Core Viewpoint - Hewlett Packard Enterprise Company (HPE) has shown exceptional performance over the past year, with a stock increase of 34.1%, significantly outperforming its peers and major indices [1][2]. Group 1: Performance and Growth Drivers - HPE's stock performance has outpaced the Zacks Computer - Integrated Systems, Zacks Computer and Technology sector, and the S&P 500 index, which returned 8.5%, 33.4%, and 24.9% respectively [1]. - The growth has been primarily driven by strong performance in key segments, particularly GreenLake and artificial intelligence (AI) systems, with a notable increase in customer adoption [3]. - GreenLake's customer base expanded by approximately 34.5% year over year, reaching 39,000 in Q4 of fiscal 2024, contributing to an annualized revenue run rate that increased 48% year over year, exceeding $1.9 billion [4]. Group 2: AI Systems and Orders - HPE reported cumulative orders for AI products and services amounting to $6.7 billion since Q1 of fiscal 2023, with new AI orders in Q4 of fiscal 2024 increasing backlogs to $3.5 billion [5]. Group 3: Valuation Metrics - HPE's stock is trading at a forward 12-month price-to-earnings (P/E) ratio of 10.31, significantly lower than the industry average of 19.39, and a forward 12-month price-to-sales (P/S) ratio of 0.89 compared to the industry average of 3.34, indicating a potentially attractive investment opportunity [6]. Group 4: Challenges and Market Outlook - Despite the positive growth in AI and GreenLake, HPE faces near-term challenges due to softening IT spending, higher interest rates, and inflationary pressures affecting consumer spending [9]. - The Intelligent Edge division experienced a 20% year-over-year revenue drop in Q4 of fiscal 2024, attributed to inventory accumulation among customers and softer demand for switching and campus solutions [10]. - HPE's gross margin contracted by 390 basis points year over year to 30.9%, influenced by a low mix of high-margin Intelligent Edge revenues [11]. - The financial services division reported a modest 2% year-over-year revenue growth of $893 million in Q4 of fiscal 2024, reflecting the overall softness in IT spending [12]. Group 5: Financial Estimates - The Zacks Consensus Estimate for fiscal 2025 earnings has been revised downward to $2.10, and for fiscal 2026 to $2.28, indicating a lack of strong financial recovery in the near term [13]. Group 6: Conclusion - HPE's growth in GreenLake and AI indicates long-term potential, but current challenges necessitate a cautious approach, suggesting that holding the stock is advisable for now [15].

Did you analyze how Hewlett Packard Enterprise (HPE) fared in its international operations for the quarter ending October 2024? Given the widespread global presence of this information technology products and services provider, scrutinizing the trends in international revenues becomes imperative to assess its financial strength and future growth possibilities.In today's increasingly interconnected global economy, a company's ability to tap into international markets can be a pivotal factor in shaping its ov ...

