Revenue growth has accelerated sharply to 32.7% year-over-year in Q3 FY2026, while gross margin has expanded structurally from 31.8% to 40.1% over the past two years, indicating a successful mix shift toward higher-margin Intelligent Edge and AI solutions.
Hewlett Packard Enterprise Company (HPE) annual income statement — 13-year revenue, gross profit & net income history
| Metric | TTM | Oct'25 | Oct'24 | Oct'23 | Oct'22 | Oct'21 | Oct'20 | Oct'19 | Oct'18 | Oct'17 | Oct'16 | Oct'15 | Oct'14 | Oct'13 |
|---|
| Sales/Revenue | 41.89B | 34.3B | 30.07B | 29.11B | 28.11B | 27.86B | 26.94B | 28.9B | 30.88B | 28.94B | 30.33B | 51.83B | 55.13B | 57.33B |
| Revenue Growth % | 26.62% | 14.06% | 3.3% | 3.55% | 0.87% | 3.42% | -6.77% | -6.39% | 6.69% | -4.58% | -41.49% | -5.98% | -3.83% | - |
| Cost of Goods Sold | 26.8B | 24.43B | 20.52B | 19.18B | 19.28B | 18.76B | 18.89B | 19.91B | 21.91B | 20.5B | 20.78B | 38.03B | 40.4B | 42.86B |
| COGS % of Revenue | - | 71.23% | 68.23% | 65.91% | 68.6% | 67.33% | 70.12% | 68.88% | 70.98% | 70.83% | 68.51% | 73.37% | 73.28% | 74.76% |
| Gross Profit | 15.09B | 9.87B | 9.55B | 9.92B | 8.82B | 9.1B | 8.05B | 8.99B | 8.96B | 8.44B | 9.55B | 13.8B | 14.73B | 14.47B |
| Gross Margin % | 36.02% | 28.77% | 31.77% | 34.09% | 31.4% | 32.67% | 29.88% | 31.12% | 29.02% | 29.17% | 31.49% | 26.63% | 26.72% | 25.24% |
| Gross Profit Growth % | - | 3.29% | -3.74% | 12.44% | -3.05% | 13.05% | -10.46% | 0.36% | 6.16% | -11.6% | -30.83% | -6.29% | 1.82% | - |
| Operating Expenses | 11.62B | 8.22B | 7.12B | 7.51B | 6.99B | 6.91B | 6.5B | 6.75B | 6.59B | 6.43B | 7.09B | 10.58B | 10.9B | 10.55B |
| OpEx % of Revenue | - | 23.97% | 23.67% | 25.8% | 24.85% | 24.79% | 24.12% | 23.35% | 21.34% | 22.21% | 23.39% | 20.42% | 19.78% | 18.41% |
| Selling, General & Admin | 7.13B | 5.7B | 4.87B | 5.16B | 4.94B | 4.93B | 4.62B | 4.91B | 4.85B | 5.01B | 7.82B | 8.03B | 8.72B | 8.6B |
| SG&A % of Revenue | - | 16.63% | 16.2% | 17.73% | 17.58% | 17.69% | 17.16% | 16.98% | 15.71% | 17.3% | 25.79% | 15.48% | 15.81% | 15% |
| Research & Development | 3.71B | 2.52B | 2.25B | 2.35B | 2.04B | 1.98B | 1.87B | 1.84B | 1.66B | 1.49B | 2.3B | 2.34B | 2.2B | 1.96B |
| R&D % of Revenue | - | 7.34% | 7.47% | 8.07% | 7.28% | 7.1% | 6.96% | 6.37% | 5.39% | 5.13% | 7.58% | 4.51% | 3.99% | 3.41% |
| Other Operating Expenses | 2M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Operating Income | 3.46B | 1.64B | 2.44B | 2.41B | 1.84B | 2.19B | 1.55B | 2.24B | 2.37B | 2.01B | 2.46B | 3.22B | 3.83B | 3.91B |
| Operating Margin % | 8.27% | 4.79% | 8.1% | 8.29% | 6.54% | 7.88% | 5.77% | 7.76% | 7.69% | 6.96% | 8.09% | 6.21% | 6.94% | 6.83% |
| Operating Income Growth % | - | -32.48% | 0.87% | 31.27% | -16.22% | 41.25% | -30.75% | -5.44% | 17.88% | -18% | -23.78% | -15.83% | -2.2% | - |
| EBITDA | 5.54B | 4.38B | 5B | 5.03B | 4.32B | 4.79B | 4.18B | 4.78B | 4.95B | 5.06B | 6.23B | 7.17B | 7.97B | 8.31B |
| EBITDA Margin % | 13.23% | 12.77% | 16.63% | 17.28% | 15.37% | 17.2% | 15.51% | 16.54% | 16.03% | 17.5% | 20.54% | 13.83% | 14.46% | 14.49% |
