Hewlett Packard Enterprise — 2026Q3 earnings
reported 2026-09-02
EPS $1.11 vs $0.94 est — beat
next session +5.0% (close 2026-09-02 → 2026-09-03)
Source
Press release ↗Summary
A quarter of records that also beat both EPS ranges HPE had guided to, set against a constraint management named plainly: orders are growing faster than the company can ship. The EPS figure shown above is the non-GAAP number HPE headlines; GAAP EPS for the same quarter was $1.06, and it cleared its own guided range too. The counterweight sits in the CFO's own guidance — gross margin is expected to moderate toward historical levels as AI systems take a larger share of the mix — and the multi-billion-dollar hyperscaler inferencing deal management highlighted was awarded after the quarter ended, so it is not in these results.
Earnings call
Earnings call webcast ↗Review
From the report
Records on revenue and operating profit, with both the GAAP and the non-GAAP EPS above the ranges HPE had guided to, and the full-year outlook raised.
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Revenue set a record at $12.2 billion, up 34% year over year. show quote
“Record revenue of $12.2 billion, up 34% year-over-year”
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Non-GAAP diluted EPS of $1.11 — the figure stored above — came in above HPE's own outlook range of $0.88 to $0.93, and was $0.67 higher than the prior-year period. show quote
“Non-GAAP(1) of $1.11, up $0.67 from the prior-year period and above our outlook range of $0.88 - $0.93”
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On a GAAP basis diluted EPS was $1.06, also above its guided range of $0.84 to $0.89 — a second measure of the same quarter, not a restatement of the headline figure. show quote
“GAAP of $1.06, up $0.85 from the prior-year period and above our outlook range of $0.84 - $0.89”
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The $1.11 non-GAAP figure excludes a one-off disposal gain: HPE sold its remaining equity interest in H3C in May 2026 for a gain of $444 million, and its non-GAAP definition removes gains of that kind. Removing a gain lowers the non-GAAP figure, so this exclusion narrows the distance between GAAP and non-GAAP rather than opening it. show quote
“In May 2026, the Company sold the remaining equity interest in H3C, which resulted in a gain of $444 million and is included in the fiscal 2026 adjustment Gain on sale of equity interest.”
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Networking revenue was $2.9 billion, up 74.9% year over year, but its operating profit margin was 22.0% against 22.1% a year earlier — growth without margin expansion. show quote
“Networking revenue was $2.9 billion, up 74.9% from the prior-year period, with 22.0% operating profit margin, compared to 22.1% from the prior-year period.”
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CFO Marie Myers tied the raised outlook to the quarter's results and a record order backlog, and said HPE plans to return at least 75% of free cash flow to shareholders in Q4. show quote
“With our Q3 results and our order backlog at a record level, we are raising our financial outlook and plan to return at least 75% of free cash flow to shareholders in Q4.”
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Full-year guidance was raised to non-GAAP diluted EPS of $3.75 to $3.85 and GAAP diluted EPS of $2.93 to $3.03. show quote
“HPE is raising both GAAP diluted net EPS to be in the range of $2.93 to $3.03 and non-GAAP diluted net EPS(1) to be in the range of $3.75 to $3.85.”
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From the call
Management's stated limit is supply, not demand — orders outran revenue into a record backlog — and the CFO guided gross margin to moderate from here as AI systems take more of the mix. One basis note for the growth rates below: the call normalizes prior-year figures to include Juniper from the start of fiscal 2025, so its percentages do not line up with the as-reported ones in the press release above.
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CEO Antonio Neri said supply constraints continue to limit HPE's ability to fulfil the increased customer demand. show quote
“Supply constraints continue to affect our ability to fulfill the increased customer demand.”
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Neri said orders grew faster than revenue and that HPE booked more orders than in any prior quarter in its history, leaving a record backlog. show quote
“Customer demand in the quarter accelerated across both business segments, with orders growing faster than revenues. We booked more orders than any prior quarter in our history, resulting in a record-breaking backlog for the company.”
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Neri framed $1.11 as a milestone — the first quarter in which HPE earned more than $1 of non-GAAP EPS. show quote
“Non-GAAP earnings per share was $1.11, another record and the first time we achieved more than $1 in non-GAAP EPS in a single quarter.”
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CFO Marie Myers put revenue at $12.2 billion, up 34% and above the high end of guidance, and gave order growth separately at 42% on a normalized basis, led by traditional service, AI systems and networking. show quote
“Revenue of $12.2 billion increased 34%, exceeding the high end of our guidance range, with order growth up 42% on a normalized basis led by demand in traditional service, AI systems and networking.”
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Myers guided gross margin lower from this quarter's level, saying it should moderate toward historical levels as AI systems grow and traditional service normalizes. show quote
“Going forward, we expect our gross margin to moderate toward more historical levels driven by the growth in AI systems and the normalization in traditional service, offset by the growing mix of networking.”
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Myers said data center networking revenue declined 6% on shipment timing driven by supply constraints — one line in a segment walk she gave on a normalized basis, which restates the prior year to include Juniper. show quote
“Within networking, campus and branch revenue grew 8% on a normalized basis. Routing revenue growth accelerated 23% as we benefit from increasing demand for our on-and-off ramp AI network infrastructure. Security grew 12% while data center networking revenue declined 6% due to shipment timing driven by supply constraints.”
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The multi-billion-dollar hyperscaler server deal for inferencing that management highlighted was awarded after the quarter ended, so it is not in these results. show quote
“after quarter end HPE was awarded a multi-billion-dollar server deal with a hyperscaler customer specifically designed for inferencing, supporting our view that demand for inferencing and agentic AI workloads is building”
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Neri said HPE announced an expanded collaboration with Oracle, which will deploy HPE Juniper routers and switches across one of the largest AI cloud infrastructure build-outs. show quote
“Today, we announced an expanded collaboration with Oracle to accelerate gigawatt scale AI infrastructure. Oracle will deploy HPE Juniper networking routers and switches across one of the largest AI cloud infrastructure build outs.”
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as of 2026-09-02