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3 days 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
4 days 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
4 days ago
- Business
- Yahoo
Hewlett Packard Enterprise Co (HPE) Q2 2025 Earnings Call Highlights: Strong Revenue Growth ...
Revenue: $7.6 billion, up 7% year over year. Non-GAAP Diluted Net Earnings Per Share: $0.38, above guidance. Operating Margin: 8%, down 150 basis points year over year. Free Cash Flow: Negative $847 million. Server Revenue: $4.1 billion, up 7% year over year. Intelligent Edge Revenue: $1.2 billion, up 8% year over year. Hybrid Cloud Revenue: $1.5 billion, up 15% year over year. Financial Services Revenue: $856 million, up 1% year over year. Annualized Revenue Run Rate (ARR): $2.2 billion, up 47% year over year. Gross Margin: 29.4%, down 370 basis points year over year. GAAP Diluted Net Loss Per Share: $0.82, due to a non-cash goodwill impairment charge. AI Systems Revenue: Over $1 billion, up from $900 million last quarter. Customer Count for GreenLake: Approximately 42,000. Warning! GuruFocus has detected 5 Warning Sign with HPE. Release Date: June 03, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Hewlett Packard Enterprise Co (NYSE:HPE) delivered Q2 revenue of $7.6 billion, up 7% year over year, exceeding the high end of guidance. The company saw year-over-year revenue growth in every product segment, with strong performance in AI systems, Intelligent Edge, and Hybrid Cloud. HPE's GreenLake Cloud subscription services showed significant growth, contributing to a 47% increase in annualized revenue run rate. The company implemented effective measures to address previous operational challenges in the Server segment, leading to improved margin performance. HPE's commitment to innovation is evident with new product launches, including advanced private cloud solutions and AI partnerships with NVIDIA. HPE faced a complex macroeconomic and geopolitical landscape, impacting demand and creating uncertainty. Non-GAAP gross margin was down 370 basis points year over year, affected by an unfavorable mix within the Server segment. Free cash flow was negative $847 million, although slightly better than expected. The company recorded a non-cash goodwill impairment charge of approximately $1.4 billion related to its Hybrid Cloud business. HPE's Financial Services segment saw a 20% year-over-year decrease in financing volumes. Q: What steps are needed for Server margins to improve from 5% to 10% by year-end, and what are the priorities if the Juniper transaction doesn't close? A: Antonio Neri, CEO, explained that HPE has addressed execution challenges with targeted actions, such as new pricing analytics and inventory management, which are expected to help achieve a 10% operating margin by Q4. Regarding the Juniper transaction, HPE is exploring other options, including capital return and portfolio actions, if the deal doesn't close. Q: Can you elaborate on the pipeline strength exiting Q2 compared to Q1, and what is driving this? A: Antonio Neri, CEO, noted a strengthening pipeline across the portfolio, particularly in AI, with significant enterprise-driven orders. The Hybrid Cloud segment also showed strong momentum, especially with the Alletra MP portfolio. Networking saw recovery, and GreenLake continued to perform well, contributing to the overall pipeline strength. Q: Where is HPE seeing the most AI server traction, and how can the margin profile of the Storage business be improved? A: Antonio Neri, CEO, highlighted that AI server traction varies by customer segment, with strong demand in enterprise and sovereign markets. For Storage, Marie Myers, CFO, mentioned that margins are expected to improve towards the end of the year, reaching high single digits by Q4. Q: How has Blackwell demand impacted AI server recovery, and what steps are being taken to optimize inventory levels? A: Antonio Neri, CEO, stated that Blackwell demand has shifted rapidly, and HPE now requires pre-payment for inventory purchases, reducing exposure to older inventory. This approach helps optimize inventory levels and aligns with customer demand. Q: How does HPE's AI server strategy compare to competitors, given the differences in order momentum? A: Antonio Neri, CEO, explained that HPE focuses on disciplined participation in all market segments, prioritizing gross margin accretion and working capital. HPE chooses not to participate in certain large opportunities if they don't align with profitability goals, focusing instead on enterprise and sovereign markets. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus.
Yahoo
5 days ago
- Business
- Yahoo
HPE Set to Report Q2 Earnings: Is a Beat in Store for the Stock?
Hewlett Packard Enterprise HPE is scheduled to report second-quarter fiscal 2025 results on June the second quarter of fiscal 2025, management expects non-GAAP earnings per share between 28 cents and 34 cents. The consensus mark is pegged at 34 cents per share, indicating a decrease of 19.05% from the prior-year quarter's reported figure. The estimate has been revised upward by a penny over the past 30 earnings beat the Zacks Consensus Estimate for earnings in three of the trailing four quarters, missing the same on one occasion, delivering an average earnings surprise of 5.67%.For the second quarter of fiscal 2025, HPE expects revenues between $7.2 billion and $7.6 billion. The Zacks Consensus Estimate is pegged at $7.47 billion, suggesting growth of approximately 3.66% from the year-ago quarter's reported figure. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.) Hewlett Packard Enterprise Company price-eps-surprise | Hewlett Packard Enterprise Company Quote Hewlett Packard Enterprise's fiscal second-quarter performance is expected to have been supported by a recovering demand environment fueled by artificial intelligence (AI). HPE's AI-driven networking portfolio is likely to have contributed to the growth of its Intelligent Edge services across campus and branch continues to be a key growth catalyst for HPE. During the second quarter, HPE's AI systems and sovereign AI cloud offerings are likely to have been driven by strong demand from the customers, particularly through HPE Private Cloud AI, which is expected to have boosted the company's top increasing adoption of the Aruba Edge Services Platform and HPE GreenLake is expected to have driven Hewlett Packard Enterprise's revenues in the to-be-reported quarter. The HPE GreenLake solution is likely to have benefited from the company's effort to simplify its cloud strategy by including all related products in the hybrid cloud segment. This initiative is expected to have simplified the customer adoption of the solution and added to the top Packard Enterprise has been benefiting from persistent growth in sales of its accelerator processing unit, primarily driven by rising demand for HPE Cray EX, Cray XT and HPE ProLiant Gen11 AI-optimized softening IT spending is likely to have impacted overall financial performance in the second quarter. Higher interest rates and inflationary pressures are hurting consumer spending. On the other hand, enterprises are postponing their large IT spending plans due to a weakening global economy amid ongoing macroeconomic and geopolitical issues. Our proven model predicts an earnings beat for Hewlett Packard Enterprise this earnings season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat, which is the case here. Earnings ESP : Earnings ESP, which represents the difference between the Most Accurate Estimate (35 cents) and the Zacks Consensus Estimate (34 cents), is +2.94%. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter. Zacks Rank : HPE carries a Zacks Rank #3 at present. Per our model, Broadcom AVGO, Ciena CIEN and Vail Resorts MTN also have the right combination of elements to post an earnings beat in their upcoming carries a Zacks Rank #2 and has an Earnings ESP of +1.27%. The company is scheduled to report second-quarter fiscal 2025 results on June 5. Its earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 3.44%. You can see the complete list of today's Zacks #1 Rank stocks Zacks Consensus Estimate for Broadcom's second-quarter earnings is pinned at $1.57 per share, suggesting an increase of 42.73% from the year-ago quarter. It is estimated to report revenues of $14.92 billion, which suggests an increase of approximately 19.5% from the year-ago has a Zacks Rank #3 and an Earnings ESP of +20.1% at present. Ciena is slated to report the second quarter of fiscal 2025 results on June 5. CIEN's earnings beat the Zacks Consensus Estimate for earnings in three of the trailing four quarters, missing the same on one occasion, delivering an earnings surprise of 40.14%, on average. The Zacks Consensus Estimate for second-quarter earnings is pegged at 52 cents per share, suggesting a whopping increase of 92.59% from the year-ago quarter. Ciena's quarterly revenues are estimated to increase 20.27% year over year to $1.1 Resorts carries a Zacks Rank #3 and has an Earnings ESP of +1.87%. The company is scheduled to report third-quarter fiscal 2025 results on June 5. Its earnings surpassed the Zacks Consensus Estimate twice in the trailing four quarters, while missing the same on two occasions, the average surprise being 0.37%.The Zacks Consensus Estimate for MTN's third-quarter earnings is pegged at $10 per share, indicating a year-over-year increase of 4.82%. The consensus mark for revenues is pegged at $1.3 billion, suggesting a year-over-year rise of 1.51%. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Ciena Corporation (CIEN) : Free Stock Analysis Report Broadcom Inc. (AVGO) : Free Stock Analysis Report Vail Resorts, Inc. (MTN) : Free Stock Analysis Report Hewlett Packard Enterprise Company (HPE) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research 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
5 days ago
- Business
- Yahoo
Hewlett Packard Enterprise Delivers Solid FY 2025 Second Quarter Results
HOUSTON, June 03, 2025--(BUSINESS WIRE)--Hewlett Packard Enterprise (NYSE: HPE) today announced financial results for the second quarter ended April 30, 2025. "We delivered a solid performance, achieving yet another quarter of year-over-year revenue growth with strength in each of our product segments," said Antonio Neri, president and CEO of Hewlett Packard Enterprise. "In a very dynamic macro environment, we executed our strategy with discipline. We remain focused on bringing breakthrough innovation to our customers while increasing profitability and enhancing shareholder value." "We drove higher revenue year-over-year in Q2 across Server, Intelligent Edge, and Hybrid Cloud, and, importantly in Server, we improved margin performance over the course of the quarter," said Marie Myers, executive vice president and CFO of Hewlett Packard Enterprise. "We are maintaining our focus on achieving efficiencies and streamlining operations across our businesses to position HPE for the future and deliver financial results aligned with our fiscal 2025 outlook." Second Quarter Fiscal 2025 Financial Results Revenue: $7.6 billion, up 6% from the prior-year period in actual dollars and 7% in constant currency(1) Annualized revenue run-rate ("ARR")(2): $2.2 billion, up 46% from the prior-year period in actual dollars and 47% in constant currency(1) Gross margins: GAAP of 28.4%, down 460 basis points from the prior-year period and down 80 basis points sequentially Non-GAAP(1) of 29.4%, down 370 basis points from the prior-year period and flat sequentially Diluted net (loss) earnings per share ("EPS"): GAAP of $(0.82), compared to $0.24 in the prior-year period, includes non-cash impairment of legacy goodwill impacting GAAP diluted net EPS by $1.03 Non-GAAP(1) of $0.38, down 10% from the prior-year period and down 22% sequentially, above our guidance range of $0.28 - $0.34 Cash flow from operations: $(461) million, a decrease of $1,554 million from the prior-year period Free cash flow ("FCF")(1)(3): $(847) million, a decrease of $1,457 million from the prior-year period Capital returns to common shareholders: $221 million in the form of dividends and share repurchases Second Quarter Fiscal 2025 Segment Results Server revenue was $4.1 billion, up 6% from the prior-year period in actual dollars and up 7% in constant currency(1), with 5.9% operating profit margin, compared to 11.0% from the prior-year period. Intelligent Edge revenue was $1.2 billion, up 7% from the prior-year period in actual dollars and 8% in constant currency(1), with 23.6% operating profit margin, compared to 21.8% from the prior-year period. Hybrid Cloud revenue was $1.5 billion, up 13% from the prior-year period in actual dollars and 15% in constant currency(1), with 5.4% operating profit margin, compared to 1.0% from the prior-year period. Financial Services revenue was $856 million, down 1.3% from the prior-year period in actual dollars and up 1% in constant currency(1), with 10.4% operating profit margin, compared to 9.3% from the prior-year period. Net portfolio assets of $13.3 billion, up 0.9% from the prior-year period and flat in constant currency(1). The business delivered return on equity of 17.5%, down 0.5 points from the prior-year period. Dividend The HPE Board of Directors declared a regular cash dividend of $0.13 per share on the company's common stock, payable on or about July 17, 2025, to stockholders of record as of the close of business on June 18, 2025. Fiscal 2025 Third Quarter Outlook HPE estimates revenue to be in the range of $8.2 billion and $8.5 billion. HPE estimates GAAP diluted net EPS to be in the range of $0.24 to $0.29 and non-GAAP diluted net EPS(1) to be in the range of $0.40 to $0.45. Fiscal 2025 third quarter non-GAAP diluted net EPS estimate excludes net after-tax adjustments of approximately $0.16 per diluted share primarily related to stock-based compensation expense, acquisition, disposition and other charges, the cost reduction program, and amortization of intangible assets. Fiscal 2025 Outlook HPE estimates fiscal 2025 revenue growth of 7% to 9%, in constant currency(1)(5), and fiscal 2025 GAAP operating profit growth to be in the range of negative 81% to negative 72%(6) and non-GAAP operating profit(1)(4) growth to be negative 7% to 0%. HPE estimates GAAP diluted net EPS to be in the range of $0.30 and $0.42(6) and non-GAAP diluted net EPS(1) to be in the range of $1.78 to $1.90. Fiscal 2025 non-GAAP diluted net EPS estimate excludes net after-tax adjustments of approximately $1.48 per diluted share, primarily related to impairment of goodwill, stock-based compensation expense, the cost reduction program, acquisition, disposition and other charges, amortization of intangible assets, and H3C divestiture related severance costs. HPE estimates free cash flow(1)(3)(5) of approximately $1 billion. 1 A description of HPE's use of non-GAAP financial information is provided below under "Use of non-GAAP financial information and key performance metrics." 2 Annualized Revenue Run-Rate ("ARR") is a financial metric used to assess the growth of the Consumption Services offerings. ARR represents the annualized revenue of all net HPE GreenLake cloud services revenue, related financial services revenue (which includes rental income from operating leases and interest income from finance leases), and software-as-a-Service, software consumption revenue, and other as-a-Service offerings, recognized during a quarter and multiplied by four. We use ARR as a performance metric. ARR should be viewed independently of net revenue and is not intended to be combined with it. 3 Free cash flow represents cash flow from operations, less net capital expenditures (investments in property, plant & equipment ("PP&E") and software assets less proceeds from the sale of PP&E), and adjusted for the effect of exchange rate fluctuations on cash, cash equivalents, and restricted cash. 4 FY25 non-GAAP operating profit excludes costs of approximately $2.5 billion primarily related to impairment of goodwill, stock-based compensation expense, the cost reduction program, acquisition, disposition and other charges, amortization of intangible assets, and H3C divestiture related severance costs. 5 Hewlett Packard Enterprise provides certain guidance on a non-GAAP basis. In reliance on the exception provided by Item 10(e)(1)(i)(B) of Regulation S-K, Hewlett Packard Enterprise is unable to provide a reconciliation to the most directly comparable GAAP financial measure without unreasonable efforts, as the Company cannot predict some elements that are included in such directly comparable GAAP financial measure. These elements could have a material impact on the Company's reported GAAP results for the guidance period. Refer to the discussion of non-GAAP financial measures below for more information. 