| EBITDA Growth % | 21.97% | -12.36% | -0.62% | 16.46% | -9.87% | 14.67% | -12.55% | -3.44% | -2.27% | -18.72% | -13.09% | -10.07% | -4.07% | - |
| D&A (Non-Cash Add-back) | 2.05B | 2.74B | 2.56B | 2.62B | 2.48B | 2.6B | 2.63B | 2.54B | 2.58B | 3.05B | 3.77B | 3.95B | 4.14B | 4.4B |
| EBIT | 2.73B | -110M | 3B | 2.23B | 1.92B | 3.73B | -186M | 1.87B | 558M | 769M | 4.16B | 1.5B | 2.29B | 2.91B |
| Net Interest Income | -568M | -175M | -117M | 138M | -1.04B | -138M | -256M | -315M | -290M | -497M | -298M | -29M | -45M | -40M |
| Interest Income | -450M | 0 | 0 | 138M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Interest Expense | 118M | 175M | 117M | 0 | 1.04B | 138M | 256M | 315M | 290M | 497M | 298M | 29M | 45M | 40M |
| Other Income/Expense | -830M | -1.93B | 518M | -184M | -963M | 1.39B | -2B | -691M | -2.1B | -1.74B | 1.41B | -1.75B | -1.58B | -1.04B |
| Pretax Income | 2.63B | -285M | 2.95B | 2.23B | 876M | 3.59B | -442M | 1.55B | 268M | 272M | 4.08B | 1.47B | 2.24B | 2.87B |
| Pretax Margin % | 6.29% | -0.83% | 9.82% | 7.66% | 3.12% | 12.87% | -1.64% | 5.37% | 0.87% | 0.94% | 13.45% | 2.84% | 4.07% | 5.01% |
| Income Tax | -120M | -342M | 374M | 205M | 8M | 160M | -120M | 504M | -1.74B | -164M | 623M | -705M | 596M | 820M |
| Effective Tax Rate % | -4.56% | 120% | 12.67% | 9.19% | 0.91% | 4.46% | 27.15% | 32.45% | -650.75% | -60.29% | 15.27% | -47.96% | 26.56% | 28.56% |
| Net Income | 2.75B | 57M | 2.58B | 2.02B | 868M | 3.43B | -322M | 1.05B | 1.91B | 344M | 3.16B | 2.46B | 1.65B | 2.05B |
| Net Margin % | 6.57% | 0.17% | 8.58% | 6.96% | 3.09% | 12.3% | -1.2% | 3.63% | 6.18% | 1.19% | 10.42% | 4.75% | 2.99% | 3.58% |
| Net Income Growth % | 120.59% | -97.79% | 27.36% | 133.29% | -74.67% | 1164.29% | -130.7% | -45.02% | 454.65% | -89.12% | 28.44% | 49.33% | -19.65% | - |
| Net Income (Continuing) | 2.75B | 57M | 2.58B | 2.02B | 868M | 3.43B | -322M | 1.05B | 2.01B | 436M | 3.24B | 2.64B | 1.65B | 2.05B |
| Discontinued Operations | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Minority Interest | 62M | 66M | 64M | 56M | 45M | 46M | 47M | 51M | 35M | 39M | 70M | 383M | 396M | 387M |
| EPS (Diluted) | 1.90 | -0.04 | 1.93 | 1.54 | 0.66 | 2.58 | -0.25 | 0.77 | 1.23 | 0.21 | 1.82 | 1.34 | 0.90 | 1.12 |
| EPS Growth % | 143.04% | -102.31% | 25.32% | 133.33% | -74.42% | 1132% | -132.47% | -37.4% | 485.71% | -88.46% | 35.82% | 48.89% | -19.64% | - |
| EPS (Basic) | - | -0.04 | 1.95 | 1.56 | 0.67 | 2.62 | -0.25 | 0.78 | 1.25 | 0.21 | 1.84 | 1.36 | 0.92 | 1.14 |
| Diluted Shares Outstanding | 1.45B | 1.32B | 1.34B | 1.32B | 1.32B | 1.33B | 1.29B | 1.37B | 1.55B | 1.67B | 1.74B | 1.83B | 1.83B | 1.83B |
| Basic Shares Outstanding | 1.34B | 1.32B | 1.31B | 1.3B | 1.3B | 1.31B | 1.29B | 1.35B | 1.53B | 1.65B | 1.72B | 1.8B | 1.8B | 1.8B |
| Dividend Payout Ratio | - | 1396.49% | 26.21% | 30.57% | 71.54% | 18.24% | - | 57.96% | 29.87% | 124.42% | 11.8% | 1.3% | 2.25% | - |
Quick answers to the most common questions about buying HPE stock.
