[10-Q] Hewlett Packard Enterprise Company Quarterly Earnings Report
Filing Impact
Filing Sentiment
Form Type
10-Q
Hewlett Packard Enterprise Company (HPE) completed its acquisition of Juniper Networks on July 2, 2025 for $40.00 per share, or approximately $13.4 billion in cash, and began consolidating Juniper results into the Networking segment.
Net revenue was $9.1 billion for the three months ended July 31, 2025 (up 18.5% year-over-year; +17.7% constant currency) and $24.6 billion for the nine months (up 13.6%; +14.0% constant currency). Gross margin was 29.2% for the quarter and 29.0% for nine months; operating margin was 2.7% for the quarter and (1.7)% for nine months, the latter impacted by a $1.4 billion goodwill impairment related to the Hybrid Cloud reporting unit. The Company recorded a three-month income tax benefit of $17 million (effective rate (6.5)%) and recognized discrete tax benefits totaling $106 million in the quarter.
Hewlett Packard Enterprise Company (HPE) ha completato l'acquisizione di Juniper Networks il 2 luglio 2025 a 40,00 dollari per azione, pari a circa 13,4 miliardi di dollari in contanti, e ha iniziato a consolidare i risultati di Juniper nel segmento Networking.
I ricavi netti sono stati di 9,1 miliardi di dollari per i tre mesi conclusi il 31 luglio 2025 (in aumento del 18,5% rispetto all'anno precedente; +17,7% a valuta costante) e di 24,6 miliardi di dollari per i nove mesi (in aumento del 13,6%; +14,0% a valuta costante). Il margine lordo è stato del 29,2% nel trimestre e del 29,0% nei nove mesi; il margine operativo è stato del 2,7% nel trimestre e del (1,7)% nei nove mesi, quest'ultimo influenzato da un impairment del goodwill di 1,4 miliardi di dollari relativo all'unità di reporting Hybrid Cloud. La Società ha registrato un beneficio fiscale trimestrale di 17 milioni di dollari (aliquota effettiva (6,5)%) e ha riconosciuto benefici fiscali discreti per un totale di 106 milioni di dollari nel trimestre.
Hewlett Packard Enterprise Company (HPE) completó la adquisición de Juniper Networks el 2 de julio de 2025 a 40,00 dólares por acción, por un total aproximado de 13,4 mil millones de dólares en efectivo, y comenzó a consolidar los resultados de Juniper en el segmento de Networking.
Los ingresos netos fueron 9,1 mil millones de dólares para los tres meses terminados el 31 de julio de 2025 (un aumento del 18,5% interanual; +17,7% a moneda constante) y 24,6 mil millones de dólares para los nueve meses (un incremento del 13,6%; +14,0% a moneda constante). El margen bruto fue 29,2% en el trimestre y 29,0% en los nueve meses; el margen operativo fue 2,7% en el trimestre y (1,7)% en los nueve meses, este último afectado por un deterioro del fondo de comercio de 1,4 mil millones de dólares relacionado con la unidad informativa Hybrid Cloud. La Compañía registró un beneficio fiscal trimestral de 17 millones de dólares (tasa efectiva (6,5)%) y reconoció beneficios fiscales discretos por un total de 106 millones de dólares en el trimestre.
Hewlett Packard Enterprise Company(HPE)는 2025년 7월 2일 주당 40.00달러, 약 134억 달러 현금으로 Juniper Networks 인수를 완료했으며 Juniper의 실적을 네트워킹 부문에 편입하기 시작했습니다.
순수익은 2025년 7월 31일 종료된 3개월 동안 91억 달러(전년 동기 대비 +18.5%; 환율 영향을 제거하면 +17.7%)였고, 9개월 누계 기준으로는 246억 달러(전년 대비 +13.6%; 환율 영향 제거 시 +14.0%)였습니다. 분기 총마진은 29.2%, 9개월 누계 총마진은 29.0%였고, 영업이익률은 분기 기준 2.7%, 9개월 누계 기준 (1.7)%였으며, 후자는 하이브리드 클라우드 보고 단위와 관련한 14억 달러의 영업권 손상차손의 영향을 받았습니다. 회사는 3개월 동안 1,700만 달러의 법인세 이익(유효세율 (6.5)%)을 기록했으며 분기 중 총 1억 600만 달러의 개별 세제 혜택을 인식했습니다.
Hewlett Packard Enterprise Company (HPE) a finalisé l'acquisition de Juniper Networks le 2 juillet 2025 à 40,00 $ par action, soit environ 13,4 milliards de dollars en espèces, et a commencé à consolider les résultats de Juniper dans la division Networking.
Le chiffre d'affaires net s'est élevé à 9,1 milliards de dollars pour les trois mois clos le 31 juillet 2025 (en hausse de 18,5% sur un an ; +17,7% à taux de change constants) et à 24,6 milliards de dollars pour les neuf mois (en hausse de 13,6% ; +14,0% à taux constants). La marge brute était de 29,2% pour le trimestre et de 29,0% pour les neuf mois ; la marge d'exploitation s'est établie à 2,7% pour le trimestre et à (1,7)% pour les neuf mois, cette dernière étant affectée par une dépréciation du goodwill de 1,4 milliard de dollars liée à l'unité de reporting Hybrid Cloud. La Société a enregistré un avantage d'impôt sur trois mois de 17 millions de dollars (taux effectif (6,5)%) et a reconnu des avantages fiscaux discrets totalisant 106 millions de dollars au cours du trimestre.
Hewlett Packard Enterprise Company (HPE) schloss die Übernahme von Juniper Networks am 2. Juli 2025 zu einem Preis von 40,00 USD je Aktie, entsprechend etwa 13,4 Milliarden USD in bar, ab und begann damit, Junipers Ergebnisse im Networking-Segment zu konsolidieren.
Der Nettoumsatz belief sich auf 9,1 Milliarden USD für die drei Monate zum 31. Juli 2025 (plus 18,5% gegenüber dem Vorjahr; +17,7% konstant Währung) und auf 24,6 Milliarden USD für die neun Monate (plus 13,6%; +14,0% konstant Währung). Die Bruttomarge lag im Quartal bei 29,2% und für neun Monate bei 29,0%; die operative Marge betrug 2,7% im Quartal und (1,7)% für neun Monate, wobei letztere durch eine Goodwill-Abschreibung in Höhe von 1,4 Milliarden USD im Zusammenhang mit der Berichtseinheit Hybrid Cloud belastet wurde. Das Unternehmen verzeichnete einen dreimonatigen Ertragsteuerertrag von 17 Millionen USD (effektiver Steuersatz (6,5)%) und erkannte im Quartal diskrete Steuererleichterungen in Höhe von insgesamt 106 Millionen USD an.
Positive
- Completion of Juniper merger on July 2, 2025 for approximately $13.4 billion, adding AI-native networking capabilities to the Networking segment
- Top-line growth with net revenue of $9.1 billion for the quarter (up 18.5%) and $24.6 billion for nine months (up 13.6%)
- CTG divestiture completed Dec 1, 2024, generating net proceeds of $210 million and a gain of $245 million
- Asset-backed securities issuance of $900 million at a weighted-average rate of 4.673% to diversify funding
- Ongoing shareholder actions: paid quarterly dividend and remaining share repurchase authorization of approximately $0.7 billion
Negative
- $1.4 billion goodwill impairment recorded in Q2 fiscal 2025 related to the Hybrid Cloud reporting unit, reducing carrying value and pressuring operating results
- Margin compression: gross margin down ~2.4 percentage points year-over-year for the quarter and operating margin decline driven by Merger costs
- Increased leverage and financing to fund the Merger, including $3.0 billion and $1.0 billion delayed-draw term loans and higher commercial paper issuance
- Higher unrecognized tax positions increased by $111 million due to the Merger and $485 million remained as of July 31, 2025 (was $724 million on Oct 31, 2024)
- Elevated inventory and supply uncertainty noted due to component updates, GPU transitions and conservative customer acceptance timelines
Insights
TL;DR Revenue grew year-over-year but margins and operating results were pressured by merger and impairment charges.
HPE showed notable top-line growth, driven by higher AUPs in Server, Juniper revenue in Networking, and volume in Hybrid Cloud. However, gross margins contracted and operating margin declined materially for the nine-month period, largely reflecting acquisition-related costs and a $1.4 billion goodwill impairment for Hybrid Cloud. The company increased leverage to fund the Juniper transaction, drawing $3.0 billion and $1.0 billion under delayed-draw term loans and issuing $900 million of asset-backed securities. Key near-term considerations include integration costs, amortization of assumed equity awards, and working capital dynamics given elevated inventory levels.
TL;DR The Juniper acquisition is strategically accretive to Networking but materially affected near-term financials.
HPE paid ~$13.4 billion in cash for Juniper and converted Juniper equity into ~46 million HPE awards, adding significant integration and compensation expense and $563 million of unrecognized pre-tax stock-based compensation. The Merger also increased unrecognized tax positions and required financings including term loan drawdowns and commercial paper issuances. While the acquisition expands HPE's AI-native networking capabilities, it is already a primary driver of higher revenue and short-term volatility in operating results and balance sheet composition.
Hewlett Packard Enterprise Company (HPE) ha completato l'acquisizione di Juniper Networks il 2 luglio 2025 a 40,00 dollari per azione, pari a circa 13,4 miliardi di dollari in contanti, e ha iniziato a consolidare i risultati di Juniper nel segmento Networking.
I ricavi netti sono stati di 9,1 miliardi di dollari per i tre mesi conclusi il 31 luglio 2025 (in aumento del 18,5% rispetto all'anno precedente; +17,7% a valuta costante) e di 24,6 miliardi di dollari per i nove mesi (in aumento del 13,6%; +14,0% a valuta costante). Il margine lordo è stato del 29,2% nel trimestre e del 29,0% nei nove mesi; il margine operativo è stato del 2,7% nel trimestre e del (1,7)% nei nove mesi, quest'ultimo influenzato da un impairment del goodwill di 1,4 miliardi di dollari relativo all'unità di reporting Hybrid Cloud. La Società ha registrato un beneficio fiscale trimestrale di 17 milioni di dollari (aliquota effettiva (6,5)%) e ha riconosciuto benefici fiscali discreti per un totale di 106 milioni di dollari nel trimestre.
Hewlett Packard Enterprise Company (HPE) completó la adquisición de Juniper Networks el 2 de julio de 2025 a 40,00 dólares por acción, por un total aproximado de 13,4 mil millones de dólares en efectivo, y comenzó a consolidar los resultados de Juniper en el segmento de Networking.
Los ingresos netos fueron 9,1 mil millones de dólares para los tres meses terminados el 31 de julio de 2025 (un aumento del 18,5% interanual; +17,7% a moneda constante) y 24,6 mil millones de dólares para los nueve meses (un incremento del 13,6%; +14,0% a moneda constante). El margen bruto fue 29,2% en el trimestre y 29,0% en los nueve meses; el margen operativo fue 2,7% en el trimestre y (1,7)% en los nueve meses, este último afectado por un deterioro del fondo de comercio de 1,4 mil millones de dólares relacionado con la unidad informativa Hybrid Cloud. La Compañía registró un beneficio fiscal trimestral de 17 millones de dólares (tasa efectiva (6,5)%) y reconoció beneficios fiscales discretos por un total de 106 millones de dólares en el trimestre.
Hewlett Packard Enterprise Company(HPE)는 2025년 7월 2일 주당 40.00달러, 약 134억 달러 현금으로 Juniper Networks 인수를 완료했으며 Juniper의 실적을 네트워킹 부문에 편입하기 시작했습니다.
순수익은 2025년 7월 31일 종료된 3개월 동안 91억 달러(전년 동기 대비 +18.5%; 환율 영향을 제거하면 +17.7%)였고, 9개월 누계 기준으로는 246억 달러(전년 대비 +13.6%; 환율 영향 제거 시 +14.0%)였습니다. 분기 총마진은 29.2%, 9개월 누계 총마진은 29.0%였고, 영업이익률은 분기 기준 2.7%, 9개월 누계 기준 (1.7)%였으며, 후자는 하이브리드 클라우드 보고 단위와 관련한 14억 달러의 영업권 손상차손의 영향을 받았습니다. 회사는 3개월 동안 1,700만 달러의 법인세 이익(유효세율 (6.5)%)을 기록했으며 분기 중 총 1억 600만 달러의 개별 세제 혜택을 인식했습니다.
Hewlett Packard Enterprise Company (HPE) a finalisé l'acquisition de Juniper Networks le 2 juillet 2025 à 40,00 $ par action, soit environ 13,4 milliards de dollars en espèces, et a commencé à consolider les résultats de Juniper dans la division Networking.
Le chiffre d'affaires net s'est élevé à 9,1 milliards de dollars pour les trois mois clos le 31 juillet 2025 (en hausse de 18,5% sur un an ; +17,7% à taux de change constants) et à 24,6 milliards de dollars pour les neuf mois (en hausse de 13,6% ; +14,0% à taux constants). La marge brute était de 29,2% pour le trimestre et de 29,0% pour les neuf mois ; la marge d'exploitation s'est établie à 2,7% pour le trimestre et à (1,7)% pour les neuf mois, cette dernière étant affectée par une dépréciation du goodwill de 1,4 milliard de dollars liée à l'unité de reporting Hybrid Cloud. La Société a enregistré un avantage d'impôt sur trois mois de 17 millions de dollars (taux effectif (6,5)%) et a reconnu des avantages fiscaux discrets totalisant 106 millions de dollars au cours du trimestre.
Hewlett Packard Enterprise Company (HPE) schloss die Übernahme von Juniper Networks am 2. Juli 2025 zu einem Preis von 40,00 USD je Aktie, entsprechend etwa 13,4 Milliarden USD in bar, ab und begann damit, Junipers Ergebnisse im Networking-Segment zu konsolidieren.
Der Nettoumsatz belief sich auf 9,1 Milliarden USD für die drei Monate zum 31. Juli 2025 (plus 18,5% gegenüber dem Vorjahr; +17,7% konstant Währung) und auf 24,6 Milliarden USD für die neun Monate (plus 13,6%; +14,0% konstant Währung). Die Bruttomarge lag im Quartal bei 29,2% und für neun Monate bei 29,0%; die operative Marge betrug 2,7% im Quartal und (1,7)% für neun Monate, wobei letztere durch eine Goodwill-Abschreibung in Höhe von 1,4 Milliarden USD im Zusammenhang mit der Berichtseinheit Hybrid Cloud belastet wurde. Das Unternehmen verzeichnete einen dreimonatigen Ertragsteuerertrag von 17 Millionen USD (effektiver Steuersatz (6,5)%) und erkannte im Quartal diskrete Steuererleichterungen in Höhe von insgesamt 106 Millionen USD an.
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
| (Mark One) | ||||||||
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | ||||||||
| For the quarterly period ended: | |||||
| Or | |||||
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | ||||||||
| For the transition period from to | ||||||||
| Commission file number | |||||
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation or organization) | (I.R.S. employer identification no.) | |||||||
| (Address of principal executive offices) | (Zip code) | |||||||||||||
| (Registrant's telephone number, including area code) | ||||||||||||||
| Securities registered pursuant to Section 12(b) of the Exchange Act: | ||||||||||||||
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”) during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| ☒ | Accelerated filer | ☐ | ||||||||||||
| Non-accelerated filer | ☐ | Smaller reporting company | ||||||||||||
| Emerging growth company | ||||||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
The number of shares of Hewlett Packard Enterprise Company common stock outstanding as of August 28, 2025 was 1,319,450,062 shares, par value $0.01.
Table of Content
HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES
Form 10-Q
For the Quarterly Period Ended July 31, 2025
Table of Contents
| Page | |||||||||||
Forward-Looking Statements | 4 | ||||||||||
Part I. | Financial Information | ||||||||||
Item 1. | Financial Statements (Unaudited) | 6 | |||||||||
Item 2. | Management's Discussion and Analysis of Financial Condition and Results of Operations | 45 | |||||||||
Item 3. | Quantitative and Qualitative Disclosures About Market Risk | 73 | |||||||||
Item 4. | Controls and Procedures | 73 | |||||||||
Part II. | Other Information | ||||||||||
Item 1. | Legal Proceedings | 73 | |||||||||
Item 1A. | Risk Factors | 73 | |||||||||
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 73 | |||||||||
Item 5. | Other Information | 74 | |||||||||
Item 6. | Exhibits | 75 | |||||||||
Exhibit Index | 76 | ||||||||||
Signature | 83 | ||||||||||
Unless otherwise stated or the context otherwise indicates, all references in this Quarterly Report on Form 10-Q to “HPE,” or “the Company” mean Hewlett Packard Enterprise Company and its consolidated subsidiaries.
3
Forward-Looking Statements
This Quarterly Report on Form 10-Q, including “Management's Discussion and Analysis of Financial Condition and Results of Operations” in Item 2 of Part I, contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements involve risks, uncertainties, and assumptions. If the risks or uncertainties ever materialize or the assumptions prove incorrect, the results of Hewlett Packard Enterprise Company and its consolidated subsidiaries (“Hewlett Packard Enterprise”) may differ materially from those expressed or implied by such forward-looking statements and assumptions. The words “believe”, “expect”, “anticipate”, “guide”, “optimistic”, “intend”, “aim”, “will”, “estimates”, “may”, “could”, “should” and similar expressions are intended to identify such forward-looking statements. All statements other than statements of historical fact are statements that could be deemed forward-looking statements, including but not limited to any statements regarding the ongoing integration of Juniper Networks, Inc., and any projections, estimates, or expectations of savings or synergy realizations in connection therewith; any projections, estimations, or expectations of addressable markets and their sizes, revenue (including annualized revenue run-rate), margins, expenses (including stock-based compensation expenses), investments, effective tax rates, interest rates, the impact of tax law changes and related guidance and regulations, the impact of changes in trade policies and restrictions and the uncertainty created thereby, net earnings, net earnings per share, cash flows, liquidity and capital resources, inventory, goodwill, impairment charges, hedges and derivatives and related offsets, order backlog, benefit plan funding, deferred tax assets, share repurchases, currency exchange rates, repayments of debts including our asset-backed debt securities, or other financial items; recent amendments to accounting guidance and any potential impacts on our financial reporting therefrom; any projections or estimations of orders; any projections of the amount, timing, or impact of cost savings or restructuring charges; any statements of the plans, strategies, and objectives of management for future operations, as well as the execution and consummation of cost reduction program, corporate transactions or contemplated acquisitions and dispositions (including but not limited to the disposition of shares of H3C Technologies Co., Limited (“H3C”) and the receipt of proceeds therefrom), research and development expenditures, and any resulting benefit, cost savings, charges, or revenue or profitability improvements; any statements concerning the expected development, performance, market share, or competitive performance relating to our products or services; any statements concerning technological and market trends, the pace of technological innovation, and adoption of new technologies, including artificial intelligence-related and other products and services offered by Hewlett Packard Enterprise; any statements regarding current or future macroeconomic trends or events and the impacts of those trends and events on Hewlett Packard Enterprise and our financial performance, including but not limited to supply chain dynamics, uncertain global trade policies and/or restrictions, and demand for our products and services, and our actions to mitigate such impacts on our business; the scope and duration of the ongoing conflicts and geopolitical tensions, including but not limited to those between Russia and Ukraine, in the Middle East, and between China and the U.S., and our actions in response thereto, and their impacts on our business, operations, liquidity and capital resources, employees, customers, partners, supply chain, financial results, and the world economy; any statements regarding future regulatory trends and the resulting legal and reputational exposure, including but not limited to those relating to environmental, social, governance, cybersecurity, data privacy, and artificial intelligence issues, among others; any statements regarding pending investigations, claims, or disputes; any statements of expectation or belief, including those relating to future guidance and the financial performance of Hewlett Packard Enterprise; and any statements of assumptions underlying any of the foregoing. Risks, uncertainties, and assumptions include the need to address the many challenges facing Hewlett Packard Enterprise’s businesses; the competitive pressures faced by Hewlett Packard Enterprise’s businesses; risks associated with executing Hewlett Packard Enterprise’s strategy; the impact of macroeconomic and geopolitical trends and events, including but not limited to those mentioned above; the need to effectively manage third-party suppliers and distribute Hewlett Packard Enterprise's products and services; the protection of Hewlett Packard Enterprise's intellectual property assets, including intellectual property licensed from third parties and intellectual property shared with its former parent; risks associated with Hewlett Packard Enterprise's international operations (including from geopolitical events, such as those mentioned above); the development and transition of new products and services and the enhancement of existing products and services to meet customer needs and respond to emerging technological trends; the execution of Hewlett Packard Enterprise’s transformation and mix shift of its portfolio of offerings; the execution and performance of contracts by Hewlett Packard Enterprise and its suppliers, customers, clients, and partners, including any impact thereon resulting from macroeconomic or geopolitical events, such as those mentioned above; the hiring and retention of key employees; the execution, integration, consummation, and other risks associated with business combination, disposition, and investment transactions, including but not limited to the risks associated with the disposition of H3C shares and the receipt of proceeds therefrom and successful integration of Juniper Networks, Inc., including our ability to implement our plans and forecasts and realize our anticipated financial and operational benefits with respect to the consolidated business; the execution, timing, and results of any cost reduction program, including estimates and assumptions related to the costs and anticipated benefits of implementing such plan; the impact of changes to privacy, cybersecurity, environmental, global trade, and other governmental regulations; changes in our product, lease, intellectual property, or real estate portfolio; the payment or non-payment of a dividend for any period; the efficacy of using non-GAAP, rather than GAAP, financial measures in business projections and planning; the judgments required in connection with determining revenue recognition; impact of company policies and related compliance; utility of segment realignments; allowances for recovery of receivables and warranty obligations; provisions for, and resolution of, pending investigations, claims, and disputes; the impacts of legal and regulatory changes and related guidance; and other risks that are described
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Table of Content
herein, including but not limited to the items discussed in “Risk Factors” in Item 1A of Part I of the Annual Report on Form 10-K for the fiscal year ended October 31, 2024 and that are otherwise described or updated from time to time in Hewlett Packard Enterprise's subsequent Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and in other filings made with the Securities and Exchange Commission. Hewlett Packard Enterprise assumes no obligation and does not intend to update these forward-looking statements, except as required by applicable law.
5
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements.
Index
| Page | |||||
Condensed Consolidated Statements of Earnings for the three and nine months ended July 31, 2025 and 2024 (Unaudited) | 7 | ||||
Condensed Consolidated Statements of Comprehensive Income for the three and nine months ended July 31, 2025 and 2024 (Unaudited) | 8 | ||||
Condensed Consolidated Balance Sheets as of July 31, 2025 (Unaudited) and October 31, 2024 (Audited) | 9 | ||||
Condensed Consolidated Statements of Cash Flows for the nine months ended July 31, 2025 and 2024 (Unaudited) | 10 | ||||
Condensed Consolidated Statements of Stockholders' Equity for the three and nine months ended July 31, 2025 and 2024 (Unaudited) | 11 | ||||
Notes to Condensed Consolidated Financial Statements (Unaudited) | 14 | ||||
Note 1: Overview and Summary of Significant Accounting Policies | 14 | ||||
Note 2: Segment Information | 15 | ||||
Note 3: Transformation Programs | 17 | ||||
Note 4: Retirement Benefit Plans | 18 | ||||
Note 5: Taxes on Earnings | 18 | ||||
Note 6: Balance Sheet Details | 20 | ||||
Note 7: Accounting for Leases as a Lessor | 24 | ||||
Note 8: Acquisitions and Dispositions | 27 | ||||
Note 9: Goodwill | 29 | ||||
Note 10: Fair Value | 31 | ||||
Note 11: Financial Instruments | 34 | ||||
Note 12: Borrowings | 38 | ||||
Note 13: Stockholders' Equity | 39 | ||||
Note 14: Net Earnings (Loss) Per Share | 40 | ||||
Note 15: Litigation, Contingencies, and Commitments | 41 | ||||
Note 16: Subsequent Events | 44 | ||||
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Table of Content
HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES
Condensed Consolidated Statements of Earnings
(Unaudited)
| For the three months ended July 31, | For the nine months ended July 31, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| In millions, except per share amounts | |||||||||||||||||||||||
| Net Revenue: | |||||||||||||||||||||||
| Products | $ | $ | $ | $ | |||||||||||||||||||
| Services | |||||||||||||||||||||||
| Financing income | |||||||||||||||||||||||
| Total net revenue | |||||||||||||||||||||||
| Costs and Expenses: | |||||||||||||||||||||||
| Cost of products (exclusive of amortization shown separately below) | |||||||||||||||||||||||
| Cost of services (exclusive of amortization shown separately below) | |||||||||||||||||||||||
| Financing cost | |||||||||||||||||||||||
| Research and development | |||||||||||||||||||||||
| Selling, general and administrative | |||||||||||||||||||||||
| Amortization of intangible assets | |||||||||||||||||||||||
| Impairment of goodwill | |||||||||||||||||||||||
| Transformation costs | |||||||||||||||||||||||
| Acquisition, disposition and other charges | |||||||||||||||||||||||
| Total costs and expenses | |||||||||||||||||||||||
| Earnings (loss) from operations | ( | ||||||||||||||||||||||
| Interest and other, net | ( | ( | |||||||||||||||||||||
| Gain on sale of a business | |||||||||||||||||||||||
| Earnings from equity interests | |||||||||||||||||||||||
| Earnings (loss) before provision for taxes | ( | ||||||||||||||||||||||
| Benefit (provision) for taxes | ( | ( | ( | ||||||||||||||||||||
| Net earnings (loss) attributable to HPE | ( | ||||||||||||||||||||||
| Preferred stock dividends | ( | ( | |||||||||||||||||||||
| Net earnings (loss) attributable to common stockholders | $ | $ | $ | ( | $ | ||||||||||||||||||
| Net Earnings (Loss) Per Share Attributable to Common Stockholders: | |||||||||||||||||||||||
| Basic | $ | $ | $ | ( | $ | ||||||||||||||||||
| Diluted | $ | $ | $ | ( | $ | ||||||||||||||||||
| Weighted-average Shares Used to Compute Net Earnings (Loss) Per Share: | |||||||||||||||||||||||
| Basic | |||||||||||||||||||||||
| Diluted | |||||||||||||||||||||||
The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.
