By Mukundan Sivaraj · AIM Media House
In October 2025, Hewlett Packard Enterprise told investors it expected to generate more than $3 in non-GAAP earnings per share and more than $3.5 billion in free cash flow by fiscal 2028. Eight months later, the company says it expects to exceed those targets in fiscal 2026.
Revenue rose 40% year over year to a record $10.68 billion in the second quarter, while HPE raised its full-year earnings, cash flow, and growth outlook. The immediate explanation is AI demand.
HPE raised its fiscal 2026 networking growth outlook to 72% to 75% and now expects free cash flow of at least $3.5 billion this year, matching a target originally set for fiscal 2028. But a closer look at the quarter points to another factor.
The company spent much of the past two years arguing that its $14 billion acquisition of Juniper Networks would make networking a larger, more profitable part of the business.
At its 2025 Securities Analyst Meeting, HPE laid out a plan in which networking would become one of the company's primary profit engines by the end of the decade. The latest results suggest that transition may be happening far sooner than management originally projected.
HPE Bought Juniper To Change Its Business Mix When HPE announced its plan to acquire Juniper Networks in January 2024, the company did not frame the deal as a simple expansion of its networking portfolio.
Management argued that combining HPE Aruba Networking with Juniper would create a larger, higher-margin business built around AI-native networking, cloud operations, and software-driven infrastructure.
The company said the acquisition would accelerate revenue growth, expand operating margins, and increase free cash flow over time.
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