On November 28, 2023, Hewlett Packard Enterprise Co (HPE, Financial) released its 8-K filing, announcing its financial results for the fourth quarter and the full fiscal year of 2023. The company reported a year of strong financial performance, marked by increased revenue, expanded gross margins, and a significant rise in earnings per share. Despite a challenging fourth quarter, HPE's full-year results demonstrate the company's resilience and strategic focus on growth areas such as Edge, Hybrid Cloud, and AI.
Fiscal 2023 Full-Year Financial Highlights
HPE's revenue for the full year stood at $29.1 billion, marking a 2% increase from the previous year, with a more pronounced 5.5% growth in constant currency. The company's GAAP gross margin improved by 170 basis points to 35.1%, while non-GAAP gross margin rose by 140 basis points to 35.3%. Diluted net earnings per share (EPS) on a GAAP basis soared by 133% to $1.54, reflecting a strong recovery from the prior year, which included a substantial non-cash goodwill impairment charge. Non-GAAP diluted net EPS also increased by 6% to $2.15, hitting the high end of the guidance range.
Despite a slight decrease in cash flow from operations, which came in at $4.4 billion, HPE's free cash flow reached a record $2.2 billion, up $444 million from the prior year. The company returned $1.0 billion to shareholders through dividends and share repurchases.
Fourth Quarter Fiscal 2023 Performance
For the fourth quarter, HPE reported a revenue of $7.4 billion, a 7% decrease from the same period last year, with a 6% drop in constant currency. However, the annualized revenue run-rate (ARR) grew substantially by 39% to $1.3 billion. GAAP gross margin for the quarter was 34.8%, up 190 basis points year-over-year but down sequentially. Diluted net EPS on a GAAP basis was $0.49, a 313% increase from the prior-year period, and non-GAAP diluted net EPS was $0.52, down 9% year-over-year but up 6% sequentially.
Operating cash flow for the quarter was $2.8 billion, with free cash flow at $2.3 billion, showing an increase of $326 million from the previous year. Capital returns to shareholders in the form of dividends and share repurchases totaled $209 million.
Segment Performance and Dividend Announcement
HPE's Intelligent Edge and High Performance Computing & Artificial Intelligence (HPC & AI) segments saw significant revenue growth of 41% and 37%, respectively. However, the Compute and Storage segments experienced declines. The Financial Services segment reported a modest revenue increase and a solid return on equity.
In light of the strong annual performance, HPE's Board of Directors declared a regular cash dividend of $0.13 per share for the first quarter of fiscal 2024, an increase from the previous dividend rate.
Outlook for Fiscal 2024
HPE provided guidance for the first quarter of fiscal 2024, expecting revenue to be between $6.9 billion and $7.3 billion. The company reiterated its fiscal 2024 revenue growth projection of 2% to 4% in constant currency and a GAAP diluted net EPS range of $1.81 to $2.01. Non-GAAP operating profit growth is estimated to be between 3% to 5%, with a free cash flow guidance range of $1.9 billion to $2.1 billion. HPE plans to return approximately 65% to 75% of free cash flow to shareholders in dividends and share repurchases.
Overall, HPE's fiscal 2023 results reflect a company successfully navigating market challenges and capitalizing on strategic growth areas. With a solid financial foundation and a positive outlook for the coming year, HPE is poised to continue delivering value to its shareholders.
Explore the complete 8-K earnings release (here) from Hewlett Packard Enterprise Co for further details.
