HPE Posts Blowout Q2 as Juniper Integration and AI Demand Fuel Record Results

Benzinga reported Monday that Hewlett Packard Enterprise delivered a standout fiscal second quarter, posting HPE revenue of $10.7 billion. That figure marked a 40% increase from the same period a year earlier.

Earnings and Guidance Blow Past Expectations

Non-GAAP earnings per share came in at $0.79, more than doubling the year-ago figure for a 108% gain. HPE President and CEO Antonio Neri struck a confident tone on the call. Management lifted its full-year non-GAAP EPS forecast to a range of $3.35 to $3.45. Free cash flow guidance was raised to at least $3.5 billion. That target arrives roughly two years ahead of the company’s own long-range plan.

Juniper Integration Ahead of Schedule

The absorption of networking giant Juniper Networks into HPE’s operations is progressing faster than expected. The deal, which closed earlier this year, was framed as a cornerstone of HPE’s so-called Catalyst initiative. Neri said the combined networking business is gaining ground in campus and branch deployments. Customers are increasingly pairing those upgrades with AI workload capabilities and tighter security features. The faster-than-planned integration is helping HPE expand its competitive position against larger rivals in enterprise networking.

AI and Cloud Revenue Climb Sharply

Cloud and AI-related revenue rose 23% in the quarter. Traditional server orders, which power conventional enterprise workloads, surged triple digits as companies modernized aging infrastructure. Analysts on the call from Bank of America and Evercore pressed management on how demand would evolve across different customer segments into fiscal 2027. Neri described the pipeline as large and engagement levels as strong. CFO Marie Myers indicated free cash flow growth is expected to outpace EPS gains next fiscal year, driven by working capital improvements and higher margins from the Juniper business.

Background: HPE’s Long Road Back to Growth

HPE was spun off from the original Hewlett-Packard in 2015, inheriting the enterprise hardware and services business. The company spent years navigating commoditized server margins and sluggish enterprise IT spending. The Juniper acquisition, valued at roughly $14 billion when announced in early 2024, was designed to give HPE a credible networking software story alongside its hardware roots. Monday’s results suggest that bet is beginning to pay off. The company also pledged to return at least 75% of free cash flow to shareholders beginning in fiscal 2027.

Read Next: AI Infrastructure Spending Is Reshaping Enterprise Tech Budgets