⚠ The Obligations Are Now Mostly Near-TermLow threat

Dell Technologies (DELL) — threat to the moat

Dell's contracted future revenue tripled in two years, but three-quarters of it is due within twelve months, the profile of an order book, not an annuity.

Dell's remaining performance obligations, the revenue it is contracted to deliver, have grown enormously and changed character. They were about $40 billion in February 2024, with 58% due within twelve months1; about $38 billion in January 2025, 61% within a year2; about $82 billion in January 2026, 78% within a year3; and about $132 billion at 31 July 2026, 77% within a year4.

Remaining performance obligations ($bn, approximate as disclosed)40Feb 202438Jan 202582Jan 2026132Jul 2026Dell Forms 10-K FY2024-FY2026 and 10-Q Q2 FY2027
Tripled, mostly near-term.

The rising near-term share says the growth is hardware orders waiting to ship, not multi-year service contracts. About $102 billion of the latest figure is due within twelve months5.

That is good for next year's revenue and weaker as a moat signal. A long-dated obligation locks a customer in; a hardware order due next quarter can be delayed or reduced.

The definition explains the jump. Dell's product backlog is included in remaining performance obligations only "to the extent we determine that the manufacturing orders are non-cancelable"6. The rise in obligations due within a year is therefore mostly firm hardware orders from the AI wave, which will convert into revenue quickly and leave little behind.

The share due within twelve months is the thing to watch. If it stays near 77% while the total grows, Dell's contracted revenue is mostly the AI wave passing through, not a deeper base of recurring work.