Research and Development - Research and development expenditures were $2.2 billion in fiscal 2024, down from $2.3 billion in fiscal 2023 and up from $2.0 billion in fiscal 2022[47]. - The company is focusing on next-generation compute solutions, including cloud-native server management solutions and AI infrastructure, to enhance performance and efficiency[48]. - Significant investments are being made in hybrid cloud technologies, including software-defined cloud-native deployments in Amazon Web Services and integrated hardware-software offers[49]. - The company is investing in disruptive innovation and applied research in areas such as AI, sustainability, and quantum computing through Hewlett Packard Labs[51]. - The company anticipates continued strong competition in the enterprise IT infrastructure market, necessitating ongoing innovation and product development[58]. Market Position and Strategy - Future operational strategies include the proposed acquisition of Juniper Networks, which aims to enhance the company's market position[46]. - Hybrid Cloud solutions include HPE's GreenLake and Storage solutions, enabling customers to focus on innovation while HPE manages infrastructure[62]. - The server business operates in a highly competitive market with primary competitors including Dell Technologies and Cisco Systems, focusing on performance scalability for AI workloads[59]. - Intelligent Edge operates in a competitive networking market, emphasizing superior enterprise networking components and integrated solutions[63]. - The anticipated merger with Juniper Networks is expected to enhance innovation across edge to cloud, but failure to realize expected benefits could adversely affect the company's stock price[117]. Sustainability and Corporate Responsibility - HPE aims to become a net-zero enterprise by 2040, with interim targets set for 2030, supported by a Net-Zero Roadmap[78]. - In 2024, HPE's greenhouse gas emissions primarily resulted from customers' use of its products, highlighting the need for sustainable IT solutions[79]. - HPE's Living Progress strategy integrates sustainability into its core business, providing a competitive advantage in meeting customer IT sustainability goals[77]. - The company is committed to sustainability and corporate responsibility, with established goals that may present operational and regulatory risks if not achieved[140]. - Failure to meet sustainability expectations could harm the company's reputation and ability to attract customers and talent, leading to potential financial impacts[140]. Human Capital and Diversity - Approximately 61,000 employees were reported as of October 31, 2024, reflecting HPE's commitment to human capital resources[65]. - HPE's "My Success Plan" program engages about 95% of employees in quarterly performance and career discussions[70]. - The company has achieved pay parity for base compensation and bonus targets between male and female team members in the U.S. and several other countries[71]. - HPE's commitment to diversity, equity, and inclusion extends to its suppliers, enhancing opportunities for underrepresented communities[83]. - Attracting and retaining key employees is critical for the company's growth strategy, particularly in networking, hybrid cloud, and AI sectors, with competitive compensation packages being essential[133]. Financial Performance and Risks - The company has experienced fluctuations in revenue and profitability, making future financial results less predictable[113]. - The transition to aaS offerings results in differences in revenue recognition timing, impacting financial results and growth[119]. - The company relies on third-party suppliers, and any failure to manage these relationships could negatively impact financial performance[120]. - Cybersecurity risks, including potential data breaches and system disruptions, could adversely affect revenue and reputation[122]. - The company faces risks related to component shortages and excess supply, which could lead to increased costs and operational challenges[120]. Compliance and Regulatory Environment - The company is committed to maintaining compliance with environmental laws and reducing its environmental impact across all aspects of its business[88]. - The company actively evaluates and replaces materials in its products and supply chain to meet new legal requirements and customer preferences[88]. - The company supports open trade policies that facilitate integrated cross-border supply chains, which are crucial for global economic growth[89]. - The company faces risks associated with government regulations that could materially impact its operations and financial condition[90]. - The company is subject to product take-back legislation, which requires producers of electrical goods to be financially responsible for the collection and recycling of their products[88]. Acquisitions and Mergers - The company entered into a definitive agreement to acquire Juniper Networks, a leader in AI-native networks, with a termination fee of $815 million if the merger is not completed[128]. - The merger is subject to various conditions, including regulatory approvals and the absence of material adverse effects on Juniper Networks[128]. - The company may face significant challenges in integrating Juniper Networks, including preserving customer relationships and consolidating operations[130]. - The company’s ability to manage and integrate acquisitions effectively is critical for realizing anticipated benefits and maintaining financial performance[130]. Economic and Geopolitical Factors - The ongoing geopolitical tensions may heighten the risk of cyberattacks, impacting the company's operations and customer data security[125]. - Approximately 64% of the company's net revenue in fiscal 2024 came from international sales, making it vulnerable to geopolitical and economic changes[145]. - The ongoing conflict between Russia and Ukraine has negatively affected business operations and financial performance in that region[147]. - Economic uncertainty and inflationary pressures could lead to reduced demand for the company's products and services, affecting financial performance[145]. - The relationship between the U.S. and China may introduce uncertainties affecting contract enforceability and payment timing, impacting financial performance[158]. Intellectual Property and Competitive Landscape - The patent portfolio includes approximately 13,000 issued and pending patents as of October 31, 2024, which is crucial for maintaining competitive differentiation[54]. - The company relies on intellectual property rights, including patents and trademarks, which are subject to challenges and may impact competitive advantages[151]. - The company’s ability to enforce intellectual property rights is subject to litigation risks, which could divert management resources and incur significant costs[154]. - The company faces risks related to third-party intellectual property licenses, which could affect product offerings and financial condition if favorable terms are not maintained[152]. Stock Performance and Market Dynamics - The company's stock price has shown volatility, influenced by various factors including media sentiment and market conditions[170]. - Future stock prices may be difficult to predict based on recent or historical trends[170]. - The company's performance can be affected by the announcement of new products, services, or acquisitions[170]. - Developments in the company's as-a-service business model may impact financial results[170]. - Quarterly financial results and comparisons to investment community estimates are critical for stock performance[170].

Hewlett Packard Enterprise Company (NYSE:HPE) Barclays 22nd Annual Global Technology Conference December 12, 2024 3:45 PM ET Company Participants Antonio Neri - President & CEO Conference Call Participants Unidentified Company Representative Good afternoon, everybody. And it’s terrific to be here with you all to 22nd Barclays Global Technology Conference. This afternoon, we have a very special guest in the CEO and President of HPE, Antonio Neri. Antonio, welcome, thank you for doing this with us. We greatly ...

Momentum investing is essentially the opposite of the tried-and-tested Wall Street adage -- "buy low and sell high." Investors following this investing style typically avoid betting on cheap stocks and waiting long for them to recover. They believe instead that one could make far more money in lesser time by "buying high and selling higher."Everyone likes betting on fast-moving trending stocks, but it isn't easy to determine the right entry point. These stocks often lose momentum when their future growth po ...

