HPE CEO Antonio Neri on FY26 guidance, company strategic priorities and growth outlook

Core Viewpoint - HPE shares have declined sharply due to lower guidance for the next fiscal year, with a strategic shift towards higher growth and margin areas, particularly in cloud and artificial intelligence [1] Financial Guidance - HPE has provided a strong earnings per share and free cash flow guidance, with a commitment to generate over $3.5 billion in free cash flow by 2028, driven by operating profit expansion of 11% to 17% over the next three years [6][7] - The company expects revenue growth between 17% and 23% on a reported basis, with operating profit expansion between 10% and 18% [8][10] Shareholder Returns - More than 75% of cash generated by 2028 will be returned to shareholders, including a 10% increase in dividends and an additional $3 billion share buyback authorization [7][13][15] - The total authorization for share buybacks has been increased to $3.7 billion, with plans to pay down $4 billion of debt to achieve a leverage ratio of two times EBITDA [15] Strategic Focus - HPE's strategy revolves around three pillars: networking, cloud, and AI, with a significant portion of operating profit expected to come from the networking business [10][11] - The company aims to compete in the Neo clouds and sovereign space, emphasizing the importance of networking infrastructure to support AI and GPU demands [12][16] Market Positioning - HPE is positioning itself to capitalize on the growing demand for AI and supercomputing technologies, with unique offerings such as direct liquid cooling [12][13] - The company is focused on maintaining a disciplined approach to working capital in the AI sector, where margins are currently low [16][17]