Hewlett Packard Enterprise Company (HPE) Q3 2026 earnings summary

Executive summary

• Achieved record quarterly revenue of $12.2 billion, up 34% year-over-year, driven by strong AI and networking demand, Juniper Networks acquisition, and higher Cloud & AI pricing.

• Operating profit surged, with GAAP up 464% and non-GAAP up 155% year-over-year; non-GAAP diluted EPS reached $1.11, a record and first time above $1 in a quarter.

• Orders and backlog reached all-time highs, with orders growing faster than revenue, reflecting robust customer demand across both business segments.

• Integration of Juniper Networks is ahead of schedule, delivering cost synergies and strengthening business performance.

• Raised outlook for FY26 and FY27 based on sustained demand, record backlog, and large post-quarter deals.

Financial highlights

• Q3 revenue was $12.2 billion, up 34% year-over-year, exceeding guidance.

• Non-GAAP gross margin reached a record 40.4%; GAAP gross margin was 40.1%, up 1,090 basis points year-over-year.

• Non-GAAP operating profit was $2 billion, 2.5x higher than a year ago; GAAP operating profit margin was 11.4%, up 870 basis points.

• Non-GAAP EPS was $1.11, GAAP EPS was $1.06; free cash flow was $1.0 billion, the highest ever for a third quarter.

• Returned $324 million to shareholders in Q3 via dividends and share repurchases.

Outlook and guidance

• FY26 revenue guidance raised; Q4 revenue expected between $13.9B–$14.8B.

• Networking revenue expected to grow 11%-13% in Q4; Cloud & AI revenue to grow 60%-72%.

• FY26 EPS guidance raised to $3.75–$3.85 (non-GAAP), GAAP EPS to $2.93–$3.03; free cash flow at least $3.75B.

• FY27 framework: consolidated revenue growth 13%-17%, networking 14%-17%, Cloud & AI 14%-18%, operating profit 14%-18%, EPS $4.40–$4.60, free cash flow at least $5B.

• At least $600 million in cost savings from Juniper integration synergies are targeted by fiscal 2028.