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HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES
Condensed Consolidated Statements of Comprehensive Income
(Unaudited)
| For the three months ended July 31, | For the nine months ended July 31, | ||||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||||||||||||||
| In millions | |||||||||||||||||||||||||||||||||||
| Net earnings (loss) attributable to HPE | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||
| Other Comprehensive Income (Loss) Before Taxes | |||||||||||||||||||||||||||||||||||
| Change in Net Unrealized Gains (Losses) on Available-for-sale Securities: | |||||||||||||||||||||||||||||||||||
| Net unrealized gains (losses) arising during the period | ( | ||||||||||||||||||||||||||||||||||
| ( | |||||||||||||||||||||||||||||||||||
| Change in Net Unrealized Components of Cash Flow Hedges: | |||||||||||||||||||||||||||||||||||
| Net unrealized gains (losses) arising during the period | ( | ( | ( | ||||||||||||||||||||||||||||||||
| Net losses reclassified into earnings | |||||||||||||||||||||||||||||||||||
| ( | ( | ( | |||||||||||||||||||||||||||||||||
| Change in Unrealized Components of Defined Benefit Plans: | |||||||||||||||||||||||||||||||||||
| Net unrealized losses arising during the period | ( | ( | ( | ||||||||||||||||||||||||||||||||
| Amortization of net actuarial loss and prior service benefit | |||||||||||||||||||||||||||||||||||
| Curtailments, settlements and other | |||||||||||||||||||||||||||||||||||
| Change in Cumulative Translation Adjustment: | ( | ( | ( | ( | |||||||||||||||||||||||||||||||
| Other Comprehensive Income (Loss) Before Taxes | ( | ( | |||||||||||||||||||||||||||||||||
| (Provision) Benefit for Taxes | ( | ||||||||||||||||||||||||||||||||||
| Other Comprehensive Income (Loss), Net of Taxes | ( | ||||||||||||||||||||||||||||||||||
| Comprehensive Income (Loss) | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||
The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.
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HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
| As of | |||||||||||
| July 31, 2025 | October 31, 2024 | ||||||||||
| (Unaudited) | (Audited) | ||||||||||
| In millions, except par value and shares | |||||||||||
| ASSETS | |||||||||||
| Current Assets: | |||||||||||
| Cash and cash equivalents | $ | $ | |||||||||
| Accounts receivable, net of allowances | |||||||||||
| Financing receivables, net of allowances | |||||||||||
| Inventory | |||||||||||
| Assets held for sale | |||||||||||
| Other current assets | |||||||||||
| Total current assets | |||||||||||
| Property, plant and equipment, net | |||||||||||
| Long-term financing receivables and other assets | |||||||||||
| Investments in equity interests | |||||||||||
| Goodwill | |||||||||||
| Intangible assets, net | |||||||||||
| Total assets | $ | $ | |||||||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||||
| Current Liabilities: | |||||||||||
| Notes payable and short-term borrowings | $ | $ | |||||||||
| Accounts payable | |||||||||||
| Employee compensation and benefits | |||||||||||
| Taxes on earnings | |||||||||||
| Deferred revenue | |||||||||||
| Liabilities held for sale | |||||||||||
| Other accrued liabilities | |||||||||||
| Total current liabilities | |||||||||||
| Long-term debt | |||||||||||
| Other non-current liabilities | |||||||||||
| Commitments and Contingencies | |||||||||||
| HPE Stockholders' Equity: | |||||||||||
Common stock, $ | |||||||||||
| Additional paid-in capital | |||||||||||
| Accumulated deficit | ( | ( | |||||||||
| Accumulated other comprehensive loss | ( | ( | |||||||||
| Total HPE stockholders' equity | |||||||||||
| Non-controlling interests | |||||||||||
| Total stockholders' equity | |||||||||||
| Total liabilities and stockholders' equity | $ | $ | |||||||||
The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.
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HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows (Unaudited)
| For the nine months ended July 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| In millions | |||||||||||
| Cash Flows from Operating Activities: | |||||||||||
| Net (loss) earnings attributable to HPE | $ | ( | $ | ||||||||
| Adjustments to Reconcile Net (Loss) Earnings Attributable to HPE to Net Cash Provided by Operating Activities: | |||||||||||
| Depreciation and amortization | |||||||||||
| Impairment of goodwill | |||||||||||
| Stock-based compensation expense | |||||||||||
| Provision for inventory and credit losses | |||||||||||
| Restructuring (credit) charges | ( | ||||||||||
| Cost reduction program | |||||||||||
| Deferred taxes on earnings | ( | ||||||||||
| Earnings from equity interests | ( | ( | |||||||||
| Gain on sale of a business | ( | ||||||||||
| Dividends received from equity investees | |||||||||||
| H3C divestiture related severance costs | |||||||||||
| Other, net | |||||||||||
| Changes in Operating Assets and Liabilities, Net of Acquisitions: | |||||||||||
| Accounts receivable | ( | ( | |||||||||
| Financing receivables | ( | ( | |||||||||
| Inventory | ( | ||||||||||
| Accounts payable | ( | ||||||||||
| Taxes on earnings | ( | ||||||||||
| Restructuring | ( | ( | |||||||||
| Other assets and liabilities | ( | ( | |||||||||
| Net cash provided by operating activities | |||||||||||
| Cash Flows from Investing Activities: | |||||||||||
| Investment in property, plant and equipment and software assets | ( | ( | |||||||||
| Proceeds from sale of property, plant and equipment | |||||||||||
| Purchases of equity investments | ( | ( | |||||||||
| Proceeds from sale of available-for-sale securities | |||||||||||
| Proceeds from maturities and redemptions of available-for-sale securities | |||||||||||
| Financial collateral posted | ( | ( | |||||||||
| Financial collateral received | |||||||||||
| Payments made in connection with business acquisitions, net of cash acquired | ( | ||||||||||
| Proceeds from sale of a business | |||||||||||
| Net cash used in investing activities | ( | ( | |||||||||
| Cash Flows from Financing Activities: | |||||||||||
| Short-term borrowings with original maturities less than 90 days, net | ( | ||||||||||
| Proceeds from debt, net of issuance costs | |||||||||||
| Payment of debt | ( | ( | |||||||||
| Net payments related to stock-based award activities | ( | ( | |||||||||
| Repurchases of common stock | ( | ( | |||||||||
| Cash dividends paid to non-controlling interests, net of contributions | ( | ( | |||||||||
| Cash dividends paid to preferred stockholders | ( | ||||||||||
| Cash dividends paid to common stockholders | ( | ( | |||||||||
| Net cash provided by (used in) financing activities | ( | ||||||||||
| Effect of exchange rate changes on cash, cash equivalents, and restricted cash | ( | ||||||||||
| Change in cash, cash equivalents and restricted cash | ( | ( | |||||||||
| Cash, cash equivalents and restricted cash at beginning of period | |||||||||||
| Cash, cash equivalents and restricted cash at end of period | $ | $ | |||||||||
The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.
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HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES
Condensed Consolidated Statements of Stockholders' Equity (Unaudited)
| Common Stock | Preferred Stock | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| For the three months ended July 31, 2025 | Number of Shares | Par Value | Number of Series C Mandatory Convertible Shares | Additional Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Loss | Equity Attributable to the Company | Non- controlling Interests | Total Equity | |||||||||||||||||||||||||||||||||||||||||||||||
| In millions, except number of shares in thousands | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance as of April 30, 2025 | $ | $ | $ | ( | $ | ( | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||
| Net earnings attributable to HPE | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive income | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Comprehensive income | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation expense | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Tax withholding related to vesting of employee stock plans | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Consideration for replacement of Juniper Networks Inc.’s equity awards | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of common stock in connection with employee stock plans and other | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Dividends on preferred stock accrued/declared ($ | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash dividends declared ($ | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance as of July 31, 2025 | $ | $ | $ | ( | $ | ( | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||
11
| Common Stock | Preferred Stock | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| For the nine months ended July 31, 2025 | Number of Shares | Par Value | Number of Series C Mandatory Convertible Shares | Additional Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Loss | Equity Attributable to the Company | Non- controlling Interests | Total Equity | ||||||||||||||||||||||||||||||||||||||||||||
| In millions, except number of shares in thousands | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance as of October 31, 2024 | $ | $ | $ | ( | $ | ( | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||
| Net (loss) earnings attributable to HPE | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive loss | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Comprehensive (loss) income | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation expense | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Tax withholding related to vesting of employee stock plans | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Consideration for replacement of Juniper Networks Inc.’s equity awards | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of common stock in connection with employee stock plans and other | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Repurchases of common stock | ( | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||
Dividends on preferred stock accrued/declared ($ | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||
Cash dividends declared ($ | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
| Balance as of July 31, 2025 | $ | $ | $ | ( | $ | ( | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||
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| Common Stock | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| For the three months ended July 31, 2024 | Number of Shares | Par Value | Additional Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Loss | Equity Attributable to the Company | Non- controlling Interests | Total Equity | |||||||||||||||||||||||||||||||||||||||||||||
| In millions, except number of shares in thousands | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance as of April 30, 2024 | $ | $ | $ | ( | $ | ( | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||
| Net earnings attributable to HPE | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive income | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Comprehensive income | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation expense | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Tax withholding related to vesting of employee stock plans | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of common stock in connection with employee stock plans and other | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Repurchases of common stock | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
Cash dividends declared ($ | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance as of July 31, 2024 | $ | $ | $ | ( | $ | ( | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||
| Common Stock | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| For the nine months ended July 31, 2024 | Number of Shares | Par Value | Additional Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Loss | Equity Attributable to the Company | Non- controlling Interests | Total Equity | |||||||||||||||||||||||||||||||||||||||||||||
| In millions, except number of shares in thousands | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance as of October 31, 2023 | $ | $ | $ | ( | $ | ( | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||
| Net earnings attributable to HPE | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive income | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Comprehensive income | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation expense | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Tax withholding related to vesting of employee stock plans | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of common stock in connection with employee stock plans and other | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Repurchases of common stock | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
Cash dividends declared ($ | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
| Balance as of July 31, 2024 | $ | $ | $ | ( | $ | ( | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||
The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.
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HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
(Unaudited)
Note 1: Overview and Summary of Significant Accounting Policies
Background
Hewlett Packard Enterprise Company (“Hewlett Packard Enterprise,” “HPE,” or the “Company”) is a global technology leader focused on developing intelligent solutions that allow customers to capture, analyze and act upon data seamlessly from edge-to-cloud. Hewlett Packard Enterprise enables customers to accelerate business outcomes by driving new business models, creating new customer and employee experiences, and increasing operational efficiency today and into the future. Hewlett Packard Enterprise's customers range from small- and medium-sized businesses to large global enterprises and governmental entities.
On July 2, 2025, the Company completed the Juniper Networks, Inc. (“Juniper Networks”) merger (the “Merger”). Under the terms of the Agreement and Plan of Merger (the “Merger Agreement”), HPE agreed to pay $40.00 per share of Juniper Networks common stock, issued and outstanding as of July 2, 2025, representing a cash consideration of approximately $13.4 billion. The results of operations of Juniper Networks are included in the unaudited Condensed Consolidated Financial Statements commencing on July 2, 2025. See Note 8, “Acquisitions and Dispositions” to the Condensed Consolidated Financial Statements for additional information.
Basis of Presentation and Consolidation
The Condensed Consolidated Financial Statements of the Company were prepared in accordance with United States (“U.S.”) Generally Accepted Accounting Principles (“GAAP”). The Company’s unaudited Condensed Consolidated Financial Statements include the accounts of the Company and all subsidiaries and affiliates in which the Company has a controlling financial interest or is the primary beneficiary. All intercompany transactions and accounts within the consolidated businesses of the Company have been eliminated. This interim information should be read in conjunction with the Consolidated Financial Statements for the fiscal year ended October 31, 2024 in HPE’s Annual Report on Form 10-K, filed with the U.S. Securities and Exchange Commission (“SEC”) on December 19, 2024. The Condensed Consolidated Balance Sheet for October 31, 2024 was derived from audited financial statements.
Use of Estimates
The preparation of financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in HPE’s Condensed Consolidated Financial Statements and accompanying notes. Actual results may differ materially from those estimates.
Significant Accounting Policies
There have been no significant changes to the Company's significant accounting policies described in Part II, Item 8, Note 1, “Overview and Summary of Significant Accounting Policies,” of the Company's Annual Report on Form 10-K for the fiscal year ended October 31, 2024.
Recently Enacted Accounting Pronouncements
In July 2025, the Financial Accounting Standards Board (“FASB”) issued guidance to provide a practical expedient for measuring expected credit losses on current trade receivables and contract assets by assuming that current conditions remain unchanged over the life of the asset. The amendment is effective for annual and interim periods beginning after December 15, 2025, with early adoption permitted. The Company is currently evaluating the impact of this amendment on its Condensed Consolidated Financial Statements.
In November 2024, the FASB issued guidance to provide disaggregated expense disclosures in the Consolidated Financial Statements. The Company is required to adopt the guidance for its annual period ending October 31, 2028 and all interim periods thereafter, though early adoption is permitted. The Company is currently evaluating the impact of this amendment on its Condensed Consolidated Financial Statements.
In December 2023, the FASB issued guidance to provide disaggregated income tax disclosures on the effective tax rate reconciliation and income taxes paid. The Company is required to adopt the guidance in fiscal 2026, though early adoption is permitted. The Company will adopt the guidance prospectively. Adoption of this new guidance will result in increased disclosures in the “Taxes on Earnings” note in the Company’s Consolidated Financial Statements but will not impact the consolidated financial results.
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Notes to Condensed Consolidated Financial Statements (Continued)
(Unaudited)
In November 2023, the FASB issued guidance to improve the disclosures about a public entity’s reportable segments and address requests from investors for additional, more detailed information about a reportable segment’s expenses. The Company will adopt this guidance for its annual period ending October 31, 2025 and all interim periods thereafter. The Company does not expect the adoption of this guidance to have a significant impact on its Condensed Consolidated Financial Statements.
Note 2: Segment Information
Hewlett Packard Enterprise's operations are organized into five segments for financial reporting purposes: Server, Hybrid Cloud, Networking, Financial Services (“FS”), and Corporate Investments and Other. During the third quarter of fiscal 2025, the Intelligent Edge segment was renamed to Networking. The segment name change did not result in any change to the composition of the Company’s segments and therefore no prior information was recast; further, the designation change did not impact the Company’s Condensed Consolidated Financial Statements. The results of operations of Juniper Networks are included in the Networking segment commencing on July 2, 2025. See Note 8, “Acquisitions and Dispositions” to the Condensed Consolidated Financial Statements for additional information.
Hewlett Packard Enterprise's organizational structure is based on a number of factors that the Chief Operating Decision Maker (“CODM”), who is the Chief Executive Officer, uses to evaluate, view and run the Company's business operations, which include, but are not limited to, customer base and homogeneity of products and technology. The five segments are based on this organizational structure and information reviewed by Hewlett Packard Enterprise's management to evaluate segment results. A summary of the types of products and services within each segment is as follows:
Server consists of general-purpose servers for multi-workload computing and workload-optimized servers to deliver the best performance and value for demanding applications, and integrated systems comprised of software and hardware designed to address High-Performance Computing and Supercomputing (including exascale applications), Artificial Intelligence (“AI”), Data Analytics, and Transaction Processing workloads for government and commercial customers globally. This portfolio of products includes the secure and versatile HPE ProLiant Rack and Tower servers; HPE Synergy, a composable infrastructure for traditional and cloud-native applications; HPE Scale Up Servers product lines for critical applications, including large enterprise software applications and data analytics platforms; HPE Edgeline servers; HPE Cray EX; HPE Cray XD (formerly known as HPE Apollo); and HPE NonStop. The Server segment’s offerings also include operational and support services sold with systems and as standalone services.
Hybrid Cloud offers a wide variety of cloud-native and hybrid solutions across storage, private cloud and the infrastructure software-as-a-service (“SaaS”) space. Storage includes data storage and data management offerings with the HPE Alletra Storage portfolio; unstructured data solutions and analytics for AI; data protection and archiving; and storage networking. It also includes AIOps-driven intelligence with HPE InfoSight and HPE CloudPhysics. In private cloud, the HPE GreenLake offerings include new cloud-native offerings and capabilities for virtual machines, containers, and bare metal; a full suite of private cloud offerings that enable customers to self-manage or choose a fully managed experience; and a portfolio of world-class Private Cloud AI infrastructure delivered as-a-service (“aaS”). This segment also provides self-service private cloud on-demand with HPE GreenLake for Private Cloud Business Edition, which includes an integrated VM Essentials virtualization software. Infrastructure software includes monitoring and observability for day two operations and beyond through the Company’s acquisition of OpsRamp and unified data access through HPE Ezmeral Data Fabric and analytics suite, which helps move and transform data for use in AI and other applications. The Hybrid Cloud segment also includes data lifecycle management and protection through its suite of offerings, including Zerto Disaster Recovery.
Networking develops and sells high-performance network and security products and services that empower customers of all sizes to build scalable, reliable, secure, agile, and efficient automated networks. Our platforms are purpose-built using AI to deliver secure and sustainable user experiences from the edge to the data center and cloud. Our solutions include hardware products such as Wi-Fi and private cellular access points; QFX, EX, and CX switches; MX and PTX routers; and gateways. Additionally, HPE provides software products, such as Mist and Aruba Central for cloud-based and on-premise management, network access control, software-defined wide area networking, network security, analytics and assurance, and private cellular core software. The Company also offers professional and support services and education and training programs, as well as aaS and flexible consumption models through the HPE GreenLake platform.
Financial Services provides flexible investment solutions, such as leasing, financing, IT consumption, utility programs, and asset management services for customers that facilitate unique technology deployment models and the acquisition of complete IT solutions, including hardware, software, and services from Hewlett Packard Enterprise and others. The FS segment also supports financial solutions for on-premise flexible consumption models, such as the HPE GreenLake cloud.
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Notes to Condensed Consolidated Financial Statements (Continued)
(Unaudited)
Corporate Investments and Other includes the Advisory and Professional Services (“A & PS”) business, which primarily offers consultative-led services, HPE and partner technology expertise and advice, implementation services as well as complex solution engagement capabilities; and Hewlett Packard Labs, which is responsible for research and development.
Segment Policy
Hewlett Packard Enterprise does not allocate to its segments certain operating expenses, which it manages at the corporate level. These unallocated operating costs include certain corporate costs and eliminations, stock-based compensation expense, amortization of intangible assets, transformation costs, H3C divestiture related severance costs, severance costs associated with the cost reduction program, acquisition, disposition and other charges, and impairment of goodwill. Total assets by segment are not presented as that information is not used to allocate resources or assess performance at the segment level and is not reviewed by the CODM.
Segment Operating Results
Segment net revenue and operating results were as follows:
| Server | Hybrid Cloud | Networking | Financial Services | Corporate Investments and Other | Total | ||||||||||||||||||||||||||||||||||||
| In millions | |||||||||||||||||||||||||||||||||||||||||
Three months ended July 31, 2025: | |||||||||||||||||||||||||||||||||||||||||
| Net revenue | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||
| Intersegment net revenue | ( | ( | |||||||||||||||||||||||||||||||||||||||
| Total segment net revenue | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||
| Segment earnings (loss) from operations | $ | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||||||
Three months ended July 31, 2024: | |||||||||||||||||||||||||||||||||||||||||
Net revenue(1) | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||
| Intersegment net revenue | |||||||||||||||||||||||||||||||||||||||||
Total segment net revenue(1) | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||
Segment earnings (loss) from operations(1) | $ | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||||||
Nine months ended July 31, 2025: | |||||||||||||||||||||||||||||||||||||||||
| Net revenue | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||
| Intersegment net revenue | ( | ||||||||||||||||||||||||||||||||||||||||
| Total segment net revenue | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||
| Segment earnings (loss) from operations | $ | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||||||
Nine months ended July 31, 2024: | |||||||||||||||||||||||||||||||||||||||||
Net revenue(1) | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||
| Intersegment net revenue | |||||||||||||||||||||||||||||||||||||||||
Total segment net revenue(1) | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||
Segment earnings (loss) from operations(1) | $ | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||||||
(1) Effective at the beginning of the first quarter of fiscal 2025, in order to align its segment financial reporting more closely with its current business structure, HPE implemented an organizational change with the transfer of certain managed services, previously reported within the Server segment, to the Hybrid Cloud segment.
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HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements (Continued)
(Unaudited)
| For the three months ended July 31, | For the nine months ended July 31, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| In millions | |||||||||||||||||||||||
| Net Revenue: | |||||||||||||||||||||||
| Total segments | $ | $ | $ | $ | |||||||||||||||||||
| Eliminations of intersegment net revenue | ( | ( | ( | ( | |||||||||||||||||||
| Total consolidated net revenue | $ | $ | $ | $ | |||||||||||||||||||
| Earnings (Loss) Before Taxes: | |||||||||||||||||||||||
| Total segment earnings from operations | $ | $ | $ | $ | |||||||||||||||||||
| Unallocated corporate costs and eliminations | ( | ( | ( | ( | |||||||||||||||||||
| Stock-based compensation expense | ( | ( | ( | ( | |||||||||||||||||||
| Amortization of intangible assets | ( | ( | ( | ( | |||||||||||||||||||
| Impairment of goodwill | ( | ||||||||||||||||||||||
| Transformation costs | ( | ( | ( | ||||||||||||||||||||
| Gain on sale of a business | |||||||||||||||||||||||
| H3C divestiture related severance costs | ( | ||||||||||||||||||||||
| Cost reduction program | ( | ( | |||||||||||||||||||||
Acquisition, disposition and other charges(1) | ( | ( | ( | ( | |||||||||||||||||||
Interest and other, net(2) | ( | ( | |||||||||||||||||||||
| Earnings from equity interests | |||||||||||||||||||||||
| Total earnings (loss) before provision for taxes | $ | $ | $ | ( | $ | ||||||||||||||||||
(1) Includes disaster recovery and divestiture related exit costs. For the three and nine months ended July 31, 2025, Acquisition, disposition and other charges include non-cash amortization of fair value adjustment for inventory in connection with the acquisition of Juniper Networks, which was recorded in cost of sales.
Geographic Information
Net revenue by geographic region was as follows:
| For the three months ended July 31, | For the nine months ended July 31, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| In millions | |||||||||||||||||||||||
| Americas: | |||||||||||||||||||||||
| United States | $ | $ | $ | $ | |||||||||||||||||||
| Americas excluding United States | |||||||||||||||||||||||
| Total Americas | |||||||||||||||||||||||
| Europe, Middle East and Africa | |||||||||||||||||||||||
| Asia Pacific and Japan | |||||||||||||||||||||||
| Total consolidated net revenue | $ | $ | $ | $ | |||||||||||||||||||
Note 3: Transformation Programs
Transformation programs are comprised of the Cost Optimization and Prioritization Plan and the HPE Next Plan. The primary elements of both plans were completed by the end of fiscal 2024.
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Notes to Condensed Consolidated Financial Statements (Continued)
(Unaudited)
Restructuring activities related to the Company's employees and infrastructure under the Cost Optimization and Prioritization Plan and HPE Next Plan are presented in the table below:
| Cost Optimization and Prioritization Plan | HPE Next Plan | ||||||||||||||||||||||
| Employee Severance | Infrastructure and other | Infrastructure and other | |||||||||||||||||||||
| In millions | |||||||||||||||||||||||
Liability as of October 31, 2024 | $ | $ | $ | ||||||||||||||||||||
| Credits | ( | ( | |||||||||||||||||||||
| Cash payments | ( | ( | ( | ||||||||||||||||||||
| Non-cash items | ( | ( | |||||||||||||||||||||
Liability as of July 31, 2025 | $ | $ | $ | ||||||||||||||||||||
Total costs incurred to date, as of July 31, 2025 | $ | $ | $ | ||||||||||||||||||||
Total expected costs to be incurred as of July 31, 2025 | $ | $ | $ | ||||||||||||||||||||
Note 4: Retirement Benefit Plans
The Company's net pension benefit (credit) cost for defined benefit plans recognized in the Condensed Consolidated Statements of Earnings was as follows:
| For the three months ended July 31, | For the nine months ended July 31, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| In millions | |||||||||||||||||||||||
| Service cost | $ | $ | $ | $ | |||||||||||||||||||
Interest cost(1) | |||||||||||||||||||||||
Expected return on plan assets(1) | ( | ( | ( | ( | |||||||||||||||||||
Amortization and Deferrals(1): | |||||||||||||||||||||||
| Actuarial loss | |||||||||||||||||||||||
| Prior service benefit | ( | ( | ( | ( | |||||||||||||||||||
| Net periodic benefit (credit) cost | ( | ( | |||||||||||||||||||||
Settlement loss and special termination benefits(1) | |||||||||||||||||||||||
| Total net benefit (credit) cost | $ | ( | $ | $ | ( | $ | |||||||||||||||||
(1)These non-service components were included in Interest and other, net in the Condensed Consolidated Statements of Earnings.
Note 5: Taxes on Earnings
Benefit (Provision) for Taxes
For the three months ended July 31, 2025 and 2024, the Company recorded income tax benefit of $17 million and income tax expense of $96 million, respectively, which reflects an effective tax rate of (6.5 )% and 15.8 %, respectively. For the nine months ended July 31, 2025 and 2024, the Company recorded income tax expense of $94 million and $323 million, respectively, which reflects an effective tax rate of (359.9 )% and 21.0 %, respectively. For the three and nine months ended July 31, 2025 and the three months ended July 31, 2024 the effective tax rate generally differs from the U.S. federal statutory rate of
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HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements (Continued)
(Unaudited)
21.0% due to favorable tax rates associated with certain earnings from the Company’s operations in lower tax jurisdictions throughout the world but is also impacted by discrete tax adjustments during each fiscal period. The effective tax rate for the nine months ended July 31, 2025 also included the effects of the non-deductible goodwill impairment.
For the three and nine months ended July 31, 2025, the Company recorded $106 million and $217 million of net income tax benefits, respectively, related to various items discrete to the period. For the three months ended July 31, 2025, this amount primarily included $76 million of net income tax benefits related to the release of certain state valuation allowances and $21 million of net income tax benefits related to costs incurred as a result of the Merger, and $4 million of net income tax benefits related to acquisition, disposition and other related charges. For the nine months ended July 31, 2025, this amount primarily included $76 million of net income tax benefits related to the release of certain state valuation allowances, $33 million of net income tax benefits related to the cost reduction program, $33 million of net income tax benefits related to the favorable resolution of non-U.S. tax litigation matters, $30 million of net excess tax benefits related to stock-based compensation, $29 million of net income tax benefits related to costs incurred as a result of the Merger, $16 million of net income tax benefits related to the settlement of U.S. tax audit matters, and $9 million of net income tax benefits related to acquisition, disposition and other related charges, partially offset by $22 million of net income tax charges resulting from the gain on the Communications Technology Group (“CTG”) divestiture.
