HPE Surpasses Revenue Expectations with Strong AI Server and Networking Demand

Hewlett Packard beats quarterly revenue estimates on robust server demand

Sept 3 (Reuters) - Hewlett Packard Enterprise (HPE.N), opens new tab beat Wall Street estimates for third-quarter revenue on Wednesday, driven by strong demand in its server and networking segments. Demand for AI servers has surged as big tech companies and startups race to deploy generative AI services, such as ChatGPT, which require immense computing power. The surge in GenAI has boosted demand for HPE's AI-optimized servers, powered by Nvidia (NVDA.O), opens new tab processors, which can run complex applications. HPE integrated Nvidia's latest GPUs into its server portfolio in 2025. "Customer demand stretched broadly across our portfolio and was particularly strong in our Server and Networking segments," CEO Antonio Neri said. HPE's acquisition of Juniper expands its networking business, a segment that generally grows faster compared to traditional hardware. HPE completed the $14 billion acquisition in early July. The company added veteran tech industry executive Robert Calderoni to its board in July, reaching a truce with activist investor Elliott Investment Management, one of HPE's biggest shareholders with a stake exceeding $1.5 billion. For the third quarter ended July 31, HPE reported revenue of $9.14 billion, ahead of analysts' average estimate of $8.53 billion, according to data compiled by LSEG. Server revenue increased by 16% year-over-year to $4.9 billion, while networking revenue surged 54% to $1.7 billion during the quarter. The server maker projects fourth-quarter revenue between $9.7 billion and $10.1 billion, exceeding analysts' expectations of $9.54 billion. HPE now expects revenue growth of 14% to 16% in fiscal year 2025, compared with its prior forecast of growth of 7% to 9%. Reporting by Juby Babu in Mexico City; Editing by Mohammed Safi Shamsi Our Standards: The Thomson Reuters Trust Principles., opens new tab

HPE's stock inches higher on strong AI server sales and networking boost - SiliconANGLE

HPE's stock inches higher on strong AI server sales and networking boost Hewlett Packard Enterprise Co. beat Wall Street's expectations as it delivered its third-quarter financial results today, and its stock moved slightly higher even though its revenue guidance for the current quarter came up short. The computer server and networking firm reported earnings before certain costs such as stock compensation of 44 cents per share on revenue of $9.14 billion, with sales rising 19% from a year earlier. Those results were better-than-expected, with analysts looking for earnings of just 41 cents on revenue of $8.84 billion. The strong results boosted HPE's bottom line, and it reported net income for the quarter of $276 million, reversing from a loss of $1.07 billion in the year-ago quarter. HPE President and Chief Executive Antonio Neri (pictured) said the improvement in profitability was due to its record-breaking quarter revenue. "Customer demand stretched broadly across our portfolio and was particularly strong in our server and networking segments," he said. The lion's share of HPE's revenue came from its server business, where it has enjoyed a lot of momentum thanks to demand for artificial intelligence servers equipped with graphics processing units that can handle large language models. The segment delivered $4.94 billion in revenue during the quarter, up 16% from a year earlier and well ahead of the Street's consensus estimate of $4.72 billion. During the quarter, HPE achieved a major milestone when it finally closed on its long and drawn-out $14 billion acquisition of Juniper Networks Inc. The deal represented a merger of the second- and third-largest wireless networking providers in the U.S., and analysts believe it will put the newly combined company in a much better position to take on the market leader, Cisco Systems Inc. With that acquisition done and dusted, HPE saw fit to rename its "Intelligent Edge" business segment. It's now known as the Networking business, and it was the best performing segment during the quarter, with revenue rising 54% from a year earlier to $1.7 billion. The numbers were boosted because they include the consolidation of Juniper's financial results from the period between July 2 and July 31. HPE's two other business segments were less impressive, but they did grow. Hybrid cloud revenue came to $1.5 billion, up 12% from one year earlier, while the smaller financial services unit delivered $886 million in sales, inching up just 1% from last year. The results were all the more impressive because they come at a time when there's still plenty of uncertainty and speculation around U.S. President Donald Trump's continuously evolving tariff policies, which could yet have a detrimental impact on HPE's business. For now, some technology hardware is temporarily exempted from the heftiest tariffs due to the ongoing Section 232 investigations into electronic products such as semiconductors. The government is reportedly looking into whether or not imports of certain products could be a threat to its national security. On a conference call with analysts, Neri said he thinks it will still be some time before those investigations are resolved. "In the context of the next quarter, which is really the next two months, we see no impact," he told analysts. Despite that, HPE's guidance for the current quarter was mixed. It's looking for earnings of between 56 cents and 60 cents per share, ahead of the Street's forecast of 56 cents, but in terms of revenue, it's targeting $9.7 billion to $10.1 billion, which is lower than the analysts' $10.11 billion target. For the full year, the company raised its earnings guidance to a range of $1.88 to $1.92 per share, up from an earlier forecast of $1.78 to $1.90 per share. In terms of revenue, it's forecasting growth of between 14% and 16%, up from an earlier range of 7% to 9%. The reason for that change is simple. "We are raising our guidance because we are consolidating the Juniper results into our numbers," Neri explained. HPE's stock initially declined 2%, but later reversed that trend and was up just over 1% in extended trading. In the year to date, the stock has gained just over 7%, trailing the broader S&P 500, which has gained more than 9% for the year.

Hewlett Packard beats quarterly revenue estimates on robust server demand - The Economic Times

The surge in GenAI has boosted demand for HPE's AI-optimized servers, powered by Nvidia processors, which can run complex applications. HPE integrated Nvidia's latest GPUs into its server portfolio in 2025.Hewlett Packard Enterprise beat Wall Street estimates for third-quarter revenue on Wednesday, driven by strong demand in its server and networking segments. Demand for AI servers has surged as big tech companies and startups race to deploy generative AI services, such as ChatGPT, which require immense computing power. The surge in GenAI has boosted demand for HPE's AI-optimized servers, powered by Nvidia processors, which can run complex applications. HPE integrated Nvidia's latest GPUs into its server portfolio in 2025. "Customer demand stretched broadly across our portfolio and was particularly strong in our Server and Networking segments," CEO Antonio Neri said. HPE's acquisition of Juniper expands its networking business, a segment that generally grows faster compared to traditional hardware. HPE completed the $14 billion acquisition in early July. The company added veteran tech industry executive Robert Calderoni to its board in July, reaching a truce with activist investor Elliott Investment Management, one of HPE's biggest shareholders with a stake exceeding $1.5 billion. For the third quarter ended July 31, HPE reported revenue of $9.14 billion, ahead of analysts' average estimate of $8.53 billion, according to data compiled by LSEG. Server revenue increased by 16% year-over-year to $4.9 billion, while networking revenue surged 54% to $1.7 billion during the quarter. The server maker projects fourth-quarter revenue between $9.7 billion and $10.1 billion, exceeding analysts' expectations of $9.54 billion. HPE now expects revenue growth of 14% to 16% in fiscal year 2025, compared with its prior forecast of growth of 7% to 9%.