind of what has changed in the storage market over the last 90 days to get a bit more cautious there. Thanks so much,
Jeff Clarke — Vice Chairman and COO, Dell Technologies
Erik. You correctly pointed out down 3% P&L growth.
We tried to describe what we saw was in large accounts, demand was a bit slower, particularly month 2 and 3 of the quarter and particularly in the United States, North America. We tend to look at this through the lens of some of the bright spots that we called out in our remarks. PowerStore grew double digits, it's grown now six consecutive quarters, five of them double digits. Our entire all-flash storage portfolio grew double digits. When you look at where we landed in Q2, the guidance for Q3 would suggest we're doing better than normal sequentials, which I think is an improvement. The fact of the matter is our Dell IP storage, we expect to outperform the marketplace. The market is growing and we expect to outgrow that market in the second half.
It's offset by HCI customers going through what I think is a rethink of their private cloud options. You might have noticed yesterday we actually made an announcement around our Dell automation platform to help those HCI customers with an open disaggregated automated alternative. We're working through that headwind of HCI customers that are in the portfolio trying to determine their next path or the path going forward, while at the same time our Dell IP portfolio continues to grow. It outperforms the market. We're expanding margin in each of the categories. We're very optimistic about our Dell IP portfolio and managing through customers' decision and future decision about where they're going with their private cloud deployment. I hope that helps some.
Erik Woodring — Managing Director and Equity Research, Morgan Stanley
Yep, super, super helpful. Thank you, Jeff.
Jeff Clarke — Vice Chairman and COO, Dell Technologies
You're welcome. Thanks, Erik.
Ben Reitzes — Managing Director and Head of Technology Research, Melius Research
Yeah.Hey guys, thanks. I wanted to go back to sort of Wamsi's question, but more specifically around AI servers, why will the margins improve and what is the order of magnitude there? I think there's a perception that it's low single digits OP margin and that it could have the potential, you know, eventually over time to get to a higher number than that. What specifically is going on there? How high can it get by the fourth quarter or long term? I know Jeff, you've talked about an attach rate there. Is that the reason that the margins are going up? Thanks.
Jeff Clarke — Vice Chairman and COO, Dell Technologies
Thanks for the question. I think there are two things to consider and Yvonne hit it. I think it's worth making sure we communicate the business mix matters. When you look at Q2, the AI server component was nearly half of the ISG revenue.
That meant that the traditional server business and the storage business underperformed. What we're trying to call out on our guidance is we're going to see a recovery in North America servers, which are profitable, and we're going to see improved margin performance in our storage business. That changes the ultimate business mix in the second half, which is why Yvonne talked about that as the improvement in AI specifically, which is your question. Q2 is interesting. I would call to your attention that we did add $6.5 billion of revenue quarter-over-quarter and nearly $500 million of operating income quarter-over-quarter with that significant shipment that we had in AI. As we said consistently, that's gross dollar accretive, rate dilutive. I think those are examples of that. In our Q2 shipments we shipped a lot of the early Blackwell wins.
As you might mention, I said last quarter those were aggressive deals, very competitive deals, and they were shipped throughout the quarter. Coupled with that, we had some expense that I think is one time in nature in our supply chain as we expedited materials to meet our customer needs and demands and to reconfigure the supply chain with what was going on in our geopolitical environment. We expect those margins to improve through some value engineering, scaling of the business, and the expansion of our enterprise customer base. We had the best quarter we've had in AI with enterprise customers in Q2. Number of customers grew, the largest dollar demand that we had to date in enterprise. I think that bodes well for the future, particularly in enterprise where we have the opportunity to sell networking, storage, and services with AI factories.
Ben Reitzes — Managing Director and Head of Technology Research, Melius Research
Okay, thanks. Thanks, Jeff. You bet.
Vijay Rakesh — Managing Director, Mizuho
Yeah, hi Jeff and Johan, just a quick question on the pipeline. Just wondering what your mix of sovereign orders was. I know you talked about improving AI margins in the back half. Just wondering what would be the improvements there and the margin upside that you expect. Thanks.
Jeff Clarke — Vice Chairman and COO, Dell Technologies
Sure. As we look at the pipeline again, I think it's important for us to make sure we communicate clearly. Our sovereign part of the pipeline and our enterprise part of the pipeline grew double digits and grew faster than the CSP portion of the pipeline. That pipeline now has over 6,700 unique customers as opportunity for and the composition of that is predominantly Blackwell, encouraging. We're seeing the new RTX 6000 in that portfolio and we're seeing air and PCIe as a result of that in the pipeline, which are very good indicators of enterprise opportunity. That's the composition of it. It is a composition of CSP from a customer point of view plus enterprise plus sovereign. It's predominantly from a technology point of view Blackwell, with a growing demand of PCIe options.