References
  1. ReportedThey were about $40 billion in February 2024, with 58% due within twelve months; about $38 billion in January 2025, 61% within a year; about $82 billion in January 2026, 78% within a year; and about $132 billion at 31 July 2026, 77% within a year.
    Dell Technologies Form 10-K for fiscal 2024 - segment revenue and operating income for fiscal 2022-2024, headcount, and the VMware spin-off and Boomi sale. — FY2024 · publ. March 2024 · source ↗
  2. ReportedThey were about $40 billion in February 2024, with 58% due within twelve months; about $38 billion in January 2025, 61% within a year; about $82 billion in January 2026, 78% within a year; and about $132 billion at 31 July 2026, 77% within a year.
    Dell Technologies Form 10-K for fiscal 2025 - the revision of fiscal 2024 for unrecorded supplier credits, headcount and the dividend increase. — FY2025 · publ. March 2025 · source ↗
  3. ReportedThey were about $40 billion in February 2024, with 58% due within twelve months; about $38 billion in January 2025, 61% within a year; about $82 billion in January 2026, 78% within a year; and about $132 billion at 31 July 2026, 77% within a year.
    Dell Technologies Form 10-K for fiscal 2026 (year ended 30 January 2026) - Item 1 business: history, customers, employees, channels and management. — FY2026 · publ. March 2026 · source ↗
  4. ReportedThey were about $40 billion in February 2024, with 58% due within twelve months; about $38 billion in January 2025, 61% within a year; about $82 billion in January 2026, 78% within a year; and about $132 billion at 31 July 2026, 77% within a year.
    Dell Technologies Form 10-Q for the quarter ended 31 July 2026 - remaining performance obligations, debt, deferred revenue, purchase obligations, share counts and risk disclosures. — Q2 FY2027 · publ. 8 September 2026 · source ↗
  5. Moat Explorer calcAbout $102 billion of the latest figure is due within twelve months.
    Moat Explorer calculation from Dell Technologies' reported figures ($ millions unless stated; fiscal years labelled by the year they end). Margins FY2026: gross margin 22,707 / 113,538 = 20.0% (FY2024 21,069 / 88,425 = 23.8%; FY2025 21,250 / 95,567 = 22.2%); operating margin 8,149 / 113,538 = 7.2%. Products gross margin 90,405 - 78,057 = 12,348, 12,348 / 90,405 = 13.7%; services gross margin 23,133 - 12,774 = 10,359, 10,359 / 23,133 = 44.8%; services share of revenue 23,133 / 113,538 = 20.4%; services share of gross margin 10,359 / 22,707 = 45.6%. Growth FY2026: revenue 113,538 / 95,567 - 1 = 18.8%; services 23,133 / 24,147 - 1 = -4.2%; ISG revenue 60,826 / 43,593 - 1 = 39.5%; ISG operating income 7,111 / 5,579 - 1 = 27.5%; United States 63,140 / 51,014 - 1 = 23.8%; foreign 50,398 / 44,553 - 1 = 13.1%. Revenue FY2024 to FY2026 113,538 / 88,425 - 1 = 28.4%; employees 97,000 / 120,000 - 1 = -19.2%; revenue per employee 88,425 / 120,000 = 0.74 and 113,538 / 97,000 = 1.17. AI servers: 24,683 / 1,873 = 13.2 times; share of revenue 24,683 / 113,538 = 21.7% (FY2024 1,873 / 88,425 = 2.1%); share of ISG 24,683 / 60,826 = 40.6%; Q2 FY2027 share of ISG 16,401 / 31,782 = 51.6%; first half 16,132 + 16,401 = 32,533, 32,533 / 74,000 = 44.0%; second half needed 74,000 - 32,533 = 41,467, about 20,700 a quarter; FY2027 guidance share 74.0 / 192.0 = 38.5%; FY2027 guidance 74.0 / 24.683 = 3.0 times. Orders: Q4 FY2026 AI orders about 64 - 30 = 34 billion; Q2 FY2027 orders to revenue 60.9 / 16.4 = 3.7. ISG share of segment operating income: FY2024 4,286 / 7,998 = 53.6%; FY2026 7,111 / 9,944 = 71.5%. Q2 FY2027 CSG share 1,142 / (4,781 + 1,142) = 19.3%. ISG operating margin: FY2022 3,736 / 34,366 = 10.9%; FY2023 5,045 / 38,356 = 13.2%. CSG operating margin: FY2024 3,712 / 48,916 = 7.6%; Q1 FY2026 653 / 12,509 = 5.2%; Q2 FY2026 803 / 12,503 = 6.4%; Q4 FY2026 629 / 13,494 = 4.7%; Q1 FY2027 1,170 / 14,609 = 8.0%; Q2 FY2027 1,142 / 15,034 = 7.6%. CSG operating income FY2022 to FY2026 2,833 / 4,365 - 1 = -35.1%. Q2 FY2027 client: CSG revenue 15,034 / 12,503 - 1 = 20.2%; CSG operating income 1,142 / 803 - 1 = 42.2%. Traditional servers and networking first half FY2027 8,543 + 10,531 = 19,074. Servers and networking growth FY2025 27,136 / 17,624 - 1 = 54.0%, FY2026 44,195 / 27,136 - 1 = 62.9%; share of revenue 44,195 / 113,538 = 38.9%; Q2 FY2027 16,401 + 10,531 = 26,932, 26,932 / 46,971 = 57.3%. Line changes FY2022 to FY2026: servers and networking 44,195 / 17,901 - 1 = 146.9%; storage 16,631 / 16,465 - 1 = 1.0%; commercial 44,062 / 45,576 - 1 = -3.3%; consumer 6,922 / 15,888 - 1 = -56.4%. Storage 16,631 / 17,958 - 1 = -7.4%; storage share of revenue 16,631 / 113,538 = 14.6%; storage share of ISG 16,631 / 60,826 = 27.3%. Consumer share of revenue 15,888 / 101,197 = 15.7% (FY2022) and 6,922 / 113,538 = 6.1% (FY2026); consumer against FY2015 6,922 / 10,880 - 1 = -36.4%. Commercial share of revenue 44,062 / 113,538 = 38.8%. Servers