Hewlett Packard Enterprise Company (HPE) Investor Update summary

Strategic transformation and integration

• Completed Juniper Networks acquisition, positioning for leadership in high-growth, high-margin networking markets and accelerating profitable growth and capital returns.

• Focused on integrating Juniper and HPE Aruba Networking portfolios, leveraging AIOps, security, and cloud-native innovations to disrupt the networking industry.

• Targeting $600 million in annual run-rate synergies from Juniper integration and $350 million from Catalyst initiatives by 2028.

• Streamlining operations, reducing headcount, and optimizing portfolio through divestitures and SKU reduction to drive efficiency and reinvest in growth.

• Embedding AI across operations to enhance agility, decision-making, and operational efficiency.

Financial outlook and capital allocation

• Projecting consolidated revenue growth of 5%-7% CAGR and non-GAAP operating profit CAGR of 11%-17% through FY 2028.

• Networking margins expected to reach 25%-28% by FY 2028, with cloud and AI margins in the 8%-10% range.

• Free cash flow forecasted to exceed $3.5 billion by 2028, with $700 million in 2025 and $1.5-$2 billion in 2026.

• Announced a 10% dividend increase for FY 2026 and a new $3 billion share repurchase authorization, targeting at least 75% of free cash flow returned to shareholders post-2027.

• Committed to reducing net leverage to 2x by end of 2027, prioritizing debt repayment and maintaining investment grade rating.

Market positioning and growth drivers

• Positioned to capitalize on $1.1 trillion total addressable market across networking, cloud, and AI by 2028.

• Leading in campus and branch networking with 18% market share and robust ARR growth, aiming for #1 in Wi-Fi and expanding internationally.

• Accelerating adoption of AI-native networking, hybrid cloud, and storage solutions, with strong momentum in sovereign and enterprise AI segments.

• HPE GreenLake cloud platform driving over $2 billion in ARR, with 44,000 customers and new agentic AI ops framework.

• Storage portfolio shifting to HPE-developed solutions, with Alletra MP gaining market share and supporting AI and hybrid cloud adoption.