HPE Reports Record Q3 Earnings Amid Strong AI Demand
Hewlett Packard Enterprise (HPE) delivered strong financial performance in the third quarter of fiscal year 2026, with revenue reaching $12.2 billion — a 34% increase from the prior year and exceeding management's guidance. Non-GAAP earnings per share hit a record high of $1.11 for the first time above $1.00 in a single quarter. The company also reported significant growth across key segments, including AI systems revenue rising to nearly $1.6 billion and networking orders increasing by 36%. HPE raised its full-year guidance for non-GAAP EPS and free cash flow due to strong demand driven largely by artificial intelligence infrastructure. HPE's gross margin reached a record high of 40.4%, supported by disciplined pricing in traditional servers and increased sales from the networking segment. Free cash flow hit $958 million, reflecting improved collections and operating performance. The company also announced an increase to its AI order target for fiscal year-end due to robust demand across sovereign customers, cloud providers, and large enterprises. Despite these gains, HPE acknowledged ongoing supply chain constraints affecting fulfillment of customer orders — particularly in DDR5 memory, NAND flash storage, and wafer capacity. Looking ahead, the company expects gross margin normalization as AI systems grow relative to traditional servers but remains optimistic about long-term synergies from its Juniper integration.
Tickers: $HPE
Topics: AI orders free cash flow gross margin networking revenue non-GAAP EPS operating profit revenue