and networking plus commercial 44,195 + 44,062 = 88,257, 88,257 / 113,538 = 77.7%. Corporate and other FY2022 101,197 - 17,901 - 16,465 - 45,576 - 15,888 = 5,367; corporate and other change 1,728 / 5,624 - 1 = -69.3%. Geography: United States share 43,986 / 88,425 = 49.7% (FY2024), 51,014 / 95,567 = 53.4% (FY2025), 63,140 / 113,538 = 55.6% (FY2026). Largest customer: 12% x 113,538 = 13,625; 13,625 / 60,826 = 22.4% of ISG; all other customers 113,538 - 13,625 = 99,913. Remaining performance obligations due within twelve months: 132 x 77% = 101.6 billion. Server share: Dell lead over Supermicro 16.5 - 7.6 = 8.9 points in Q1 2026 against 10 - 9.5 = 0.5 points in 2025; Supermicro plus HPE 7.6 + 3.0 = 10.6%. Inventories 21,290 / 10,437 = 2.04 times; payables 49,723 - 33,630 = 16,093; inventory increase 21,290 - 10,437 = 10,853; payables less inventories 49,723 - 21,290 = 28,433; payables less inventories and receivables 49,723 - 21,290 - 22,918 = 5,515. DFS-related debt 20,660 / 14,646 - 1 = 41.1%. Debt: FY2020 7,737 + 44,319 = 52,056; net core debt 13,983 - 11,569 = 2,414; net debt 31,503 - 11,528 = 19,975 (January 2026) and 34,466 - 11,569 = 22,897 (July 2026); interest paid 1,354 / 8,149 = 16.6%. Goodwill and intangibles 19,547 + 4,533 = 24,080, 24,080 / 101,286 = 23.8%; other assets 101,286 - 24,080 = 77,206. Capital returns: buybacks first half FY2027 5.4 billion / 20 million shares = about $270 a share; dividends paid 1,459 / 5,936 = 24.6% of net income; annual dividend 0.37 x 4 = 1.48, 0.445 x 4 = 1.78, 0.525 x 4 = 2.10, 0.63 x 4 = 2.52, 2.52 / 1.48 - 1 = 70%; Q2 FY2027 buybacks and dividends 3,796 + 405 = 4,201. Guidance: FY2027 revenue 192.0 / 113.538 - 1 = 69%; non-AI revenue 192.0 - 74.0 = 118.0 against 113,538 - 24,683 = 88,855, 118.0 / 88.855 - 1 = 32.8%; implied second half 192.0 - 90.8 = 101.2 billion; implied fourth quarter 101.2 - 49.0 = 52.2 billion; implied second-half GAAP EPS 24.37 - 11.58 = 12.79; guidance raised 192 - 140 = 52 billion. Voting at 1 September 2026: Class A 276,744,341 / 635,812,750 = 43.5% of shares; votes 276.7 million x 10 = 2,767 million, Class B 43.6 million x 10 = 436 million, Class C 315.4 million; total 3,519 million; Class A 2,767 / 3,519 = 78.6%, Class B 436 / 3,519 = 12.4%, Class C 315 / 3,519 = 9.0%. Valuation: trailing revenue 113,538 - 53,154 + 90,813 = 151,197; trailing net income 5,936 - 2,129 + 7,571 = 11,378; P/E 357.89 / 11.378 = 31.5; P/S 357.89 / 151.2 = 2.37; year-end market value over the next fiscal year: 37.89 / 4.616 = 8.2, 54.95 / 3.250 = 16.9, 42.90 / 5.563 = 7.7, 28.80 / 2.442 = 11.8, 54.43 / 3.388 = 16.1, 82.18 / 4.592 = 17.9, 86.61 / 5.936 = 14.6. Q2 FY2027 cash from operations 2,225 / 4,133 = 54%. Further: ISG operating income 7,111 / 4,286 - 1 = 65.9%; Q2 FY2026 AI orders about 30 - 12.1 - 12.3 = 5.6 billion; operating income 8,149 / 2,622 = 3.1 times (FY2020 to FY2026); NVIDIA Data Center revenue against Dell ISG revenue 89.0 / 31.782 = 2.8 times; buybacks 2,080 + 2,588 + 6,014 = 10,682; ISG revenue 60,826 / 14,714 = 4.1 times (FY2015 to FY2026); IEIT, Lenovo and HPE 2025 server shares 4.1 + 4.0 + 3.1 = 11.2%; Commercial share of client revenue 45,576 / 61,464 = 74.2% (FY2022), 39,814 / 48,916 = 81.4% (FY2024); consumer share of revenue 9,102 / 88,425 = 10.3% (FY2024); Dell server growth against the market 244.1 / 80.4 = 3.0 times. Services share of Q2 FY2027 revenue 5,859 / 46,971 = 12.5%; commercial share of client revenue 44,062 / 50,984 = 86.4%; client revenue growth FY2026 50,984 / 48,393 - 1 = 5.4%; consumer Q1 FY2027 1,589 / 1,463 - 1 = 8.6%; CSG first half FY2027 2,312 / 29,643 = 7.8%; annual dividend cost 0.63 x 4 x 635.8 million = about 1,602; remaining performance obligations 132 / 38 = 3.5 times; EPS guidance 24.37 / 11.52 = 2.1 times; AI backlog against second-half AI revenue needed 95 / 41.5 = 2.3 times; commercial first half FY2027 13,020 + 13,192 = 26,212, 26,212 / 44,062 = 59.5%; storage share of ISG 16,261 / 33,885 = 48.0% (FY2024) and 4,850 / 31,782 = 15.3% (Q2 FY2027); consumer share of Q2 FY2027 revenue 1,842 / 46,971 = 3.9%; AI orders less AI revenue in Q2 FY2027 60.9 - 16.4 = 44.5 billion; consumer share of client revenue 10,880 / 39,634 = 27.5% (FY2015) and 6,922 / 50,984 = 13.6% (FY2026) - segment margins and growth rates. — FY2015-FY2027 · publ. September 2026 · source ↗
    Method: Arithmetic on figures reported in Dell Technologies' Forms 10-K and 10-Q, results releases, IDC data and market data; operands shown in the source line.
  6. ReportedDell's product backlog is included in remaining performance obligations only "to the extent we determine that the manufacturing orders are non-cancelable".
    Dell Technologies Form 10-K for fiscal 2026 (year ended 30 January 2026) - Item 1 business: history, customers, employees, channels and management. — FY2026 · publ. March 2026 · source ↗
Sources
Generated September 26, 2026