This ranking evaluates how Fortune 500 companies are deploying AI, and how technology leaders value those investments relative to industry peers.

Fortune AIQ 75

The companies on the Global 500 employ 70.2 million people, and their revenue represents more than one-third of the world’s GDP.

Fortune Global 500

With a combined revenue of $21 trillion and $2.1 trillion in profits, the 2026 Fortune 500 is the definitive list of America's largest companies.

Fortune 500

Fortune partnered with Great Place to Work to analyze survey feedback representing nearly 100,000 U.S. employees.

GPTW_100BestCompaniesToWorkForByRegion_2026-Texas_Large-HPE_US1__69b3fda85504e0abfadc0519_3

Employees say:"I am proud to work at HPE because of the support I receive from leadership to be able to come to work as my true self. I am also supported in career growth, positive networking and opportunities to show my value to the company. I hope to have a lasting career here. The culture is what truly makes it special and safe here."

Best Large Workplaces in Texas

The 300 companies on this year’s list brought in over $12.5 trillion in revenue for the latest 12 months, with the median revenue figure at $24 billion.

America's Most Innovative Companies

AI is a major force shaping this year’s list—but it’s far from the only story.

World's Most Admired Companies

This year's 100 Best Companies to Work For are rebuilding the social contract at work so people feel supported, trusted, and future-ready as they undergo that transition.

100 Best Places to Work 2026_HPE

Employees say:"I've never worked someplace with such a flat organizational feel to it. The access to senior leaders and ability to have conversations on a level playing field is amazing, making you feel important in your role and part of a bigger picture within the company."

Fortune 100 Best Companies to Work For

Fortune AIQ 50

See which workplaces made this year's list.

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Employees say:"Our culture is top notch, and our people make this a great place to work. I love that on my team we can bring new ideas to the table, have a seat at the table, and know with confidence that our ideas will be considered. I am fully trusted to get my work done and my leader is available any time I need her. I also love the frequency of the recognition within our team. It keeps our team motivated and inspired."

Best Large Workplaces in Technology

Fortune partnered with Great Place to Work to analyze survey feedback representing nearly 116,000 U.S. employees.

Best Workplaces_Texas_Large_2025-Hewlett Packard Enterprise_US1__67fd62d0bb07cc513ab900d5_3

Employees say:"HPE is a company that prioritizes employee retention in a way that I've found to be very rare, especially in tech. There is a real focus on ensuring that people who work here are happy and fulfilled in their roles. There are also opportunities for people to find other roles within HPE if they are unhappy in their current role, instead of looking for a job at another company. I think this improves not only our company culture, but also the quality of our products/services. There is an amazing amount of expertise that is able to build when people stick around for a long time. As a newer employee, I really value the knowledge that the long-time members of my team have."

Almost $20 trillion in revenue—and a record-breaking $1.87 trillion in profits. Introducing the 2025 Fortune 500, the definitive list of the biggest companies in America.

The top companies on our list have one thing in common: Staff largely trust leadership to see them as well-rounded people and reward them for a job well done.

GPTW_100BestCompaniesToWorkFor_2025-Hewlett Packard Enterprise_US1__20241210214006_1

Employees say: "My upper-level management is exceptionally good, especially my immediate manager. The entire team is extremely supportive and invested in you learning and performing well. It is one of the healthiest work environments I have ever worked in. I would work here just for that reason alone."

The 300 companies on this year’s list brought in over $12.6 trillion in revenue for the latest 12 months, with the median revenue figure at $22 billion.

Leaders in all industries rely more than ever on Big Tech—and appreciate the giants that deliver, at scale, without drama.

2025 Best Large Workplaces for Parents_HPE_US1__68b9ad8e7757c3af0ca2bb8e_3

Best Large Workplaces for Parents

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Employees say:"What is truly exemplary is the 6 months of parental leave for having a child, but what's even more special is the recipients include adoptive parents. In addition, the huge benefit for those struggling with fertility and/or adoption...HPE really cares about its teams families."

