Hewlett Packard 2025 Q4 Earnings EPS Dives 89.2% Amidst Revenue Growth

Hewlett Packard (HPE) reported mixed Q4 2025 results, with revenue exceeding estimates by $210 million but GAAP EPS falling short. The company raised FY26 guidance for non-GAAP diluted EPS to $2.25–$2.45, reflecting stronger networking margins and Juniper integration progress.

Revenue

Hewlett Packard’s total revenue surged 14.4% year-over-year to $9.68 billion, driven by robust demand in server and networking segments. Server revenue led with $4.46 billion, while Hybrid Cloud and Networking contributed $1.41 billion and $2.81 billion, respectively. Financial Services added $889 million, and Corporate Investments and other segments totaled $191 million. Intersegment eliminations reduced consolidated revenue by $82 million.

Earnings/Net Income

GAAP diluted EPS plummeted 89.2% to $0.11, compared to $1.02 in 2024 Q4, while net income dropped 87.2% to $175 million. Despite the decline, HPE maintained 11 years of quarterly profitability, underscoring operational stability.

Post-Earnings Price Action Review

A strategy of buying HPE shares after a quarterly revenue drop on earnings release dates and holding for 30 days generated a 118.37% return over three years, outperforming the benchmark by 47.20%. With a Sharpe ratio of 1.09 and zero maximum drawdown, the approach demonstrated low-risk, high-reward potential.

CEO Commentary

CEO Antonio Neri highlighted $9.7 billion in revenue, a record 12.2% non-GAAP operating margin, and $1.9 billion in free cash flow. He emphasized AI infrastructure growth, Juniper integration, and GreenLake Cloud expansion, expressing confidence in 2026’s strategic momentum.

Guidance

HPE raised FY26 non-GAAP diluted EPS guidance to $2.25–$2.45 and free cash flow to $1.7–$2.0 billion. Q1 2026 revenue is projected at $9–$9.4 billion, with networking growth expected to hit 145%–155% YoY.

Additional News

1. M&A Activity: HPE completed its $14 billion acquisition of Juniper Networks, enhancing its networking leadership and AI infrastructure capabilities.

2. Dividend Increase: The company announced a 9.6% raise in quarterly dividends to $0.1425 per share, effective January 16, 2026.

3. Strategic Partnerships: HPE expanded collaborations with AMD and Nvidia to develop open rack-scale AI infrastructure, aligning with sovereign and enterprise client demand.