Latest news with #GreenLake
Yahoo
2 hours ago
- Business
- Yahoo
HPE Q1 Earnings Call: Revenue Misses Expectations, Adjusted EPS Beats, AI and Hybrid Cloud Growth Highlighted
Enterprise technology company Hewlett Packard Enterprise (NYSE:HPE) fell short of the market's revenue expectations in Q1 CY2025, but sales rose 5.9% year on year to $7.63 billion. Its non-GAAP EPS of $0.38 per share was 16.3% above analysts' consensus estimates. Is now the time to buy HPE? Find out in our full research report (it's free). Revenue: $7.63 billion (5.9% year-on-year growth) Adjusted EPS: $0.38 vs analyst estimates of $0.33 (16.3% beat) Adjusted Operating Income: $613 million vs analyst estimates of $549.5 million (8% margin, 11.6% beat) Revenue Guidance for Q2 CY2025 is $8.35 billion at the midpoint, above analyst estimates of $8.18 billion Management raised its full-year Adjusted EPS guidance to $1.84 at the midpoint, a 2.2% increase Operating Margin: -14.5%, down from 5.9% in the same quarter last year Annual Recurring Revenue: $2.25 billion at quarter end, up 47.2% year on year Market Capitalization: $23.24 billion Hewlett Packard Enterprise's first quarter results reflected a mix of headwinds and operational improvements across its core segments, as management targeted execution issues in its server business and capitalized on expanding demand for AI-driven infrastructure. CEO Antonio Neri highlighted that the company 'addressed the operational challenges we experienced in our service segment last quarter,' referencing the implementation of new pricing analytics and increased discount scrutiny. Growth was led by higher AI system revenue, improved performance in the Intelligent Edge segment, and robust adoption of the hybrid cloud platforms, particularly the HPE Alletra MP storage transition and GreenLake cloud services. CFO Marie Myers noted that the company also made significant progress with its cost reduction program, which included workforce reductions and organizational streamlining. Looking ahead, management's guidance is anchored by anticipated improvements in server profitability, ongoing strength in AI and hybrid cloud demand, and incremental benefits from structural cost actions. Neri stated, 'We continue to capitalize on the mega trends reshaping the IT industry across networking, AI, and hybrid cloud,' and expects further margin recovery in the server segment as corrective actions take hold. The company anticipates a less pronounced impact from tariffs, continued scaling of its annual recurring revenue, and additional product launches in AI and networking. Myers emphasized a focus on balancing investments in innovation with disciplined cost management, cautioning that macroeconomic and trade policy uncertainties remain potential headwinds for the remainder of the year. Management attributed the quarter's performance to stronger AI systems revenue, momentum in hybrid cloud and Intelligent Edge, and operational changes aimed at improving server margins. Server margin remediation: Management implemented new pricing analytics, tighter discount controls, and inventory management to address previous execution issues in the server segment. These steps are expected to result in server operating margins recovering to approximately 10% by year-end. AI systems and backlog growth: The company highlighted over $1 billion in recognized AI systems revenue, an increase from the prior quarter, and a $3.2 billion AI systems backlog. Growth was attributed to enterprise and sovereign customer demand for AI infrastructure, with management noting a 'multiples of our backlog' in the pipeline. Hybrid cloud and storage momentum: The HPE Alletra MP storage platform experienced high double-digit growth, with orders for Alletra MP growing over 75% year over year for four consecutive quarters. The transition to a subscription model is currently a revenue headwind but is expected to support long-term profitability. Intelligent Edge recovery: Intelligent Edge returned to revenue growth after five quarters, benefiting from improved demand in networking and the introduction of new Wi-Fi 7 solutions. Channel inventory levels remained healthy, and data center and campus switching orders saw double-digit growth. Cost reduction and organizational changes: The company executed a cost reduction program, including a 5% workforce reduction and the launch of the 'Catalyst' initiative to streamline operations and leverage AI for internal efficiency. Myers described these efforts as 'accelerating our reporting cycles by approximately 50% and reducing processing costs by an estimated 25%.' Management expects ongoing AI and hybrid cloud momentum, server profitability improvements, and disciplined cost actions to drive results, though macroeconomic and trade policy uncertainties remain significant factors. AI and hybrid cloud demand: Management projects continued high demand for AI systems and hybrid cloud solutions, especially as enterprise and sovereign clients expand deployments. The company's integration with NVIDIA's new GPUs and AI software partnerships are expected to further expand market opportunities. Server margin recovery: The server segment's profitability is expected to improve as pricing and discounting controls, inventory management, and cost actions take full effect. Management reaffirmed the target for server operating margins to approach 10% by year-end, supported by the rollout of new server