HPE(US:HPE)2024-06-05 12:14Financial Position - As of April 30, 2024, cash, cash equivalents, and restricted cash totaled $2,924 million, down from $4,581 million as of October 31, 2023[256] - Total debt decreased to $11,257 million from $12,355 million as of October 31, 2023[256] - The company anticipates that cash generated from operations and access to capital markets will meet liquidity requirements for at least the next twelve months[248] - The company expects to utilize cash held outside the U.S. to support non-U.S. liquidity needs without significant tax implications[250] - As of April 30, 2024, the company had approximately $241 million of recorded liabilities related to uncertain tax positions[279] Cash Flow and Operating Activities - Net cash provided by operating activities for the six months ended April 30, 2024, was $1,157 million, an increase of $1.1 billion compared to the same period in fiscal 2023[261] - Free cash flow for the six months ended April 30, 2024, was $128 million, a significant improvement from a negative $1,038 million in the prior year[260] - For the six months ended April 30, 2024, free cash flow increased by $1.2 billion compared to the same period in fiscal 2023, primarily due to higher cash provided by operations[269] - Free cash flow for the three months ended April 30, 2024, was $610 million, significantly up from $288 million in the same period of 2023, indicating a 112% increase[290] - The company reported net cash provided by operating activities of $1,093 million for the three months ended April 30, 2024, compared to $889 million in 2023, marking a 23% increase[290] Investment and Financing Activities - Net cash used in investing activities decreased by $1.1 billion for the six months ended April 30, 2024, mainly due to lower cash utilized in net financial collateral activities and reduced payments for business acquisitions[267] - Net cash used in financing activities increased by $1.8 billion for the six months ended April 30, 2024, primarily due to lower proceeds from debt and short-term borrowings[268] - The company plans to acquire Juniper Networks for $14 billion, with the transaction expected to be funded through $14 billion in term loans[254] - In January 2024, the company issued $796 million of asset-backed debt securities with a weighted average interest rate of 5.476%[272] Revenue and Profitability - GAAP net revenue for the three months ended April 30, 2024, was $7.204 billion, a 3.3% increase from $6.973 billion in the same period of 2023[284] - GAAP gross profit for the three months ended April 30, 2024, was $2.376 billion, representing a gross profit margin of 33.0%, down from 36.0% in the same period of 2023[284] - Non-GAAP earnings from operations for the three months ended April 30, 2024, were $684 million, or 9.5% of revenue, compared to $799 million, or 11.5% of revenue in the same period of 2023[285] - For the three months ended April 30, 2024, GAAP net earnings were $314 million, resulting in a diluted net earnings per share of $0.24, compared to $418 million and $0.32 per share for the same period in 2023, representing a decrease of 25% in net earnings[288] - Non-GAAP net earnings for the three months ended April 30, 2024, were $561 million, with a diluted net earnings per share of $0.42, compared to $685 million and $0.52 per share in 2023, reflecting a decrease of 18% in non-GAAP net earnings[288] Operational Efficiency - Days of sales outstanding (DSO) increased to 48 days from 43 days, while days of supply in inventory (DOS) rose to 137 days from 87 days[262] - The cash conversion cycle remained flat at (4) days, indicating stable operational efficiency[262] Future Outlook and Strategic Initiatives - The company expects to make future cash payments of approximately $210 million in connection with approved restructuring plans, including $60 million expected to be paid through the remainder of fiscal 2024[278] - The company expects continued focus on market expansion and new product development as part of its strategic initiatives moving forward[293] Non-GAAP Financial Measures - The company plans to exclude certain non-recurring charges from its non-GAAP financial measures to provide a clearer view of ongoing operational performance[296] - Non-GAAP financial measures should not be considered in isolation and may not reflect the full economic effect of asset value loss[304] - The company relies primarily on GAAP results and uses non-GAAP measures only as a supplement, providing reconciliations for investor review[305] - For fiscal 2024, the projected non-GAAP income tax rate is 15%, up from 14% in fiscal 2023[302] - The adjustments for taxes in the non-GAAP measures included a $31 million adjustment for the three months ended April 30, 2024, compared to a $7 million adjustment in 2023[288] Cost Management - The company incurred stock-based compensation expenses of $120 million for the three months ended April 30, 2024, compared to $126 million in 2023, a decrease of 5%[288] - Transformation costs for the three months ended April 30, 2024, were $33 million, down from $60 million in the same period of 2023, reflecting a 45% decrease[288] Market Risk - There have been no material changes in market risk exposures since October 31, 2023[307]