Hewlett Packard Enterprise Reports Fiscal 2025 Third Quarter Results

Delivers record revenue with sequential profitability growth

HPE (NYSE:HPE) today announced financial results for the third quarter ended July 31, 2025.

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"HPE delivered record-breaking revenue and improved profitability this quarter as we marked a major milestone by closing our acquisition of Juniper Networks," said Antonio Neri, president and CEO of HPE. "Customer demand stretched broadly across our portfolio and was particularly strong in our Server and Networking segments. As we enter a new chapter at HPE, we are focused on capturing the tremendous market opportunity through execution that delivers strong, consistent shareholder value."

"In Q3, we delivered on our commitments, generating record revenue, as well as improved sequential operating profit with major contributions from our three largest segments," said Marie Myers, executive vice president and CFO of HPE. "Acquiring Juniper Networks has already added to our results, with more profit accretion expected as we work to quickly capture planned synergies and drive new market opportunities."

Third Quarter Fiscal 2025 Financial Results

• Revenue: $9.1 billion, up 19% from the prior-year period in actual dollars and 18% in constant currency⁽¹⁾
• Annualized revenue run-rate ("ARR")⁽²⁾: $3.1 billion, up 77% from the prior-year period in actual dollars and 75% in constant currency⁽¹⁾
• Gross margins:
  • GAAP of 29.2%, down 240 basis points from the prior-year period and up 80 basis points sequentially
  • Non-GAAP⁽¹⁾ of 29.9%, down 190 basis points from the prior-year period and up 50 basis points sequentially
• Diluted net earnings per share ("EPS"):
  • GAAP of $0.21, down $0.17 from the prior-year period
  • Non-GAAP⁽¹⁾ of $0.44, down $0.06 from the prior-year period and within our outlook range of $0.40 - $0.45
• Cash flow from operations: $1,305 million, an increase of $151 million from the prior-year period
• Free cash flow ("FCF")⁽¹⁾⁽³⁾: $790 million, an increase of $121 million from the prior-year period
• Capital returns to common shareholders: $171 million in the form of dividends

Third Quarter Fiscal 2025 Segment Results

• Server revenue was $4.9 billion, up 16% from the prior-year period in actual dollars and in constant currency⁽¹⁾, with 6.4% operating profit margin, compared to 10.8% from the prior-year period.
• Networking⁽⁴⁾ revenue was $1.7 billion, up 54% from the prior-year period in actual dollars and in constant currency⁽¹⁾, with 20.8% operating profit margin, compared to 22.4% from the prior-year period. The Networking segment was renamed from Intelligent Edge to more precisely reflect the business and the market of this segment.
• Hybrid Cloud revenue was $1.5 billion, up 12% from the prior-year period in actual dollars and 11% in constant currency⁽¹⁾, with 5.9% operating profit margin, compared to 5.2% from the prior-year period.
• Financial Services revenue was $886 million, up 1% from the prior-year period in actual dollars and down 1% in constant currency⁽¹⁾, with 9.9% operating profit margin, compared to 9.0% from the prior-year period. Net portfolio assets of $13.2 billion, up 0.7% from the prior-year period and 17.9% in constant currency⁽¹⁾. The business delivered return on equity of 17.7%, up 0.3 points from the prior-year period.

Dividend

The HPE Board of Directors declared a regular cash dividend of $0.13 per share on the company's common stock, payable on or about October 17, 2025, to stockholders of record as of the close of business on September 18, 2025.

Fiscal 2025 Fourth Quarter Outlook

HPE estimates revenue to be in the range of $9.7 billion and $10.1 billion. HPE estimates GAAP diluted net EPS to be in the range of $0.50 to $0.54 and non-GAAP diluted net EPS⁽¹⁾ to be in the range of $0.56 to $0.60. Fiscal 2025 fourth quarter non-GAAP diluted net EPS estimate excludes net after-tax adjustments of approximately $0.06 per diluted share, primarily related to acquisition, disposition and other charges, stock-based compensation expense, and cost reduction program, partially offset by tax adjustments.

Fiscal 2025 Outlook

HPE estimates fiscal 2025 revenue growth of 14% to 16%, in constant currency⁽¹⁾⁽⁶⁾, and fiscal 2025 GAAP operating profit growth to be in the range of negative 112% to negative 109%⁽⁷⁾ and non-GAAP operating profit⁽¹⁾⁽⁵⁾ growth to be 4% to 7%. HPE estimates GAAP diluted net EPS to be in the range of $0.42 and $0.46⁽⁷⁾ and non-GAAP diluted net EPS⁽¹⁾ to be in the range of $1.88 to $1.92. Fiscal 2025 non-GAAP diluted net EPS estimate excludes net after-tax adjustments of approximately $1.46 per diluted share, primarily related to impairment of goodwill, acquisition, disposition and other charges, stock-based compensation expense, and cost reduction program, partially offset by tax adjustments and the gain from the disposition of Communications Technology Group. HPE estimates free cash flow^(1)(3)(6) of approximately $700 million.

