Hewlett Packard Enterprise raised its full-year free-cash-flow targets and offered optimistic earnings and revenue guidance for fiscal 2027 on Thursday, pointing to sustained demand for artificial-intelligence infrastructure and networking gear as it integrates its acquisition of Juniper Networks.
HPE reported earnings per share of $1.11 for the most recent quarter, the first time the company has exceeded $1 a share in a single quarter. Free cash flow came in at nearly $1 billion, a company record. The results helped push HPE shares up 148 percent year to date through the conference; the stock was trading at $55.86 with a market capitalization of $74.06 billion.
Management raised its fiscal 2026 free-cash-flow target to at least $3.75 billion, up from previous guidance, and set a fiscal 2027 target of at least $5 billion. The company committed to returning at least 75 percent of free cash flow to shareholders through a combination of share repurchases and dividends.
For fiscal 2027, HPE guided for revenue growth of 13 percent to 17 percent and EPS growth of 16 percent to 20 percent. Networking revenue growth guidance was raised to 14 percent to 17 percent, compared with a prior range of 8 percent to 12 percent. Networking margins are expected to expand into the mid-to-high 20s, while the cloud and AI segment is targeted to post margins of 13 percent, down from 17 percent achieved in the reported quarter.
Purchase commitments surged to $30 billion in the latest quarter, up sharply from $6 billion in the prior period, with networking purchase commitments doubling quarter over quarter. AI server orders reached $2.4 billion in the quarter, with a backlog of nearly $7 billion. Traditional server orders rose 75 percent year over year.
Revenue growth across segments showed networking rising 10 percent with orders accelerating 36 percent; storage growing 10 percent with order growth around 20 percent; and campus and branch revenue increasing 8 percent with order growth in the low teens.
HPE also highlighted two significant wins. A $3.5 billion enterprise deal was announced after the quarter for CPU-based server infrastructure focused on on-premises inferencing. Separately, the company won a gigawatt-scale AI data center contract from Oracle, deploying HPE and Juniper backend infrastructure including PTX and MX routers along with direct liquid-cooled QFX switches.
Shannon Cross, an executive at HPE, told the conference there is "a new TAM developing" driven by key factors creating incremental demand beyond existing trends. She emphasized capital discipline, saying the company is "a cash-generating engine" focused on managing working capital.
HPE announced that its networking investor day will take place September 30 in the Bay Area, and its partner day — combining sales and partner networks for HPE and Juniper products — occurred November 1, 2024, marking a milestone in the integration of the $14 billion Juniper acquisition, whose sales forces were combined in January 2024.
