Hewlett Packard Enterprise (NYSE:HPE) Issues Quarterly Earnings Results

Key Points

• HPE reported Q1 non‑GAAP EPS of $0.65 (above the $0.59 consensus) on $9.3B revenue (+18% y/y), generated $708M free cash flow, and raised FY26 EPS guidance to $2.30–$2.50 with Q2 EPS guided to $0.51–$0.55.
• Networking is the standout growth driver — now about 30% of revenue and over 50% of operating profit after networking sales nearly tripled to $2.7B, aided by Juniper integration and a target of $1.7–$1.9B in cumulative “networks for AI” orders plus a $5B AI systems backlog.
• Management warned of prolonged DRAM and NAND shortages and rising memory costs (into 2027), has shortened quote commitments and reserved the right to reprice orders, and is prioritizing higher‑margin SKUs — actions that could constrain AI systems revenue conversion.

Hewlett Packard Enterprise (NYSE:HPE - Get Free Report) announced its earnings results on Monday. The technology company reported $0.65 earnings per share (EPS) for the quarter, topping analysts' consensus estimates of $0.59 by $0.06, FiscalAI reports. Hewlett Packard Enterprise had a net margin of 0.17% and a return on equity of 9.15%. The business had revenue of $9.30 billion for the quarter, compared to analyst estimates of $9.31 billion. During the same quarter in the previous year, the firm posted $0.49 earnings per share. Hewlett Packard Enterprise's revenue was up 18.4% compared to the same quarter last year. Hewlett Packard Enterprise updated its FY 2026 guidance to 2.300-2.500 EPS and its Q2 2026 guidance to 0.510-0.550 EPS.

Here are the key takeaways from Hewlett Packard Enterprise's conference call:

• HPE reported Q1 revenue of $9.3B (+18%), record non‑GAAP EPS of $0.65 and $708M free cash flow, and raised its FY26 outlook for EPS and free cash flow.
• Networking is the clear standout — now ~30% of revenue and >50% of operating profit, with strong data‑center switching and routing orders, completed Juniper sales integration, and a target of $1.7–$1.9B cumulative "networks for AI" orders by FY26 end.
• Management warned of prolonged DRAM and NAND shortages and rising memory costs (expected into 2027), has shortened quote commitments and reserved the right to reprice orders, and is prioritizing higher‑margin SKUs — actions that could limit AI systems revenue conversion.
• The Cloud & AI segment saw revenue down 3% but operating profit up 18%; HPE flagged a record $5B AI systems backlog and strong pipeline, yet lowered full‑year cloud & AI growth guidance as it shifts mix toward margin‑accretive orders.

Hewlett Packard Enterprise Stock Up 3.3%

Shares of HPE stock opened at $21.82 on Tuesday. Hewlett Packard Enterprise has a 52-week low of $11.97 and a 52-week high of $26.44. The company has a debt-to-equity ratio of 0.72, a quick ratio of 0.76 and a current ratio of 1.01. The stock has a market cap of $28.99 billion, a price-to-earnings ratio of -363.61, a PEG ratio of 0.58 and a beta of 1.31. The firm's 50-day moving average is $22.11 and its 200-day moving average is $23.09.

Insider Buying and Selling at Hewlett Packard Enterprise

In other news, EVP Maeve C. Culloty sold 35,958 shares of the business's stock in a transaction that occurred on Thursday, December 11th. The stock was sold at an average price of $24.66, for a total transaction of $886,724.28. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which is available at this link. Also, SVP Jeremy Cox sold 13,463 shares of the business's stock in a transaction on Thursday, December 11th. The shares were sold at an average price of $24.68, for a total value of $332,266.84. The SEC filing for this sale provides additional information. Over the last ninety days, insiders have sold 400,793 shares of company stock worth $9,921,393. 0.44% of the stock is currently owned by corporate insiders.

