EarningsQ3 2026 Earnings Report
MX:HPE Q3 2026 EPS Results
Actual EPS$20.16
Consensus EPS$16.93
Beat/MissBeat by +$3.23
One Year Ago EPS$7.99
MX:HPE Q3 2026 Revenue Results
Actual Revenue$221.24B
Expected Revenue$217.38B
Beat/MissBeat by +$3.85B
YoY Revenue Growth+32.37%
Earnings Announcement Details
QuarterQ3 2026
Date09/02/2026
TimeAfter Close
Conference CallWednesday, September 2, 2026
MX:HPE Upcoming Earnings
Hewlett Packard Enterprise's next earnings date is estimated for December 3, 2026, based on past reporting schedules.
Q3 2026 Earnings Call Audio
MX:HPE Q3 2026 Earnings Call
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Q3 2026 Earnings Slide Deck
Q3 2026 Earnings Call Summary
Earnings Call Sentiment|Positive
The call was strongly positive. HPE reported records across revenue, gross margin, operating profit, EPS and free cash flow, cited exceptionally strong demand and record orders and backlog, raised fiscal 2026 and fiscal 2027 guidance, and highlighted strong Juniper integration, AI momentum, deleveraging and shareholder returns. The principal challenges were supply constraints, higher inventory, expected margin normalization, a decline in data center networking revenue due to shipment timing, and flat Financial Services revenue, but these lowlights were outweighed by the company's reported achievements and outlook.Company Guidance
Record Third-Quarter Financial Results
HPE delivered record revenue of $12.2 billion, up 34% year over year, exceeding the high end of guidance. Non-GAAP gross margin reached a record 40%, non-GAAP operating profit reached a record $2 billion, up 2.5x from a year ago, and non-GAAP EPS was a record $1.11, the first quarter above $1.
Record Cash Generation and Raised Fiscal 2026 Free Cash Flow Target
Third-quarter free cash flow was a record $958 million, supported by strong operating profit and collections. HPE raised its fiscal 2026 free cash flow target to at least $3.75 billion.
Record Orders and Backlog
Orders grew 42% on a normalized basis and exceeded revenue growth. HPE booked more orders than in any prior quarter, resulting in a record company backlog.
Raised Fiscal 2026 and Fiscal 2027 Outlook
HPE raised fiscal 2026 EPS guidance to $3.75 to $3.85 and GAAP EPS guidance to $2.93 to $3.03. The fiscal 2027 framework calls for consolidated revenue growth of 13% to 17%, operating profit growth of 14% to 18%, EPS of $4.40 to $4.60, and free cash flow of at least $5 billion, which is up 33% year over year.
Strong Networking Order Momentum
Networking revenue was $2.9 billion, up 10% on a normalized basis, while orders increased 36%, approximately 3.5x faster than revenue. Networking operating margin was 22%, in line with guidance.
Networks for AI Orders Surpassed Target
Networks for AI orders reached a quarterly record of $700 million, up triple digits. Cumulative orders reached $2.2 billion, surpassing the fiscal 2026 target, prompting HPE to raise its year-end target to $2.5 billion to $3 billion.
Networking Portfolio and Oracle Collaboration
HPE announced an expanded collaboration with Oracle to accelerate gigawatt-scale AI infrastructure. Oracle will deploy HPE Juniper QFX switching products, PTX routing products, software and AI Ops across a multigigawatt, multiyear AI infrastructure build-out.
Networking Segment Growth Across Key Categories
Within networking, Campus & Branch revenue grew 8% on a normalized basis, routing revenue grew 23%, and security grew 12%. Campus & Branch achieved record revenue, while orders were up low teens. Enterprise networking revenue grew 12% and service-provider revenue grew 5% on a normalized basis.
