Hewlett Packard Enterprise (HPE) updates guidance

Hewlett Packard Enterprise (NYSE: HPE) on Wedneday:

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 forma2,3 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 flow3,4 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.

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