• Strengthened networking capabilities will be a major contributor to HPE’s financial performance and strategic growth
• HPE intends to profitably capture explosive AI infrastructure growth with a focus on enterprise and sovereign customer segments, and anticipates expansion of its leadership in the hybrid cloud market
• HPE to increase its annual dividend for fiscal year 2026 by 10% and share repurchase capacity by an additional $3 billion, bringing the total repurchase authorization to approximately $3.7 billion
• By fiscal year 2028, HPE expects to generate more than $3.5 billion in free cash flow, with GAAP diluted net EPS of approximately $1.93 and non-GAAP diluted net EPS of at least $3.00 

New York – HPE (NYSE: HPE) today hosted its Securities Analyst Meeting at the New York Stock Exchange, where Antonio Neri, HPE president and CEO; Marie Myers, executive vice president and CFO; and Rami Rahim, executive vice president, president and general manager of HPE Networking, discussed the company’s strategic priorities and financial outlook through fiscal year 2028. They illustrated how HPE’s leadership position in the high-growth, high-margin networking market and differentiated offering across cloud and AI will strengthen the company’s ability to generate stronger returns for investors.

Neri highlighted the company’s differentiated strategy and financial progress as HPE enters a new chapter driven by expanded networking capabilities and enhanced participation in the cloud and AI markets with a stronger value proposition.

“By aligning our investments and innovation to address the IT industry’s most promising opportunities in networking, cloud, and AI, we’re poised to gain share in the markets that matter most to our customers,” said Antonio Neri, president and CEO. “In HPE’s new chapter, our strengthened portfolio will create more profitable growth, increasing capital return opportunities that deliver even greater value to our shareholders.”

HPE is shifting its portfolio to higher-growth, higher-margin businesses, giving the company greater potential to enhance long-term profit. The company discussed its intent to achieve greater profitability and improve free cash flow generation in the coming years, in order to provide higher capital return to shareholders.

To support its shareholder capital return goals, the company announced a 10% increase to its annual dividend for fiscal year 2026¹, reflecting confidence in its outlook. Its Board of Directors authorized an additional $3 billion in capacity for share repurchases, bringing HPE’s total repurchase authorization to approximately $3.7 billion. Long-term, HPE plans to return significant free cash flow to shareholders via dividends and buybacks.

Neri noted the company’s strategic priorities for the company’s next chapter: build a new  networking  industry leader; capture profitable growth in the AI infrastructure market with a focus on sovereign and enterprise customers; accelerate high-margin software and services growth through GreenLake; capitalize on unstructured data market growth; and transition customers to next-generation server platforms. The company will pursue these market opportunities while optimizing the company’s cost structure to enhance long-term profitability.

Creating a new networking industry leader

Networking has become a foundational pillar of HPE’s business. With the acquisition of Juniper Networks, Inc., HPE has created an opportunity to disrupt the status quo in the networking industry. HPE is uniquely positioned to lead in this market, offering an industry-leading, AI-native networking portfolio across campus and branch, data center switching, and wide-area routing infrastructure. With expanded portfolio breadth and go-to-market scale, HPE is set to fuel networking innovation with AI and for AI.

Capturing profitable growth in the AI infrastructure market

HPE’s portfolio of AI offerings positions the company competitively across customer segments, including AI model builders and service providers, sovereigns, and enterprises. The company intends to leverage its unique strengths to focus on the sovereign and enterprise segments, enabling HPE to capture explosive AI infrastructure growth profitably.

Accelerating high-margin GreenLake software and services growth

HPE expects to continue to attract new customers and grow share of wallet with GreenLake, the cloud that delivers a unified platform experience to enable enterprises to simplify IT, reduce costs and transform faster. GreenLake creates cross-sell opportunities for software and services across the installed base. HPE’s growing portfolio of high-margin software offerings is also expanding the company’s ability to accelerate growth and margin. HPE plans to capitalize on unstructured data market growth with proprietary technology.

Capitalizing on unstructured data market growth with our own IP through Alletra MP

AI has made data management an even more important priority for enterprises, and HPE Alletra MP is uniquely positioned for growing unstructured data management needs. HPE is building on the momentum of Alletra MP to drive a transition to HPE-developed storage solutions, reducing reliance on third-party products and enhancing profitability.

Driving customer transition to next-generation server platforms

In its core server segment, HPE will balance profitability and unit growth, focusing on volume and service attachment to sustain long-term cash flow. Transitioning customers to HPE ProLiant Gen 11 and Gen 12 servers drives revenue growth through richer configurations and higher average prices.