6 Includes the impact of $1.4 billion impairment of goodwill recorded in Q2 of fiscal 2025. About Hewlett Packard Enterprise Hewlett Packard Enterprise (NYSE: HPE) is a global technology leader focused on developing intelligent solutions that allow customers to capture, analyze, and act upon data seamlessly. The company innovates across networking, hybrid cloud, and AI to help customers develop new business models, engage in new ways, and increase operational performance. For more information, visit: Use of non-GAAP financial information and key performance metrics To supplement Hewlett Packard Enterprise's condensed consolidated financial statement information presented on a generally accepted accounting principles ("GAAP") basis, Hewlett Packard Enterprise provides financial measures, including revenue on a constant currency basis (including at the business segment level), non-GAAP gross profit, non-GAAP gross profit margin, non-GAAP operating profit (non-GAAP earnings from operations), non-GAAP operating profit margin (non-GAAP earnings from operations as a percentage of net revenue), non-GAAP income tax rate, non-GAAP net earnings attributable to HPE and non-GAAP net earnings attributable to common stockholders, non-GAAP diluted net earnings per share attributable to common stockholders, and free cash flow ("FCF"). Hewlett Packard Enterprise also provides forecasts of revenue growth on a constant currency basis, non-GAAP operating profit growth, non-GAAP diluted net earnings per share, and FCF. Reconciliations of each of these non-GAAP financial measures to their most directly comparable GAAP measures for this quarter and prior periods are included in the tables below or elsewhere in the materials accompanying this news release. In addition an explanation of the ways in which Hewlett Packard Enterprise's management uses these non-GAAP measures to evaluate its business, the substance behind Hewlett Packard Enterprise's decision to use these non-GAAP measures, the material limitations associated with the use of these non-GAAP measures, the manner in which Hewlett Packard Enterprise's management compensates for those limitations, and the substantive reasons why Hewlett Packard Enterprise's management believes that these non-GAAP measures provide supplemental useful information to investors is included further below. This additional non-GAAP financial information is not meant to be considered in isolation or as a substitute for revenue, gross profit, gross profit margin, operating profit (earnings from operations), operating profit margin (earnings from operations as a percentage of net revenue), net earnings, diluted net earnings per share, and cash flow from operations prepared in accordance with GAAP. In addition to the supplemental non-GAAP financial information, Hewlett Packard Enterprise also presents annualized revenue run-rate ("ARR") as performance metric. ARR is a financial metric used to assess the growth of the Consumption Services offerings. ARR represents the annualized revenue of all net HPE GreenLake cloud services revenue, related financial services revenue (which includes rental income from operating leases and interest income from finance leases), and software-as-a-service ("SaaS"), software consumption revenue, and other as-a-service offerings recognized during a quarter and multiplied by four. ARR should be viewed independently of net revenue and is not intended to be combined with it. Forward-looking statements This press release contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements involve risks, uncertainties, and assumptions. If the risks or uncertainties ever materialize or the assumptions prove incorrect, the results of Hewlett Packard Enterprise and its consolidated subsidiaries ("Hewlett Packard Enterprise") may differ materially from those expressed or implied by such forward-looking statements and assumptions. The words "believe", "expect", "anticipate", "guide", "optimistic", "intend", "aim", "will", "estimates", "may", "could", "should" and similar expressions are intended to identify such forward-looking statements. All statements other than statements of historical fact are statements that could be deemed forward-looking statements, including but not limited to any projections, estimations, or expectations of addressable markets and their sizes, revenue (including annualized revenue run rate), margins, expenses (including stock-based compensation expenses), investments, effective tax rates, interest rates, the impact of tax law changes and related guidance and regulations, the impact of changes in trade policies and restrictions and the uncertainty created thereby, net earnings, net earnings per share, cash flows, liquidity and capital resources, inventory, order backlog, goodwill, impairment charges, order backlog, share repurchases, currency exchange rates, repayments of debts (including our asset-backed debt securities), or other financial items; recent amendments to accounting guidance and any related potential impacts on our financial reporting therefrom; any projections or estimations of orders, including as-a-service orders; any projections of the amount, timing, or impact of cost savings or restructuring charges; any statements of the plans, strategies, and objectives of management for future operations, as well as the execution and consummation of cost reduction programs, corporate transactions or contemplated acquisitions (including our proposed acquisition of Juniper Networks, Inc.) and dispositions (including disposition of shares of H3C Technologies Co., Limited and the receipt of proceeds therefrom), research and development expenditures, and any resulting benefit, cost savings, charges, or revenue or profitability improvements; any statements concerning the expected development, performance, market share or competitive performance relating to our products or services; any statements concerning technological and market trends, the pace of technological innovation, and adoption of new technologies, including artificial intelligence-related and other products and services offered by Hewlett Packard Enterprise; any statements regarding current or future macroeconomic trends or events and the impact of those trends and events on Hewlett Packard Enterprise and our financial performance and our actions to mitigate such impacts to our business; any statements regarding future regulatory trends and the resulting legal and reputational exposure, including but not limited to those relating to environmental, social, and governance, cybersecurity, data privacy, and artificial intelligence issues, among others; any statements regarding pending investigations, claims, or disputes, including but not limited to the litigation enjoining the closing of the proposed acquisition of Juniper Networks, Inc.; any statements of expectation or belief, including those relating to future guidance and the financial performance of Hewlett Packard Enterprise; and any statements of assumptions underlying any of the foregoing. Risks, uncertainties, and assumptions include the need to address the many challenges facing Hewlett Packard Enterprise's businesses; the competitive pressures faced by Hewlett Packard Enterprise's businesses; risks associated with executing Hewlett Packard Enterprise's strategy; the impact of macroeconomic and geopolitical trends and events, including but not limited to supply chain constraints, heightening global trade restrictions, the use and development of artificial intelligence, the uncertain inflationary environment, the ongoing conflicts between Russia and Ukraine and in the Middle East, and the relationship between China and the U.S.; the need to effectively manage third-party suppliers and distribute Hewlett Packard Enterprise's products and services; the protection of Hewlett Packard Enterprise's intellectual property assets, including intellectual property licensed from third parties and intellectual