HPE Q4 2025: Mixed Results, Raised EPS Guidance, Soft Revenue Outlook

December 5, 2025 at 07:16 UTC

6 min read

HPE Q4 2025 earnings chart showing EPS beat, revenue miss, and Juniper-driven networking growth

Key Points

Hewlett Packard Enterprise (HPE) reported Q4 2025 adjusted EPS of $0.62, beating estimates by 6.5%, but revenue of $9.68 billion missed expectations by 2.6%.
Networking revenue surged 150% year-over-year to $2.8 billion, driven by the Juniper Networks acquisition, while server and hybrid cloud revenues declined 5% and 12%, respectively.
HPE raised its fiscal 2026 non-GAAP diluted net EPS guidance to a range of $2.25 to $2.45 and increased free cash flow guidance midpoint to $1.85 billion, despite issuing a soft revenue outlook for Q1 2026 between $9 billion and $9.4 billion.
The integration of Juniper Networks is progressing, contributing to strong networking backlog and accelerating GreenLake ARR growth, with 80% of ARR now from software and services.

Q4 2025 Financial Performance and Segment Highlights

Hewlett Packard Enterprise (HPE) reported its fiscal fourth-quarter 2025 results with adjusted earnings per share (EPS) of $0.62, surpassing analyst expectations of $0.58 by 6.5%. However, the company’s revenue of $9.68 billion fell short of the consensus estimate of $9.94 billion by approximately 2.6%. The year-over-year revenue growth was 14.4%, reflecting a mixed performance across business segments. Networking revenue experienced a significant increase of 150% to $2.8 billion, largely attributed to the acquisition of Juniper Networks, which closed during the fiscal year. This segment also maintained a strong operating profit margin of 23%, slightly below the prior year’s 24.4%. Conversely, server revenue declined 5% to $4.5 billion with a reduced operating margin of 9.8%, down from 11.6% the previous year. The hybrid cloud segment saw a 12% decrease in revenue to $1.4 billion and a drop in operating margin to 5% from 7.8%. Financial services revenue remained flat at $889 million with an improved operating margin of 11.5%. Overall, HPE’s total segment net revenue for the quarter was $9.76 billion, up 14% year-over-year, but the company’s adjusted EBITDA margin was 11%, missing estimates by a wide margin. The company generated $1.9 billion in free cash flow during the quarter, exceeding its outlook.

Guidance and Market Outlook for Fiscal 2026

Despite the revenue miss in Q4, HPE raised its fiscal 2026 non-GAAP diluted net EPS guidance to a range of $2.25 to $2.45, up from prior guidance of $2.20 to $2.40, reflecting confidence in profitability and cash flow generation. The midpoint of free cash flow guidance was also increased to $1.85 billion, within a range of $1.7 billion to $2 billion. However, the company issued a soft revenue outlook for the first quarter of fiscal 2026, projecting revenue between $9 billion and $9.4 billion, below analyst expectations of approximately $9.9 billion. This cautious outlook is driven by ongoing weakness in enterprise spending amid economic uncertainty, particularly impacting server and hybrid cloud businesses. HPE expects non-GAAP EPS for Q1 2026 to be between $0.57 and $0.61, slightly above consensus estimates. The company anticipates that AI server demand will be uneven throughout the year, with significant contributions expected in the second half, influenced by longer procurement cycles and data center readiness among sovereign and enterprise customers.

Juniper Networks Integration and GreenLake Growth

The integration of Juniper Networks, acquired by HPE during the fiscal year, is progressing well but presents challenges such as unifying sales forces and implementing a new sales compensation plan. The acquisition has notably strengthened HPE’s networking portfolio, contributing to a strong backlog and accelerating growth in the GreenLake as-a-service platform. GreenLake’s annual recurring revenue (ARR) has been bolstered by Juniper’s software subscription services, with 80% of ARR now derived from software and services, enhancing the overall subscription and service model. This shift supports HPE’s strategic focus on hybrid cloud and AI-enabled infrastructure solutions. The company has proactively communicated upcoming price increases to customers to address rising component costs, including DRAM price pressures, which have been factored into fiscal 2026 guidance. Pricing adjustments have led to a shift toward higher average unit prices, supported by demand for newer server generations.

Operational Discipline and Financial Metrics

HPE emphasized operational discipline in Q4, achieving record gross profit and robust non-GAAP operating profit despite revenue challenges. Gross margins expanded sharply, with non-GAAP gross margin rising 550 basis points to 36.4%. The company’s free cash flow margin improved to 19.8%, up from 17.9% in the prior year quarter. However, operating margin declined to -0.1% from 8.2% a year earlier, reflecting increased costs and integration expenses. The company declared a quarterly cash dividend of $0.1425 per share, payable in January 2026. While HPE’s revenue growth over the past five years has been modest at an annualized 4.9%, recent acceleration to 8.5% over two years suggests improving demand dynamics. Nonetheless, challenges remain in maintaining high growth rates given the company’s large scale and competitive pressures from rivals such as Dell Technologies and Super Micro Computer. HPE’s management highlighted the need for portfolio innovation, pricing strategies, and market expansion to sustain growth.

Rubrik’s Q3 Fiscal 2026 Results and Market Position

In related enterprise technology news, Rubrik, Inc., a security and AI operations company, reported strong third-quarter fiscal 2026 results with total revenue of $350.2 million, a 48% increase year-over-year, and subscription revenue up 52% to $336.4 million. The company posted a non-GAAP net income per share of $0.10, a significant improvement from a loss of $0.21 per share in the prior year period. Rubrik achieved its first positive non-GAAP operating income of $10.1 million and expanded its non-GAAP gross margin to 82.8%. Free cash flow surged nearly 400% to $76.9 million. The company’s subscription annual recurring revenue (ARR) contribution margin improved to 10.3%. Rubrik’s growth is driven by its focus on data protection, cyber resilience, and enterprise AI acceleration, with recent product launches and partnerships enhancing its market position. The company raised its full-year revenue outlook to approximately $1.28 billion and expects continued momentum in subscription ARR and free cash flow generation.

Hormel Foods Q3 CY2025 Performance Overview

Separately, Hormel Foods, a packaged foods company, reported third-quarter calendar year 2025 revenue of $3.19 billion, a 1.5% increase year-over-year but below analyst estimates of $3.25 billion. Adjusted earnings per share of $0.32 exceeded expectations by 6%. Despite revenue growth, the company experienced a significant decline in operating margin to 0.1% from 9.4% in the prior year quarter and a decrease in free cash flow margin to 7.3% from 10.4%. Sales volumes fell 1.8% year-over-year, indicating challenges in demand. Hormel’s long-term revenue growth has been modest, with recent sales volumes shrinking, reflecting market saturation and competitive pressures. The company’s outlook for fiscal 2026 adjusted EPS is $1.47, slightly above analyst estimates. Hormel’s performance highlights the difficulties faced by large consumer staples companies in driving volume growth amid changing consumer preferences.

Key Takeaways

HPE’s Q4 2025 results showed strong earnings beats but revenue misses, with networking growth offset by declines in server and hybrid cloud segments.
The Juniper Networks acquisition is a key driver of HPE’s networking revenue surge and subscription ARR growth within GreenLake.
HPE raised fiscal 2026 EPS and free cash flow guidance but issued a cautious revenue outlook for Q1 2026 due to weak enterprise spending and delayed AI server shipments.
Rubrik demonstrated robust subscription growth and improved profitability in Q3 fiscal 2026, while Hormel Foods faced volume declines and margin compression despite modest revenue growth.

References

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