Hewlett Packard Enterprise

Employees say:"HPE does an excellent job with Employee Resource Groups to help build the culture. Executives support the initiatives and the ERG leaders host events that make everyone feel welcome. I share our activities on social media and my friends are amazed at all we do for our employees at HPE."

Industries included in the sector are computers, internet services, IT services, semiconductors, and software companies.

Fortune Sector Leaders: Technology

Fortune partnered with Great Place to Work to analyze survey feedback representing nearly 95,000 U.S. employees.

GPTW-2024-Texas-Large-Hewlett-Packard-Enterprise

Employees say:"The wellness Fridays, innovation days, and the team member appreciation day are taken seriously and are nice benefits. The innovation days help employees to expand their knowledge toolkits and attack new problems and find new ways of doing things."

The Fortune 500, in its 70th year in 2024, ranks the biggest U.S. companies by revenue.

Creating a more empathetic workplace looks like staying loyal to workers, emphasizing D&I initiatives, and paying well.

100 Best Companies 2024-Hewlett Packard Enterprise

In 2015, when HPE was created in the wake of Hewlett-Packard’s separation, it made ambitious DEI goals a key part of its agenda. In February, it earned the top spot in Just Capital’s annual ranking, which takes into account social factors such as paying a fair living wage, creating American jobs, providing benefits to ensure work-life balance, and minimizing pollution. HPE was also dubbed the 15th-best workplace for parents last year, owing in large part to its flexible remote-work policies as well as its paid gender-neutral parental leave, bereavement leave after a miscarriage, and reimbursement for fertility expenses. &nbsp;HPE’s remote-work model, which it rolled out during the pandemic, reimagined offices as cultural and collaboration hubs, with workspaces reflecting HPE’s hybrid vision—equipped with more meeting spaces and hybrid tech. Approximately 78% of team members say they are pleased with the model. And nearly 87% say they are happy with the connectivity tools that bring team members together. Among hybrid staff, 84% say their work environment enables them to perform their roles more effectively.

The 26th edition of the list shows how much esteem Big Tech giants command among other business leaders.

The 25th Fortune World’s Most Admired Companies list suggests that tech giants’ peers respect them as much as ever.

Building a culture of trust and transparency is essential to help everyone thrive, especially in rocky economic times.

100 BEST COMPANIES 2023-HPE

IT firm Hewlett Packard emphasizes the importance of transparency between employees and management. 
<ul> 
 	<li>So far more than 3,500 employees have taken part in Mystery Coffee, a program where team members connect with others from around the globe for virtual one-on-one coffee breaks.</li> 
 	<li>Employee wellness is a top priority at HPE, and team members worldwide can leave work three hours early on designated Wellness Fridays to spend time focused on their personal well-being.</li> 
 	<li>Staff receive financial wellness help, too, with tools enabling them to assess their current money situation and receive insights on how to budget, manage debt, build savings, and protect their finances.</li> 
 	<li>“HPE encourages employees to speak up, innovate, collaborate, be empowered, own our development, et cetera,” noted one employee.</li> 
</ul>

GPTW Texas 2023-Hewlett Packard Enterprise

Employees say: 
 
"HPE encourages employees to speak up, innovate, collaborate, be empowered, own your development, etc. HPE is a place of unlimited opportunities to grow and contribute, and provides a sense of belonging of a family."

GPTW 2023 Best Workplaces Tech LargeHewlett Packard Enterprise Company_1

Employees say: 
 
"Top executives care for employees, encourage and provide opportunities for work-life balance, and celebrate every ethnicity and culture. That creates a great all-inclusive culture, which is the best thing this company offers."

The Fortune 500, in its 69th year in 2023, ranks the biggest U.S. companies by revenue.

Just as it dominates our economy, Big Tech now dominates Fortune’s annual ranking of corporate reputation.

When it comes to supporting employees, flexibility, diversity, and a few extra paid days off go a long way.

