Dell Technologies posted record second-quarter revenues for its fiscal year 2022, despite ongoing concerns over industrywide supply shortages, component cost inflation, and order backlogs. In fact, Dell executives were almost cavalier in their confidence of riding out those challenges.

CFO Tom Sweet noted during the company's earnings call that Dell adjusted prices to compensate for component cost inflation that began during its most recent quarter. He added that demand has not lagged despite continuing pricing pressure.   

“We feel good about the overall environment and look, customers have generally been accepting of the price increases, given there is inflation in the environment broadly in many different commodities and areas,” Sweet said. “Frankly, with the lack of supply in the industry, there are not a lot of places that they can go.”

Dell called out chips as being the main supply chain choke point. “In aggregate, the semiconductor industry needs more capacity,” COO Jeff Clarke said on the call. He expects the constraints will go into next year, due to a lack of investment in fab capacity and the time it takes to crank up that production.

However, Clarke pointed out that Dell has no interest in getting into the semiconductor business. Instead, they consistently let their supply partners know there is long-term demand in the PC market, server industry, and storage business.

Dell's Infrastructure Solutions Group (ISG) posted a 3% year-over-year revenue increase to $8.4 billion, “primarily driven by growth in servers and networking as customers modernize their IT infrastructure to enable data-driven artificial intelligence (AI) and machine learning technologies,” Clarke said.

However, strict storage revenue was down 1% during the quarter. Sweet explained that overall storage orders grew 2%, “with ongoing demand in high-growth areas like hyperconverged infrastructure, where VxRail orders were up 34%, and in midrange storage, where orders were up 17%.”

When asked about Dell's pure-play competitors seeing double-digit growth in storage for this quarter, Clarke said that Dell remains a market-share leader in aggregate across all market segments and is growing competitively or at a faster rate in the two most important segments: midrange and the new two-tier architecture model.

Clarke did add that the high-end of the market is declining, which Dell accounts for close to half of the total market share.

Dell did not provide much color on their recently launched Apex service. Clarke said in his prepared statement that Apex “provides an incremental growth opportunity as we introduce more as-a-service solutions and gain traction with current offers."

Additionally, the vendor's VMware spinoff remains on track for a November closure. VMware earlier posted an earnings beat and continued growth in its cloud-delivered software with subscription and software-as-a-service (SaaS) revenue for the second quarter of its fiscal year 2022 topping $776 million, an increase of 23% year over year.

Dell Technologies banked $880 million in net income for the latest quarter, which was down 20% year over year, and more than $26.1 billion in total revenue, which was a 15% increase.