HPE reports fiscal 2026 third quarter results
News Release HPE reports fiscal 2026 third quarter results Record results and demand drive higher outlook for fiscal 2026 and fiscal 2027 -Record revenue of $12.2 billion, up 34% year-over-year -Record operating profit, with GAAP OP up 464% and non-GAAP OP up 155% year-over-year
– HPE (NYSE: HPE) today announced financial results for the third quarter ended July 31, 2026. “HPE’s strategy is proving itself again this quarter. Our results demonstrate the durability of our profitable growth momentum. We delivered record revenue, orders, and profitability, fueled by surging customer demand across our portfolio,” said Antonio Neri, president and CEO of HPE. “AI is becoming a multi-year growth driver for HPE, and our differentiated portfolio positions us to capture that opportunity at scale.”
“Our outstanding revenue performance and expanded profitability in the third quarter reflect robust demand across our portfolio and consistent, disciplined execution,” said Marie Myers, executive vice president and CFO of HPE. “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.”
◦ GAAP of 40.1%, up 1,090 basis points from the prior-year period and up 360 basis points sequentially
◦ Non-GAAP (1) of 40.4%, up 1,050 basis points from the prior-year period and up 350 basis points sequentially
◦ GAAP of 11.4%, up 870 basis points from the prior-year period and up 440 basis points sequentially
◦ Non-GAAP (1) of 16.2%, up 770 basis points from the prior-year period and up 290 basis points sequentially
◦ GAAP of $1.06, up $0.85 from the prior-year period and above our outlook range of $0.84 - $0.89
◦ Non-GAAP (1) of $1.11, up $0.67 from the prior-year period and above our outlook range of $0.88 - $0.93
• Capital returns to common shareholders: $324 million in the form of dividends and share repurchases
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.
▪ Data Center Networking was $382 million, up 112.2% from the prior-year period.
revenue was $9.0 billion, up 25.4% from the prior-year period, with 17.0% operating profit margin, compared to 7.0% from the prior-year period.
revenue was $278 million, up 3.0% from the prior-year period, with -24.1% of operating profit margin, compared to -7.0% from the prior-year period.
The HPE Board of Directors declared a regular cash dividend of $0.1425 per share on the company’s common stock, payable on or about October 16, 2026, to stockholders of record as of the close of business on September 17, 2026.
HPE estimates revenue to be in the range of $13.9 billion to $14.8 billion. HPE estimates GAAP diluted net EPS to be in the range of $1.12 to $1.22 and non-GAAP diluted net EPS (1) to be in the range of $1.20 to $1.30. Fiscal 2026 fourth quarter non-GAAP diluted net EPS estimate excludes net after-tax
adjustments of approximately $0.08 per diluted share, primarily related to amortization of intangible assets, stock-based compensation expense, acquisition, disposition and other charges, and cost reduction program.
HPE is raising its FY26 revenue growth outlook range to 34% to 37%. HPE is raising revenue growth expectations for the Networking segment to 73% to 74%. HPE estimates GAAP operating profit growth range to be 1,070% to 1,105% and non- GAAP operating profit growth range between 100% to 105% (1)(3) .
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. Fiscal 2026 non-GAAP diluted net EPS estimate excludes net after-tax adjustments of approximately $0.82 per diluted share, primarily related to amortization of intangible assets, stock-based compensation expense, acquisition, disposition and other charges, cost reduction program, and adjustments related to the sale of H3C. HPE is also raising its free cash flow (1)(2)(4) guidance and now expects free cash flow to be at least $3.75 billion.
The company is raising its growth framework for FY27. HPE is raising its revenue growth outlook range to 13% to 17%. HPE is raising expectations for non-GAAP diluted net EPS growth to be in the range of 16% to 20% (1)(4) . HPE estimates non-GAAP operating margin rate to be in the range of 14% to 15% (1)(4) . HPE is also raising its free cash flow guidance and now expects free cash flow to be at least $5.0 billion (1)(2)(4) .
1 A description of HPE’s use of non-GAAP financial information is provided below under “Use of non-GAAP financial information and key performance metrics.”
2 Free cash flow represents cash flow from operations, less net capital expenditures (investments in property, plant & equipment (“PP&E”) and software assets less proceeds from the sale of PP&E), and adjusted for the effect of exchange rate fluctuations on cash, cash equivalents, and restricted cash.
3 FY26 non-GAAP operating profit excludes costs of approximately $2.5 billion primarily related to amortization of intangible assets, stock-based compensation expense, acquisition, disposition and other charges, and cost reduction program.
4 HPE provides certain guidance on a non-GAAP basis. In reliance on the exception provided by Item 10(e)(1)(i)(B) of Regulation S-K, Hewlett Packard Enterprise is unable to provide a reconciliation to the most directly comparable GAAP financial measure without unreasonable efforts, as the Company cannot predict some elements that are included in such directly comparable GAAP financial measure. These elements could have a material impact on the Company’s reported GAAP results for the guidance period. Refer to the discussion of non- GAAP financial measures below for more information.
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To supplement Hewlett Packard Enterprise’s condensed consolidated financial statement information presented on a generally accepted accounting principles (“GAAP”) basis, Hewlett Packard Enterprise provides financial measures, non-GAAP gross profit, non-GAAP gross profit margin, non-GAAP operating profit (non-GAAP earnings from operations), non-GAAP operating profit margin (non-GAAP earnings from operations as a percentage of net revenue), non-GAAP income tax rate, non- GAAP net earnings attributable to HPE and non-GAAP net earnings attributable to common stockholders, non-GAAP diluted net earnings per share attributable to common stockholders, and free cash flow (“FCF”). Hewlett Packard Enterprise also provides forecasts of non-GAAP operating profit growth, non-GAAP diluted net earnings per share, and FCF. Reconciliations of each of these non-GAAP financial measures to their most directly comparable GAAP measures for this quarter and prior periods are included in the tables below or elsewhere in the materials accompanying this news release. In addition an explanation of the ways in which Hewlett Packard Enterprise’s management uses these non-GAAP measures to evaluate its business, the substance behind Hewlett Packard Enterprise’s decision to use these non-GAAP measures, the material limitations associated with the use of these non-GAAP measures, the manner in which Hewlett Packard Enterprise’s management compensates for those limitations, and the substantive reasons why Hewlett Packard Enterprise’s management believes that these non-GAAP measures provide supplemental useful information to investors is included further below. This additional non-GAAP financial information is not meant to be considered in isolation or as a substitute for revenue, gross profit, gross profit margin, operating profit (earnings from operations), operating profit margin (earnings from operations as a percentage of net revenue), net earnings, diluted net earnings (loss) per share (“EPS”), and cash flow from operations prepared in accordance with GAAP.
This press release contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements involve risks, uncertainties, and assumptions. If the risks or uncertainties ever materialize or the assumptions prove incorrect, the results of Hewlett Packard Enterprise Company and its consolidated subsidiaries (“Hewlett Packard Enterprise”) may differ materially from those expressed or implied by such forward-looking statements and assumptions. The words “believe”, “expect”, “anticipate”, “guide”, “optimistic”, “intend”, “aim”, “will”, “estimates”, “may”, “likely”, “could”, “should” and similar expressions are intended to identify such forward-looking statements. All statements other than statements of historical fact are statements that could be deemed forward- looking statements, including but not limited to any statements regarding the ongoing integration of Juniper Networks, Inc., and any projections, estimates, or expectations of savings or synergy realizations in connection therewith; any projections, estimations, or expectations of addressable markets and their sizes, revenue (including annualized revenue run-rate), margins, expenses (including stock-based compensation expenses), investments, effective tax rates, interest rates, the impact of tax law changes and related guidance and regulations, the impact of changes in trade policies and restrictions and the uncertainty created thereby, component costs, commodity shortage, net earnings, net earnings per share, cash flows, liquidity and capital resources, inventory, goodwill, impairment charges, hedges and derivatives and related offsets, order backlog, benefit plan funding, deferred tax assets, share repurchases, currency exchange rates, repayments of debts including our asset-backed debt securities, or other financial items; recent amendments to accounting guidance and any potential impacts on our financial reporting therefrom; any projections or estimations of orders; any projections of the amount, timing, or impact of cost saving actions and anticipated benefits to be realized if any; any statements of the plans, strategies, and objectives of management for future operations, as well as the execution and consummation of corporate transactions or contemplated acquisitions and dispositions, research and development expenditures, and any resulting benefits, cost savings, charges, or revenue or profitability improvements; any statements concerning the expected development, performance, market share, or competitive performance relating to products or services; any statements concerning technological and market trends, the pace of technological innovation, and adoption of new technologies, including quantum- and artificial intelligence-related developments and any impacts of such developments on products and services offered by Hewlett Packard Enterprise; any statements regarding current or future macroeconomic trends or events and the impacts of those trends and events on Hewlett Packard Enterprise and our financial performance, including but not limited to supply chain dynamics (including but not limited to worldwide component availability), uncertain global trade policies and/or restrictions, and demand for our products and services, and our actions to mitigate such impacts to our business; the scope and duration of geopolitical tensions, including but not limited to the ongoing conflict between Russia and Ukraine, instability and conflicts in the Middle East, and the relationship between China and the U.S., and our actions in response thereto, and their impacts on our business, operations, liquidity and capital resources, employees, customers, partners, supply chain, financial results, and the world economy; any statements regarding future regulatory trends and the resulting legal and reputational exposure, including but not limited to those relating to environmental, social, governance, cybersecurity, data privacy, and artificial intelligence issues, among others; any statements regarding pending litigation, investigations, claims, or disputes; any statements of expectation or belief, including those relating to future guidance and the financial performance of Hewlett Packard Enterprise; and any statements of assumptions underlying any of the foregoing.
Risks, uncertainties, and assumptions include the need to address the many challenges facing Hewlett Packard Enterprise’s businesses; the competitive pressures faced by Hewlett Packard Enterprise’s businesses; risks associated with executing Hewlett Packard Enterprise’s strategy; the impact of macroeconomic and geopolitical trends and events, including but not limited to those mentioned above; the need to effectively manage third-party suppliers and distribute Hewlett Packard Enterprise's products and services; the protection of Hewlett Packard Enterprise's intellectual property assets, including intellectual property licensed from third parties and intellectual property shared with its former parent; risks associated with Hewlett Packard Enterprise's international operations (including from geopolitical events and macroeconomic uncertainties); the development of and transition to new products and services and the enhancement of existing products and services to meet customer needs and respond to emerging technological trends; the execution of Hewlett Packard Enterprise’s ongoing transformation and mix shift of its portfolio of offerings; the execution and performance of contracts by Hewlett Packard Enterprise and its suppliers, customers, clients, and partners, including any impact thereon resulting from macroeconomic or geopolitical events, including inflation and rising commodity costs; the prospect of a shutdown of the U.S. federal government; the hiring and retention of key employees; the execution, integration, consummation, and other risks associated with business combination, disposition, and investment transactions, including but not limited to successful integration of Juniper Networks, Inc., including our ability to integrate and implement our plans and forecasts and realize our anticipated financial and operational benefits with respect to the consolidated business; the execution, timing, and results of any cost reduction actions, including estimates and assumptions related to the costs and anticipated benefits of implementing such actions; the impact of changes to privacy, cybersecurity, environmental, global trade, and other governmental regulations; changes in our product, lease, intellectual property, or real estate portfolio; the payment or non-payment of a dividend for any period; the efficacy of using non-GAAP, rather than GAAP, financial measures in business projections and planning; the judgments required in connection with determining certain financial metrics; utility of segment realignments; allowances for recovery of receivables and warranty obligations; provisions for, and resolution of, pending litigation investigations, claims, and disputes; the impacts of tax law changes and related guidance or regulations; and other risks that are described herein,
including but not limited to the items discussed in “Risk Factors” in Item 1A of Part I of the Annual Report on Form 10-K for the fiscal year ended October 31, 2025 and that are otherwise described or updated from time to time in Hewlett Packard Enterprise's subsequent Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and in other filings made with the Securities and Exchange Commission. Hewlett Packard Enterprise assumes no obligation and does not intend to update these forward-looking statements, except as required by applicable law.