property shared with its former parent; risks associated with Hewlett Packard Enterprise's international operations (including from public health crises, such as pandemics or epidemics, and geopolitical events, such as those mentioned above); the development and transition of new products and services and the enhancement of existing products and services to meet customer needs and respond to emerging technological trends; the execution of Hewlett Packard Enterprise's transformation and mix shift of its portfolio of offerings, the execution and performance of contracts by Hewlett Packard Enterprise and its suppliers, customers, clients, and partners, including any impact thereon resulting from macroeconomic or geopolitical events such as those mentioned above; the prospect of a shutdown of the U.S. federal government or dramatic shifts in public sector staffing and resources; the hiring and retention of key employees; the execution, consummation, integration, and other risks associated with business combination, disposition, and investment transactions, including but not limited to the risks associated with the disposition of shares of H3C Technologies Co., Limited and the receipt of proceeds therefrom and completion of our proposed acquisition of Juniper Networks, Inc. and our ability to integrate and implement our plans, forecasts, and other expectations with respect to the consolidated business; the execution, timing, and results of any cost reduction programs, including estimates and assumptions related to the costs and anticipated benefits of implementing such plans; the impact of changes to privacy, cybersecurity, environmental, global trade, and other governmental regulations; changes in our product, lease, intellectual property, or real estate portfolio; the payment or non-payment of a dividend for any period; the efficacy of using non-GAAP, rather than GAAP, financial measures in business projections and planning; the judgments required in connection with determining revenue recognition; impact of company policies and related compliance; utility of segment realignments; allowances for recovery of receivables and warranty obligations; provisions for, and resolution of pending investigations, claims, and disputes, including but not limited to the litigation enjoining the closing of the proposed acquisition of Juniper Networks, Inc.; the impacts of legal and regulatory changes; and related guidance; and other risks that are described in Hewlett Packard Enterprise's Annual Report on Form 10-K for the fiscal year ended October 31, 2024, subsequent Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and in other filings made by Hewlett Packard Enterprise from time to time with the Securities and Exchange Commission. As in prior periods, the financial information set forth in this press release, including tax-related items, reflects estimates based on information available at this time. While Hewlett Packard Enterprise believes these estimates to be reasonable, these amounts could differ materially from reported amounts in the filings made by Hewlett Packard Enterprise from time to time with the Securities and Exchange Commission. Hewlett Packard Enterprise assumes no obligation and does not intend to update these forward-looking statements, except as required by applicable law. HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES Condensed Consolidated Statements of Earnings (Unaudited) For the three months ended April 30, 2025 January 31, 2025 April 30, 2024 In millions, except per share amounts Net revenue $ 7,627 $ 7,854 $ 7,204 Costs and Expenses: Cost of sales (exclusive of amortization shown separately below) 5,458 5,559 4,828 Research and development 540 475 590 Selling, general and administrative 1,298 1,268 1,215 Amortization of intangible assets 37 38 67 Impairment of goodwill 1,361 — — Transformation (credit) costs (13 ) 15 33 Acquisition, disposition and other charges 55 66 46 Total costs and expenses 8,736 7,421 6,779 (Loss) earnings from operations (1,109 ) 433 425 Interest and other, net(1) 39 39 (22 ) Gain on sale of a business — 244 — Earnings (loss) from equity interests 25 17 42 (Loss) earnings before provision for taxes (1,045 ) 733 445 Provision for taxes (5 ) (106 ) (131 ) Net (loss) earnings attributable to HPE (1,050 ) 627 314 Preferred stock dividends (29 ) (29 ) — Net (loss) earnings attributable to common stockholders $ (1,079 ) $ 598 $ 314 Net (Loss) Earnings Per Share Attributable to Common Stockholders: Basic $ (0.82 ) $ 0.45 $ 0.24 Diluted (0.82 ) 0.44 0.24 Cash dividends declared per share 0.13 0.13 0.13 Cash dividends accrued per preferred share $ 0.95 $ 0.95 $ — Weighted-average Shares Used to Compute Net (Loss) Earnings Per Share: Basic 1,322 1,316 1,311 Diluted 1,322 1,409 1,325 HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES Condensed Consolidated Statements of Earnings (Unaudited) For the six months ended April 30, 2025 April 30, 2024 In millions, except per share amounts Net revenue $ 15,481 $ 13,959 Costs and Expenses: Cost of sales (exclusive of amortization shown separately below) 11,017 9,126 Research and development 1,015 1,172 Selling, general and administrative 2,566 2,431 Amortization of intangible assets 75 138 Impairment of goodwill 1,361 — Acquisition, disposition and other charges 121 89 Total costs and expenses 16,157 13,009 (Loss) earnings from operations (676 ) 950 Interest and other, net(1) 78 (110 ) Gain on sale of a business 244 — Earnings from equity interests 42 88 Loss (earnings) before provision for taxes (312 ) 928 Provision for taxes (111 ) (227 ) Net (loss) earnings attributable to HPE (423 ) 701 Preferred stock dividends (58 ) — Net (loss) earnings attributable to common stockholders $ (481 ) $ 701 Net (Loss) Earnings Per Share Per Share Attributable to Common Stockholders: Basic $ (0.36 ) $ 0.54 Diluted (0.36 ) 0.53 Cash dividends declared per share 0.26 0.26 Cash dividends accrued per preferred share $ 1.91 $ — Weighted-average Shares Used to Compute Net (Loss) Earnings Per Share: Basic 1,319 1,306 Diluted 1,319 1,320 HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES Reconciliation of GAAP to Non-GAAP measures (Unaudited) For the three months ended April 30, 2025 January 31, 2025 April 30, 2024 Dollars in millions GAAP net revenue $ 7,627 $ 7,854 $ 7,204 GAAP cost of sales 5,458 5,559 4,828 GAAP gross profit 2,169 2,295 2,376 Non-GAAP Adjustments Stock-based compensation expense 13 17 14 Acquisition, disposition and other charges — (3 ) (7 ) Cost reduction program 46 — — H3C divestiture related severance costs 16 1 — Non-GAAP gross profit $ 2,244 $ 2,310 $ 2,383 GAAP gross profit margin 28.4 % 29.2 % 33.0 % Non-GAAP adjustments 1.0 % 0.2 % 0.1 % Non-GAAP gross profit margin 29.4 % 29.4 % 33.1 % For the six months ended April 30, 2025 April 30, 2024 Dollars in millions GAAP net revenue $ 15,481 $ 13,959 GAAP cost of sales 11,017 9,126 GAAP gross profit 4,464 4,833 Non-GAAP Adjustments Stock-based compensation expense 30 30 Acquisition, disposition and other charges (3 ) (32 ) Cost reduction program 46 — H3C divestiture related severance costs 17 — Non-GAAP gross profit $ 4,554 $ 4,831 GAAP gross profit margin 28.8 % 34.6 % Non-GAAP adjustments 0.6 % — % Non-GAAP gross profit margin 29.4 % 34.6 % For the three months ended April 30, 2025 January 31, 2025 April 30, 2024 Dollars in millions GAAP (loss) earnings from operations $ (1,109 ) $ 433 $ 425 Non-GAAP Adjustments Amortization of intangible assets 37 38 67 Impairment of goodwill 1,361 — — Transformation (credit) costs (13 ) 15 33 Stock-based compensation expense 116 154 120 H3C divestiture related severance costs 20 77 — Cost reduction program 146 — — Acquisition, disposition and other charges 55 63 39 Non-GAAP earnings from operations $ 613 $ 780 $ 684 GAAP operating profit margin (14.5 )% 5.5 % 5.9 % Non-GAAP adjustments 22.5 % 4.4 % ... 