HPE · Hewlett Packard Enterprise Company

Hewlett Packard Enterprise reported a standout fiscal Q2 2026, with record revenue of $10.7 billion (+40% YoY) and non-GAAP EPS of $0.79, well above the guided range of $0.51-$0.55. The beat was driven by the Networking segment, which surged 148% to $2.7 billion on the back of Juniper Networks integration and strong campus/branch and routing demand. Cloud & AI revenue rose 23% to $7.7 billion, with server revenue up 33% as enterprises scale AI infrastructure. Gross margins expanded significantly: GAAP gross margin rose 810 bps to 36.5%, and non-GAAP gross margin hit 36.9%, reflecting cost synergies and favorable mix. Operating cash flow reached $1.4 billion, and free cash flow was $0.9 billion, a record for a second quarter. Management commentary highlighted the two-year acceleration of the fiscal 2028 long-term plan. Guidance for fiscal Q3 2026 is robust: revenue of $11.5-$12.1 billion, GAAP EPS $0.84-$0.89, non-GAAP EPS $0.88-$0.93. The full-year outlook was raised sharply: FY26 revenue growth of 29%-33%, GAAP EPS $2.42-$2.52, non-GAAP EPS $3.35-$3.45, and free cash flow at least $3.5 billion. The company also introduced a FY2027 framework targeting 8%-12% revenue growth, non-GAAP EPS growth of 12%-16%, and non-GAAP operating margin of 12%-16%, with FCF of at least $4.5 billion. A quarterly dividend of $0.1425 per share was declared. The H3C divestiture closed on May 28, 2026, generating $1.357 billion in proceeds. Overall, the results demonstrate successful execution of the Juniper acquisition, strong AI-driven demand, and operational discipline, positioning HPE for sustained outperformance.