For fiscal year 2025, Hewlett Packard Enterprise Company (HPE) reported total revenue of $34.30B. This represents a 40.2% decline compared to $57.33B in 2013.
Hewlett Packard Enterprise Company (HPE) is profitable, generating $57.0M in net income for the fiscal year ending 2025 with a net profit margin of 0.2%.
Hewlett Packard Enterprise Company (HPE) reported an operating income of $1.64B, resulting in an operating profit margin of 4.8%. This margin reflects the operational efficiency of the business before interest and taxes.
Hewlett Packard Enterprise Company (HPE) generated $9.87B in gross profit for the year, representing a gross profit margin of 28.8%. This demonstrates the company's core pricing power and production efficiency.
Key Metrics
Top Statement Risk
Margin compression from component costs
Metrics are mathematically derived from official filings.
Revenue Growth Accelerates on AI & Edge Demand
HPE's revenue growth has accelerated sharply, reaching 32.7% year-over-year in Q3 FY2026, driven by strong demand in its Intelligent Edge and HPC & Digital AI segments, as reported in recent quarterly filings.
The acceleration from single-digit growth in early 2024 to over 30% in the latest quarter suggests a successful capture of enterprise AI infrastructure and networking refresh cycles. This growth appears to be a mix of volume recovery in Compute and a favorable mix shift toward higher-value Intelligent Edge solutions, indicating the strategic pivot is gaining traction. However, the durability of this acceleration will depend on sustained enterprise IT spending and HPE's ability to convert its AI server backlog into recognized revenue.
Gross Margin Expansion Driven by Mix Shift
Gross margin has expanded significantly from 31.8% in Q2 FY2024 to 40.1% in Q3 FY2026, a structural improvement that appears to reflect a higher mix of software-defined networking and services revenue from the Intelligent Edge segment.
This margin expansion is not merely cyclical; it suggests a fundamental change in the revenue mix toward higher-margin offerings like Aruba and GreenLake. The 40.1% gross margin now approaches the profile of a software-centric company, which is a stark contrast to the commodity hardware margins of peers like Dell (20.0%). The key question for investors is whether this mix shift is sustainable or if it represents a temporary peak driven by a specific product cycle.
Operating Leverage Emerging as SG&A Efficiency Improves
Operating income has scaled faster than gross profit, with the operating margin expanding from 6.7% in Q2 FY2024 to 11.4% in Q3 FY2026, indicating improving overhead efficiency as revenue scales.
The improvement in operating leverage is evident as SG&A expenses have grown at a slower pace than revenue, suggesting disciplined cost management. This operating margin expansion is critical for translating top-line growth into bottom-line profitability, especially given the company's historically thin net margins. The trend implies that HPE is beginning to realize the benefits of its scale, though the sustainability of this leverage will be tested by the integration costs of the pending Juniper acquisition.
Net Income Volatility Masks Underlying Profitability
Reported net income has been highly volatile, swinging from a loss of $1.1B in Q2 FY2025 to a profit of $1.5B in Q3 FY2026, a pattern that suggests significant non-operating items are distorting the core earnings trend.
The volatility in net income, particularly the large loss in Q2 FY2025, likely reflects one-time charges such as restructuring or the accounting for the H3C stake, as noted in the company's risk factors. This makes the reported EPS of $1.06 in the latest quarter less indicative of sustainable operational performance. Analysts should focus on operating income as a cleaner measure of core profitability, as it excludes these non-recurring items and better reflects the underlying business momentum.
R&D Investment Rises to Fuel AI and Edge Strategy
Research and development expenses have increased substantially, reaching $1.2B in Q3 FY2026 from $547M in Q3 FY2024, a strategic investment that appears aimed at maintaining competitiveness in AI servers and software-defined networking.
The significant increase in R&D spending, which has more than doubled over two years, indicates a commitment to innovation in high-growth areas like AI and the Intelligent Edge. This investment is necessary to defend HPE's moat in proprietary networking and exascale computing but will pressure near-term margins. The key metric to monitor is whether this R&D spend translates into higher-margin revenue streams and a stronger competitive position against rivals like Cisco and Super Micro.
Margin Sustainability Faces Component Cost Headwinds
The impressive gross margin expansion to 40.1% may be vulnerable to a reversal if commodity component prices, particularly for DRAM and high-end GPUs, spike again, as HPE's cost structure remains heavily exposed to semiconductor volatility.
While the current margin profile is strong, it is heavily dependent on a favorable mix and stable input costs. A sharp increase in memory or GPU prices could quickly compress gross margins, as hardware contracts often have fixed pricing that lags behind spot-market costs. Furthermore, the transition to GreenLake's recurring revenue model creates a short-term revenue headwind that could mask underlying cost pressures, making the current profitability appear more robust than it might be in a different pricing environment.