Earlier this week, Hewlett Packard Enterprise Co. (NYSE: HPE) reported its second quarter results. While it beat all market expectations, its cautious outlook sent the stock tumbling.

HP Enterprise’s Financials

HPE’s revenues grew 10% over the year to $7.5 billion, ahead of the Street’s forecast of $7.4 billion. Adjusted EPS of $0.34 was also ahead of the market’s forecast of $0.31 for the quarter.

By segment, revenues from its hybrid IT business grew 7% to $6 billion. Revenues from the Intelligent Edge revenues climbed 17% to $710 million, and Financial Services revenues grew 5% to $916 million.

During the quarter, HPE returned $1 billion to shareholders through share repurchases and dividends. This was part of the $7 billion stock buyback program announced by the company earlier in the year to manage the tax code change.

HPE expects current quarter earnings to come in at $0.35-$0.39 per share, and full-year earnings of $1.40-$1.50 per share. The market was looking for earnings of $0.36 per share for the quarter and $1.41 per share for the year.

This was the first full quarter under HPE’s new CEO Antonio Neri. Former CEO Meg Whitman had stepped down earlier this year. Despite beating all market expectations, Antonio believes that the second half of the year will be “challenging” due to tougher compares from the previous year. Following the results, HPE’s stock fell 10.5% in the day.

HP Enterprise’s Acquisitions

HPE plans to address some of these growth concerns through acquisitions. Earlier last quarter, it announced the acquisition of networking firm Cape Networks. Cape Networks applies a sensor-based and network agnostic approach to service assurance. It proactively tests the availability and performance of services and applications and alerts IT professionals of issues before they impact the user or the business. By offering easy-to-use dashboards, its product helps simplify IT management for organizations. HP plans to integrate Cape Networks’ offerings with Aruba NetInsight to deliver comprehensive AI-powered analytics and assurance so that customers can quickly adapt to changes in the user, device, application, and network environments. The merger will also help HPE compete against other networking giants like Cisco and Dell. Terms of the acquisition were not disclosed. Cape Networks was founded in 2013 by David Wilson, Fouad Zreik, Michael Champanis, and Ross Douglas. It is based both out of San Francisco and Cape Town, South Africa.

Earlier this month, HPE also bought software firm Plexxi to improve its hybrid cloud offerings. Founded in 2010, Plexxi is a leading provider of software-defined data fabric networking technology. It is a specialist in software-defined data center solutions that focus on optimizing application performance for enterprises that are using hybrid cloud environments. The terms of the acquisition were not disclosed. Plexxi has raised $83.4 million in funding and was valued at $267 million in 2016.

Last month it had also acquired RedPixie, a UK-based leading provider of cloud consulting, application development and migration services for enterprises looking to move workloads to public cloud. Founded in 2010, RedPixie is known for its team of business consultants, cloud architects, and data scientists who focus on helping organizations achieve digital transformation. It helps customers migrate legacy systems to the cloud, speed up the adoption of data analytics, and drive cost-cutting, while accelerating time-to-market and increasing agility. The acquisition is expected to help improve HPE’s cloud consulting division and will help it offer a more holistic suite of offerings to its corporate clients. Terms of the acquisition were not disclosed. RedPixie was founded in 2010 and has been privately held since. Its funding and revenue details are not known.

Its stock is trading at $15.58 with a market capitalization of $24.2 billion. It touched a 52-week high of $19.48 in March this year. The stock has been gradually growing from the 52-week low of $12.70 that it had fallen to in June of last year.