HPE(HPE) - 2023 Q3 - Quarterly Report

Financial Position - As of July 31, 2023, cash, cash equivalents, and restricted cash totaled $3,132 million, down from$4,763 million as of October 31, 2022[275]. - Total debt increased to $13,352 million as of July 31, 2023, compared to$12,465 million as of October 31, 2022[275]. - As of July 31, 2023, the company had approximately $292 million of recorded liabilities related to uncertain tax positions, with$26 million expected to be paid within one year[295]. - The company anticipates making contributions of approximately $41 million to its non-U.S. pension plans for the remainder of fiscal 2023[293]. - The company expects to make future cash payments of approximately$310 million in connection with approved restructuring plans, including $170 million expected to be paid through the remainder of fiscal 2023[294]. Cash Flow and Investments - Net cash provided by operating activities for the nine months ended July 31, 2023, was$1,585 million, an increase of $28 million compared to the same period in fiscal 2022[276][277]. - Net cash used in investing activities rose by$2.0 billion to $3,186 million for the nine months ended July 31, 2023, primarily due to higher cash utilized in financial collateral activities and business acquisitions[283]. - Free cash flow for the nine months ended July 31, 2023, increased by$118 million compared to the prior year, attributed to favorable currency impacts[285]. - Net cash provided by operating activities for the three months ended July 31, 2023, was $1,525 million, an increase of 21.6$1,254 million in the same period of 2022[304]. - Free cash flow for the three months ended July 31, 2023, was $955 million, up 62.6$587 million in the same period of 2022[304]. - Investment in property, plant, and equipment for the three months ended July 31, 2023, was $671 million, a decrease of 13.2$773 million in the same period of 2022[304]. - Proceeds from the sale of property, plant, and equipment for the three months ended July 31, 2023, were $102 million, compared to$106 million in the same period of 2022[304]. - The effect of exchange rate changes on cash and cash equivalents for the nine months ended July 31, 2023, was a positive $138 million, compared to no effect in the same period of 2022[304]. Revenue and Profitability - For the three months ended July 31, 2023, GAAP net revenue was$7.002 billion, a slight increase from $6.951 billion in the same period of 2022[299]. - GAAP gross profit for the nine months ended July 31, 2023, was$7.680 billion, representing a gross profit margin of 35.3% compared to 33.5% in the same period of 2022[299]. - Non-GAAP earnings from operations for the nine months ended July 31, 2023, were $2.435 billion, with an operating profit margin of 11.2$464 million, or $0.35 per diluted share, compared to$409 million, or $0.31 per diluted share in the same period of 2022[303]. Shareholder Actions - The company repurchased$366 million in shares during the first nine months of fiscal 2023, with a remaining authorization of $1.0 billion for future repurchases[271]. - The company plans to sell its 49$3.5 billion, pending regulatory approvals[272]. Operational Efficiency - The cash conversion cycle increased to 23 days as of July 31, 2023, compared to a negative 14 days as of October 31, 2022[278]. - Days of sales outstanding (DSO) improved to 44 days as of July 31, 2023, down from 47 days as of October 31, 2022[278]. - Days of supply in inventory (DOS) increased to 91 days as of July 31, 2023, compared to 88 days as of October 31, 2022[278]. - The company expects to complete the Cost Optimization and Prioritization Plan by October 31, 2023, which is aimed at improving operational efficiency[313]. Tax and Financial Measures - The projected non-GAAP income tax rate for fiscal 2023 is 14%, consistent with the previous fiscal year[320]. - The company emphasizes the importance of non-GAAP financial measures for providing transparency and facilitating comparisons with industry peers[307]. - The exclusion of non-recurring charges, such as disaster recovery costs, is intended to present a clearer picture of ongoing operational performance[312].