For the three and nine months ended July 31, 2024, the Company recorded immaterial
Uncertain Tax Positions
As of July 31, 2025 and October 31, 2024, the amount of unrecognized tax benefits was $485 million and $724 million, respectively, of which up to $345 million and $344 million, respectively, would affect the Company's effective tax rate if realized as of their respective periods. During the second quarter of fiscal 2025, the Company effectively settled with the U.S. Internal Revenue Service ("IRS") regarding its audit of the Company’s fiscal 2017 through 2019 U.S. federal income tax returns, resulting in a reduction in the Company's unrecognized tax benefits of approximately $340 million; however, the effective settlement did not result in a material impact to the Company’s Condensed Consolidated Statement of Earnings and Condensed Consolidated Balance Sheet. The resolution of the audit resulted in the release of tax reserves that were predominantly related either to adjustments to foreign tax credits that carried a full valuation allowance or to the timing of intercompany royalty revenue recognition, neither of which affected the Company’s effective tax rate. Unrecognized tax benefits increased $111 million due to the Merger.
For tax liabilities pertaining to unrecognized tax benefits, the Company recognizes interest income from favorable settlements and interest expense and penalties in Benefit (provision) for taxes in the Condensed Consolidated Statements of Earnings. The Company recognized $7 million of interest income for the nine months ended July 31, 2025 and the interest expense was not material for the nine months ended July 31, 2024. The increase in interest income resulted from the favorable resolution of non-U.S. tax litigation matters, partially offset with the addition of interest accrued on unrecognized tax benefits due to the Merger. As of July 31, 2025 and October 31, 2024, the Company had accrued $52 million and $58 million, respectively, for interest and penalties in the Condensed Consolidated Balance Sheets.
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HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements (Continued)
(Unaudited)
Deferred Tax Assets and Liabilities
Deferred tax assets and liabilities included in the Condensed Consolidated Balance Sheets were as follows:
| As of | |||||||||||
| July 31, 2025 | October 31, 2024 | ||||||||||
| In millions | |||||||||||
| Deferred tax assets | $ | $ | |||||||||
| Deferred tax liabilities | ( | ( | |||||||||
| Deferred tax assets net of deferred tax liabilities | $ | $ | |||||||||
Net deferred tax assets increased $26 million as a result of discrete tax benefits from the release of certain state valuation allowances of $76 million and the settlement of U.S. tax audit matters of $16 million, which were partially offset by a decrease of $65 million due to the Merger.
Note 6: Balance Sheet Details
Cash, Cash Equivalents and Restricted Cash
| As of | |||||||||||
| July 31, 2025 | October 31, 2024 | ||||||||||
| In millions | |||||||||||
| Cash and cash equivalents | $ | $ | |||||||||
Restricted cash(1) | |||||||||||
| Total | $ | $ | |||||||||
(1) The Company included restricted cash in Other current assets in the accompanying Condensed Consolidated Balance Sheets.
Inventory
| As of | |||||||||||
| July 31, 2025 | October 31, 2024 | ||||||||||
| In millions | |||||||||||
| Purchased parts and fabricated assemblies | $ | $ | |||||||||
| Finished goods | |||||||||||
| Total | $ | $ | |||||||||
The Company values inventory at the lower of cost or net realizable value. Cost is computed using standard cost which approximates actual cost on a first-in, first-out basis. At each reporting period, the Company assesses the value of its inventory and writes down the cost of inventory to its net realizable value if required, for estimated excess or obsolescence. Factors influencing these adjustments include changes in future demand forecasts, market conditions, technological changes, product life-cycle and development plans, component cost trends, product pricing, physical deterioration, and quality issues. If in any period the Company anticipates a change in those factors to be less favorable than its previous estimates, additional inventory write-downs may be required and could materially impact gross margin. The write down for excess or obsolescence is charged to the provision for inventory, which is a component of cost of sales in the Condensed Consolidated Statements of Earnings. At the point of the loss recognition, a new, lower cost basis for that inventory is established, and subsequent changes in facts and circumstances do not result in the restoration or increase in that newly established cost basis. The Company recorded a net provision for excess or obsolete inventory to cost of sales totaling $122 million and $271 million for the three and nine months ended July 31, 2025, respectively. For the fiscal year ended October 31, 2024, the Company recorded a net provision for excess or obsolete inventory to cost of sales totaling $89 million.
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HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements (Continued)
(Unaudited)
Property, Plant and Equipment, net
| As of | |||||||||||
| July 31, 2025 | October 31, 2024 | ||||||||||
| In millions | |||||||||||
| Land | $ | $ | |||||||||
| Buildings and leasehold improvements | |||||||||||
| Machinery and equipment, including equipment held for lease | |||||||||||
| Gross property, plant and equipment | |||||||||||
| Accumulated depreciation | ( | ( | |||||||||
| Property, plant and equipment, net | $ | $ | |||||||||
Supplier Financing Arrangements
The Company enters into supplier financing arrangements with external financial institutions. Under these arrangements, suppliers can choose to settle outstanding payment obligations at a discount. The Company holds no economic interest in suppliers' participation, nor does it provide guarantees or pledge assets under these arrangements. Invoices are settled with the financial institutions based on the original supplier payment terms. These arrangements do not alter the Company's rights and obligations towards suppliers, including scheduled payment terms. Liabilities associated with the funded participation in these arrangements, are presented within Accounts payable on the Consolidated Balance Sheets, amounted to $435 million, and $466 million as of July 31, 2025 and October 31, 2024, respectively.
Warranties
The Company's aggregate product warranty liabilities and changes for the nine months ended July 31, 2025, and the fiscal year ended October 31, 2024 were as follows:
| As of | |||||||||||
| July 31, 2025 | October 31, 2024 | ||||||||||
| In millions | |||||||||||
| Balance at beginning of period | $ | $ | |||||||||
| Charges | |||||||||||
| Adjustments related to pre-existing warranties | ( | ( | |||||||||
| Settlements made | ( | ( | |||||||||
Balance at end of period(1) | $ | $ | |||||||||
(1)The Company included the current portion in Other accrued liabilities, and amounts due after one year in Other non-current liabilities in the accompanying Consolidated Balance Sheets.
Severance Charges
The Company incurs costs related to employee severance and records a liability for these costs when it is probable that employees will be entitled to termination benefits and the amounts can be reasonably estimated. As of July 31, 2025, $164 million and $42 million was recorded in Other Accrued Liabilities and Other Non-current liabilities, respectively.
The following table presents the activity related to the Company’s severance liability for the period indicated:
| As of | |||||
| July 31, 2025 | |||||
| In millions | |||||
| Balance at beginning of period | $ | ||||
| Severance charges | |||||
| Cash paid and other | ( | ||||
| Balance at end of period | $ | ||||
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HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements (Continued)
(Unaudited)
The following table presents severance charges as included in the Condensed Consolidated Statements of Earnings for the periods indicated:
| For the three months ended July 31, 2025 | For the nine months ended July 31, 2025 | |||||||||||||
| In millions | ||||||||||||||
| Cost of sales | $ | |||||||||||||
| Research and development | ||||||||||||||
| Selling, general and administrative | ||||||||||||||
| Acquisition, disposition and other charges | ||||||||||||||
| Total severance charges | $ | $ | ||||||||||||
Contract Balances
The Company’s contract balances consist of contract assets, contract liabilities, and costs to obtain a contract with a customer.
Contract Assets
A summary of accounts receivable, net, including unbilled receivables was as follows:
| As of | |||||||||||
| July 31, 2025 | October 31, 2024 | ||||||||||
| In millions | |||||||||||
| Accounts receivable | $ | $ | |||||||||
| Unbilled receivables | |||||||||||
| Allowances | ( | ( | |||||||||
| Total | $ | $ | |||||||||
The allowances for credit losses related to accounts receivable and changes for the nine months ended July 31, 2025, and the fiscal year ended October 31, 2024 were as follows:
| As of | |||||||||||
| July 31, 2025 | October 31, 2024 | ||||||||||
| In millions | |||||||||||
| Balance at beginning of period | $ | $ | |||||||||
| Provision for credit losses | |||||||||||
| Adjustments to existing allowances, including write offs | ( | ( | |||||||||
| Balance at end of period | $ | $ | |||||||||
Sale of Trade Receivables
The Company has third-party revolving short-term financing arrangements intended to facilitate the working capital requirements of certain customers. For the three and nine months ended July 31, 2025, the Company sold $1.0 billion and $2.8 billion of trade receivables, respectively. For the fiscal year ended October 31, 2024, the Company sold $3.1 billion of trade receivables. The Company recorded an obligation of $70 million and $62 million within Notes payable and short-term borrowings in its Condensed Consolidated Balance Sheets as of July 31, 2025 and October 31, 2024, respectively, related to the trade receivables sold and collected from the third-party for which the revenue recognition was deferred.
Contract Liabilities and Remaining Performance Obligations
Contract liabilities consist of deferred revenue and customer deposits. A summary of contract liabilities were as follows:
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Notes to Condensed Consolidated Financial Statements (Continued)
(Unaudited)
| As of | ||||||||||||||
| July 31, 2025 | October 31, 2024 | |||||||||||||
| Location | In millions | |||||||||||||
| Customer deposits | Other accrued liabilities | $ | $ | |||||||||||
| Customer deposits - non-current | Other non-current liabilities | |||||||||||||
| Total customer deposits | $ | $ | ||||||||||||
| Deferred revenue | Deferred revenue | $ | $ | |||||||||||
| Deferred revenue - non-current | Other non-current liabilities | |||||||||||||
| Total deferred revenue | $ | $ | ||||||||||||
For the nine months ended July 31, 2025, approximately $3.0 billion of revenue was recognized relating to contract liabilities recorded as of October 31, 2024.
Revenue allocated to remaining performance obligations represents contract work that has not yet been performed and does not include contracts where the customer is not committed. Remaining performance obligations estimates are subject to change and are affected by several factors, including contract terminations, changes in the scope of contracts, adjustments for revenue that has not materialized and adjustments for currency. As of July 31, 2025, the aggregate amount of deferred revenue, was $10.1 billion. The Company expects to recognize approximately 18 % of this balance over fiscal 2025 with the remainder to be recognized thereafter. The Company receives payments in advance of completion of its contractual obligations; these payments are considered customer deposits. As customer acceptance milestones are met, the Company will recognize revenue and reduce the amount of contract liabilities. As of July 31, 2025, the aggregate amount of customer deposits was $653 million. The Company expects to recognize $580 million over the next twelve months and the remaining balance thereafter.
Costs to Obtain a Contract
As of July 31, 2025, the current and non-current portions of the capitalized costs to obtain a contract were $122 million and $147 million, respectively. As of October 31, 2024, the current and non-current portions of the capitalized costs to obtain a contract were $88 million and $136 million, respectively. The current and non-current portions of the capitalized costs to obtain a contract were included in Other current assets, and Long-term financing receivables and other assets, respectively, in the Condensed Consolidated Balance Sheets. For the three and nine months ended July 31, 2025, the Company amortized $88 million and $142 million, of capitalized costs to obtain a contract. For the three and nine months ended July 31, 2024 the Company amortized $27 million and $79 million respectively, of capitalized costs to obtain a contract. The amortized capitalized costs to obtain a contract are included in Selling, general and administrative expense in the Condensed Consolidated Statements of Earnings.
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Notes to Condensed Consolidated Financial Statements (Continued)
(Unaudited)
Note 7: Accounting for Leases as a Lessor
Financing receivables represent sales-type and direct-financing leases of the Company and third-party products. These receivables typically have terms ranging from two to five years and are usually collateralized by a security interest in the underlying assets. Financing receivables also include billed receivables from operating leases. The allowance for credit losses represents future expected credit losses over the life of the receivables based on past experience, current information and forward-looking economic considerations. The components of financing receivables were as follows:
| As of | |||||||||||
| July 31, 2025 | October 31, 2024 | ||||||||||
| In millions | |||||||||||
| Minimum lease payments receivable | $ | $ | |||||||||
| Unguaranteed residual value | |||||||||||
| Unearned income | ( | ( | |||||||||
| Financing receivables, gross | |||||||||||
Allowance for credit losses | ( | ( | |||||||||
| Financing receivables, net | |||||||||||
| Less: current portion | ( | ( | |||||||||
| Amounts due after one year, net | $ | $ | |||||||||
Sale of Financing Receivables
The Company enters into arrangements to transfer the contractual payments due under certain financing receivables to third party financial institutions. For the three and nine months ended July 31, 2025, the Company sold $17 million and $164 million of financing receivables, respectively. For the fiscal year ended October 31, 2024, the Company sold $93 million of financing receivables.
Credit Quality Indicators
Due to the homogeneous nature of its leasing transactions, the Company manages its financing receivables on an aggregate basis when assessing and monitoring credit risk. Credit risk is generally diversified due to the large number of entities comprising the Company's customer base and their dispersion across many different industries and geographic regions. The Company evaluates the credit quality of an obligor at lease inception and monitors that credit quality over the term of a transaction. The Company assigns risk ratings to each lease based on the creditworthiness of the obligor and other variables that augment or mitigate the inherent credit risk of a particular transaction and periodically updates the risk ratings when there is a change in the underlying credit quality. Such variables include the underlying value and liquidity of the collateral, the essential use of the equipment, the term of the lease, and the inclusion of credit enhancements, such as guarantees, letters of credit or security deposits.
The credit risk profile of gross financing receivables, based on internal risk ratings as of July 31, 2025, presented on amortized cost basis by year of origination was as follows:
As of July 31, 2025 | |||||||||||||||||
| Risk Rating | |||||||||||||||||
| Low | Moderate | High | |||||||||||||||
| Fiscal Year | In millions | ||||||||||||||||
| 2025 | $ | $ | $ | ||||||||||||||
| 2024 | |||||||||||||||||
| 2023 | |||||||||||||||||
| 2022 | |||||||||||||||||
| 2021 and prior | |||||||||||||||||
| Total | $ | $ | $ | ||||||||||||||
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Notes to Condensed Consolidated Financial Statements (Continued)
(Unaudited)
The credit risk profile of gross financing receivables, based on internal risk ratings as of October 31, 2024, presented on amortized cost basis by year of origination was as follows:
| As of October 31, 2024 | |||||||||||||||||
| Risk Rating | |||||||||||||||||
| Low | Moderate | High | |||||||||||||||
| Fiscal Year | In millions | ||||||||||||||||
| 2024 | $ | $ | $ | ||||||||||||||
| 2023 | |||||||||||||||||
| 2022 | |||||||||||||||||
| 2021 | |||||||||||||||||
| 2020 and prior | |||||||||||||||||
| Total | $ | $ | $ | ||||||||||||||
Accounts rated low risk typically have the equivalent of a Standard & Poor's rating of BBB– or higher, while accounts rated moderate risk generally have the equivalent of BB+ or lower. The Company classifies accounts as high risk when it considers the financing receivable to be impaired or when management believes there is a significant near-term risk of impairment. The credit quality indicators do not reflect any mitigation actions taken to transfer credit risk to third parties.
Allowance for Credit Losses
The allowance for credit losses for financing receivables as of July 31, 2025 and October 31, 2024 and the respective changes for the nine and twelve months then ended were as follows:
| As of | |||||||||||
| July 31, 2025 | October 31, 2024 | ||||||||||
| In millions | |||||||||||
| Balance at beginning of period | $ | $ | |||||||||
| Provision for credit losses | |||||||||||
| Adjustment to the existing allowance | ( | ( | |||||||||
| Write-offs | ( | ( | |||||||||
| Balance at end of period | $ | $ | |||||||||
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Notes to Condensed Consolidated Financial Statements (Continued)
(Unaudited)
Non-Accrual and Past-Due Financing Receivables
The following table summarizes the aging and non-accrual status of gross financing receivables:
| As of | |||||||||||
| July 31, 2025 | October 31, 2024 | ||||||||||
| In millions | |||||||||||
Billed:(1) | |||||||||||
| Current 1-30 days | $ | $ | |||||||||
| Past due 31-60 days | |||||||||||
| Past due 61-90 days | |||||||||||
| Past due > 90 days | |||||||||||
| Unbilled sales-type and direct-financing lease receivables | |||||||||||
| Total gross financing receivables | $ | $ | |||||||||
Gross financing receivables on non-accrual status(2) | $ | $ | |||||||||
Gross financing receivables 90 days past due and still accruing interest(2) | $ | $ | |||||||||
(1)Includes billed operating lease receivables and billed sales-type and direct-financing lease receivables.
The following table presents amounts included in the Condensed Consolidated Statements of Earnings related to lessor activity:
| For the three months ended July 31, | For the nine months ended July 31, | ||||||||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||||||||
| Location | In millions | ||||||||||||||||||||||||||||
| Interest income from sales-type leases and direct financing leases | Financing Income | $ | $ | $ | $ | ||||||||||||||||||||||||
| Lease income from operating leases | Services | ||||||||||||||||||||||||||||
| Total lease income | $ | $ | $ | $ | |||||||||||||||||||||||||
Variable Interest Entities
The Company has issued asset-backed debt securities under a fixed-term securitization program to private investors. The asset-backed debt securities are collateralized by the U.S. fixed-term financing receivables and leased equipment in the offering, which is held by a Special Purpose Entity (“SPE”). The SPE meets the definition of a Variable Interest Entity (“VIE”) and is consolidated, along with the associated debt, into the Condensed Consolidated Financial Statements as the Company is the primary beneficiary of the VIE. The SPE is a bankruptcy-remote legal entity with separate assets and liabilities. The purpose of the SPE is to facilitate the funding of customer receivables and leased equipment in the capital markets.
The Company’s risk of loss related to securitized receivables and leased equipment is limited to the amount by which the Company’s right to receive collections for assets securitized exceeds the amount required to pay interest, principal, and fees and expenses related to the asset-backed securities.
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Notes to Condensed Consolidated Financial Statements (Continued)
(Unaudited)
The following table presents the assets and liabilities held by the consolidated VIE as of July 31, 2025 and October 31, 2024, which are included in the Condensed Consolidated Balance Sheets. The assets in the table below include those that can be used to settle the obligations of the VIE. Additionally, general creditors of the Company do not have recourse to the assets of the VIE.
| As of | |||||||||||
| July 31, 2025 | October 31, 2024 | ||||||||||
| Assets held by VIE: | In millions | ||||||||||
| Other current assets | $ | $ | |||||||||
| Financing receivables | |||||||||||
| Short-term | |||||||||||
| Long-term | |||||||||||
| Property, plant and equipment, net | |||||||||||
| Liabilities held by VIE: | |||||||||||
| Notes payable and short-term borrowings, net of unamortized debt issuance costs | |||||||||||
| Long-term debt, net of unamortized debt issuance costs | $ | $ | |||||||||
For the nine months ended July 31, 2025, the financing receivables and leased equipment transferred via securitization through the SPE were $0.7 billion and $0.3 billion, respectively. For the fiscal year ended October 31, 2024, financing receivables and leased equipment transferred via securitization through the SPE were $1.2 billion and $0.6 billion, respectively.
Note 8: Acquisitions and Dispositions
Acquisition of Juniper Networks
On July 2, 2025, the Company completed the Merger. Under the terms of the Merger Agreement, HPE agreed to pay $40.00 per share of Juniper Networks common stock, issued and outstanding as of July 2, 2025, representing a cash consideration of approximately $13.4 billion, which was paid through cash on hand, including proceeds and term loan drawdowns from the financings in fiscal 2024, and commercial paper issuances.
Juniper Networks is a leader in AI-native networks, and will be reported in the Networking segment. The Company acquired Juniper Networks to advance HPE’s portfolio mix shift toward higher-growth solutions and strengthen its networking business.
Purchase Consideration
The following table summarizes the purchase consideration for the Merger:
| In millions | |||||
| Cash paid for outstanding Juniper Networks common stock | $ | ||||
| Consideration for replacement of Juniper Networks equity awards | |||||
| Total purchase consideration | $ | ||||
In connection with the Merger, each of the outstanding and unvested equity awards of Juniper Networks which was comprised of restricted stock units, performance stock awards and stock options which had been previously issued to employees, was converted into HPE equity awards utilizing an exchange ratio of approximately 2.1 . The exchange ratio was calculated as purchase consideration per share divided by HPE’s 10-day average stock price prior to July 2, 2025. The acquisition date fair value of the replacement equity awards has been determined using the Hull-White I Lattice model for options, and for restricted stock units by adjusting HPE’s Merger date close price for expected dividends as applicable. The fair value of the replacement awards was $927 million , of which $239 million is included in the Merger consideration. At the date of the acquisition, the Company converted Juniper Networks’ equity awards into approximately 46 million HPE equity awards, of which approximately 10 million restricted stock units vested in July 2025. As of July 31, 2025, there was $563 million of unrecognized pre-tax stock-based compensation expense related to unvested restricted stock units, which the Company expects to recognize over the remaining weighted-average vesting period of 1.5 years.
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Notes to Condensed Consolidated Financial Statements (Continued)
(Unaudited)
For the three and nine months ended July 31, 2025, HPE recorded stock-based compensation expense of $87
A summary of the preliminary allocation of the total purchase price for the Merger is presented as follows:
| In millions | |||||||||||||||||
| Cash and cash equivalents | $ | ||||||||||||||||
| Inventory | |||||||||||||||||
| Other current assets | |||||||||||||||||
| Goodwill | |||||||||||||||||
| Intangible assets | |||||||||||||||||
| Long-term financing receivables and other assets | |||||||||||||||||
| Total assets acquired | |||||||||||||||||
Other accrued liabilities(1) | |||||||||||||||||
| Long-term debt | |||||||||||||||||
| Other non-current liabilities | |||||||||||||||||
| Total liabilities assumed | |||||||||||||||||
| Total purchase consideration | $ | ||||||||||||||||
(1)Includes the current portion of long-term debt.
This acquisition has been accounted for as a business combination under FASB Topic Accounting Standards Codification 805 using the acquisition method. Tangible and identifiable intangible assets acquired, and liabilities assumed were recorded at the respective preliminary estimated fair values. The excess of the consideration transferred over the estimated fair value of the net assets received has been recorded as goodwill. The factors that contributed to the recognition of goodwill primarily relate to acceleration of the company’s portfolio mix shift to higher-margin, higher-growth areas. Goodwill also reflects the expectation that the Merger will position the company for long-term profitable growth. Goodwill created as a result of the Merger is not deductible for tax purposes.
The purchase price allocation is preliminary as the final review of intangible assets, certain tangible assets, income tax balances, liabilities assumed, and residual goodwill related to this acquisition is not complete. These amounts are subject to revision as additional information about fair value of assets acquired and liabilities assumed is obtained within the measurement period, which is up to one year from the acquisition date.
Purchased Intangible Assets
The weighted-average useful life for intangible assets acquired was 6.5 years, the following table presents preliminary details of the purchased intangible assets acquired:
| Useful Life (in Years) | In millions | ||||||||||
| Customer contracts, customer lists and distribution agreements | $ | ||||||||||
| Developed and core technology and patents | |||||||||||
| Trade name and trademarks | |||||||||||
Total intangible assets(1) | $ | ||||||||||
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Notes to Condensed Consolidated Financial Statements (Continued)
(Unaudited)
Long-term Debt
The following table presents long-term debt assumed at closing:
| Maturity Date | Par Value | Fair Value | |||||||||||||||
| In millions | |||||||||||||||||
| December 2025 | $ | $ | |||||||||||||||
| August 2029 | |||||||||||||||||
| December 2030 | |||||||||||||||||
| March 2041 | $ | $ | |||||||||||||||
Results of Operations and Pro forma Financial Information
The following table presents revenues and net earnings for Juniper Networks since the acquisition date, July 2, 2025 through July 31, 2025:
| In millions | |||||
| Total revenue | $ | ||||
Earnings from operations(1) | $ | ||||
(1) This amount does not include certain corporate costs which are managed at the corporate level.
The unaudited pro forma results of operations for HPE as if the Merger had occurred on November 1, 2023 are presented in the table below:
| For the three months ended July 31, | For the nine months ended July 31, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| In millions | |||||||||||||||||||||||
| Total revenue | $ | $ | $ | $ | |||||||||||||||||||
| Net earnings (loss) | $ | $ | $ | ( | $ | ||||||||||||||||||
These pro forma results were based on estimates and assumptions, which the Company believes are reasonable. The pro forma financial information is presented for informational purposes only and is not indicative of the results of operations that would have been achieved if the acquisition and the cost of financing the acquisition had taken place at the beginning of fiscal 2024. The unaudited pro forma information includes adjustments to amortization for intangible assets acquired, stock-based compensation expense, interest expense for acquisition financing, and depreciation for property and equipment acquired.
Acquisition costs related to the Merger were primarily included within Acquisition, disposition and other charges in the Condensed Consolidated Statements of Earnings. For the three and nine months ended July 31, 2025, acquisition costs were $159 million and $231 million, respectively. For the three and nine months ended July 31, 2024, acquisition costs were $23 million and $77 million, respectively.
Disposition of Communications Technology Group
On May 23, 2024, HPE announced plans to divest the CTG business to HCL Tech. CTG was included in the Communications and Media Solutions business, which was reported in the Corporate Investments and Other segment. This divestiture includes the platform-based software solutions portions of the CTG portfolio, including systems integration, network applications, data intelligence, and the business support systems groups. On December 1, 2024, the Company completed the disposition of CTG. The Company received net proceeds of $210 million and recognized a gain of $245 million included in Gain on sale of a business in the Condensed Consolidated Statements of Earnings.
Note 9: Goodwill
Goodwill is tested for impairment at the reporting unit level. As of November 1, 2024, the Company reassessed its
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Notes to Condensed Consolidated Financial Statements (Continued)
(Unaudited)
reporting units and determined that the former Compute and High Performance Computing & Artificial Intelligence reporting units (within the Server segment) met the criteria to qualify as a single Server reporting unit. As of July 31, 2025, the Company's reporting units are consistent with the reportable segments identified in Note 2, “Segment Information”, with the exception of Networking and Corporate Investments and Other segments. The Networking segment contains two reporting units: Intelligent Edge and Juniper Networks. The Corporate Investments and Other segment contains the A & PS reporting unit. The following table represents the carrying value of goodwill, by segment as of July 31, 2025 and October 31, 2024.
| Server | Hybrid Cloud | Networking | Financial Services | Corporate Investments and Other | Total | ||||||||||||||||||||||||||||||||||||||||||
| In millions | |||||||||||||||||||||||||||||||||||||||||||||||
Balance as of October 31, 2024 | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||
| Goodwill acquired during the period | |||||||||||||||||||||||||||||||||||||||||||||||
| Goodwill impairment | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
Balance as of July 31, 2025(1) | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||
Goodwill is tested annually for impairment, as of the first day of the fourth quarter and whenever events or changes in circumstances indicate the carrying amount of goodwill may not be recoverable. The Company performed interim goodwill impairment tests as of November 1, 2024 and April 30, 2025.
November 1, 2024 Interim Impairment Test
An interim impairment test was performed as of November 1, 2024 based on organizational changes impacting the Hybrid Cloud and Server reporting units. The interim impairment test did not result in an impairment of goodwill.