Financial Data and Key Metrics Changes - The company reported record quarterly revenue of $8.5 billion, up 15% year-over-year, exceeding $8 billion for the first time in history [12][38] - Fiscal year 2024 revenue growth topped 3% year-over-year, exceeding $30 billion, with a record-breaking free cash flow of $2.3 billion [19][33] - Non-GAAP diluted net EPS was $0.58, above guidance, with a non-GAAP operating margin of more than 11%, a 110 basis points increase sequentially [18][41] Business Line Data and Key Metrics Changes - Server revenue reached an all-time high of $4.7 billion, up 31% year-over-year, marking the third consecutive quarter of double-digit growth [13][43] - AI systems revenue grew 150% year-over-year to $4.1 billion, with a backlog of over $3.5 billion [35][46] - Hybrid cloud revenue increased 18% year-over-year and 21% sequentially to $1.6 billion, driven by HPE Private Cloud and HPE Storage [15][47] - Intelligent Edge revenue was $1.1 billion, down 20% year-over-year, but showed signs of recovery with strong order growth [50][52] Market Data and Key Metrics Changes - The company added more than 9,000 new customers across its portfolio in fiscal year 2024, ending with approximately 39,000 unique customers [19][39] - HPE Financial Services financing volumes rose to an all-time high of $2.1 billion, up 41% year-over-year [17][53] Company Strategy and Development Direction - The company is focused on providing a complete portfolio of modern, secure networking solutions, particularly in AI and hybrid cloud [10][20] - Continued investment in innovation is aimed at enhancing product offerings and capturing additional market share [21][24] - The pending acquisition of Juniper Networks is expected to strengthen HPE's position in the market and enhance its portfolio [31][57] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the upcoming fiscal year, anticipating increased IT spending and continued recovery in traditional compute and AI systems [58][62] - The company expects to close the Juniper transaction in early 2025, which will provide combined company guidance for fiscal 2025 [57][62] - Management highlighted the importance of disciplined cost management and strategic investments to drive profitability [41][100] Other Important Information - The company achieved a non-GAAP operating profit of $938 million in Q4, translating to a non-GAAP operating margin of 11.1% [18][41] - The cash conversion cycle was a negative 12 days, indicating efficient cash flow management [55] Q&A Session Summary Question: Can you provide insight into the AI pipeline given the backlog levels dipped? - Management indicated that the AI pipeline is a multiple of the current backlog, with significant growth in enterprise AI and ongoing orders from model builders and hyperscalers [66][68][70] Question: Can you discuss the dynamics affecting gross margins, particularly server margins? - Management noted that the server segment achieved an operating margin of 11.6%, driven by strong performance in AI server revenue and effective cost controls [75][78][81] Question: What drove the significant sequential increase in Hybrid Cloud revenue? - Management attributed the growth to strong performance in Private Cloud and the adoption of HPE Alletra MP Storage, with no unusual large deals impacting the results [121][125][130] Question: How is the company managing gross margin degradation? - Management explained that the decline in gross margin was primarily due to a lower contribution from Intelligent Edge revenue, but gross profit dollars increased year-over-year [94][96][98] Question: What is the outlook for traditional servers in the upcoming quarter? - Management confirmed expectations for traditional servers to be flattish to slightly up sequentially, driven by ongoing momentum and the transition to Gen11 products [104][105][107]

Thursday, December 5, 2024 All good things come to an end. So it is with this latest run of all-time highs hit during the last week or so of trading: all major indexes closed out today's session in the red. The Dow slid -248 points, -0.55%, while the S&P 500 — fresh off its 56th record closing high this year so far — slipped -11 points, -0.19%. The Nasdaq dropped -34 points on the day, -0.18%, while the small-cap Russell 2000 shed -25 points, -1.06%. It looks to be a bit of a wait-and-see thing with tomorro ...

Hewlett Packard Enterprise (HPE) reported $8.46 billion in revenue for the quarter ended October 2024, representing a year-over-year increase of 15.1%. EPS of $0.58 for the same period compares to $0.52 a year ago.The reported revenue represents a surprise of +2.81% over the Zacks Consensus Estimate of $8.23 billion. With the consensus EPS estimate being $0.55, the EPS surprise was +5.45%.While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- and how they compare ...

Hewlett Packard Enterprise (HPE) came out with quarterly earnings of $0.58 per share, beating the Zacks Consensus Estimate of $0.55 per share. This compares to earnings of $0.52 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 5.45%. A quarter ago, it was expected that this information technology products and services provider would post earnings of $0.46 per share when it actually produced earnings of $0.50, delivering a surpr ...

