HPE delivered blowout results with record revenue and EPS, as AI demand accelerated and supply constraints continued to limit revenue. The company raised its full-year outlook for fiscal 2026 and introduced a higher growth trajectory for fiscal 2027 while highlighting strong networking growth and wins at Oracle-based AI infrastructure. HPE reported record quarterly revenue of $12.2 billion (+34% YoY) and EPS of $1.11, exceeding estimates.
HPE delivered blowout results with record revenue and EPS, as AI demand accelerated and supply constraints continued to limit revenue. The company raised its full-year outlook for fiscal 2026 and introduced a higher growth trajectory for fiscal 2027 while highlighting strong networking growth and wins at Oracle-based AI infrastructure. HPE reported record quarterly revenue of $12.2 billion (+34% YoY) and EPS of $1.11, exceeding estimates.
Order growth outpaces revenue, with record orders and backlog. Networking orders grew 36% in Q3, networks-for-AI orders reached a new high of $700M and are targeted to $2.5-3B by year-end. In cloud & AI, pipeline is multiples of backlog and AI systems orders grew 30%+…
Management highlights accelerating enterprise adoption of AI inferencing and agentic workloads beyond initial training deployments, driving demand for traditional servers, storage, and networking for AI. Multiple large AI deals, including Oracle and a hyperscaler inferencing…
Management highlights accelerating enterprise adoption of AI inferencing and agentic workloads beyond initial training deployments, driving demand for traditional servers, storage, and networking for AI. Multiple large AI deals, including Oracle and a hyperscaler inferencing…
Guidance · revenue to 15%
Management highlights accelerating enterprise adoption of AI inferencing and agentic workloads beyond initial training deployments, driving demand for traditional servers, storage, and networking for AI. Multiple large AI deals, including Oracle and a hyperscaler inferencing deal, validate broad demand, but supply constraints, especially on components, currently cap revenue growth.
Order growth outpaces revenue, with record orders and backlog. Networking orders grew 36% in Q3, networks-for-AI orders reached a new high of $700M and are targeted to $2.5-3B by year-end. In cloud & AI, pipeline is multiples of backlog and AI systems orders grew 30%+ sequentially. New multi-billion-dollar hyperscaler inferencing deal and expansion with Oracle at gigawatt scale add to visible dema
Management raised FY26 free cash flow target to at least $3.75 billion and is returning 75% of free cash flow to shareholders in Q4, but specific capex or capacity investment plans were not disclosed, only supply-focused purchase commitments.
Management repeatedly emphasized record results, raising guidance, and a multi-year growth opportunity, using language like 'exceptional', 'durable', and 'confident'.
Creates a backlog of $10.4B, but management expects to convert more and accelerate revenue growth in fiscal Q4 and 2027.
“Supply constraints continue to affect our ability to fulfill the increased customer demand.”
“We are not selling that type of infrastructure. We are selling traditional servers for AI inferencing that they will use for their own internal Usage.”
“The difference this time is that for us, These scale-up tray switches are HPE Juniper.”
“waiting is not an option, but they are getting smarter about where to land their budgets and how to optimize for this token economics”
“we see almost a fundamental shift in the way Enterprise is deploying technology, right? It started with some experimentation, and now there is a clear cadence to drive outcomes”
| 지표 | 기간 | 범위 | 중간값 | 상태 |
|---|---|---|---|---|
| EPS | FY2027 | $4.40–$4.60above 컨센서스 대비 | $4.50 | RAISED |
| EPS | FY2027 Q4 | $1.20–$1.30 | $1.25 | GUIDED |
| Free cash flow | FY2027 | $5B | $5B | RAISED |
| RevenueNETWORKING | FY2027 | 14%–17%above 컨센서스 대비 | 15.5% | RAISED |
| RevenueCLOUD | FY2027 | 14%–18%above 컨센서스 대비 | 16% | RAISED |
| Revenue | FY2027 | 13%–17%above 컨센서스 대비 | 15% | RAISED |
| 제시 시점 | 지표 | 목표 기간 | 가이던스 | 실제 | 결과 |
|---|---|---|---|---|---|
| FY2026 Q1 | EPS | FY2026 Q2 | $0.51–$0.55 | $0.79 | Met / beat |
| FY2026 Q1 | Revenue | FY2026 Q2 | $9.6B–$10B | $10.678B | Met / beat |
| FY2025 Q4 | EPS | FY2026 Q1 | $0.57–$0.61 | $0.65 | Met / beat |
| FY2025 Q4 | Revenue | FY2026 Q1 | $9B–$9.4B | $9.301B | Met / beat |
Oracle's AI cloud build-out is a flagship gigawatt-scale customer for HPE's networking portfolio, signaling expansion in Oracle's capex for AI infrastructure and a major validation of HPE Juniper networking.