As in prior periods, the financial information set forth in this press release, including tax-related items, reflects estimates based on information available at this time. While Hewlett Packard Enterprise believes these estimates to be reasonable, these amounts could differ materially from reported amounts in the filings made by Hewlett Packard Enterprise from time to time with the Securities and Exchange Commission. Hewlett Packard Enterprise assumes no obligation and does not intend to update these forward-looking statements, except as required by applicable law.
HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIAR… Condensed Consolida… Statements For the of three Earnings months July 31, April 30, July 31, (Unaudite… ended 2026 2026 2025 ────────────────────────────────────────────────────────────────────────────── In millions, except per share amounts Net $ 12,213 $ 10,678 $ 9,136 revenue Costs and Expenses: Cost of sales (exclusive of 7,314 6,778 6,464 amortizat… shown separately below) Research and 1,158 922 622 developme… Selling, general 1,962 1,830 1,496 and administr… Amortizat… of 315 323 126 intangible assets Acquisiti… dispositi… 71 78 181 and other charges Total costs and 10,820 9,931 8,889 expenses Earnings from 1,393 747 247 operations Interest and other, -75 -73 8 net(1) Gain on sale of 444 — — equity interest Gain on sale of a — — 1 business Earnings from — 25 32 equity interests Earnings before 1,762 699 288 provision for taxes (Provisio… benefit -222 -75 17 for taxes Net earnings 1,540 624 305 attributa… to HPE Preferred stock -29 -29 -29 dividends Net earnings attributa… $ 1,511 $ 595 $ 276 to common stockhold… Net Earnings Per Share Attributa… to Common Stockhold… Basic $ 1.13 $ 0.45 $ 0.21 Diluted 1.06 0.44 0.21 Cash dividends 0.1425 0.1425 0.1300 declared per share Cash dividends accrued $ 0.9531 $ 0.9531 $ 0.9531 per preferred share Weighted-… Shares Used to Compute Net Earnings Per Share: Basic 1,336 1,335 1,325 Diluted 1,449 1,432 1,421
HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES Condensed Consolidated Statements of Earnings For the nine months (Unaudited) ended July 31, 2026 July 31, 2025 ────────────────────────────────────────────────────────────────────────────── In millions, except per share amounts Net revenue $ 32,192 $ 24,617 Costs and Expenses: Cost of sales (exclusive of amortization 20,053 17,481 shown separately below) Research and 2,824 1,637 development Selling, general 5,490 4,062 and administrative Amortization of 949 201 intangible assets Impairment charges — 1,361 Acquisition, disposition and 266 304 other charges Total costs and 29,582 25,046 expenses Earnings (loss) 2,610 -429 from operations Interest and -202 86 other, net(1) Gain on sale of 444 — equity interest Gain on sale of a — 245 business Earnings from 42 74 equity interests Earnings (loss) before provision 2,894 -24 for taxes Provision for -278 -94 taxes Net earnings (loss) 2,616 -118 attributable to HPE Preferred stock -87 -87 dividends Net earnings (loss) attributable to $ 2,529 $ -205 common stockholders Net Earnings (Loss) Per Share Attributable to Common Stockholders: Basic $ 1.89 $ -0.16 Diluted 1.82 -0.16 Cash dividends 0.4275 0.3900 declared per share Cash dividends accrued per $ 2.8594 $ 2.8594 preferred share Weighted-average Shares Used to Compute Net Earnings (Loss) Per Share: Basic 1,335 1,321 Diluted 1,441 1,321
For the nine months ended July 31, 2026 July 31, 2025 ────────────────────────────────────────────────────────────────────────────── Dollars in millions GAAP net $ 32,192 $ 24,617 revenue GAAP cost of 20,053 17,481 sales GAAP gross 12,139 7,136 profit Non-GAAP Adjustments Stock-based compensation 65 40 expense Acquisition, disposition and 37 47 other charges(2) Cost reduction 27 46 program H3C divestiture related — 17 severance costs Non-GAAP gross $ 12,268 $ 7,286 profit GAAP gross 37.7 % 29.0 % profit margin Non-GAAP 0.4 % 0.6 % adjustments Non-GAAP gross 38.1 % 29.6 % profit margin
For the nine months ended July 31, 2026 July 31, 2025 ────────────────────────────────────────────────────────────────────────────── Dollars in millions GAAP earnings (loss) from $ 2,610 $ -429 operations Non-GAAP Adjustments Amortization of intangible 949 201 assets Impairment — 1,361 charges Stock-based compensation 599 447 expense H3C divestiture related — 97 severance costs Cost reduction 84 148 program Acquisition, disposition 342 345 and other charges(2) Non-GAAP earnings from $ 4,584 $ 2,170 operations GAAP operating 8.1 % (1.7 %) profit margin Non-GAAP 6.1 % 10.5 % adjustments Non-GAAP operating 14.2 % 8.8 % profit margin
For the three months July 31, April 30, July 31, ended 2026 2026 2025 ────────────────────────────────────────────────────────────────────────────── In millions Net cash provided by $ 1,641 $ 1,410 $ 1,305 operating activities Investment in property, plant and -745 -583 -576 equipment and software assets Proceeds from sale of property, 92 130 90 plant and equipment Effect of exchange rate changes on cash, -30 -42 -29 cash equivalen… and restricted cash Free cash $ 958 $ 915 $ 790 flow
For the nine months ended July 31, 2026 July 31, 2025 ────────────────────────────────────────────────────────────────────────────── In millions Net cash provided by operating $ 4,229 $ 454 activities Investment in property, plant and -1,897 -1,651 equipment and software assets Proceeds from sale of property, plant 288 254 and equipment Effect of exchange rate changes on cash, -39 9 cash equivalents, and restricted cash Free cash flow $ 2,581 $ -934
HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES Condensed Consolidated As of Balance Sheets July 31, 2026 October 31, 2025 ────────────────────────────────────────────────────────────────────────────── -Unaudited -Audited In millions, except par value ASSETS Current assets: Cash and cash $ 6,216 $ 5,773 equivalents Accounts receivable, net of 6,185 5,290 allowances Financing receivables, net 3,841 3,826 of allowances Inventory 11,823 6,352 Other current 5,800 3,753 assets Total current 33,865 24,994 assets Property, plant 5,645 6,002 and equipment, net Long-term financing 14,632 13,817 receivables and other assets Investments in — 955 equity interests Goodwill and 29,454 30,138 intangible assets Total assets $ 83,596 $ 75,906 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Notes payable and short-term $ 2,901 $ 4,609 borrowings Accounts payable 13,734 7,731 Employee compensation and 2,880 1,871 benefits Deferred revenue 5,561 5,358 Other accrued 5,360 5,074 liabilities Total current 30,436 24,643 liabilities Long-term debt 17,343 17,756 Other non-current 9,241 8,753 liabilities Commitments and Contingencies Stockholders' Equity HPE stockholders' Equity: 7.625% Series C mandatory convertible preferred stock, $0.01 par value (30 — — shares issued and outstanding as of July 31, 2026 and October 31, 2025, respectively) Common stock, $0.01 par value (9,600 shares authorized; 1,328 and 1,318 shares issued and 13 13 outstanding as of July 31, 2026 and October 31, 2025, respectively) Additional paid-in 30,151 30,234 capital Accumulated -948 -2,811 deficit Accumulated other -2,702 -2,748 comprehensive loss Total HPE stockholders' 26,514 24,688 equity Non-controlling 62 66 interests Total stockholders' 26,576 24,754 equity Total liabilities and stockholders' $ 83,596 $ 75,906 equity
HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES Condensed Consolidated Statements of Cash Flows For the nine months (Unaudited) ended July 31, 2026 July 31, 2025 ────────────────────────────────────────────────────────────────────────────── In millions Cash Flows from Operating Activities: Net earnings (loss) $ 2,616 $ -118 attributable to HPE Adjustments to Reconcile Net Earnings (Loss) Attributable to HPE to Net Cash Provided by Operating Activities: Depreciation and 2,613 1,860 amortization Impairment charges — 1,361 Stock-based compensation 599 447 expense Provision for inventory and 477 339 credit losses Cost reduction 84 148 program Deferred taxes on -313 -74 earnings Earnings from -42 -74 equity interests Gain on sale of a — -245 business Gain on sale of -444 — equity interest Dividends received from equity 100 — investees H3C divestiture related severance — 97 costs Amortization of inventory fair 31 — value adjustment Other, net 161 143 Changes in Operating Assets and Liabilities, Net of Acquisitions:
Accounts -997 -1,130 receivable Financing -224 -3 receivables Inventory -5,847 1,385 Accounts payable 5,870 -2,595 Other assets and -455 -1,087 liabilities Net cash provided by operating 4,229 454 activities Cash Flows from Investing Activities: Investment in property, plant and -1,897 -1,651 equipment and software assets Proceeds from sale of property, plant 288 254 and equipment Purchases of -5 -7 equity investments Proceeds from sale of available-for-sale 10 47 securities and other investments Proceeds from maturities and redemptions — 48 of available-for-sale securities Proceeds from sale 1,357 — of equity interest Financial -737 -755 collateral posted Financial collateral 789 518 received Payments made in connection with business — -12,278 acquisitions, net of cash acquired Proceeds from sale — 210 of a business Net cash used in investing -195 -13,614 activities Cash Flows from Financing Activities: Short-term borrowings with original 12 8 maturities less than 90 days, net Proceeds from debt, net of 2,546 5,333 issuance costs Payment of debt -4,686 -1,663 Net payments related to -338 -229 stock-based award activities Repurchases of -447 -102 common stock Cash dividends paid to preferred -87 -83 stockholders Cash dividends paid to common -568 -513 stockholders Other -8 -8 Net cash (used in) provided by -3,576 2,743 financing activities Effect of exchange rate changes on cash, -39 9 cash equivalents, and restricted cash Change in cash, cash equivalents 419 -10,408 and restricted cash Cash, cash equivalents and restricted 5,859 15,105 cash at beginning of period Cash, cash equivalents and restricted $ 6,278 $ 4,697 cash at end of period
HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIAR… For the Segment three Informati… months July 31, April 30, July 31, (Unaudite… ended 2026 2026 2025 ────────────────────────────────────────────────────────────────────────────── In millions Net Revenue(5… Networking $ 2,893 $ 2,690 $ 1,654 Cloud & AI 9,042 7,707 7,212 Corporate Investmen… 278 281 270 and Other Total segment 12,213 10,678 9,136 net revenue Earnings Before Taxes(5): Networking 637 581 365 Cloud & AI 1,539 954 504 Corporate -67 -9 -19 Investmen… Total segment earnings 2,109 1,526 850 from operations Unallocat… corporate -130 -103 -73 costs and eliminati… Stock-bas… compensat… -165 -218 -177 expense Amortizat… of -315 -323 -126 intangible assets Gain on sale of a — — 1 business Cost reduction -31 -30 -2 program Acquisiti… dispositi… -75 -105 -225 and other charges(2) Interest and other, -75 -73 8 net(1) Gain on sale of 444 — — equity interest Earnings from — 25 32 equity interests Total pretax $ 1,762 $ 699 $ 288 earnings
HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES Segment Information For the nine months (Unaudited) ended July 31, 2026 July 31, 2025 ────────────────────────────────────────────────────────────────────────────── In millions Net Revenue(5): Networking $ 8,289 $ 3,814 Cloud & AI 23,083 19,994 Corporate Investments and 820 809 Other Total segment net 32,192 24,617 revenue Earnings Before Taxes(5): Networking 1,858 956 Cloud & AI 3,138 1,465 Corporate -88 -34 Investments Total segment earnings from 4,908 2,387 operations Unallocated corporate costs -324 -217 and eliminations Stock-based compensation -599 -447 expense Amortization of -949 -201 intangible assets Impairment charges — -1,361 Gain on sale of a — 245 business H3C divestiture related severance — -97 costs Cost reduction -84 -148 program Acquisition, disposition and -342 -345 other charges(2) Interest and -202 86 other, net(1) Gain on sale of 444 — equity interest Earnings from 42 74 equity interests Total pretax $ 2,894 $ -24 earnings (loss)
HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIAR… Calculati… of Diluted Net For the Earnings three Per Share months July 31, April 30, July 31, (Unaudite… ended 2026 2026 2025 ────────────────────────────────────────────────────────────────────────────── In millions, except per share amounts Numerator: GAAP net earnings attributa… $ 1,511 $ 595 $ 276 to common stockhold… - Basic Plus: 7.625% Series C mandatory 29 29 29 convertib… preferred stock dividends GAAP net earnings attributa… $ 1,540 $ 624 $ 305 to HPE - Diluted Non-GAAP net earnings attributa… $ 1,581 $ 1,107 $ 602 to common stockhold… - Basic Plus: 7.625% Series C mandatory 29 29 29 convertib… preferred stock dividends Non-GAAP net earnings attributa… $ 1,610 $ 1,136 $ 631 to HPE - Diluted Denominat… Weighted-… shares used to 1,336 1,335 1,325 compute basic net EPS Dilutive effect of employee 37 21 16 stock plans(6) Dilutive effect of 7.625% Series C 76 76 80 mandatory convertib… preferred stock(6) Weighted-… shares used to 1,449 1,432 1,421 compute diluted net EPS GAAP Net EPS Basic $ 1.13 $ 0.45 $ 0.21 Diluted $ 1.06 $ 0.44 $ 0.21 Non-GAAP Net EPS Basic $ 1.18 $ 0.83 $ 0.45 Diluted(4) $ 1.11 $ 0.79 $ 0.44
For the nine months ended July 31, 2026 July 31, 2025 ────────────────────────────────────────────────────────────────────────────── In millions, except per share amounts Numerator: GAAP net earnings (losses) attributable $ 2,529 $ -205 to common stockholders - Basic Plus: 7.625% Series C mandatory convertible 87 — preferred stock dividends GAAP net earnings (losses) $ 2,616 $ -205 attributable to HPE - Diluted Non-GAAP net earnings attributable to $ 3,589 $ 1,773 common stockholders - Basic Plus: 7.625% Series C mandatory convertible 87 87 preferred stock dividends Non-GAAP net earnings $ 3,676 $ 1,860 attributable to HPE - Diluted Denominator: Weighted-average shares used to 1,335 1,321 compute basic net EPS Dilutive effect of employee stock 30 — plans(7) Dilutive effect of 7.625% Series C mandatory 76 — convertible preferred stock(7) Weighted-average shares used to 1,441 1,321 compute diluted net EPS Denominator (Non-GAAP): Weighted-average shares used to 1,335 1,321 compute basic net EPS Dilutive effect of employee stock 30 14 plans(7) Dilutive effect of 7.625% Series C mandatory 76 78 convertible preferred stock(7) Weighted-average shares used to 1,441 1,413 compute diluted net EPS GAAP Net EPS Basic $ 1.89 $ -0.16 Diluted $ 1.82 $ -0.16 Non-GAAP Net EPS Basic $ 2.69 $ 1.34 Diluted(4) $ 2.55 $ 1.32
(1) Interest and other, net includes tax indemnification and other adjustments, non-service net periodic benefit credit, and interest and other, net. The three and nine months ended July 31, 2025, include a $52 million litigation settlement which HPE received in the third quarter of fiscal 2025.
(2) For the nine months ended July 31, 2026 and 2025, and for the three months ended July 31, 2025, Acquisition, disposition and other charges include non-cash amortization of fair value adjustment for inventory in connection with the acquisition of Juniper Networks, which was recorded in cost of sales.
(3) Other adjustments includes non-service net periodic benefit credit and tax indemnification and other adjustments.
(4) For purposes of calculating diluted net EPS, the preferred stock dividends are added back to the net earnings attributable to common stockholders and the diluted weighted average share calculation assumes the preferred stock was converted at issuance or as of the beginning of the reporting period.
(5) Effective at the beginning of the first quarter of fiscal 2026, HPE implemented an organizational change by (i) merging the Server, Hybrid Cloud, and Financial Services business segments into a new segment named Cloud & AI and (ii) transferring the Telco and Instant On businesses to Corporate Investments and Other from Networking. The Company reflected these changes to its segment information retrospectively. These changes had no impact on Hewlett Packard Enterprise’s previously reported consolidated net revenue, net earnings, net earnings per share or total assets.
(6) The impact of dilutive effect of employee stock plans is calculated under the treasury stock method, and the impact of dilutive effect of the preferred stock is calculated under the if-converted method. For the nine months ended July 31, 2025, the effect of employee stock plans and preferred stock is excluded as it would be anti-dilutive.
(7) For the nine months ended July 31, 2025, the diluted net EPS adjustment includes the impact to Non-GAAP net earnings attributable to HPE for the dilutive effect of preferred stock.
To supplement Hewlett Packard Enterprise’s condensed consolidated financial statement information presented on a GAAP basis, Hewlett Packard Enterprise provides non-GAAP financial measures, non-GAAP gross profit, non-GAAP gross profit margin, non-GAAP operating profit (non-GAAP earnings from operations), non-GAAP operating profit margin (non-GAAP earnings from operations as a percentage of net revenue), non-GAAP income tax rate, non-GAAP net earnings attributable to HPE, non-GAAP net earnings attributable to common stockholders, non-GAAP diluted net earnings per share attributable to common stockholders, and FCF. Hewlett Packard Enterprise also provides, non-GAAP diluted net earnings per share, non-GAAP operating profit growth, and FCF.
These non-GAAP financial measures are not computed in accordance with, or as an alternative to, GAAP in the United States. The GAAP measure most directly comparable to non-GAAP gross profit is gross profit. The GAAP measure most directly comparable to non-GAAP gross profit margin is gross profit margin. The GAAP measure most directly comparable to non-GAAP operating profit (non-GAAP earnings from operations) is earnings from operations. The GAAP measure most directly comparable to non-GAAP operating profit margin (non-GAAP earnings from operations as a percentage of net revenue) is operating profit margin (earnings from operations as a percentage of net revenue). The GAAP measure most directly comparable to non-GAAP income tax rate is income tax rate. The GAAP measure most directly comparable to non-GAAP net earnings attributable to HPE and non-GAAP net earnings attributable to common stockholders is net earnings. The GAAP measure most directly comparable to non-GAAP diluted net earnings per share attributable to common stockholders is diluted net earnings per share attributable to common stockholders. The GAAP measure most directly comparable to FCF is cash flow from operations. Reconciliations of each of these non-GAAP financial measures to their most directly comparable GAAP measures for this quarter and prior periods are included in the tables above or elsewhere in the materials accompanying this news release.
Hewlett Packard Enterprise believes that providing the non-GAAP financial measures stated above, in addition to the related GAAP measures provides investors with greater transparency to the information used by Hewlett Packard Enterprise’s management in its financial and operational decision making and allows investors to see Hewlett Packard Enterprise’s results “through the eyes” of management. Hewlett Packard Enterprise further believes that providing this information provides Hewlett Packard Enterprise’s investors with a supplemental view to understand the Company’s historical and prospective operating performance and to evaluate the efficacy of the methodology and information used by Hewlett Packard Enterprise’s management to evaluate and measure such performance. Disclosure of these non-GAAP financial measures also facilitates the comparisons of Hewlett Packard Enterprise’s operating performance with the performance of other companies in the same industry that supplement their GAAP results with non-GAAP financial measures that may be calculated in a similar manner.
Economic substance of and material limitations associated with non-GAAP financial measures used by Hewlett Packard Enterprise
Non-GAAP gross profit and non-GAAP gross profit margin are defined to exclude charges related to the stock-based compensation expense, acquisition, disposition and other charges, severance costs associated with the cost reduction program, and H3C divestiture related severance costs. Non-GAAP operating profit (non-GAAP earnings from operations) and non-GAAP operating profit margin (non-GAAP earnings from operations as a percentage of net revenue) consist of earnings from operations or earnings from operations as a percentage of net revenue excluding the items mentioned above and charges relating to the amortization of intangible assets, and impairment charges. Non-GAAP net earnings, Non-GAAP net earnings attributable to HPE, non-GAAP net earnings attributable to common stockholders, and non-GAAP diluted net earnings per share attributable to common stockholders consist of net earnings or diluted net earnings per share excluding the charges previously stated, as well as gain on sale of a business, gain on sale of equity interest, adjustments for equity interests, gain or loss on equity investments, litigation judgments, other adjustments, and adjustments for taxes. Non-GAAP net earnings attributable to HPE and non-GAAP diluted net earnings per share attributable to common stockholders includes preferred stock dividends added back to non-GAAP net earnings attributable to HPE. The Adjustments for taxes line item includes certain income tax valuation allowances and separation taxes, the impact of tax reform, structural rate adjustment, excess tax benefit from stock-based compensation, and adjustments for additional taxes or tax benefits associated with each non-GAAP item.
Hewlett Packard Enterprise believes that excluding the items mentioned above from the non-GAAP financial measures provides a supplemental view to management and investors of its consolidated financial performance and presents the financial results of the business without costs that Hewlett Packard Enterprise’s management does not believe to be reflective of ongoing operating results. Exclusion of these items can have a material impact on the equivalent GAAP measure and cash flows thus limiting their use as analytical tools. These limitations are discussed below or elsewhere in the materials
accompanying this news release. More specifically, Hewlett Packard Enterprise’s management excludes each of those items mentioned above for the following reasons:
• Stock-based compensation expense consists of equity awards granted based on the estimated fair value of those awards at grant date. Although stock-based compensation is a key incentive offered to employees, HPE excludes these charges for the purpose of calculating these non-GAAP measures, primarily because they are non-cash expenses, and the Company’s internal benchmarking analyses evidence that many industry participants and peers present non-GAAP financial measures excluding stock-based compensation expense.
• HPE incurred costs related to its acquisition, disposition and other charges. Charges include expenses associated with acquisitions, non-cash amortization of fair value adjustment for inventory in connection with the Merger, exit costs associated with disposal activities, transformation costs (credits), and disaster (recovery) charges. HPE excludes these costs because the Company considers these charges to be discrete events and does not believe they are reflective of normal continuing business operations. Acquisition charges were driven by costs associated with the Merger and miscellaneous disposition related charges.
• HPE incurred severance and other charges pursuant to cost management initiatives. HPE excludes these charges because management does not believe they are reflective of normal continuing business operations. HPE believes eliminating these adjustments for the purposes of calculating non-GAAP measures facilitates the evaluation of its current operating performance.