100 Best 2022-Hewlett Packard Enterprise

Hewlett Packard Enterprise—which split from Hewlett-Packard in 2015 and focuses on information technology—saw order growth up 20% during the first fiscal quarter of 2022 as many U.S. companies continued to bring employees back to the office. Yet internally HPE has doubled down on the mental and emotional support offered to employees and focused on rolling out benefits like the Work That Fits Your Life program. As part of the initiative, rolled out in 2019, employees get access to three hours of paid time off one Friday a month and six full Fridays off each summer.

A key trait that shines through for company after company on this year's list is all-around fairness.

GPTW Texas Large 2022-Hewlett Packard Enterprise Company

Employees say: 
 
“Through almost 25 years of working here I've been able to balance my work and life. HPE has allowed me to be there for my children, attend field trips, and volunteer in classrooms throughout the years. When my parents get sick, I am able to balance my work and tend to them. I honestly don't know what other company would allow me to do this. I am so grateful to HPE and always tell people how much I LOVE MY JOB AND COMPANY! My colleagues are not just my colleagues but my family! Now with being an Edge worker, it's only made my work life so much easier. Thank you HPE!!!” 
 
Read the Great Place to Work review .

Fortune collaborated with the Diligent Institute to rank the most innovative boards of directors among S&P 500.

Modern Boards 2022  Hewlett Packard Enterprise

In 2014, the old-guard Silicon Valley giant Hewlett-Packard split into two companies, HP Inc. and Hewlett Packard Enterprise. Since then, both have found strong footing in corporate governance: Both HPE and HP made this list. (HP is No. 9.) 
 
That fact signals a remarkable turnaround. A little over a decade ago, Hewlett-Packard’s board endured multiple controversies involving proxy fights, <a href="https://www.businessinsider.com/a-brief-history-of-hps-totally-dysfunctional-board-2011-9#a-couple-weeks-later-fiorina-was-fired-4">unusual CEO transitions</a>, and a scandal over surveillance of colleagues and journalists that led to the <a href="https://money.cnn.com/2011/01/20/technology/HP_board_of_directors/index.htm#:~:text=The%20long%20and%20winding%20Hurd,marketing%20contractor%20for%20the%20company.">departure of four directors</a> in 2011. 
 
With those issues far in the past, HPE’s board earned the No. 2 spot on this list thanks to strengths in board expertise, gender equality, and board independence, among other criteria. The company specializes in enterprise information tech; it has recently seen particularly robust growth from its Intelligent Edge division, a data analytics and business intelligence platform. 
 
HPE’s board is chaired by Patricia Russo, former CEO of Alcatel-Lucent, the communications company. Russo is also a director at Merck, General Motors, and the private equity firm KKR. 
 
HPE’s directors’ careers reflect a wide range of expertise. Daniel Ammann is a former president of General Motors, as well as its former CFO, and until recently was CEO of GM Cruise LLC, a subsidiary of GM that focuses on autonomous vehicles. Pamela Carter is a former executive at Cummins, a machinery design and manufacturing company, where she was a business unit leader and general counsel; she chairs HPE’s HR and compensation committee.  
 
George R. Kurtz started his career at PwC and later founded a tech company that was acquired by McAfee. Mary Agnes Wilderotter chairs the audit committee and is the former CEO of Frontier Communications. 
 
In the non-CEO realm, Raymond Ozzie is a former chief software architect at Microsoft and a fellow of the Computer History Museum; Gary M. Reiner is the former chief information officer at General Electric; and Raymond Lane is the former COO of Oracle and partner emeritus at the famed venture capital firm Kleiner Perkins.

Fortune Modern Board 25

GPTW Information Technology Large 2022-Hewlett Packard Enterprise Company

Employees say: 
 
“The ability to make employees feel like a significant part of the overall team. In a company this size it's hard for employees to feel as if they make a difference. At HPE they go the extra mile to make sure that you know your contributions are critical for the company's success.”

This year’s Fortune 500 marks the 68th running of the list.

After a year in which humanity leaned more heavily than ever on tech giants, see which companies topped Fortune's ranking of corporate reputation.

Total revenue for the world’s biggest companies fell 4.8% to $31.7 trillion this year—the first decline in half a decade.

