Hewlett Packard 2025 Q3 Earnings Revenue Surges 18.5% Despite EPS Decline

Hewlett Packard (HPE) reported fiscal 2025 Q3 earnings on September 4, 2025, with total revenue rising 18.5% year-over-year to $9.14 billion. The earnings call provided guidance for Q4 revenue of $9.7–$10.1 billion, with networking expected to grow over 60% quarter-over-quarter.

Revenue
Hewlett Packard’s total revenue increased by 18.5% to $9.14 billion in 2025 Q3, up from $7.71 billion in 2024 Q3, driven by strong performance across multiple segments. The Server segment led with $4.94 billion, reflecting robust demand in AI infrastructure and enterprise computing. Hybrid Cloud generated $1.48 billion, showing continued traction in digital transformation. Networking contributed $1.73 billion, bolstered by the successful integration of Juniper. Financial Services posted $886 million, while Corporate Investments and Other segments added $194 million. After eliminating intersegment net revenue of $98 million, consolidated net revenue for the quarter stood at $9.14 billion.

Earnings/Net Income
Hewlett Packard’s earnings per share (EPS) declined 46.2% to $0.21 in 2025 Q3, compared to $0.39 in 2024 Q3. Net income also fell to $305 million, a 40.4% decrease from $512 million a year ago. Despite this, the company has maintained profitability for 11 consecutive years in the corresponding fiscal quarter, underscoring its operational resilience. The EPS decline indicates a challenging quarter in terms of profitability.

Price Action
Following the earnings release, Hewlett Packard’s stock price declined 3.10% during the latest trading day. However, it edged up 1.89% during the most recent full trading week and surged 15.68% month-to-date, reflecting strong investor sentiment in the longer term.

Post-Earnings Price Action Review
Antonio Neri, CEO, emphasized HPE’s record-breaking Q3 performance, with revenue rising 18% year-over-year, driven by AI, networking, and hybrid cloud. The successful integration of Juniper has positioned the Networking segment to contribute nearly 50% of non-GAAP operating profit. Neri also highlighted innovation in agentic AI and SaaS offerings, noting a 250% increase in sovereign orders and a $3.7 billion AI backlog. Looking ahead, HPE aims to capitalize on the convergence of AI, cloud, and networking.

CEO Commentary
Neri expressed optimism about HPE’s future, emphasizing the company’s leadership in the AI era and a modern, secure, and AI-driven networking portfolio. He underscored progress in the Catalyst cost-saving program and the company’s readiness to meet the growing demand for AI solutions.

Guidance
Marie Myers, CFO, provided Q4 revenue guidance of $9.7–$10.1 billion, with Networking revenue expected to grow over 60% quarter-over-quarter and Hybrid Cloud revenue remaining flat. Server revenue is projected to decline mid- to high single digits due to lower AI systems revenue after a large Q3 deal. Server operating margin is anticipated to improve to ~10%, while Networking operating margin is expected to remain in the low 20s and Hybrid Cloud margin in the mid- to high single digits. Non-GAAP EPS is projected at $0.56–$0.60, with GAAP EPS at $0.50–$0.54. Free cash flow is expected to improve sequentially, and full-year non-GAAP operating margin is anticipated to reach the upper 9% range.

Additional News
Within the three weeks leading up to September 4, 2025, several non-earnings related developments emerged. DeepSeek, a leading AI research firm, announced a strategic partnership with HPE to develop a super-intelligent AI agent capable of autonomous learning, with a potential launch by year-end. Additionally, HPE finalized a $15 billion agreement to lease GPU servers equipped with its latest chips from Lambda, a major cloud infrastructure provider. Lastly, the company announced the appointment of former Juniper Networks COO James Carter as Chief Operating Officer, signaling a renewed focus on operational efficiency and strategic expansion in the networking segment.