• HPE incurred H3C divestiture related severance costs in connection with the disposition of issued share capital of H3C held by HPE. The divestiture resulted in decreased future investment earnings and cash dividend inflows resulting in a decision to implement offsetting cost savings measures. These measures include severance for certain of the Company’s employees. The non-GAAP adjustment represents our costs to execute these related exit actions to offset the loss in equity earnings and related cash flows.
• HPE incurs charges relating to the amortization of intangible assets and excludes these charges for purposes of calculating these non-GAAP measures. Such charges are significantly impacted by the timing and magnitude of the Company’s acquisitions. HPE excludes these charges for the purpose of calculating these non-GAAP measures, primarily because they are non-cash expenses and the Company’s internal benchmarking analyses evidence that many industry participants and peers present non-GAAP financial measures excluding intangible asset amortization. Although this does not directly affect HPE’s cash position, the loss in value of intangible assets over time can have a material impact on the equivalent GAAP earnings measure.
• In fiscal 2025, HPE recorded non-cash impairment charges for the goodwill associated with its Cloud & AI (excluding Financial Services) reporting unit and the impairment of certain fixed assets. HPE believes that these non-cash charges do not reflect the Company’s operating results and is not indicative of the underlying performance of the business. HPE excludes these charges for purposes of calculating these non-GAAP measures to facilitate the evaluation of the Company’s current operating performance and comparisons to past operating results. Although this does not directly affect the Company’s cash position, the loss in value of goodwill over time can have a material impact on the equivalent GAAP earnings measure.
• Gain on sale of a business represents the gain associated with certain disposal activities. On December 1, 2024, HPE completed the disposition of the Company’s Communication Technology Group which resulted in a gain of $248 million. The Company’s management considers this divestiture to be a discrete event and believes eliminating this adjustment for the purposes of calculating non-GAAP measures facilitates the evaluation of its current operating performance.
• Beginning in fiscal 2026, HPE stopped reporting H3C earnings in our non-GAAP results due to the divestiture of our H3C investment. 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. The Company believes that eliminating these amounts for purposes of calculating non-GAAP financial measures facilitates the evaluation of its current operating performance.
• HPE excludes gains and losses (including impairments) on its non-marketable equity investments because the Company does not believe they are reflective of normal continuing business operations. These adjustments are reflected in Interest and other, net in the Condensed Consolidated Statements of Earnings. The Company believes eliminating these adjustments for the purposes of calculating non-GAAP measures facilitates the evaluation of its current operating performance.
• Hewlett Packard Enterprise utilizes a structural long-term projected non-GAAP income tax rate in order to provide consistency across the interim reporting periods and to eliminate the effects of items not directly related to the Company’s operating structure that can vary in size, frequency and timing. When projecting this long-term rate, HPE evaluated a three-year financial projection. The projected rate assumes no incremental acquisitions in the three-year projection period and considers other factors including the Company’s expected tax structure, its tax positions in
various jurisdictions and current impacts from key legislation implemented in major jurisdictions where HPE operates. For fiscal 2026, HPE will use a projected non-GAAP income tax rate of 14%, which reflects currently available information as well as other factors and assumptions. For fiscal 2025, HPE used a projected non-GAAP income tax rate of 15%. The non-GAAP income tax rate could be subject to change for a variety of reasons, including the rapidly evolving global tax environment, significant changes in the Company’s geographic earnings mix including due to acquisition activity, or other changes to the Company’s strategy or business operations. HPE will re-evaluate its long-term rate as appropriate. HPE believes that making these adjustments for purposes of calculating non-GAAP measures, facilitates a supplemental evaluation of the Company’s current operating performance and comparisons to past operating results.
• FCF is defined as cash flow from operations, less net capital expenditures (investments in property, plant & equipment (“PP&E”) and software assets less proceeds from the sale of PP&E), and adjusted for the effect of exchange rate fluctuations on cash, cash equivalents, and restricted cash. FCF does not represent the total increase or decrease in cash for the period. Hewlett Packard Enterprise’s management and investors can use FCF for the purpose of determining the amount of cash available for investment in the Company’s businesses, repurchasing stock and other purposes as well as evaluating its historical and prospective liquidity.
These non-GAAP financial measures have limitations as analytical tools, and these measures should not be considered in isolation or as a substitute for analysis of Hewlett Packard Enterprise’s results as reported under GAAP. Some of the limitations in relying on these non-GAAP financial measures are that they can have a material impact on the equivalent GAAP earnings measures and cash flows, they may be calculated differently by other companies (limiting the usefulness of those measures for comparative purposes) and may not reflect the full economic effect of the loss in value of certain assets. Hewlett Packard Enterprise compensates for these limitations on the use of non-GAAP financial measures by relying primarily on its GAAP results and using non-GAAP financial measures only as a supplement. Hewlett Packard Enterprise also provides a reconciliation of each non-GAAP financial measure to its most directly comparable GAAP financial measure for this quarter and prior periods within this news release and in other written materials that include these non-GAAP financial measures, and Hewlett Packard Enterprise encourages investors to review those reconciliations carefully.
Full text with the tables
Exhibit 99.1
HPE
1701 E. Mossy Oaks Road
Spring, TX 77389-1767
hpe.com
News Release
HPE reports fiscal 2026 third quarter results
Record results and demand drive higher outlook for fiscal 2026 and fiscal
2027
-Record revenue of $12.2 billion, up 34% year-over-year
-Record operating profit, with GAAP OP up 464% and non-GAAP OP up 155%
year-over-year
HOUSTON
–
September 2, 2026
– HPE (NYSE: HPE) today announced financial results for the third quarter ended
July 31, 2026.
“HPE’s strategy is proving itself again this quarter. Our results demonstrate
the durability of our profitable growth momentum. We delivered record revenue,
orders, and profitability, fueled by surging customer demand across our
portfolio,” said Antonio Neri, president and CEO of HPE. “AI is becoming a
multi-year growth driver for HPE, and our differentiated portfolio positions us
to capture that opportunity at scale.”
“Our outstanding revenue performance and expanded profitability in the third
quarter reflect robust demand across our portfolio and consistent, disciplined
execution,” said Marie Myers, executive vice president and CFO of HPE. “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.”
Third Quarter Fiscal 2026 Financial Results
•
Revenue
: $12.2 billion, up 34% from the prior-year period
•
Gross margins
:
◦ GAAP of 40.1%, up 1,090 basis points from the prior-year period and up 360
basis points sequentially
◦ Non-GAAP (1) of 40.4%, up 1,050 basis points from the prior-year period and up
350 basis points sequentially
• Operating profit margins:
◦ GAAP of 11.4%, up 870 basis points from the prior-year period and up 440 basis
points sequentially
◦ Non-GAAP (1) of 16.2%, up 770 basis points from the prior-year period and up
290 basis points sequentially
•
Diluted net earnings per share (“EPS”)
:
◦ GAAP of $1.06, up $0.85 from the prior-year period and above our outlook range
of $0.84 - $0.89
◦ Non-GAAP (1) of $1.11, up $0.67 from the prior-year period and above our
outlook range of $0.88 - $0.93
•
Cash flow from operations
: $1.6 billion, an increase of $0.3 billion from the prior-year period
•
Free cash flow
(1)(2) : $1.0 billion, an increase of $0.2 billion from the prior-year period
• Capital returns to common shareholders: $324 million in the form of dividends
and share repurchases
Third Quarter Fiscal 2026 Segment Results
•
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.
◦ Within Networking, revenue from:
▪ Campus & Branch was $1.4 billion, up 31.0% from the prior-year period.
▪ Data Center Networking was $382 million, up 112.2% from the prior-year period.
▪ Security was $281 million, up 75.6% from the prior-year period.
▪ Routing was $788 million, up 270.0% from the prior-year period.
•
Cloud & AI
revenue was $9.0 billion, up 25.4% from the prior-year period, with 17.0%
operating profit margin, compared to 7.0% from the prior-year period.
◦ Within Cloud & AI, revenue from:
▪ Server was $6.8 billion, up 35.3% from the prior-year period.
▪ Storage was $1.3 billion, up 10.2% from the prior-year period.
▪ Financial Services was $0.9 billion, down 0.3% from the prior-year period.
•
Corporate Investments and Other
revenue was $278 million, up 3.0% from the prior-year period, with -24.1% of
operating profit margin, compared to -7.0% from the prior-year period.
Dividend
The HPE Board of Directors declared a regular cash dividend of $0.1425 per share
on the company’s common stock, payable on or about October 16, 2026, to
stockholders of record as of the close of business on September 17, 2026.
Fiscal 2026 Fourth Quarter Outlook
HPE estimates revenue to be in the range of $13.9 billion to $14.8 billion. HPE
estimates GAAP diluted net EPS to be in the range of $1.12 to $1.22 and non-GAAP
diluted net EPS (1) to be in the range of $1.20 to $1.30. Fiscal 2026 fourth
quarter non-GAAP diluted net EPS estimate excludes net after-tax
adjustments of approximately $0.08 per diluted share, primarily related to
amortization of intangible assets, stock-based compensation expense,
acquisition, disposition and other charges, and cost reduction program.
Fiscal 2026 Full Year Outlook
HPE is raising its FY26 revenue growth outlook range to 34% to 37%. HPE is
raising revenue growth expectations for the Networking segment to 73% to 74%.
HPE estimates GAAP operating profit growth range to be 1,070% to 1,105% and non-
GAAP operating profit growth range between 100% to 105% (1)(3) .
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. Fiscal
2026 non-GAAP diluted net EPS estimate excludes net after-tax adjustments of
approximately $0.82 per diluted share, primarily related to amortization of
intangible assets, stock-based compensation expense, acquisition, disposition
and other charges, cost reduction program, and adjustments related to the sale
of H3C. HPE is also raising its free cash flow (1)(2)(4) guidance and now
expects free cash flow to be at least $3.75 billion.
Fiscal 2027 Outlook
Framework
The company is raising its growth framework for FY27. HPE is raising its revenue
growth outlook range to 13% to 17%. HPE is raising expectations for non-GAAP
diluted net EPS growth to be in the range of 16% to 20% (1)(4) . HPE estimates
non-GAAP operating margin rate to be in the range of 14% to 15% (1)(4) . HPE is
also raising its free cash flow guidance and now expects free cash flow to be at
least $5.0 billion (1)(2)(4) .
1 A description of HPE’s use of non-GAAP financial information is provided below
under “Use of non-GAAP financial information and key performance metrics.”
2 Free cash flow represents cash flow from operations, less net capital
expenditures (investments in property, plant & equipment (“PP&E”) and software
assets less proceeds from the sale of PP&E), and adjusted for the effect of
exchange rate fluctuations on cash, cash equivalents, and restricted cash.
3 FY26 non-GAAP operating profit excludes costs of approximately $2.5 billion
primarily related to amortization of intangible assets, stock-based compensation
expense, acquisition, disposition and other charges, and cost reduction program.
4 HPE provides certain guidance on a non-GAAP basis. In reliance on the
exception provided by Item 10(e)(1)(i)(B) of Regulation S-K, Hewlett Packard
Enterprise is unable to provide a reconciliation to the most directly comparable
GAAP financial measure without unreasonable efforts, as the Company cannot
predict some elements that are included in such directly comparable GAAP
financial measure. These elements could have a material impact on the Company’s
reported GAAP results for the guidance period. Refer to the discussion of non-
GAAP financial measures below for more information.
About HPE
HPE (NYSE: HPE) is a leader in essential enterprise technology, bringing
together the power of AI, cloud, and networking to help organizations achieve
more. As pioneers of possibility, our innovation and expertise advance the way
people live and work. We empower our customers across industries to
optimize operational performance, transform data into foresight, and maximize
their impact. Unlock your boldest ambitions with HPE. Discover more at
www.hpe.com.