generations and improved backlog conversion. Operational efficiency and cost control: The 'Catalyst' initiative, including workforce reductions and AI-driven process improvements, is expected to deliver incremental cost savings and improved agility. Management cautioned that ongoing trade policy changes and macroeconomic volatility could affect both demand and margins. In coming quarters, the StockStory team will monitor (1) the pace of server margin recovery and execution on cost reductions, (2) sustained growth in AI systems and hybrid cloud platforms as new product launches roll out, and (3) the closing and integration of the Juniper Networks acquisition. Other important indicators include annual recurring revenue expansion and signs of stabilization in the networking and Intelligent Edge segments. Hewlett Packard Enterprise currently trades at a forward P/E ratio of 9.1×. At this valuation, is it a buy or sell post earnings? The answer lies in our full research report (it's free). Market indices reached historic highs following Donald Trump's presidential victory in November 2024, but the outlook for 2025 is clouded by new trade policies that could impact business confidence and growth. While this has caused many investors to adopt a "fearful" wait-and-see approach, we're leaning into our best ideas that can grow regardless of the political or macroeconomic climate. Take advantage of Mr. Market by checking out our Top 5 Growth Stocks for this month. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025). Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
15 hours ago
- Business
- Yahoo
HPE earnings: CEO Antonio Neri talks results & Juniper deal
Hewlett Packard Enterprise (HPE) reported fiscal second quarter results that topped Wall Street estimates on both the top and bottom lines. In the video above, HPE CEO Antonio Neri discusses the company's quarter, layoffs, and the Department of Justice's bid to block its acquisition of Juniper (JNPR). To watch more expert insights and analysis on the latest market action, check out more Market Domination Overtime here. All right, we're keeping a close eye on shares of HPE after better-than-expected earnings. Let's bring in HPE CEO Antonio Neri. Um look, we were here, I was in the seat, I think you were in that seat three months ago talking about challenges in the server business. Has this business, did it bottom in the most recent quarter? It did. It did. But look, Brian, we had a very solid quarter. In fact, we delivered above our commitments for the quarter, including the server business which we provided a guide that ultimately our results came at the very high end of that guide, both on revenue, operating profit, and operating margins. But what I'm really pleased is the fact that we took swift, targeted, and aggressive actions to address the three challenges we discussed last quarter in the server business. But this was our fifth consecutive quarter of year-over-year revenue growth across the company and every product business: in Intelligent Edge, in Networking, hybrid cloud, particularly true storage and GreenLake and private cloud, and then server growth revenues. And then, we also expanded profitability in hybrid cloud, HP Financial Services, and Intelligent Edge. And we are on track to deliver the server operating margins back to 10% by the exit of Q4. So, all in all, strong performance. And because of the momentum we saw in Q2, the line of sight we have for the second half, the bigger pipeline we exited Q2, we are raising our bottom range of that EPS guidance, the non-GAAP EPS guidance by eight cents. The margins, the operating margins in the server business, down year over year, down sequentially, or quarter over quarter, in the trenches here, what are your teams seeing? What has been making it so challenging in that server market? Well, first of all, like I said, we delivered better than expected. Although we guided down quarter over quarter, and like I said, it will take two to three quarters to get back to that 10%. But it's a combination of things, right? One is what we discussed last quarter with some inventory issues that we had that we had to take care of it, aggressive discounting. But ultimately, it comes down to the mix of the business with AI. And that's why we take a very disciplined approach across the AI ecosystem, if you will. And what I'm really pleased in AI is that this quarter, one-third of our orders came from enterprise, which tend to come with higher margin because there is more software and services attached to that enterprise market. Then you have to pay attention also to working capital. Working capital is very important because in some of these deals, you are deploying a significant amount of capital and there is a time between the capital deployment and the revenue profit recognition. So that's why, it is a technology transition, there is a business transition, and then there's a working capital transition. But I'm pleased with the progress we made in Q2. Definitely was the lowest and although better than we anticipated, and we have our way path back to where we need to be. When I talked to Enrique Lores, who you know, of course, Antonio, he is the CEO of HP. They reported earnings, disappointing quarter from them, sounded cautious on the outlook. Maybe enterprise consumers or businesses are holding back demand or orders because of everything going on in the economy. Heard the same vibe from