3.6 % Non-GAAP operating profit margin 8.0 % 9.9 % 9.5 % For the six months ended April 30, 2025 April 30, 2024 Dollars in millions GAAP (loss) earnings from operations $ (676 ) $ 950 Non-GAAP Adjustments Amortization of intangible assets 75 138 Impairment of goodwill 1,361 — Transformation costs 2 53 Stock-based compensation expense 270 261 H3C divestiture related severance costs 97 — Cost reduction program 146 — Acquisition, disposition and other charges 118 57 Non-GAAP earnings from operations $ 1,393 $ 1,459 GAAP operating profit margin (4.4 )% 6.8 % Non-GAAP adjustments 13.4 % 3.7 % Non-GAAP operating profit margin 9.0 % 10.5 % HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES Reconciliation of GAAP to Non-GAAP measures (Unaudited) For the three months ended April 30,2025 Diluted NetEPS January 31,2025 Diluted NetEPS April 30,2024 Diluted NetEPS Dollars in millions, except per share amounts GAAP net (loss) earnings attributable to HPE $ (1,050 ) $ (0.82 ) $ 627 $ 0.44 $ 314 $ 0.24 Non-GAAP Adjustments: Amortization of intangible assets 37 0.03 38 0.03 67 0.05 Impairment of goodwill 1,361 1.03 — — — — Transformation (credit) costs (13 ) (0.01 ) 15 0.01 33 0.03 Stock-based compensation expense 116 0.09 154 0.11 120 0.09 Gain on sale of a business — — (244 ) (0.17 ) — — H3C divestiture related severance costs 20 0.02 77 0.05 — — Cost reduction program 146 0.11 — — — — Acquisition, disposition and other charges 55 0.04 63 0.04 39 0.03 Adjustments for equity interests — — — — (42 ) (0.03 ) (Gain) loss on equity investments, net (7 ) (0.01 ) (2 ) — — — Adjustments for taxes (91 ) (0.08 ) (15 ) — 31 0.02 Other adjustments(2) (29 ) (0.02 ) (29 ) (0.02 ) (1 ) (0.01 ) Non-GAAP net earnings attributable to HPE(3) 545 $ 0.38 684 $ 0.49 561 $ 0.42 Preferred stock dividends (29 ) (29 ) — Non-GAAP net earnings attributable to common stockholders $ 516 $ 655 $ 561 For the six months ended April 30, 2025 Diluted Net EPS April 30, 2024 Diluted Net EPS Dollars in millions, except per share amounts GAAP net (loss) earnings attributable to HPE $ (423 ) $ (0.36 ) $ 701 $ 0.53 Non-GAAP Adjustments: Amortization of intangible assets 75 0.06 138 0.10 Impairment of goodwill 1,361 1.03 — — Transformation costs 2 — 53 0.04 Stock-based compensation expense 270 0.20 261 0.20 Gain on sale of a business (244 ) (0.18 ) — — H3C divestiture related severance costs 97 0.07 — — Cost reduction program 146 0.11 — — Acquisition, disposition and other related charges 118 0.08 57 0.05 Adjustments for equity interests — — (88 ) (0.07 ) (Gain) loss on equity investments, net (9 ) (0.01 ) 61 0.05 Adjustments for taxes (106 ) (0.09 ) 15 0.01 Other adjustments(2) (58 ) (0.04 ) 1 — Non-GAAP net earnings attributable to HPE(3) 1,229 0.87 1,199 0.91 Preferred stock dividends (58 ) — Non-GAAP net earnings attributable to common stockholders $ 1,171 $ 1,199 For the three months ended April 30, 2025 January 31, 2025 April 30, 2024 In millions Net cash (used in) provided by operating activities $ (461 ) $ (390 ) $ 1,093 Investment in property, plant and equipment and software assets (547 ) (528 ) (560 ) Proceeds from sale of property, plant and equipment 80 84 122 Effect of exchange rate changes on cash, cash equivalents, and restricted cash 81 (43 ) (45 ) Free cash flow $ (847 ) $ (877 ) $ 610 For the six months ended April 30, 2025 April 30, 2024 In millions Net cash (used in) provided by operating activities $ (851 ) $ 1,157 Investment in property, plant and equipment and software assets (1,075 ) (1,216 ) Proceeds from sale of property, plant and equipment 164 218 Effect of exchange rate changes on cash, cash equivalents, and restricted cash 38 (31 ) Free cash flow $ (1,724 ) $ 128 HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES Condensed Consolidated Balance Sheets As of April 30, 2025 October 31, 2024 (Unaudited) (Audited) In millions, except par value ASSETS Current Assets: Cash and cash equivalents $ 11,667 $ 14,846 Accounts receivable, net of allowances 3,899 3,550 Financing receivables, net of allowances 3,907 3,870 Inventory 8,096 7,810 Assets held for sale — 1 Other current assets 4,002 3,380 Total current assets 31,571 33,457 Property, plant and equipment, net 5,407 5,664 Long-term financing receivables and other assets 12,674 12,616 Investments in equity interests 965 929 Goodwill and intangible assets 17,237 18,596 Total assets $ 67,854 $ 71,262 LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Notes payable and short-term borrowings $ 5,152 $ 4,742 Accounts payable 9,316 11,064 Employee compensation and benefits 1,055 1,356 Taxes on earnings 277 284 Deferred revenue 4,172 3,904 Accrued restructuring 39 61 Liabilities held for sale — 32 Other accrued liabilities 4,527 4,530 Total current liabilities 24,538 25,973 Long-term debt 12,378 13,504 Other non-current liabilities 7,011 6,905 Commitments and Contingencies Stockholders' Equity HPE stockholders' Equity: 7.625% Series C mandatory convertible preferred stock, $0.01 par value (30 shares issued and outstanding as of April 30, 2025 and October 31, 2024, respectively) — — Common stock, $0.01 par value (9,600 shares authorized; 1,311 and 1,297 shares issued and outstanding as of April 30, 2025 and October 31, 2024, respectively) 13 13 Additional paid-in capital 29,840 29,848 Accumulated deficit (2,892 ) (2,068 ) Accumulated other comprehensive loss (3,094 ) (2,977 ) Total HPE stockholders' equity 23,867 24,816 Non-controlling interests 60 64 Total stockholders' equity 23,927 24,880 Total liabilities and stockholders' equity $ 67,854 $ 71,262 HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES Condensed Consolidated Statements of Cash Flows (Unaudited) For the six months ended April 30, 2025 April 30, 2024 In millions Cash Flows from Operating Activities: Net (loss) earnings attributable to HPE $ (423 ) $ 701 Adjustments to Reconcile Net Earnings Attributable to HPE to Net Cash (Used in) Provided by Operating Activities: Depreciation and amortization 1,173 1,299 Impairment of goodwill 1,361 — Stock-based compensation expense 270 261 Provision for inventory and credit losses 190 113 Restructuring (credit) charges (13 ) 18 Cost reduction program 146 — Deferred taxes on earnings (43 ) — Earnings from equity interests (42 ) (88 ) Gain on sale of a business (244 ) — H3C divestiture related severance costs 97 — Other, net 41 128 Changes in Operating Assets and Liabilities, Net of Acquisitions: Accounts receivable (372 ) (376 ) Financing receivables 25 (327 ) Inventory (435 ) (2,808 ) Accounts payable (1,698 ) 3,026 Taxes on earnings (36 ) 95 Restructuring (32 ) (121 ) Other assets and liabilities (816 ) (764 ) Net cash (used in) provided by operating activities (851 ) 1,157 Cash Flows from Investing Activities: Investment in property, plant and equipment and software assets (1,075 ) (1,216 ) Proceeds from sale of property, plant and equipment 164 218 Purchases of investments (1 ) (16 ) Proceeds from maturities and sales of investments 41 5 Financial collateral posted (638 ) (499 ) Financial collateral received 287 401 Proceeds from divestiture 210 — Net cash used in investing activities (1,012 ) (1,107 ) Cash Flows from Financing Activities: Short-term borrowings with original maturities less than 90 days, net (11 ) (45 ) Proceeds from debt, net of issuance costs 257 1,075 Payment of debt (1,061 ) (2,218 ) Net payments related to stock-based award activities (171 ) (94 ) Repurchases of common stock (102 ) (48 ) Cash dividends paid to non-controlling interests, net of contributions (8 ) (8 ) Cash dividends paid to preferred stockholders (54 ) — Cash dividends paid to common stockholders (342 ) (338 ) Net cash (used in) provided by financing activities (1,492 ) (1,676 ) Effect of exchange rate changes on cash, cash equivalents, and restricted cash 38 (31 ) Change in cash, cash equivalents and restricted cash (3,317 ) (1,657 ) Cash, cash equivalents and restricted cash at beginning of period 15,105 4,581 Cash, cash equivalents and restricted cash at end of period $ 11,788 $ 2,924 HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES Segment Information (Unaudited) For the three months ended April 30, 2025 January 31, 2025 April 30, 2024 In millions Net Revenue: Server(4) $ 4,058 $ 4,290 $ 3,841 Hybrid Cloud(4) 1,453 1,405 1,282 Intelligent Edge 1,162 1,146 1,086 Financial Services 856 873 867 Corporate Investments and other 194 197 252 Total segment net revenue 7,723 7,911 7,328 Elimination of intersegment net revenue (96 ) (57 ) (124 ) Total consolidated net revenue $ 7,627 $ 7,854 $ 7,204 Earnings Before Taxes: Server(4) $ 241 $ 348 $ 423 Hybrid Cloud(4) 78 99 13 Intelligent Edge 274 314 237 Financial Services 89 