Core Insights - Hewlett Packard Enterprise (HPE) provided a weak earnings guidance for fiscal year 2026, projecting adjusted earnings per share between $2.20 and $2.40, which is below analyst expectations of $2.40 [1] - The company anticipates revenue growth for fiscal year 2026 to be between 5% and 10%, significantly lower than Wall Street's estimate of 17% [1] - HPE plans to focus its business on networking technology, including the acquisition of Juniper Networks, and related artificial intelligence technologies aimed at sovereign and enterprise markets [1] - The company's board approved an additional $3 billion stock buyback, bringing the total stock repurchase program to $3.7 billion [1]

Group 1 - The company, Hewlett Packard Enterprise (HPE), has provided earnings and cash flow forecasts for the next fiscal year that are below analyst expectations, indicating challenges in profit margins amid the AI era [1] - HPE expects adjusted earnings per share to be between $2.20 and $2.40 for the fiscal year ending in October 2026, while analysts had an average forecast of $2.41 [1] - The company anticipates free cash flow to be between $1.5 billion and $2 billion, compared to the analyst average of $2.41 billion [1] Group 2 - HPE plans to increase its dividend by 10%, raising it from $0.13 per share per quarter, and has approved an additional $3 billion for stock buybacks [2] - For the fiscal year ending in October 2028, HPE forecasts adjusted earnings per share to reach at least $3 and free cash flow to exceed $3.5 billion, slightly above analyst expectations [2] - The company will implement layoffs as part of the integration with Juniper Networks, resulting in a loss of approximately $240 million, with most layoffs expected to occur within the next year [2] Group 3 - Following the earnings announcement, HPE's stock fell about 9% in after-hours trading, despite having risen 17% year-to-date [3]

Core Insights - Hewlett Packard Enterprise (HPE) has projected annual profit and revenue figures that fall short of Wall Street expectations, indicating potential challenges ahead for the company [1] Financial Performance - The company is shifting its server business focus towards artificial intelligence and networking, which may impact its traditional revenue streams [1] Market Positioning - HPE's strategic pivot towards AI and networking reflects broader industry trends, as companies increasingly invest in these areas to drive growth [1]

Core Insights - Hewlett Packard Enterprise (HPE) shares fell 7% after disappointing fiscal 2026 guidance, with adjusted earnings per share expected between $2.20 and $2.40, below analyst expectations of $2.40 [1] - Revenue growth is projected to be between 5% and 10%, significantly lower than Wall Street's estimate of 17% [1] Strategic Focus - HPE plans to concentrate on strategic priorities, including networking technology and artificial intelligence offerings for both sovereign and enterprise segments [2] - The CEO emphasized that the strengthened portfolio aims to create more profitable growth and enhance capital return opportunities for shareholders [2] Financial Actions - The board approved an additional $3 billion in share buybacks, increasing the total repurchase plan to $3.7 billion [3] - HPE announced a 5% reduction in employee headcount, equating to approximately 2,500 job cuts [3]

The technology company expects revenue to grow between 5% to 10% for fiscal 2026 as it targets higher-growth businesses to improve profit. ...

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]