Hewlett Packard Enterprise Company

HPE separated from HP in 2015 to specialize on the enterprise side of the business (not PCs or printers) which can be summed up in their reporting segments: Servers, Hybrid Cloud, Networking, and Financial Services. The company believes their strategy of offering edge-to-cloud solutions offers a comprehensive portfolio which is enhanced by the acquisition of Juniper Networks to better serve diverse needs in the growing and competitive data center market.

 

Net Debt/Cap includes cash, financing receivables, short and long-term debt, and deferred revenues.

 

Quarterly EPS are as reported non-GAAP EPS to HPE but my trailing EPS is to common shareholders (after preferred dividends).   

 

Ests       4Q25    1Q26    FY25     FY26

Revs      9.9b       9.9b       34.5b    40.8b

EPS        .58          .54          1.90       2.38

y/y           0%          +10%    -5%        +25%

 

P=23.03, div .57, yield=2.5%, TTM EPS=1.94, net debt 4.3bn before selling 1.4bn Chinese stake, D/C=15%, P/E=12X, FY26 P/E=9.7X

 

4Q25    .62 vs .58, est .58, FY25 EPS 1.94 vs 1.91

  • Dec 4, 2025, P=23.03, TTM EPS=1.94, P/E=12X, FY26 P/E=9.7X

  • Revs +14% to 9.68bn (est 9.9), GM 36.4% vs 30.9%, OM 12.2% vs 11.1%, FCF 1.92bn vs 1.5bn

  • Server -4.8% to 4.46bn, OM 9.8% vs 11.6%, Networking 2.8bn (+double digits pro forma), OM 23% vs 24.4%, Hybrid Cloud -12.1% to 1.4bn, OM 5% vs 7.8%, FinSvcs -0.4% to 889m, OM 11.5% vs 9.2%

  • 1Q Outlook: Revs 9-9.4bn (est 9.9), EPS .57-.61 (est .54),

  • FY26 Guidance reaffirmed but raised networking to +MSD pro-forma (previously +LSD), categorized “prudent” with EPS inching up to 2.25-2.45 (est 2.38), previously 2.20-2.40, expect FCF 1.7-2bn (previously 1.5-2bn) vs 986m.

  • Saw acceleration in orders in last few weeks of the quarter, will be selling remaining stake in H3C Holdings in China business for 1.4bn to reduce debt (net debt 4.3bn)

  • Expect to pass through majority of higher memory costs (should ease fears of margin erosion)

  • Announced first OEM switch with Broadcom Tomahawk 6, likely with Celestica

  • AI demand to remain uneven as some larger sovereign customers place orders with longer lead times, US govt orders were delayed by shutdown 

Analyst Day Oct 15, 2027

  • Divy +10% starting in 1Q26

  • FY26 pro forma Revs +5-10% (est +17% not pro forma, looks roughly comparable), OpInc +10-18%, EPS 2.20-2.40 (est 2.42), margin expansion stronger in 2H as efficiencies take hold.

  • FY28 Rev CAG +5-7%, OpInc +11-17%, EPS at least 3.00 (est 3.20)

  • Growth offsetting declines from exiting non-ip storage business but little detail

3Q25 .44 vs .50

Sept 3, 2025, P=22.68, TTM EPS=1.89, P/E=12X, FY26 P/E=9X

Revs +19% to 9.1bn (included 1m of JNPR of 480m, +11% ex JNPR), GM 29.9% vs 31.8%, OM 8.5% vs 10%

Server +16% to 4.9bn, OM 6.4% vs 10.8%, Networking +54% to 1.7bn (+11% ex JNPR), OM 20.8% vs 22.4%, Hybrid Cloud +12% to 1.5bn, OM 5.9% vs 5.2%, FinSvcs +1% to 886m, OM 9.9% vs 9%

Margins in server and hybrid cloud improved q/q as pricing/discounting changes take effect but a large AI program was dilutive, Juniper should contribute to growth and higher margins

Booked 2.1bn net new orders in AI systems

4Q Outlook: Revs +15-19% to 9.7-10.1bn, EPS .56-.60 (vs .58), guidance factors HSD q/q decline in Server with OM approx. 10% due to absence of large AI deal in 3Q, mgmt. affirms pricing/discounting issues are behind them  

 

2Q25

Revs +5.9%

Server +5.6% to 4.06bn, OM 5.9% vs 11%, Hybrid Cloud +13.3% to 1.45bn, OM 5.4% vs 1%, Networking +7% to 1.16bn, OM 22.7% vs 21.8%, FinSvcs -1.3% to 856m, OM 10.4% vs 9.3%