HPE Reports Strong Q1 2026 Results with Revenue Up 18%

Hewlett Packard Enterprise  reported strong financial results for the first quarter of fiscal 2026, ended January 31, 2026, with revenue reaching $9.3 billion, representing an 18% increase year over year. The company also recorded significant improvements in profitability and cash flow, driven by strong product demand and growth across multiple business segments.

The company reported GAAP gross margins of 35.9%, up 670 basis points from the same period last year, while non-GAAP gross margins reached 36.6%. GAAP diluted earnings per share stood at $0.31, exceeding the company’s projected outlook, while non-GAAP EPS reached $0.65, also surpassing expectations. Cash flow from operations totaled $1.2 billion, an increase of $1.6 billion year over year, while free cash flow reached $0.7 billion. The company returned $348 million to shareholders through dividends and share repurchases during the quarter.

According to Antonio Neri, president and CEO of HPE, the results were supported by strong networking performance and operational discipline.

“HPE delivered a strong first quarter, outperforming in our networking business and posting one of our most profitable quarters on record. Our Q1 results reflect our newly combined networking innovation, and effective operational discipline in a dynamic commodity supply environment. Demand for our products and solutions was strong, with orders increasing double digits year over year across all segments.”

– Antonio Neri, President and CEO, HPE

The networking segment delivered standout growth, generating $2.7 billion in revenue, a 151.5% increase compared to the previous year. Campus and branch networking generated $1.2 billion, data center networking $444 million, security $255 million, and routing $780 million, reflecting the impact of integrating the company’s networking portfolio, including the addition of Juniper capabilities.

Meanwhile, the Cloud & AI segment recorded $6.3 billion in revenue, slightly down 2.7% year over year, but with improved operating profit margins of 10.2%. Within this segment, server revenue reached $4.2 billion, storage $1.1 billion, and financial services $0.9 billion. The Corporate Investments and Other segment generated $261 million in revenue, reflecting a slight decline from the prior year.

Chief Financial Officer Marie Myers highlighted strong demand and disciplined cost management as key drivers of the quarter’s performance.

“We successfully delivered on our commitments in the quarter, and exceeded our expectations for profitability and cash flow measures. Strong demand, prudent cost management, and faster-than-planned Juniper and Catalyst synergies contributed to our performance and underscore our confidence that we will drive profitable, sustainable growth while transforming the way we operate.”

– Marie Myers, Chief Financial Officer, HPE

Looking ahead, HPE expects second-quarter fiscal 2026 revenue between $9.6 billion and $10.0 billion, with non-GAAP diluted EPS projected between $0.51 and $0.55. For the full fiscal year, the company reaffirmed its revenue growth outlook of 17% to 22%, while raising expectations for the networking segment to 68% to 73% growth. HPE also increased its full-year earnings outlook and now expects free cash flow of at least $2.0 billion.

The company’s board of directors also declared a quarterly cash dividend of $0.1425 per share, payable on April 23, 2026, to shareholders of record as of March 24, 2026.