your competitor over at Dell in the server market. Have you started to see concern from your customers, those business customers, about placing orders given everything that's going on in the world? Well, look, because of a unique portfolio, and we have a very comprehensive portfolio between Networking, and we are excited to see the transaction with Juniper come to a close very soon, and then, you know, the hybrid cloud with GreenLake. Look, GreenLake grew 47% year-over-year driven by the stickiness of that experience through storage and private cloud and all the ancillary services, and then our server business, which is a very large business. We have actually ability to mitigate ups and downs, but I will tell you that the demand during the quarter was steady. Although it was uneven in through the weeks because of the tariff churn that we went through. But month three was very solid month, and like I stated, our pipeline was higher in Q2 than it was in Q1. And so from my vantage point, customers continue to invest in IT. They all realize without IT, you can't compete in any industry you are in. And so that's why I'm more optimistic than just thinking PCs or printers or anything else. We play in the right markets, and we are capturing some of these inflection points we see. Last time I talked to Antonio, you announced a workforce reduction, 5%, 350 million potential cost savings, but on that earnings call last night, I heard a more, maybe more aggressive HPE than I thought. Are you going to go deeper or beyond 350 million in cost savings? Look, our goal is to accelerate growth while we drive structural cost savings, right? We are not only reducing costs but rethinking how we become more agile in the way we operate. So we are on track to achieve our overall 350 million cost savings by the 2026 fiscal year. We made significant progress and we expect that will contribute to the future results. Obviously, actions impact our employees, our team members, and we don't take those lightly. But the reality is that we are focused on anything that will drive operational efficiencies across the company. So aspect of that may be portfolio rationalization, but in the end, it's about process simplification and automation. And look, I think we spoke before, the fact that we have more than 250 use cases where we are doing POCs or already deploying AI. In fact, more than 40 are already in production. And we see the benefits of that across finance, global operations, marketing, as well as services. So that's why we believe there is an opportunity to accelerate that improvement, not just by reducing the workforce, but really becoming nimbler and better at everything we do. You mentioned Juniper, Antonio. That trial begins, I believe, in July, and I've been following this with you every step of the way ever since you announced this transaction. You remain confident you can get this deal done this year. Are there concessions you're willing to make to the administration to get this done? And if so, what are they? Well, look, the trial will start on July 9th, and we believe it's going to last only one to two weeks. That was the direction of the judge. So that's why we are now closer and closer to that timeline. And then the judge may take, you know, two to six weeks to issue the opinion, but that's the court process. And nothing has changed in our confidence to get the deal done. As we said many, many times, we believe the DOJ, this is flawed, the narrow the market in ways that really is not right. And secondly, it's not the reality, by the way. You know, in the United States, when you think about the Wi-Fi, the wireless market, there is at least eight competitors that they all play in every segment of the market. And then, you know, through the documents we have access, we believe we have the right to win this case. But you know, we obviously talk to the DOJ on an ongoing basis, but if they come forward with something that makes sense in terms of a proposal for settlement, that does not change the thesis of the deal and the return to our shareholders, we will consider it. But right now, we haven't seen that. Coming out of this quarter, Antonio, and this, I was surprised by this number, we're just crunching the math, almost 12 billion dollars in cash on your balance sheet. That's about 50% of your market cap. If this Juniper deal does not go through, what's your next course of action to drive shareholder value? Well, look, Brian, the reason why we have that balance sheet is because we are ready to pay for the Juniper deal. And as you recall, I stated that the Juniper deal is not only the fastest way to generate shareholder value, but we are committed to deliver at least 450 million dollars of synergies, which pays for more than the deal itself. So this is a no-brainer from a financial architecture perspective. From a technology perspective, this is totally complementary to our Aruba Networking and the rest of the HPE portfolio, which will allow us to provide a modern, secure AI networking set of product and services. And outside the United States, it's to compete with other vendors, including Huawei, which obviously, they have a larger share because they are not allowed to play in the United States. So from an investor perspective, it's a great deal. From a customer standpoint, it's a great set of technology and talent that we can integrate. But look, we looked at multiple alternatives with our