Hewlett Packard Enterprise Company

Record Q3 performance + strong cash returns (all-time highs): - Revenue: $12.2B, +34% YoY (exceeded high end of guidance). - Orders/backlog: Orders +42% YoY (normalized basis); orders grew ~3.5x faster than revenue, producing record backlog (orders for “Networks for AI” reached $700M in the quarter). - Profitability/EPS: Non-GAAP gross margin 40% (record); non-GAAP EPS $1.11 (record; first time >$1 in a quarter); non-GAAP operating profit $2.0B (~2.5x YoY); operating margin 16.2% (GAAP EPS $1.06). - Cash flow: Free cash flow $958M (highest-ever for a Q3); returned $324M to shareholders ($189M dividends + $135M buybacks).

Raised FY2026 outlook + strong FY2027 growth framework (backed by demand and backlog): - Q4 guidance: Revenue $13.9B–$14.8B; Networking revenue +11% to +13%; Cloud & AI revenue +60% to +72%; EPS $1.20–$1.30 (GAAP $1.12–$1.22). - FY2026 updated: EPS $3.75–$3.85 (GAAP $2.93–$3.03); FY26 free cash flow ≥ $3.75B. - FY2027 framework (updated): consolidated revenue growth 13%–17%, Networking 14%–17%, Cloud & AI 14%–18%, operating margin ~14%–15%, EPS $4.40–$4.60, and free cash flow ≥ $5B (implying ~16%–20% growth vs midpoint of FY26).

What’s driving growth (opportunities): AI + networking momentum + enterprise production shift: - AI becoming a “multiyear growth driver” with demand broadening from early training to agentic AI and inferencing. - Networking: demand accelerated; Networks for AI orders $2.2B cumulative, surpassing FY26 target; end-of-year target raised to $2.5B–$3B. - Cloud & AI: traditional servers strong (+35% server revenue, ASP-driven) despite supply limits; AI systems orders +30% sequentially and enterprise demand “more than doubled.” - Storage/data management: standout quarter; growth linked to modern AI-era storage (Alletra MP) and “token economics” focus.