Enterprise technology company Hewlett Packard Enterprise (NYSE: HPE) reported revenue ahead of Wall Street’s expectations in Q2 CY2026, with sales up 33.7% year on year to $12.21 billion. On top of that, next quarter’s revenue guidance ($14.35 billion at the midpoint) was surprisingly good and 10.2% above what analysts were expecting. Its non-GAAP profit of $1.11 per share was 18.4% above analysts’ consensus estimates.

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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 $41.87 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 sales grew at a solid 8.7% compounded annual growth rate over the last five years. This is a good 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 20.1% 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 wonderful year-on-year revenue growth of 33.7%, and its $12.21 billion of revenue exceeded Wall Street’s estimates by 1.9%. Company management is currently guiding for a 48.3% year-on-year increase in sales next quarter.

Looking further ahead, sell-side analysts expect revenue to grow 19.3% over the next 12 months, similar to its two-year rate. This projection is eye-popping for a company of its scale and indicates the market is forecasting success for its products and services.

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Adjusted Operating Margin

Adjusted operating margin is a key measure of profitability. Think of it as net income (the bottom line) excluding the impact of non-recurring expenses, taxes, and interest on debt - metrics less connected to business fundamentals.

Hewlett Packard Enterprise has done a decent job managing its cost base over the last five years. The company has produced an average adjusted operating margin of 10.9%, higher than the broader business services sector.

Analyzing the trend in its profitability, Hewlett Packard Enterprise’s adjusted operating margin rose by 2.6 percentage points over the last five years, as its sales growth gave it operating leverage.

In Q2, Hewlett Packard Enterprise generated an adjusted operating margin profit margin of 12.8%, up 4.3 percentage points year on year. This increase was a welcome development and shows it was more efficient.

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 EPS grew at 11.7% compounded annual growth rate over the last five years, higher than its 8.7% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.

We can take a deeper look into Hewlett Packard Enterprise’s earnings to better understand the drivers of its performance. As we mentioned earlier, Hewlett Packard Enterprise’s adjusted operating margin expanded by 2.6 percentage points over the last five years. This was the most relevant factor (aside from the revenue impact) behind its higher earnings; interest expenses and taxes can also affect EPS but don’t tell us as much about a company’s fundamentals.

Like with revenue, we analyze EPS over a more recent period because it can provide insight into an emerging theme or development for the business.

For Hewlett Packard Enterprise, its two-year annual EPS growth of 28.5% was higher than its five-year trend. We love it when earnings growth accelerates, especially when it accelerates off an already high base.

In Q2, Hewlett Packard Enterprise reported adjusted EPS of $1.11, up from $0.44 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 grow 27.7% from $3.17 to $4.05.

Key Takeaways from Hewlett Packard Enterprise’s Q2 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 market seemed to be hoping for more, and the stock traded down 1.7% to $51.39 immediately following the results.

So do we think Hewlett Packard Enterprise is an attractive buy at the current price? If you’re making that decision, you should consider the bigger picture of valuation, business qualities, as well as the latest earnings. We cover that in our actionable full research report which you can read here (it’s free).