Financial Performance - HPE reported record revenue of $9.1 billion for Q3 FY2025, a 19% increase from the prior-year period[3] - Annualized revenue run-rate (ARR) reached $3.1 billion, up 77% year-over-year[3] - Net revenue for the three months ended July 31, 2025, was $9,136 million, a 19.7% increase from $7,710 million in the same period last year[20] - For the nine months ended July 31, 2025, net revenue was $24,617 million, up 13.5% from $21,669 million in the same period last year[22] - Total consolidated net revenue for the three months ended July 31, 2025, was $9,136 million, representing a 20% increase from $7,627 million in the previous quarter and a 19% increase from $7,710 million year-over-year[34] - For the nine months ended July 31, 2025, total consolidated net revenue reached $24,617 million, a 14% increase compared to $21,669 million for the same period last year[36] Earnings and Profitability - GAAP diluted net earnings per share (EPS) was $0.21, down $0.17 from the prior-year period, while non-GAAP EPS was $0.44, down $0.06[3] - Net earnings attributable to common stockholders for the three months ended July 31, 2025, were $276 million, compared to a loss of $1,079 million in the previous quarter[20] - For the three months ended July 31, 2025, GAAP net earnings attributable to HPE were $305 million, resulting in a diluted EPS of $0.21, compared to a net loss of $1,050 million and an EPS of $(0.82) for the same period in 2024[26] - Non-GAAP net earnings attributable to HPE for the three months ended July 31, 2025, were $631 million, with a diluted EPS of $0.44, compared to $545 million and an EPS of $0.38 for the same period in 2024[26] - For the nine months ended July 31, 2025, GAAP net loss attributable to HPE was $(118) million, resulting in a diluted EPS of $(0.16), compared to net earnings of $1,213 million and an EPS of $0.92 for the same period in 2024[28] - Non-GAAP net earnings attributable to HPE for the nine months ended July 31, 2025, were $1,860 million, with a diluted EPS of $1.32, consistent with $1,860 million and an EPS of $1.40 for the same period in 2024[28] Cash Flow and Dividends - Cash flow from operations increased to $1,305 million, up $151 million from the prior-year period[8] - Free cash flow (FCF) was $790 million, an increase of $121 million year-over-year[8] - Cash provided by operating activities for the three months ended July 31, 2025, was $1,305 million, compared to $(461) million for the previous quarter[28] - Free cash flow for the three months ended July 31, 2025, was $790 million, a significant improvement from $(847) million in the previous quarter[28] - Cash dividends declared per share remained consistent at $0.13 for the three months ended July 31, 2025[20] Segment Performance - Server revenue was $4.9 billion, up 16% from the prior-year period, with a 6.4% operating profit margin[8] - Networking revenue was $1.7 billion, up 54% year-over-year, with a 20.8% operating profit margin[8] - The Server segment reported net revenue of $4,940 million for the three months ended July 31, 2025, up 22% quarter-over-quarter and 16% year-over-year[38] - The Networking segment achieved a net revenue of $1,730 million for the three months ended July 31, 2025, reflecting a 49% increase from the previous quarter and a 54% increase year-over-year[38] - The total segment earnings from operations for the nine months ended July 31, 2025, were $2,351 million, slightly down from $2,448 million in the same period last year[36] Acquisitions and Organizational Changes - HPE completed the acquisition of Juniper Networks on July 2, 2025, which is expected to enhance profitability and market opportunities[9] - The company incurred acquisition charges primarily related to the acquisition of Juniper Networks, impacting financial results for the three and nine months ended July 31, 2025[49] - The company has implemented an organizational change to align its segment financial reporting with its current business structure, affecting the Hybrid Cloud reportable segment[43] Impairments and Settlements - The company incurred an impairment of goodwill of $1,361 million during the nine months ended July 31, 2025[22] - The company reported a $52 million litigation settlement included in the three and nine months ended July 31, 2025[43] - HPE received $52 million from a settlement related to ongoing litigation, which is excluded from non-GAAP measures for performance evaluation[52] Financial Metrics and Guidance - HPE estimates Q4 FY2025 revenue between $9.7 billion and $10.1 billion, with GAAP diluted net EPS projected between $0.50 and $0.54[6] - The company expects FY2025 revenue growth of 14% to 16% in constant currency[7] - HPE's projected non-GAAP income tax rate for fiscal 2025 is 15%, consistent with the previous fiscal year[51] Non-GAAP Measures - Hewlett Packard Enterprise provides non-GAAP financial measures to enhance transparency and allow investors to evaluate the company's performance without the impact of foreign exchange rates[44] - The company believes that excluding certain items from non-GAAP financial measures provides a clearer view of its consolidated financial performance[48] - HPE excludes stock-based compensation and amortization of intangible assets from non-GAAP measures to provide a clearer view of operating performance[49] - HPE's free cash flow (FCF) is defined as cash flow from operations less net capital expenditures, adjusted for exchange rate fluctuations[51] - HPE's management believes that excluding certain charges facilitates a more meaningful evaluation of current operating performance[51] - The company stopped reporting H3C earnings in non-GAAP results due to the planned divestiture, which aids in evaluating current operating performance[52]

Core Insights - HPE hosted its Securities Analyst Meeting at the New York Stock Exchange, where key executives discussed the company's strategic priorities and financial outlook through fiscal year 2028 [1] Group 1: Strategic Priorities - HPE's leadership position in the high-growth, high-margin networking market was emphasized as a key strategic priority [1] Group 2: Financial Outlook - The financial outlook presented by HPE executives indicates a focus on growth and profitability through fiscal year 2028 [1]

Summary of Hewlett Packard Enterprise (HPE) 2025 Security Analyst Meeting Company Overview - **Company**: Hewlett Packard Enterprise (NYSE: HPE) - **Event**: 2025 Security Analyst Meeting - **Date**: October 15, 2025 - **Key Speakers**: Antonio Neri (President and CEO), Rami Rahim (EVP and General Manager of Networking), Marie Myers (CFO) Core Industry Insights - **Industry Context**: The IT industry is undergoing significant transformation driven by digitalization, cloud growth, and AI advancements [10][11][12] - **Market Position**: HPE has evolved into a leaner, more innovative company with a differentiated portfolio, ready to capitalize on emerging opportunities in networking, cloud, and AI [11][12][15] Strategic Priorities - **Networking Leadership**: HPE aims to build a new networking industry leader, focusing on high-margin software and services growth through HPE GreenLake cloud [14][15] - **Financial Goals**: HPE targets annual run-rate synergies of at least $600 million from the Juniper integration and $350 million from Catalyst initiatives by 2028 [14][15] - **Free Cash Flow**: Expected to exceed $3.5 billion by fiscal year 2028, with plans for increased dividends and share buybacks [15] Market Opportunities - **Total Addressable Market (TAM)**: Anticipated to grow to over $1.1 trillion by fiscal year 2028, with significant growth in networking, cloud, and AI sectors [15][16] - **Networking Market**: Expected to reach $169 billion by 2028, driven by AI adoption and increased data center interconnectivity [38][46] - **AI Infrastructure**: HPE is positioned to capture growth in AI infrastructure, particularly in sovereign and enterprise markets, with a focus on high-performance computing [69][71] Product Innovations - **HPE GreenLake**: A unified platform that simplifies IT management and reduces costs, with 44,000 customers and over $2 billion in annual recurring revenue (ARR) [79] - **Alletra MP Storage**: A cloud-native platform for structured and unstructured data, gaining market share in the rapidly expanding AI market [84] - **HPE ProLiant Gen 12 Servers**: Delivering significant power savings and improved performance, with a focus on sustainability and profitability [88] Competitive Advantages - **Integration of Juniper Networks**: The acquisition enhances HPE's networking capabilities, creating a comprehensive portfolio that includes secure, AI-native networking solutions [19][20][21] - **AIOps Solutions**: HPE's advanced AIOps platforms are designed to improve network performance and reduce operational costs, positioning the company as a leader in AI-driven networking [39][40] - **Security Strategy**: HPE is focusing on integrated security solutions that align with the growing trend of Universal Zero Trust Network Access (UZTNA) [50][51] Customer Engagement and Success Stories - **Diverse Customer Base**: HPE serves a wide range of industries, including notable clients like Carnival Cruise Line and the University of Notre Dame [53] - **Ryder Cup Deployment**: HPE showcased its capabilities by powering a large-scale smart city for the Ryder Cup, demonstrating the effectiveness of its integrated solutions [54][55] Conclusion - **Future Outlook**: HPE is committed to leveraging its strengths in networking, cloud, and AI to drive growth and deliver value to shareholders, with a clear strategy and robust product offerings [67][68]

Forward -looking statements You'll hear some forward -looking statements in today's presentation. All statements other than statements of historical fact are statements that could be deemed forward -looking statements. Our actual results could differ materially and we assume no obligation to update. Financial information, plans, and projections reflect estimates based on information available at the time of this presentation. These are based on risks and assumptions that may not prove correct. These risks a ...

Market Overview - Major averages are experiencing a rebound, with the Dow up approximately 350 points (0.75%), the S&P up nearly 1%, and the Nasdaq up about 1.1% [2] - The Russell 2000 index has reached a new record high, increasing by about 1.4% for the session and up 13% year-to-date [3] Banking Sector Performance - Bank of America and Morgan Stanley reported stronger-than-expected third-quarter results, driven by a surge in deal-making on Wall Street [8] - Morgan Stanley achieved a record quarter in its equity underwriting business, while Bank of America set a record for its lending margin and net interest income [9][10] - Goldman Sachs reported over $1 trillion in M&A volume advised year-to-date, indicating strong performance across major banks [10] - Analysts expect street estimates for bank earnings to rise for 2026, reflecting positive trends in loan demand and credit quality [12][15] Trade Tensions and Economic Implications - U.S. Treasury Secretary and U.S. Trade Representative criticized China for new restrictions on rare earth exports, labeling it as economic coercion [28][29] - The U.S. aims to diversify supply chains rather than decouple from China, with ongoing discussions at staff levels [30] - President Trump indicated potential retribution against China regarding cooking oil imports, which could impact U.S. farmers [32][39] ETF Market Trends - ETF net inflows surpassed $1 trillion, significantly ahead of last year's total, with strong interest in thematic and fixed-income ETFs [82][83] - The shift from mutual funds to ETFs is evident, with significant inflows into S&P 500 index-based products and thematic ETFs related to artificial intelligence and nuclear energy [84][86] - Retail investors are driving demand for thematic strategies, indicating a resurgence in retail-driven trading [88] Oil Seed Processing Sector - Bungi, a major oil seed processor, reported positive earnings and updated guidance, benefiting from potential reductions in Chinese used cooking oil imports [40][41] - The sector is expected to gain from a shift away from Chinese imports, with companies like ADM and Darling Ingredients also positioned to benefit [42]

Core Viewpoint - A group of U.S. states is considering blocking Hewlett-Packard Enterprise's $14 billion acquisition of Juniper Networks, seeking to intervene in a case where the U.S. Department of Justice has proposed a settlement to allow the deal to proceed [1]. Group 1: Legal and Regulatory Actions - Colorado Attorney General Phil Weiser, along with attorneys general from six other states and Washington, D.C., expressed intentions to investigate what they describe as suspicious circumstances surrounding the settlement [2]. - The states aim to ensure transparency in the merger review process and to confirm that government officials are making decisions based on legal merits rather than political influences [2]. - If permitted by U.S. District Judge Casey Pitts, the states could request a halt to the integration of HPE and Juniper's businesses [3]. Group 2: Background of the Acquisition - The DOJ initially sued to block the acquisition, citing concerns that it would reduce competition, resulting in Cisco Systems and HPE controlling over 70% of the U.S. networking equipment market [4]. - The DOJ agreed to drop its claims in June after HPE committed to licensing some of Juniper's AI technology to competitors and divesting a unit focused on small and mid-sized businesses [4]. - Colorado was part of a coalition that urged further investigation into whether the settlement adequately addressed the DOJ's initial concerns and the influence of lobbyists connected to the Trump administration [5].

Group 1 - A coalition of U.S. states is considering blocking Hewlett-Packard Enterprise's $14 billion acquisition of Juniper Networks [1] - The states have requested a judge's permission to intervene in the legal proceedings related to the acquisition [1]

Core Insights - Hewlett Packard Enterprise (HPE) is experiencing significant growth in its Server segment, with record revenues of $4.9 billion, reflecting a 16% year-over-year increase and a 21% sequential increase, driven by strong AI order conversions and demand for traditional servers [1][9] Group 1: Server Segment Performance - HPE's Server revenues reached $4.9 billion, marking a 16% increase year over year and a 21% increase sequentially, attributed to robust AI order conversions and rising demand for traditional servers [1][9] - The global server refresh cycle is a major factor driving this growth, as enterprises replace outdated infrastructure with HPE's efficient servers [2] - HPE's new Gen12 servers can replace multiple older units while reducing power consumption by 65% and enhancing security with quantum-proof encryption [2][3] Group 2: Technological Advancements - The Gen12 servers allow customers to optimize data center space, reduce cooling needs, and improve system protection [3] - HPE has expanded its Gen12 compute portfolio by integrating AMD's fifth-generation EPYC processors, enhancing performance and energy efficiency [3] - HPE Compute Ops Management supports the new servers with AI-driven lifecycle management, expected to accelerate Gen12 adoption through 2026 [4] Group 3: Competitive Landscape - Dell Technologies is also benefiting from strong server demand due to digital transformation and generative AI applications, showing sequential growth in server adoption [5] - Super Micro Computer is experiencing significant growth driven by AI workloads, as data centers expand and new ones are established [6] - The demand for servers in data centers is anticipated to rise, benefiting HPE, Dell, and Super Micro Computer [7] Group 4: Financial Performance and Valuation - HPE's shares have increased by 17.1% year to date, compared to the Zacks Computer - Integrated Systems industry's growth of 64.1% [8] - HPE trades at a forward price-to-sales ratio of 0.83, significantly lower than the industry's 4.38 [10] - The Zacks Consensus Estimate for HPE's fiscal 2025 earnings is $1.89 per share, indicating a 4.5% decrease year over year, while fiscal 2026 is estimated at $2.40 per share, reflecting a 26.5% increase [11]

Core Insights - Dell Technologies and Hewlett-Packard Enterprise are significant players in the AI infrastructure market, with Dell focusing on AI-optimized infrastructure and edge computing, while HPE emphasizes hybrid cloud and edge computing platforms like GreenLake [1][2] Dell Technologies - Dell is experiencing strong demand for AI servers, driven by digital transformation and interest in generative AI applications [3] - In Q2 of fiscal 2026, Dell shipped $8.2 billion in AI servers, with a $5.6 billion increase in orders and an AI backlog of $11.7 billion [4][11] - The company delivered $10 billion worth of AI-optimized servers in the first half of fiscal 2026 and projects $20 billion in shipments for the entire fiscal year [5][11] - Dell introduced the PowerEdge XR8720t, the first single-server solution for Open RAN and Cloud RAN, enhancing performance and reducing costs for telecom and edge deployments [6] Hewlett-Packard Enterprise - HPE's server segment sales increased by 16% year over year to $4.94 billion in Q3 of fiscal 2025, driven by strong demand for AI servers [7][11] - The company launched advanced servers equipped with NVIDIA RTX PRO 6000 Blackwell and NVIDIA Blackwell Ultra platforms tailored for AI workloads [8] - HPE's GreenLake platform benefits from a robust demand environment as customers undergo digital transformation [9] Market Performance - Year-to-date, Dell's shares have increased by 30.7%, while HPE's shares have risen by 14.3%, with Dell outperforming due to strong AI server demand [12] - Dell's shares are trading at a forward Price/Sales ratio of 0.90X, compared to HPE's 0.81X, indicating a more favorable valuation for Dell [15] Earnings Estimates - The Zacks Consensus Estimate for Dell's fiscal 2026 earnings is $9.54 per share, reflecting a 17.20% year-over-year increase [17] - In contrast, HPE's fiscal 2025 earnings estimate is $1.90 per share, indicating a 4.52% decline year over year [17] Conclusion - Both companies benefit from the expanding AI infrastructure market, but Dell's robust portfolio and expanding partner base position it as a more attractive option for long-term investors [18]

Core Insights - Hewlett Packard Enterprise (HPE) has seen a year-to-date increase of 14.3%, but this is significantly lower than the Zacks Computer - Integrated Systems industry's growth of 61.9%, prompting questions about whether to accumulate HPE shares or take profits [1][5] Valuation Metrics - HPE is currently trading at a forward price-to-sales ratio of 0.81, which is below the industry's ratio of 3.59, indicating a discounted valuation [2] - The Zacks Value Score for HPE is B, reflecting its attractive valuation relative to peers [2] Business Performance - HPE's Hybrid Cloud segment grew by 14.2% year-over-year, driven by the adoption of Alletra MP and the expansion of the GreenLake cloud platform [5][7] - The new Networking unit experienced a significant revenue increase of 54.3%, reaching $1.73 billion in the third quarter of fiscal 2025, aided by the acquisition of Juniper Networks [10] - HPE's GreenLake cloud product added 2,000 new users in the third quarter of fiscal 2025, bringing the total to 44,000 customers [8] Strategic Partnerships - HPE is enhancing its AI capabilities through partnerships with NVIDIA, Arista Networks, and Microsoft, which are expected to contribute positively to its revenue [11][12][13] - Collaborations with these companies are aimed at developing AI-driven solutions and expanding HPE's market reach [12][13] Financial Outlook - The Zacks Consensus Estimate for HPE's fiscal 2025 earnings is $1.90 per share, which has been revised upward recently [14] Challenges - HPE faces challenges from softening IT spending, higher interest rates, and inflation, which may impact its near-term prospects [15][18] - The company must navigate strong competition from major players like IBM, Dell, Cisco, and Microsoft across its business segments [17]