Media Contact:
Laura Keller
Laura.Keller@hpe.com
Investor Contact:
Shannon Cross
investor.relations@hpe.com
Use of non-GAAP financial information and key performance metrics
To supplement Hewlett Packard Enterprise’s condensed consolidated financial
statement information presented on a generally accepted accounting principles
(“GAAP”) basis, Hewlett Packard Enterprise provides financial measures, non-GAAP
gross profit, non-GAAP gross profit margin, non-GAAP operating profit (non-GAAP
earnings from operations), non-GAAP operating profit margin (non-GAAP earnings
from operations as a percentage of net revenue), non-GAAP income tax rate, non-
GAAP net earnings attributable to HPE and non-GAAP net earnings attributable to
common stockholders, non-GAAP diluted net earnings per share attributable to
common stockholders, and free cash flow (“FCF”). Hewlett Packard Enterprise also
provides forecasts of non-GAAP operating profit growth, non-GAAP diluted net
earnings per share, and FCF. Reconciliations of each of these non-GAAP financial
measures to their most directly comparable GAAP measures for this quarter and
prior periods are included in the tables below or elsewhere in the materials
accompanying this news release. In addition an explanation of the ways in which
Hewlett Packard Enterprise’s management uses these non-GAAP measures to evaluate
its business, the substance behind Hewlett Packard Enterprise’s decision to use
these non-GAAP measures, the material limitations associated with the use of
these non-GAAP measures, the manner in which Hewlett Packard Enterprise’s
management compensates for those limitations, and the substantive reasons why
Hewlett Packard Enterprise’s management believes that these non-GAAP measures
provide supplemental useful information to investors is included further below.
This additional non-GAAP financial information is not meant to be considered in
isolation or as a substitute for revenue, gross profit, gross profit margin,
operating profit (earnings from operations), operating profit margin (earnings
from operations as a percentage of net revenue), net earnings, diluted net
earnings (loss) per share (“EPS”), and cash flow from operations prepared in
accordance with GAAP.
Forward-looking statements
This press release contains forward-looking statements within the meaning of the
safe harbor provisions of the Private Securities Litigation Reform Act of 1995.
Such statements involve risks, uncertainties, and assumptions. If the risks or
uncertainties ever materialize or the assumptions prove incorrect, the results
of Hewlett Packard Enterprise Company and its consolidated subsidiaries
(“Hewlett Packard Enterprise”) may differ materially from those expressed or
implied by such forward-looking statements and assumptions. The words “believe”,
“expect”, “anticipate”, “guide”, “optimistic”, “intend”, “aim”, “will”,
“estimates”, “may”, “likely”, “could”, “should” and similar expressions are
intended to identify such forward-looking statements. All statements other than
statements of historical fact are statements that could be deemed forward-
looking statements, including but not limited to any statements regarding the
ongoing integration of Juniper Networks, Inc., and any projections, estimates,
or expectations of savings or synergy realizations in connection therewith; any
projections, estimations, or expectations of addressable markets and their
sizes, revenue (including annualized revenue run-rate), margins, expenses
(including stock-based compensation expenses), investments, effective tax rates,
interest rates, the impact of tax law changes and related guidance and
regulations, the impact of changes in trade policies and restrictions and the
uncertainty created thereby, component costs, commodity shortage, net earnings,
net earnings per share, cash flows, liquidity and capital resources, inventory,
goodwill, impairment charges, hedges and derivatives and related offsets, order
backlog, benefit plan funding, deferred tax assets, share repurchases, currency
exchange rates, repayments of debts including our asset-backed debt securities,
or other financial items; recent amendments to accounting guidance and any
potential impacts on our financial reporting therefrom; any projections or
estimations of orders; any projections of the amount, timing, or impact of cost
saving actions and anticipated benefits to be realized if any; any statements of
the plans, strategies, and objectives of management for future operations, as
well as the execution and consummation of corporate transactions or contemplated
acquisitions and dispositions, research and development expenditures, and any
resulting benefits, cost savings, charges, or revenue or profitability
improvements; any statements concerning the expected development, performance,
market share, or competitive performance relating to products or services; any
statements concerning technological and market trends, the pace of technological
innovation, and adoption of new technologies, including quantum- and artificial
intelligence-related developments and any impacts of such developments on
products and services offered by Hewlett Packard Enterprise; any statements
regarding current or future macroeconomic trends or events and the impacts of
those trends and events on Hewlett Packard Enterprise and our financial
performance, including but not limited to supply chain dynamics (including but
not limited to worldwide component availability), uncertain global trade
policies and/or restrictions, and demand for our products and services, and our
actions to mitigate such impacts to our business; the scope and duration of
geopolitical tensions, including but not limited to the ongoing conflict between
Russia and Ukraine, instability and conflicts in the Middle East, and the
relationship between China and the U.S., and our actions in response thereto,
and their impacts on our business, operations, liquidity and capital resources,
employees, customers, partners, supply chain, financial results, and the world
economy; any statements regarding future regulatory trends and the resulting
legal and reputational exposure, including but not limited to those relating to
environmental, social, governance, cybersecurity, data privacy, and artificial
intelligence issues, among others; any statements regarding pending litigation,
investigations, claims, or disputes; any statements of expectation or belief,
including those relating to future guidance and the financial performance of
Hewlett Packard Enterprise; and any statements of assumptions underlying any of
the foregoing.
Risks, uncertainties, and assumptions include the need to address the many
challenges facing Hewlett Packard Enterprise’s businesses; the competitive
pressures faced by Hewlett Packard Enterprise’s businesses; risks associated
with executing Hewlett Packard Enterprise’s strategy; the impact of
macroeconomic and geopolitical trends and events, including but not limited to
those mentioned above; the need to effectively manage third-party suppliers and
distribute Hewlett Packard Enterprise's products and services; the protection of
Hewlett Packard Enterprise's intellectual property assets, including
intellectual property licensed from third parties and intellectual property
shared with its former parent; risks associated with Hewlett Packard
Enterprise's international operations (including from geopolitical events and
macroeconomic uncertainties); the development of and transition to new products
and services and the enhancement of existing products and services to meet
customer needs and respond to emerging technological trends; the execution of
Hewlett Packard Enterprise’s ongoing transformation and mix shift of its
portfolio of offerings; the execution and performance of contracts by Hewlett
Packard Enterprise and its suppliers, customers, clients, and partners,
including any impact thereon resulting from macroeconomic or geopolitical
events, including inflation and rising commodity costs; the prospect of a
shutdown of the U.S. federal government; the hiring and retention of key
employees; the execution, integration, consummation, and other risks associated
with business combination, disposition, and investment transactions, including
but not limited to successful integration of Juniper Networks, Inc., including
our ability to integrate and implement our plans and forecasts and realize our
anticipated financial and operational benefits with respect to the consolidated
business; the execution, timing, and results of any cost reduction actions,
including estimates and assumptions related to the costs and anticipated
benefits of implementing such actions; the impact of changes to privacy,
cybersecurity, environmental, global trade, and other governmental regulations;
changes in our product, lease, intellectual property, or real estate portfolio;
the payment or non-payment of a dividend for any period; the efficacy of using
non-GAAP, rather than GAAP, financial measures in business projections and
planning; the judgments required in connection with determining certain
financial metrics; utility of segment realignments; allowances for recovery of
receivables and warranty obligations; provisions for, and resolution of, pending
litigation investigations, claims, and disputes; the impacts of tax law changes
and related guidance or regulations; and other risks that are described herein,
including but not limited to the items discussed in “Risk Factors” in Item 1A of
Part I of the Annual Report on Form 10-K for the fiscal year ended October 31,
2025 and that are otherwise described or updated from time to time in Hewlett
Packard Enterprise's subsequent Quarterly Reports on Form 10-Q, Current Reports
on Form 8-K, and in other filings made with the Securities and Exchange
Commission. Hewlett Packard Enterprise assumes no obligation and does not intend
to update these forward-looking statements, except as required by applicable
law.
As in prior periods, the financial information set forth in this press release,
including tax-related items, reflects estimates based on information available
at this time. While Hewlett Packard Enterprise believes these estimates to be
reasonable, these amounts could differ materially from reported amounts in the
filings made by Hewlett Packard Enterprise from time to time with the Securities
and Exchange Commission. Hewlett Packard Enterprise assumes no obligation and
does not intend to update these forward-looking statements, except as required
by applicable law.
