HPE Smashes Q3 2026 Earnings Expectations, Raises Outlook for Both Fiscal 2026 and Fiscal 2027
HPE's fiscal third quarter earnings conference call has revealed a record-breaking performance from the company, showcasing its continued growth momentum and disciplined execution. The results demonstrate HPE's ability to deliver high-quality financial outcomes, exceeding all its commitments and achieving new records across revenue, gross margin, non-GAAP operating profit, and earnings per share.
Speaking on the conference call, Antonio Neri, President and Chief Executive Officer of HPE, highlighted that AI has become a multi-year growth driver for the company. This expansion in demand is evident across HPE's portfolio, with orders growing faster than revenues. The quarter witnessed more orders than any prior quarter in HPE's history, culminating in a record-breaking backlog for the company.
The strong customer demand experienced during the quarter, however, has been hindered by supply constraints affecting the company's ability to fulfill this increased customer requirement. To address this issue, HPE is engaging closely with its partners to secure additional multi-year supply agreements and also providing customers with alternative product configurations and deeper planning interlocks to better forecast supply availability.
The financial results for Q3 2026 are truly impressive, with HPE delivering record revenue of $12.2 billion, a year-over-year increase of 34%. The company's non-GAAP gross margin reached a new high of 40%, and it generated record non-GAAP operating profit of $2 billion, representing a significant jump from the same period last year.
These outstanding results led to the highest free cash flow ever recorded by HPE for a third quarter, at $958 million. Notably, this performance also enabled the company to raise its outlook for both fiscal 2026 and fiscal 2027, as disclosed during the conference call.
In his remarks on the market and business segment performance, Antonio Neri noted the importance of an important milestone regarding HPE's Juniper Networks acquisition. The U.S. federal court approved the settlement with the Department of Justice in August, saying it serves the public interest. This outcome reinforces HPE's confidence in the long-term value of bringing these two great networking portfolios together.