Close of Juniper Networks Acquisition

HPE closed its acquisition of Juniper Networks Inc. on July 2, 2025. HPE's Q3 results include the consolidation of Juniper Networks' financial results from the period between July 2, 2025, and July 31, 2025.

About HPE

HPE (NYSE:HPE) is a leader in essential enterprise technology, bringing together the power of AI, cloud, and networking to help organizations achieve more. As pioneers of possibility, our innovation and expertise advance the way people live and work. We empower our customers across industries to optimize operational performance, transform data into foresight, and maximize their impact. Unlock your boldest ambitions with HPE. Discover more at www.hpe.com.

Use of non-GAAP financial information and key performance metrics

To supplement Hewlett Packard Enterprise's condensed consolidated financial statement information presented on a generally accepted accounting principles ("GAAP") basis, Hewlett Packard Enterprise provides financial measures, including revenue on a constant currency basis (including at the business segment level), non-GAAP gross profit, non-GAAP gross profit margin, non-GAAP operating profit (non-GAAP earnings from operations), non-GAAP operating profit margin (non-GAAP earnings from operations as a percentage of net revenue), non-GAAP income tax rate, non-GAAP net earnings attributable to HPE and non-GAAP net earnings attributable to common stockholders, non-GAAP diluted net earnings per share attributable to common stockholders, and free cash flow ("FCF"). Hewlett Packard Enterprise also provides forecasts of revenue growth on a constant currency basis, non-GAAP operating profit growth, non-GAAP diluted net earnings per share, and FCF. Reconciliations of each of these non-GAAP financial measures to their most directly comparable GAAP measures for this quarter and prior periods are included in the tables below or elsewhere in the materials accompanying this news release. In addition an explanation of the ways in which Hewlett Packard Enterprise's management uses these non-GAAP measures to evaluate its business, the substance behind Hewlett Packard Enterprise's decision to use these non-GAAP measures, the material limitations associated with the use of these non-GAAP measures, the manner in which Hewlett Packard Enterprise's management compensates for those limitations, and the substantive reasons why Hewlett Packard Enterprise's management believes that these non-GAAP measures provide supplemental useful information to investors is included further below. This additional non-GAAP financial information is not meant to be considered in isolation or as a substitute for revenue, gross profit, gross profit margin, operating profit (earnings from operations), operating profit margin (earnings from operations as a percentage of net revenue), net earnings, diluted net earnings per share, and cash flow from operations prepared in accordance with GAAP.

In addition to the supplemental non-GAAP financial information, Hewlett Packard Enterprise also presents annualized revenue run-rate ("ARR") as performance metric. ARR is a financial metric used to assess the growth of the Consumption Services offerings. ARR represents the annualized revenue of all net HPE GreenLake cloud services revenue, related financial services revenue (which includes rental income from operating leases and interest income from finance leases), and software-as-a-service ("SaaS"), software consumption revenue, and other as-a-service offerings by taking such revenue recognized during a quarter and multiplying by four. To better align the calculation of ARR with Juniper Networks' business and offerings, beginning with the quarter ended July 31, 2025, we also included revenue from software licenses support and maintenance in our ARR calculation, and will continue to do so going forward. The impact of this change was not material to the current and prior periods presented. ARR should be viewed independently of net revenue and is not intended to be combined with it.