HEWLETT
PACKARD
ENTERPRISE
COMPANY
AND
SUBSIDIAR…
Condensed
Consolida…
Statements For the
of three
Earnings months July 31, April 30, July 31,
(Unaudite… ended 2026 2026 2025
──────────────────────────────────────────────────────────────────────────────
In
millions,
except per
share
amounts
Net $ 12,213 $ 10,678 $ 9,136
revenue
Costs and
Expenses:
Cost of
sales
(exclusive
of 7,314 6,778 6,464
amortizat…
shown
separately
below)
Research
and 1,158 922 622
developme…
Selling,
general 1,962 1,830 1,496
and
administr…
Amortizat…
of 315 323 126
intangible
assets
Acquisiti…
dispositi… 71 78 181
and other
charges
Total
costs and 10,820 9,931 8,889
expenses
Earnings
from 1,393 747 247
operations
Interest
and other, -75 -73 8
net(1)
Gain on
sale of 444 — —
equity
interest
Gain on
sale of a — — 1
business
Earnings
from — 25 32
equity
interests
Earnings
before 1,762 699 288
provision
for taxes
(Provisio…
benefit -222 -75 17
for taxes
Net
earnings 1,540 624 305
attributa…
to HPE
Preferred
stock -29 -29 -29
dividends
Net
earnings
attributa… $ 1,511 $ 595 $ 276
to common
stockhold…
Net
Earnings
Per Share
Attributa…
to
Common
Stockhold…
Basic $ 1.13 $ 0.45 $ 0.21
Diluted 1.06 0.44 0.21
Cash
dividends 0.1425 0.1425 0.1300
declared
per share
Cash
dividends
accrued $ 0.9531 $ 0.9531 $ 0.9531
per
preferred
share
Weighted-…
Shares
Used to
Compute
Net
Earnings
Per Share:
Basic 1,336 1,335 1,325
Diluted 1,449 1,432 1,421
HEWLETT PACKARD
ENTERPRISE COMPANY
AND SUBSIDIARIES
Condensed
Consolidated
Statements of
Earnings For the nine months
(Unaudited) ended July 31, 2026 July 31, 2025
──────────────────────────────────────────────────────────────────────────────
In millions, except
per share amounts
Net revenue $ 32,192 $ 24,617
Costs and
Expenses:
Cost of sales
(exclusive of
amortization 20,053 17,481
shown separately
below)
Research and 2,824 1,637
development
Selling, general 5,490 4,062
and administrative
Amortization of 949 201
intangible assets
Impairment charges — 1,361
Acquisition,
disposition and 266 304
other
charges
Total costs and 29,582 25,046
expenses
Earnings (loss) 2,610 -429
from operations
Interest and -202 86
other, net(1)
Gain on sale of 444 —
equity interest
Gain on sale of a — 245
business
Earnings from 42 74
equity interests
Earnings (loss)
before provision 2,894 -24
for
taxes
Provision for -278 -94
taxes
Net earnings
(loss) 2,616 -118
attributable to
HPE
Preferred stock -87 -87
dividends
Net earnings
(loss)
attributable to $ 2,529 $ -205
common
stockholders
Net Earnings
(Loss) Per Share
Attributable to
Common
Stockholders:
Basic $ 1.89 $ -0.16
Diluted 1.82 -0.16
Cash dividends 0.4275 0.3900
declared per share
Cash dividends
accrued per $ 2.8594 $ 2.8594
preferred
share
Weighted-average
Shares Used to
Compute
Net Earnings
(Loss) Per Share:
Basic 1,335 1,321
Diluted 1,441 1,321
HEWLETT
PACKARD
ENTERPRI…
COMPANY
AND
SUBSIDIA…
Reconcil…
of GAAP
to For the
Non-GAAP three
measures months July 31, April 30, July 31,
(Unaudit… ended 2026 2026 2025
──────────────────────────────────────────────────────────────────────────────
Dollars
in
millions
GAAP net $ 12,213 $ 10,678 $ 9,136
revenue
GAAP cost 7,314 6,778 6,464
of sales
GAAP
gross 4,899 3,900 2,672
profit
Non-GAAP
Adjustme…
Stock-ba…
compensa… 18 23 10
expense
Acquisit…
disposit… -3 6 50
and other
charges(…
Cost
reduction 14 8 —
program
Non-GAAP
gross $ 4,928 $ 3,937 $ 2,732
profit
GAAP
gross 40.1 % 36.5 % 29.2 %
profit
margin
Non-GAAP 0.3 % 0.4 % 0.7 %
adjustme…
Non-GAAP
gross 40.4 % 36.9 % 29.9 %
profit
margin
For the nine
months ended July 31, 2026 July 31, 2025
──────────────────────────────────────────────────────────────────────────────
Dollars in
millions
GAAP net $ 32,192 $ 24,617
revenue
GAAP cost of 20,053 17,481
sales
GAAP gross 12,139 7,136
profit
Non-GAAP
Adjustments
Stock-based
compensation 65 40
expense
Acquisition,
disposition and 37 47
other
charges(2)
Cost reduction 27 46
program
H3C divestiture
related — 17
severance costs
Non-GAAP gross $ 12,268 $ 7,286
profit
GAAP gross 37.7 % 29.0 %
profit margin
Non-GAAP 0.4 % 0.6 %
adjustments
Non-GAAP gross 38.1 % 29.6 %
profit margin
For the
three
months July 31, April 30, July 31,
ended 2026 2026 2025
──────────────────────────────────────────────────────────────────────────────
Dollars
in
millions
GAAP
earnings $ 1,393 $ 747 $ 247
from
operatio…
Non-GAAP
Adjustme…
Amortiza…
of 315 323 126
intangib…
assets
Stock-ba…
compensa… 165 218 177
expense
Cost
reduction 31 30 2
program
Acquisit…
disposit… 75 105 225
and other
charges(…
Non-GAAP
earnings $ 1,979 $ 1,423 $ 777
from
operatio…
GAAP
operating 11.4 % 7.0 % 2.7 %
profit
margin
Non-GAAP 4.8 % 6.3 % 5.8 %
adjustme…
Non-GAAP
operating 16.2 % 13.3 % 8.5 %
profit
margin
For the nine
months ended July 31, 2026 July 31, 2025
──────────────────────────────────────────────────────────────────────────────
Dollars in
millions
GAAP earnings
(loss) from $ 2,610 $ -429
operations
Non-GAAP
Adjustments
Amortization
of intangible 949 201
assets
Impairment — 1,361
charges
Stock-based
compensation 599 447
expense
H3C
divestiture
related — 97
severance
costs
Cost reduction 84 148
program
Acquisition,
disposition 342 345
and other
charges(2)
Non-GAAP
earnings from $ 4,584 $ 2,170
operations
GAAP operating 8.1 % (1.7 %)
profit margin
Non-GAAP 6.1 % 10.5 %
adjustments
Non-GAAP
operating 14.2 % 8.8 %
profit margin
HEW…
PAC…
ENT…
COM…
AND
SUB…
Rec…
of
GAAP For
to the
Non… thr… July Dil… April Dil… July Dil…
mea… mon… 31, Net 30, Net 31, Net
(Un… end… 2026 EPS 2026 EPS 2025 EPS
──────────────────────────────────────────────────────────────────────────────
Dol…
in
mil…
exc…
per
sha…
amo…
GAAP
net
ear…
att… $ 1,511 $ 595 $ 276
to
com…
sto…
Pre…
sto… 29 29 29
div…
GAAP
net
ear… $ 1,540 $ 1.06 $ 624 $ 0.44 $ 305 $ 0.21
att…
to
HPE
Non…
adj…
Amo…
of 315 0.22 323 0.23 126 0.09
int…
ass…
Sto…
com… 165 0.11 218 0.15 177 0.12
exp…
Gain
on
sale — — — — -1 —
of a
bus…
Cost
red… 31 0.02 30 0.02 2 —
pro…
Acq…
dis…
and 75 0.05 105 0.08 225 0.17
oth…
cha…
Gain
on
sale -444 -0.… — — — —
of
equ…
int…
Adj…
for — — -25 -0.… — —
equ…
int…
Lit… — — — — -52 -0.…
jud…
Loss
on
equ… — — 3 — 1 —
inv…
net
Adj…
for -40 -0.… -110 -0.… -128 -0.…
tax…
Oth… -32 -0.… -32 -0.… -24 -0.…
adj…
Non…
net
ear… 1,610 $ 1.11 1,136 $ 0.79 631 $ 0.44
att…
to
HPE…
Pre…
sto… -29 -29 -29
div…
Non…
net
ear…
att… $ 1,581 $ 1,107 $ 602
to
com…
sto…
For
the
nine
mont…
ended
July
31,
2026
Doll…
in
mill…
exce…
per Dilu… July Dilu…
share Net 31, Net
amou… EPS 2025 EPS(…
──────────────────────────────────────────────────────────────────────────────
GAAP
net
ear…
(lo… $ 2,529 $ -205 $ -0.16
att…
to
com…
sto…
Pre…
sto… 87 87
div…
GAAP
net
ear…
(lo… $ 2,616 $ 1.82 $ -118
att…
to
HPE
Non…
adj…
Amo…
of 949 0.66 201 0.15
int…
ass…
Imp… — — 1,361 1.03
cha…
Sto…
com… 599 0.42 447 0.34
exp…
Gain
on
sale — — -245 -0.19
of a
bus…
H3C
div…
rel… — — 97 0.07
sev…
cos…
Cost
red… 84 0.06 148 0.11
pro…
Acq…
dis…
and 342 0.24 345 0.26
oth…
cha…
Gain
on
sale -444 -0.31 — —
of
equ…
int…
Adj…
for -42 -0.03 — —
equ…
int…
Lit… — — -52 -0.04
jud…
Gain
on
equ… -11 -0.01 -8 —
inv…
net
Adj…
for -320 -0.23 -234 -0.19
tax…
Oth… -97 -0.07 -82 -0.06
adj…
Non…
net
ear… 3,676 $ 2.55 1,860 $ 1.32
att…
to
HPE…
Pre…
sto… -87 -87
div…
Non…
net
ear…
att… $ 3,589 $ 1,773
to
com…
sto…
For the
three
months July 31, April 30, July 31,
ended 2026 2026 2025
──────────────────────────────────────────────────────────────────────────────
In millions
Net cash
provided
by $ 1,641 $ 1,410 $ 1,305
operating
activities
Investment
in
property,
plant and -745 -583 -576
equipment
and
software
assets
Proceeds
from sale
of
property, 92 130 90
plant
and
equipment
Effect of
exchange
rate
changes on
cash, -30 -42 -29
cash
equivalen…
and
restricted
cash
Free cash $ 958 $ 915 $ 790
flow
For the nine months
ended July 31, 2026 July 31, 2025
──────────────────────────────────────────────────────────────────────────────
In millions
Net cash provided
by operating $ 4,229 $ 454
activities
Investment in
property, plant
and -1,897 -1,651
equipment and
software assets
Proceeds from sale
of property, plant 288 254
and equipment
Effect of exchange
rate changes on
cash, -39 9
cash equivalents,
and restricted
cash
Free cash flow $ 2,581 $ -934
HEWLETT PACKARD
ENTERPRISE COMPANY
AND SUBSIDIARIES
Condensed
Consolidated As of
Balance Sheets July 31, 2026 October 31, 2025
──────────────────────────────────────────────────────────────────────────────
-Unaudited -Audited
In millions,
except par value
ASSETS
Current assets:
Cash and cash $ 6,216 $ 5,773
equivalents
Accounts
receivable, net of 6,185 5,290
allowances
Financing
receivables, net 3,841 3,826
of allowances
Inventory 11,823 6,352
Other current 5,800 3,753
assets
Total current 33,865 24,994
assets
Property, plant 5,645 6,002
and equipment, net
Long-term
financing 14,632 13,817
receivables and
other assets
Investments in — 955
equity interests
Goodwill and 29,454 30,138
intangible assets
Total assets $ 83,596 $ 75,906
LIABILITIES AND
STOCKHOLDERS’
EQUITY
Current
liabilities:
Notes payable and
short-term $ 2,901 $ 4,609
borrowings
Accounts payable 13,734 7,731
Employee
compensation and 2,880 1,871
benefits
Deferred revenue 5,561 5,358
Other accrued 5,360 5,074
liabilities
Total current 30,436 24,643
liabilities
Long-term debt 17,343 17,756
Other non-current 9,241 8,753
liabilities
Commitments and
Contingencies
Stockholders'
Equity
HPE stockholders'
Equity:
7.625% Series C
mandatory
convertible
preferred stock,
$0.01 par value
(30 — —
shares issued and
outstanding as of
July
31, 2026 and
October 31, 2025,
respectively)
Common stock,
$0.01 par value
(9,600
shares authorized;
1,328 and 1,318
shares issued and 13 13
outstanding as of
July
31, 2026 and
October 31, 2025,
respectively)
Additional paid-in 30,151 30,234
capital
Accumulated -948 -2,811
deficit
Accumulated other -2,702 -2,748
comprehensive loss
Total HPE
stockholders' 26,514 24,688
equity
Non-controlling 62 66
interests
Total
stockholders' 26,576 24,754
equity
Total liabilities
and stockholders' $ 83,596 $ 75,906
equity
HEWLETT PACKARD
ENTERPRISE COMPANY
AND SUBSIDIARIES
Condensed
Consolidated
Statements of Cash
Flows For the nine months
(Unaudited) ended July 31, 2026 July 31, 2025
──────────────────────────────────────────────────────────────────────────────
In millions
Cash Flows from
Operating
Activities:
Net earnings
(loss) $ 2,616 $ -118
attributable to
HPE
Adjustments to
Reconcile Net
Earnings
(Loss)
Attributable to
HPE to Net Cash
Provided by
Operating
Activities:
Depreciation and 2,613 1,860
amortization
Impairment charges — 1,361
Stock-based
compensation 599 447
expense
Provision for