82 81 Corporate Investments and other (10 ) (2 ) (9 ) Total segment earnings from operations 672 841 745 Unallocated corporate costs and eliminations (59 ) (61 ) (61 ) Stock-based compensation expense (116 ) (154 ) (120 ) Amortization of intangible assets (37 ) (38 ) (67 ) Impairment of goodwill (1,361 ) — — Transformation credit (costs) 13 (15 ) (33 ) Gain on sale of a business — 244 — H3C divestiture related severance costs (20 ) (77 ) — Cost reduction program (146 ) — — Acquisition, disposition and other charges (55 ) (63 ) (39 ) Interest and other, net(1) 39 39 (22 ) Earnings (loss) from equity interests 25 17 42 Total pretax (loss) earnings $ (1,045 ) $ 733 $ 445 HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES Segment Information (Unaudited) For the six months ended April 30, 2025 April 30, 2024 In millions Net Revenue: Server(4) $ 8,348 $ 7,168 Hybrid Cloud(4) 2,858 2,555 Intelligent Edge 2,308 2,287 Financial Services 1,729 1,740 Corporate Investments and other 391 490 Total segment net revenue 15,634 14,240 Elimination of intersegment net revenue (153 ) (281 ) Total consolidated net revenue $ 15,481 $ 13,959 Earnings Before Taxes: Server(4) $ 589 $ 802 Hybrid Cloud(4) 177 64 Intelligent Edge 588 590 Financial Services 171 155 Corporate Investments and other (12 ) (19 ) Total segment earnings from operations 1,513 1,592 Unallocated corporate costs and eliminations (120 ) (133 ) Stock-based compensation expense (270 ) (261 ) Amortization of intangible assets (75 ) (138 ) Impairment of goodwill (1,361 ) — Transformation costs (2 ) (53 ) Gain on sale of a business 244 — H3C divestiture related severance costs (97 ) — Cost reduction program (146 ) — Acquisition, disposition and other charges (118 ) (57 ) Interest and other, net(1) 78 (110 ) Earnings from equity interests 42 88 Total pretax (loss) earnings $ (312 ) $ 928 HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES Segment Information (Unaudited) For the three months ended Change (%) April 30, 2025 January 31, 2025 April 30, 2024 Q/Q Y/Y Dollars in millions Net Revenue: Server(4) $ 4,058 $ 4,290 $ 3,841 (5 %) 6 % Hybrid Cloud(4) 1,453 1,405 1,282 3 13 Intelligent Edge 1,162 1,146 1,086 1 7 Financial Services 856 873 867 (2 ) (1 ) Corporate Investments and other 194 197 252 (2 ) (23 ) Total segment net revenue 7,723 7,911 7,328 (2 ) 5 Elimination of intersegment net revenue (96 ) (57 ) (124 ) 68 (23 ) Total consolidated net revenue $ 7,627 $ 7,854 $ 7,204 (3 %) 6 % For the six months ended April 30, 2025 April 30, 2024 Y/Y Dollars in millions Net Revenue: Server(4) $ 8,348 $ 7,168 17 % Hybrid Cloud(4) 2,858 2,555 12 Intelligent Edge 2,308 2,287 1 Financial Services 1,729 1,740 (1 ) Corporate Investments and other 391 490 (20 ) Total segment net revenue 15,634 14,240 10 Elimination of intersegment net revenue (153 ) (281 ) (46 ) Total consolidated net revenue $ 15,481 $ 13,959 11 % HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES Segment Operating Margin Summary Data (Unaudited) For the three months ended Change in operating profitmargin (pts) April 30,2025 January 31,2025 April 30,2024 Q/Q Y/Y Segment Operating Profit Margin: Server(4) 5.9 % 8.1 % 11.0 % (2.2 ) (5.1 ) Hybrid Cloud(4) 5.4 % 7.0 % 1.0 % (1.6 ) 4.4 Intelligent Edge 23.6 % 27.4 % 21.8 % (3.8 ) 1.8 Financial Services 10.4 % 9.4 % 9.3 % 1.0 1.1 Corporate Investments and other (5.2 %) (1.0 %) (3.6 %) (4.2 ) (1.6 ) Total segment operating profit margin 8.7 % 10.6 % 10.2 % (1.9 ) (1.5 ) For the six months ended Change in operating profitmargin (pts) April 30, 2025 April 30, 2024 Y/Y Segment Operating Profit Margin: Server(4) 7.1 % 11.2 % (4.1 ) Hybrid Cloud(4) 6.2 % 2.5 % 3.7 Intelligent Edge 25.5 % 25.8 % (0.3 ) Financial Services 9.9 % 8.9 % 1.0 Corporate Investments and other (3.1 %) (3.9 %) 0.8 Total segment operating profit margin 9.7 % 11.2 % (1.5 ) HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES Calculation of Diluted Net Earnings Per Share (Unaudited) For the three months ended April 30, 2025 January 31, 2025 April 30, 2024 In millions, except per share amounts Numerator: GAAP net (losses) earnings attributable to common stockholders - Basic $ (1,079 ) $ 598 $ 314 Plus: 7.625% Series C mandatory convertible preferred stock dividends — 29 — GAAP net earnings attributable to HPE - Diluted $ (1,079 ) $ 627 $ 314 Non-GAAP net earnings attributable to common stockholders - Basic $ 516 $ 655 $ 561 Plus: 7.625% Series C mandatory convertible preferred stock dividends 29 29 — Non-GAAP net earnings attributable to HPE - Diluted $ 545 $ 684 $ 561 Denominator: GAAP Weighted-average shares used to compute basic net EPS 1,322 1,316 1,311 Dilutive effect of employee stock plans(5) — 17 14 Dilutive effect of 7.625% Series C mandatory convertible preferred stock(5) — 76 — GAAP Weighted-average shares used to compute diluted net EPS 1,322 1,409 1,325 Non-GAAP Weighted-average shares used to compute basic net EPS 1,322 1,316 1,311 Dilutive effect of employee stock plans(5) 10 17 14 Dilutive effect of 7.625% Series C mandatory convertible preferred stock(5) 87 76 — Non-GAAP Weighted-average shares used to compute diluted net EPS 1,419 1,409 1,325 GAAP Net (loss) Earnings Per Share Basic $ (0.82 ) $ 0.45 $ 0.24 Diluted $ (0.82 ) $ 0.44 $ 0.24 Non-GAAP Net EPS Basic $ 0.39 $ 0.50 $ 0.43 Diluted(3) $ 0.38 $ 0.49 $ 0.42 For the six months ended April 30, 2025 April 30, 2024 In millions, except per share amounts Numerator: GAAP net earnings attributable to common stockholders - Basic $ (481 ) $ 701 Plus: 7.625% Series C mandatory convertible preferred stock dividends — — GAAP net earnings attributable to HPE - Diluted $ (481 ) $ 701 Non-GAAP net earnings attributable to common stockholders - Basic $ 1,171 $ 1,199 Plus: 7.625% Series C mandatory convertible preferred stock dividends 58 — Non-GAAP net earnings attributable to HPE - Diluted $ 1,229 $ 1,199 Denominator: Weighted-average shares used to compute basic net EPS 1,319 1,306 Dilutive effect of employee stock plans(5) — 14 Dilutive effect of 7.625% Series C mandatory convertible preferred stock(5) — — Weighted-average shares used to compute diluted net EPS 1,319 1,320 Denominator(Non-GAAP): Weighted-average shares used to compute basic net EPS 1,319 1,306 Dilutive effect of employee stock plans(5) 14 14 Dilutive effect of 7.625% Series C mandatory convertible preferred stock(5) 76 — Weighted-average shares used to compute diluted net EPS 1,409 1,320 GAAP Net EPS Basic $ (0.36 ) $ 0.54 Diluted $ (0.36 ) $ 0.53 Non-GAAP Net EPS Basic $ 0.89 $ 0.92 Diluted(3) $ 0.87 $ 0.91 ______________ (1) Interest and other, net includes tax indemnification and other adjustments, non-service net periodic benefit credit, and interest and other, net. (2) Other adjustments includes non-service net periodic benefit credit and tax indemnification and other adjustments. (3) For purposes of calculating diluted net EPS, the preferred stock dividends are added back to the net earnings attributable to common stockholders and the diluted weighted average share calculation assumes the preferred stock was converted at issuance or as of the beginning of the reporting period. (4) Effective at the beginning of the first quarter of fiscal 2025, in order to align its segment financial reporting more closely with its current business structure, HPE implemented an organizational change with the transfer of certain managed services, previously reported within the Server reportable segment, to the Hybrid Cloud reportable segment. (5) The impact of dilutive effect of employee stock plans is calculated under the treasury stock method, and the impact of dilutive effect of the preferred stock is calculated under the if-converted method. The effect of employee stock plans and preferred stock is excluded when calculating diluted net loss per share as it would be anti-dilutive. Use of non-GAAP financial measures To supplement Hewlett Packard Enterprise's condensed consolidated financial statement information presented on a GAAP basis, Hewlett Packard Enterprise provides non-GAAP financial measures including revenue on a constant currency basis (including at the business segment level), non-GAAP gross profit, non-GAAP gross profit margin, non-GAAP operating profit (non-GAAP earnings from operations), non-GAAP operating