01—Abstract
Summary
Summary of the 10-Q filed March 10, 2026. Cited figures are marked; the original filing is the authoritative source.
Hewlett Packard Enterprise (HPE) reported a solid first quarter for fiscal year 2026, with total net revenue reaching $9.3 billiona, an increase of 18.4% year-over-year.
This growth was primarily driven by the inclusion of Juniper Networks following its acquisition. The Networking segment, significantly boosted by Juniper, saw revenue jump by 151.5%b. However, the Cloud & AI segment experienced a slight revenue decline of 2.7%, mainly due to lower server business performance, though storage and financial services showed modest growth.
Despite the robust revenue increase, net earnings attributable to HPE common stockholders decreased by 29.3% to $423 millionc, or $0.31 per diluted share, compared to $598 million, or $0.44 per diluted share, in the prior year. This decrease is largely attributable to higher operating expenses, including amortization of intangible assets and acquisition-related costs stemming from the Juniper acquisition, which offset the increased gross profit. Management highlights ongoing efforts to manage costs, optimize supply chains, and navigate macroeconomic uncertainties, including inflationary pressures and foreign currency fluctuations.
02—Key points
Key Highlights
- Total net revenue increased by 18.4% to $9.3 billion, largely driven by the acquisition of Juniper Networks.
- The Networking segment experienced substantial growth, with net revenue up 151.5% due to the Juniper acquisition.
- Cloud & AI segment revenue decreased by 2.7%, primarily due to a decline in the Server business, partially offset by growth in Storage and Financial Services.
- Gross profit margin improved significantly to 35.9% from 29.2% year-over-year, mainly due to the higher revenue in the Networking segment.
- Operating expenses increased by 33.9% primarily due to costs associated with the Juniper Networks merger, including higher R&D and SG&A expenses.
- Net earnings attributable to common stockholders decreased by 29.3% to $423 million ($0.31/share) from $598 million ($0.44/share) in the prior year period, impacted by increased operating expenses.
- HPE completed the acquisition of Juniper Networks for approximately $13.4 billion, which closed on July 2, 2025, and is now contributing to segment results.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2026filed March 10, 2026Financial Statements
Q1 FY2026 against Q1 FY2025
| Line item | Q1 FY2026Q1 FY2025 | Change |
|---|---|---|
| Revenue | $9.30B$7.85B | +18.4% |
| R&D Expenses | $744.00M$475.00M | +56.6% |
| SG&A Expenses | $1.70B$1.27B | +33.9% |
| Operating Expenses | $8.83B$7.42B | +19.0% |
| Operating Income | $470.00M$433.00M | +8.5% |
| Net Income | $452.00M$627.00M | −27.9% |
| EPS (Basic) | $0.32$0.45 | −28.9% |
| EPS (Diluted) | $0.31$0.44 | −29.5% |
| Shares Outstanding (Basic) | 1.33B1.32B | +1.4% |
| Shares Outstanding (Diluted) | 1.36B1.41B | −3.8% |
05—Questions
Frequently Asked Questions
What is the primary driver of HPE's revenue growth in this quarter?
The primary driver of HPE's revenue growth of 18.4% to $9.3 billion in the first quarter of fiscal year 2026 was the acquisition of Juniper Networks, which closed on July 2, 2025. This significantly boosted the Networking segment's revenue by 151.5%.
Why did net earnings decrease despite the significant revenue increase?
Net earnings attributable to common stockholders decreased by 29.3% despite revenue growth because operating expenses increased substantially. This rise in expenses is primarily due to costs associated with the Juniper Networks merger, including higher amortization of intangible assets, research and development, and selling, general, and administrative expenses.
How is the Cloud & AI segment performing, and what are the contributing factors?
The Cloud & AI segment experienced a slight revenue decrease of 2.7%. This was mainly due to lower net revenue in the Server business, driven by reduced unit volume and average selling prices. However, the Storage business showed a modest increase, and Financial Services remained stable.
What are HPE's ongoing cost-saving initiatives and their impact?
HPE is undertaking cost-saving actions, including a cost reduction program expected to deliver $350 million in gross savings by fiscal year 2027 through workforce reductions. Additionally, they anticipate achieving at least $600 million in cost synergies from the integration of Juniper Networks by fiscal year 2028. These initiatives are aimed at reducing structural operating costs and enhancing profitability.
06—Continue