inventory and 477 339
credit
losses
Cost reduction 84 148
program
Deferred taxes on -313 -74
earnings
Earnings from -42 -74
equity interests
Gain on sale of a — -245
business
Gain on sale of -444 —
equity interest
Dividends received
from equity 100 —
investees
H3C divestiture
related severance — 97
costs
Amortization of
inventory fair 31 —
value
adjustment
Other, net 161 143
Changes in
Operating Assets
and
Liabilities, Net
of Acquisitions:
Accounts -997 -1,130
receivable
Financing -224 -3
receivables
Inventory -5,847 1,385
Accounts payable 5,870 -2,595
Other assets and -455 -1,087
liabilities
Net cash provided
by operating 4,229 454
activities
Cash Flows from
Investing
Activities:
Investment in
property, plant
and -1,897 -1,651
equipment and
software assets
Proceeds from sale
of property, plant 288 254
and equipment
Purchases of -5 -7
equity investments
Proceeds from sale
of
available-for-sale 10 47
securities and
other investments
Proceeds from
maturities and
redemptions — 48
of
available-for-sale
securities
Proceeds from sale 1,357 —
of equity interest
Financial -737 -755
collateral posted
Financial
collateral 789 518
received
Payments made in
connection with
business — -12,278
acquisitions, net
of cash
acquired
Proceeds from sale — 210
of a business
Net cash used in
investing -195 -13,614
activities
Cash Flows from
Financing
Activities:
Short-term
borrowings with
original 12 8
maturities less
than 90 days, net
Proceeds from
debt, net of 2,546 5,333
issuance
costs
Payment of debt -4,686 -1,663
Net payments
related to -338 -229
stock-based
award activities
Repurchases of -447 -102
common stock
Cash dividends
paid to preferred -87 -83
stockholders
Cash dividends
paid to common -568 -513
stockholders
Other -8 -8
Net cash (used in)
provided by -3,576 2,743
financing
activities
Effect of exchange
rate changes on
cash, -39 9
cash equivalents,
and restricted
cash
Change in cash,
cash equivalents 419 -10,408
and
restricted cash
Cash, cash
equivalents and
restricted 5,859 15,105
cash at beginning
of period
Cash, cash
equivalents and
restricted $ 6,278 $ 4,697
cash at end of
period
HEWLETT
PACKARD
ENTERPRISE
COMPANY
AND
SUBSIDIAR… For the
Segment three
Informati… months July 31, April 30, July 31,
(Unaudite… ended 2026 2026 2025
──────────────────────────────────────────────────────────────────────────────
In millions
Net
Revenue(5…
Networking $ 2,893 $ 2,690 $ 1,654
Cloud & AI 9,042 7,707 7,212
Corporate
Investmen… 278 281 270
and Other
Total
segment 12,213 10,678 9,136
net
revenue
Earnings
Before
Taxes(5):
Networking 637 581 365
Cloud & AI 1,539 954 504
Corporate -67 -9 -19
Investmen…
Total
segment
earnings 2,109 1,526 850
from
operations
Unallocat…
corporate -130 -103 -73
costs and
eliminati…
Stock-bas…
compensat… -165 -218 -177
expense
Amortizat…
of -315 -323 -126
intangible
assets
Gain on
sale of a — — 1
business
Cost
reduction -31 -30 -2
program
Acquisiti…
dispositi… -75 -105 -225
and other
charges(2)
Interest
and other, -75 -73 8
net(1)
Gain on
sale of 444 — —
equity
interest
Earnings
from — 25 32
equity
interests
Total
pretax $ 1,762 $ 699 $ 288
earnings
HEWLETT PACKARD
ENTERPRISE COMPANY
AND SUBSIDIARIES
Segment
Information For the nine months
(Unaudited) ended July 31, 2026 July 31, 2025
──────────────────────────────────────────────────────────────────────────────
In millions
Net Revenue(5):
Networking $ 8,289 $ 3,814
Cloud & AI 23,083 19,994
Corporate
Investments and 820 809
Other
Total segment net 32,192 24,617
revenue
Earnings Before
Taxes(5):
Networking 1,858 956
Cloud & AI 3,138 1,465
Corporate -88 -34
Investments
Total segment
earnings from 4,908 2,387
operations
Unallocated
corporate costs -324 -217
and
eliminations
Stock-based
compensation -599 -447
expense
Amortization of -949 -201
intangible assets
Impairment charges — -1,361
Gain on sale of a — 245
business
H3C divestiture
related severance — -97
costs
Cost reduction -84 -148
program
Acquisition,
disposition and -342 -345
other
charges(2)
Interest and -202 86
other, net(1)
Gain on sale of 444 —
equity interest
Earnings from 42 74
equity interests
Total pretax $ 2,894 $ -24
earnings (loss)
HEWL…
PACK… For
ENTE… the
COMP… three
AND months
SUBS… ended
Segm… July April July Chan…
Info… 31, 30, 31, (%)
(Una… 2026 2026 2025 Q/Q Y/Y
──────────────────────────────────────────────────────────────────────────────
Dolla…
in
milli…
Net
Reve…
Netw…
Camp…
& $ 1,442 $ 1,322 $ 1,101 9.1% 31.0%
Bran…
Data
Cent… 382 320 180 19.4 112.2
Netw…
Secu… 281 273 160 2.9 75.6
Rout… 788 775 213 1.7 270.0
Total 2,893 2,690 1,654 7.5 74.9
Cloud
&
AI(5)
Serv… 6,766 5,454 5,000 24.1 35.3
Stor… 1,291 1,175 1,171 9.9 10.2
Fina… 883 904 886 -2.3 -0.3
Serv…
Other 102 174 155 -41.4 -34.2
Total 9,042 7,707 7,212 17.3 25.4
Corp…
Inve… 278 281 270 -1.1 3.0
and
Other
Total
cons… $ 12,213 $ 10,678 $ 9,136 14.4% 33.7%
net
reve…
For the nine
months ended Change (%)
July 31, 2026 July 31, 2025 Y/Y
──────────────────────────────────────────────────────────────────────────────
Dollars in
millions
Net Revenue:
Networking(…
Campus & $ 3,991 $ 2,845 40.3%
Branch
Data Center 1,146 368 211.4
Networking
Security 809 386 109.6
Routing 2,343 215 989.8
Total 8,289 3,814 117.3
Cloud &
AI(5)
Server 16,452 13,457 22.3
Storage 3,527 3,374 4.5
Financial 2,663 2,615 1.8
Services
Other 441 548 -19.5
Total 23,083 19,994 15.4
Corporate
Investments 820 809 1.4
and Other
Total
consolidated $ 32,192 $ 24,617 30.8%
net revenue
H…
P…
E…
C…
A…
S…
S… Ch…
O… For in
M… the op…
S… th… Ju… Ap… Ju… pr…
D… mo… 31, 30, 31, ma…
(… en… 20… 20… 20… (p… Q/Q Y/Y
──────────────────────────────────────────────────────────────────────────────
S…
O…
P…
M…
N… 22… % 21… % 22… % 0.4 -0.1
C…
& 17… % 12… % 7.0 % 4.6 10.0
AI
C…
I… (2… %) (3… %) (7… %) -2… -17…
a…
O…
T…
s…
o… 17… % 14… % 9.3 % 3.0 8.0
p…
m…
Change
in
For the operati…
nine profit
months July 31, July 31, margin
ended 2026 2025 (pts) Y/Y
──────────────────────────────────────────────────────────────────────────────
Segment
Operat…
Profit
Margin:
Networ… 22.4 % 25.1 % -2.7
Cloud & 13.6 % 7.3 % 6.3
AI
Corpor…
Invest… (10.7 %) (4.2 %) -6.5
and
Other
Total
segment
operat… 15.2 % 9.7 % 5.5
profit
margin
HEWLETT
PACKARD
ENTERPRISE
COMPANY
AND
SUBSIDIAR…
Calculati…
of Diluted
Net For the
Earnings three
Per Share months July 31, April 30, July 31,
(Unaudite… ended 2026 2026 2025
──────────────────────────────────────────────────────────────────────────────
In
millions,
except per
share
amounts
Numerator:
GAAP net
earnings
attributa… $ 1,511 $ 595 $ 276
to common
stockhold…
- Basic
Plus:
7.625%
Series C
mandatory 29 29 29
convertib…
preferred
stock
dividends
GAAP net
earnings
attributa… $ 1,540 $ 624 $ 305
to HPE -
Diluted
Non-GAAP
net
earnings
attributa… $ 1,581 $ 1,107 $ 602
to
common
stockhold…
- Basic
Plus:
7.625%
Series C
mandatory 29 29 29
convertib…
preferred
stock
dividends
Non-GAAP
net
earnings
attributa… $ 1,610 $ 1,136 $ 631
to
HPE -
Diluted
Denominat…
Weighted-…
shares
used to 1,336 1,335 1,325
compute
basic net
EPS
Dilutive
effect of
employee 37 21 16
stock
plans(6)
Dilutive
effect of
7.625%
Series C 76 76 80
mandatory
convertib…
preferred
stock(6)
Weighted-…
shares
used to 1,449 1,432 1,421
compute
diluted
net EPS
GAAP Net
EPS
Basic $ 1.13 $ 0.45 $ 0.21
Diluted $ 1.06 $ 0.44 $ 0.21
Non-GAAP
Net EPS
Basic $ 1.18 $ 0.83 $ 0.45
Diluted(4) $ 1.11 $ 0.79 $ 0.44
For the nine months
ended July 31, 2026 July 31, 2025
──────────────────────────────────────────────────────────────────────────────
In millions, except
per share amounts
Numerator:
GAAP net earnings
(losses)
attributable $ 2,529 $ -205
to common
stockholders -
Basic
Plus: 7.625%
Series C mandatory
convertible 87 —
preferred stock
dividends
GAAP net earnings
(losses) $ 2,616 $ -205
attributable
to HPE - Diluted
Non-GAAP net
earnings
attributable to $ 3,589 $ 1,773
common
stockholders -
Basic
Plus: 7.625%
Series C mandatory
convertible 87 87
preferred stock
dividends
Non-GAAP net
earnings $ 3,676 $ 1,860
attributable to
HPE - Diluted
Denominator:
Weighted-average
shares used to 1,335 1,321
compute
basic net EPS
Dilutive effect of
employee stock 30 —
plans(7)
Dilutive effect of
7.625% Series C
mandatory 76 —
convertible
preferred stock(7)
Weighted-average
shares used to 1,441 1,321
compute
diluted net EPS
Denominator
(Non-GAAP):
Weighted-average
shares used to 1,335 1,321
compute
basic net EPS
Dilutive effect of
employee stock 30 14
plans(7)
Dilutive effect of
7.625% Series C
mandatory 76 78
convertible
preferred stock(7)
Weighted-average
shares used to 1,441 1,413
compute
diluted net EPS
GAAP Net EPS
Basic $ 1.89 $ -0.16
Diluted $ 1.82 $ -0.16
Non-GAAP Net EPS
Basic $ 2.69 $ 1.34
Diluted(4) $ 2.55 $ 1.32
(1) Interest and other, net includes tax indemnification and other adjustments,
non-service net periodic benefit credit, and interest and other, net. The three
and nine months ended July 31, 2025, include a $52 million litigation settlement
which HPE received in the third quarter of fiscal 2025.
(2) For the nine months ended July 31, 2026 and 2025, and for the three months
ended July 31, 2025, Acquisition, disposition and other charges include non-cash
amortization of fair value adjustment for inventory in connection with the
acquisition of Juniper Networks, which was recorded in cost of sales.
(3) Other adjustments includes non-service net periodic benefit credit and tax
indemnification and other adjustments.
(4) For purposes of calculating diluted net EPS, the preferred stock dividends
are added back to the net earnings attributable to common stockholders and the
diluted weighted average share calculation assumes the preferred stock was
converted at issuance or as of the beginning of the reporting period.
(5) Effective at the beginning of the first quarter of fiscal 2026, HPE
implemented an organizational change by (i) merging the Server, Hybrid Cloud,
and Financial Services business segments into a new segment named Cloud & AI and
(ii) transferring the Telco and Instant On businesses to Corporate Investments
and Other from Networking. The Company reflected these changes to its segment
information retrospectively. These changes had no impact on Hewlett Packard
Enterprise’s previously reported consolidated net revenue, net earnings, net
earnings per share or total assets.
(6) The impact of dilutive effect of employee stock plans is calculated under
the treasury stock method, and the impact of dilutive effect of the preferred
stock is calculated under the if-converted method. For the nine months ended
July 31, 2025, the effect of employee stock plans and preferred stock is
excluded as it would be anti-dilutive.