If I go back to your question about margins, it's what I tried to articulate earlier with Ben. We expect the one-time cost on our supply chain to reconfigure and expedite materials not to be in place in the second half. We think there's some opportunity for us to continue to value engineer the scaling of the P&L and then lastly the enterprise customers and shipping to enterprise customers and the opportunity to attach unstructured storage, networking, and our professional services around that.
Vijay Rakesh — Managing Director, Mizuho
Thank you.
Jeff Clarke — Vice Chairman and COO, Dell Technologies
Thanks, Vijay.
David Vogt — Analyst, UBS
Thanks, guys. Thanks, Jeff. Thanks a lot, Jeff. Maybe not to belabor the point, but just for clarification, if we think about the mix in the October quarter to more proprietary Dell storage delivery in server, traditional server, should we expect to see the same level of profitability from those products or should they expand relative to where you were last year, where it was more 3P technology within storage? If that's the case, then should we just think about maybe margins holistically in ISG still being down from last year because of the greater AI server within the ISG segment? Thanks.
Jeff Clarke — Vice Chairman and COO, Dell Technologies
I'll start and then Yvonne can come in and get specific with the details with the guide.
As we've been moving towards more Dell IP, which is the strategy, those are more margin-rich storage offers than our partner IP. We continue to see our Dell IP portfolio grow, and within that we are actually working to improve and have made progress improving the margins of each one of our Dell IP storage products in our portfolio. As I just mentioned, I think it was Erik's question about growing in storage. We expect our Dell IP storage portfolio to outperform the marketplace. I think that bodes very well for what we're doing in terms of margin and margin growth. The challenge we have is it didn't grow, it was unacceptable. We see that we are working to remedy that.
That's an aggregate storage number, which again, I think is partly explained by the fact that we have HCI customers working through their next decisions and next purchases in infrastructure, which is why, again, I'll come back and link to it. It's very important as we look at a disaggregated architecture that's open and now with automation capability that we've just provided customers, we're providing an alternative. I think that's a key element going forward.
Yvonne McGill — CFO, Dell Technologies
I'd add to that, our gross margin rate is certainly a function, and Jeff mentioned it, of our mix. We called up the AI portion to $20 billion, and we've seen we've lowered our expectations for the core business for CSG, for traditional servers and storage embedded within our second half guide. The impact of the input costs that Jeff's talking about will also have some offset in gross margin, but there's rate potential compression for the second half. We're still guiding strong EPS growth of 17%. I feel we're going to navigate through the environment and deliver successfully.
Jeff Clarke — Vice Chairman and COO, Dell Technologies
Maybe to put another level of inspection, here is the AI revenue was three times the mix of the business than it was in the previous quarter, Q1 to Q2. As we said, that has a dilutive effect. In our guide, you're going to see the percentage of our AI business be less, which means the traditional server and Dell IP storage part of the business will be a greater percentage, which is more profitable, leading to the more profitable second half.
Yvonne McGill — CFO, Dell Technologies
Right. The seasonality of storage in the fourth quarter. Very excited about that.
Jeff Clarke — Vice Chairman and COO, Dell Technologies
Thanks, David.
David Vogt — Analyst, UBS
Thank you guys.
Amit Daryanani — Senior Managing Director and Equity Research, Evercore
Good afternoon, everyone. I guess I just have a question on the fiscal year 2026 guide. The way you folks have raised it, you're raising the top line by 4 points, the bottom line by about $0.15. It's what it looks like. $4 billion more of revenues and about $100 million, $110 million more of net income. I'm sure there's a lot of moving parts over here. It almost looks like AI server margins are in the 2%, 2.5% zone for you folks. Maybe just talk about why is the conversion margin so low for the incremental revenues that are coming into the model and what are the other puts and takes around it? Assuming AI margins are better than that 2%, 2.5% math would imply. Thank you.
Yvonne McGill — CFO, Dell Technologies
If I think about the guide that we have for the second half, certainly the demand dynamics play a key role in that. If I think about the traditional server, when I think about the AI mix, the biggest impact to the second half and the profitability and outcome is the seasonality within the ISG business and within storage. When through how we're going to drive more profitability, I really do think it's holistic across the board. It is weighted towards the standard seasonality in the fourth quarter from a storage standpoint. That's what is embedded within guide. That's what you can see, that's what we deliver historically and we will do that again this fiscal year.
