HPE's quarterly revenues reached a record $9.1 billion as AI server sales increased sharply, along with newly-acquired Juniper pushing the networking numbers up. Alletra storage sales increased by triple digits.
There was a 19 percent year-on-year revenue rise in the third fiscal 2025 quarter ended July 31, 2025, with a GAAP profit of $288 million, 44.3 percent down Y/Y. This was HPE's fourth successive revenue growth quarter. It parallels Dell's AI-driven revenue surge with 19 percent Y/Y growth in its most recent quarter.
CEO Antonio Neri said: "HPE delivered record-breaking revenue and improved profitability this quarter as we marked a major milestone by closing our acquisition of Juniper Networks. Customer demand stretched broadly across our portfolio and was particularly strong in our Server and Networking segments."
Financial summary:
Neri said in the earnings call that the free cash flow number was high "as we significantly lowered our inventory driven by higher AI backlog conversion to revenue and strong supply chain execution. We continue to transform our business through Catalyst, the structural cost-saving program we announced last quarter, including enhancing operational efficiency, simplifying our portfolio, adopting AI, and optimizing our workforce." Staff went out of the door as well as server and networking gear.
The HPE business segment revenues were:
There was solid demand for servers and the AI systems part of it hit an all-time $1.6 billion revenue high point. Neri said: "AI systems orders increased nearly 100 percent quarter-over-quarter, including Middle East sovereign wins and continued traction in enterprise. We have grown enterprise AI orders year-over-year every quarter since the beginning of fiscal 2024." Sovereign AI orders rose 250 percent sequentially.
Networking, the renamed Intelligent Edge segment, was strong. Neri pointed out: "Our strategy is to lead with networking for AI. The opportunity is significant. Juniper is getting traction. It's becoming the de facto standard in many of those customers and the opportunity with HPE is to expand that footprint."
Storage systems are part of the Hybrid Cloud business unit. Here, Neri said, there was "robust growth in our IP product portfolio." Alletra MP array revenues rose more than 100 percent Y/Y and 5,000-plus Alletra MP arrays have been shipped to date.
CFO Marie Myers noted: "Our HPE Alletra MP platform continues to drive robust growth, achieving triple-digit year-over-year revenue growth for the third consecutive quarter while high double-digit margins expanded sequentially again. In Q3, new logos were up more than 350 sequentially and grew over 70 percent year-over-year. "
She discussed the Catalyst staff ejection program: "Our starting point was at approximate 5 percent workforce reduction from the exit of Q1 with gross savings of at least $350 million by fiscal year 2027. We are executing well against our plan and expect to achieve our target of 20 percent of the total savings by fiscal year end 2025. We are taking an AI-first approach to reimagine our key workflows, I have started in my own finance organization leveraging AI to increase productivity."
AI sales boomed in HPE's enterprise market. Neri again: "Through the AI factory engagement with our private cloud AI portfolio, which this quarter added 300 plus new logos, double from last quarter, we will lead with a full-integrated stack. And that's what we did with Nvidia, the integration. Their software with our GreenLake plus the integrated infrastructure with our HPE Proliant and Cray for the GPUs, and then our Alletra MP storage for fast object and file plus all the services around it."
He said it was "the third consecutive quarter of triple-digits year-over-year revenue growth in Alletra MP. Why that's happening is because we architected a new platform that's totally disaggregated. That provides the most effective block solution for those structural databases, while at the same time leveraging the same infrastructure and growing that in a scale out architecture into the unstructured data for fast object which is necessary for training or fine-tuning RAG models, especially if you do that on-prem, and then eventually to do file ingestion. That value proposition is resonating with customers That's why we gained one point of share in the last report from IDC."
Nothing was said about HPE's other Alletra storage system products.
HPE now has 44,000 Greenlake subscription customers, up from last quarter's 42,000. Its annualized revenue run rate (ARR) is now $3.1 billion, up 82.3 percent from a year ago.
The company is on a roll. Next quarter's revenue outlook is $9.9 billion +/- $200 million, a 17 percent Y/Y increase at the mid-point. The full fy2025 outlook is $34.6 billion, a 14.6 percent increase from fy2024 at the Q4 mid-point, and, if achieved, will be HPE's best annual result since fy 2018's $30.8 billion.
HPE closed its acquisition of Juniper Networks Inc. on July 2, 2025. HPE's Q3 results include the consolidation of Juniper Networks' financial results from the period between July 2, 2025, and July 31, 2025.