profit margin (non-GAAP earnings from operations as a percentage of net revenue), non-GAAP income tax rate, non-GAAP net earnings attributable to HPE, non-GAAP net earnings attributable to common stockholders, non-GAAP diluted net earnings per share attributable to common stockholders, and FCF. Hewlett Packard Enterprise also provides forecasts of revenue growth on a constant currency basis, non-GAAP diluted net earnings per share, non-GAAP operating profit growth, and FCF. These non-GAAP financial measures are not computed in accordance with, or as an alternative to, GAAP in the United States. The GAAP measure most directly comparable to net revenue on a constant currency basis is net revenue. The GAAP measure most directly comparable to non-GAAP gross profit is gross profit. The GAAP measure most directly comparable to non-GAAP gross profit margin is gross profit margin. The GAAP measure most directly comparable to non-GAAP operating profit (non-GAAP earnings from operations) is earnings from operations. The GAAP measure most directly comparable to non-GAAP operating profit margin (non-GAAP earnings from operations as a percentage of net revenue) is operating profit margin (earnings from operations as a percentage of net revenue). The GAAP measure most directly comparable to non-GAAP income tax rate is income tax rate. The GAAP measure most directly comparable to non-GAAP net earnings attributable to HPE and non-GAAP net earnings attributable to common stockholders is net earnings. The GAAP measure most directly comparable to non-GAAP diluted net earnings per share attributable to common stockholders is diluted net earnings per share attributable to common stockholders. The GAAP measure most directly comparable to FCF is cash flow from operations. Reconciliations of each of these non-GAAP financial measures to their most directly comparable GAAP measures for this quarter and prior periods are included in the tables above or elsewhere in the materials accompanying this news release. Usefulness of non-GAAP financial measures to investors Hewlett Packard Enterprise believes that providing the non-GAAP financial measures stated above, in addition to the related GAAP measures provides investors with greater transparency to the information used by Hewlett Packard Enterprise's management in its financial and operational decision making and allows investors to see Hewlett Packard Enterprise's results "through the eyes" of management. Hewlett Packard Enterprise further believes that providing this information provides Hewlett Packard Enterprise's investors with a supplemental view to understand the Company's historical and prospective operating performance and to evaluate the efficacy of the methodology and information used by Hewlett Packard Enterprise's management to evaluate and measure such performance. Disclosure of these non-GAAP financial measures also facilitates the comparisons of Hewlett Packard Enterprise's operating performance with the performance of other companies in the same industry that supplement their GAAP results with non-GAAP financial measures that may be calculated in a similar manner. Economic substance of and material limitations associated with non-GAAP financial measures used by Hewlett Packard Enterprise Net revenue on a constant currency basis assumes no change to the foreign exchange rate utilized in the comparable prior-year period. This measure assists investors with evaluating the Company's past and future performance, without the impact of foreign exchange rates, as more than half of our revenue is generated outside of the U.S. Non-GAAP gross profit and non-GAAP gross profit margin are defined to exclude charges related to the stock-based compensation expense, acquisition, disposition and other charges, severance costs associated with the cost reduction program, and H3C divestiture related severance costs. Non-GAAP operating profit (non-GAAP earnings from operations) and non-GAAP operating profit margin (non-GAAP earnings from operations as a percentage of net revenue) consist of earnings from operations or earnings from operations as a percentage of net revenue excluding the items mentioned above and charges relating to the amortization of intangible assets, impairment of goodwill, and transformation (credit) costs. Non-GAAP net earnings net earnings attributable to HPE and non-GAAP net earnings attributable to common stockholders and non-GAAP diluted net earnings per share attributable to common stockholders consist of net earnings or diluted net earnings per share excluding the charges previously stated, as well as gain on sale of a business, adjustments for equity interests, gain or loss on equity investments, other adjustments, and adjustments for taxes. Non-GAAP net earnings attributable to HPE and non-GAAP diluted net earnings per share attributable to common stockholders includes preferred stock dividends added back to non-GAAP net earnings attributable to HPE. The Adjustments for taxes line item includes certain income tax valuation allowances and separation taxes, the impact of tax reform, structural rate adjustment, excess tax benefit from stock-based compensation, and adjustments for additional taxes or tax benefits associated with each non-GAAP item. Hewlett Packard Enterprise believes that excluding the items mentioned above from the non-GAAP financial measures provides a supplemental view to management and investors of its consolidated financial performance and presents the financial results of the business without costs that Hewlett Packard Enterprise's management does not believe to be reflective of ongoing operating results. Exclusion of these items can have a material impact on the equivalent GAAP measure and cash flows thus limiting their use as analytical tools. These limitations are discussed below or elsewhere in the materials accompanying this news release. More specifically, Hewlett Packard Enterprise's management excludes each of those items mentioned above for the following reasons: Stock-based compensation expense consists of equity awards granted based on the estimated fair value of those awards at grant date. Although stock-based compensation is a key incentive offered to employees, HPE excludes these charges for the purpose of calculating these non-GAAP measures, primarily because they are non-cash expenses, and the Company's internal benchmarking analyses evidence that many industry participants and peers present non-GAAP financial measures excluding stock-based compensation expense. HPE incurred costs related to its acquisition, disposition and other charges. Charges include expenses associated with acquisitions, disposal activities, and disaster (recovery) charges. HPE excludes these costs because the Company's management considers these charges to be discrete events and does not believe they are reflective of normal continuing business operations. For the three and six months ended April 30, 2025, acquisition charges were driven by costs associated with the proposed acquisition of Juniper Networks and miscellaneous disposition related charges. For the three months ended January 31, 2025, these charges were driven by costs associated with the proposed acquisition of Juniper Networks and the acquisition of Morpheus Data, in addition to prior acquisitions of Axis, Athonet and OpsRamp. For the three and six months ended April 30, 2024, acquisition charges were driven by the proposed acquisition of Juniper Networks, in addition to prior acquisitions of Axis and Athonet. We incurred severance and other charges pursuant to cost management initiatives. We exclude these charges because we do not believe they are reflective of normal continuing business operations. We believe eliminating these adjustments for the purposes of calculating non-GAAP measures facilitates the evaluation of our current operating performance. HPE incurred H3C divestiture related severance costs in connection with the disposition of total issued share capital of H3C. On September 4, 2024, HPE divested 30% of the total issued share capital of H3C and received proceeds of $2.1 billion of pre-tax consideration ($2.0 billion post-tax). The divestiture resulted in decreased future investment earnings and cash dividend inflows resulting in a