Hewlett Packard Enterprise was founded in 2015 after splitting from the Hewlett-Packard company. Specializing in business information technology, the company offers cloud and infrastructure services to provide data storage, security, and network connectivity to its customers.

Caring leaders at the Best Workplaces in Technology have been preparing their companies to thrive as the business world emerges from the COVID downturn.

Best-Workplaces-in-Technology-Large-Hewlett-Packard-Enterprise-Company

Employees say: 
“I am appreciative of the open line of communication our CEO and executive committee have kept in place with the entire company, especially during the COVID-19 shelter-in-place.” 
Read the Great Place to Work review .

These companies empower employees to bring their whole selves to work, prioritize their well-being, and grow in their careers.

Best Workplaces Women 2020-Hewlett Packard Enterprise Company

Employees say: 
 
“Our company is committed to our wellness and has provided many employee resources for financial, physical, emotional wellness. For example, every month we can leave several hours early to take care of ourselves on what's called a Wellness Friday.”

Best Large Workplaces in the Bay Area

This year’s Fortune 500 marks the 67th running of the list.

F500-2021-106-Hewlett Packard Enterprise

We surveyed tens of thousands of employees to create this list of millennials’ favorite workplaces.

Best Large Workplaces Millennials 2021-Hewlett-Packard-Enterprise

Employees say: 
 
“Management is very supportive about growing and expanding your knowledge. Whenever I have shown interest in working on areas outside of my expertise, management has always been supportive, which I really appreciate.”

100 Best Large Workplaces for Millennials

For an astounding 13th straight year, Apple claims the top spot in Fortune’s annual ranking of corporate reputation, based on a survey of almost 3,800 executives, directors, and analysts.

This year's Fortune Global 500 generated $33.3 trillion in revenues and $2.1 trillion in profits.

G500-2020-431-Hewlett-Packard-Enterprise

Hewlett Packard Enterprise is a provider of various technologies including servers, storage, and networking equipment. Like many hardware companies, HPE has experienced pandemic-related supply chain problems in 2020, causing the company in March to walk back predictions that revenues would increase this year.

The companies on this year's list make a conscious effort to be supportive, inclusive workplaces.

Employees say: 
 
“While my husband was deployed, I was raising three kids with no close family. HPE has supported me for doctor appointments, sick kids, and school events. It was empowering to know that I could be a career-driven mom. ”

100 Best Large Workplaces for Women

This year's Fortune 500 marks the 66th running of the list.

F500-2020-109-HP

Hewlett Packard Enterprise is a provider of various technologies including servers, storage, and networking.

Here are the World's Most Admired Companies for 2019 as ranked in their industries. See who made the list.

This year's Fortune Global 500 generated $27.7 trillion in revenues and $1.5 trillion in profits.

This year's Fortune 500 marks the 65th running of the list.

This year's Fortune 500 marks the 64th running of the list.

This year's Fortune 500 marks the 63rd running of the list.

Company Info

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Total Worldwide [including U.S.] Revenue in the Latest Fiscal Year

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Best Workplaces For Parents

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Maximum $ amount covered for fertility services

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Fully paid paternal leave (days)

Fully paid adoptive leave (days)

Maternal leave in addition to regular time off (days)

Paid days off for volunteering

Best Workplaces In Technology

Sector

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Best Workplaces In Texas

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Hewlett Packard Enterprise focuses on enterprise IT solutions for customers across the Americas, Europe, the Middle East, and the Asia-Pacific region. The company delivers products and services related to cloud computing, servers, storage, networking, artificial intelligence, and more. HPE has developed several of the fastest supercomputers in the world. With origins tracing back to 1939, the company was spun off from PC manufacturer HP in 2015 and has since expanded through several acquisitions.

Q3 2026

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Hewlett Packard Enterprise (HPE): Company Profile, Stock Price, News, Rankings

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hewlett packard enterprise

Please note this event is being recorded. I would now like to turn the conference over to Shannon Cross, Chief Strategy Officer. Please go ahead.