April 30, 2025 Interim Impairment Test
During the second quarter of fiscal 2025, the macroeconomic environment experienced a rapid deterioration, primarily driven by the announcement and subsequent modifications of international tariffs, an escalation in global trade tensions, and increasing geopolitical uncertainty. These events have contributed to significant movement in inputs used to determine the weighted-average cost of capital. As of April 30, 2025, the Company determined that an indicator of potential impairment existed to require an interim quantitative goodwill impairment test for its reporting units.
Based on the results of the interim quantitative impairment test performed as of April 30, 2025, the fair value of the Hybrid Cloud reporting unit was below the carrying value assigned to Hybrid Cloud. The decline in the fair value of the Hybrid Cloud reporting unit was primarily driven by an increase in the discount rate used in the discounted cash flows analysis, which reflected heightened macroeconomic uncertainty and changes in market conditions. The fair value of the Hybrid Cloud reporting unit was based on a weighting of fair values derived most significantly from the income approach, and to a lesser extent, the market approach. Under the income approach, the Company estimates the fair value of a reporting unit based on the present value of estimated future cash flows which HPE considers to be a level 3 unobservable input in the fair value hierarchy.
Prior to the quantitative goodwill impairment test, the Company tested the recoverability of long-lived assets and other assets of the Hybrid Cloud reporting unit and concluded that such assets were not impaired. The quantitative goodwill impairment test indicated that the carrying value of the Hybrid Cloud reporting unit exceeded its fair value by $1.4 billion. As a result, the Company recorded a goodwill impairment charge of $1.4 billion in the second quarter of fiscal 2025.
Subsequent to the impairment of the Hybrid Cloud reporting unit, the indicated fair values of the reporting units exceeded their respective carrying amounts by a range of 0 % to 112 %. In order to evaluate the sensitivity of the estimated fair value of the reporting units in the goodwill impairment test, the Company applied a hypothetical 10 % decrease to the fair value of each reporting unit. Based on the results of this hypothetical 10 % decrease, all of the reporting units had an excess of fair value over carrying amount, except Server and Hybrid Cloud.
The Hybrid Cloud reporting unit has remaining goodwill of $3.5 billion as of July 31, 2025 and an excess of fair value over carrying value of net assets of 0 % as of the interim test date. Hybrid Cloud business is transitioning to a more cloud-native,
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Notes to Condensed Consolidated Financial Statements (Continued)
(Unaudited)
software-defined platform with HPE Alletra. Translating this growth to revenue and operating income will take time because a greater mix of high margin business, such as ratable software and services, are deferred and recognized in future periods.
The excess of fair value over carrying amount for the Server reporting unit was 3 %. The fair value of the Server reporting unit was also impacted by an increase in the discount rate used in the discounted cash flow analysis, driven by heightened macroeconomic uncertainty. The Server reporting unit has a goodwill balance of $10.2 billion as of July 31, 2025. In the current macroeconomic and inflationary environment, customers have invested selectively, resulting in moderate unit growth and competitive pricing in the traditional servers business. While the AI servers business is growing at a faster pace, because graphics processing units represent a large portion of the solutions, the pricing is very competitive and margins are limited. The Server business continues to focus on capturing market share in both traditional and AI servers, while maintaining operating margin and leveraging its strong portfolio of products.
If the global macroeconomic or geopolitical conditions worsen, projected revenue growth rates or operating margins decline, weighted-average cost of capital increases, or if the Company has significant or sustained decline in its stock price, it is possible its estimates about the Hybrid Cloud and Server reporting units’ ability to successfully address the current challenges may change, which could result in the carrying value of the Hybrid Cloud and Server reporting units exceeding their estimated fair value and potential impairment charges.
Note 10: Fair Value
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the measurement date.
The Company uses valuation techniques that are based upon observable and unobservable inputs. Observable inputs are developed using market data such as publicly available information and reflect the assumptions market participants would use, while unobservable inputs are developed using the best information available about the assumptions market participants would use.
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Notes to Condensed Consolidated Financial Statements (Continued)
(Unaudited)
The following table presents the Company's assets and liabilities that are measured at fair value on a recurring basis:
| As of July 31, 2025 | As of October 31, 2024 | ||||||||||||||||||||||||||||||||||||||||||||||
| Fair Value Measured Using | Fair Value Measured Using | ||||||||||||||||||||||||||||||||||||||||||||||
Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Remaining Inputs (Level 2) | Significant Other Unobservable Remaining Inputs (Level 3) | Total | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Remaining Inputs (Level 2) | Significant Other Unobservable Remaining Inputs (Level 3) | Total | ||||||||||||||||||||||||||||||||||||||||
| In millions | |||||||||||||||||||||||||||||||||||||||||||||||
| Assets | |||||||||||||||||||||||||||||||||||||||||||||||
| Cash Equivalents: | |||||||||||||||||||||||||||||||||||||||||||||||
| Commercial paper | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
| Time deposits | |||||||||||||||||||||||||||||||||||||||||||||||
| Money market funds | |||||||||||||||||||||||||||||||||||||||||||||||
| Total cash equivalents | |||||||||||||||||||||||||||||||||||||||||||||||
| Available-for-sale Debt Investments: | |||||||||||||||||||||||||||||||||||||||||||||||
| Asset-backed and mortgage-backed securities | |||||||||||||||||||||||||||||||||||||||||||||||
| Certificates of deposit | |||||||||||||||||||||||||||||||||||||||||||||||
| Corporate debt securities | |||||||||||||||||||||||||||||||||||||||||||||||
| Commercial paper | |||||||||||||||||||||||||||||||||||||||||||||||
| U.S. government agency securities | |||||||||||||||||||||||||||||||||||||||||||||||
| U.S. government securities | |||||||||||||||||||||||||||||||||||||||||||||||
| Foreign bonds | |||||||||||||||||||||||||||||||||||||||||||||||
Other debt securities (1) | |||||||||||||||||||||||||||||||||||||||||||||||
| Total available-for-sale debt investments | |||||||||||||||||||||||||||||||||||||||||||||||
| Equity Investments: | |||||||||||||||||||||||||||||||||||||||||||||||
| Mutual funds | |||||||||||||||||||||||||||||||||||||||||||||||
| Equity securities in public companies | |||||||||||||||||||||||||||||||||||||||||||||||
| Equity securities | |||||||||||||||||||||||||||||||||||||||||||||||
| Total equity investments | |||||||||||||||||||||||||||||||||||||||||||||||
| Derivatives Instruments: | |||||||||||||||||||||||||||||||||||||||||||||||
| Foreign currency contracts | |||||||||||||||||||||||||||||||||||||||||||||||
| Other derivatives | |||||||||||||||||||||||||||||||||||||||||||||||
| Total assets | |||||||||||||||||||||||||||||||||||||||||||||||
| Liabilities | |||||||||||||||||||||||||||||||||||||||||||||||
| Derivatives Instruments: | |||||||||||||||||||||||||||||||||||||||||||||||
| Interest rate contracts | |||||||||||||||||||||||||||||||||||||||||||||||
| Foreign currency contracts | |||||||||||||||||||||||||||||||||||||||||||||||
| Other derivatives | |||||||||||||||||||||||||||||||||||||||||||||||
| Total liabilities | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
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Notes to Condensed Consolidated Financial Statements (Continued)
(Unaudited)
Other Fair Value Disclosures
Short-Term and Long-Term Debt: As of July 31, 2025, the estimated fair value and carrying value of the Company's short-term and long-term debt was $23.6 billion and $23.7 billion, respectively. As of October 31, 2024, the estimated fair value and carrying value of the Company's short-term and long-term debt was $18.3 billion and $18.2 billion, respectively. If measured at fair value in the Condensed Consolidated Balance Sheets, short-term and long-term debt would be classified in Level 2 of the fair value hierarchy.
Other Financial Instruments: For the balance of the Company's financial instruments, primarily accounts receivable, accounts payable and financial liabilities included in other accrued liabilities, the carrying amounts approximate fair value due to their short-term nature. If measured at fair value in the Condensed Consolidated Balance Sheets, these other financial instruments would be classified in Level 2 or Level 3 of the fair value hierarchy.
Non-Recurring Fair Value Measurements
Equity Investments without Readily Determinable Fair Value: Equity investments are recorded at cost and measured at fair value when they are deemed to be impaired or when there is an adjustment from observable price changes. For the three months ended July 31, 2025 and 2024, the Company recognized unrealized gains of $1 million and $7 million, respectively, on these investments. For the nine months ended July 31, 2025, the Company recognized a net loss of $1 million primarily resulting from an impairment on these investments. If measured at fair value in the Condensed Consolidated Balance Sheets, these would generally be classified in Level 3 of the fair value hierarchy. For investments still held as of July 31, 2025, the cumulative upward adjustments for observable price changes was $83 million and cumulative downward adjustments for observable price changes and impairments was $89 million. Refer to Note 11 “Financial Instruments,” for further information about equity investments.
Non-Financial Assets: The Company's non-financial assets, such as intangible assets, goodwill, and property, plant and equipment, are recorded at cost. The Company records right-of-use assets based on the lease liability, adjusted for lease prepayments, lease incentives received, and the lessee's initial direct costs. Fair value adjustments are made to these non-financial assets in the period an impairment charge is recognized.
In the second quarter of fiscal 2025, the Company recorded a goodwill impairment charge of $1.4 billion associated with the Hybrid Cloud reporting unit. The fair values of the Company's reporting units were classified in Level 3 of the fair value hierarchy due to the significance of unobservable inputs developed using company-specific information. For more information on the goodwill impairment, see Note 9 “Goodwill”.
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Notes to Condensed Consolidated Financial Statements (Continued)
(Unaudited)
Note 11: Financial Instruments
Cash Equivalents and Available-for-Sale Debt Investments
Cash equivalents and available-for-sale debt investments were as follows:
| As of July 31, 2025 | As of October 31, 2024 | ||||||||||||||||||||||||||||||||||||||||||||||
| Cost | Gross Unrealized Gains (Losses) | Fair Value | Cost | Gross Unrealized Gains (Losses) | Fair Value | ||||||||||||||||||||||||||||||||||||||||||
| In millions | |||||||||||||||||||||||||||||||||||||||||||||||
| Cash Equivalents | |||||||||||||||||||||||||||||||||||||||||||||||
| Commercial paper | $ | $ | — | $ | $ | $ | — | $ | |||||||||||||||||||||||||||||||||||||||
| Time deposits | — | — | |||||||||||||||||||||||||||||||||||||||||||||
| Money market funds | — | — | |||||||||||||||||||||||||||||||||||||||||||||
| Total cash equivalents | — | — | |||||||||||||||||||||||||||||||||||||||||||||
| Available-for-sale Investments | |||||||||||||||||||||||||||||||||||||||||||||||
| Debt Securities: | |||||||||||||||||||||||||||||||||||||||||||||||
| Asset-backed and mortgage-backed securities | |||||||||||||||||||||||||||||||||||||||||||||||
| Certificates of deposit | |||||||||||||||||||||||||||||||||||||||||||||||
| Corporate debt securities | ( | ||||||||||||||||||||||||||||||||||||||||||||||
| Commercial paper | |||||||||||||||||||||||||||||||||||||||||||||||
| U.S. government agency securities | |||||||||||||||||||||||||||||||||||||||||||||||
| U.S. government securities | |||||||||||||||||||||||||||||||||||||||||||||||
| Foreign bonds | |||||||||||||||||||||||||||||||||||||||||||||||
| Other debt securities | |||||||||||||||||||||||||||||||||||||||||||||||
| Total debt securities | |||||||||||||||||||||||||||||||||||||||||||||||
| Equity Securities: | |||||||||||||||||||||||||||||||||||||||||||||||
| Equity securities in public companies | ( | ||||||||||||||||||||||||||||||||||||||||||||||
| Mutual funds | |||||||||||||||||||||||||||||||||||||||||||||||
| Total equity securities | ( | ||||||||||||||||||||||||||||||||||||||||||||||
| Total available-for-sale investments | |||||||||||||||||||||||||||||||||||||||||||||||
| Total cash equivalents and available-for-sale investments | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||
As of July 31, 2025 and October 31, 2024, the carrying amount of cash equivalents approximated fair value due to the short period of time to maturity. Time deposits were primarily issued by institutions outside the U.S. as of July 31, 2025 and October 31, 2024. The estimated fair value of the available-for-sale debt investments may not be representative of values that will be realized in the future.
Contractual maturities of investments in available-for-sale debt securities were as follows:
| As of July 31, 2025 | |||||||||||||||||||||||
| Amortized Cost | Fair Value | ||||||||||||||||||||||
| In millions | |||||||||||||||||||||||
| Due in one year | $ | $ | |||||||||||||||||||||
| Due in one to five years | |||||||||||||||||||||||
| Due in more than five years | |||||||||||||||||||||||
| Total | $ | $ | |||||||||||||||||||||
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Notes to Condensed Consolidated Financial Statements (Continued)
(Unaudited)
Equity Investments
Non-marketable equity investments in privately held companies are included in Long-term financing receivables and other assets in the Condensed Consolidated Balance Sheets. These non-marketable equity investments are carried either at fair value or under measurement alternative. Measurement alternative equity investments are recorded at cost and measured at fair value when they are deemed to be impaired or when there is an adjustment from observable price changes.
The carrying amount of those non-marketable equity investments accounted for under the fair value option was $54 million and $88 million as of July 31, 2025 and October 31, 2024, respectively. For the nine months ended July 31, 2025, the Company recognized a total gain of $5 million on these investments, of which $4 million was unrealized and $1 million was realized. During the nine months ended July 31, 2025, the Company sold $38 million of these investments. For the three and nine months ended July 31, 2024, the Company recognized an unrealized gain of $7 million and an unrealized loss of $47 million on these investments. This amount is reflected in Interest and other, net in the Condensed Consolidated Statements of Earnings.
The carrying amount of those non-marketable equity investments accounted for under the measurement alternative was $252 million and $200 million as of July 31, 2025 and October 31, 2024, respectively. For the three months ended July 31, 2025 and 2024, the Company recognized unrealized gains of $1 million and $7 million, respectively, on these investments. For the nine months ended July 31, 2025, the Company recognized a loss of $1 million primarily resulting from an impairment on these investments. These amounts are reflected in Interest and other, net in the Condensed Consolidated Statements of Earnings.
Fair Value of Derivative Instruments in the Condensed Consolidated Balance Sheets
The gross notional and fair value of derivative instruments in the Condensed Consolidated Balance Sheets were as follows:
| As of July 31, 2025 | As of October 31, 2024 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fair Value | Fair Value | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Outstanding Gross Notional | Other Current Assets | Long-Term Financing Receivables and Other Assets | Other Accrued Liabilities | Long-Term Other Liabilities | Outstanding Gross Notional | Other Current Assets | Long-Term Financing Receivables and Other Assets | Other Accrued Liabilities | Long-Term Other Liabilities | ||||||||||||||||||||||||||||||||||||||||||||||||||
| In millions | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Derivatives Designated as Hedging Instruments | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fair Value Hedges: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Interest rate contracts | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||
| Cash Flow Hedges: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Foreign currency contracts | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net Investment Hedges: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Foreign currency contracts | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total derivatives designated as hedging instruments | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Derivatives Not Designated as Hedging Instruments | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Foreign currency contracts | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other derivatives | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total derivatives not designated as hedging instruments | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total derivatives | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||
Offsetting of Derivative Instruments
The Company recognizes all derivative instruments on a gross basis in the Condensed Consolidated Balance Sheets. The Company's derivative instruments are subject to master netting arrangements and collateral security arrangements. The Company does not offset the fair value of its derivative instruments against the fair value of cash collateral posted under
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Notes to Condensed Consolidated Financial Statements (Continued)
(Unaudited)
collateral security agreements. The information related to the potential effect of the Company's use of the master netting agreements and collateral security agreements were as follows:
| As of July 31, 2025 | ||||||||||||||||||||||||||||||||||||||
| In the Condensed Consolidated Balance Sheets | ||||||||||||||||||||||||||||||||||||||
| (i) | (ii) | (iii) = (i)–(ii) | (iv) | (v) | (vi) = (iii)–(iv)–(v) | |||||||||||||||||||||||||||||||||
| Gross Amounts Not Offset | ||||||||||||||||||||||||||||||||||||||
| Gross Amount Recognized | Gross Amount Offset | Net Amount Presented | Derivatives | Financial Collateral | Net Amount | |||||||||||||||||||||||||||||||||
| In millions | ||||||||||||||||||||||||||||||||||||||
| Derivative assets | $ | $ | $ | $ | $ | (1) | $ | |||||||||||||||||||||||||||||||
| Derivative liabilities | $ | $ | $ | $ | $ | (2) | $ | |||||||||||||||||||||||||||||||
| As of October 31, 2024 | ||||||||||||||||||||||||||||||||||||||
| In the Condensed Consolidated Balance Sheets | ||||||||||||||||||||||||||||||||||||||
| (i) | (ii) | (iii) = (i)–(ii) | (iv) | (v) | (vi) = (iii)–(iv)–(v) | |||||||||||||||||||||||||||||||||
| Gross Amounts Not Offset | ||||||||||||||||||||||||||||||||||||||
| Gross Amount Recognized | Gross Amount Offset | Net Amount Presented | Derivatives | Financial Collateral | Net Amount | |||||||||||||||||||||||||||||||||
| In millions | ||||||||||||||||||||||||||||||||||||||
| Derivative assets | $ | $ | $ | $ | $ | (1) | $ | |||||||||||||||||||||||||||||||
| Derivative liabilities | $ | $ | $ | $ | $ | (2) | N/A | |||||||||||||||||||||||||||||||
(1)Represents the cash collateral posted by counterparties as of the respective reporting date for the Company's asset position, net of derivative amounts that could be offset, as of, generally, two
(2)Represents the collateral posted by the Company in cash or through the re-use of counterparty cash collateral as of the respective reporting date for the Company's liability position, net of derivative amounts that could be offset, as of, generally, two 181 million of collateral posted, $174 million was in cash and $7 million was through the re-use of counterparty collateral. As of October 31, 2024, $27 million of collateral posted was entirely through the re-use of counterparty collateral.
The amounts recorded on the Condensed Consolidated Balance Sheets related to cumulative basis adjustments for fair value hedges were as follows:
| Carrying Amount of the Hedged Liabilities | Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount of the Hedged Liabilities | ||||||||||||||||||||||
| As of | As of | ||||||||||||||||||||||
| July 31, 2025 | October 31, 2024 | July 31, 2025 | October 31, 2024 | ||||||||||||||||||||
| In millions | |||||||||||||||||||||||
| Notes payable and short-term borrowings | $ | ( | $ | ( | $ | $ | |||||||||||||||||
| Long-term debt | $ | ( | $ | $ | $ | ||||||||||||||||||
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Notes to Condensed Consolidated Financial Statements (Continued)
(Unaudited)
The pre-tax effect of derivative instruments in cash flow and net investment hedging relationships recognized in Other Comprehensive Income (“OCI”) were as follows:
| Gains (Losses) Recognized in OCI on Derivatives | |||||||||||||||||||||||
| For the three months ended July 31, | For the nine months ended July 31, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| In millions | |||||||||||||||||||||||
| Derivatives in Cash Flow Hedging Relationship: | |||||||||||||||||||||||
| Foreign exchange contracts | $ | $ | ( | $ | ( | $ | ( | ||||||||||||||||
| Derivatives in Net Investment Hedging Relationship: | |||||||||||||||||||||||
| Foreign exchange contracts | ( | ( | |||||||||||||||||||||
| Total | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
As of July 31, 2025, the Company expects to reclassify an estimated net accumulated other comprehensive loss of approximately $63 million, net of taxes, to earnings in the next twelve months along with the earnings effects of the related forecasted transactions associated with cash flow hedges.
Effect of Derivative Instruments on the Condensed Consolidated Statements of Earnings
The following table represents the pre-tax effect of derivative instruments on total amounts of income and expense line items presented in the Condensed Consolidated Statements of Earnings in which the effects of fair value hedges and derivatives not designated as hedging instruments are recorded:
| Gains (Losses) Recognized in Income | |||||||||||||||||||||||||||||||||||||||||||||||
| For the three months ended July 31, | For the nine months ended July 31, | ||||||||||||||||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||||||||||||||||||||||||||
| Net Revenue | Interest and Other, net | Net Revenue | Interest and Other, net | Net Revenue | Interest and Other, net | Net Revenue | Interest and Other, net | ||||||||||||||||||||||||||||||||||||||||
| In millions | |||||||||||||||||||||||||||||||||||||||||||||||
| Total net revenue and interest and other, net | $ | $ | $ | $ | ( | $ | $ | $ | $ | ( | |||||||||||||||||||||||||||||||||||||
| Gains (Losses) on Derivatives in Fair Value Hedging Relationships: | |||||||||||||||||||||||||||||||||||||||||||||||
| Interest Rate Contracts | |||||||||||||||||||||||||||||||||||||||||||||||
| Hedged items | $ | $ | ( | $ | $ | ( | $ | $ | ( | $ | $ | ( | |||||||||||||||||||||||||||||||||||
| Derivatives designated as hedging instruments | |||||||||||||||||||||||||||||||||||||||||||||||
| Gains (Losses) on Derivatives in Cash Flow Hedging Relationships: | |||||||||||||||||||||||||||||||||||||||||||||||
| Foreign Exchange Contracts | |||||||||||||||||||||||||||||||||||||||||||||||
| Amount of gains (losses) reclassified from accumulated other comprehensive income into income | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||
| Interest Rate Locks | |||||||||||||||||||||||||||||||||||||||||||||||
| Amount of losses reclassified from accumulated other comprehensive income into income | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
| Gains (Losses) on Derivatives not Designated as Hedging Instruments: | |||||||||||||||||||||||||||||||||||||||||||||||
| Foreign exchange contracts | ( | ||||||||||||||||||||||||||||||||||||||||||||||
| Other derivatives | ( | ||||||||||||||||||||||||||||||||||||||||||||||
| Total gains (losses) | $ | ( | $ | $ | $ | ( | $ | $ | ( | $ | $ | ( | |||||||||||||||||||||||||||||||||||
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Notes to Condensed Consolidated Financial Statements (Continued)
(Unaudited)
Note 12: Borrowings
Notes Payable, Short-Term Borrowings and Long-Term Debt
Notes payable, short-term borrowings, including the current portion of long-term debt, and long-term debt were as follows:
| As of | |||||||||||||||||
| July 31, 2025 | October 31, 2024 | ||||||||||||||||
| In millions | |||||||||||||||||
Current portion of long-term debt(1) | $ | $ | |||||||||||||||
| Commercial paper | |||||||||||||||||
| Notes payable to banks, lines of credit and other | |||||||||||||||||
| Total notes payable and short-term borrowings | |||||||||||||||||
| Long-term debt | |||||||||||||||||
| Total | $ | $ | |||||||||||||||
Asset-backed Debt Securities
In July 2025, the Company issued $900 million of asset-backed debt securities in six tranches at a weighted-average price of 99.99 % and a weighted-average interest rate of 4.673 %, payable monthly from September 2025 with a stated final maturity date of March 2033.
Commercial Paper
Hewlett Packard Enterprise maintains two commercial paper programs, “the Parent Programs”, and a wholly-owned subsidiary maintains a third program. The Parent Program in the U.S. provides for the issuance of U.S. dollar-denominated commercial paper up to a maximum aggregate principal amount of $4.75 billion. The Parent Program outside the U.S. provides for the issuance of commercial paper denominated in U.S. dollars, euros or British pounds up to a maximum aggregate principal amount of $3.0 billion or the equivalent in those alternative currencies. The combined aggregate principal amount of commercial paper outstanding under those two programs at any one time cannot exceed the $4.75 billion as authorized by Hewlett Packard Enterprise's Board of Directors. In addition, the Hewlett Packard Enterprise subsidiary's euro Commercial Paper/Certificate of Deposit Program provides for the issuance of commercial paper in various currencies of up to a maximum aggregate principal amount of $1.0 billion. As of July 31, 2025 and October 31, 2024, no 625 million and $649 million, respectively, were outstanding under the subsidiary’s program.
Revolving Credit Facility
In September 2024, the Company terminated its prior senior unsecured revolving credit facility that was entered into in December 2021, and entered into a new senior unsecured revolving credit facility with an aggregate lending commitment of $5.25 billion for a period of five years . The commitment initially comprised of (i) $4.75 billion of commitments available immediately and (ii) $500 million of commitments available from and subject to the closing of the Merger and refinancing of Juniper Networks’ credit agreement in connection with the closing of such acquisition. With the completion of the acquisition and the associated refinancing, the full $5.25 billion commitment under the new facility is now available to the Company. As of July 31, 2025 and October 31, 2024, no
Uncommitted Credit Facility
The Company maintains an uncommitted short-term advance facility with Societe Generale that was entered into in September 2023 with a principal amount of up to $500 million for a period of 5 years. As of July 31, 2025 and October 31, 2024, no
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Notes to Condensed Consolidated Financial Statements (Continued)
(Unaudited)
Juniper Networks Acquisition Financing
In September 2024, the Company entered into term loan agreements with JPMorgan Chase Bank, N.A, Citibank, N.A., and Mizuho Bank, Ltd. for approximately $12.0 billion of senior unsecured delayed draw term loan facilities, comprised of an approximately $9.0 billion 364-day tranche and a $3.0 billion three-year tranche, subject to customary conditions. The Company has since further reduced the commitments under the 364-day term loan to $1.0 billion.
HPE funded the aggregate consideration for the Merger through a combination of cash from its balance sheet, commercial paper issuances, and borrowings pursuant to the aforementioned three-year delayed-draw term loan credit facility of $3.0 billion and the 364-day delayed-draw term loan credit facility of $1.0 billion.
The 364-day loan is scheduled for full repayment on July 1, 2026. The three-year loan is subject to quarterly amortization at 1.25 %, with the remaining balance due at maturity on June 30, 2028. Under both loans, interest was initially calculated using the Alternate Base Rate until July 8, 2025 with payment due in September 2025. Thereafter, the rate transitioned to the Term Benchmark Rate (defined as Adjusted Term SOFR plus the Applicable Rate), payable monthly in accordance with the terms of both credit agreements.
As of July 31, 2025, $3.0 billion was outstanding under the three-year delayed-draw term loan credit facility and $1.0 billion was outstanding under the 364-day delayed-draw term loan credit facility.
