Hewlett Packard Enterprise Development LP (HPE) has announced its financial performance for the first quarter ending January 31, 2025, reporting continued revenue growth.
Financial Overview for Q1 Fiscal 2025
In the first quarter of fiscal year 2025, HPE achieved a revenue of $7.9 billion, reflecting a 16% increase compared to the previous year and a 17% rise in constant currency. The Annualized Revenue Run-Rate (ARR) stood at $2.1 billion, up 45% year-over-year. However, gross margins reported a decline, with GAAP margins at 29.2% and non-GAAP margins at 29.4%.
Earnings Performance
- GAAP Diluted EPS: $0.44, marking a 52% increase year-over-year but a 56% decrease sequentially, exceeding expectations.
- Non-GAAP Diluted EPS: $0.49, up 2% from the prior year, falling within the forecast range.
- Operational Cash Flow: $(390) million, a decline of $454 million from the previous year.
- Free Cash Flow: $(877) million, down $395 million year-over-year.
- Capital Returns: HPE returned $223 million to shareholders via dividends and share buybacks.
Segment Performance Highlights
- Server Revenue: $4.3 billion, up 29% year-over-year, with an operating profit margin of 8.1%.
- Intelligent Edge Revenue: $1.1 billion, down 5%, with a profit margin of 27.4%.
- Hybrid Cloud Revenue: $1.4 billion, a 10% increase with a 7.0% margin.
- Financial Services Revenue: $873 million, flat year-over-year, demonstrating a margin of 9.4%.
Dividend Announcement
The HPE Board declared a regular cash dividend of $0.13 per share, scheduled for payment on or about April 18, 2025, for shareholders on record as of March 21, 2025.
Outlook for Upcoming Quarters
Looking ahead, HPE expects revenue for the second quarter to be between $7.2 billion and $7.6 billion. For fiscal year 2025, revenue growth is projected at 7%-11% in constant currency, while GAAP operating profit is anticipated to decline by 24% to 9%. The company forecasts GAAP diluted net EPS between $1.15 and $1.35 and non-GAAP diluted net EPS ranging from $1.70 to $1.90, with an expected free cash flow of about $1 billion.
Merger with Juniper Networks Update
A proposed merger with Juniper Networks has faced challenges, with the U.S. Department of Justice filing a complaint to block the deal. HPE has responded to refute these claims and is preparing for a trial set to begin on July 9, 2025, asserting that the merger will enhance competition and innovation in the networking market.