Forward-looking statements

This press release contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements involve risks, uncertainties, and assumptions. If the risks or uncertainties ever materialize or the assumptions prove incorrect, the results of Hewlett Packard Enterprise Company and its consolidated subsidiaries ("Hewlett Packard Enterprise") may differ materially from those expressed or implied by such forward-looking statements and assumptions. The words "believe", "expect", "anticipate", "guide", "optimistic", "intend", "aim", "will", "estimates", "may", "could", "should" and similar expressions are intended to identify such forward-looking statements. All statements other than statements of historical fact are statements that could be deemed forward-looking statements, including but not limited to any statements regarding the ongoing integration of Juniper Networks, Inc., and any projections, estimates, or expectations of savings or synergy realizations in connection therewith; any projections, estimations, or expectations of addressable markets and their sizes, revenue (including annualized revenue run-rate), margins, expenses (including stock-based compensation expenses), investments, effective tax rates, interest rates, the impact of tax law changes and related guidance and regulations, the impact of changes in trade policies and restrictions and the uncertainty created thereby, net earnings, net earnings per share, cash flows, liquidity and capital resources, inventory, goodwill, impairment charges, hedges and derivatives and related offsets, order backlog, benefit plan funding, deferred tax assets, share repurchases, currency exchange rates, repayments of debts including our asset-backed debt securities, or other financial items; recent amendments to accounting guidance and any potential impacts on our financial reporting therefrom; any projections or estimations of orders; any projections of the amount, timing, or impact of cost savings or restructuring charges; any statements of the plans, strategies, and objectives of management for future operations, as well as the execution and consummation of cost reduction program, corporate transactions or contemplated acquisitions and dispositions (including but not limited to the disposition of shares of H3C Technologies Co., Limited ("H3C") and the receipt of proceeds therefrom), research and development expenditures, and any resulting benefit, cost savings, charges, or revenue or profitability improvements; any statements concerning the expected development, performance, market share, or competitive performance relating to our products or services; any statements concerning technological and market trends, the pace of technological innovation, and adoption of new technologies, including artificial intelligence-related and other products and services offered by Hewlett Packard Enterprise; any statements regarding current or future macroeconomic trends or events and the impacts of those trends and events on Hewlett Packard Enterprise and our financial performance, including but not limited to supply chain dynamics, uncertain global trade policies and/or restrictions, and demand for our products and services, and our actions to mitigate such impacts on our business; the scope and duration of the ongoing conflicts and geopolitical tensions, including but not limited to those between Russia and Ukraine, in the Middle East, and between China and the U.S., and our actions in response thereto, and their impacts on our business, operations, liquidity and capital resources, employees, customers, partners, supply chain, financial results, and the world economy; any statements regarding future regulatory trends and the resulting legal and reputational exposure, including but not limited to those relating to environmental, social, governance, cybersecurity, data privacy, and artificial intelligence issues, among others; any statements regarding pending investigations, claims, or disputes; any statements of expectation or belief, including those relating to future guidance and the financial performance of Hewlett Packard Enterprise; and any statements of assumptions underlying any of the foregoing.

Risks, uncertainties, and assumptions include the need to address the many challenges facing Hewlett Packard Enterprise's businesses; the competitive pressures faced by Hewlett Packard Enterprise's businesses; risks associated with executing Hewlett Packard Enterprise's strategy; the impact of macroeconomic and geopolitical trends and events, including but not limited to those mentioned above; the need to effectively manage third-party suppliers and distribute Hewlett Packard Enterprise's products and services; the protection of Hewlett Packard Enterprise's intellectual property assets, including intellectual property licensed from third parties and intellectual property shared with its former parent; risks associated with Hewlett Packard Enterprise's international operations (including from geopolitical events, such as those mentioned above); the development and transition of new products and services and the enhancement of existing products and services to meet customer needs and respond to emerging technological trends; the execution of Hewlett Packard Enterprise's transformation and mix shift of its portfolio of offerings; the execution and performance of contracts by Hewlett Packard Enterprise and its suppliers, customers, clients, and partners, including any impact thereon resulting from macroeconomic or geopolitical events, such as those mentioned above; the hiring and retention of key employees; the execution, integration, consummation, and other risks associated with business combination, disposition, and investment transactions, including but not limited to the risks associated with the disposition of H3C shares and the receipt of proceeds therefrom and successful integration of Juniper Networks, Inc., including our ability to implement our plans and forecasts and realize our anticipated financial and operational benefits with respect to the consolidated business; the execution, timing, and results of any cost reduction program, including estimates and assumptions related to the costs and anticipated benefits of implementing such plan; the impact of changes to privacy, cybersecurity, environmental, global trade, and other governmental regulations; changes in our product, lease, intellectual property, or real estate portfolio; the payment or non-payment of a dividend for any period; the efficacy of using non-GAAP, rather than GAAP, financial measures in business projections and planning; the judgments required in connection with determining revenue recognition; impact of company policies and related compliance; utility of segment realignments; allowances for recovery of receivables and warranty obligations; provisions for, and resolution of, pending investigations, claims, and disputes; the impacts of legal and regulatory changes and related guidance; and other risks that are described in Hewlett Packard Enterprise's Annual Report on Form 10-K for the fiscal year ended October 31, 2024, subsequent Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and in other filings made by Hewlett Packard Enterprise from time to time with the Securities and Exchange Commission.

As in prior periods, the financial information set forth in this press release, including tax-related items, reflects estimates based on information available at this time. While Hewlett Packard Enterprise believes these estimates to be reasonable, these amounts could differ materially from reported amounts in the filings made by Hewlett Packard Enterprise from time to time with the Securities and Exchange Commission. Hewlett Packard Enterprise assumes no obligation and does not intend to update these forward-looking statements, except as required by applicable law.