Jeff Clarke — Vice Chairman and COO, Dell Technologies
Thanks, Amit.
Michael Ng — Managing Director, Goldman Sachs
Hey, good afternoon. Thanks for the question. Just within ISG, I was wondering if you could talk a little bit more about some of the key things that may have impacted the traditional server and storage performance in the quarter. I was wondering if any changes in federal demand played an impact and then, you know, sequentially, were there any notable margin changes that you would call out for traditional servers and storage. Thank you,
Jeff Clarke — Vice Chairman and COO, Dell Technologies
Mike. Let me try to give some color to that. The slowness that we saw in North America in traditional servers in April that we commented on in Q1 continued into Q2 too, and our North America's traditional server demand was challenged through the quarter.
We had demand growth in all other regions, but in North America, our most profitable region was challenged from a demand perspective. We saw that again continue from what we encountered in April. Federal spending continues to be down. That had an impact on our overall demand for the quarter. We continue to work on the opportunity of server consolidation that exists out there today. We saw a continued uplift in more cores, more memory, more SSDs, so the content of our servers is going up. ASPs continue to trend up. We do see this notion of server consolidation happening in the marketplace, replacing old servers with more efficient new servers. For example, our 17G converts old servers at 6 to 1 to 7 to 1 ratios, depending on which variety we're looking at. We think the opportunity is still massive out there.
70% of our installed base is still running 14G or older servers, and we expect our traditional server business to grow in the second half, albeit a little bit muted from our expectations at the beginning of the year. In storage, it was what I tried to describe earlier as the large accounts, particularly in North America, particularly in months two and three, was slower than expected. Our Dell IP portfolio continues to shine around our PowerStore. We're winning new customers. The mix of new customers and old customers or existing customers continues to bias towards new customers coming to the portfolio, which is encouraging.
Our all-flash portfolio continues to grow significantly in double digits, and again we have this, if you want to call it a headwind, it's just the reality of what we've been selling for years as it comes up for refresh where again our Dell IP portfolio, I expect it to outperform the market. We have customers in our HCI business that are being thoughtful about their next purchase decisions and how they want to build their private cloud. Our offering there is a more open, disaggregated architecture. Our entire Dell IP storage portfolio was that, and now bundled with an automation platform that makes it easy to scale and deploy infrastructure systems and solutions.
Michael Ng — Managing Director, Goldman Sachs
Thank you, Jeff.
Jeff Clarke — Vice Chairman and COO, Dell Technologies
Of course.
Simon Leopold — Managing Director, Raymond James
Thanks for taking the question, Jeff. Earlier in the call you alluded to progress and encouragement around enterprise.
I'd like to see if you could double click on that vertical and offer us some quantification. Related to this, NVIDIA last night talked about improvement, sequential improvement in Hopper business for them. I'm just wondering whether that is related to enterprise traction or if you see that as something different. Thank you.
Jeff Clarke — Vice Chairman and COO, Dell Technologies
Yes, demand within the quarter for enterprise AI was up significantly. It was a very measurable part of our mix. It's the single largest number of customers that we sold to in a quarter. It is the most revenue we generated to enterprise customers in a quarter to date. We now have eight consecutive quarters of quarter-over-quarter growth of the buyer base. The mix now is roughly 50% new customers and 50% returning customers. We're seeing that across a broad base of segments, whether it's tech firms, manufacturing firms, financial services firms, engineering firms, higher education, healthcare.
The number of PoCs are up, the number of PoCs converting to production is up. We think these are great opportunities to build Dell AI factories for enterprise, which ultimately gives us an opportunity to sell the networking, storage, and professional services around that. We're very encouraged about the momentum. Customers are getting real value-added AI or they have deployed it into real difficult problems. There is a return on those investments, and we see that dollars continuing to go. I would look at our own company as an example of getting return on investment with investing in AI infrastructure. Does that help?
Simon Leopold — Managing Director, Raymond James
It does. Any thoughts on why NVIDIA saw sequential growth in the Hopper business for them? Did you see that?
Jeff Clarke — Vice Chairman and COO, Dell Technologies
Recall many enterprises are not ready for DLC, don't have the increased power density that some of the advanced technologies have.
With Hopper air going into current data centers, the RTX 6000 as I mentioned as an example, we saw significant growth in that. Those are all indicators that enterprises are buying AI and deploying AI in their current infrastructure, which is very encouraging.
Simon Leopold — Managing Director, Raymond James
Great, thank you.
