Hewlett Packard Enterprise Co (HPE), a leader in enterprise technology, announced its financial results for the first quarter of fiscal 2026, showcasing robust performance despite the challenges posed by the dynamic commodity supply environment. The press release dated March 9, 2026, highlighted impressive revenue growth and operational efficiency that positions the company for sustainable growth.

1. Key Financial Highlights

Revenue: HPE reported revenue of $9.3 billion, marking an 18% increase from the previous year.

Gross Margins:

GAAP gross margin stood at 35.9%, an increase of 670 basis points year-over-year.

Non-GAAP gross margin was 36.6%, up 720 basis points from the same period last year.

Earnings Per Share:

GAAP diluted net EPS was $0.31, down from $0.44 in the prior-year period but exceeding the company's outlook of $0.09 to $0.13.

Non-GAAP diluted net EPS reached $0.65, an increase of $0.16 year-over-year, surpassing expectations of $0.57 to $0.61.

Cash Flow:

Cash flows from operations were $1.2 billion, a remarkable increase of $1.6 billion compared to the prior year.

Free cash flow stood at $0.7 billion, also reflecting a year-over-year increase of $1.6 billion.

Capital Returns: HPE returned $348 million to shareholders in the form of dividends and share repurchases.

2. Segment Performance

Networking

The networking segment experienced exceptional growth, with revenue reaching $2.7 billion, up 151.5% from the previous year. Noteworthy highlights from this segment include:

Campus & Branch Revenue: $1.2 billion, reflecting a 42.0% year-over-year increase.

Data Center Networking Revenue: $444 million, up 382.6% compared to the prior year.

Operating Profit Margin: Despite strong revenue, the operating profit margin in networking decreased to 23.7% from 29.7% in the prior-year period.

Cloud & AI

In the newly consolidated Cloud & AI segment, revenue totaled $6.3 billion, down 2.7% from last year. However, the segment's operating profit margin improved to 10.2%, up from 8.4% in the prior year. Notable figures include:

Server Revenue: $4.2 billion, a slight decrease of 2.7% year-over-year.

Storage Revenue: $1.1 billion, with a minimal increase of 0.6%.

Financial Services Revenue: $0.9 billion, up 0.3% from the previous year.

Corporate Investments and Other

This segment reported revenue of $261 million, a 2.2% decline from the previous year, with an operating loss margin of -4.6%, down from -3.0% year-over-year.

3. Dividend Announcement

The Board of Directors declared a regular cash dividend of $0.1425 per share, payable on or about April 23, 2026, to stockholders of record as of March 24, 2026.

4. Outlook for Fiscal 2026

HPE provided optimistic guidance for the second quarter, estimating revenue between $9.6 billion and $10.0 billion. The company anticipates GAAP diluted net EPS to be in the range of $0.09 to $0.13, and non-GAAP diluted net EPS to range from $0.51 to $0.55. Furthermore, HPE reaffirmed its full-year revenue growth outlook of 17% to 22%, with an increased forecast for the networking segment projected growth of 68% to 73%.

Key Takeaways

The results underscore HPE's commitment to innovation and operational excellence, as emphasized by CEO Antonio Neri, who noted strong demand and effective cost management in a challenging environment. With a solid first quarter and an optimistic outlook, HPE is well-positioned to navigate the evolving landscape of enterprise technology, focusing on sustainable growth and shareholder value.

Original press release