HPE Q3 FY26: record $12.21 billion revenue, raised FY26 and FY27 outlook
HPE's fiscal 2026 third quarter was a beat on every headline: revenue of $12.21 billion, gross margin of 40.1% and non-GAAP EPS of $1.11, all above guidance, with raised FY26 and FY27 targets. Read the segment detail first, then the balance sheet: inventory and payables both ballooned, and that is the number to watch.
1 · Expected vs. Actual
Free preview belowGAAP EPS of $1.06 and non-GAAP EPS of $1.11 both came in above the guided ranges of $0.84-$0.89 and $0.88-$0.93. Net income of $1.54 billion included a $444 million gain on the sale of an equity interest, which is stripped out of non-GAAP EPS but sits inside the GAAP number. Non-GAAP operating margin of 16.2% was up 770 basis points from 8.5% a year earlier.
Revenue of $12.21 billion rose 33.7% year over year and 14.4% sequentially, with Networking up 74.9% to $2.89 billion and Cloud & AI up 25.4% to $9.04 billion. Gross margin of 40.1% was 1,090 basis points better than a year ago, so the extra revenue did not come at the cost of margin. Routing, up 270.0%, and Data Center Networking, up 112.2%, did the heavy lifting inside Networking.
Q4 revenue guidance of $13.90 billion to $14.80 billion implies a $14.35 billion midpoint, about 0.8% below the $14.46 billion consensus estimate for next quarter. Full-year FY26 targets were raised to 34% to 37% revenue growth and $3.75 to $3.85 of non-GAAP EPS, with free cash flow of at least $3.75 billion. The FY27 framework now points to 13% to 17% revenue growth, a 14% to 15% non-GAAP operating margin and at least $5.0 billion of free cash flow.
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Figures on this page come from the company's original SEC filings. The analysis is generated automatically and checked against validation rules, but may still contain errors or omissions. Not investment advice. · Generated 2026-09-17
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