Hewlett Packard (0J51.L) Q3 2025 Earnings Report

Hewlett Packard Enterprise (HPE) reported a strong top-line surge in QQ3 2025, with revenue of $9.136 billion, up 19% year over year and up 20.4% quarter over quarter. The gross profit of $2.365 billion yielded a gross margin of 25.9%, while operating income remained modest at $247 million, producing an operating margin of 2.70%. Net income came in at $305 million, translating to a net margin of 3.33% and earnings per share (EPS) of $0.21 (diluted $0.19). The quarterly results reflect ongoing transformation toward higher-value, data-centric offerings and Aruba-based networking solutions, even as profitability remains constrained by mix and spending patterns characteristic of a hardware-centric hardware-and-services portfolio. The company generated solid operating cash flow of approximately $1.305 billion and reported capital expenditures of about $1.075 billion, with a stated free cash flow figure of $2.38 billion in the data, though the reported free cash flow appears inconsistent with OCF and capex when viewed in isolation (FCF ≈ OCF − Capex would imply roughly $0.23 billion). Financing activities contributed approximately $4.235 billion (net), driven by debt issuance and other financing inflows, while debt repayments totaled around $4.493 billion and a $0.2 billion dividend was paid. Net debt stood at about $19.1 billion against total debt of $23.65 billion and total assets of $77.34 billion. In summary, QQ3 2025 demonstrates meaningful revenue momentum and cash flow generation, but profitability is still weighed down by the costs of a strategic transition and ongoing financing activity. The investment thesis centers on HPE’s positioning in data-center modernization, hybrid IT solutions, and Aruba networking—areas with secular IT budgets and potential uplift from AI/edge workloads—while balancing leverage, working-capital dynamics, and long-duration asset-heavy investments.