Jeff Clarke — Vice Chairman and COO, Dell Technologies
You're welcome.
Samik Chatterjee — Analyst, JPMorgan
Yeah, hi, thanks for taking my question, Jeff. Maybe sticking with AI servers. I was curious if you can share how the backlog or the pipeline there has transitioned to GB300. What you're seeing from customers in terms of their mix of demand shifting to GB300 versus the GB200 and is that leading to some level of margin or pricing pressure on the older platforms in terms of just demand profile there? Thank you.
Jeff Clarke — Vice Chairman and COO, Dell Technologies
Our backlog is at $11.7 billion, is rich with all forms of Blackwell. Customers that started early deployment of the GB200 continue with those deployments. Customers are migrating to GB300 without getting into the specific details of how much of each one of them. The backlog is primarily Blackwell, the pipeline is primarily Blackwell. All variants of Blackwell, B200, B300, GB200, GB300. It depends on customer specific needs, how they're deploying, that the parts are in full production and have wide scale availability. We're shipping all variants to customers. We're excited about the technology. The transition continues to go well. Our partnership with NVIDIA and our customers to get the racks ready or the nodes ready themselves I think is working incredibly well, which is enabling us to move the material through the factories very quickly. The cycle time is very quick, very good if you will. Deployment to our customers is second to none.
The fact that it shows up, you can turn it on and it works and it's deployed at scale we believe is a differentiator in the marketplace for us.
Samik Chatterjee — Analyst, JPMorgan
Thank you.
Jeff Clarke — Vice Chairman and COO, Dell Technologies
Of course.
Asiya Merchant — Technology Equity Research, Citi
Great, thanks for squeezing me in here. On the PC side, if I may, I think some of your peers have talked about better second half growth. I think you alluded to share gains and improving profitability here in the back half. Just help us understand what gives you the confidence in that as we kind of look to the back half. At a high level, if people are thinking about 2026, should we expect PC momentum to sustain here or was there a lot of pull forward and refresh activity that happened in 2025 that would suppress growth in 2026.
Jeff Clarke — Vice Chairman and COO, Dell Technologies
Thank you. Maybe in reverse order, you have the Windows 10 end of life. That is an event that is certainly an opportunity to refresh. The market continues to be large in that area. There's still many hundreds of millions of PCs that can't run Windows 11. There's an opportunity for Windows 10 PCs that can run Windows 11 to continue to be upgraded. Our best marker is about half of the installed base is now upgraded, which tells you about half of the installed base is not. That's what's in front of us. We're 48 days away from the end of life period of Microsoft. Highly unlikely the other half is going to be done in the next 48 days. We have the opportunity to push through that. That likely spills into next year. How much I don't know.
It's why we believe the second half of the market continues, the good PC market. We have every intention to grow. We have every intention to outperform the marketplace and take share. That's our goal. We have not done that consistently enough. That's problematic. We are focused on doing so. I think we've leaned into the market as we need to while understanding our operating range of 5%-7% operating margins. The new product that we launched this morning I think is indicative that we're playing to win and leaning in to do so. The organization is focused on that. This business is hugely important to our company. In many ways, it's a scale business. It is part of our end-to-end solution for our commercial customers, from small businesses to the largest businesses in the world. It's a primary customer acquisition vehicle for us.
Many customers experience our company through the PC business. They experience our brands, they experience their interaction with our company through our PC business. That's why it's very important we're focused on it. I'm not happy with the share performance. We're going to turn that around, and we've reflected that in our guide where we believe our business will grow mid single digits and will improve our operating margins.
Asiya Merchant — Technology Equity Research, Citi
Thank you.
Jeff Clarke — Vice Chairman and COO, Dell Technologies
Yes.
Mehdi Hosseini — Analyst, SIG
Yes, thanks for taking my question. Just two quick follow-ups. In order to get to 7% year-over-year growth in operating profit and given your OpEx guide, gross margin would need to improve. Corporate gross margin would need to improve by about 150, 160 basis points. I'm just trying to understand if that's the case, what are the key drivers behind the gross margin improvement. I have a follow-up. Sure.
Yvonne McGill — CFO, Dell Technologies
As I look at the second half and have talked about it a bit, we have a different seasonality in the second half with a solid weighting of storage and lean in on storage in the ISG business in the fourth quarter. As we look through that and from a profitability standpoint for the second half, I see CSG is expected to do slightly better second half versus first half. For all the reasons we've already talked about, I expect AI servers to be balanced. Again, we're improving that margin rate as we've talked about. The storage mix, storage is one of the biggest drivers and Jeff's talked about it already. Not only the seasonality within storage, but the mix more towards our Dell IP drives more profitability for us, which we'll continue to benefit from. Traditional servers we're thinking will grow in the second half.
