Exceptional Q4 drives full-year revenue and EPS outperformance
with strong cash flow
Hewlett Packard Enterprise (NYSE: HPE) today announced financial
results for the fourth quarter ended October 31, 2024.
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“HPE delivered an exceptional fourth quarter with record
quarterly revenue, capping off a strong FY 2024. We exceeded our
full-year commitments for revenue, EPS, and free cash flow,” said
Antonio Neri, president and CEO of Hewlett Packard Enterprise. “Our
differentiated portfolio across hybrid cloud, AI, and networking,
which will be further enhanced with the pending Juniper Networks
acquisition, positions us well to capitalize on the market
opportunity, accelerating value for our shareholders.”
“Our exceptional revenue, profitability, and
higher-than-expected free cash flow this fiscal year reflect
disciplined execution and improving customer demand across our
portfolio,” said Marie Myers, executive vice president and CFO of
Hewlett Packard Enterprise. “We are pleased to have exceeded our
commitments and look forward to the opportunities ahead in fiscal
year 2025.”
Fourth Quarter Fiscal 2024 Financial Results
- Revenue: $8.5 billion, up 15% from the prior-year period
in actual dollars and in constant currency(1)
- Annualized revenue run-rate (“ARR”)(2): $1.9 billion, up
49% from the prior-year period in actual dollars and 48% in
constant currency(1)
- Gross margins:
- GAAP of 30.8%, down 400 basis points from the prior-year period
and down 80 basis points sequentially
- Non-GAAP(1) of 30.9%, down 390 basis points from the prior-year
period and down 90 basis points sequentially
- Diluted net earnings per share (“EPS”):
- GAAP of $0.99, up 102% from the prior-year period and up 161%
sequentially, above our guidance range of $0.76 to $0.81
- Non-GAAP(1) of $0.58, up 12% from the prior-year period and up
16% sequentially, above our guidance range of $0.52 to $0.57
- Cash flow from operations: $2.0 billion, a decrease of
$813 million from the prior-year period
- Free cash flow (“FCF”)(1)(3): $1.5 billion, a decrease
of $821 million from the prior-year period
- Capital returns to common shareholders: $219 million in
the form of dividends and share repurchases
Fourth Quarter Fiscal 2024 Segment Results
- Server revenue was $4.7 billion, up 32% from the prior-year
period in actual dollars and up 31% in constant currency(1), with
11.6% operating profit margin, compared to 10.1% from the
prior-year period.
- Intelligent Edge revenue was $1.1 billion, down 20% from the
prior-year period in actual dollars and in constant currency(1),
with 24.4% operating profit margin, compared to 27.1% in the
prior-year period.
- Hybrid Cloud revenue was $1.6 billion, up 18% from the
prior-year period in actual dollars and in constant currency(1),
with 7.7% operating profit margin, compared to 3.8% from the
prior-year period.
- Financial Services revenue was $893 million, up 2% from the
prior-year period in actual dollars and in constant currency(1),
with 9.2% operating profit margin, compared to 8.0% from the
prior-year period. Net portfolio assets of $13.6 billion, up 4%
from the prior-year period in actual dollars and in constant
currency(1). The business delivered return on equity of 17.0%, up
3.4 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 January
16, 2025, to stockholders of record as of the close of business on
December 20, 2024.
Fiscal 2025 First Quarter Outlook
HPE estimates revenue to grow by mid-teens percent when compared
to revenue for the prior-year period. HPE estimates GAAP diluted
net EPS to be in the range of $0.31 to $0.36 and non-GAAP diluted
net EPS(1) to be in the range of $0.47 to $0.52. Fiscal 2025 first
quarter non-GAAP diluted net EPS excludes net after-tax adjustments
of $0.16 per diluted share primarily related to stock-based
compensation, acquisition, disposition and other related charges
and amortization of intangible assets.
Juniper Networks Pending Transaction Update
HPE’s pending acquisition of Juniper Networks, Inc. has received
approval from key jurisdictions including the European Union,
United Kingdom, India, South Korea, and Australia, among others.
HPE and Juniper Networks are cooperatively engaged with the U.S.
Department of Justice as the agency continues to review the
transaction into the new calendar year. HPE and Juniper expect that
the transaction will close in the early part of 2025 — within the
previously stated timeframe.
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.
About Hewlett Packard Enterprise
Hewlett Packard Enterprise (NYSE: HPE) is the global
edge-to-cloud company that helps organizations accelerate outcomes
by unlocking value from all of their data, everywhere. Built on
decades of reimagining the future and innovating to advance the way
people live and work, HPE delivers unique, open and intelligent
technology solutions as a service. With offerings spanning Cloud
Services, Server, Intelligent Edge, Software, and Hybrid Cloud, HPE
provides a consistent experience across all clouds and edges,
helping customers develop new business models, engage in new ways,
and increase operational performance. For more information, visit:
www.hpe.com.