Future Maturities of Borrowings
As of July 31, 2025, aggregate future maturities of the Company's borrowings at face value (excluding a fair value adjustment related to hedged debt of $17 million, a net discount of $49 million, unamortized debt issuance costs of $81 million, and adjusted for fair value to par accretion relating to debt assumed as a result of the Merger of $72 million), including finance lease obligations were as follows:
Fiscal Year | In millions | ||||
| 2025 | $ | ||||
| 2026 | |||||
| 2027 | |||||
| 2028 | |||||
| 2029 | |||||
| Thereafter | |||||
| Total | $ | ||||
Note 13: Stockholders' Equity
The components of accumulated other comprehensive loss, net of taxes as of July 31, 2025, and changes for the nine months ended July 31, 2025 were as follows:
| Net unrealized gains (losses) on available-for-sale securities | Net unrealized (losses) gains on cash flow hedges | Unrealized components of defined benefit plans | Cumulative translation adjustment | Accumulated other comprehensive loss | |||||||||||||||||||||||||
| In millions | |||||||||||||||||||||||||||||
| Balance at beginning of period | $ | $ | ( | $ | ( | $ | ( | $ | ( | ||||||||||||||||||||
| Other comprehensive loss before reclassifications | ( | ( | ( | ( | ( | ||||||||||||||||||||||||
| Reclassifications of losses into earnings | |||||||||||||||||||||||||||||
| Tax benefit (provision) | ( | ||||||||||||||||||||||||||||
| Balance at end of period | $ | $ | ( | $ | ( | $ | ( | $ | ( | ||||||||||||||||||||
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HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements (Continued)
(Unaudited)
The components of accumulated other comprehensive loss, net of taxes as of July 31, 2024, and changes for the nine months ended July 31, 2024 were as follows:
| Net unrealized gains on available-for-sale securities | Net unrealized gains (losses) on cash flow hedges | Unrealized components of defined benefit plans | Cumulative translation adjustment | Accumulated other comprehensive loss | |||||||||||||||||||||||||
| In millions | |||||||||||||||||||||||||||||
| Balance at beginning of period | $ | $ | $ | ( | $ | ( | $ | ( | |||||||||||||||||||||
| Other comprehensive income (loss) before reclassifications | ( | ( | ( | ( | |||||||||||||||||||||||||
| Reclassifications of losses into earnings | |||||||||||||||||||||||||||||
| Tax benefit (provision) | ( | ||||||||||||||||||||||||||||
| Balance at end of period | $ | $ | $ | ( | $ | ( | $ | ( | |||||||||||||||||||||
Share Repurchase Program
For the nine months ended July 31, 2025, the Company repurchased and settled 5.7 million shares under its share repurchase program through open market repurchases, which included 0.1 million shares that were unsettled open market repurchases as of October 31, 2024. As of July 31, 2025, the Company did not have any unsettled open market repurchases. Shares repurchased for the nine months ended July 31, 2025 were recorded as a $100 million reduction to stockholders' equity. As of July 31, 2025, the Company had a remaining authorization of approximately $0.7 billion for future share repurchases.
Note 14: Net Earnings (Loss) Per Share
The Company calculates basic net earnings (loss) per share (“EPS”) using net earnings (loss) and the weighted-average number of shares outstanding during the reporting period.
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Notes to Condensed Consolidated Financial Statements (Continued)
(Unaudited)
The reconciliations of the numerators and denominators of each of the basic and diluted net EPS calculations were as follows:
| For the three months ended July 31, | For the nine months ended July 31, | ||||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||||||||||||||
| In millions, except per share amounts | |||||||||||||||||||||||||||||||||||
| Numerator: | |||||||||||||||||||||||||||||||||||
| Net earnings (loss) attributable to common stockholders - Basic | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||
Plus: | — | — | — | ||||||||||||||||||||||||||||||||
| Net earnings (loss) - Diluted | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||
| Denominator: | |||||||||||||||||||||||||||||||||||
| Weighted-average shares used to compute basic net EPS | |||||||||||||||||||||||||||||||||||
Dilutive effect of employee stock plans(1) | |||||||||||||||||||||||||||||||||||
Dilutive effect of | |||||||||||||||||||||||||||||||||||
| Weighted-average shares used to compute diluted net EPS | |||||||||||||||||||||||||||||||||||
| Net EPS: | |||||||||||||||||||||||||||||||||||
| Basic | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||
| Diluted | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||
Anti-dilutive Share Count(1)(2): | |||||||||||||||||||||||||||||||||||
| Employee stock plans | |||||||||||||||||||||||||||||||||||
| Total anti-dilutive weighted-average stock | |||||||||||||||||||||||||||||||||||
(1)The impact of dilutive effect of employee stock plans is calculated under the treasury stock method, and the impact of dilutive effect of the 7.625 % Series C mandatory convertible preferred stock (“Preferred Stock”) is calculated under the if-converted method. The effect of employee stock plans and Preferred Stock is excluded when calculating diluted net loss per share as it would be anti-dilutive.
(2)The Company excludes shares potentially issuable under employee stock plans that could dilute basic net EPS in the future from the calculation of diluted net EPS, as their effect, if included, would have been anti-dilutive for the periods presented.
Note 15: Litigation, Contingencies, and Commitments
Litigation
The Company and certain of its subsidiaries are involved in various lawsuits, claims, investigations and proceedings including those consisting of intellectual property, commercial, securities, employment, employee benefits, and environmental matters, which arise in the ordinary course of business. In addition, as part of the Separation and Distribution Agreement (the “Separation and Distribution Agreement”) entered into in connection with HPE's spin-off from HP Inc. (formerly known as “Hewlett-Packard Company”) (the “Separation”), HPE and HP Inc. agreed to cooperate with each other in managing certain existing litigation related to both parties' businesses. The Separation and Distribution Agreement included provisions that allocate liability and financial responsibility for pending litigation involving the parties, as well as provide for cross-indemnification of the parties against liabilities to one party arising out of liabilities allocated to the other party. The Separation and Distribution Agreement also included provisions that assign to the parties responsibility for managing pending and future litigation related to the general corporate matters of HP Inc. arising prior to the Separation. HPE records a liability when it believes that it is both probable that a liability has been incurred and the amount of loss can be reasonably estimated. Significant judgment is required to determine both the probability of having incurred a liability and the estimated amount of the liability. HPE reviews these matters at least quarterly and adjusts these liabilities to reflect the impact of negotiations, settlements, rulings, advice of legal counsel, and other updated information and events pertaining to a particular matter. Litigation is inherently unpredictable. However, HPE believes it has valid defenses with respect to legal matters pending against us.
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Notes to Condensed Consolidated Financial Statements (Continued)
(Unaudited)
Nevertheless, cash flows or results of operations could be materially affected in any particular period by the resolution of one or more of these contingencies. HPE believes it has recorded adequate provisions for any such matters and, as of July 31, 2025, it was not reasonably possible that a material loss had been incurred in connection with such matters in excess of the amounts recognized in its financial statements.
Litigation, Proceedings, and Investigations
Department of Justice Action on the Proposed Acquisition of Juniper Networks. As previously disclosed, on January 9, 2024, the Company entered into the Merger Agreement with Juniper Networks and Jasmine Acquisition Sub, Inc., providing for the acquisition of Juniper Networks by HPE. On January 30, 2025, the Antitrust Division of the United States Department of Justice (the “DOJ”) filed a complaint in the United States District Court for the Northern District of California, seeking to enjoin the closing of the Merger, alleging that the Merger is likely to substantially lessen competition in violation of Section 7 of the Clayton Act. On February 10, 2025, HPE and Juniper Networks filed answers to the DOJ’s complaint, disputing these claims. On June 27, 2025, HPE, Juniper Networks, and the DOJ filed an Asset Preservation and Hold Separate Stipulation and Order (“Stipulation”) and Proposed Final Judgment with the Court. Pursuant to the Stipulation, HPE has agreed to divest its global InstantOn campus and branch business. HPE also has agreed to grant up to two licenses to the Mist AIOps source code, with the licensees determined through an auction process. In exchange, the DOJ has agreed to dismiss its action to enjoin the Merger, subject to the Court’s approval of the Proposed Final Judgment. On June 30, 2025, the Court signed the Stipulation, allowing the Merger to proceed to closing.
India Directorate of Revenue Intelligence Proceedings. On April 30 and May 10, 2010, the India Directorate of Revenue Intelligence (the “DRI”) issued notices to Hewlett-Packard India Sales Private Ltd (“HP India”), a subsidiary of HP Inc., seven HP India employees and one former HP India employee alleging that HP India underpaid customs duties while importing products and spare parts into India and seeking to recover an aggregate of approximately $370 million, plus penalties. On April 11, 2012, the Bangalore Commissioner of Customs issued an order on the products-related notices affirming duties and penalties against HP India and the named individuals for approximately $386 million (plus interests). On April 20, 2012, the Commissioner issued an order on the spare parts-related notice affirming duties and penalties against HP India and certain of the named individuals for approximately $17 million. HP India filed appeals of the Commissioner's orders before the Customs Tribunal. The Customs Department filed cross-appeals before the Customs Tribunal. On October 27, 2014, the Customs Tribunal commenced hearings on the cross-appeals of the Commissioner's orders. The Customs Tribunal rejected HP India's request to return the matter to the Commissioner on procedural grounds. After multiple delays and postponements over the last decade, the Customs Tribunal began hearing the parties’ cross-appeals on April 21, 2025. The hearings on the cross-appeals were completed in June 2025. The Company expects a ruling from the Customs Tribunal in 2025. Either party may appeal the ruling to the India Supreme Court.
ECT Proceedings. In January 2011, the postal service of Brazil, Empresa Brasileira de Correios e Telégrafos (“ECT”), notified a former subsidiary of HP Inc. in Brazil (“HP Brazil”) that it had initiated administrative proceedings to consider whether to suspend HP Brazil's right to bid and contract with ECT related to alleged improprieties in the bidding and contracting processes whereby employees of HP Brazil and employees of several other companies allegedly coordinated their bids and fixed results for three ECT contracts in 2007 and 2008. In late July 2011, ECT notified HP Brazil it had decided to apply the penalties against HP Brazil and suspend HP Brazil's right to bid and contract with ECT for five years , based upon the evidence before it. In August 2011, HP Brazil appealed ECT's decision. In April 2013, ECT rejected HP Brazil's appeal, and the administrative proceedings were closed with the penalties against HP Brazil remaining in place. In parallel, in September 2011, HP Brazil filed a civil action against ECT seeking to have ECT's decision revoked. HP Brazil also requested an injunction suspending the application of the penalties until a final ruling on the merits of the case, which was denied. HP Brazil appealed the denial of its request for injunctive relief to the intermediate appellate court, which issued a preliminary ruling denying the request for injunctive relief but reducing the length of the sanctions from five to two years . HP Brazil appealed that decision and, in December 2011, obtained a ruling staying enforcement of ECT's sanctions until a final ruling on the merits of the case. HP Brazil expects a resolution of the decision on the merits to take several years.
Autonomy-Related Legal Proceedings. In 2015, four Hewlett Packard Enterprise subsidiaries (Autonomy Corporation Limited, Hewlett Packard Vision BV, Autonomy Systems Limited, and Autonomy, Inc., hereinafter the “Claimants”) initiated civil proceedings in the U.K. High Court of Justice against two members of Autonomy’s former management, Michael Lynch and Sushovan Hussain, for breach of their fiduciary duties in causing Autonomy group companies to engage in improper transactions and accounting practices before and in connection with the 2011 acquisition of Autonomy. Trial concluded in January 2020. In May 2022, the court issued its liability judgment, finding that the Claimants had succeeded on substantially all
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Notes to Condensed Consolidated Financial Statements (Continued)
(Unaudited)
claims against Messrs. Lynch and Hussain, and dismissing a counterclaim filed by Mr. Lynch. In February 2024, the court held a two-week trial on damages. The Claimants sought recovery for $4 billion in losses. In May 2025, Claimants reached an agreement with Mr. Hussain to resolve claims against him. On July 22, 2025, the court issued its ruling on the quantum of damages, finding that the Lynch estate owed £740 million. The court has set a hearing for the week of November 17, 2025, to address additional matters, including attorneys’ fees, pre-judgment interest, and the relevant date to use for the exchange rate to convert the recovery from pounds to dollars. The damages award is also subject to a set-off for prior settlements. Pursuant to the terms of the 2015 Separation and Distribution Agreement, HP and Hewlett Packard Enterprise will share equally in any recovery.
Shared Litigation with HP Inc., DXC Technology Company and Micro Focus International plc. As part of the Separation and Distribution Agreements between HPE and HP Inc., HPE and DXC Technology Company (“DXC”), and HPE and Seattle SpinCo (“Micro Focus”), the parties to each agreement agreed to cooperate with each other in managing certain existing litigation related to both parties' businesses. The Separation and Distribution Agreements also included provisions that assign to the parties responsibility for managing pending and future litigation related to the general corporate matters of HP Inc. (in the case of the separation of HPE from HP Inc.) or of HPE (in the case of the separation of DXC from HPE and the separation of Micro Focus from HPE), in each case arising prior to the applicable separation.
Environmental
The Company's operations and products are or may in the future become subject to various federal, state, local, and foreign laws and regulations concerning the environment, including laws addressing the discharge of pollutants into the air and water; supply chain due diligence; sustainability, environment, and emissions-related reporting; environmental claims and statements; the management, movement, and disposal of hazardous substances and wastes; the clean-up of contaminated sites; product safety and compliance; the energy consumption of products, services, and operations; and the operational or financial responsibility for recycling, treatment, and disposal of those products. This includes legislation that makes producers of electrical goods, including servers and networking equipment, responsible for repairability requirements or financially responsible for specified collection, recycling, treatment, and disposal of past and future covered products (sometimes referred to as “product take-back legislation”). The Company could incur substantial costs, its products could be restricted from entering certain jurisdictions, and it could face other sanctions, if it were to violate or become liable under environmental laws, including those related to addressing climate change, sustainability, and other environmental related issues, or if its products become non-compliant with such environmental laws. The Company's potential exposure includes impacts on revenue, fines and civil or criminal sanctions, third-party environmental or property damage or personal injury claims or actions, and clean-up costs. The amount and timing of costs to comply with environmental laws are difficult to predict.
In particular, the Company may become a party to, or otherwise involved in, proceedings brought by U.S. or state environmental agencies under the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”), known as “Superfund,” or other federal, state or foreign laws and regulations addressing the clean-up of contaminated sites, and may become a party to, or otherwise involved in, proceedings brought by private parties for contribution towards clean-up costs. The Company is also contractually obligated to make financial contributions to address actions related to certain environmental liabilities, both ongoing and arising in the future, pursuant to its Separation and Distribution Agreement with HP Inc.
Unconditional Purchase Obligations
As of July 31, 2025, the Company had unconditional purchase obligations of approximately $3.0 billion. These unconditional purchase obligations include agreements to purchase goods or services that are enforceable and legally binding on the Company and that specify all significant terms, including fixed or minimum quantities to be purchased, fixed, minimum or variable price provisions and the approximate timing of the transaction, as well as settlements that the Company has reached with third parties, requiring it to pay determined amounts over a specified period of time. These unconditional purchase obligations are related principally to inventory purchases, software maintenance and support services and other items. Unconditional purchase obligations exclude agreements that are cancellable without penalty. The Company expects the commitments to total $463 million, $1,314 million, $385 million, $375 million, $346 million, and $91 million for fiscal years 2025, 2026, 2027, 2028, 2029, and thereafter, respectively.
Guarantees
In the ordinary course of business, the Company may issue performance guarantees to certain of its clients, customers,
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Notes to Condensed Consolidated Financial Statements (Continued)
(Unaudited)
and other parties pursuant to which the Company has guaranteed the performance obligations of third parties. Some of those guarantees may be backed by standby letters of credit or surety bonds. In general, the Company would be obligated to perform over the term of the guarantee in the event a specified triggering event occurs as defined by the guarantee. The Company believes the likelihood of having to perform under a material guarantee is remote.
The Company has entered into service contracts with certain of its clients that are supported by financing arrangements. If a service contract is terminated as a result of the Company's non-performance under the contract or failure to comply with the terms of the financing arrangement, the Company could, under certain circumstances, be required to acquire certain assets related to the service contract. The Company believes the likelihood of having to acquire a material amount of assets under these arrangements is remote.
The maximum potential future payments under performance guarantees and financing arrangements was $320 million as of July 31, 2025.
Indemnifications
In the ordinary course of business, the Company enters into contractual arrangements under which the Company may agree to indemnify a third party to such arrangement from any losses incurred relating to the services they perform on behalf of the Company or for losses arising from certain events as defined within the particular contract, which may include, for example, litigation or claims relating to past performance. The Company also provides indemnifications to certain vendors and customers against claims of IP infringement made by third parties arising from the use by such vendors and customers of the Company's software products and support services and certain other matters. Some indemnifications may not be subject to maximum loss clauses. Historically, payments made related to these indemnifications have been immaterial.
Note 16: Subsequent Events
On August 18, 2025, the Company elected to redeem the entire $2.5 billion aggregate principal amount of its outstanding 4.900 % Notes due 2025, on September 17, 2025 (the “Redemption Date”). The Notes will be redeemed at par, along with any accrued and unpaid interest up to, but not including, the Redemption Date.
Subsequent to the quarter end, the Company sold approximately $739 million of available-for-sale investments and recognized a realized gain of approximately $2 million.
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Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.
HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES
For purposes of this Management's Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) section, we use the terms “Hewlett Packard Enterprise”, “HPE”, the “Company”, “we”, “us” and “our” to refer to Hewlett Packard Enterprise Company.
We intend the discussion of our financial condition and results of operations that follows to provide information that will assist the reader in understanding our Condensed Consolidated Financial Statements, changes in certain key items in these financial statements from period-to-period and the primary factors that accounted for these changes, as well as how certain accounting principles, policies, and estimates affect our Condensed Consolidated Financial Statements. This discussion should be read in conjunction with our Condensed Consolidated Financial Statements and the related notes that appear elsewhere in this document.
The financial discussion and analysis in the following MD&A compares the three and nine months ended July 31, 2025 to the comparable prior-year period and where appropriate, as of July 31, 2025, unless otherwise noted.
This MD&A is organized as follows:
•Trends and Uncertainties. A discussion of material events and uncertainties known to management, such as the mixed macroeconomic environment and heightening global trade restrictions, uneven demand across our portfolio, increased demand for and adoption of new technologies, increased inventory levels, conservative customer spending environment (though recovering), persistent inflation, foreign exchange pressures, recent tax developments, and competitive pricing pressures.
•Executive Overview. A discussion of our business and a summary of our financial performance and other highlights, including non-GAAP financial measures, affecting the Company in order to provide context to the remainder of the MD&A.
•Results of Operations. A discussion of the results of operations at the consolidated level is followed by a discussion of the results of operations at the segment level.
•Critical Accounting Policies and Estimates. A discussion of accounting policies and estimates that we believe are important to understanding the assumptions and judgments incorporated in our reported financial results.
•Liquidity and Capital Resources. An analysis of changes in our cash flows, financial condition, liquidity, and cash requirements and commitments.
•GAAP to Non-GAAP Reconciliations. Each non-GAAP financial measure has been reconciled to the most directly comparable GAAP financial measure. This section also includes a discussion of the use, usefulness and economic substance of the non-GAAP financial measures, along with a discussion of material limitations, and compensation for those limitations, associated with the use of non-GAAP financial measures.
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Management's Discussion and Analysis of
Financial Condition and Results of Operations (Continued)
TRENDS AND UNCERTAINTIES
During the first nine months of fiscal 2025, the effects of the evolving macroeconomic environment on demand persisted and certain significant developments impacted our operations, as follows:
Technological Advancements: We have observed market trends and demand (of customers of various segments and sizes) gravitating towards artificial intelligence (“AI”), hybrid cloud, edge computing, data security capabilities, and related offerings. The volume of data at the edge continues to grow, driven by the proliferation of more devices. The need for a unified cloud experience everywhere has grown, as well, in order to manage the growth of data at the edge. Increasing demand for AI is also contributing to changes in the competitive landscape. With the abundance of data, there are opportunities to develop AI tools with powerful computational abilities to extract insights and value from the captured data. Secure networking that is purpose-built for AI workloads is the foundation that enables users to seamlessly connect and apply AI learnings to such data that lives in various ecosystems. While we believe our recent acquisition of Juniper Networks, Inc. positions us to capitalize on the growing market opportunities across AI-accelerated computing, data, and networking, our major competitors and emerging competitors are expanding their product and service offerings with integrated products and solutions and exerting increased competitive pressure. We expect these market dynamics and trends to continue in the longer term.
Macroeconomic Uncertainty: The evolving macroeconomic environment has impacted industry-wide demand, as, until recently, customers took longer to work through prior orders and, to this day, have been adopting a more strategic approach to discretionary IT spending. While this dynamic has been easing, this has resulted in uneven demand across our portfolio and geographies, particularly for certain of our hardware offerings, as customers have focused investments on modernizing infrastructure, such as migrating to cloud-based offerings, including our own. Additionally, there continues to be significant uncertainty surrounding the tariff environment and import/export regulations due to numerous factors, including but not limited to tariff imposition delays, changes to tariff rates and policies, and enactment of reciprocally restrictive trade policies and measures. These have enhanced global trade uncertainty and contributed to higher prices of components and end products and services. While we have relied on our global supply chain and pricing measures in an attempt to mitigate adverse impacts, we expect such a mixed macroeconomic environment to largely continue and possibly limit revenue and margin growth in the near term.
Supply Chain: We experienced supply chain constraints for certain components, including graphics processing units, (“GPUs”) and accelerated processing units. Though they have since eased, in part due to increased availability of supply and lower material and logistics costs, the future remains uncertain due to continuous shifts in U.S. trade policy, which has thus far impacted our ability to import and export components and finished products and the costs of doing so. Additionally, logistics costs may rise with the aforementioned changes in trade policies. We have been experiencing higher-than-normal inventory levels, primarily due to frequent component part updates, customers transitioning to the next generation of GPUs, our securing supply ahead of demand, and longer customer acceptance timelines on AI-related orders. While we have been working to reduce inventory, any or all of the aforementioned factors could contribute to sustained higher-than-normal levels and further uncertainty. We have experienced, and expect to continue experiencing, rising input component costs due to the global trade uncertainties referenced above and a competitive pricing environment, all of which may impact our financial results. We plan to mitigate the impact of these dynamics through continued disciplined cost and pricing management and supply chain diversification.
Recurring Revenue and Consumption Models: We continue to strengthen our core server and storage-oriented offerings and expand our offerings on the HPE GreenLake cloud, to deliver our entire portfolio as-a-service (“aaS”) and become the edge-to-cloud company for our customers and partners. We expect that such flexible consumption model will continue to strengthen our customer relationships and contribute to growth in recurring revenue.
Foreign Currency Exposure: We have a large global presence, with more than half of our revenue generated outside of the U.S. As a result, our financial results can be, and particularly in recent periods have been, impacted by fluctuations in foreign currency exchange rates. We utilize a comprehensive hedging strategy intended to mitigate the impact of foreign currency volatility over time, and we adjust pricing when possible to further minimize foreign currency impacts.
Public Sector: We have a number of engagements with various public sector entities, including the U.S. federal government and its agencies, as direct or indirect customers of our IT services and hardware. Significant staffing and resource reductions at certain public sector entities create an uncertain environment and as a result, our financial results may be impacted in the near term.
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Management's Discussion and Analysis of
Financial Condition and Results of Operations (Continued)
Recent Tax Developments: The Organisation for Economic Co-operation and Development (“OECD”), an international association of 38 countries including the United States, has proposed changes to numerous long-standing tax principles, namely, its Pillar Two framework, which imposes a global minimum corporate tax rate of 15%. To date, 60 countries have enacted portions, or all, of the OECD proposal and a further 5 countries have drafted, or have announced an intent to draft, legislation enacting the proposed rules. Where enacted, the rules are effective for us in fiscal 2025. Under US GAAP, the OECD Pillar Two rules are considered an alternative minimum tax and therefore deferred taxes would not be recognized or adjusted for the estimated effects of the future minimum tax. The adoption and effective dates of these rules may vary by country and could increase tax complexity and uncertainty and may adversely affect our provision for income taxes. We do not expect a material impact to our fiscal 2025 results.
The Internal Revenue Service (“IRS”) is conducting audits of our fiscal 2020 through 2022 U.S. federal income tax returns. In the second quarter of fiscal 2025, the IRS issued a Revenue Agent Report regarding the audit of our fiscal 2017 through 2019 U.S. federal income tax returns with which we agreed. The audit cycle for fiscal 2017 through 2019 is now considered effectively settled, resulting in a reduction of existing unrecognized tax benefits of approximately $340 million, which did not result in a material impact to our Condensed Consolidated Statement of Earnings and our Condensed Consolidated Balance Sheet. The resolution of the audit resulted in the release of tax reserves that were predominantly related either to adjustments to foreign tax credits that carried a full valuation allowance or to the timing of intercompany royalty revenue recognition, neither of which affected our effective tax rate.
On July 4, 2025, the U.S. government enacted the One Big Beautiful Bill Act (“OB3”) into law. OB3 introduces several changes to tax regulations, including the permanent restoration of 100% depreciation and the permanent restoration of immediate deductibility of costs associated with research and development activities performed in the United States. We do not anticipate a material impact to our fiscal 2025 results but continue to evaluate the full impact of these changes on our future results.
Other Trends and Uncertainties: The impacts of geopolitical volatility (including the ongoing conflict in the Middle East and in Ukraine and the relationship between China and the U.S.) may impact our operations, financial performance, and ability to conduct business in some non-U.S. markets. We have, in the past, entered into contracts for the sale of certain products and services that reflect heavier-than-normal discounting due to competitive pressures, which have resulted in lower margins than expected, and we expect will continue to negatively impact our margins in the near term. We have been monitoring and seeking to mitigate these risks with adjustments to our manufacturing, supply chain, and distribution networks, as well as our pricing and discounting practices. We remain focused on executing our key strategic priorities, building long-term value creation for our stakeholders, and addressing our customers’ needs while continuing to make prudent decisions in response to the environment.
EXECUTIVE OVERVIEW
We are a global technology leader focused on developing intelligent solutions that allow customers to capture, analyze, and act upon data seamlessly from edge-to-cloud. We enable customers to accelerate business outcomes by driving new business models, creating new customer and employee experiences, and increasing operational efficiency today and into the future. Our customers range from small-and-medium size businesses to large global enterprises and governmental entities. Our legacy dates to a partnership founded in 1939 by William R. Hewlett and David Packard, and we strive every day to uphold and enhance that legacy through our dedication to providing innovative technological solutions to our customers.
Our operations are organized into five reportable segments for financial reporting purposes: Server, Hybrid Cloud, Networking, Financial Services (“FS”), and Corporate Investments and Other. During the third quarter of fiscal 2025, the Intelligent Edge segment was renamed to Networking. The segment name change did not result in any change to the composition of the Company’s segments and therefore no prior information was recast; further, the designation change did not impact the Company’s condensed consolidated financial statements. Effective at the beginning of the first quarter of fiscal 2025, in order to align its segment financial reporting more closely with its current business structure, HPE implemented an organizational change with the transfer of certain managed services, previously reported within the Server segment, to the Hybrid Cloud segment.