Revenue Performance - Q4 revenue reached $8.5 billion, a 15% increase from the prior-year period[4] - Annualized revenue run-rate (ARR) was $1.9 billion, up 49% year-over-year[4] - Net revenue for the three months ended October 31, 2024, was $8,458 million, a 9.6% increase from $7,710 million in the previous quarter[19] - For the year ended October 31, 2024, net revenue was $30,127 million, a 3.4% increase from $29,135 million in the previous year[21] - Total consolidated net revenue for the year ended October 31, 2024, reached $30,127 million, compared to $29,135 million in the prior year, reflecting an increase of 3.4%[35] - Total consolidated net revenue for the three months ended October 31, 2024, was $8,458 million, a 10% increase from $7,710 million in the previous quarter and a 15% increase year-over-year from $7,351 million[37] Earnings and Profitability - GAAP diluted net EPS was $0.99, up 102% from the prior-year period, exceeding guidance[5] - Net earnings attributable to common stockholders for the quarter were $1,341 million, compared to $512 million in the previous quarter, representing a significant increase of 161.4%[19] - Basic earnings per share for the quarter were $1.02, up from $0.39 in the previous quarter, indicating a 161.5% increase[19] - Net earnings attributable to Hewlett Packard Enterprise (HPE) for the year ended October 31, 2024, increased to $2,579 million, up from $2,025 million in the previous year, representing a growth of 27.3%[31] - GAAP net earnings attributable to HPE for the three months ended October 31, 2024, were $1,366 million, compared to $642 million for the same period in 2023, representing a 113% increase[27] - Non-GAAP net earnings attributable to common stockholders for the three months ended October 31, 2024, were $770 million, up from $680 million in the same period last year, reflecting a 13.24% increase[27] Cash Flow and Dividends - Free cash flow (FCF) was $1.5 billion, a decrease of $821 million from the prior-year period[5] - Free cash flow for the three months ended October 31, 2024, was $1,500 million, compared to $669 million for the previous quarter, indicating a significant increase[29] - Cash dividends declared per share for the quarter were $0.52, compared to $0.48 in the previous year[21] - The Board declared a cash dividend of $0.13 per share, payable on January 16, 2025[7] Segment Performance - Server revenue was $4.7 billion, up 32% year-over-year, with an operating profit margin of 11.6%[6] - Hybrid Cloud revenue was $1.6 billion, up 18% year-over-year, with a 7.7% operating profit margin[6] - Intelligent Edge revenue was $1.1 billion, down 20% year-over-year, with a 24.4% operating profit margin[6] - The Server segment generated $16,205 million in revenue for the year ended October 31, 2024, compared to $14,361 million in the previous year, marking a growth of 12.9%[35] - The Hybrid Cloud segment reported revenue of $5,386 million for the year ended October 31, 2024, slightly down from $5,493 million, indicating a decrease of 2.0%[35] - The Intelligent Edge segment reported revenue of $4,532 million for the year ended October 31, 2024, down from $5,379 million, reflecting a decrease of 15.7%[35] Assets and Liabilities - Total current assets as of October 31, 2024, were $33,457 million, up from $18,948 million as of October 31, 2023, showing an increase of 76.73%[30] - Total assets increased to $71,262 million as of October 31, 2024, from $57,153 million a year earlier, marking a growth of 24.7%[30] - Long-term debt as of October 31, 2024, was $13,504 million, compared to $7,487 million as of October 31, 2023, reflecting an increase of 80.5%[30] - Cash and cash equivalents increased to $14,846 million as of October 31, 2024, from $4,270 million a year earlier, representing a growth of 248.5%[30] Strategic Initiatives and Future Outlook - HPE expects revenue growth in the mid-teens percentage for Q1 FY 2025[8] - The acquisition of Juniper Networks is expected to close in early 2025, pending regulatory review[9] - The company plans to continue investing in new technologies and market expansion strategies to drive future growth[28] - Transformation costs related to the HPE Next Plan and Cost Optimization and Prioritization Plan are expected to decline significantly beyond fiscal 2024[50] Non-GAAP Measures and Financial Adjustments - Hewlett Packard Enterprise's non-GAAP net earnings for the quarter were significantly impacted by charges related to stock-based compensation, disaster recovery, and divestiture-related exit costs[48] - The company reported a projected non-GAAP income tax rate of 15% for fiscal 2024, up from 14% in fiscal 2023, reflecting changes in its tax structure and geographic earnings mix[51] - Non-GAAP gross profit margin excludes stock-based compensation and other specific charges, providing a clearer view of operational performance[49] - Non-GAAP operating profit margin excludes amortization of intangible assets and other specific charges, reflecting ongoing operational results more accurately[49] - The company emphasizes the importance of non-GAAP measures for providing transparency and facilitating comparisons with industry peers[47]