Hedge Funds Weigh In On Hewlett Packard Enterprise

A number of institutional investors have recently modified their holdings of HPE. Headlands Technologies LLC acquired a new position in shares of Hewlett Packard Enterprise in the second quarter worth approximately $26,000. IFC & Insurance Marketing Inc. bought a new position in Hewlett Packard Enterprise during the 4th quarter worth approximately $40,000. Quarry LP acquired a new position in shares of Hewlett Packard Enterprise in the 3rd quarter worth approximately $45,000. DV Equities LLC acquired a new position in shares of Hewlett Packard Enterprise in the 4th quarter worth approximately $45,000. Finally, Geneos Wealth Management Inc. increased its position in shares of Hewlett Packard Enterprise by 44.7% during the first quarter. Geneos Wealth Management Inc. now owns 4,456 shares of the technology company's stock worth $69,000 after buying an additional 1,377 shares during the period. Institutional investors and hedge funds own 80.78% of the company's stock.

More Hewlett Packard Enterprise News

Here are the key news stories impacting Hewlett Packard Enterprise this week:

• Positive Sentiment: Q1 EPS topped estimates — HPE reported $0.65 EPS, above consensus and well ahead of last year’s $0.49, signaling margin improvement and profitability momentum. Hewlett Packard Enterprise (HPE) Surpasses Q1 Earnings Estimates
• Positive Sentiment: Raised FY and Q2 guidance — management boosted FY26 EPS guidance to $2.30–$2.50 (vs. street ~$2.19) and Q2 EPS to $0.51–$0.55, implying stronger margin and earnings visibility going forward. HPE Reports Fiscal 2026 First Quarter Results
• Positive Sentiment: Revenue outlook and AI server demand ahead of expectations — HPE said Q2 revenue should top Wall Street forecasts driven by strong orders for AI-powered servers using Nvidia chips. That supports near-term top-line upside. Hewlett-Packard Enterprise forecasts revenue above estimates
• Positive Sentiment: Networking is a major growth driver — networking sales nearly tripled to $2.7B, with a fivefold jump in data-center networking, reflecting successful integration and demand for AI-native networking. HPE Sales Rise on Networking Growth Despite Cloud and AI Decline
• Positive Sentiment: Product/strategic progress — HPE expanded its AI-native networking and deepened Juniper integration, reinforcing the long-term growth story in managed networking and service-provider opportunities. HPE Expands AI Networking As Juniper Integration Tests Long Term Growth Story
• Neutral Sentiment: Investor materials and calls available — management hosted a call and released a slide deck and press release with more detail on margins, segment performance and order trends; useful for modeling but not new directional news. Listen to Conference Call

Analyst Upgrades and Downgrades

HPE has been the subject of a number of recent research reports. The Goldman Sachs Group initiated coverage on shares of Hewlett Packard Enterprise in a research report on Tuesday, January 13th. They set a "buy" rating and a $31.00 price target for the company. Citigroup dropped their price objective on Hewlett Packard Enterprise from $28.00 to $26.00 and set a "buy" rating for the company in a report on Tuesday, February 17th. Morgan Stanley decreased their target price on Hewlett Packard Enterprise from $25.00 to $23.00 and set an "equal weight" rating for the company in a research report on Wednesday, February 18th. Weiss Ratings reiterated a "hold (c-)" rating on shares of Hewlett Packard Enterprise in a research report on Friday, December 26th. Finally, Zacks Research upgraded shares of Hewlett Packard Enterprise from a "strong sell" rating to a "hold" rating in a report on Monday, December 8th. One analyst has rated the stock with a Strong Buy rating, eight have given a Buy rating and twelve have given a Hold rating to the company. Based on data from MarketBeat, the stock currently has a consensus rating of "Hold" and a consensus target price of $25.29.

Hewlett Packard Enterprise Company Profile

Hewlett Packard Enterprise (HPE) is an enterprise technology company that designs, develops and sells IT infrastructure, software and services for business and government customers. Its core offerings span servers, storage, networking, and related software, together with consulting, integration and support services aimed at modernizing and managing enterprise IT environments. HPE's product portfolio includes systems for traditional data centers as well as solutions for high-performance computing, edge computing and telecommunications infrastructure.

A major focus for HPE is hybrid cloud and consumption-based IT.