(7) For the nine months ended July 31, 2025, the diluted net EPS adjustment
includes the impact to Non-GAAP net earnings attributable to HPE for the
dilutive effect of preferred stock.
Use of non-GAAP financial measures
To supplement Hewlett Packard Enterprise’s condensed consolidated financial
statement information presented on a GAAP basis, Hewlett Packard Enterprise
provides non-GAAP financial measures, non-GAAP gross profit, non-GAAP gross
profit margin, non-GAAP operating profit (non-GAAP earnings from operations),
non-GAAP operating profit margin (non-GAAP earnings from operations as a
percentage of net revenue), non-GAAP income tax rate, non-GAAP net earnings
attributable to HPE, non-GAAP net earnings attributable to common stockholders,
non-GAAP diluted net earnings per share attributable to common stockholders, and
FCF. Hewlett Packard Enterprise also provides, non-GAAP diluted net earnings per
share, non-GAAP operating profit growth, and FCF.
These non-GAAP financial measures are not computed in accordance with, or as an
alternative to, GAAP in the United States. The GAAP measure most directly
comparable to non-GAAP gross profit is gross profit. The GAAP measure most
directly comparable to non-GAAP gross profit margin is gross profit margin. The
GAAP measure most directly comparable to non-GAAP operating profit (non-GAAP
earnings from operations) is earnings from operations. The GAAP measure most
directly comparable to non-GAAP operating profit margin (non-GAAP earnings from
operations as a percentage of net revenue) is operating profit margin (earnings
from operations as a percentage of net revenue). The GAAP measure most directly
comparable to non-GAAP income tax rate is income tax rate. The GAAP measure most
directly comparable to non-GAAP net earnings attributable to HPE and non-GAAP
net earnings attributable to common stockholders is net earnings. The GAAP
measure most directly comparable to non-GAAP diluted net earnings per share
attributable to common stockholders is diluted net earnings per share
attributable to common stockholders. The GAAP measure most directly comparable
to FCF is cash flow from operations. Reconciliations of each of these non-GAAP
financial measures to their most directly comparable GAAP measures for this
quarter and prior periods are included in the tables above or elsewhere in the
materials accompanying this news release.
Usefulness of non-GAAP financial measures to investors
Hewlett Packard Enterprise believes that providing the non-GAAP financial
measures stated above, in addition to the related GAAP measures provides
investors with greater transparency to the information used by Hewlett Packard
Enterprise’s management in its financial and operational decision making and
allows investors to see Hewlett Packard Enterprise’s results “through the eyes”
of management. Hewlett Packard Enterprise further believes that providing this
information provides Hewlett Packard Enterprise’s investors with a supplemental
view to understand the Company’s historical and prospective operating
performance and to evaluate the efficacy of the methodology and information used
by Hewlett Packard Enterprise’s management to evaluate and measure such
performance. Disclosure of these non-GAAP financial measures also facilitates
the comparisons of Hewlett Packard Enterprise’s operating performance with the
performance of other companies in the same industry that supplement their GAAP
results with non-GAAP financial measures that may be calculated in a similar
manner.
Economic substance of and material limitations associated with non-GAAP
financial measures used by Hewlett Packard Enterprise
Non-GAAP gross profit and non-GAAP gross profit margin are defined to exclude
charges related to the stock-based compensation expense, acquisition,
disposition and other charges, severance costs associated with the cost
reduction program, and H3C divestiture related severance costs. Non-GAAP
operating profit (non-GAAP earnings from operations) and non-GAAP operating
profit margin (non-GAAP earnings from operations as a percentage of net revenue)
consist of earnings from operations or earnings from operations as a percentage
of net revenue excluding the items mentioned above and charges relating to the
amortization of intangible assets, and impairment charges. Non-GAAP net
earnings, Non-GAAP net earnings attributable to HPE, non-GAAP net earnings
attributable to common stockholders, and non-GAAP diluted net earnings per share
attributable to common stockholders consist of net earnings or diluted net
earnings per share excluding the charges previously stated, as well as gain on
sale of a business, gain on sale of equity interest, adjustments for equity
interests, gain or loss on equity investments, litigation judgments, other
adjustments, and adjustments for taxes. Non-GAAP net earnings attributable to
HPE and non-GAAP diluted net earnings per share attributable to common
stockholders includes preferred stock dividends added back to non-GAAP net
earnings attributable to HPE. The Adjustments for taxes line item includes
certain income tax valuation allowances and separation taxes, the impact of tax
reform, structural rate adjustment, excess tax benefit from stock-based
compensation, and adjustments for additional taxes or tax benefits associated
with each non-GAAP item.
Hewlett Packard Enterprise believes that excluding the items mentioned above
from the non-GAAP financial measures provides a supplemental view to management
and investors of its consolidated financial performance and presents the
financial results of the business without costs that Hewlett Packard
Enterprise’s management does not believe to be reflective of ongoing operating
results. Exclusion of these items can have a material impact on the equivalent
GAAP measure and cash flows thus limiting their use as analytical tools. These
limitations are discussed below or elsewhere in the materials
accompanying this news release. More specifically, Hewlett Packard Enterprise’s
management excludes each of those items mentioned above for the following
reasons:
• Stock-based compensation expense consists of equity awards granted based on
the estimated fair value of those awards at grant date. Although stock-based
compensation is a key incentive offered to employees, HPE excludes these charges
for the purpose of calculating these non-GAAP measures, primarily because they
are non-cash expenses, and the Company’s internal benchmarking analyses evidence
that many industry participants and peers present non-GAAP financial measures
excluding stock-based compensation expense.
• HPE incurred costs related to its acquisition, disposition and other charges.
Charges include expenses associated with acquisitions, non-cash amortization of
fair value adjustment for inventory in connection with the Merger, exit costs
associated with disposal activities, transformation costs (credits), and
disaster (recovery) charges. HPE excludes these costs because the Company
considers these charges to be discrete events and does not believe they are
reflective of normal continuing business operations. Acquisition charges were
driven by costs associated with the Merger and miscellaneous disposition related
charges.
• HPE incurred severance and other charges pursuant to cost management
initiatives. HPE excludes these charges because management does not believe they
are reflective of normal continuing business operations. HPE believes
eliminating these adjustments for the purposes of calculating non-GAAP measures
facilitates the evaluation of its current operating performance.
• HPE incurred H3C divestiture related severance costs in connection with the
disposition of issued share capital of H3C held by HPE. The divestiture resulted
in decreased future investment earnings and cash dividend inflows resulting in a
decision to implement offsetting cost savings measures. These measures include
severance for certain of the Company’s employees. The non-GAAP adjustment
represents our costs to execute these related exit actions to offset the loss in
equity earnings and related cash flows.
• HPE incurs charges relating to the amortization of intangible assets and
excludes these charges for purposes of calculating these non-GAAP measures. Such
charges are significantly impacted by the timing and magnitude of the Company’s
acquisitions. HPE excludes these charges for the purpose of calculating these
non-GAAP measures, primarily because they are non-cash expenses and the
Company’s internal benchmarking analyses evidence that many industry
participants and peers present non-GAAP financial measures excluding intangible
asset amortization. Although this does not directly affect HPE’s cash position,
the loss in value of intangible assets over time can have a material impact on
the equivalent GAAP earnings measure.
• In fiscal 2025, HPE recorded non-cash impairment charges for the goodwill
associated with its Cloud & AI (excluding Financial Services) reporting unit and
the impairment of certain fixed assets. HPE believes that these non-cash charges
do not reflect the Company’s operating results and is not indicative of the
underlying performance of the business. HPE excludes these charges for purposes
of calculating these non-GAAP measures to facilitate the evaluation of the
Company’s current operating performance and comparisons to past operating
results. Although this does not directly affect the Company’s cash position, the
loss in value of goodwill over time can have a material impact on the equivalent
GAAP earnings measure.
• Gain on sale of a business represents the gain associated with certain
disposal activities. On December 1, 2024, HPE completed the disposition of the
Company’s Communication Technology Group which resulted in a gain of $248
million. The Company’s management considers this divestiture to be a discrete
event and believes eliminating this adjustment for the purposes of calculating
non-GAAP measures facilitates the evaluation of its current operating
performance.
• Beginning in fiscal 2026, HPE stopped reporting H3C earnings in our non-GAAP
results due to the divestiture of our H3C investment. 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. The Company believes that eliminating these amounts for purposes of
calculating non-GAAP financial measures facilitates the evaluation of its
current operating performance.
• HPE excludes gains and losses (including impairments) on its non-marketable
equity investments because the Company does not believe they are reflective of
normal continuing business operations. These adjustments are reflected in
Interest and other, net in the Condensed Consolidated Statements of Earnings.
The Company believes eliminating these adjustments for the purposes of
calculating non-GAAP measures facilitates the evaluation of its current
operating performance.
• Hewlett Packard Enterprise utilizes a structural long-term projected non-GAAP
income tax rate in order to provide consistency across the interim reporting
periods and to eliminate the effects of items not directly related to the
Company’s operating structure that can vary in size, frequency and timing. When
projecting this long-term rate, HPE evaluated a three-year financial projection.
The projected rate assumes no incremental acquisitions in the three-year
projection period and considers other factors including the Company’s expected
tax structure, its tax positions in
various jurisdictions and current impacts from key legislation implemented in
major jurisdictions where HPE operates. For fiscal 2026, HPE will use a
projected non-GAAP income tax rate of 14%, which reflects currently available
information as well as other factors and assumptions. For fiscal 2025, HPE used
a projected non-GAAP income tax rate of 15%. The non-GAAP income tax rate could
be subject to change for a variety of reasons, including the rapidly evolving
global tax environment, significant changes in the Company’s geographic earnings
mix including due to acquisition activity, or other changes to the Company’s
strategy or business operations. HPE will re-evaluate its long-term rate as
appropriate. HPE believes that making these adjustments for purposes of
calculating non-GAAP measures, facilitates a supplemental evaluation of the
Company’s current operating performance and comparisons to past operating
results.
• FCF is defined as cash flow from operations, less net capital expenditures
(investments in property, plant & equipment (“PP&E”) and software assets less
proceeds from the sale of PP&E), and adjusted for the effect of exchange rate
fluctuations on cash, cash equivalents, and restricted cash. FCF does not
represent the total increase or decrease in cash for the period. Hewlett Packard
Enterprise’s management and investors can use FCF for the purpose of determining
the amount of cash available for investment in the Company’s businesses,
repurchasing stock and other purposes as well as evaluating its historical and
prospective liquidity.
Compensation for material limitations with use of non-GAAP financial measures
These non-GAAP financial measures have limitations as analytical tools, and
these measures should not be considered in isolation or as a substitute for
analysis of Hewlett Packard Enterprise’s results as reported under GAAP. Some of
the limitations in relying on these non-GAAP financial measures are that they
can have a material impact on the equivalent GAAP earnings measures and cash
flows, they may be calculated differently by other companies (limiting the
usefulness of those measures for comparative purposes) and may not reflect the
full economic effect of the loss in value of certain assets. Hewlett Packard
Enterprise compensates for these limitations on the use of non-GAAP financial
measures by relying primarily on its GAAP results and using non-GAAP financial
measures only as a supplement. Hewlett Packard Enterprise also provides a
reconciliation of each non-GAAP financial measure to its most directly
comparable GAAP financial measure for this quarter and prior periods within this
news release and in other written materials that include these non-GAAP
financial measures, and Hewlett Packard Enterprise encourages investors to
review those reconciliations carefully.