board, it's our fiduciary duty, how we accelerate value, and we landed on this one. But if this doesn't happen, which would be incredibly disappointing, then obviously, we're going to discuss what is coming next, and there is a number of scenarios, including capital return and the like. But we are not prepared to discuss those at this point in time because our focus is closing this transaction and going through the trial. Since we last spoke, Antonio, Elliott Management, of course, a feared activist investor, has reportedly taken a 1.5 billion dollar stake in HPE. Have you been able to meet with them yet to hear what they had in mind or suggesting for your company? Well, Brian, HPE and our board maintain an ongoing dialogue with shareholders, and that has to do with a range of issues, and we always value their constructive input. We don't comment on specific communications that we have had with our shareholders. But as you can imagine, our board is very engaged. But I don't speculate on anything at this point in time. Is an activist helpful or hurtful to what you're trying to do in terms of transform HPE? Look, we welcome all the ideas, you know? And if there are really ideas that we haven't considered in the past, of course, we welcome them. And that's why we always approach every conversation from a constructive standpoint. Look, we have very smart investors, and Elliott, of course, is one of the smartest out there. So we approach this in a constructive way. And so if they have ideas that will accelerate the strategy and the value we are focused on, of course, we'll consider. All right, we'll leave it there for now. HPE CEO Antonio Neri, always good to see you. We'll talk to you soon. Thank you, Brian.
Yahoo
2 days ago
- Business
- Yahoo
Hewlett Packard Enterprise (NYSE:HPE) Expands Fault-Tolerant Solutions With New Nonstop Compute Offerings
Hewlett Packard Enterprise recently unveiled two new products in its HPE Nonstop Compute lineup, enhancing their capability to support critical operations with high availability. This product launch, along with other enhancements in AI computing and networking, likely added weight to HPE's 3% price increase over the past month, aligning closely with the broader market's performance. While the market saw a 2% increase over the past week and a 12% rise over the past year, HPE's varied technological advancements and compliance features supported its positive movement, countering any other market fluctuations. We've identified 1 possible red flag with Hewlett Packard Enterprise and understanding the impact should be part of your investment process. Find companies with promising cash flow potential yet trading below their fair value. The recent introduction of HPE's new products enhances its capacity to maintain high availability for critical operations. This aligns with HPE's strategic focus on AI and cloud strategies, which are anticipated to drive revenue and margin growth. The enhancements could potentially bolster HPE's competitive edge, further integrating high-margin offerings such as GreenLake into its portfolio. The market has reacted positively to these advancements, reflected in a 3% increase in HPE's share price over the past month. This price movement positions HPE well, considering a consensus price target of US$19.98, which suggests room for future growth from the current share price of US$16.49. Over a five-year span, HPE's total shareholder return, combining share price appreciation and dividends, was 75.96%. Despite underperforming the US Tech industry and broader market over the past year, this long-term gain demonstrates HPE's resilience and ability to deliver consistent returns. Analysts are factoring in both opportunities, such as synergies from the Juniper acquisition and potential AI-driven revenue, and challenges like regulatory and operational risks, which may impact future earnings forecasts. Analysts predict revenue growth of 4.6% per year, which, though slower than the broader market forecast, highlights a steady expansion path for HPE underpinned by its recent product developments. Gain insights into Hewlett Packard Enterprise's outlook and expected performance with our report on the company's earnings estimates. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include NYSE:HPE. This article was originally published by Simply Wall St. Have feedback on this article? Concerned about the content? with us directly. Alternatively, email editorial-team@ Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
28-05-2025
- Business
- Yahoo
Hewlett Packard Enterprise (NYSE:HPE) Advances Networking Solutions With Expanded HPE Aruba Offerings
