TLDR
- HPE revenue jumps 18% to $9.3B as networking demand accelerates
- Networking unit surges 151% after Juniper integration boosts growth
- EPS beats guidance as margins expand and expenses decline
- HPE raises full-year outlook with stronger revenue and EPS forecast
- Stock rises 3.22% to $21.81 after strong Q1 earnings results
Hewlett Packard Enterprise (HPE) shares reported stronger-than-expected fiscal first-quarter results while its networking business delivered rapid growth. Revenue climbed 18% year over year, and margins expanded as demand for networking and infrastructure products strengthened. Consequently, the stock rose about 3.22% to $21.81 and continued slightly higher in extended trading.
Hewlett Packard Enterprise Company, HPE
Strong Revenue Growth and Profitability Lift First-Quarter Performance
Hewlett Packard Enterprise generated $9.3 billion in revenue during the quarter ended January 31, 2026. The result marked an 18% increase from the same period last year. The company reported stronger profitability and improved cash flow.
Non-GAAP diluted earnings per share reached $0.65, which exceeded management’s previous guidance range. Meanwhile, GAAP earnings per share came in at $0.31. Higher pricing discipline and stronger networking demand supported margins.
Gross margin reached 36.6% on a non-GAAP basis and improved compared with last year. Operating margin reached 12.7% as operating expenses declined sequentially. The company maintained cost control while product demand remained firm.
Networking Business Expansion Drives Growth Momentum
The networking segment delivered the strongest expansion across Hewlett Packard Enterprise operations. Segment revenue reached $2.7 billion and increased more than 151% compared with last year. This growth followed the integration of Juniper Networks with the company’s networking portfolio.
Campus and branch networking products generated $1.2 billion in revenue and increased 42% year over year. Data center networking revenue surged to $444 million. Security and routing products also recorded strong growth.
Routing revenue alone reached $780 million, compared with minimal revenue in the prior year. Security revenue climbed to $255 million and more than doubled. These gains strengthened overall networking demand across enterprise and data center customers.
Cloud and AI Segment Holds Steady as Company Raises Outlook
The cloud and AI segment produced $6.3 billion in revenue during the quarter. This result declined slightly by 2.7% compared with last year. However, operating margin improved to 10.2% due to operational adjustments.
Server revenue totaled $4.2 billion while storage revenue reached $1.1 billion. Financial services revenue totaled about $0.9 billion. Together these businesses now operate under the unified cloud and AI segment structure.
The company also issued updated guidance for the upcoming quarter and full fiscal year. Management projected second-quarter revenue between $9.6 billion and $10.0 billion. Full-year revenue growth is expected to range between 17% and 22%.
Hewlett Packard Enterprise also raised full-year earnings expectations. GAAP diluted earnings per share are projected between $1.02 and $1.22. Non-GAAP diluted earnings per share are expected between $2.30 and $2.50.
The company also increased its free cash flow outlook to at least $2.0 billion. In addition, the board approved a quarterly dividend of $0.1425 per share. The dividend will be paid on April 23, 2026, to shareholders recorded on March 24.
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