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Management's Discussion and Analysis of
Financial Condition and Results of Operations (Continued)
Acquisition of Juniper Networks
On July 2, 2025, we completed the Juniper Networks, Inc. (“Juniper Networks”) merger (the “Merger”). Under the terms of the Merger Agreement, HPE agreed to pay $40.00 per share of Juniper Networks common stock, issued and outstanding as of July 2, 2025, representing a cash consideration of approximately $13.4 billion. The results of operations of Juniper Networks are included in the unaudited Condensed Consolidated Financial Statements commencing on July 2, 2025. See Note 8, “Acquisitions and Dispositions” to the Condensed Consolidated Financial Statements for additional information.
Cost Reduction Program
On March 6, 2025, the Board of Directors approved a cost reduction program (the "Program") intended to reduce structural operating costs and continue advancing our ongoing commitment to profitable growth. The Program is expected to be implemented through fiscal year 2026 and deliver gross savings of approximately $350 million by fiscal year 2027 through reductions in our workforce.
The estimates of the duration of the Program, the charges and expenditures that we expect to incur in connection therewith, and the timing thereof are subject to a number of assumptions, including local law requirements in various jurisdictions, and actual amounts may differ materially from estimates. In addition, we may incur other charges or cash expenditures not currently contemplated due to unanticipated events that may occur, including in connection with the implementation of the Program. In connection with the Program, we incurred charges of $2 million and $148 million for the three and nine months ended July 31, 2025, respectively.
Three months ended July 31, 2025 compared with three months ended July 31, 2024
Net revenue of $9.1 billion represented an increase of 18.5% (increased 17.7% on a constant currency basis) primarily due to higher average unit prices (“AUPs”) in the Server segment, higher revenue from the Merger in the Networking segment, and higher unit volume in the Hybrid Cloud segment. The gross profit margin of 29.2% (or $2.7 billion), represents a decrease of 2.4 percentage points from the prior-year period primarily due to an increase in cost of sales in the Server, Networking and Hybrid Cloud segments. The operating profit margin of 2.7% represents a decrease of 4.4 percentage points from the prior-year period primarily due to the costs associated with the Merger.
Nine months ended July 31, 2025 compared with nine months ended July 31, 2024
Net revenue of $24.6 billion represented an increase of 13.6% (increased 14.0% on a constant currency basis) primarily due to higher AUPs in the Server segment, higher revenue from the Merger in the Networking segment, and higher unit volume in the Hybrid Cloud segment. The gross profit margin of 29.0% (or $7.1 billion), represents a decrease of 4.6 percentage points from the prior-year period, primarily due to an increase in cost of sales in the Server, Hybrid Cloud and Networking segments. The operating profit margin of (1.7)% represents a decrease of 8.6 percentage points from the prior-year period primarily due to the impairment of goodwill and costs associated with the Merger.
Financial Results
The following table summarizes our condensed consolidated GAAP financial results:
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Financial Condition and Results of Operations (Continued)
| For the three months ended July 31, | For the nine months ended July 31, | ||||||||||||||||||||||||||||||||||
| 2025 | 2024 | Change | 2025 | 2024 | Change | ||||||||||||||||||||||||||||||
| Dollars in millions, except per share amounts | |||||||||||||||||||||||||||||||||||
| Net revenue | $ | 9,136 | $ | 7,710 | 18.5% | $ | 24,617 | $ | 21,669 | 13.6% | |||||||||||||||||||||||||
| Gross profit | $ | 2,672 | $ | 2,439 | 9.6% | $ | 7,136 | $ | 7,272 | (1.9)% | |||||||||||||||||||||||||
| Gross profit margin | 29.2 | % | 31.6 | % | (2.4)pts | 29.0 | % | 33.6 | % | (4.6)pts | |||||||||||||||||||||||||
| Earnings (loss) from operations | $ | 247 | $ | 547 | (54.8)% | $ | (429) | $ | 1,497 | (128.7)% | |||||||||||||||||||||||||
| Operating profit margin | 2.7 | % | 7.1 | % | (4.4)pts | (1.7) | % | 6.9 | % | (8.6)pts | |||||||||||||||||||||||||
| Net earnings (loss) attributable to HPE | $ | 305 | $ | 512 | (40.4)% | $ | (118) | $ | 1,213 | (109.7)% | |||||||||||||||||||||||||
| Net earnings (loss) attributable to common stockholders | $ | 276 | $ | 512 | (46.1)% | $ | (205) | $ | 1,213 | (116.9)% | |||||||||||||||||||||||||
Diluted net earnings (loss) per share attributable to common stockholders(1) | $ | 0.21 | $ | 0.38 | $(0.17) | $ | (0.16) | $ | 0.92 | $(1.08) | |||||||||||||||||||||||||
| Cash flow provided by operations | $ | 1,305 | $ | 1,154 | $151 | $ | 454 | $ | 2,311 | $(1,857) | |||||||||||||||||||||||||
The following table summarizes our condensed consolidated non-GAAP financial results:
| For the three months ended July 31, | For the nine months ended July 31, | ||||||||||||||||||||||||||||||||||
| 2025 | 2024 | Change | 2025 | 2024 | Change | ||||||||||||||||||||||||||||||
| Dollars in millions, except per share amounts | |||||||||||||||||||||||||||||||||||
| Net revenue in constant currency | $ | 9,075 | $ | 7,710 | 17.7% | $ | 24,708 | $ | 21,669 | 14.0% | |||||||||||||||||||||||||
| Non-GAAP gross profit | $ | 2,732 | $ | 2,450 | 11.5% | $ | 7,286 | $ | 7,281 | 0.1% | |||||||||||||||||||||||||
| Non-GAAP gross profit margin | 29.9 | % | 31.8 | % | (1.9)pts | 29.6 | % | 33.6 | % | (4.0)pts | |||||||||||||||||||||||||
| Non-GAAP earnings from operations | $ | 777 | $ | 771 | 0.8% | $ | 2,170 | $ | 2,230 | (2.7)% | |||||||||||||||||||||||||
| Non-GAAP operating profit margin | 8.5 | % | 10.0 | % | (1.5)pts | 8.8 | % | 10.3 | % | (1.5)pts | |||||||||||||||||||||||||
| Non-GAAP net earnings attributable to HPE | $ | 631 | $ | 661 | (4.5)% | $ | 1,860 | $ | 1,860 | —% | |||||||||||||||||||||||||
| Non-GAAP net earnings attributable to common stockholders | $ | 602 | $ | 661 | (8.9)% | $ | 1,773 | $ | 1,860 | (4.7)% | |||||||||||||||||||||||||
Non-GAAP diluted net earnings per share attributable to common stockholders(1) | $ | 0.44 | $ | 0.50 | $(0.06) | $ | 1.32 | $ | 1.40 | $(0.08) | |||||||||||||||||||||||||
| Free cash flow | $ | 790 | $ | 669 | $121 | $ | (934) | $ | 797 | $(1,731) | |||||||||||||||||||||||||
(1)For purposes of calculating diluted net earnings (loss) per share (“EPS”), the 7.625% Series C mandatory convertible preferred stock (“Preferred Stock”) dividends are added back to the net earnings (loss) attributable to common stockholders and the diluted weighted-average share calculation assumes the Preferred Stock was converted at issuance or as of the beginning of the reporting period. For GAAP diluted net EPS, the effect of employee stock plans and Preferred Stock is excluded when calculating diluted net loss per share as it would be anti-dilutive.
Each non-GAAP financial measure has been reconciled to the most directly comparable GAAP financial measure herein. Please refer to the section “GAAP to non-GAAP Reconciliations” included in this MD&A for these reconciliations, a discussion of the use, usefulness and economic substance of the non-GAAP financial measures, along with a discussion of material limitations, and compensation for those limitations, associated with the use of non-GAAP financial measures.
Annualized Revenue Run-rate (“ARR”)
ARR represents the annualized revenue of all net HPE GreenLake cloud services revenue, related financial services revenue (which includes rental income from operating leases and interest income from finance leases), and software-as-a-service, software consumption revenue, and other aaS offerings, by taking such revenue recognized during a quarter and multiplying by four. To better align the calculation of ARR with Juniper Networks’ business and offerings, beginning with the quarter ended July 31, 2025, we also included revenue from software licenses support and maintenance in our ARR calculation, and will continue to do so going forward. The impact of this change was not material to the current and prior periods presented. We believe that ARR is a metric that allows management to better understand and highlight the potential future performance of
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Management's Discussion and Analysis of
Financial Condition and Results of Operations (Continued)
our aaS business. We also believe ARR provides investors with greater transparency to our financial information and of the performance metric used in our financial and operational decision making and allows investors to see our results “through the eyes of management.” We use ARR as a performance metric. ARR should be viewed independently of net revenue and is not intended to be combined with it.
ARR does not have any standardized definition and is therefore unlikely to be comparable to similarly titled measures presented by other companies. ARR is not a forecast and the active contracts at the end of a reporting period used in calculating ARR may or may not be extended or renewed by our customers.
The following presents our ARR calculated as of July 31, 2025 and 2024:
| As of July 31, | |||||||||||||||||||||||
| 2025 | 2024 | ||||||||||||||||||||||
| Dollars in millions | |||||||||||||||||||||||
ARR(1) | $ | 3,053 | $ | 1,723 | |||||||||||||||||||
| Year-over-year growth rate | 77% | 35% | |||||||||||||||||||||
(1) The amount of annualized revenue attributable to Juniper Networks is approximately $590 million as of July 31, 2025. We calculated ARR attributable to Juniper Networks using one month of recurring revenue multiplied by 12, as we acquired Juniper Networks on July 2, 2025.
The 77% year-over year increase in ARR was primarily due to growth in the Networking segment due to the Merger and an expanding customer installed base. The Hybrid Cloud and Server segments increased due to an expanded range of HPE GreenLake Flex Solutions and Server aaS activity.
Dividends and Share Repurchase Program
Returning capital to our stockholders remains an important part of our capital allocation framework, which also consists of strategic investments. The holders of HPE common stock are entitled to receive dividends when and as declared by the Board of Directors. Our ability to pay dividends will depend on many factors, such as the Company’s financial condition, earnings, capital requirements, debt service obligations, restrictive covenants in its debt, industry practice, legal requirements, regulatory constraints, and other factors that the Board of Directors deems relevant. Furthermore, so long as any share of our Preferred Stock remains outstanding, no dividend on shares of common stock (or any other class of stock junior to the Preferred Stock) shall be declared or paid unless all accumulated and unpaid dividends for all preceding dividend periods for the Preferred Stock have been declared and paid in full in cash, shares of the Company’s common stock or a combination thereof, or a sufficient sum of cash or number of shares of its common stock has been set apart for the payment of such dividends, on all outstanding shares of the Preferred Stock. During the third quarter of fiscal 2025, we paid a quarterly dividend of $0.13 per share of common stock. On September 3, 2025, we declared a regular cash dividend of $0.13 per share of our common stock, payable on or about October 17, 2025, to our holders of record as of the close of business on September 18, 2025. We also declared a cash dividend of $0.953125 per share of our 7.625% Series C Mandatory Convertible Preferred Stock, which was paid on September 1, 2025, to holders of record as of the close of business on August 15, 2025.
As of July 31, 2025, we had a remaining authorization of approximately $0.7 billion for future share repurchases.
RESULTS OF OPERATIONS
Revenue from our international operations has historically represented, and we expect will continue to represent, a majority of our overall net revenue. As a result, our revenue growth has been impacted, and we expect will continue to be impacted, by fluctuations in foreign currency exchange rates. In order to provide a framework for assessing performance excluding the impact of foreign currency fluctuations, we present the year-over-year percentage change in revenue on a constant currency basis, which assumes no change in foreign currency exchange rates from the prior-year period and does not adjust for any repricing or demand impacts from changes in foreign currency exchange rates. This change in revenue on a constant currency basis is calculated as the quotient of (a) current year revenue converted to U.S. dollars using the prior-year period's foreign currency exchange rates divided by (b) the prior-year period revenue. This information is provided so that revenue can be viewed without the effect of fluctuations in foreign currency exchange rates, which is consistent with how management evaluates our revenue results and trends. This constant currency disclosure is provided in addition to, and not as a substitute for, the year-over-year percentage change in revenue on a GAAP basis. Other companies may calculate and define similarly labeled items differently, which may limit the usefulness of this measure for comparative purposes.
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Management's Discussion and Analysis of
Financial Condition and Results of Operations (Continued)
Results of operations in dollars and as a percentage of net revenue were as follows:
| For the three months ended July 31, | For the nine months ended July 31, | ||||||||||||||||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||||||||||||||||||||||||||
| Dollars | % of Revenue | Dollars | % of Revenue | Dollars | % of Revenue | Dollars | % of Revenue | ||||||||||||||||||||||||||||||||||||||||
| Dollars in millions | |||||||||||||||||||||||||||||||||||||||||||||||
| Net revenue | $ | 9,136 | 100.0 | % | $ | 7,710 | 100.0 | % | $ | 24,617 | 100.0 | % | $ | 21,669 | 100.0 | % | |||||||||||||||||||||||||||||||
| Cost of sales (exclusive of amortization shown separately below) | 6,464 | 70.8 | 5,271 | 68.4 | 17,481 | 71.0 | 14,397 | 66.4 | |||||||||||||||||||||||||||||||||||||||
| Gross profit | 2,672 | 29.2 | 2,439 | 31.6 | 7,136 | 29.0 | 7,272 | 33.6 | |||||||||||||||||||||||||||||||||||||||
| Research and development | 622 | 6.8 | 547 | 7.1 | 1,637 | 6.6 | 1,719 | 7.9 | |||||||||||||||||||||||||||||||||||||||
| Selling, general and administrative | 1,496 | 16.4 | 1,229 | 15.9 | 4,062 | 16.5 | 3,660 | 16.9 | |||||||||||||||||||||||||||||||||||||||
| Amortization of intangible assets | 126 | 1.4 | 60 | 0.8 | 201 | 0.8 | 198 | 0.9 | |||||||||||||||||||||||||||||||||||||||
| Impairment of goodwill | — | — | — | — | 1,361 | 5.5 | — | — | |||||||||||||||||||||||||||||||||||||||
| Transformation costs | — | — | 14 | 0.2 | 2 | — | 67 | 0.3 | |||||||||||||||||||||||||||||||||||||||
| Acquisition, disposition and other charges | 181 | 2.0 | 42 | 0.5 | 302 | 1.2 | 131 | 0.6 | |||||||||||||||||||||||||||||||||||||||
| Earnings (loss) from operations | 247 | 2.7 | 547 | 7.1 | (429) | (1.7) | 1,497 | 6.9 | |||||||||||||||||||||||||||||||||||||||
| Interest and other, net | 8 | 0.1 | (12) | (0.2) | 86 | 0.3 | (122) | (0.6) | |||||||||||||||||||||||||||||||||||||||
| Gain on sale of a business | 1 | — | — | — | 245 | 1.0 | — | — | |||||||||||||||||||||||||||||||||||||||
| Earnings from equity interests | 32 | 0.4 | 73 | 0.9 | 74 | 0.3 | 161 | 0.7 | |||||||||||||||||||||||||||||||||||||||
| Earnings (loss) before provision for taxes | 288 | 3.2 | 608 | 7.9 | (24) | (0.1) | 1,536 | 7.1 | |||||||||||||||||||||||||||||||||||||||
| Benefit (provision) for taxes | 17 | 0.2 | (96) | (1.2) | (94) | (0.4) | (323) | (1.5) | |||||||||||||||||||||||||||||||||||||||
| Net earnings (loss) attributable to HPE | 305 | 3.3 | 512 | 6.6 | (118) | (0.5) | 1,213 | 5.6 | |||||||||||||||||||||||||||||||||||||||
| Preferred stock dividends | (29) | (0.3) | — | — | (87) | (0.4) | — | — | |||||||||||||||||||||||||||||||||||||||
| Net earnings (loss) attributable to common stockholders | $ | 276 | 3.0 | % | $ | 512 | 6.6 | % | $ | (205) | (0.8) | % | $ | 1,213 | 5.6 | % | |||||||||||||||||||||||||||||||
Three and nine months ended July 31, 2025 compared with the three and nine months ended July 31, 2024
Net revenue
For the three months ended July 31, 2025, total net revenue of $9.1 billion represented an increase of $1.4 billion, or 18.5% (increased 17.7% on a constant currency basis). U.S. net revenue increased by $1.4 billion, or 48.4%, to $4.3 billion, and net revenue from outside of the U.S. increased by $30 million, or 0.6%, to $4.8 billion.
For the nine months ended July 31, 2025, total net revenue of $24.6 billion represented an increase of $2.9 billion, or 13.6% (increased 14.0% on a constant currency basis). U.S. net revenue increased by $1.8 billion, or 22.9%, to $9.5 billion, and net revenue from outside of the U.S. increased by $1.1 billion, or 8.4%, to $15.1 billion.
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Management's Discussion and Analysis of
Financial Condition and Results of Operations (Continued)
The components of the weighted net revenue change by segment were as follows:
| For the three months ended July 31, 2025 | For the nine months ended July 31, 2025 | ||||||||||
| Percentage Points | |||||||||||
| Server | 8.9 | 8.6 | |||||||||
| Hybrid Cloud | 2.1 | 2.2 | |||||||||
| Networking | 7.9 | 2.9 | |||||||||
| Financial Services | 0.1 | — | |||||||||
| Corporate Investments and Other | (0.9) | (0.8) | |||||||||
| Total segment | 18.1 | 12.9 | |||||||||
| Elimination of intersegment net revenue and other | 0.4 | 0.7 | |||||||||
| Total HPE | 18.5 | 13.6 | |||||||||
Three months ended July 31, 2025 compared with three months ended July 31, 2024
From a segment perspective, the primary factors contributing to the change in total net revenue are summarized as follows:
•Server net revenue increased $685 million, or 16.1%, primarily due to higher AUPs
•Hybrid Cloud net revenue increased $159 million, or 12.0%, primarily due to increase in unit volume
•Networking net revenue increased $609 million, or 54.3%, primarily due to the Merger
•Financial Services net revenue increased $7 million, or 0.8%, primarily due to favorable currency fluctuations
•Corporate Investments and Other net revenue decreased $68 million, or 26.0%, primarily due to the divestiture of the Communications Technology Group (“CTG”) business
Nine months ended July 31, 2025 compared with nine months ended July 31, 2024
From a segment perspective, the primary factors contributing to the change in total net revenue are summarized as follows:
•Server net revenue increased $1,865 million, or 16.3%, primarily due to higher AUPs
•Hybrid Cloud net revenue increased $462 million, or 11.9%, primarily due to an increase in unit volume
•Networking net revenue increased $630 million, or 18.5%, primarily due to the Merger
•Financial Services net revenue decreased $4 million, or 0.2%, primarily due to unfavorable currency fluctuations
•Corporate Investments and Other net revenue decreased $167 million, or 22.2%, primarily due to the divestiture of CTG
Please refer to the section “Segment Information” further below for a discussion of our results of operations for each reportable segment.
Gross profit
For the three and nine months ended July 31, 2025, the total gross profit margin of 29.2% and 29.0%, respectively, represents a decrease of 2.4 and 4.6 percentage points, respectively, as compared to the respective prior year periods. The decrease for the three and nine months ended July 31, 2025, was primarily due to an increase in cost of sales in the Server, Networking, and Hybrid Cloud segments.
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Management's Discussion and Analysis of
Financial Condition and Results of Operations (Continued)
Operating expenses
Research and development (“R&D”)
For the three months ended July 31, 2025, R&D expense increased by $75 million, or 13.7%, primarily due to operating expenses associated with Juniper Networks, which contributed 17.3 percentage points to the change, and higher employee costs, which contributed 6.2 percentage points. The increase was partially offset by lower operating expenses due to higher mix of capital versus expense investment, which contributed 8.9 percentage points to the change.
For the nine months ended July 31, 2025, R&D expense decreased by $82 million, or 4.8%, primarily due to higher mix of capital versus expense investment, which contributed 11.0 percentage points to the change. The decrease was partially offset by higher operating expenses associated with Juniper Networks, which contributed 5.5 percentage points to the change.
Selling, general and administrative (“SG&A”)
For the three months ended July 31, 2025, SG&A expense increased by $267 million, or 21.7%, primarily due to higher employee costs and increased operating expenses associated with Juniper Networks, which contributed 21.9 percentage points to the change.
For the nine months ended July 31, 2025, SG&A expense increased by $402 million, or 11.0%, primarily due to higher employee costs and increased operating expenses associated with Juniper Networks, which contributed 7.8 percentage points to the change, and the expenses incurred related to the cost reduction program, which contributed 3.2 percentage points to the change.
Impairment of goodwill
Impairment of goodwill for the nine months ended July 31, 2025 represents a partial goodwill impairment charge of $1.4 billion, as it was determined that the fair value of the Hybrid Cloud reporting unit was below the carrying value of its net assets. The decline in the fair value was primarily driven by an increase in the discount rate used in the discounted cash flows analysis, driven by heightened macroeconomic uncertainty. Refer to Note 9, “Goodwill” to the Condensed Consolidated Financial Statements in Item 1 of Part I for more information.
Acquisition, disposition and other charges
For the three and nine months ended July 31, 2025, acquisition, disposition and other charges increased by $139 million or 331.0%, and $171 million, or 130.5%, respectively, primarily due to costs incurred in connection with the Merger.
Interest and other, net
For the three months ended July 31, 2025, interest and other, net income increased by $20 million, or 166.7%, primarily due to a gain relating to a settlement to resolve claims solely against Sushovan Hussain, the former CFO of Autonomy, in the ongoing Autonomy litigation, partially offset by higher net interest expense.
For the nine months ended July 31, 2025, interest and other, net income increased by $208 million, or 170.5%, primarily due to an increase in the non-service net periodic benefit credit, the gain from the settlement to resolve claims solely against Sushovan Hussain in the ongoing Autonomy litigation, a gain on equity investments recognized in the current period compared to a loss on equity investments in the prior-year period, and increase in net interest income.
Gain on sale of a business
On December 1, 2024, we completed the disposition of CTG. We received net proceeds of $210 million and recognized a gain of $245 million.
Earnings from equity interests
For the three and nine months ended July 31, 2025, earnings from equity interests decreased $41 million, or 56.2%, and $87 million, or 54.0%, respectively, primarily due to lower earnings from our equity interest in H3C Technologies Co., Limited (“H3C”) as a result of the disposition of 30% of the total issued share capital of H3C.
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Management's Discussion and Analysis of
Financial Condition and Results of Operations (Continued)
Benefit (provision) for taxes
For the three months ended July 31, 2025 and 2024, we recorded income tax benefit of $17 million and income tax expense of $96 million, respectively, which reflects an effective tax rate of (6.5)% and 15.8%, respectively. For the nine months ended July 31, 2025 and 2024, we recorded income tax expense of $94 million and $323 million, respectively, which reflects an effective tax rate of (359.9)% and 21.0%, respectively. For the three and nine months ended July 31, 2025 and the three months ended July 31, 2024, the effective tax rate generally differs from the U.S. federal statutory rate of 21% due to favorable tax rates associated with certain earnings from our operations in lower tax jurisdictions throughout the world but is also impacted by discrete tax adjustments during each fiscal period. The effective tax rate for the nine months ended July 31, 2025 also included the effects of the non-deductible goodwill impairment.
For further discussion, refer to Note 5, “Taxes on Earnings” to the Condensed Consolidated Financial Statements in Item 1 of Part I.
Segment Information
Hewlett Packard Enterprise's organizational structure is based on a number of factors that the Chief Operating Decision Maker, who is the Chief Executive Officer, uses to evaluate, view, and run our business operations, which include, but are not limited to, customer base and homogeneity of products and technology. The segments are based on this organizational structure and information reviewed by Hewlett Packard Enterprise's management to evaluate segment results.
A description of the products and services for each segment, along with other pertinent information related to segments can be found in Note 2, “Segment Information” to the Condensed Consolidated Financial Statements in Item 1 of Part I.
Segment Results
The following table and ensuing discussion provide an overview of our key financial metrics by segment for the three months ended July 31, 2025, as compared to the prior-year period:
| HPE Consolidated | Server | Hybrid Cloud | Networking | Financial Services | Corporate Investments and Other | ||||||||||||||||||||||||||||||
| Dollars in millions | |||||||||||||||||||||||||||||||||||
Net revenue(1) | $ | 9,136 | $ | 4,940 | $ | 1,484 | $ | 1,730 | $ | 886 | $ | 194 | |||||||||||||||||||||||
| Year-over-year change % | 18.5 | % | 16.1 | % | 12.0 | % | 54.3 | % | 0.8 | % | (26.0) | % | |||||||||||||||||||||||
Earnings (loss) from operations(2) | $ | 247 | $ | 317 | $ | 87 | $ | 360 | $ | 88 | $ | (14) | |||||||||||||||||||||||
| Earnings (loss) from operations as a % of net revenue | 2.7 | % | 6.4 | % | 5.9 | % | 20.8 | % | 9.9 | % | (7.2) | % | |||||||||||||||||||||||
| Year-over-year change percentage points | (4.4) | pts | (4.4) | pts | 0.7 | pts | (1.6) | pts | 0.9 | pts | (5.7) | pts | |||||||||||||||||||||||
The following table and ensuing discussion provide an overview of our key financial metrics by segment for the nine months ended July 31, 2025, as compared to the prior-year period:
| HPE Consolidated | Server | Hybrid Cloud | Networking | Financial Services | Corporate Investments and Other | ||||||||||||||||||||||||||||||
| Dollars in millions | |||||||||||||||||||||||||||||||||||
Net revenue(1) | $ | 24,617 | $ | 13,288 | $ | 4,342 | $ | 4,038 | $ | 2,615 | $ | 585 | |||||||||||||||||||||||
| Year-over-year change % | 13.6 | % | 16.3 | % | 11.9 | % | 18.5 | % | (0.2) | % | (22.2) | % | |||||||||||||||||||||||
(Loss) earnings from operations(2) | $ | (429) | $ | 906 | $ | 264 | $ | 948 | $ | 259 | $ | (26) | |||||||||||||||||||||||
| (Loss) earnings from operations as a % of net revenue | (1.7) | % | 6.8 | % | 6.1 | % | 23.5 | % | 9.9 | % | (4.4) | % | |||||||||||||||||||||||
| Year-over-year change percentage points | (8.6) | pts | (4.3) | pts | 2.7 | pts | (1.2) | pts | 1.0 | pts | (1.3) | pts | |||||||||||||||||||||||
(1)HPE consolidated net revenue excludes intersegment net revenue. Segment net revenues include intersegment net revenue.
