Hewlett Packard Enterprise Company (HPE) Q2 2026 Financial Results Summary

2026-06-02 · Stocks · QuoteReporter

Hewlett Packard Enterprise (HPE) Q2 2026: Record Revenue and Profitability — Strongly Positive

Hewlett Packard Enterprise (HPE) reported a remarkable second quarter for fiscal 2026, achieving record revenue of $10.7 billion, which represents an increase of $3.1 billion or +40% compared to the same quarter last year. This performance significantly outpaced expectations and highlights the company's robust growth trajectory.

The quarter's results are undoubtedly positive for shareholders. The substantial revenue growth, coupled with impressive profitability metrics, indicates that HPE is effectively capitalizing on market demand, particularly in the areas of networking and cloud services. The company’s operational discipline and strategic execution have led to higher-than-anticipated profitability and free cash flow, which are critical indicators of financial health.

Key Financial Metrics:

Revenue: $10.7 billion, up $3.1 billion or +40% YoY
Gross Margin:
- GAAP: 36.5%, up 810 basis points YoY
- Non-GAAP: 36.9%, up 750 basis points YoY
Diluted Net EPS:
- GAAP: $0.44, up $1.26 YoY
- Non-GAAP: $0.79, up $0.41 YoY
Cash Flow from Operations: $1.4 billion, an increase of $1.9 billion YoY
Free Cash Flow: $0.9 billion, an increase of $1.8 billion YoY
Capital Returns to Shareholders: $343 million in dividends and share repurchases

HPE's gross margins improved significantly, with GAAP margins rising to 36.5% and non-GAAP margins reaching 36.9%. This reflects the company's ability to manage costs effectively while driving revenue growth. The diluted net earnings per share (EPS) also exceeded expectations, with GAAP EPS at $0.44, surpassing the outlook range of $0.09 - $0.13, and non-GAAP EPS at $0.79, exceeding the forecast of $0.51 - $0.55.

Dividend and Share Buyback:

The Board of Directors declared a regular cash dividend of $0.1425 per share, payable on or about July 15, 2026, to stockholders of record as of the close of business on June 16, 2026. This commitment to returning capital to shareholders is a positive signal of HPE's financial stability and confidence in future performance.

Guidance Changes:

HPE has raised its fiscal 2026 revenue growth outlook to a range of 29% to 33% and has increased its expectations for the Networking segment to 72% to 75% growth. The company also anticipates GAAP diluted net EPS to be in the range of $2.42 to $2.52 and non-GAAP diluted net EPS to be in the range of $3.35 to $3.45. Furthermore, HPE expects free cash flow to be at least $3.5 billion, indicating strong cash generation capabilities.

Forward Catalyst:

Investors should closely monitor HPE's performance in the upcoming quarter, particularly in light of the raised guidance and the ongoing integration of Juniper Networks. The company’s ability to sustain this momentum and deliver on its ambitious growth targets will be crucial. Additionally, the market's response to HPE's strategic initiatives in AI and cloud services will be a key area to watch, as these sectors are expected to drive future growth.

In summary, HPE's second quarter results reflect a strong operational performance and a positive outlook for the remainder of fiscal 2026. The company is well-positioned to capitalize on market opportunities, making it an attractive prospect for investors.

Condensed Consolidated Statements of Earnings

Amounts in millions, except per share amounts

Note: The amounts in the following tables are in thousands/millions.

	For the three months ended
	April 30, 2026	January 31, 2026	April 30, 2025
Net revenue	$10,678	$9,301	$7,627
Costs and Expenses:
Cost of sales	$6,778	$5,961	$5,458
Research and development	$922	$744	$540
Selling, general and administrative	$1,830	$1,698	$1,298
Amortization of intangible assets	$323	$311	$37
Impairment charges	$—	$—	$1,361
Acquisition, disposition and other charges	$78	$117	$42
Total costs and expenses	$9,931	$8,831	$8,736
Earnings (loss) from operations	$747	$470	$-1,109
Interest and other, net (1)	$-73	$-54	$39
Earnings from equity interests	$25	$17	$25
Earnings (loss) before provision for taxes	$699	$433	$-1,045
(Provision) benefit for taxes	$-75	$19	$-5
Net earnings (loss) attributable to HPE	$624	$452	$-1,050
Preferred stock dividends	$-29	$-29	$-29
Net earnings (loss) attributable to common stockholders	$595	$423	$-1,079
Net Earnings (Loss) Per Share Attributable to Common Stockholders:
Basic	$0.45	$0.32	$-0.82
Diluted	$0.44	$0.31	$-0.82
Cash dividends declared per share	$0.14	$0.14	$0.13
Cash dividends accrued per preferred share	$0.95	$0.95	$0.95
Weighted-average Shares Used to Compute Net Earnings (Loss) Per Share:
Basic	1,335	1,334	1,322
Diluted	1,432	1,356	1,322

Condensed Consolidated Balance Sheets

Amounts in millions, except par value