Good afternoon. I'm Shannon Cross, Chief Strategy Officer for HPE. I'd like to welcome you to our fiscal 2026 third quarter earnings conference call with Antonio Neri, HPE's President and Chief Executive Officer, and Marie Myers, HPE's Chief Financial Officer. Before handing the call to Antonio, let me remind you that this call is being webcast. A replay of the webcast will be available shortly after the call concludes. We have posted the press release and the slide presentation accompanying the release on our HPE Investor Relations webpage. Elements of the financial information referenced on this call are forward-looking and are based on our best view of our business and the external factors affecting us as we see them today. HPE assumes no obligation and does not intend to update any such forward-looking statements.

We also note that the financial information discussed on this call reflects estimates based on information available at this time and could differ materially from the amounts ultimately reported in HPE's quarterly report on Form 10-Q for the fiscal quarter ended July 31st, 2026. Figures used in verbal remarks are rounded for ease of discussion. For more detailed information, please see the earnings materials, as well as disclaimers relating to forward-looking statements that involve risk, uncertainties, and assumptions. Please refer to HPE's filings with the SEC for more detailed discussion of these risks. For financial information that we are showing on a non-GAAP basis, we have provided reconciliations to the comparable GAAP information. Please refer to the tables and slide presentation accompanying today's earnings release on our investor relations website for details. Throughout this conference call, all revenue growth rates, unless noted otherwise, are presented on a year-over-year basis.

Unless otherwise noted, all financial metrics and growth rates discussed today are non-GAAP, and EPS refers to non-GAAP diluted net earnings per share. Certain financial information featured in the presentation today has been normalized to include Juniper Network's results as of the beginning of HPE's fiscal year 2025. Antonio and Marie will reference our earnings presentation in their prepared comments. We will also be disclosing records for certain financial metrics during the presentation. Please refer to our endnotes in the presentation while reading these statements. With that, let me turn it over to Antonio.

Thank you, Shannon. Good afternoon, everyone. Our strategy is proving itself again this quarter. We deliver another set of record financial results, which demonstrates the durability of our profitable growth momentum and disciplined execution across the company. We exceeded all our company-wide financial commitments, achieving record results across revenue, gross margin, non-GAAP operating profit, and earnings per share. AI has become a multi-year growth driver, expanding demand across our HPE portfolio. Customer demand in the quarter accelerated across both business segments, with orders growing faster than revenues. We booked more orders than any prior quarter in our history, resulting in a record-breaking backlog for the company. Supply constraints continue to affect our ability to fulfill the increased customer demand. We are collaborating very closely with our partners to secure additional multi-year supply agreements.

We are also providing our customers with alternative product configurations and deeper planning interlocks to better forecast supply availability. In fiscal Q3, HPE delivered record revenue of $12.2 billion, up 34% from a year ago. Our HPE revenue growth year to date has risen about twice as fast as it did over the same period last year. HPE non-GAAP gross margin was a record of 40%. We generated record non-GAAP operating profit of $2 billion, 2.5 times more than a year ago. Non-GAAP earnings per share was $1.11, another record, and the first time we achieved more than $1 in non-GAAP EPS in a single quarter. Our outstanding operating results translated directly into stronger cash generation, resulting in our highest free cash flow ever for a third quarter at $958 million. Last quarter, we updated our fiscal 2026 outlook and introduced our initial fiscal 2027 growth framework.

Thanks to our record results, record orders, and record backlog, we are raising our outlook for both fiscal 2026 and fiscal 2027. Marie will discuss the details shortly. Before I hand over the call to Marie, I want to provide some observations about the market and our business segment performance. I also want to note an important milestone regarding our Juniper Networks acquisition. In August, a U.S. federal court approved our settlement with the Department of Justice, saying it serves the public interest. We are pleased with the outcome, which reinforces our confidence in the long-term value of bringing these two great networking portfolios together. A year after closing the Juniper Networks acquisition, our integration plan and cost synergies remain ahead of schedule. The business performance continues to strengthen through expanded innovation and strong execution.