“Oracle will deploy HPE Juniper networking routers and switches across one of the largest AI cloud infrastructure build-outs.”
… AI-driven operations software, as they continue to increase their AI cloud CapEx infrastructure investments. Growth in our backlog shows strong customer demand is running ahead of available supply. We expect to convert more orders into revenue in Q4. which give us even greater confidence in sustaining our networking growth in fiscal 2027. Today, we announced an expanded collaboration with Oracle to accelerate gigawatt-scale AI infrastructure. Oracle will deploy HPE Juniper networking routers and switches across one of the largest AI cloud infrastructure build-outs. HPE is uniquely positioned to support Oracle with a networked for AI portfolio, which is one of the most comprehensive in the industry. SASE and security also contributed to our growth. Our strong performance in firewall SD branch and branch SRX reflects growing customer demand for networking and security that operate as one converged solution. I hope you will attend our upcoming Networking Investor Day later this month to hear more about how our networking strategy, innovation, and business momentum are giving us even greater confidence in the opportunity ahead. While our networking segment continues to strengthen …
Nvidia's 'Helios' rack-scale platform is set to be a massive new revenue stream, possibly tens of billions in market size, but HPE management is strategically decoupling the networking portion and excluding that $ opportunity from its 2027 guidance. — This shows that a major step-up in scale-up compute capex will drive a step-up in high-value networking infrastructure spending, suggesting a potential to capture value from both the hardware and the networking parts of AI infrastructure.
“the AI factory that we co-engineered with NVIDIA.”
Yeah, thanks for taking the question and congratulations on the strong results. On the traditional server side, I guess the question I have is, I think you talked about a lot of the growth being driven by the ability to pass through pricing relative to unit growth. So I guess my question is, as we think about AI moving into the enterprise environments more prolifically, how would you characterize the installed base and the upgrade opportunity that you're seeing associated with that? And should we start to think about unit growth accelerating on top of the ASP pass-through? Secondarily to that, the hyperscale deal, I think in the past HPE has been pretty clear of you'll be opportunistic on…
Thank you, Aaron. Maybe I'll start with the latter because it's a very important use case. It is a hyperscaler customer, but think about them as an enterprise customer who is going to use our AI inferencing for their own internal usage. So our strategy has not changed from a, you know, selling large amount of infrastructure for them to serve like it used to be in the past, the cloud business. This is about a multi-billion dollar AI inferencing for their own internal usage as an enterprise customer. It just happened to be they are labeled as a hyperscaler customer, okay? And so that's one takeaway. Second is that, look, units will modulate as supply becomes available, right? And so we, as Marie said in her prepared remarks, we still, like everyone else, working through the supply availability, but What we are very excited about is that the acceleration of traditional servers and storage, by the way, in private cloud, because some customers go server only, some go with no servers attached to, storage attached to servers, and some are using the full stack, like a private cloud AI, which in many ways is the AI factory that we co-engineered with NVIDIA. and in that case, right, is about the growing of the AI deployment on-premise. And so over time, right, it's going to become how large those deployments come and ultimately whether you're server-only or you go private cloud, that will drive units, but it also will come down to the conversion of the units based on the supply availability as we navigate 2027. But right now, as we said, right, we expect continued exceptional demand in Q4 in 2027.
Juniper's integration is yielding significant wins and synergies, driving HPE's strategic pivot into a networking powerhouse headed into a cycle of massive AI-related infrastructure buildouts.
… raising our outlook for both fiscal 2026 and fiscal 2027. Marie will discuss the details shortly. Before I hand over the call to Marie, I want to provide some observations about the market and our business segment performance. I also want to note an important milestone regarding our Juniper Networks acquisition. In August, a U.S. federal court approved our settlement with the Department of Justice, saying it serves the public interest. We are pleased with the outcome, which reinforces our confidence in the long-term value of bringing these two great networking portfolios together. A year after closing the Juniper Networks acquisition, our integration plan and cost synergies remain ahead of schedule. The business performance continues to strengthen through expanded innovation and strong execution. The enhanced ability to compete is already driving more innovative networking solutions for customers and higher profitable growth for shareholders. Order bookings and revenue for our networking products and services reached record levels despite supply constraints, which limited our ability to convert the higher demand into revenue in the quarter. Campus and branch had record revenue …
Nvidia's 'Helios' rack-scale platform is set to be a massive new revenue stream, possibly tens of billions in market size, but HPE management is strategically decoupling the networking portion and excluding that $ opportunity from its 2027 guidance. — This shows that a major step-up in scale-up compute capex will drive a step-up in high-value networking infrastructure spending, suggesting a potential to capture value from both the hardware and the networking parts of AI infrastructure.