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Financial Condition and Results of Operations (Continued)
(2)Segment earnings (loss) from operations exclude certain unallocated corporate costs and eliminations, stock-based compensation expense, amortization of intangible assets, transformation costs, H3C divestiture related severance costs, severance costs related to the cost reduction program, acquisition, disposition and other charges, and impairment of goodwill.
Server
| For the three months ended July 31, | For the nine months ended July 31, | ||||||||||||||||||||||||||||||||||
| 2025 | 2024 | % Change | 2025 | 2024 | % Change | ||||||||||||||||||||||||||||||
| Dollars in millions | |||||||||||||||||||||||||||||||||||
| Net revenue | $ | 4,940 | $ | 4,255 | 16.1 | % | $ | 13,288 | $ | 11,423 | 16.3 | % | |||||||||||||||||||||||
| Earnings from operations | $ | 317 | $ | 461 | (31.2) | % | $ | 906 | $ | 1,263 | (28.3) | % | |||||||||||||||||||||||
| Earnings from operations as a % of net revenue | 6.4 | % | 10.8 | % | 6.8 | % | 11.1 | % | |||||||||||||||||||||||||||
Three months ended July 31, 2025 compared with three months ended July 31, 2024
Server segment net revenue increased by $685 million, or 16.1% (increased 15.7% on a constant currency basis), primarily due to a $698 million, or 20.5%, increase in product revenue. The increase in product revenue was primarily due to higher net AUPs of $750 million, or 22.0%, partially offset by a decrease in net unit volume of $50 million, or 1.5%.
Server segment earnings from operations as a percentage of net revenue decreased 4.4 percentage points due to an increase in cost of products as a percentage of net revenue resulting from higher mix of lower margin products and input cost increases. Operating expenses as a percentage of net revenue remained relatively flat as compared to the prior-year period.
Nine months ended July 31, 2025 compared with nine months ended July 31, 2024
Server segment net revenue increased by $1,865 million, or 16.3% (increased 16.8% on a constant currency basis), primarily due to a $1,878 million, or 21.1%, increase in product revenue. The increase in product revenue was primarily due to higher net AUPs of $2,357 million, or 26.5%, partially offset by a decrease in net unit volume of $427 million, or 4.8%, and unfavorable currency fluctuations of $52 million, or 0.6%.
Server segment earnings from operations as a percentage of net revenue decreased 4.3 percentage points due to an increase in costs of products as a percentage of net revenue, moderated by a decrease in operating expenses as a percentage of net revenue. The increase in cost of products as a percentage of net revenue was primarily due to input cost increases, competitive pricing pressure, and higher mix of lower margin products. The decrease in operating expenses as a percentage of net revenue was primarily due to the scale of the net revenue increase, partially offset by higher SG&A expenses.
Hybrid Cloud
| For the three months ended July 31, | For the nine months ended July 31, | ||||||||||||||||||||||||||||||||||
| 2025 | 2024 | % Change | 2025 | 2024 | % Change | ||||||||||||||||||||||||||||||
| Dollars in millions | |||||||||||||||||||||||||||||||||||
| Net revenue | $ | 1,484 | $ | 1,325 | 12.0 | % | $ | 4,342 | $ | 3,880 | 11.9 | % | |||||||||||||||||||||||
| Earnings from operations | $ | 87 | $ | 69 | 26.1 | % | $ | 264 | $ | 133 | 98.5 | % | |||||||||||||||||||||||
| Earnings from operations as a % of net revenue | 5.9 | % | 5.2 | % | 6.1 | % | 3.4 | % | |||||||||||||||||||||||||||
Three months ended July 31, 2025 compared with three months ended July 31, 2024
Hybrid Cloud segment net revenue increased by $159 million, or 12.0% (increased 10.9% on a constant currency basis), primarily due to an increase in unit volume, partially offset by a decrease in AUPs. Hybrid Cloud product revenue increased by $62 million, or 8.5%, primarily due to a unit volume increase of $260 million, or 35.5%, led by private cloud and storage products. This increase was partially offset by decrease in AUPs of $200 million, or 27.3%, led by private cloud and storage products. Hybrid Cloud services revenue increased by $97 million, or 16.3%, primarily driven by higher services contribution from private cloud solutions.
Hybrid Cloud segment earnings from operations as a percentage of net revenue increased 0.7 percentage points, due to a decrease in operating expenses as a percentage of net revenue, partially offset by an increase in cost of products and services as a percentage of net revenue. Operating expenses as a percentage of net revenue decreased due to the scale of net revenue growth. Cost of products and services as a percentage of net revenue increased due to a higher contribution from our products
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Management's Discussion and Analysis of
Financial Condition and Results of Operations (Continued)
portfolio, as we transition to a more software-defined platform with HPE Alletra.
Nine months ended July 31, 2025 compared with nine months ended July 31, 2024
Hybrid Cloud segment net revenue increased by $462 million, or 11.9%, (increased 12.2% on a constant currency basis) primarily due to an increase in unit volume, partially offset by a decrease in AUPs. Hybrid Cloud product revenue increased by $221 million, or 10.6%, primarily due to a unit volume increase of $392 million, or 18.8%, led by private cloud and storage products. This increase was partially offset by a decrease in AUPs of $157 million, or 7.5%, led by private cloud products. Hybrid Cloud services revenue increased by $241 million, or 13.5%, primarily driven by higher services contribution from private cloud solutions.
Hybrid Cloud segment earnings from operations as a percentage of net revenue increased 2.7 percentage points, due to a decrease in operating expenses as a percentage of net revenue, primarily driven by capitalization of software costs and cost containment measures. Cost of products and services as a percentage of net revenue increased due to a higher contribution from our products portfolio, as we transition to a more software-defined platform with HPE Alletra.
Networking
| For the three months ended July 31, | For the nine months ended July 31, | ||||||||||||||||||||||||||||||||||
| 2025 | 2024 | % Change | 2025 | 2024 | % Change | ||||||||||||||||||||||||||||||
| Dollars in millions | |||||||||||||||||||||||||||||||||||
| Net revenue | $ | 1,730 | $ | 1,121 | 54.3 | % | $ | 4,038 | $ | 3,408 | 18.5 | % | |||||||||||||||||||||||
| Earnings from operations | $ | 360 | $ | 251 | 43.4 | % | $ | 948 | $ | 841 | 12.7 | % | |||||||||||||||||||||||
| Earnings from operations as a % of net revenue | 20.8 | % | 22.4 | % | 23.5 | % | 24.7 | % | |||||||||||||||||||||||||||
Three months ended July 31, 2025 compared with three months ended July 31, 2024
Networking segment net revenue increased by $609 million, or 54.3% (increased 53.9% on a constant currency basis). Product revenue increased by $396 million, or 48.2%, primarily led by revenue attributable to Juniper Networks of $303 million, or 36.9%, higher volume and product mix effect of $58 million, or 7.0%, and higher AUPs of $34 million, or 4.1%. Services net revenue increased $213 million, or 71.2%, primarily led by revenue attributable to Juniper Networks of $177 million, or 59.2%, and increased services net revenue primarily from our aaS offerings of $36 million, or 12.0%.
Networking segment earnings from operations as a percentage of net revenue decreased 1.6 percentage points primarily due to an increase in cost of products and services as a percentage of net revenue, partially offset by a decrease in operating expenses as a percentage of net revenue. The increase in cost of product and services as a percentage of net revenue was primarily due to competitive pricing pressure. The decrease in operating expenses as a percentage of net revenue was primarily due to the scale of the net revenue increase, partially offset by higher operating expenses associated with Juniper Networks.
Nine months ended July 31, 2025 compared with nine months ended July 31, 2024
Networking segment net revenue increased by $630 million, or 18.5% (increased 18.8% on a constant currency basis). Product revenue increased by $344 million, or 13.6%, primarily led by revenue attributable to Juniper Networks of $303 million, or 11.9%, higher volume and product mix effect of $185 million, or 7.3%, partially offset by lower AUPs of $138 million, or 5.4%. Services net revenue increased $286 million, or 32.8%, primarily led by revenue attributable to Juniper Networks of $177 million, or 20.3%, and increased services net revenue primarily from our aaS offerings of $109 million, or 12.5%.
Networking segment earnings from operations as a percentage of net revenue decreased 1.2 percentage points primarily due to an increase in cost of products and services as a percentage of net revenue, partially offset by a decrease in operating expenses as a percentage of net revenue. The increase in cost of product and services as a percentage of net revenue was primarily due to competitive pricing pressure. The decrease in operating expenses as a percentage of net revenue primarily due to the scale of the net revenue increase, partially offset by higher operating expenses associated with Juniper Networks.
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HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES
Management's Discussion and Analysis of
Financial Condition and Results of Operations (Continued)
Financial Services
| For the three months ended July 31, | For the nine months ended July 31, | ||||||||||||||||||||||||||||||||||
| 2025 | 2024 | % Change | 2025 | 2024 | % Change | ||||||||||||||||||||||||||||||
| Dollars in millions | |||||||||||||||||||||||||||||||||||
| Net revenue | $ | 886 | $ | 879 | 0.8 | % | $ | 2,615 | $ | 2,619 | (0.2) | % | |||||||||||||||||||||||
| Earnings from operations | $ | 88 | $ | 79 | 11.4 | % | $ | 259 | $ | 234 | 10.7 | % | |||||||||||||||||||||||
| Earnings from operations as a % of net revenue | 9.9 | % | 9.0 | % | 9.9 | % | 8.9 | % | |||||||||||||||||||||||||||
Three months ended July 31, 2025 compared with three months ended July 31, 2024
FS segment net revenue increased by $7 million, or 0.8% (decreased 0.9% on a constant currency basis) primarily due to favorable currency fluctuations, higher finance income from higher average finance leases, and higher asset management remarketing revenue, partially offset by lower rental revenue on lower average operating leases.
FS segment earnings from operations as a percentage of net revenue increased 0.9 percentage points due to a decrease in cost of services as a percentage of net revenue, while operating expenses as a percentage of net revenue were relatively flat. The decrease in cost of services as a percentage of net revenue resulted primarily from lower depreciation expense, partially offset by higher bad debt expense.
Nine months ended July 31, 2025 compared with nine months ended July 31, 2024
FS segment net revenue decreased by $4 million, or 0.2% (increased 0.5% on a constant currency basis) primarily due to unfavorable currency fluctuations and lower rental revenue on lower average operating leases, partially offset by higher finance income from higher average finance leases, along with higher asset management remarketing revenue and asset recovery services revenue.
FS segment earnings from operations as a percentage of net revenue increased 1.0 percentage points due to a decrease in cost of services as a percentage of net revenue, while operating expenses as a percentage of net revenue were flat. The decrease in cost of services as a percentage of net revenue resulted primarily from lower depreciation expense, partially offset by higher bad debt expense and higher borrowing costs.
Financing Volume
| For the three months ended July 31, | For the nine months ended July 31, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| In millions | |||||||||||||||||||||||
| Financing volume | $ | 1,513 | $ | 1,483 | $ | 3,974 | $ | 4,518 | |||||||||||||||
Financing volume, which represents the amount of financing provided to customers for equipment and related software and services, including intercompany activity, increased 2.0% and decreased 12.0% for the three and nine months ended July 31, 2025, respectively, as compared to the prior-year period. The increase for the three months ended July 31, 2025 was primarily driven by higher financing of third-party product sales and services, partially offset by lower financing of HPE product sales and services. The decrease for the nine months ended July 31, 2025 was primarily driven by lower financing of both HPE and third-party product sales and services.
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HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES
Management's Discussion and Analysis of
Financial Condition and Results of Operations (Continued)
Portfolio Assets and Ratios
The portfolio assets and ratios derived from the segment balance sheets for FS were as follows:
| As of | |||||||||||
| July 31, 2025 | October 31, 2024 | ||||||||||
| Dollars in millions | |||||||||||
| Financing receivables, gross | $ | 9,628 | $ | 9,647 | |||||||
| Net equipment under operating leases | 3,234 | 3,632 | |||||||||
Capitalized profit on intercompany equipment transactions(1) | 491 | 396 | |||||||||
Intercompany leases(1) | 130 | 119 | |||||||||
| Gross portfolio assets | 13,483 | 13,794 | |||||||||
Allowance for doubtful accounts(2) | 196 | 177 | |||||||||
| Operating lease equipment reserve | 48 | 30 | |||||||||
| Total reserves | 244 | 207 | |||||||||
| Net portfolio assets | $ | 13,239 | $ | 13,587 | |||||||
| Reserve coverage | 1.8 | % | 1.5 | % | |||||||
Debt-to-equity ratio(3) | 7.0x | 7.0x | |||||||||
(1)Intercompany activity is eliminated in consolidation.
(2)Allowance for credit losses for financing receivables includes both the short- and long-term portions.
(3)Debt benefiting the FS segment consists of intercompany equity that is treated as debt for segment reporting purposes, intercompany debt, and borrowing- and funding-related activity associated with the FS segment and its subsidiaries. Debt benefiting the FS segment totaled $11.4 billion and $11.8 billion as of July 31, 2025 and October 31, 2024, respectively, and was determined by applying an assumed debt-to-equity ratio, which management believes to be comparable to that of other similar financing companies. The FS segment equity was $1.6 billion and $1.7 billion as of July 31, 2025 and October 31, 2024, respectively.
As of July 31, 2025 and October 31, 2024, the FS segment net cash and cash equivalents balances were approximately $666 million and $533 million, respectively.
Net portfolio assets as of July 31, 2025 decreased 2.6% from October 31, 2024. The decrease generally resulted from portfolio runoff exceeding new financing volume during the period, partially offset by favorable currency fluctuations.
The FS segment bad debt expense includes charges to general reserves, specific reserves, and write-offs for sales-type, direct-financing, and operating leases. For the three and nine months ended July 31, 2025, the FS segment recorded net bad debt expense of $27 million and $77 million, respectively. For the three and nine months ended July 31, 2024, the FS segment recorded net bad debt expense of $14 million and $36 million, respectively.
Corporate Investments and Other
| For the three months ended July 31, | For the nine months ended July 31, | ||||||||||||||||||||||||||||||||||
| 2025 | 2024 | % Change | 2025 | 2024 | % Change | ||||||||||||||||||||||||||||||
| Dollars in millions | |||||||||||||||||||||||||||||||||||
| Net revenue | $ | 194 | $ | 262 | (26.0) | % | $ | 585 | $ | 752 | (22.2) | % | |||||||||||||||||||||||
| Loss from operations | $ | (14) | $ | (4) | (250.0) | % | $ | (26) | $ | (23) | (13.0) | % | |||||||||||||||||||||||
| Loss from operations as a % of net revenue | (7.2) | % | (1.5) | % | (4.4) | % | (3.1) | % | |||||||||||||||||||||||||||
Three months ended July 31, 2025 compared with three months ended July 31, 2024
Corporate Investments and Other segment net revenue decreased by $68 million, or 26.0% (decreased 29.4% on a constant currency basis), primarily due to the divestiture of the CTG business effective December 1, 2024.
Corporate Investments and Other segment loss from operations as a percentage of net revenue increased by 5.7% percentage points primarily due to increases in cost of services and operating expenses as a percentage of net revenue due to the scale of the net revenue decline.
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Management's Discussion and Analysis of
Financial Condition and Results of Operations (Continued)
Nine months ended July 31, 2025 compared with nine months ended July 31, 2024
Corporate Investments and Other segment net revenue decreased by $167 million, or 22.2% (decreased 22.3% on a constant currency basis), primarily due to the divestiture of the CTG business effective December 1, 2024.
Corporate Investments and Other segment loss from operations remained relatively flat.
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
Our Condensed Consolidated Financial Statements are prepared in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”), which requires us to make estimates, judgments, and assumptions that affect the reported amounts of assets, liabilities, net revenue, and expenses, and the disclosure of contingent liabilities. An accounting policy is deemed to be critical if the nature of the estimate or assumption it incorporates is subject to a material level of judgment related to matters that are highly uncertain, and changes in those estimates and assumptions are reasonably likely to materially impact our Condensed Consolidated Financial Statements.
Estimates and judgments are based on historical experience, forecasted events, and various other assumptions that we believe to be reasonable under the circumstances. Estimates and judgments may vary under different assumptions or conditions. We evaluate our estimates and judgments on an ongoing basis. Accounting policies that are critical in the portrayal of our financial condition and results of operations and require management’s most difficult, subjective, or complex judgments include revenue recognition, taxes on earnings, impairment assessment of goodwill and intangible assets, and contingencies.
As of July 31, 2025, there have been no significant changes to our critical accounting estimates since our Annual Report on Form 10-K for the fiscal year ended October 31, 2024, except as set forth below.
Business Combinations
We account for acquired businesses using the acquisition method of accounting, which requires that once control is obtained, all the assets acquired and liabilities assumed are recorded at their respective fair values at the date of acquisition. The determination of fair values of identifiable assets and liabilities requires estimates and the use of valuation techniques when fair value is not readily available and requires a significant amount of management judgment. For the valuation of intangible assets acquired in a business combination, we use an income approach. The income approach estimates fair value by discounting associated lifetime expected future cash flows to their present value and relies on significant assumptions regarding future expected cash flows, forecasted revenue, customer attrition rates, obsolescence rate and the discount rate. Although the Company believes its estimates of fair value are reasonable, actual financial results could differ from those estimates due to the inherent uncertainty involved in making such estimates. Changes in assumptions concerning future financial results or other underlying assumptions could have a significant impact on the determination of the fair value of the intangible assets acquired. Third-party valuation specialists are utilized for certain estimates.
We estimate the fair value of acquired inventory, including raw materials, finished goods and work in process, by determining the estimated selling price when completed, less an estimate of costs to be incurred to complete and sell the inventory, and an estimate of a reasonable profit allowance for those manufacturing and selling efforts. The fair value of inventory is recognized in our results of operations as the inventory is sold. Some of the more significant estimates and assumptions inherent in the estimate of the fair value of inventory include stage of completion, costs to complete, costs to dispose and selling price.
We estimate the fair value of acquired property, plant and equipment using a combination of the cost and market approaches. The market approach estimates fair value by analyzing recent actual market transactions for similar assets or liabilities. The cost approach estimates fair value based on the expected cost to replace or reproduce the asset or liability and relies on assumptions regarding the occurrence and extent of any physical, functional and/or economic obsolescence. Some of the more significant estimates and assumptions inherent in these approaches are the values of asset replacement costs, comparable assets and estimated remaining economic lives of the assets.
The excess of the purchase price over fair values of identifiable assets acquired and liabilities assumed is recorded as goodwill. During the measurement period, which is up to one year from the acquisition date, we may record adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill due to the use of preliminary information in our initial estimates. Upon the conclusion of the measurement period, any subsequent adjustments are recorded to earnings.
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Management's Discussion and Analysis of
Financial Condition and Results of Operations (Continued)
Goodwill
We review goodwill for impairment at the reporting unit level annually on the first day of the fourth quarter, or whenever events or circumstances indicate the carrying amount of goodwill may not be recoverable. We are permitted to conduct a qualitative assessment to determine whether it is necessary to perform a quantitative goodwill impairment test. We performed interim goodwill impairment tests as of November 1, 2024 and April 30, 2025.
As of July 31, 2025, our reporting units with goodwill are consistent with the reportable segments identified in Note 2, “Segment Information” to the Condensed Consolidated Financial Statements in Item 1 of Part I of this Quarterly Report, with the exception of Networking and Corporate Investments and Other segments. The Networking segment contains two reporting units: Intelligent Edge and Juniper Networks. The Corporate Investments and Other segment contains the A & PS reporting unit.
When performing the goodwill impairment test, we compare the fair value of each reporting unit to its carrying amount. An impairment exists if the fair value of the reporting unit is less than its carrying amount.
Estimating the fair value of a reporting unit is judgmental in nature and involves the use of significant estimates and assumptions. We estimate the fair value of our reporting units using a weighting of fair values derived mostly from the income approach and, to a lesser extent, the market approach. Under the income approach, the fair value of a reporting unit is based on discounted cash flow analysis of management's short-term and long-term forecast of operating performance. This analysis includes significant assumptions regarding revenue growth rates, expected operating margins, and timing of expected future cash flows based on market conditions and customer acceptances. The discount rate used is based on the weighted-average cost of capital of comparable public companies adjusted for the relevant risk associated with business specific characteristics and the uncertainty related to the reporting unit's ability to execute on the projected cash flows. Under the market approach, the fair value is based on market multiples of revenue and earnings derived from comparable publicly traded companies with operating and investment characteristics similar to the reporting unit. We weight the fair value derived from the market approach commensurate with the level of comparability of these publicly traded companies to the reporting unit. When market comparables are not meaningful or not available, we estimate the fair value of a reporting unit using the income approach. In addition, we make certain judgments and assumptions in allocating shared assets and liabilities to individual reporting units to determine the carrying amount of each reporting unit.
November 1, 2024 Interim Impairment Test
An interim impairment test was performed as of November 1, 2024 based on organizational changes impacting the Hybrid Cloud and Server reporting units. The interim impairment test did not result in an impairment of goodwill.
April 30, 2025 Interim Impairment Test
During the second quarter of fiscal 2025, the macroeconomic environment experienced a rapid deterioration, primarily driven by the announcement and subsequent modifications of international tariffs, an escalation in global trade tensions, and increasing geopolitical uncertainty. These events have contributed to significant movement in inputs used to determine the weighted-average cost of capital. As of April 30, 2025, we determined that an indicator of potential impairment existed to require an interim quantitative goodwill impairment test for its reporting units.
Based on the results of the interim quantitative impairment test performed as of April 30, 2025, the fair value of the Hybrid Cloud reporting unit was below the carrying value assigned to Hybrid Cloud. The decline in the fair value of the Hybrid Cloud reporting unit was primarily driven by an increase in the discount rate used in the discounted cash flows analysis, which reflected heightened macroeconomic uncertainty and changes in market conditions. The fair value of the Hybrid Cloud reporting unit was based on a weighting of fair values derived most significantly from the income approach, and to a lesser extent, the market approach. Under the income approach, we estimate the fair value of a reporting unit based on the present value of estimated future cash flows which we consider to be a level 3 unobservable input in the fair value hierarchy.
Prior to the quantitative goodwill impairment test, we tested the recoverability of long-lived assets and other assets of the Hybrid Cloud reporting unit and concluded that such assets were not impaired. The quantitative goodwill impairment test indicated that the carrying value of the Hybrid Cloud reporting unit exceeded its fair value by $1.4 billion. As a result, we recorded a goodwill impairment charge of $1.4 billion in the second quarter of fiscal 2025.
Subsequent to the impairment of Hybrid Cloud reporting unit, the indicated fair values of the reporting units exceeded their respective carrying amounts by a range of 0% to 112%. In order to evaluate the sensitivity of the estimated fair value of
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our reporting units in the goodwill impairment test, we applied a hypothetical 10% decrease to the fair value of each reporting unit. Based on the results of this hypothetical 10% decrease all of the reporting units had an excess of fair value over carrying amount, except Server and Hybrid Cloud.
The Hybrid Cloud reporting unit has remaining goodwill of $3.5 billion as of July 31, 2025 and an excess of fair value over carrying value of net assets of 0% as of the interim test date. Hybrid Cloud business is transitioning to a more cloud-native, software-defined platform with HPE Alletra. Translating this growth to revenue and operating income will take time because a greater mix of high margin business, such as ratable software and services, are deferred and recognized in future periods.
The excess of fair value over carrying amount for the Server reporting unit was 3%. The fair value of the Server reporting unit was also impacted by an increase in the discount rate used in the discounted cash flow analysis, driven by heightened macroeconomic uncertainty. The Server reporting unit has a goodwill balance of $10.2 billion as of July 31, 2025. In the current macroeconomic and inflationary environment, customers have invested selectively, resulting in moderate unit growth and competitive pricing in the traditional servers business. While the AI servers business is growing at a faster pace, because graphics processing units represent a large portion of the solutions, the pricing is very competitive and margins are limited. The Server business continues to focus on capturing market share in both traditional and AI servers, while maintaining operating margin and leveraging its strong portfolio of products.
If the global macroeconomic or geopolitical conditions worsen, projected revenue growth rates or operating margins decline, weighted-average cost of capital increases, or if we have a significant or sustained decline in our stock price, it is possible the estimates about our Hybrid Cloud and Server reporting units’ ability to successfully address the current challenges may change, which could result in the carrying value of the Hybrid Cloud and Server reporting units exceeding their estimated fair value and potential impairment charges.
LIQUIDITY AND CAPITAL RESOURCES
Current Overview
We use cash generated by operations as our primary source of liquidity. We believe that internally generated cash flows will be generally sufficient to support our operating businesses, capital expenditures, product development initiatives, acquisitions and disposal activities including legal settlements, restructuring activities, transformation costs, indemnifications, maturing debt, interest payments, and income tax payments, in addition to any future investments, share repurchases, and stockholder dividend payments. We expect to supplement this short-term liquidity, if necessary, by accessing the capital markets, issuing commercial paper, and borrowing under credit facilities made available by various domestic and foreign financial institutions. However, our access to capital markets may be constrained and our cost of borrowing may increase under certain business, market and economic conditions. We anticipate that the funds made available, cash generated from our operations, along with our access to capital markets, will be sufficient to meet our liquidity requirements for at least the next twelve months and for the foreseeable future thereafter. Our liquidity is subject to various risks including the risks identified in the section entitled “Risk Factors” in Item 1A of Part I of the Annual Report on Form 10-K for the fiscal year ended October 31, 2024, as modified by the risk statements in the section titled “Risk Factors” in Item 1A of Part II subsequent Quarterly Reports, and market risks identified in the section entitled “Quantitative and Qualitative Disclosures about Market Risk” in Item 3 of Part I of this Quarterly Report.
Our cash balances are held in numerous locations throughout the world, with a substantial amount held outside the U.S. as of July 31, 2025. We utilize a variety of planning and financing strategies in an effort to ensure that our worldwide cash is available when and where it is needed.
Amounts held outside of the U.S. are generally utilized to support our non-U.S. liquidity needs. Repatriations of amounts held outside the U.S. generally will not be taxable from a U.S. federal tax perspective, but may be subject to state income or foreign withholding tax. Where local restrictions prevent an efficient intercompany transfer of funds, our intent is to keep cash balances outside of the U.S. and to meet liquidity needs through ongoing cash flows, external borrowings, or both. We do not expect restrictions or potential taxes incurred on repatriation of amounts held outside of the U.S. to have a material effect on our overall liquidity, financial condition, or results of operations.
