Hewlett Packard Enterprise Closes Strong Fiscal Year 2025 With Record Earnings
Highlights
- Q4 Revenue: $9.7 billion (+14% YoY)
- Non-GAAP Operating Profit: +26% YoY
- Non-GAAP Operating Margin: 12.2%
- Non-GAAP EPS: $0.62 (exceeded guidance)
- Free Cash Flow: $1.9 billion
- Full-year Revenue: $34.3 billion (+14% YoY)
- Full-year Non-GAAP EPS: $1.94
- Networking Segment Revenue: $6.9 billion (+51% YoY)
- Orders for New Combined Networking Segment: Faster rate than revenue
- AI Server Orders in Fiscal Year 2025: $6.8 billion
- Total Company ARR: $3.2 billion (+62% YoY)
Hewlett Packard Enterprise (HPE) has ended fiscal year 2025 on a high note, marking a transformative year underpinned by strategic acquisitions and robust financial outcomes. The company's initiatives toward aligning with core growth areas have resulted in a record quarter marked by notable financial metrics and a strengthened market position.
Record Q4 and Yearly Performance
HPE's fourth-quarter revenue climbed to $9.7 billion, reflecting a 14% increase year over year. The company's non-GAAP operating profit surged by 26%, while operating margins hit a record high of 12.2%. This performance led to a non-GAAP diluted earnings per share (EPS) of $0.62, surpassing their guidance expectations. An impressive free cash flow of $1.9 billion for the quarter capped off a year where HPE's full-year revenue reached $34.3 billion, a 14% increase from the previous year, with non-GAAP EPS at a solid $1.94.
Networking and AI Driving Growth
The acquisition of Juniper Networks played a pivotal role in bolstering HPE's position within the networking sector, which emerged as a standout performer for the fiscal year. Networking segment revenue soared by 51% to $6.9 billion, with orders growing at a faster pace than revenue. The strategic merger has seen initial synergies materialize quickly, contributing to enhanced margin profiles and growth prospects.
AI infrastructure has also been a key growth driver, with $6.8 billion in new AI server orders during the fiscal year. HPE's focus on sovereign and enterprise AI systems has demonstrated itself as a sound strategic approach, prioritizing high-margin growth opportunities.
Expanding ARR and Strategic Outlook
HPE's annualized revenue run rate (ARR) grew to $3.2 billion, a 62% year-over-year increase, showcasing the robust momentum of their GreenLake platform and associated software solutions. The integration of ARR from Juniper further expands HPE's reach in subscription services within the networking sector.
Overall, HPE's year has been marked by disciplined execution and strategic transformation amidst operational synergies from the Juniper acquisition. With 2025 ending on a strong note, HPE is well-positioned financially and strategically to pursue significant growth opportunities in networking, cloud, and AI as it moves forward.