Hewlett Packard Enterprise Company

Record Q3 performance (strong upside momentum): HPE reported FY2026 Q3 revenue of $12.2B (+34% YoY), non-GAAP gross margin 40% (record), non-GAAP operating profit $2.0B (~2.5x YoY), and non-GAAP EPS $1.11 (record; first time >$1 in a quarter). Cash generation was exceptional with free cash flow (FCF) of $958M and highest-ever Q3 FCF. This translated into improved capital returns: $324M returned to shareholders (including $189M dividends and $135M buybacks).

Orders/backlog vs. revenue: demand is ahead of supply (key “good but constrained” theme): Orders grew faster than revenue—order growth +42% YoY (normalized) and network orders ~3.5x faster than revenue. Antonio highlighted record-breaking backlog and said supply constraints limited revenue conversion in the quarter. HPE is trying to close the gap via deeper planning interlocks, alternative product configurations, and partner collaboration plus more multiyear multison supply agreements (notably “more than doubled” networking purchase commitments QoQ). They expect revenue to catch up to orders as supply aligns, especially into Q4.

Networking: growing fast, with record “Networks for AI” orders + major Oracle partnership: Networking delivered $2.9B revenue (+10% normalized YoY) with orders +36%. Growth mix: Campus & Branch +8% normalized, routing +23%, security +12%, while data center networking revenue -6% due to shipment timing/supply constraints. “Networks for AI” orders hit $700M (triple digits YoY/scale); cumulative Networks for AI orders $2.2B, surpassing FY26 target, and HPE raised year-end target to $2.5B–$3B. They announced an expanded multi-year collaboration with Oracle to deploy HPE Juniper networking (QFX switching + PTX routing) for gigawatt-scale AI infrastructure, positioned as scale-out + scale-across using differentiated routing/switch silicon and software + AI Ops.