Hewlett Packard Enterprise reported record quarterly revenue of $10.7 billion in its fiscal second quarter on Monday, up 40% from a year ago, as demand for AI infrastructure drove results well past Wall Street expectations.
Non-GAAP earnings per share came in at $0.79, above the company's own guidance range of $0.51 to $0.55. Analysts had expected $0.53 per share, according to CNBC. Revenue of $10.68 billion also exceeded the $9.79 billion analysts anticipated.
HPE's Cloud & AI segment generated $7.7 billion in revenue, up 22.9% from a year earlier, driven by its server business. Server revenue reached $5.45 billion, up 32.7% year over year. Analysts had expected $4.66 billion from the server unit and $6.87 billion from Cloud & AI overall.
The company raised its full-year non-GAAP EPS guidance to a range of $3.35 to $3.45, up from a prior range of $2.30 to $2.50 — an increase of roughly $1 per share. HPE also raised its free cash flow guidance to at least $3.5 billion. Both figures exceed targets the company had set for fiscal 2028 when it issued long-term guidance in October 2025, putting it approximately two years ahead of schedule, the company said.
"Customers continue to invest in modernizing their infrastructure and scaling AI, and our performance shows the strength of our combined networking portfolio," HPE president and CEO Antonio Neri said in a statement.
On the demand side, CFO Marie Myers pointed to a surge in customers seeking server capacity for agentic AI applications, noting that those workloads place far heavier computational demands on infrastructure than traditional tasks, The Wall Street Journal reported. In an interview with CNBC, Neri said bookings for conventional servers have grown by triple-digit percentages, with the company's order backlog reaching a historic high.
The Networking segment, which includes the Juniper Networks $JNPR business HPE acquired, posted revenue of $2.7 billion, up 148.2% from a year ago. On a GAAP basis, the quarter produced $624 million in profit, or $0.44 per diluted share; a year earlier, HPE had recorded a $1.05 billion net loss.
For the fiscal third quarter, HPE projected revenue of $11.5 billion to $12.1 billion, and non-GAAP EPS of $0.88 to $0.93. The company also introduced a fiscal 2027 framework calling for revenue growth of 8% to 12% and free cash flow of at least $4.5 billion.