Optimizing cost structure to sustain long-term profitability

HPE will focus on operational execution and cost structure optimization to increase free cash flow and reduce its net debt leverage ratio, creating the ability to accelerate greater capital return to shareholders.

The company announced updates to Catalyst, a set of initiatives to enhance growth opportunities while driving structural cost savings. Designed to make the company faster, smarter, and more efficient, these cost-reduction and efficiency actions position HPE for improved operating leverage and higher long-term profitability. The company anticipates that by fiscal year 2028, Catalyst will deliver at least $350 million in gross savings. The company also still expects to achieve at least $600 million in cost savings from Juniper-related synergies during that time. These savings will impact both cost of sales and operating expenses, improving non-GAAP gross profit, enhancing non-GAAP operating profit, while supporting investments vital for long-term sustainable growth.

Long-Term Financial Outlook

HPE provided its long-term financial model for fiscal year 2025 through fiscal year 2028. HPE projects a compounded revenue growth rate of 5% to 7% and non-GAAP operating profit growth of 11% to 17%, both on a pro forma^2,3 basis, driving non-GAAP diluted net earnings per share (“EPS”) of at least $3.00 per share by fiscal year 2028. GAAP diluted net EPS is estimated to be approximately $1.93 per diluted share by fiscal year 2028. Non-GAAP diluted net EPS excludes net after-tax adjustments of approximately $1.07 per diluted share, primarily related to amortization of intangible assets and stock-based compensation expense. GAAP diluted net EPS guidance does not reflect any potential gains or losses from the disposition of its remaining interest in H3C. In addition, HPE expects to generate more than $3.5 billion in free cash flow^3,4 by fiscal year 2028.

The company will continue to follow a strategic financial framework for value creation, focused on driving free cash flow generation, a commitment to reducing net leverage, and delivering capital returns through consistent dividend growth and share repurchases.

FY26 Outlook

For fiscal year 2026, HPE expects sustained momentum across its business and provided the following forecast: year over year revenue growth between 5% to 10%, non-GAAP operating profit growth between 10% to 18%, both on a pro forma² basis, and GAAP operating profit growth estimate without the pro forma treatment is expected to be 435% to 445%. FY26 non-GAAP operating profit excludes costs of approximately $2.9 billion primarily related to amortization of intangible assets, stock-based compensation expense, acquisition, disposition and other charges, and cost reduction program.

The company expects headwinds of approximately $650 million in interest and other, net for the full year. The company expects a structural non-GAAP tax rate of 14%³ based on current tax laws due to the benefits from the Juniper acquisition.

HPE is expecting fiscal year 2026 GAAP diluted net EPS to be in the range of $0.57 to $0.77 and non-GAAP diluted net EPS of between $2.20 and $2.40. The non-GAAP diluted net EPS outlook excludes after-tax costs of approximately $1.63 per diluted share, primarily related to amortization of intangible assets, stock-based compensation expense, and acquisition, disposition and other charges. GAAP diluted net EPS guidance does not reflect any potential gains or losses from the disposition of its remaining interest in H3C. HPE expects fiscal year 2026 free cash flow to be $1.5 billion to $2.0 billion.^3,4

The company announced a 10% increase in its annual dividend per share¹.  

Webcast Details

A recording of today’s SAM webcast event, along with executives’ presentations and related materials, will be available on the HPE Investor Relations website at https://www.hpe.com/investor/SAM2025.

This press release contains only a summary of some of the information presented at today’s event and should be read in conjunction with the management presentations and related materials made available on that website.

¹ Subject to HPE Board of Directors approval

² Growth rates include FY25 results normalized to include 8 months of Juniper results preacquisition close. Revenue growth outlook without such treatment is expected to be 17 to 22% for FY26 and 8 to 11% long-term.
 

³ Hewlett Packard Enterprise provides certain guidance on a non-GAAP basis. The Company is unable to provide a reconciliation to the most directly comparable GAAP financial measure without unreasonable efforts, as it cannot predict some elements that are included in such directly comparable GAAP financial measure or, in the case of non-GAAP operating profit growth CAGR, GAAP operating profit CAGR is not derivable because GAAP operating profit for FY25 is expected to be negative. These elements could have a material impact on the Company’s reported GAAP results for the guidance period.
 

⁴ Free cash flow represents cash flow from operations, less net capital expenditures (investments in property, plant & equipment (“PP&E”) and software assets less proceeds from the sale of PP&E), and adjusted for the effect of exchange rate fluctuations on cash, cash equivalents, and restricted cash.