Hewlett Packard Enterprise Co
(BSP:H1PE34)
R$
266.27
+4.16 (+1.59%)
Market Cap: 352.59 Bil
Enterprise Value: 434.16 Bil
PE Ratio: 48.44
PB Ratio: 2.71
GF Score: 62/100 
Q3 2026 Hewlett Packard Enterprise Company Earnings Call Transcript
Sep 02, 2026 / 08:30PM GMT
Release Date Price:
R$266.27
(+1.59%)
Key Points
Positve
- Hewlett Packard Enterprise Co (HPE) delivered record financial results, exceeding all company-wide commitments with record revenue of $12.2 billion, up 34% year-over-year, and record non-GAAP EPS of $1.11.
- Customer demand is accelerating, with orders growing 42% year-over-year and outpacing revenue, leading to a record-breaking backlog that provides strong visibility into future revenue.
- The company is raising its fiscal 2026 and fiscal 2027 outlook, with fiscal 2027 revenue growth now expected at 13% to 17% and EPS of $4.40 to $4.60, reflecting confidence in durable demand.
- Networking momentum is strong, with record orders and revenue, including a significant expansion of its collaboration with Oracle for gigawatt-scale AI infrastructure, and cumulative 'Networks for AI' orders surpassing its FY26 target.
- The company is seeing a broadening AI inflection into enterprise workloads like agentic AI and inferencing, driving strong demand for its traditional servers, storage, and private cloud solutions, evidenced by a multi-billion dollar server deal with a hyperscaler for inferencing.
- Hewlett Packard Enterprise Co (HPE) is executing well on its strategic initiatives, with the Juniper Networks integration and cost synergies ahead of schedule, and the company achieved its net leverage target of 2.0x more than a year ahead of plan.
- The company generated its highest free cash flow ever for a third quarter at $958 million and is raising its FY26 free cash flow target to at least $3.75 billion.
- Gross margin reached a record 40%, and operating profit hit a record $2 billion, demonstrating strong operating leverage and disciplined pricing.
- The company is not including the potential AMD Helios opportunity in its fiscal 2027 outlook, which could provide additional upside to networking growth.
- Hewlett Packard Enterprise Co (HPE) is seeing strong growth in its storage business with record revenue, driven by demand for its own IP offerings like HPE Alletra MP, and its GreenLake customer base grew 18% year-over-year to 52,000.
Negative
- Supply constraints continue to be a significant challenge, limiting the company's ability to convert strong customer demand into revenue, particularly for networking and AI systems.
- The company expects gross margins to moderate toward more historical levels in the future, driven by a higher mix of AI systems and normalization in traditional server pricing.
- Operating expenses increased 17% sequentially due to higher variable compensation, which is expected to decrease in fiscal 2027 but impacts current profitability.
- Data center networking revenue declined 6% in the quarter due to shipment timing driven by supply constraints, despite strong order momentum.
- The company faces ongoing challenges from component shortages, including DDR5 memory and NAND flash, which are expected to persist and could impact costs and pricing.
- While demand is strong, the company's ability to grow revenue is tied to its success in securing supply, and it has had to double its networking purchase commitments quarter-over-quarter to meet demand.
- The fiscal 2027 outlook does not include the potential AMD Helios opportunity, which means the company is not fully capitalizing on a potentially massive market in its guidance.
- The company expects operating margins to decline sequentially in Q4 due to a higher mix of AI systems and pricing, indicating potential pressure on profitability.
- The company's AI systems revenue was only $1.6 billion in the quarter, which is relatively small compared to the overall demand and backlog, indicating a significant gap between orders and revenue conversion.
- The company's networking revenue growth of 10% was below what some peers are seeing, highlighting the impact of supply constraints on its ability to fully capitalize on market demand.
Operator
Good day and welcome to the third quarter 2026 Hewlett Packard Enterprise earnings conference call. (Operator Instructions) Please note this event is being recorded. I would now like to turn the conference over to Ms. Shannon Cross, Chief Strategy Officer. Please go ahead.
Shannon Cross
Hewlett Packard Enterprise Company - Senior Vice President, Chief Strategy Officer, and Investor Relations
Good afternoon. I'm Shannon Cross, Chief Strategy Officer for HPE. I'd like to welcome you to our fiscal 2026 third quarter earnings conference call with Antonio Neri, HPE's President and Chief Executive Officer, and Marie Myers, HPE's Chief Financial Officer.
Before handing the call to Antonio, let me remind you that this call is being webcast. A replay of the webcast will be available shortly after the call concludes. We have posted the press release and the slide presentation accompanying the release on our HPE Investor Relations webpage.
Elements of the financial information referenced on this call are forward-looking and are based on our best view
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