Dell Technologies Inc posted a smaller-than-expected drop in quarterly revenue on Thursday, as weakness in its data center segment was cushioned by robust demand for its notebooks and software products for remote work and online learning.

The COVID-19 pandemic has led to a rapid shift to cloud, spurring demand for products that allow organizations to carry on, even as millions of people around the globe work from home to stay safe, and schools hold virtual classes.

Orders for Dell from the education sector jumped 24 percent in the second quarter that ended July 31, and government orders rose 16 percent.

The company also saw an uptick in demand for its gaming systems, including Alienware, as more people turned to gaming during stay-at-home orders.

Revenue from the company's biggest segment that includes desktop PCs, notebooks and tablets fell 4.6 percent to 11.20 billion U.S. dollars, and data center sales dropped 4.8 percent to 8.21 billion U.S. dollars as companies directed their spending towards remote work, Dell said.

Its software unit VMware, which has directly benefited from the shift to cloud, posted a 9.7 percent rise in revenue to 2.91 billion U.S. dollars. Dell said in July it was planning to spin off its 81 percent stake in the unit.

The company's total revenue slid 2.7 percent to 22.73 billion U.S. dollars from a year earlier, but edged past analysts' average estimate of 22.52 billion U.S. dollars, according to IBES data from Refinitiv.

Net income fell to about 1.10 billion U.S. dollars, or 1.37 U.S. dollars per share, from 4.23 billion U.S. dollars, or 4.47 U.S. dollars per share.

(Cover via Reuters)