decision to implement offsetting cost savings measures. These measures include severance for certain of the Company's employees. The non-GAAP adjustment represents our costs to execute these related exit actions to offset the loss in equity earnings and related cash flows. HPE expects future annualized cost savings of approximately $120 million following the completion of these actions. HPE incurs charges relating to the amortization of intangible assets and excludes these charges for purposes of calculating these non-GAAP measures. Such charges are significantly impacted by the timing and magnitude of the Company's acquisitions. HPE excludes these charges for the purpose of calculating these non-GAAP measures, primarily because they are non-cash expenses and the Company's internal benchmarking analyses evidence that many industry participants and peers present non-GAAP financial measures excluding intangible asset amortization. Although this does not directly affect HPE's cash position, the loss in value of intangible assets over time can have a material impact on the equivalent GAAP earnings measure. In the second quarter of fiscal 2025, HPE recorded a non-cash impairment charge for the goodwill associated with its Hybrid Cloud reporting unit. HPE believes that this non-cash charge does not reflect the Company's operating results and is not indicative of the underlying performance of the business. HPE excludes these charges for purposes of calculating these non-GAAP measures to facilitate a more meaningful evaluation of HPE's current operating performance and comparisons to HPE's operating performance in other periods. Although this does not directly affect the Company's cash position, the loss in value of goodwill over time can have a material impact on the equivalent GAAP earnings measure. Transformation (credit) costs represent net costs related to the (i) HPE Next Plan and (ii) Cost Optimization and Prioritization Plan. HPE excludes these costs as they are discrete costs related to two specific transformation programs that were announced in 2017 and 2020, respectively, as multi-year programs necessary to transform the business and IT infrastructure. The primary elements of the HPE Next and the Cost Optimization and Prioritization Plan have been substantially completed by October 31, 2024. The exclusion of the transformation program cost from the non-GAAP financial measures as stated above, is to provide a supplemental measure of the Company's operating results that do not include material HPE Next Plan and Cost Optimization and Prioritization Plan costs as the Company's management does not believe such costs to be reflective of its ongoing operating cost structure. Gain on sale of a business represents the gain associated with certain disposal activities. On December 1, 2024, HPE completed the disposition of the Company's Communication Technology Group which resulted in a gain of $244 million. The Company's management considers this divestiture to be a discrete event and believes eliminating this adjustment for the purposes of calculating non-GAAP measures facilitates the evaluation of its current operating performance. During the six months ended April 30, 2024, HPE stopped reporting H3C earnings in the Company's non-GAAP results due to the planned divestiture of the H3C investment. Per the terms of the original Put Share Purchase Agreement described in Note 19 "Equity Interests" to the Consolidated Financial Statements in Item 8 of Part II of the Company's Annual Report on Form 10-K for the fiscal year ended October 31, 2024, the Company was not anticipating receiving dividends from this investment prospectively. However, on May 24, 2024, HPE entered into an Amended and Restated Put Share Purchase Agreement and an Agreement on Subsequent Arrangements, both with UNIS, revised the arrangements governing the aforementioned sale as previously set forth in the original Put Share Purchase Agreement. On September 4, 2024, HPE divested 30% of the total issued share capital of H3C. HPE continues to possess the option to sell the remaining 19% of the total issued share capital of H3C at a later date. The Company's management believes that eliminating these amounts for purposes of calculating non-GAAP financial measures facilitates the evaluation of the Company's current operating performance. HPE excludes gains and losses (including impairments) on its non-marketable equity investments because the Company does not believe they are reflective of normal continuing business operations. These adjustments are reflected in Interest and other, net in the Condensed Consolidated Statements of Earnings. The Company believes eliminating these adjustments for the purposes of calculating non-GAAP measures facilitates the evaluation of its current operating performance. Hewlett Packard Enterprise utilizes a structural long-term projected non-GAAP income tax rate in order to provide consistency across the interim reporting periods and to eliminate the effects of items not directly related to the Company's operating structure that can vary in size and frequency. When projecting this long-term rate, HPE evaluated a three-year financial projection. The projected rate assumes no incremental acquisitions in the three-year projection period and considers other factors including the Company's expected tax structure, its tax positions in various jurisdictions and current impacts from key legislation implemented in major jurisdictions where HPE operates. For fiscal 2025, the Company will use a projected non-GAAP income tax rate of 15%, which reflects currently available information as well as other factors and assumptions. The non-GAAP income tax rate could be subject to change for a variety of reasons, including the rapidly evolving global tax environment, significant changes in the Company's geographic earnings mix including due to acquisition activity, or other changes to the Company's strategy or business operations. HPE will re-evaluate its long-term rate as appropriate. For fiscal 2024, HPE had a non-GAAP tax rate of 15%. HPE believes that making these adjustments for purposes of calculating non-GAAP measures, facilitates a supplemental evaluation of the Company's current operating performance and comparisons to past operating results. FCF is defined as cash flow from operations, less net capital expenditures (investments in property, plant & equipment ("PP&E") and software assets less proceeds from the sale of PP&E), and adjusted for the effect of exchange rate fluctuations on cash, cash equivalents, and restricted cash. FCF does not represent the total increase or decrease in cash for the period. Hewlett Packard Enterprise's management and investors can use FCF for the purpose of determining the amount of cash available for investment in the Company's businesses, repurchasing stock and other purposes as well as evaluating its historical and prospective liquidity. Compensation for material limitations with use of non-GAAP financial measures These non-GAAP financial measures have limitations as analytical tools, and these measures should not be considered in isolation or as a substitute for analysis of Hewlett Packard Enterprise's results as reported under GAAP. Some of the limitations in relying on these non-GAAP financial measures are that they can have a material impact on the equivalent GAAP earnings measures and cash flows, they may be calculated differently by other companies (limiting the usefulness of those measures for comparative purposes) and may not reflect the full economic effect of the loss in value of certain assets. Hewlett Packard Enterprise compensates for these limitations on the use of non-GAAP financial measures by relying primarily on its GAAP results and using non-GAAP financial measures only as a supplement. Hewlett Packard Enterprise also provides a reconciliation of each non-GAAP financial measure to its most directly comparable GAAP financial measure for this quarter and prior periods within this news release and in other written materials that include these non-GAAP financial measures, and Hewlett Packard Enterprise encourages investors to review those reconciliations carefully. View source version on Contacts Media Contact: Laura Investor Contact: Paul