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, non-GAAP diluted net earnings per share and free cash
flow (“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.
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 for 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 deferred revenue and are not
intended to be combined with any of these items.
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, net earnings, net
earnings per share, cash flows, liquidity and capital resources,
inventory, 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; any projections or estimations of future
orders, including as-a-service orders; any statements of the plans,
strategies, and objectives of management for future operations, as
well as the execution and consummation of corporate transactions or
contemplated acquisitions (including our proposed acquisition of
Juniper Networks, Inc.) and dispositions (including disposition of
our H3C shares 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 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; 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
heightened global trade restrictions, the use and development of
artificial intelligence, the inflationary environment (though
easing), 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; 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 H3C shares 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 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; the
impacts of tax law changes and related guidance or regulations; and
other risks that are described in Hewlett Packard Enterprise’s
Annual Report on Form 10-K for the fiscal year ended October 31,
2023, 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
October 31, 2024
July 31, 2024
October 31, 2023
In millions, except per share
amounts
Net revenue
$
8,458
$
7,710
$
7,351
Costs and Expenses:
Cost of sales (exclusive of amortization
shown separately below)
5,852
5,271
4,792
Research and development
527
547
578
Selling, general and administrative
1,211
1,229
1,332
Amortization of intangible assets
69
60
72
Transformation costs
26
14
56
Disaster charges (recovery)
2
5
(4
)
Acquisition, disposition and other related
charges
78
37
18
Total costs and expenses
7,765
7,163
6,844
Earnings from operations
693
547
507
Interest and other, net(1)
5
(12
)
(23
)
Gain on sale of equity interest
733
—
—
(Loss) earnings from equity interests
(14
)
73
65
Earnings before provision for taxes
1,417
608
549
(Provision) benefit for taxes
(51
)
(96
)
93
Net earnings attributable to HPE
1,366
512
642
Preferred stock dividends
(25
)
—
—
Net earnings attributable to common
stockholders
$
1,341
$
512
$
642
Net Earnings Per Share Attributable to
Common Stockholders:
Basic
$
1.02
$
0.39
$
0.50
Diluted
0.99
0.38
0.49
Cash dividends declared per share
0.13
0.13
0.12
Cash dividends accrued per preferred
share
$
0.83
$
—
$
—
Weighted-average Shares Used to Compute
Net Earnings Per Share:
Basic
1,312
1,312
1,295
Diluted
1,375
1,332
1,315
HEWLETT PACKARD ENTERPRISE
COMPANY AND SUBSIDIARIES
Condensed Consolidated
Statements of Earnings
Year Ended
October 31, 2024
October 31, 2023
(Unaudited)
(Audited)
In millions, except per share
amounts
Net revenue
$
30,127
$
29,135
Costs and Expenses:
Cost of sales (exclusive of amortization
shown separately below)
20,249
18,896
Research and development
2,246
2,349
Selling, general and administrative
4,871
5,160
Amortization of intangible assets
267
288
Transformation costs
93
283
Disaster charges
7
1
Acquisition, disposition and other related
charges
204
69
Total costs and expenses
27,937
27,046
Earnings from operations
2,190
2,089
Interest and other, net(1)
(117
)
(104
)
Gain on sale of equity interest
733
—
Earnings from equity interests
147
245
Earnings before provision for taxes
2,953
2,230
Provision for taxes
(374
)
(205
)
Net earnings attributable to HPE
2,579
2,025
Preferred stock dividends
(25
)
—
Net earnings attributable to common
stockholders
$
2,554
$
2,025
Net Earnings Per Share Per Share
Attributable to Common Stockholders:
Basic
$
1.95
$
1.56
Diluted
1.93
1.54
Cash dividends declared per share
0.52
0.48
Cash dividends accrued per preferred
share
$
0.83
$
—
Weighted-average Shares Used to Compute
Net Earnings Per Share:
Basic
1,309
1,299
Diluted
1,337
1,316
HEWLETT PACKARD ENTERPRISE
COMPANY AND SUBSIDIARIES
Reconciliation of GAAP to
Non-GAAP measures
(Unaudited)
For the three months
ended
October 31, 2024
July 31, 2024
October 31, 2023
Dollars in millions
GAAP net revenue
$
8,458
$
7,710
$
7,351
GAAP cost of sales
5,852
5,271
4,792
GAAP gross profit
2,606
2,439
2,559
Non-GAAP Adjustments
Stock-based compensation expense
10
9
9
Disaster recovery
(4
)
(7
)
(10
)
Divestiture related exit costs
—
9
—
Non-GAAP gross profit
$
2,612
$
2,450
$
2,558
GAAP gross profit margin
30.8
%
31.6
%
34.8
%
Non-GAAP adjustments
0.1
%
0.2
%
—
%
Non-GAAP gross profit margin
30.9
%
31.8
%
34.8
%
Year Ended
October 31, 2024
October 31, 2023
Dollars in millions
GAAP net revenue
$
30,127
$
29,135
GAAP cost of sales
20,249
18,896
GAAP gross profit
9,878
10,239
Non-GAAP Adjustments
Stock-based compensation expense
49
47
Disaster recovery
(43
)
(13
)
Divestiture related exit costs
9
—
Non-GAAP gross profit
$
9,893
$
10,273
GAAP gross profit margin
32.8
%
35.1
%
Non-GAAP adjustments
—
%
0.2
%
Non-GAAP gross profit margin
32.8
%
35.3
%
HEWLETT PACKARD ENTERPRISE
COMPANY AND SUBSIDIARIES
Reconciliation of GAAP to
Non-GAAP measures
(Unaudited)
For the three months
ended
October 31, 2024
July 31, 2024
October 31, 2023
Dollars in millions
GAAP earnings from operations
$
693
$
547
$
507
Non-GAAP Adjustments
Amortization of intangible assets
69
60
72
Transformation costs
26
14
56
Disaster recovery
(17
)
(2
)
(14
)
Stock-based compensation expense
89
80
71
Divestiture related exit costs
—
35
—
Acquisition, disposition and other related
charges
78
37
18
Non-GAAP earnings from
operations
$
938
$
771
$
710
GAAP operating profit margin
8.2
%
7.1
%
6.9
%
Non-GAAP adjustments
2.9
%
2.9
%
2.8
%
Non-GAAP operating profit
margin
11.1
%
10.0
%
9.7
%
Year Ended
October 31, 2024
October 31, 2023
Dollars in millions
GAAP earnings from operations
$
2,190
$
2,089
Non-GAAP Adjustments
Amortization of intangible assets
267
288
Transformation costs
93
283
Disaster recovery
(51
)
(12
)
Stock-based compensation expense
430
428
Divestiture related exit costs
35
—
Acquisition, disposition and other related
charges
204
69
Non-GAAP earnings from
operations
$
3,168
$
3,145
GAAP operating profit margin
7.3
%
7.2
%
Non-GAAP adjustments
3.2
%
3.6
%
Non-GAAP operating profit
margin
10.5
%
10.8
%
HEWLETT PACKARD ENTERPRISE
COMPANY AND SUBSIDIARIES
Reconciliation of GAAP to
Non-GAAP measures
(Unaudited)
For the three months
ended
October 31, 2024
Diluted net earnings per
share
July 31, 2024
Diluted net earnings per
share
October 31, 2023
Diluted net earnings per
share
Dollars in millions, except
per share amounts
GAAP net earnings attributable to
HPE
$
1,366
$
0.99
$
512
$
0.38
$
642
$
0.49
Non-GAAP Adjustments:
Amortization of intangible assets
69
0.05
60
0.05
72
0.05
Transformation costs
26
0.02
14
0.01
56
0.05
Disaster recovery
(17
)
(0.02
)
(2
)
—
(14
)
(0.01
)
Stock-based compensation expense
89
0.06
80
0.06
71
0.05
Divestiture related exit costs
—
—
35
—
—
—
Acquisition, disposition and other related
charges
78
0.06
37
0.03
18
0.01
Gain on sale of equity interest
(733
)
(0.53
)
—
—
—
—
Adjustments for equity interests
25
0.02
(44
)
(0.04
)
2
—
(Gain) loss on equity investments, net
(34
)
(0.02
)
(14
)
(0.01
)
40
0.03
Adjustments for taxes
(89
)
(0.06
)
(21
)
(0.01
)
(203
)
(0.15
)
Other adjustments(2)
15
0.01
4
—
(4
)
—
Non-GAAP net earnings attributable to
HPE(3)
795
0.58
661
0.50
680
0.52
Preferred stock dividends
(25
)
—
—
Non-GAAP net earnings attributable to
common stockholders
$
770
$
661
$
680
Year Ended
October 31, 2024
Diluted net earnings per
share
October 31, 2023
Diluted net earnings per
share
Dollars in millions, except
per share amounts
GAAP net earnings attributable to
HPE
$
2,579
$
1.93
$
2,025
$
1.54
Non-GAAP Adjustments:
Amortization of intangible assets
267
0.20
288
0.22
Transformation costs
93
0.07
283
0.22
Disaster recovery
(51
)
(0.04
)
(12
)
(0.01
)
Stock-based compensation expense
430
0.32
428
0.33
Divestiture related exit costs
35
0.03
—
—
Acquisition, disposition and other related
charges
204
0.16
69
0.05
Gain on sale of equity interest
(733
)
(0.55
)
—
—
Adjustments for equity interests
(107
)
(0.08
)
18
0.01
Loss on equity investments, net
13
0.01
40
0.03
Adjustments for taxes
(95
)
(0.07
)
(255
)
(0.20
)
Other adjustments(2)
20
0.01
(52
)
(0.04
)
Non-GAAP net earnings attributable to
HPE(3)
2,655
1.99
2,832
2.15
Preferred stock dividends
(25
)
—
Non-GAAP net earnings attributable to
common stockholders
$
2,630
$
2,832
HEWLETT PACKARD ENTERPRISE
COMPANY AND SUBSIDIARIES
Reconciliation of GAAP to
Non-GAAP measures
(Unaudited)
For the three months
ended
October 31, 2024
July 31, 2024
October 31, 2023
In millions
Net cash provided by operating
activities
$
2,030
$
1,154
$
2,843
Investment in property, plant and
equipment and software assets
(608
)
(543
)
(675
)
Proceeds from sale of property, plant and
equipment
90
62
255
Effect of exchange rate changes on cash,
cash equivalents, and restricted cash
(12
)
(4
)
(102
)
Free cash flow
$
1,500
$
669
$
2,321
Year Ended
October 31, 2024
October 31, 2023
In millions
Net cash provided by operating
activities
$
4,341
$
4,428
Investment in property, plant and
equipment and software assets
(2,367
)
(2,828
)
Proceeds from sale of property, plant and
equipment
370
602
Effect of exchange rate changes on cash,
cash equivalents, and restricted cash
(47
)
36
Free cash flow
$
2,297
$
2,238
HEWLETT PACKARD ENTERPRISE
COMPANY AND SUBSIDIARIES
Condensed Consolidated Balance
Sheets
As of
October 31, 2024
October 31, 2023
(Unaudited)
(Audited)
In millions, except par
value
ASSETS
Current Assets:
Cash and cash equivalents
$
14,846
$
4,270
Accounts receivable, net of allowances
3,550
3,481
Financing receivables, net of
allowances
3,870
3,543
Inventory
7,810
4,607
Assets held for sale
1
—
Other current assets
3,380
3,047
Total current assets
33,457
18,948
Property, plant and equipment, net
5,664
5,989
Long-term financing receivables and other
assets
12,616
11,377
Investments in equity interests
929
2,197
Goodwill and intangible assets
18,596
18,642
Total assets
$
71,262
$
57,153
LIABILITIES AND STOCKHOLDERS’
EQUITY
Current Liabilities:
Notes payable and short-term
borrowings
$
4,742
$
4,868
Accounts payable
11,064
7,136
Employee compensation and benefits
1,356
1,724
Taxes on earnings
284
155
Deferred revenue
3,904
3,658
Accrued restructuring
61
180
Liabilities held for sale
32
—
Other accrued liabilities
4,530
4,161
Total current liabilities
25,973
21,882
Long-term debt
13,504
7,487
Other non-current liabilities
6,905
6,546
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 October 31, 2024)
—
—
Common stock, $0.01 par value (9,600
shares authorized; 1,297 and 1,283 shares issued and outstanding as
of October 31, 2024 and October 31, 2023, respectively)
13
13
Additional paid-in capital
29,848
28,199
Accumulated deficit
(2,068
)
(3,946
)
Accumulated other comprehensive loss
(2,977
)
(3,084
)
Total HPE stockholders’ equity
24,816
21,182
Non-controlling interests
64
56
Total stockholders’ equity
24,880
21,238
Total liabilities and stockholders’
equity
$
71,262
$
57,153
HEWLETT PACKARD ENTERPRISE
COMPANY AND SUBSIDIARIES
Condensed Consolidated
Statements of Cash Flows
Year Ended
October 31, 2024
October 31, 2023
(Unaudited)
(Audited)
In millions
Cash Flows from Operating Activities:
Net earnings attributable to HPE
$
2,579
$
2,025
Adjustments to Reconcile Net Earnings
Attributable to HPE to Net Cash Provided by Operating
Activities:
Depreciation and amortization
2,564
2,616
Stock-based compensation expense
430
428
Provision for inventory and credit
losses
175
230
Restructuring charges
33
242
Deferred taxes on earnings
(64
)
(67
)
Earnings from equity interests
(147
)
(245
)
Gain on sale of equity interest
(733
)
—
Dividends received from equity
investees
43
200
Other, net
149
31
Changes in Operating Assets and
Liabilities, Net of Acquisitions:
Accounts receivable
(83
)
577
Financing receivables
(909
)
(607
)
Inventory
(3,358
)
400
Accounts payable
3,927
(1,655
)
Taxes on earnings
190
(34
)
Restructuring
(164
)
(275
)
Other assets and liabilities
(291
)
562
Net cash provided by operating
activities
4,341
4,428
Cash Flows from Investing Activities:
Investment in property, plant and
equipment and software assets
(2,367
)
(2,828
)
Proceeds from sale of property, plant and
equipment
370
602
Purchases of investments
(16
)
(15
)
Proceeds from maturities and sales of
investments
2,149
9
Financial collateral posted
(1,020
)
(1,443
)
Financial collateral received
978
1,152
Payments made in connection with business
acquisitions, net of cash acquired
(147
)
(761
)
Net cash used in investing activities
(53
)
(3,284
)
Cash Flows from Financing Activities:
Short-term borrowings with original
maturities less than 90 days, net
(31
)
(47
)
Proceeds from debt, net of issuance
costs
11,245
4,725
Payment of debt
(5,475
)
(4,887
)
Cash settlement for derivative hedging
debt
—
(7
)
Net payments related to stock-based award
activities
(84
)
(106
)
Proceeds from issuance of 7.625% Series C
mandatory convertible preferred stock, net of issuance costs
1,462
—
Repurchase of common stock
(150
)
(421
)
Cash dividends paid to non-controlling
interests, net of contributions
(8
)
—
Cash dividends paid to shareholders
(676
)
(619
)
Net cash provided by (used in) financing
activities
6,283
(1,362
)
Effect of exchange rate changes on cash,
cash equivalents, and restricted cash
(47
)
36
Change in cash, cash equivalents and
restricted cash
10,524
(182
)
Cash, cash equivalents and restricted cash
at beginning of period
4,581
4,763
Cash, cash equivalents and restricted cash
at end of period
$
15,105
$
4,581
HEWLETT PACKARD ENTERPRISE
COMPANY AND SUBSIDIARIES
Segment Information
(Unaudited)
For the three months
ended
October 31, 2024
July 31, 2024
October 31, 2023
In millions
Net Revenue:
Server(4)
$
4,706
$
4,280
$
3,574
Hybrid Cloud(4)
1,582
1,300
1,341
Intelligent Edge(4)
1,124
1,121
1,410
Financial Services
893
879
876
Corporate Investments and other(4)
262
262
263
Total segment net revenue
8,567
7,842
7,464
Elimination of intersegment net
revenue
(109
)
(132
)
(113
)
Total consolidated net revenue
$
8,458
$
7,710
$
7,351
Earnings Before Taxes(4):
Server
$
545
$
464
$
360
Hybrid Cloud
122
66
51
Intelligent Edge
274
251
382
Financial Services
82
79
70
Corporate Investments and other
(2
)
(4
)
(16
)
Total segment earnings from operations
1,021
856
847
Unallocated corporate costs and
eliminations
(83
)
(85
)
(137
)
Stock-based compensation expense
(89
)
(80
)
(71
)
Amortization of intangible assets
(69
)
(60
)
(72
)
Transformation costs
(26
)
(14
)
(56
)
Disaster recovery
17
2
14
Divestiture related exit costs
—
(35
)
—
Acquisition, disposition and other related
charges
(78
)
(37
)
(18
)
Interest and other, net(1)
5
(12
)
(23
)
Gain on sale of equity interest
733
—
—
(Loss) earnings from equity interests
(14
)
73
65
Total pretax earnings
$
1,417
$
608
$
549
HEWLETT PACKARD ENTERPRISE
COMPANY AND SUBSIDIARIES
Segment Information
(Unaudited)
Year Ended
October 31, 2024
October 31, 2023
In millions
Net Revenue:
Server(4)
$
16,205
$
14,361
Hybrid Cloud(4)
5,386
5,493
Intelligent Edge(4)
4,532
5,379
Financial Services
3,512
3,480
Corporate Investments and other(4)
1,014
985
Total segment net revenue
30,649
29,698
Elimination of intersegment net
revenue
(522
)
(563
)
Total consolidated net revenue
$
30,127
$
29,135
Earnings Before Taxes(4):
Server
$
1,818
$
1,830
Hybrid Cloud
245
232
Intelligent Edge
1,115
1,343
Financial Services
316
281
Corporate Investments and other
(25
)
(77
)
Total segment earnings from operations
3,469
3,609
Unallocated corporate costs and
eliminations
(301
)
(464
)
Stock-based compensation expense
(430
)
(428
)
Amortization of intangible assets
(267
)
(288
)
Transformation costs
(93
)
(283
)
Disaster recovery
51
12
Divestiture related exit costs
(35
)
—
Acquisition, disposition and other related
charges
(204
)
(69
)
Interest and other, net(1)
(117
)
(104
)
Gain on sale of equity interest
733
—
Earnings from equity interests
147
245
Total consolidated earnings before
taxes
$
2,953
$
2,230
HEWLETT PACKARD ENTERPRISE
COMPANY AND SUBSIDIARIES
Segment Information
(Unaudited)
For the three months
ended
Change (%)
October 31, 2024
July 31, 2024
October 31, 2023
Q/Q
Y/Y
Dollars in millions
Net Revenue:
Server(4)
$
4,706
$
4,280
$
3,574
10%
32%
Hybrid Cloud(4)
1,582
1,300
1,341
22
18
Intelligent Edge(4)
1,124
1,121
1,410
—
(20)
Financial Services
893
879
876
2
2
Corporate Investments and other(4)
262
262
263
—
—
Total segment net revenue
8,567
7,842
7,464
9
15
Elimination of intersegment net
revenue
(109
)
(132
)
(113
)
(17)
(4)
Total consolidated net revenue
$
8,458
$
7,710
$
7,351
10%
15%
Year Ended
October 31, 2024
October 31, 2023
Y/Y
Dollars in millions
Net Revenue:
Server(4)
$
16,205
$
14,361
13%
Hybrid Cloud(4)
5,386
5,493
(2)
Intelligent Edge(4)
4,532
5,379
(16)
Financial Services
3,512
3,480
1
Corporate Investments and other(4)
1,014
985
3
Total segment net revenue
30,649
29,698
3
Elimination of intersegment net
revenue
(522
)
(563
)
(7)
Total consolidated net revenue
$
30,127
$
29,135
3%
HEWLETT PACKARD ENTERPRISE
COMPANY AND SUBSIDIARIES
Segment Operating Margin
Summary Data
(Unaudited)
For the three months
ended
Change in operating profit
margin (pts)
October 31, 2024
July 31, 2024
October 31, 2023
Q/Q
Y/Y
Segment Operating Profit Margin(4):
Server
11.6
%
10.8
%
10.1
%
0.8
1.5
Hybrid Cloud
7.7
%
5.1
%
3.8
%
2.6
3.9
Intelligent Edge
24.4
%
22.4
%
27.1
%
2.0
(2.7)
Financial Services
9.2
%
9.0
%
8.0
%
0.2
1.2
Corporate Investments and other
(0.8
%)
(1.5
%)
(6.1
%)
0.7
5.3
Total segment operating profit margin
11.9
%
10.9
%
11.3
%
1.0
0.6
Year Ended
Change in operating profit
margin (pts)
October 31, 2024
October 31, 2023
Y/Y
Segment Operating Profit Margin(4):
Server
11.2
%
12.7
%
(1.5)
Hybrid Cloud
4.5
%
4.2
%
0.3
Intelligent Edge
24.6
%
25.0
%
(0.4)
Financial Services
9.0
%
8.1
%
0.9
Corporate Investments and other
(2.5
%)
(7.8
%)
5.3
Total segment operating profit margin
11.3
%
12.2
%
(0.9)
HEWLETT PACKARD ENTERPRISE
COMPANY AND SUBSIDIARIES
Calculation of Diluted Net
Earnings Per Share
(Unaudited)
For the three months
ended
October 31, 2024
July 31, 2024
October 31, 2023
In millions, except per share
amounts
Numerator:
GAAP net earnings attributable to common
stockholders - Basic
$
1,341
$
512
$
642
Plus: 7.625% Series C mandatory
convertible preferred stock dividends
25
—
—
GAAP net earnings attributable to HPE -
Diluted
$
1,366
$
512
$
642
Non-GAAP net earnings attributable to
common stockholders - Basic
$
770
$
661
$
680
Plus: 7.625% Series C mandatory
convertible preferred stock dividends
25
—
—
Non-GAAP net earnings attributable to HPE
- Diluted
$
795
$
661
$
680
Denominator:
Weighted-average shares used to compute
basic net earnings per share
1,312
1,312
1,295
Dilutive effect of employee stock
plans
22
20
20
Dilutive effect of 7.625% Series C
mandatory convertible preferred stock
41
—
—
Weighted-average shares used to compute
diluted net earnings per share
1,375
1,332
1,315
GAAP Net Earnings Per Share
Basic
$
1.02
$
0.39
$
0.50
Diluted(3)
$
0.99
$
0.38
$
0.49
Non-GAAP Net Earnings Per Share
Basic
$
0.59
$
0.50
$
0.53
Diluted(3)
$
0.58
$
0.50
$
0.52
Year Ended
October 31, 2024
October 31, 2023
In millions, except per share
amounts
Numerator:
GAAP net earnings attributable to common
stockholders - Basic
$
2,554
$
2,025
Plus: 7.625% Series C mandatory
convertible preferred stock dividends
25
—
GAAP net earnings attributable to HPE -
Diluted
$
2,579
$
2,025
Non-GAAP net earnings attributable to
common stockholders - Basic
$
2,630
$
2,832
Plus: 7.625% Series C mandatory
convertible preferred stock dividends
25
—
Non-GAAP net earnings attributable to HPE
- Diluted
$
2,655
$
2,832
Denominator:
Weighted-average shares used to compute
basic net earnings per share
1,309
1,299
Dilutive effect of employee stock
plans
18
17
Dilutive effect of 7.625% Series C
mandatory convertible preferred stock
10
—
Weighted-average shares used to compute
diluted net earnings per share
1,337
1,316
GAAP Net Earnings Per Share
Basic
$
1.95
$
1.56
Diluted(3)
$
1.93
$
1.54
Non-GAAP Net Earnings Per Share
Basic
$
2.01
$
2.18
Diluted(3)
$
1.99
$
2.15
____________________
(1)
Interest and other, net includes tax
indemnification and other adjustments, cost, and interest and
other, net.
(2)
Other adjustments includes non-service net
periodic benefit cost 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)
As previously disclosed, effective as of
the beginning of fiscal 2024, in order to align the segment
financial reporting more closely with its business structure, the
Company established two new reportable segments, Hybrid Cloud and
Server. Hybrid Cloud includes the historical Storage segment, HPE
GreenLake Flex Solutions (which provides flexible as-a-service IT
infrastructure through the HPE GreenLake cloud and was previously
reported under the Compute and the High Performance Computing &
Artificial Intelligence ("HPC & AI") segments), Private Cloud,
and Software (previously reported under the Corporate Investments
and Other segment). The Server segment combines the previously
separately reported Compute and HPC & AI segments, with
adjustments for certain product lines that are now reported in
Hybrid Cloud. Additionally, certain products and services
previously reported in the financial results for the HPC & AI
segment were moved to be reported in the Hybrid Cloud segment, and
the Athonet business and certain components of the Communications
and Media Solutions business, both previously reported in the
financial results for Corporate Investments and Other, moved to be
reported in the Intelligent Edge segment.
As a result, the Company’s organizational
structure for fiscal 2024 consisted of the following segments: (i)
Server; (ii) Hybrid Cloud; (iii) Intelligent Edge; (iv) Financial
Services; and (v) Corporate Investments and Other. The Company
began reporting under this re-aligned segment structure beginning
with the results of the first quarter of fiscal 2024.
The Company has reflected these changes to
its segment information retrospectively to the earliest period
presented, which primarily resulted in the realignment of net
revenue and operating profit for each of the segments as described
above. These changes had no impact on Hewlett Packard Enterprise’s
previously reported consolidated net revenue, net earnings, net
earnings per share or total assets.
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, non-GAAP diluted net
earnings per share, 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 is net earnings. The GAAP measure most
directly comparable to non-GAAP diluted net earnings per share is
diluted net earnings per share. 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, disaster recovery, and
divestiture related exit 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,
transformation costs, and acquisition, disposition and other
related charges. Non-GAAP net earnings and non-GAAP diluted net
earnings per share consist of net earnings or diluted net earnings
per share excluding the charges previously stated, as well as
adjustments for equity interests, gain or loss on equity
investments, other adjustments, and adjustments for taxes. 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:
- Hewlett Packard Enterprise 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 Hewlett
Packard Enterprise’s acquisitions. Hewlett Packard Enterprise
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 Hewlett Packard Enterprise’s cash position, the
loss in value of intangible assets over time can have a material
impact on the equivalent GAAP earnings measure.
- Transformation costs represent net costs related to the (i) HPE
Next Plan and (ii) Cost Optimization and Prioritization Plan and
include restructuring charges, program design and execution costs,
costs incurred to transform the Company’s IT infrastructure, net
gains from the sale of real estate and any impairment charges on
real estate identified as part of the initiatives. Hewlett Packard
Enterprise 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 following material
divestiture transactions in 2017 and in response to COVID-19 and an
evolving product portfolio in fiscal 2020. The HPE Next Plan and
the Cost Optimization and Prioritization Plan are substantially
complete. The exclusion of the transformation program costs 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 the 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. Further, the transformation costs for these plans have
materially fluctuated since 2017, have been materially declining
since 2021 the Company does not expect to incur material
transformation costs related to these programs beyond fiscal 2024.
Hewlett Packard Enterprises management believes non-GAAP measures
excluding these costs are useful to management and investors for
comparing operating performance across multiple periods.
- Disaster recoveries include direct costs or recovery of these
costs related to the exit of the Company’s businesses in Russia and
Belarus. Hewlett Packard Enterprise excludes disaster recoveries
from these non-GAAP measures as the specific net recoveries are
non-recurring charges and not indicative of the operational
performance of the Company’s business.
- 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, Hewlett Packard Enterprise 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.
- Divestiture related exit costs include expenses associated with
certain disposal activities. On May 23, 2024, HPE announced plans
to divest the Company’s Communication Technology Group (“CTG”)
business, which was completed on December 1, 2024. CTG is included
in our Communications and Media Solutions business, which is
reported in the Corporate Investments and Other segment. We
consider this divestiture to be a discrete event. We exclude these
costs as these are non-recurring exit costs to eliminate stranded
costs of this business. In addition, our internal benchmarking
analyses evidence that many industry participants and peers present
non-GAAP financial measures excluding these charges.
- Hewlett Packard Enterprise incurs costs related to its
acquisition, disposition and other related charges. The charges are
direct expenses, such as professional fees and retention costs,
most of which are treated as non-cash or non-capitalized expenses.
For the three and twelve months ended October 31, 2024, these
charges were driven by costs associated with the pending merger
with Juniper Networks and the acquisition of Morpheus Data, in
addition to prior acquisitions of Axis, Athonet and OpsRamp. For
the three and twelve months ended October 31, 2023, these charges
were driven by acquisitions of Axis, Zerto, OpsRamp and Athonet.
Charges may also include expenses associated with disposal
activities including legal and arbitration settlements in
connection with certain dispositions. Hewlett Packard Enterprise’s
management considers these acquisitions and divestitures to be
discrete events. The Company excludes these costs as these expenses
are inconsistent in amount and frequency and are significantly
impacted by the timing and nature of its acquisitions and
divestitures. In addition, the Company’s internal benchmarking
analyses evidence that many industry participants and peers present
non-GAAP financial measures excluding these charges.
- During the three and six months ended April 30, 2024, we
stopped reporting H3C earnings in our 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
Method Investments” 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, 2023, we weren’t anticipating
receiving dividends from this investment prospectively. However, on
May 24, 2024, we entered into an Amended and Restated Put Share
Purchase Agreement and an Agreement on Subsequent Arrangements,
both with UNIS, as described in the Form 8-K filed with the
Securities and Exchange Commission on May 24, 2024, which, taken
together, revise the arrangements governing the aforementioned sale
as previously set forth in the original Put Share Purchase
Agreement. For the three months ended July 31, 2024, the adjustment
for equity interests represented our expectation at such time to
divest 30% of the total issued share capital of H3C in fiscal 2024.
On September 4, 2024, we divested 30% of the total issued share
capital of H3C, which resulted in a gain of $733 million and is
included in the fiscal 2024 adjustment Gain on sale of equity
interest. We continue to possess the option to sell the remaining
19% of the total issued share capital of H3C at a later date. The
adjustment for equity interests incorporates the completed
divestment of 30% of the total issued share capital of H3C. All
periods presented include the amortization of the basis difference
in our investment. For the twelve months ended October 31, 2023,
this adjustment also included our portion of intangible asset
impairment charges from H3C. We believe that eliminating these
amounts for purposes of calculating non-GAAP financial measures
facilitates the evaluation of our current operating
performance.
- Hewlett Packard Enterprise 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, Hewlett Packard Enterprise evaluated a three-year financial
projection. The projected rate assumes no incremental acquisitions
in the three-year projection period and considers other factors
including Hewlett Packard Enterprise’s expected tax structure, its
tax positions in various jurisdictions and current impacts from key
legislation implemented in major jurisdictions where Hewlett
Packard Enterprise operates. For fiscal 2024, 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 Hewlett Packard
Enterprise’s geographic earnings mix including due to acquisition
activity, or other changes to the Company’s strategy or business
operations. The Company will re-evaluate its long-term rate as
appropriate. For fiscal 2023, the Company had a non-GAAP tax rate
of 14%. Hewlett Packard Enterprise’s management 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 businesswire.com: https://www.businesswire.com/news/home/20241205728686/en/
Media Contact: Laura Keller Laura.Keller@hpe.com
Investor Contact: Paul Glaser
investor.relations@hpe.com
Grafico Azioni Hewlett Packard Enterprise (NYSE:HPE)
Storico
Da Nov 2024 a Dic 2024
Grafico Azioni Hewlett Packard Enterprise (NYSE:HPE)
Storico
Da Dic 2023 a Dic 2024