The enhanced ability to compete is already driving more innovative networking solutions for customers and higher profitable growth for shareholders. Order bookings and revenue for our networking products and services reached record levels despite supply constraints, which limited our ability to convert the higher demand into revenue in the quarter. Campus and branch had record revenue as customers modernized aging edge infrastructure and deploy AI-driven network operations. Orders were ahead of revenue, demonstrating the differentiation of our self-driving networks and the versatility across multiple cloud deployment models. Routing and data center switching demand accelerated in the quarter, with orders substantially ahead of revenue and our backlog at its highest ever. Our backlog reflects strong customer demand from hyperscalers and neo clouds for our routers, switching, and AI-driven operation software as they continue to increase their AI cloud CapEx infrastructure investments.

Growth in our backlog shows strong customer demand is running ahead of available supply. We expect to convert more orders into revenue in Q4, which gives us even greater confidence in sustaining our networking growth in fiscal 2027. Today, we announced an expanded collaboration with Oracle to accelerate gigawatt-scale AI infrastructure. Oracle will deploy HPE Juniper Networking routers and switches across one of the largest AI cloud infrastructure build-outs. HPE is uniquely positioned to support Oracle with a network for AI portfolio, which is one of the most comprehensive in the industry. SASE and security also contributed to our growth. Our strong performance in firewall, SD-Branch, and Branch SRX reflects growing customer demand for networking and security that operate as one converged solution.

I hope you will attend our upcoming Networking Investor Day later this month to hear more about how our networking strategy, innovation, and business momentum are giving us even greater confidence in the opportunity ahead. While our networking segment continues to strengthen through our thoughtful integration, our cloud and AI segment continues to perform exceptionally well in a very supply-constrained environment. We delivered record revenue, operating profit, and operating margin. AI is beginning to inflect beyond early proof-of-concept training deployments into a broader enterprise workflow transformation opportunity. Customers are increasingly investing in new agentic AI applications and AI inferencing, requiring accelerated computing infrastructure, secure data storage access, and enterprise-grade cloud management. Our comprehensive cloud and AI portfolio is perfectly positioned for this market inflection. We continued to experience strong demand across traditional servers, AI systems, storage, private cloud solutions, and GreenLake cloud services.

The server product category drove the outperformance with high demand for traditional servers and AI systems. We saw strong demand from large enterprises, neo cloud service providers, and sovereign customers. We expect demand to remain exceptionally high as our pipeline remains multiples of our backlog. A fundamental shift in the server business is becoming quite clear. The way customers value their IT infrastructure is changing. Their focus is not just whether a server can run AI workloads, but also how it can enable entirely new business workflows using new AI applications. We are seeing AI-related enterprise initiatives receive higher levels of investment than traditional IT projects. There is more top-level executive engagement in making those investment decisions, including company boards, which are championing AI technology to unlock further business transformation potential. Storage had a standout quarter with record revenue.

It benefited from our decision to focus on our own IP offerings by delivering a modern multi-data protocol platform for the AI era. Customers are beginning to evaluate whether the AI workloads can be run most efficiently with the best secure data management and the lowest cost per token. Organizations are still in the process of modernizing data storage environments while preparing for the next generation of AI-driven workloads and applications. They want data to be close to their AI infrastructure, and they want control over sensitive information. These trends are driving strong demand for our HPE Alletra Storage MP storage solutions. We are confident our comprehensive data storage value proposition will continue to accelerate this momentum in our storage business. Our Private Cloud AI platform allows customers to manage enterprise AI applications and AI agents while keeping control of data governance, security, and operations.

Demand for PCAI is strong from enterprise customers that want to optimize the token economics of large-scale AI deployments on premises. That is rapidly scaling our order bookings and the size of our customer base. HPE GreenLake remains one of our greatest differentiators because it allows customers to manage infrastructure and software through a secure hybrid cloud operating model regardless of where traditional and new AI workloads reside. Customers are broadening their utilization of our HPE GreenLake cloud services, expanding their existing usage by consuming our new software and intelligent cloud services, which increases our net retention rates. in Q3, the number of HPE GreenLake customers grew 18% to 52,000, up from 44,000 a year ago. HPE Financial Services continues to deepen our customer relationships and offer a meaningful competitive advantage, which is becoming especially important as more customers look for financing options to help with their AI investments.