We're working on other areas we've called up. Obviously, we've called up The Guide to $107 billion at the midpoint and called up profitability. If I think through a lot of the driver of that because we called up $5 billion in AI servers, a lot of the driver there is holistic profitability across the company, across all pieces of the portfolio or I wouldn't have been able to call up the operating income in addition to the margin. We're focused on profitable growth and driving efficiency through the business.
Mehdi Hosseini — Analyst, SIG
I see. Thank you. And a quick follow-up for Jeff. This may have come up in a prior call, but I'm just looking at your revenue mix. Product versus services, and services has remained around 20%-25% of the total revenue, but with a significantly higher gross margin. Why not try to scale services as a way to expedite improvement in profitability?
Jeff Clarke — Vice Chairman and COO, Dell Technologies
We are trying to do that versus selling more PC, selling more servers, selling more storage, selling more AI. We look at the opportunity to attach all forms of services, whether that's ProSupport, ProSupport Plus, our professional services, our installation services, our deployment services, driven by outperforming the market and growing. Growing is the best way to improve our contribution of services in our portfolio.
Mehdi Hosseini — Analyst, SIG
Thanks Jeff.
Krish Sankar — Managing Director, TD Cowen
Yeah, hi, thanks for taking my question. I kind of had a two-part question too. One is for Jeff. Can you talk a little bit about the AI server mix? How much is liquid cooled versus air cooled? How much is on base CTO architecture and how do you expect that to evolve over the next year and any implications to margins? Along the same follow-up for Yvonne, congrats on raising the numbers, but it looks like your revenue raise is about 4% compared to prior guide for full year and EPS is only one and a half. Why isn't the full year EPS higher? Thank you.
Jeff Clarke — Vice Chairman and COO, Dell Technologies
The backlog and looking at the five-quarter pipeline would be biased towards direct liquid cooling, and our large-scale deployments of the GB200 and GB300 is the quick and accurate answer of what our backlog looks like. It's a mix of both technology as well as what is liquid cooled.
Yvonne McGill — CFO, Dell Technologies
To your question, from an overall standpoint we've got additional $5 billion in AI with EPS contributions that goes with it of course and about $1 billion out of CSG traditional server storage that I've mentioned. We will be driving that growth that we've outlined with the profitability that we've outlined based on numerous drivers there, of which mix and efficiency are leading the left.
Paul Frantz — VP of Investor Relations, Dell Technologies
We'll go one more question, please.
Steven Fox — Founder and CEO, Fox Advisors
Thanks just for my one question. I was hoping Jeff, if you could look forward on your supply chain both incoming and outgoing. You mentioned some expedites, deflationary pressures, moving capacity around. How do those dynamics play out differently or the same in the rest of the fiscal year? Thanks.
Jeff Clarke — Vice Chairman and COO, Dell Technologies
Let me talk about the overall supply chain and then maybe specifically about AI. When I look at what's in front of us, we had a deflationary Q2 of all input costs. I expect that to flatten over to the second half, so you're in both Q3 and Q4. We believe we have managed through the complexities of tariffs quite well and have not impacted our customers. We did not raise price.
I think the agility and resilience of our supply chain continues to pay the dividends and following the jurisdictions and rules that we have to when it comes to the political environment today. When I look at AI specifically, I tried to mention, perhaps I wasn't clear, that the cost that we incurred in Q2 to expedite material for our GB200 deployments and shipments and then the reconfiguring our supply chain to optimize that was a one-time cost in Q2 that I don't expect to incur in Q3 and in Q4.
Steven Fox — Founder and CEO, Fox Advisors
Thanks, Jeff. Great, thanks.
Paul Frantz — VP of Investor Relations, Dell Technologies
Sure. Just wanted to thank everybody for joining us today. A few points as we wrap up. AI continues to accelerate and our differentiated offering is resonating with our customers with $17.7 billion in AI orders in the first half of the year.
We are delivering and innovating for the largest at-scale AI clusters in the world while scaling it into AI factor for enterprises. We saw very strong revenue and EPS growth, both up 19%. We raised our full year revenue and EPS guidance, driving a second half that drives growth and improved profitability. Our focus continues to be on generating significant cash flow that enables meaningful shareholder return. I look forward to seeing many of you at our security analyst meeting on October 7th. Thanks for your time today.