Hi, congrats as well, and thank you for the question. And maybe if I could, I think, Antonio, you mentioned that you're not embedding the Helios opportunity into the fiscal 27 outlook. Can you just touch on the rationale behind that decision and what's keeping you on the sideline from introducing that into the framework? and any thoughts on how we should think about the magnitude of upside that you could introduce to the networking revenue and margin outlook when and if that gets introduced into the framework. Thank you.
Yeah. No, thank you for the question. Well, I mean, we are working very closely with our partner, A&D, and, you know, we expect that infrastructure to be available for ordering later in this calendar year. and we're working together on a very large pipeline, which obviously this infrastructure is designed for large AI deployment at scale, particularly for training and then obviously it can be used as well for inferencing. But these are a concentrated number of customers in the end that need that level of infrastructure, not different than they're using today with NVIDIA NBLs 72 and 144 or Verirubin. We felt that we wanted to see a little bit more as the schedule firm up and then eventually start deploying these capabilities. And then as we go through the subsequent quarters, we're going to share more about how that's happening. But the opportunity is pretty massive. When you look at the size of that deployment, it can be as a market, okay, not HPE, tens of billions of dollars, okay? Tens of billions of dollars. The difference this time is that for us, These scale-up tray switches are HPE Juniper. And let me be clear, we are going to sell HPE Juniper scale-up switches beyond just embedded in a HPE Helios rack. So we can sell it to anyone for that matter, because obviously customers will want sometimes different compute vendors, which is totally fine. But that opportunity is in the margins of the tray switch and the opportunity to sort of broadly beyond the HPE as a partner with AMD as we go forward. So once we see a little bit more of that, Marie and I will share more, but this is not in the 14 to 17% growth that we just share with you as a part of networking only.
There is a critical supply chain bottleneck in clean wafer capacity, which is expected to persist through 2027, creating a tailwind for enterprise pricing power and a need to secure long-term supply agreements. — This tells us that high-priced components, tight memory supply, and limited wafer capacity directly benefit asset-light integrated players or resellers with strong supply chain management and pricing power.
Hey, thanks so much for squeezing me in, and I'll echo the congrats on the great results. Maybe more of a high-level question. I'm wondering, Antonio, if you're seeing any incremental hesitation or pushback from customers with regards to demand appetite just in light of some of the bigger pricing actions aimed at offsetting higher memory costs, and maybe on a related note, If you can speak to where incremental budget to invest in IT infrastructure and HPE products are coming from at some of your larger customers. Thanks.
Sure. No, we don't see hesitation. I will say at the beginning of this hyper cycle on the cost, obviously, they were a little bit of in shock and they're trying to navigate through that timing by focusing on understanding the trends and looking at the spot market and the like. Once they understood that, and understood that particularly in AI you need to go faster, they figured out, look, waiting is not an option, but they are getting smarter about where to land their budgets and how to optimize for this token economics, which Marie talked about, look, when you do it on premise and we do that ourselves and we share the number, we can see up to 60% cost benefits on a token basis. and so, no, I don't see hesitation on this point in time and that's why demand continues to be exceptionally strong. That's very clear. In terms of budget, look, budgets overall are going up. Look, in our case, you can talk about it, you know, of course there is prioritization within the budget to replace that older infrastructure so invest more in AI is a balanced approach, but in our case, We are growing the budget to consume more tokens because we are very aggressive in deploying AI as a part of the catalyst transformation. Obviously, we do it with governance, rigor, return on invested capital, and all the things. But in the end, it's an add-on, okay? It's not a subtraction of something else. So I was talking to a large customer yesterday, which is in the financial sector. and he told me, yeah, we are going all in and now we have done the math and we believe it will be better suited for us to build a AI factory on-premise so that we can improve the agility of deploying AI with the cost and controls, particularly in financial services with the compliance, right, that regulates that vertical. So we see that momentum continue. and I believe 2027 is going to be even stronger for enterprise because they become more confident in what they're doing and one win leads to another win, right, on how this has been successful because in the end it's business process transformation. It's workflow transformation. It's not just technology for the sake of technology.
The market inflection in 'traditional servers' is now fundamentally being driven by a massive buildout of AI inference and agentic AI workloads across the enterprise, not just AI training in hypercloud.