Dell Technologies reported record-high revenue during the first quarter of its fiscal year 2022, but warned analysts that ongoing supply chain challenges will impact its outlook for the remainder of the year. 

“The pandemic accelerated the adoption of digital technology in every industry,” COO Jeff Clarke said during the earnings call. “When coupled with an improving global economy with greater demand for everything, there is an overall shortage of semiconductors. We are executing our strategy as we work through this environment.”

It was a busy quarter with sweeping alterations for Dell and its future. The company reached a deal to spin off its 81% stake in VMware last month, and it released a series of products and services during its annual conference earlier this month to kick off the current quarter.

Apex, which delivers “the scale of the cloud with the ease of as-a-service,” according to Clarke, was unleashed to merge the company’s cloud and consumption-based pricing portfolio, and the company revealed a reference design architecture designed to improve edge computing in manufacturing environments. 

Clarke described Apex as “a critical component to how we modernize and grow our core businesses, grow private and hybrid cloud, and win the edge.”

More broadly, following its formal split but ongoing tight integration with VMware, Dell is confident it can gain further traction in telco, cloud-based services, and data management, he said. 

On VMware’s earnings call, incoming CEO Raghu Raghuram said he intends to turbo charge the company’s multi-cloud push following the spin-off, which is expected to be finalized this fall. 

Dell reported total revenue of $18 billion on products, up 12% year over year, and almost $6.5 billion on services, which were up 10% year over year.

Product sales are growing faster than services, but company brass warned that ongoing supply chain challenges could impact laptop sales throughout the remainder of 2021. Dell’s Client Solutions Group, which includes desktops, notebooks, and tablets, reported a 20% year-over-year increase in revenue of $13.3 billion, including $9.8 billion on commercial sales and $3.5 billion on consumer.

The company’s Infrastructure Solutions Group reported $7.9 billion in revenue, including $3.8 billion on storage and $4.1 billion on servers and networking. Storage revenues were flat overall, but servers and networking sales increased 9% year over year. CFO Tom Sweet also noted that Dell hasn’t experienced significant supply chain constraints in the server space. 

Dell expects the total addressable market for its infrastructure business to increase from $150 billion in 2019 to $200 billion by 2025. 

Dell Technologies banked $938 million in net income on nearly $24.5 billion in revenue during the quarter, reflecting a 415% year-over-year increase in profit and a 12% jump in revenue.