Hewlett Packard Enterprise reported record third-quarter results on September 2, beating earnings expectations as surging AI infrastructure demand accelerated revenue growth across its portfolio, prompting the company to raise its full-year guidance.
HPE delivered $12.2 billion in revenue for the quarter ended July 31, a 34% increase year-over-year and above analyst consensus of $11.94 billion. Adjusted earnings per share reached $1.11, surpassing the consensus estimate of $0.93.
The company’s Cloud & AI segment—its largest division—generated $9.0 billion in revenue, up 25.4% from the prior year, with server revenue climbing 35.3% to $6.8 billion. Networking revenue surged 74.9% to $2.9 billion, driven by demand for data center switching and routing equipment supporting AI deployments. CEO Antonio Neri said in the earnings release that “AI is becoming a multi-year growth driver for HPE, and our differentiated portfolio positions us to capture that opportunity at scale.”
The strong quarter reflects a broader acceleration in enterprise AI spending. Hyperscalers including Alphabet and Amazon are projected to spend more than $700 billion on AI infrastructure in 2026, according to industry reports cited in HPE’s earnings coverage. This spending surge has translated into record order backlogs for HPE, which CFO Marie Myers highlighted as a key driver of the company’s expanded outlook.
HPE raised its fiscal 2026 revenue growth guidance to 34% to 37%, up from its prior range of 29% to 33%. The company also increased its full-year adjusted earnings per share guidance to $3.75 to $3.85 and raised free cash flow expectations to at least $3.75 billion. For fiscal 2027, HPE introduced a framework projecting revenue growth of 13% to 17% and adjusted earnings per share growth of 16% to 20%.
The guidance raise reflects management’s confidence in the durability of AI demand. In June, HPE had already lifted its 2026 outlook after reporting a Q2 beat, at which point the company noted it was achieving its 2028 financial targets two years ahead of schedule. The latest raise suggests that momentum has only accelerated, with the company now operating at a higher baseline for AI-driven infrastructure orders.
Profitability expanded significantly. Gross margins reached 40.4% on a non-GAAP basis, up 1,050 basis points from the prior year, while operating profit margins grew to 16.2%, up 770 basis points. These gains reflect both the higher-margin nature of AI infrastructure sales and HPE’s improved manufacturing efficiency as supply chain constraints that plagued the industry have eased.
HPE’s results align with a broader industry trend. Dell stock surges on record AI orders, raises full-year guidance and other server vendors have similarly benefited from the AI infrastructure supercycle, though HPE’s networking segment has emerged as a particular strength, with switching and routing revenue nearly tripling year-over-year.
Sources
- HPE Investor Relations — official Q3 FY2026 earnings press release with revenue, EPS, segment results, and guidance
- Investing.com — earnings call transcript confirming adjusted EPS of $1.11 on revenue of $12.2 billion
- US News & World Report (Money) — HPE’s raised FY2026 revenue growth guidance to 34-37% and adjusted earnings guidance to $3.75-$3.85
- WMBD Radio / Reuters — HPE’s record order backlog and statement that “demand is far outstripping supply”
- SeekingAlpha — HPE’s record $6.3 billion AI backlog and guidance framework for FY2027
- Reuters — hyperscaler AI spending projections of $700+ billion for 2026
