Hewlett Packard Enterprise Company (HPE) had one of those classic mixed-bag earnings reports Thursday that left investors scratching their heads—and ultimately hitting the sell button. The stock dropped in extended trading after the company beat on earnings but missed on revenue, a combination that apparently didn't sit well with the market.
Here's what HPE delivered for its fiscal fourth quarter: adjusted earnings of 62 cents per share, comfortably ahead of the 58-cent consensus estimate. That's the good news. The less-good news? Revenue came in at $9.68 billion, falling short of the $9.94 billion Wall Street was expecting.
The revenue picture gets more interesting when you look under the hood. Overall revenue climbed 14% year-over-year, powered by an absolutely explosive 150% jump in networking revenue. That's the kind of growth that makes CFOs smile. But not everything sparkled—server revenue declined 5%, hybrid cloud revenue dropped 12%, and financial services revenue was flat. Still, the company's annualized revenue run-rate shot up 63% to $3.2 billion, which tells you where the momentum is building.
On the cash flow front, HPE looked solid, generating $2.5 billion in operating cash flow and $1.9 billion in free cash flow during the quarter. The company wrapped up the period with roughly $5.77 billion in cash and equivalents on the balance sheet.
"HPE continued to drive operational discipline in Q4, resulting in record gross profit and robust non-GAAP operating profit as well as free cash flow generation that exceeded our outlook," said Marie Myers, executive vice president and CFO of HPE.
The board also declared a quarterly dividend of $0.1425 per share, payable around January 16, 2026 to shareholders of record as of December 19.
