Hewlett Packard Enterprise Q3 2026: EPS Beats by 20% as AI Demand Doubles Margins
As seen on the 24/7 Wall St. homepage on September 2, 2026.
The AI infrastructure build-out is now showing up in profits: non-GAAP operating margin nearly doubled to 16.2% from 8.5% a year ago. Management raised full-year FY26 EPS guidance to $3.75 to $3.85 and set FY27 free cash flow at a minimum of $5 billion.
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Adjusted non-GAAP EPS of $1.11 for the fiscal third quarter beat the $0.93 consensus, marking a fifth straight quarter of topping Wall Street's expectations. Revenue rose 32.7% year-over-year, ahead of estimates.
Non-GAAP operating margin nearly doubled to 16.2% from 8.5% a year ago, evidence that the AI infrastructure buildout has become a profitability inflection for HPE. Net income and free cash flow both climbed sharply.
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Networking revenue grew 74.9% year-over-year, with server revenue also rising on accelerating AI-driven demand. CEO Antonio Neri described the results as demonstrating "the durability of our profitable growth momentum" and called AI "a multi-year growth driver" for the company.
Management raised full-year FY26 non-GAAP EPS guidance to $3.75 to $3.85 and set a free cash flow floor for FY27. Fourth-quarter revenue guidance points to momentum that is far from peaking.
Sources
Mentioned: HPE