TLDR
- HPE reported Q3 2026 revenue of $12.2 billion, up 34% year over year, beating analyst estimates
- Non-GAAP EPS of $1.11 beat consensus by over 18%, the first time adjusted EPS topped $1.00 in a single quarter
- Free cash flow hit $958 million, the highest Q3 cash generation in company history
- AI Systems revenue reached $1.6 billion with $2.4 billion in quarterly orders and an all-time high backlog
- HPE raised full-year 2026 revenue growth guidance to 34-37%, up from 29-33%
Hewlett Packard Enterprise stock jumped roughly 5% to $54.44 in the session after earnings before settling around $52.09 on September 5, 2026. The stock has gained approximately 114% year to date in 2026.
Hewlett Packard Enterprise Company, HPE
Q3 2026 revenue came in at $12.2 billion, up 34% from $9.1 billion a year earlier and above the analyst consensus of around $11.99 billion. Non-GAAP EPS of $1.11 beat estimates of $0.93 by roughly 18%.
Free cash flow reached $958 million in the quarter, the strongest Q3 figure in company history. Non-GAAP operating margin hit 16.2%, nearly double the 8.5% posted in the same quarter last year.
HPE raised its full-year 2026 revenue growth guidance to 34-37%, up from a prior range of 29-33%. Fourth-quarter 2026 revenue guidance was set at $13.9 to $14.8 billion, well above the $13.02 billion analysts had expected.
Full-year adjusted EPS guidance was raised to a midpoint of $3.80, an increase of about 12%.
AI Systems Drive Record Orders
AI Systems revenue hit roughly $1.6 billion in the quarter, with $2.4 billion in quarterly orders and backlog reaching an all-time high. Networks for AI orders came in at $700 million in Q3, with cumulative orders of $2.2 billion.
GreenLake customer count grew 18% year over year to 52,000. Private Cloud AI orders grew at triple-digit rates.
CEO Antonio Neri called AI “a multiyear growth driver,” pointing to enterprise customers moving beyond pilot projects into full-scale production deployments. A key win during the quarter was an expanded partnership with Oracle, where HPE Juniper networking products will support one of the largest AI cloud infrastructure build-outs in the industry.
Supply chain constraints, particularly around high-bandwidth memory and DDR5, continue to limit how quickly orders convert to revenue. Management said these pressures are expected to persist into next year.
Margin Debate and What Comes Next
Despite the strong beat, HPE stock fell about 5% in after-hours trading immediately after the release. Investors focused on management comments about gross margins expected to ease toward historical levels as AI Systems, which carry lower gross margins than traditional hardware, become a larger share of revenue.
The 16.2% non-GAAP operating margin in Q3 reflected a favorable mix of factors that management said may not repeat every quarter.
For fiscal 2027, HPE outlined a revenue growth framework of 13-17%, a step down from the 34-37% expected in 2026.
HPE’s board approved a quarterly dividend of $0.1425 per share, payable October 16, 2026 to holders of record as of September 17, 2026.
During the September 5 session, HPE traded between $51.49 and $54.64, closing at $52.09 on the New York Stock Exchange.
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