Enterprise technology company Hewlett Packard Enterprise (NYSE: HPE) reported Q1 CY2026 results beating Wall Street’s revenue expectations, with sales up 40% year on year to $10.68 billion. On top of that, next quarter’s revenue guidance ($11.8 billion at the midpoint) was surprisingly good and 8.7% above what analysts were expecting. Its non-GAAP profit of $0.79 per share was 47.8% above analysts’ consensus estimates.

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“HPE delivered an exceptional quarter with record-breaking revenue, higher-than-anticipated profitability, and increased free cash flow, reflecting strong execution and healthy demand across the business,” said Antonio Neri, president and CEO of HPE.

Company Overview

Born from the 2015 split of the iconic Silicon Valley pioneer Hewlett-Packard, Hewlett Packard Enterprise (NYSE: HPE) provides edge-to-cloud technology solutions that help businesses capture, analyze, and act upon their data across hybrid IT environments.

Revenue Growth

A company’s long-term sales performance is one signal of its overall quality. Even a bad business can shine for one or two quarters, but a top-tier one grows for years.

With $38.79 billion in revenue over the past 12 months, Hewlett Packard Enterprise is a behemoth in the business services sector and benefits from economies of scale, giving it an edge in distribution. This also enables it to gain more leverage on its fixed costs than smaller competitors and the flexibility to offer lower prices.

As you can see below, Hewlett Packard Enterprise’s 7.1% annualized revenue growth over the last five years was solid. This is an encouraging starting point for our analysis because it shows Hewlett Packard Enterprise’s demand was higher than many business services companies.

Long-term growth is the most important, but within business services, a half-decade historical view may miss new innovations or demand cycles. Hewlett Packard Enterprise’s annualized revenue growth of 17.1% over the last two years is above its five-year trend, suggesting its demand was strong and recently accelerated.

This quarter, Hewlett Packard Enterprise reported magnificent year-on-year revenue growth of 40%, and its $10.68 billion of revenue beat Wall Street’s estimates by 9.2%. Company management is currently guiding for a 29.2% year-on-year increase in sales next quarter.

Looking further ahead, sell-side analysts expect revenue to grow 9.1% over the next 12 months, a deceleration versus the last two years. We still think its growth trajectory is attractive given its scale and implies the market sees success for its products and services.

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Adjusted Operating Margin

Hewlett Packard Enterprise’s adjusted operating margin has generally stayed the same over the last 12 months, averaging 10.1% over the last five years. This profitability was higher than the broader business services sector, showing it did a decent job managing its expenses.

Looking at the trend in its profitability, Hewlett Packard Enterprise’s adjusted operating margin might have fluctuated slightly but has generally stayed the same over the last five years. This raises questions about the company’s expense base because its revenue growth should have given it leverage on its fixed costs, resulting in better economies of scale and profitability.

This quarter, Hewlett Packard Enterprise generated an adjusted operating margin profit margin of 5%, down 3.1 percentage points year on year. This contraction shows it was less efficient because its expenses grew faster than its revenue.

Earnings Per Share

Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth — for example, a company could inflate its sales through excessive spending on advertising and promotions.

Hewlett Packard Enterprise’s decent 8.4% annual EPS growth over the last five years aligns with its revenue performance. This tells us it maintained its per-share profitability as it expanded.

Like with revenue, we analyze EPS over a shorter period to see if we are missing a change in the business.

Although it performed well, Hewlett Packard Enterprise’s two-year annual EPS growth of 14.4% lower than its 17.1% two-year revenue growth.

We can take a deeper look into Hewlett Packard Enterprise’s earnings quality to better understand the drivers of its performance. Hewlett Packard Enterprise’s adjusted operating margin has declined over the last two yearswhile its share count has grown 8.1%. This means the company not only became less efficient with its operating expenses but also diluted its shareholders.

In Q1, Hewlett Packard Enterprise reported adjusted EPS of $0.79, up from $0.38 in the same quarter last year. This print easily cleared analysts’ estimates, and shareholders should be content with the results. Over the next 12 months, Wall Street expects Hewlett Packard Enterprise’s full-year EPS to stay about the same, moving from $2.50 to $2.49.

Key Takeaways from Hewlett Packard Enterprise’s Q1 Results

It was good to see Hewlett Packard Enterprise beat analysts’ EPS expectations this quarter. We were also excited its EPS guidance for next quarter outperformed Wall Street’s estimates by a wide margin. Zooming out, we think this was a good print with some key areas of upside. The stock traded up 28.5% to $61.20 immediately following the results.

Hewlett Packard Enterprise put up rock-solid earnings, but one quarter doesn’t necessarily make the stock a buy. Let’s see if this is a good investment. What happened in the latest quarter matters, but not as much as longer-term business quality and valuation, when deciding whether to invest in this stock. We cover that in our actionable full research report which you can read here (it’s free).