Juniper Integration and Synergies Ahead of Schedule
A U.S. Federal Court approved HPE's settlement with the Department of Justice regarding the Juniper Networks acquisition. One year after closing, HPE said its integration plan and cost synergies remained ahead of schedule. Juniper synergies remain on track to achieve a $600 million annual run-rate savings target by the end of fiscal 2028, with integration costs tracking better than planned.
Cloud & AI Segment Delivered Record Profitability
Cloud & AI revenue was $9 billion, up 25%, exceeding outlook. The segment generated record revenue and operating profit, with operating profit above $1.5 billion, up 61% sequentially and triple digits year over year. Operating margin was 17%, up 460 basis points sequentially.
Strong Server and AI Systems Demand
Server revenue grew 35%, with higher average selling prices driving traditional server revenue to an all-time high. AI Systems orders were $2.4 billion, up more than 30% sequentially, while AI Systems revenue was almost $1.6 billion. AI Systems backlog increased 14% sequentially to a new high.
Multibillion-Dollar Inferencing Server Deal
After quarter end, HPE was awarded a multibillion-dollar server deal with a hyperscaler customer for AI inferencing. HPE characterized the customer as using the infrastructure for its own internal enterprise workloads rather than for traditional Tier 1 cloud infrastructure.
Storage and Private Cloud AI Momentum
Storage revenue increased 10%, with record revenue in the quarter, driven by strong order growth, higher ASPs and a favorable mix toward higher-value owned IP and private cloud. PCAI orders increased triple digits, and Alletra MP orders and revenue increased strong double digits year over year.
GreenLake Customer Growth
The number of GreenLake customers grew 18% to 52,000 in Q3 from 44,000 a year ago. Customers broadened their use of GreenLake cloud services, including new software and intelligent cloud services, which HPE said increased net retention rates.
HPE Financial Services Records
HPE Financial Services achieved third-quarter records in financing volumes, residual value and return on equity. Return on equity exceeded 20%, although revenue was roughly flat year over year.
Transformation and Internal AI Deployment
HPE said it was ahead of plan on projects to lower cost of sales and operating expenses through Catalyst and Juniper integration. The company is deploying an internal agentic AI platform built on its private cloud AI and open-source and open-weight models; HPE's internal analysis indicated that its PCAI offering can reduce token costs versus the public cloud by up to 60%.
Improved Leverage and Shareholder Returns
HPE exited Q3 with a net leverage ratio of 1.8x, below its 2x target and achieved more than a year ahead of the original plan. The company returned $324 million to common shareholders, including $189 million in dividends and $135 million through share repurchases, and plans to return at least 75% of Q4 free cash flow to shareholders.
Asset Sale Proceeds and Debt Reduction
HPE received approximately $1.4 billion in gross proceeds after closing its H3C transactions and used cash on hand to retire its term loan. It also completed the sale of its Telco Solutions business and intends to retire $1.25 billion of notes maturing later in the month.
Positive Near-Term and Fiscal 2027 Segment Guidance
For Q4, HPE expects revenue of $13.9 billion to $14.8 billion, networking revenue growth of 11% to 13%, and Cloud & AI revenue growth of 60% to 72%. For fiscal 2027, it expects networking revenue growth of 14% to 17% and Cloud & AI revenue growth of 14% to 18%.
Broadening Enterprise AI Adoption
Management said enterprise demand has reached an inflection point as customers move from AI pilots to production deployments involving agentic AI and inferencing. HPE cited more than 1,200 internal AI use cases, with more than 300 in production, and said customer budgets are increasing for AI infrastructure and older infrastructure replacement.
Additional Helios Opportunity Not Included in Fiscal 2027 Framework
HPE expects its AMD Helios infrastructure to become available for ordering later in the calendar year and said it is working with AMD on a large pipeline. Management stated that the opportunity was not included in the 14% to 17% fiscal 2027 networking growth framework and described the overall market opportunity as tens of billions of dollars.
MX:HPE Earnings History
The table shows recent earnings report dates and whether the forecast was beat or missed. See the change in forecast and EPS from the previous year.
Beat
Missed