Hewlett Packard Enterprise recently announced significant expansions of its HPE Aruba Networking portfolio, including the introduction of new distributed services switches, which are geared towards enhancing performance for AI and enterprise applications. This comes amid a favorable market environment, with the S&P 500 up 11% over the past year and stability in recent trading. These developments likely added weight to HPE's stock appreciation, as the company's shares advanced 10% over the past month. The broader market's flat performance would have provided little resistance to HPE's upward movement, supporting its gains driven by product innovation. Every company has risks, and we've spotted 1 warning sign for Hewlett Packard Enterprise you should know about. Find companies with promising cash flow potential yet trading below their fair value. Hewlett Packard Enterprise's recent expansion in its HPE Aruba Networking portfolio could potentially have a positive impact on its revenue and earnings. The focus on AI and enterprise applications might attract new business, boosting the company's high-margin offerings and supporting future financial growth. This aligns with its AI and cloud strategies, including GreenLake, which are poised for capturing AI workload revenues. Over the past five years, HPE's total shareholder return, including dividends, has reached 112.05%. This reflects a significant growth in value for investors over this extended period. In contrast, over the past year, HPE underperformed compared to the broader US market, which returned 11.3%, and the US Tech industry, which returned 4%. This discrepancy suggests a challenging environment in the short term despite an overall positive long-term trajectory. Analysts currently forecast HPE's revenue growth at 4.8% annually for the next three years, with earnings projected to reach US$2.7 billion by 2028, showing a slight decline from current levels. The expected synergies from the Juniper Networks acquisition and focus on AI might counterbalance some market and regulatory challenges that HPE faces. The current share price of US$16.49 indicates an 11.36% discount to the consensus price target of US$18.98, reflecting potential for upward movement if HPE successfully addresses these hurdles. Our valuation report unveils the possibility Hewlett Packard Enterprise's shares may be trading at a discount. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include NYSE:HPE. This article was originally published by Simply Wall St. Have feedback on this article? Concerned about the content? with us directly. Alternatively, email editorial-team@ Sign in to access your portfolio
Mid East Info
21-05-2025
- Business
- Mid East Info
Hewlett Packard Enterprise Enhances Cloud-Based Security and Deployment Flexibility with AI-Powered Solutions in the Middle East
Media Alert Hewlett Packard Enterprise Enhances Cloud-Based Security and Deployment Flexibility with AI-Powered Solutions in the Middle East Hewlett Packard Enterprise (HPE) has announced significant advancements in its cloud-based security and network management offerings, introducing expanded deployment options and enhanced security features to meet the evolving needs of enterprises and government entities. 'Organizations are increasingly prioritizing data sovereignty, requiring regional and local presence for mission-critical IT solutions. HPE addresses these challenges with unprecedented network management deployment flexibility. Combined with innovations in AI, security, and connectivity, HPE Aruba Networking Central offers powerful network management to help organisations meet security, privacy, and control requirements,' said Jacob Chacko, Regional Director for the Middle East & Africa at HPE Aruba Networking. 'Simultaneously, with the rise of data-fuelled AI applications, organizations face more sophisticated threats to data storage, capture, or transmission. HPE's security solutions deliver advanced Expanded Deployment Options for HPE Aruba Networking Central HPE Aruba Networking Central, HPE's security-first, AI-powered network management solution, now offers four distinct deployment options: cloud-delivered SaaS, Virtual Private Cloud (VPC), on-premises, and Network-as-a-Service (NaaS). With this expansion, HPE now provides the widest set of advanced network management capabilities available in the industry, giving organizations greater flexibility and allowing them to choose the deployment model that best aligns with their data sovereignty, security, and compliance requirements. The new VPC deployment option allows customers to operate HPE Aruba Networking Central within a dedicated, secure cloud environment, ensuring data control and regulatory compliance. Additionally, the on-premises deployment option supports air-gapped environments, providing enterprise efficiency for emerging use cases such as AI data capture, training, and inferencing while meeting government-level security requirement. Enhanced Security Features with Zero Trust Networking HPE Aruba Networking and HPE GreenLake cloud are expanding to help enterprises modernize secure connectivity and hybrid cloud operations by blending multi-layered and zero trust approaches to protect against threats. These new expansions include new cloud-based access control security capabilities of HPE Aruba Networking Central, new differentiated threat-adaptive and Digital Operations Resilience Act (DORA) compliant security through HPE Private Cloud Enterprise, and new cybersecurity services that optimize the design and implementation of security strategies for sovereign clouds and AI. AI-Powered Automation and Observability The latest updates to HPE Aruba Networking Central also include an always-on, automated network AIOps capability that continuously monitors critical wired and wireless network operations to optimize network operations and detect performance issues. A fabric of AI assistants acts as network architects, monitoring and gathering data, providing diagnostics and recommendations to extend existing capacity and performance, close security gaps, and identify configuration errors before they impact network operations. For more details on these expansions, read the full press releases:
