Revenue Performance - Revenue for Q1 Fiscal 2025 was $7.9 billion, representing a 16% increase year-over-year in actual dollars and a 17% increase in constant currency [3]. - Annualized revenue run-rate (ARR) reached $2.1 billion, up 45% from the prior-year period in actual dollars and 46% in constant currency [3]. - Net revenue for the three months ended January 31, 2025, was $7,854 million, a decrease of 7.1% from $8,458 million in the previous quarter and an increase of 16.2% from $6,755 million in the same quarter last year [19]. - Total consolidated net revenue for the three months ended January 31, 2025, was $7,854 million, a decrease of 7% quarter-over-quarter and an increase of 16% year-over-year [31]. - The Server segment reported net revenue of $4,290 million, down 8% from the previous quarter but up 29% year-over-year [31]. - Intelligent Edge revenue was $1.1 billion, down 5% year-over-year in actual dollars, with an operating profit margin of 27.4% [7]. - Hybrid Cloud revenue was $1.4 billion, up 10% year-over-year in actual dollars, with an operating profit margin of 7.0% [7]. Earnings and Profitability - GAAP diluted net EPS was $0.44, up 52% from the prior-year period, exceeding the guidance range of $0.31 to $0.36 [7]. - Non-GAAP diluted net EPS was $0.49, up 2% from the prior-year period, within the guidance range of $0.47 to $0.52 [7]. - Earnings from operations for the same period were $433 million, down 37.5% from $693 million in the previous quarter and down 17.5% from $525 million year-over-year [19]. - Net earnings attributable to common stockholders were $598 million, a decrease of 55.5% from $1,341 million in the previous quarter and an increase of 54.3% from $387 million year-over-year [19]. - GAAP gross profit margin for the three months ended January 31, 2025, was 29.2%, down from 30.8% in the previous quarter and down from 36.4% year-over-year [21]. - Non-GAAP net earnings attributable to HPE for the three months ended January 31, 2025, were $684 million, compared to $795 million in the previous quarter and $638 million in the same quarter last year [23]. - The total segment operating profit margin decreased to 10.6% for the three months ended January 31, 2025, down from 11.9% in the previous quarter and 12.3% year-over-year [33]. Cash Flow and Expenses - Free cash flow for the three months ended January 31, 2025, was $(877) million, a significant decrease from $1,500 million in the previous quarter and $(482) million year-over-year [23]. - Research and development expenses for the quarter were $475 million, down from $527 million in the previous quarter and down from $582 million year-over-year [19]. - The total costs and expenses for the three months ended January 31, 2025, were $7,421 million, a decrease of 4.4% from $7,765 million in the previous quarter and an increase of 19.1% from $6,230 million year-over-year [19]. - The company reported a net cash used in operating activities of $390 million for the three months ended January 31, 2025, compared to a net cash provided of $64 million for the same period last year [27]. Future Projections and Guidance - HPE estimates Q2 Fiscal 2025 revenue to be in the range of $7.2 billion to $7.6 billion, with GAAP diluted net EPS estimated between $0.08 and $0.14 [6]. - HPE expects future annualized cost savings of approximately $120 million following the divestiture of 30% of H3C's total issued share capital, which generated $2.1 billion in pre-tax proceeds [43]. - HPE announced a cost reduction program expected to deliver gross savings of approximately $350 million by fiscal year 2027 [9]. Legal and Organizational Changes - The proposed merger with Juniper Networks is facing legal challenges, with a trial set to commence on July 9, 2025 [8]. - HPE implemented an organizational change effective at the beginning of fiscal 2025, transferring certain managed services to align with its current business structure [37]. Financial Reporting and Non-GAAP Measures - The company provides non-GAAP financial measures to enhance transparency and allow investors to evaluate its operating performance without the impact of foreign exchange rates [41]. - HPE's management believes that excluding certain costs from non-GAAP measures provides a clearer view of ongoing operating results [42]. - HPE excludes gains and losses on non-marketable equity investments to reflect normal business operations, impacting the evaluation of current operating performance [46]. - For fiscal 2025, HPE projects a non-GAAP income tax rate of 15%, consistent with the rate used in fiscal 2024 [46]. - HPE's Free Cash Flow (FCF) is defined as cash flow from operations minus net capital expenditures, adjusted for exchange rate fluctuations [46]. - The projected non-GAAP income tax rate may change due to the evolving global tax environment and changes in the Company's geographic earnings mix [46]. - HPE's management and investors utilize FCF to assess cash available for investments, stock repurchases, and liquidity evaluation [46].

Core Viewpoint - Analysts forecast that Hewlett Packard Enterprise (HPE) will report quarterly earnings of $0.50 per share, reflecting a year-over-year increase of 4.2%, with revenues expected to reach $7.81 billion, an increase of 15.6% compared to the previous year [1] Earnings Projections - The consensus EPS estimate for the quarter has been adjusted downward by 0.6% over the past 30 days, indicating a reassessment by covering analysts [2] - Revisions to earnings projections are crucial for predicting investor behavior, as empirical studies show a strong correlation between earnings estimate trends and short-term stock price performance [3] Revenue Estimates - Revenue from Financial Services is projected to be $884.51 million, a year-over-year change of +1.3% [5] - Revenue from Corporate Investments and other is estimated at $244.54 million, indicating a +2.8% change from the prior year [5] - Revenue from Intelligent Edge is expected to be $1.14 billion, reflecting a -5.2% change from the year-ago quarter [5] - Revenue from Americas is forecasted to reach $3.38 billion, suggesting a +20.7% year-over-year change [6] - Revenue from Asia Pacific and Japan is estimated at $1.59 billion, indicating a +4.8% change from the previous year [6] - Revenue from Europe, Middle East and Africa is expected to be $2.72 billion, reflecting an +11.7% change from the prior year [6] Earnings from Operations - Earnings from Operations in Financial Services are projected to be $80.25 million, compared to $74 million reported in the same quarter last year [7] - Earnings from Operations in Intelligent Edge are expected to reach $250.58 million, down from $353 million reported in the same quarter of the previous year [7] Stock Performance - Shares of Hewlett Packard Enterprise have shown a return of -6.5% over the past month, compared to a -1.3% change in the Zacks S&P 500 composite [7] - HPE holds a Zacks Rank 3 (Hold), indicating expectations to mirror overall market performance in the near future [7]

Core Viewpoint - Wall Street anticipates a year-over-year increase in earnings for Hewlett Packard Enterprise (HPE) due to higher revenues, with actual results being crucial for stock price movement [1][2]. Earnings Expectations - HPE is expected to report earnings of $0.50 per share, reflecting a +4.2% change year-over-year, with revenues projected at $7.81 billion, up 15.6% from the previous year [3]. - The earnings report is scheduled for March 6, 2025, and could lead to stock price increases if results exceed expectations [2]. Estimate Revisions - The consensus EPS estimate has been revised down by 0.6% over the last 30 days, indicating a reassessment by analysts [4]. - The Most Accurate Estimate for HPE is lower than the Zacks Consensus Estimate, resulting in an Earnings ESP of -2.36%, suggesting a bearish outlook from analysts [10][11]. Earnings Surprise Prediction - The Zacks Earnings ESP model indicates that a positive reading is a strong predictor of an earnings beat, particularly when combined with a Zacks Rank of 1, 2, or 3 [8]. - HPE currently holds a Zacks Rank of 3, making it challenging to predict an earnings beat conclusively [11]. Historical Performance - HPE has beaten consensus EPS estimates in the last four quarters, with a +5.45% surprise in the most recent quarter [12][13]. Conclusion - While HPE may not appear to be a compelling earnings-beat candidate, investors should consider other factors influencing stock performance ahead of the earnings release [16].

Core Viewpoint - Hewlett Packard Enterprise (HPE) stock is currently undervalued compared to the industry average, trading at a forward 12-month P/E ratio of 9.82 versus the industry average of 19.19 [1] Group 1: Stock Performance - HPE stock has increased by 35.7% over the past year, outperforming the Zacks Computer and Technology sector and the S&P 500 index, which returned 22.2% and 21.8% respectively [3] - HPE has outperformed its peers, including Micron (MU), Seagate Technology (STX), and Advanced Micro Devices (AMD) [3] Group 2: Key Growth Drivers - The growth in HPE's stock is driven by strong performance in its GreenLake and AI systems segments [5] - GreenLake's customer base grew by approximately 34.5% year over year, reaching 39,000 customers in Q4 of fiscal 2024, contributing to an annualized revenue run rate exceeding $1.9 billion, which is a 48% increase year over year [6] - HPE reported $6.7 billion in cumulative orders for AI products and services since Q1 of fiscal 2023, with a backlog of $3.5 billion in new AI orders as of Q4 fiscal 2024 [7] Group 3: Financial Outlook - The Zacks Consensus Estimate for HPE's fiscal 2025 revenues is $32.4 billion, indicating a year-over-year growth of 7.5%, while earnings are estimated at $2.11, reflecting a 6% growth year over year [8] - HPE has consistently beaten the Zacks Consensus Estimate in the past four quarters, with an average surprise of 7.84% [8] Group 4: Investment Recommendation - HPE's growth in GreenLake and AI, along with its attractive valuation and strong past performance, suggest it is a prudent investment opportunity [9]

Core Points - Hewlett Packard Enterprise (HPE) has begun notifying individuals whose personal information was stolen during a cyberattack attributed to Russian government hackers [1][5] - The breach involved sensitive data such as Social Security numbers, driver's license information, and credit card numbers [2] - The cyberattack began in May 2023, targeting HPE's email systems and SharePoint environments, which are hosted by Microsoft [3] - HPE disclosed that the hackers accessed internal email boxes through a compromised account, primarily affecting individuals in cybersecurity and business teams [4] - The attack is linked to a group known as Midnight Blizzard, associated with Russia's foreign intelligence service, SVR, which has been involved in other significant cyber incidents [5] Data Breach Details - More than a dozen individuals have been notified about the data breach [1] - The breach was publicly disclosed by HPE in January 2024, confirming the exfiltration of a "small number" of email mailboxes and SharePoint files [3] - Microsoft also confirmed that its corporate network was compromised by the same group, indicating a broader threat landscape [5]

Core Insights - Zacks Premium provides tools for investors to enhance their stock market engagement and confidence, including daily updates, research reports, and stock screens [1][2] Zacks Style Scores - Zacks Style Scores are indicators that assist investors in selecting stocks likely to outperform the market within 30 days, rated from A to F based on value, growth, and momentum characteristics [3] - The Value Score identifies attractive and discounted stocks using ratios like P/E, PEG, and Price/Sales [4] - The Growth Score focuses on a company's financial health and future outlook, analyzing projected and historical earnings, sales, and cash flow [5] - The Momentum Score helps investors capitalize on price trends by evaluating short-term price changes and earnings estimate shifts [6] - The VGM Score combines the three Style Scores to identify stocks with the best value, growth potential, and momentum, serving as a strong indicator alongside the Zacks Rank [7] Zacks Rank - The Zacks Rank is a proprietary model based on earnings estimate revisions, aiding investors in portfolio building [8] - Stocks rated 1 (Strong Buy) have historically produced an average annual return of +25.41% since 1988, significantly outperforming the S&P 500 [9] - To maximize returns, investors should focus on stocks with a Zacks Rank of 1 or 2 and Style Scores of A or B [10] Stock Example: Hewlett Packard Enterprise (HPE) - Hewlett Packard Enterprise, formed from the split of Hewlett-Packard Company, is currently rated 3 (Hold) with a VGM Score of A [12] - HPE has a Value Style Score of A, supported by a forward P/E ratio of 9.89, making it appealing to value investors [13] - The Zacks Consensus Estimate for HPE's fiscal 2025 earnings has increased to $2.11 per share, with an average earnings surprise of 7.8% [13]

Core Viewpoint - Hewlett Packard Enterprise (HPE) has experienced a significant stock performance, gaining 38% over the past year, outperforming both the Zacks Computer and Technology sector and the S&P 500 index [1]. However, a recent lawsuit from the U.S. Department of Justice (DOJ) has raised concerns regarding HPE's $14 billion acquisition of Juniper Networks, causing a 2% drop in stock price [2]. Company Performance - HPE's stock has outperformed the Zacks Computer - Integrated Systems industry's decline of 4.3% over the past year [1]. The company is in the process of acquiring Juniper Networks for $40 per share, aimed at enhancing its networking business and offering next-generation AI-native networking solutions [3]. Regulatory Challenges - The DOJ has filed a lawsuit to block the merger, arguing that it would reduce competition in the networking market, where HPE, Juniper, and Cisco collectively hold about 70% market share [4][6]. The DOJ fears that the merger would lead to fewer competitors, lower prices, and hinder innovation [6]. Market Dynamics - HPE contends that there are eight companies competing in the $180 billion networking market, including Arista Networks and Fortinet, which also offer networking products [6][7]. The acquisition is expected to enhance HPE's portfolio and boost its revenue growth, with projected revenue increases of 7.5% and 5% for fiscal 2025 and 2026, respectively [9]. Financial Implications - HPE reported a $135 million increase in charges related to acquisitions, primarily due to the pending acquisition of Juniper Networks, with expectations for further cost increases due to the DOJ's intervention [10]. The merger has received approval from the European Union and the U.K. Competition and Markets Authority, providing some positive outlook for HPE [11]. Growth Areas - Despite regulatory challenges, HPE has seen strong performance in its GreenLake and AI systems segments. GreenLake's customer base grew by approximately 34.5% year over year, reaching 39,000 customers, with an annualized revenue run rate exceeding $1.9 billion [13]. Additionally, HPE reported $6.7 billion in cumulative orders for AI products since the first quarter of fiscal 2023, with backlogs valued at $3.5 billion [14]. Conclusion - The regulatory hurdles associated with the Juniper Networks acquisition present challenges, including rising costs and delayed revenue recognition. However, HPE's growth in GreenLake and AI systems indicates promising long-term potential for the company [15].

Stock Performance - Hewlett Packard Enterprise (HPE) shares dropped 12.3% from Monday through Tuesday amid the global tech selloff [1] - HPE shares are up 2.5% today, trading at $21.99 [1] - HPE hit a record high of $24.66 on Jan 22 before this week's pullback [3] - HPE sports a 39% year-over-year lead [3] Technical Analysis - HPE is testing its 126-day moving average, a historically bullish trendline [1] - HPE has traded down to this trendline five times in the last three years after significant periods above it [2] - In the past, when HPE met these conditions, the stock was higher one month later 80% of the time with an average 6.7% gain [2] Options Market Activity - Puts have been more popular than usual in the options pits for HPE [3] - The stock's 50-day put/call volume ratio ranks higher than 96% of readings from the past year [3] - An unwinding of this pessimism could provide tailwinds for the stock [3]

Core Insights - Zacks Premium offers various tools to help investors make informed decisions and enhance their confidence in the stock market [1][2] Zacks Style Scores - Zacks Style Scores rate stocks based on value, growth, and momentum characteristics, providing complementary indicators to the Zacks Rank [2][3] - Each stock receives a rating from A to F, with A indicating the highest potential for outperformance [3] Value Score - The Value Score focuses on identifying undervalued stocks using financial ratios such as P/E, PEG, and Price/Sales [3] Growth Score - The Growth Score assesses a company's future prospects by analyzing projected and historical earnings, sales, and cash flow [4] Momentum Score - The Momentum Score identifies trends in stock prices and earnings outlooks, helping investors time their positions effectively [5] VGM Score - The VGM Score combines all three Style Scores, providing a comprehensive indicator for investors who utilize multiple investing strategies [6] Zacks Rank - The Zacks Rank is a proprietary model that uses earnings estimate revisions to guide investors in building successful portfolios [7] - Stocks rated 1 (Strong Buy) have historically produced an average annual return of +25.41% since 1988, significantly outperforming the S&P 500 [8] Stock Selection Strategy - To maximize returns, investors should focus on stocks with a Zacks Rank of 1 or 2 and Style Scores of A or B [9] - Stocks with lower ranks but high Style Scores may still carry risks due to downward-trending earnings estimates [10] Company Spotlight: Hewlett Packard Enterprise (HPE) - Hewlett Packard Enterprise, formed from the split of Hewlett-Packard Company, is currently rated 3 (Hold) with a VGM Score of A [11] - HPE has a Momentum Style Score of A, with a 0.5% increase in shares over the past four weeks and a consensus earnings estimate of $2.10 per share for fiscal 2025 [12]

Core Viewpoint - Hewlett-Packard Enterprise (HPE) is investigating a data breach after a hacker known as "IntelBroker" claimed to have stolen sensitive information from the company [1][2]. Group 1: Data Breach Details - The hacker claims to have stolen product source code, private GitHub repositories, and access keys to several HPE services, including APIs and platforms like WePay, GitHub, and GitLab [2]. - IntelBroker also claims to have accessed HPE user data, including personally identifiable information related to past deliveries [2]. Group 2: Company Response - HPE became aware of the claims on January 16 and activated its cyber response protocols, disabling related credentials and launching an investigation [3]. - HPE stated that there is no operational impact to the business at this time, nor evidence that customer information is involved [3]. Group 3: Historical Context - A year prior, HPE confirmed that a Russia-linked hacking group, Midnight Blizzard, had compromised its cloud-based email environment, accessing and exfiltrating data from a small percentage of mailboxes [4].