As a result, HPEFS generated third-quarter records in financing volumes, residual value, and return on equity. In closing, HPE delivered another outstanding quarter, exceeding our company-wide commitments and demonstrating the ongoing differentiation in our strategy and its execution. As we look ahead, the same underlying drivers of our performance give us confidence in continuing to deliver higher profitable growth, higher cash flow generation, and higher capital returns for shareholders. I want to thank our team members for their focus and strong execution so far this year. Our amazing talent and culture have set our performance apart this quarter and in fiscal 2026 to date. With that, let me turn the call over to Marie. Marie?

Thank you, Antonio, and good afternoon, everyone. We delivered another strong quarter reflecting accelerating demand for AI and solid networking momentum together with disciplined execution across the company. The demand environment remains robust as orders continue to outpace revenue. Investment in AI infrastructure is increasing at a rapid pace, with enterprise spending focused on agentic AI workloads and AI inferencing. Importantly, this opportunity is broadening across use cases, customer verticals, and geographies, reinforcing the value of HPE's expanded portfolio and our ability to provide customers with integrated solutions across the enterprise technology stack. We remain focused on executing against strong customer demand, navigating a dynamic supply environment, managing mix and input costs while driving operating leverage. This discipline is reflected in our financial performance, supporting durable profitable growth in fiscal 2026 and 2027. Let me walk you through the results.

Revenue of $12.2 billion increased 34%, exceeding the high end of our guidance range, with order growth up 42% on a normalized basis, led by demand in traditional servers, AI systems, and networking. Gross margin exceeded 40%, driven by disciplined pricing in traditional servers and increased networking mix. Going forward, we expect our gross margin to moderate toward more historical levels, driven by the growth in AI systems and the normalization in traditional servers, offset by the growing mix of networking. Operating expense was up 17% sequentially due to higher variable compensation reflecting our record financial results. We expect operating expense to decrease in FY 2027 as variable compensation normalizes, and we see continued benefit from Catalyst Transformation efficiencies and Juniper Synergy. Operating profit was $2 billion, up nearly 40% sequentially. Operating margin of 16.2% expanded by 290 basis points sequentially, driven by gross margin expansion and operating leverage.

EPS was $1.11, well above the high end of our guidance. GAAP EPS was $1.06. We delivered Q3 free cash flow of $958 million, driven by strong operating profit as well as collections. Now, let's turn to our segment results. Networking revenue of $2.9 billion was up 10% on a normalized basis, consistent with our outlook. Orders increased 36%, about 3.5 times faster than revenue. Order growth was broad-based across the portfolio, led by AI infrastructure-related investments in data center switching and routing, and strong demand for self-driving networks in campus and branch. Networks for AI demand accelerated in Q3, with orders reaching a new high of $700 million, up triple digits. Our portfolio and competitive position in scale up, scale out, and scale across strengthened by the recent launch of our direct liquid-cooled Tomahawk 6 base switch and our differentiated PTX and MX routing portfolio.

Our pipeline continues to increase, with further acceleration expected as we bring the Helios platform to market. We expect networks for AI to be a meaningful growth engine for the company. Cumulative networks for AI orders were $2.2 billion, surpassing our FY 2026 target. As a result, we are increasing our year-end target to $2.5 billion-$3 billion. To meet this order growth, we have more than doubled our networking purchase commitments quarter over quarter. Within networking, campus and branch revenue grew 8% on a normalized basis. Routing revenue growth accelerated to 23% as we benefit from increasing demand for our on and off-ramp AI network infrastructure. Security grew 12%, while data center networking revenue declined 6% due to shipment timing driven by supply constraints.

Hewlett Packard Enterprise (HPE) Q3 2026 Earnings Call Transcript

Company Participants