In connection with the share repurchase program previously authorized by our Board of Directors, we repurchased and settled an aggregate amount of $102 million, during the first nine months of fiscal 2025. As of July 31, 2025, we had a remaining authorization of approximately $0.7 billion for future share repurchases. For more information on our share
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repurchase program, refer to the section entitled “Unregistered Sales of Equity Securities and Use of Proceeds” in Item 2 of Part II.
On May 23, 2024, we announced plans to divest our CTG business to HCLTech. CTG was included in our Communications and Media Solutions business, which was reported in the Corporate Investments and Other segment. This divestiture includes the platform-based software solutions portions of the CTG portfolio, including systems integration, network applications, data intelligence, and the business support systems groups. On December 1, 2024, we completed the disposition of CTG. We received net proceeds of $210 million and recognized a gain of $245 million included in Gain on sale of a business in the Condensed Consolidated Statements of Earnings.
HPE funded the aggregate consideration for the Merger through a combination of cash from its balance sheet, commercial paper issuances, and borrowings pursuant to the three-year delayed-draw term loan credit facility of $3.0 billion and the 364-day delayed-draw term loan credit facility of $1.0 billion entered into in September 2024.
For more information on the drawdown term loan facility, see Note 12 “Borrowings” in Item 1 of Part I.
Liquidity
Our cash, cash equivalents, restricted cash, total debt, and available borrowing resources were as follows:
| As of | |||||||||||
| July 31, 2025 | October 31, 2024 | ||||||||||
| In millions | |||||||||||
| Cash, cash equivalents and restricted cash | $ | 4,697 | $ | 15,105 | |||||||
| Total debt | 23,653 | 18,246 | |||||||||
Available borrowing resources(1) | 6,139 | 6,009 | |||||||||
Commercial paper programs(2) | 5,125 | 5,101 | |||||||||
Uncommitted lines of credit(3) | $ | 1,014 | $ | 908 | |||||||
(1) The prior period excludes the financing commitment for the Merger. The maximum aggregate commitment under those facilities is $4.0 billion, however, no balances were outstanding under these facilities as of the prior period.
(2) The maximum aggregate borrowing amount of the commercial paper programs and revolving credit facility is $5.75 billion as of July 31, 2025 and October 31, 2024, with an incremental $500 million accessible exclusively through the revolving credit facility as of July 31, 2025.
(3) The maximum aggregate capacity under the uncommitted lines of credit is $1.4 billion, of which $0.4 billion was primarily utilized towards issuances of bank guarantees.
The following tables represent the way in which management reviews cash flows:
| For the nine months ended July 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| In millions | |||||||||||
| Net cash provided by operating activities | $ | 454 | $ | 2,311 | |||||||
| Net cash used in investing activities | (13,614) | (1,580) | |||||||||
| Net cash provided by (used in) financing activities | 2,743 | (1,372) | |||||||||
| Effect of exchange rate changes on cash, cash equivalents, and restricted cash | 9 | (35) | |||||||||
| Change in cash, cash equivalents and restricted cash | $ | (10,408) | $ | (676) | |||||||
| Free cash flow | $ | (934) | $ | 797 | |||||||
Operating Activities
For the nine months ended July 31, 2025, net cash provided by operating activities decreased by $1.9 billion, as compared to the corresponding period in fiscal 2024. The decrease was primarily due to unfavorable working capital changes driven by the timing of payments, and unfavorable changes from other assets and liabilities. The decrease was moderated by an increase in collection from financing receivables, as compared to the prior-year period.
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Our working capital metrics and cash conversion impacts were as follows:
| As of | As of | ||||||||||||||||||||||||||||||||||||||||
| July 31, 2025 | October 31, 2024 | Change | July 31, 2024 | October 31, 2023 | Change | Y/Y Change | |||||||||||||||||||||||||||||||||||
| Days of sales outstanding in accounts receivable ("DSO") | 56 | 38 | 18 | 45 | 43 | 2 | 11 | ||||||||||||||||||||||||||||||||||
| Days of supply in inventory ("DOS") | 100 | 120 | (20) | 131 | 87 | 44 | (31) | ||||||||||||||||||||||||||||||||||
| Days of purchases outstanding in accounts payable ("DPO") | (121) | (170) | 49 | (172) | (134) | (38) | 51 | ||||||||||||||||||||||||||||||||||
| Cash conversion cycle | 35 | (12) | 47 | 4 | (4) | 8 | 31 | ||||||||||||||||||||||||||||||||||
The cash conversion cycle is the sum of DSO and DOS less DPO. Items which may cause the cash conversion cycle in a particular period to differ include, but are not limited to, changes in business mix, changes in payment terms (including extended payment terms to customers or from suppliers), early or late invoice payments from customers or to suppliers, the extent of receivables factoring, seasonal trends, the timing of the revenue recognition and inventory purchases within the period, the impact of commodity costs, and acquisition activity.
DSO measures the average number of days our receivables are outstanding. DSO is calculated by dividing ending accounts receivable, net of allowance for doubtful accounts, by a 90-day average of net revenue. Compared to the corresponding three-month period in fiscal 2024, the increase in DSO in the current period was primarily due to the impact of incremental receivables as a result of the Merger.
DOS measures the average number of days from procurement to sale of our products. DOS is calculated by dividing ending inventory by a 90-day average of cost of goods sold. Compared to the corresponding three-month period in fiscal 2024, the decrease in DOS in the current period was primarily due to higher shipments for large deals and lower purchases, partially offset by the impact of incremental inventory as a result of the Merger.
DPO measures the average number of days our accounts payable balances are outstanding. DPO is calculated by dividing ending accounts payable by a 90-day average of cost of goods sold. Compared to the corresponding three-month period in fiscal 2024, the decrease in DPO in the current period was primarily due to lower purchases.
Investing Activities
For the nine months ended July 31, 2025, net cash used in investing activities increased by $12.0 billion, as compared to the corresponding period in fiscal 2024. The increase was primarily due to a payment made for the Merger, net of cash acquired of $12.3 billion, partially offset by proceeds from the divestiture of our CTG business of $0.2 billion during the current period, as compared to the prior-year period.
Financing Activities
For the nine months ended July 31, 2025, net cash provided by financing activities increased by $4.1 billion, as compared to the corresponding period in fiscal 2024. This increase was primarily due to higher proceeds from debt, net of issuance costs of $3.2 billion, lower repayments of debt of $1.1 billion, partially offset by higher cash utilized for stock-based award activities of $0.2 billion, as compared to the prior-year period.
Free Cash Flow
Free cash flow (“FCF”) represents cash flow from operations less net capital expenditures (investments in property, plant and equipment (“PP&E”) and software assets less proceeds from the sale of PP&E), and adjusted for the effect of exchange rate fluctuations on cash, cash equivalents, and restricted cash. For the nine months ended July 31, 2025, FCF decreased by $1.7 billion, as compared to the corresponding period in fiscal 2024. This was primarily due to lower cash provided by operating activities, as compared to the prior-year period. For more information on our FCF, refer to the section entitled “GAAP to non-GAAP Reconciliations” included in this MD&A.
For more information on the impact of operating assets and liabilities to our cash flows, see Note 6, “Balance Sheet Details” to the Condensed Consolidated Financial Statements in Item 1 of Part I.
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Financial Condition and Results of Operations (Continued)
Capital Resources
We maintain debt levels that we establish through consideration of several factors, including cash flow expectations, cash requirements for operations, investment plans (including acquisitions), share repurchase activities, our cost of capital, and targeted capital structure. We maintain a revolving credit facility and two commercial paper programs, “the Parent Programs,” and a wholly-owned subsidiary maintains a third program. In September 2024, we terminated our prior senior unsecured revolving credit facility that was entered into in December 2021, and entered into a new senior unsecured revolving credit facility with an aggregate lending commitment of $5.25 billion for a period of five years. The commitment initially comprised of (i) $4.75 billion of commitments available immediately and (ii) $500 million of commitments available from and subject to the closing of the Merger and refinancing of Juniper Networks’ credit agreement. With the completion of the Merger and the associated refinancing, the full $5.25 billion commitment under the new facility is now available to us. There have been no changes to our commercial paper programs since October 31, 2024.
In December 2023, we filed a shelf registration statement with the Securities and Exchange Commission that allows us to sell, at any time and from time to time, in one or more offerings, debt securities, preferred stock, common stock, warrants, depository shares, purchase contracts, guarantees or units consisting of any of these securities.
On August 18, 2025, we elected to redeem the entire $2.5 billion aggregate principal amount of its outstanding 4.900% Notes due 2025, on September 17, 2025 (“Redemption Date”). The Notes will be redeemed at par, plus accrued and unpaid interest up to, but not including, the Redemption Date.
Subsequent to the quarter end, we sold approximately $739 million of available-for-sale investments and recognized a realized gain of approximately $2 million.
Significant funding and liquidity activities for the nine months ended July 31, 2025 were as follows:
Debt Issuances:
•In July 2025, we assumed fixed-rate Senior Notes of Juniper Networks with par value of $1.7 billion as a part of the Merger. For further information see Note 8, “Acquisitions and Dispositions” to the Condensed Consolidated Financial Statements in Item 1 of Part I.
•In July 2025, to support the funding of the Merger, we drew $3.0 billion under the three-year delayed-draw term loan credit facility and $1.0 billion under the 364-day delayed-draw term loan credit facility. The 364-day loan is scheduled for full repayment on July 1, 2026. The three-year loan is subject to quarterly amortization at 1.25%, with the remaining balance due at maturity on June 30, 2028.
•In July 2025, we issued $900 million of asset-backed debt securities in six tranches at a weighted-average interest rate of 4.673% and a final maturity date of March 2033.
Debt Repayments:
•During the nine months ended July 31, 2025, we repaid $1.1 billion of the outstanding asset-backed debt securities.
Cash Requirements and Commitments
Unconditional purchase obligations
In connection with the Merger, our unconditional purchase obligations increased by $1.2 billion. As of July 31, 2025, unconditional purchase obligations totaled $3.0 billion, of which $463 million is due within fiscal 2025. Our unconditional purchase obligations are related principally to inventory purchases, software maintenance and support services and other items. Unconditional purchase obligations exclude agreements that are cancellable without penalty.
Retirement Benefit Plan Funding
For the remainder of fiscal 2025, we anticipate making contributions of approximately $52 million to our non-U.S. pension plans. Our policy is to fund our pension plans so that we meet at least the minimum contribution requirements, as established by various authorities including local government and tax authorities.
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Restructuring Plans
As of July 31, 2025, we expect to make future cash payments of approximately $124 million in connection with our approved restructuring plans, which includes $21 million expected to be paid through the remainder of fiscal 2025 and $103 million expected to be paid thereafter. For more information on our restructuring activities, see Note 3, “Transformation Programs” to the Condensed Consolidated Financial Statements in Item 1 of Part I.
Cost Reduction Program
The Program is expected to be implemented through fiscal year 2026. The estimates of the duration of the Program, the charges and expenditures that we expect to incur in connection therewith, and the timing thereof are subject to a number of assumptions, including local law requirements in various jurisdictions, and actual amounts may differ materially from estimates. As of July 31, 2025, we expect to make future cash payments of approximately $327 million in connection with the Program, which includes $79 million expected to be paid through the remainder of fiscal 2025 and $248 million expected to be paid thereafter.
Uncertain Tax Positions
As of July 31, 2025, we had approximately $237 million of recorded liabilities and related interest and penalties pertaining to uncertain tax positions. These liabilities and related interest and penalties include $2 million expected to be paid within one year. For the remaining amount, we are unable to make a reasonable estimate as to when cash settlement with the tax authorities might occur due to the uncertainties related to these tax matters. Payments of these obligations would result from settlements with taxing authorities. For more information on our uncertain tax positions, see Note 5, “Taxes on Earnings” to the Condensed Consolidated Financial Statements in Item 1 of Part I.
For further information see “Cash Requirements and Commitments” in Item 7 of Part II of our Annual Report on Form 10-K for the fiscal year ended October 31, 2024.
Off-Balance Sheet Arrangements
As part of our ongoing business, we have not participated in transactions that generate material relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special purpose entities, established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes.
We have third-party revolving short-term financing arrangements intended to facilitate the working capital requirements of certain customers. For more information on our third-party revolving short-term financing arrangements, see Note 6, “Balance Sheet Details”, to the Condensed Consolidated Financial Statements in Item 1 of Part I.
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GAAP to non-GAAP Reconciliations
The following tables provide a reconciliation of each non-GAAP financial measure to the most directly comparable GAAP financial measure for the periods presented:
Reconciliation of GAAP gross profit and gross profit margin to non-GAAP gross profit and gross profit margin.
| For the three months ended July 31, | For the nine months ended July 31, | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Dollars | % of Revenue | Dollars | % of Revenue | Dollars | % of Revenue | Dollars | % of Revenue | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Dollars in millions | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| GAAP net revenue | $ | 9,136 | 100 | % | $ | 7,710 | 100 | % | $ | 24,617 | 100 | % | $ | 21,669 | 100 | % | |||||||||||||||||||||||||||||||||||||||||||
| GAAP cost of sales | 6,464 | 70.8 | % | 5,271 | 68.4 | % | 17,481 | 71.0 | % | 14,397 | 66.4 | % | |||||||||||||||||||||||||||||||||||||||||||||||
| GAAP gross profit | 2,672 | 29.2 | % | 2,439 | 31.6 | % | $ | 7,136 | 29.0 | % | 7,272 | 33.6 | % | ||||||||||||||||||||||||||||||||||||||||||||||
| Non-GAAP adjustments | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation expense | 10 | 0.1 | % | 9 | 0.1 | % | 40 | 0.2 | % | 39 | 0.2 | % | |||||||||||||||||||||||||||||||||||||||||||||||
Acquisition, disposition and other charges(1) | 50 | 0.5 | % | 2 | — | % | 47 | 0.2 | % | (30) | (0.1) | % | |||||||||||||||||||||||||||||||||||||||||||||||
| Cost reduction program | — | — | % | — | — | % | 46 | 0.2 | % | — | — | % | |||||||||||||||||||||||||||||||||||||||||||||||
| H3C divestiture related severance costs | — | — | % | — | — | % | 17 | 0.1 | % | — | — | % | |||||||||||||||||||||||||||||||||||||||||||||||
| Non-GAAP gross profit | $ | 2,732 | 29.9 | % | $ | 2,450 | 31.8 | % | $ | 7,286 | 29.6 | % | $ | 7,281 | 33.6 | % | |||||||||||||||||||||||||||||||||||||||||||
(1) Includes disaster recovery and divestiture related exit costs. For the three and nine months ended July 31, 2025, Acquisition, disposition and other charges include non-cash amortization of fair value adjustment for inventory in connection with the Merger, which was recorded in cost of sales.
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Reconciliation of GAAP earnings (loss) from operations and operating profit margin to non-GAAP earnings from operations and operating profit margin.
| For the three months ended July 31, | For the nine months ended July 31, | ||||||||||||||||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||||||||||||||||||||||||||
| Dollars | % of Revenue | Dollars | % of Revenue | Dollars | % of Revenue | Dollars | % of Revenue | ||||||||||||||||||||||||||||||||||||||||
| Dollars in millions | |||||||||||||||||||||||||||||||||||||||||||||||
| GAAP earnings (loss) from operations | $ | 247 | 2.7 | % | $ | 547 | 7.1 | % | $ | (429) | (1.7) | % | $ | 1,497 | 6.9 | % | |||||||||||||||||||||||||||||||
| Non-GAAP Adjustments: | |||||||||||||||||||||||||||||||||||||||||||||||
| Amortization of intangible assets | 126 | 1.4 | % | 60 | 0.8 | % | 201 | 0.8 | % | 198 | 0.9 | % | |||||||||||||||||||||||||||||||||||
| Impairment of goodwill | — | — | % | — | — | % | 1,361 | 5.5 | % | — | — | % | |||||||||||||||||||||||||||||||||||
| Transformation costs | — | — | % | 14 | 0.2 | % | 2 | — | % | 67 | 0.3 | % | |||||||||||||||||||||||||||||||||||
| Stock-based compensation expense | 177 | 1.9 | % | 80 | 1.0 | % | 447 | 1.8 | % | 341 | 1.6 | % | |||||||||||||||||||||||||||||||||||
| H3C divestiture related severance costs | — | — | % | — | — | % | 97 | 0.4 | % | — | — | % | |||||||||||||||||||||||||||||||||||
| Cost reduction program | 2 | — | % | — | — | % | 148 | 0.6 | % | — | — | % | |||||||||||||||||||||||||||||||||||
Acquisition, disposition and other charges(1) | 225 | 2.5 | % | 70 | 0.9 | % | 343 | 1.4 | % | 127 | 0.6 | % | |||||||||||||||||||||||||||||||||||
| Non-GAAP earnings from operations | $ | 777 | 8.5 | % | $ | 771 | 10.0 | % | $ | 2,170 | 8.8 | % | $ | 2,230 | 10.3 | % | |||||||||||||||||||||||||||||||
(1) Includes disaster recovery and divestiture related exit costs. For the three and nine months ended July 31, 2025, Acquisition, disposition and other charges include non-cash amortization of fair value adjustment for inventory in connection with the Merger, which was recorded in cost of sales.
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Management's Discussion and Analysis of
Financial Condition and Results of Operations (Continued)
Reconciliation of GAAP net earnings (loss) and diluted net EPS to non-GAAP net earnings and diluted net EPS.
| For the three months ended July 31, | Nine months ended July 31, | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Dollars | Diluted Net EPS | Dollars | Diluted Net EPS | Dollars | Diluted Net EPS(1) | Dollars | Diluted Net EPS | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Dollars in millions except per share amounts | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| GAAP net earnings (loss) | $ | 305 | $ | 0.21 | $ | 512 | $ | 0.38 | $ | (118) | $ | (0.16) | $ | 1,213 | $ | 0.92 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Non-GAAP Adjustments: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Amortization of intangible assets | 126 | 0.09 | 60 | 0.05 | 201 | 0.15 | 198 | 0.15 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Impairment of goodwill | — | — | — | — | 1,361 | 1.03 | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Transformation costs | — | — | 14 | 0.01 | 2 | — | 67 | 0.05 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation expense | 177 | 0.12 | 80 | 0.06 | 447 | 0.34 | 341 | 0.26 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Gain on sale of a business | (1) | — | — | — | (245) | (0.19) | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| H3C divestiture related severance costs | — | — | — | — | 97 | 0.07 | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Cost reduction program | 2 | — | — | — | 148 | 0.11 | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquisition, disposition and other charges(2) | 225 | 0.17 | 70 | 0.05 | 343 | 0.26 | 127 | 0.10 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Adjustments for equity interests | — | — | (44) | (0.04) | — | — | (132) | (0.10) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Litigation judgment | (52) | (0.04) | — | — | (52) | (0.04) | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Loss (gain) on equity investments, net | 1 | — | (14) | (0.01) | (8) | — | 47 | 0.03 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other adjustments(3) | (24) | (0.02) | 4 | — | (82) | (0.06) | 5 | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Adjustments for taxes | (128) | (0.09) | (21) | (0.01) | (234) | (0.19) | (6) | (0.01) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Non-GAAP net earnings attributable to HPE(4) | 631 | $ | 0.44 | 661 | $ | 0.50 | 1,860 | $ | 1.32 | 1,860 | $ | 1.40 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Preferred stock dividends | (29) | — | (87) | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Non-GAAP net earnings attributable to common stockholders | $ | 602 | $ | 661 | $ | 1,773 | $ | 1,860 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(1) Non-GAAP diluted net EPS reflects any dilutive effect of outstanding convertible Preferred Stock and employee stock plans, but that effect is excluded when calculating GAAP diluted net EPS as that would be anti-dilutive. See Note 14 “Net Earnings (Loss) Per Share”, to the Condensed Consolidated Financial Statements in Item 1 of Part I for further information.
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HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES
Management's Discussion and Analysis of
Financial Condition and Results of Operations (Continued)
(2) Includes disaster recovery and divestiture related exit costs. For the three and nine months ended July 31, 2025, Acquisition, disposition and other charges include non-cash amortization of fair value adjustment for inventory in connection with the Merger, which was recorded in cost of sales.
(3) Other adjustments includes non-service net periodic benefit cost and tax indemnification and other adjustments.
(4) For purposes of calculating Non-GAAP diluted net EPS, the Preferred Stock dividends are added back to the Non-GAAP net earnings attributable to common stockholders, and the diluted weighted-average share calculation assumes the Preferred Stock was converted at issuance or as of the beginning of the reporting period. See the table below for the shares used to calculate Non-GAAP diluted net EPS.
Shares used to calculate Non-GAAP diluted net EPS.
| For the three months ended July 31, | For the nine months ended July 31, 2025 | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| In millions | |||||||||||||||||||||||
| Weighted-average shares used to compute basic net EPS | 1,325 | 1,312 | 1,321 | 1,308 | |||||||||||||||||||
| Dilutive effect of employee stock plans | 16 | 20 | 14 | 17 | |||||||||||||||||||
Dilutive effect of 7.625% Series C mandatory convertible preferred stock | 80 | — | 78 | — | |||||||||||||||||||
| Weighted-average shares used to compute Non-GAAP diluted net EPS | 1,421 | 1,332 | 1,413 | 1,325 | |||||||||||||||||||
Reconciliation of net cash provided by operating activities to free cash flow.
| For the three months ended July 31, | For the nine months ended July 31, 2025 | ||||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||||||||||||||
| In millions | |||||||||||||||||||||||||||||||||||
| Net cash provided by operating activities | $ | 1,305 | $ | 1,154 | $ | 454 | $ | 2,311 | |||||||||||||||||||||||||||
| Investment in property, plant and equipment and software assets | (576) | (543) | (1,651) | (1,759) | |||||||||||||||||||||||||||||||
| Proceeds from sale of property, plant and equipment | 90 | 62 | 254 | 280 | |||||||||||||||||||||||||||||||
| Effect of exchange rate changes on cash, cash equivalents, and restricted cash | (29) | (4) | 9 | (35) | |||||||||||||||||||||||||||||||
| Free cash flow | $ | 790 | $ | 669 | $ | (934) | $ | 797 | |||||||||||||||||||||||||||
Use of Non-GAAP Financial Measures
The non-GAAP financial measures presented are net revenue on a constant currency basis (including at the business segment level), non-GAAP gross profit, non-GAAP gross profit margin, non-GAAP earnings from operations, non-GAAP operating profit margin (non-GAAP earnings from operations as a percentage of net revenue), non-GAAP tax rate, non-GAAP net earnings attributable to HPE, non-GAAP net earnings attributable to common stockholders, non-GAAP diluted net earnings per share attributable to common stockholders, and FCF. These non-GAAP financial measures are not computed in accordance with, or as an alternative to, generally accepted accounting principles in the United States. The GAAP measure most directly comparable to net revenue on a constant currency basis is net revenue. The GAAP measure most directly comparable to non-GAAP gross profit is gross profit. The GAAP measure most directly comparable to non-GAAP gross profit margin is gross profit margin. The GAAP measure most directly comparable to non-GAAP earnings from operations is earnings from operations. The GAAP measure most directly comparable to non-GAAP operating profit margin (non-GAAP earnings from operations as a percentage of net revenue) is operating profit margin (earnings from operations as a percentage of net revenue). The GAAP measure most directly comparable to non-GAAP income tax rate is income tax rate. The GAAP measure most directly comparable to non-GAAP net earnings attributable to HPE and non-GAAP net earnings attributable to common stockholders is net earnings. The GAAP measure most directly comparable to non-GAAP diluted net earnings per share attributable to common stockholders is diluted net earnings per share attributable to common stockholders. The GAAP measure most directly comparable to FCF is cash flow from operations.
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HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES
Management's Discussion and Analysis of
Financial Condition and Results of Operations (Continued)
We believe that providing the non-GAAP measures stated above, in addition to the related GAAP measures provides greater transparency to the information used in our financial and operational decision making and allows the reader of our Condensed Consolidated Financial Statements to see our financial results “through the eyes” of management. We further believe that providing this information provides investors with a supplemental view to understand our historical and prospective operating performance and to evaluate the efficacy of the methodology and information used by management to evaluate and measure such performance. Disclosure of these non-GAAP financial measures also facilitates comparisons of our operating performance with the performance of other companies in the same industry that supplement their GAAP results with non-GAAP financial measures that may be calculated in a similar manner.
Economic Substance of non-GAAP Financial Measures
Net revenue on a constant currency basis assumes no change to the foreign exchange rate utilized in the comparable prior-year period. This measure assists investors with evaluating our past and future performance, without the impact of foreign exchange rates, as more than half of our revenue is generated outside of the U.S.
We believe that excluding the items mentioned below from the non-GAAP financial measures provides a supplemental view to management and our investors of our consolidated financial performance and presents the financial results of the business without costs that we do not believe to be reflective of our ongoing operating results. Exclusion of these items can have a material impact on the equivalent GAAP measure and cash flows thus limiting the use of such non-GAAP financial measures as analytic tools. See “Compensation for Limitations With Use of Non-GAAP Financial Measures” section below for further information.
Non-GAAP gross profit and non-GAAP gross profit margin are defined to exclude charges related to the stock-based compensation expense, acquisition, disposition and other charges, severance costs associated with the cost reduction program, and H3C divestiture related severance costs. See below for the reasons management excludes each item:
•Stock-based compensation expense consists of equity awards granted based on the estimated fair value of those awards at grant date. Although stock-based compensation is a key incentive offered to our employees, we exclude these charges for the purpose of calculating these non-GAAP measures, primarily because they are non-cash expenses and our internal benchmarking analyses evidence that many industry participants and peers present non-GAAP financial measures excluding stock-based compensation expense.
•We incur costs related to our acquisition, disposition and other charges. Charges include expenses associated with acquisitions, non-cash amortization of fair value adjustment for inventory in connection with the Merger, exit costs associated with disposal activities, and disaster (recovery) charges. We exclude these costs because we consider these charges to be discrete events and do not believe they are reflective of normal continuing business operations. For the three and nine months ended July 31, 2025, acquisition charges were driven by costs associated with the Merger and miscellaneous disposition related charges. For the three and nine months ended July 31, 2024, acquisition charges were driven by the Merger and prior acquisitions of Axis and Athonet.
•We incurred severance and other charges pursuant to cost management initiatives. We exclude these charges because we do not believe they are reflective of normal continuing business operations. We believe eliminating these adjustments for the purposes of calculating non-GAAP measures facilitates the evaluation of our current operating performance.
•We incurred H3C divestiture related severance costs in connection with the disposition of total issued share capital of H3C. On September 4, 2024, we divested 30% of the total issued share capital of H3C and received proceeds of $2.1 billion of pre-tax consideration ($2.0 billion post-tax). The divestiture resulted in decreased future investment earnings and cash dividend inflows resulting in a decision to implement offsetting cost savings measures. These measures include severance for certain of the Company’s employees. The non-GAAP adjustment represents our costs to execute these related exit actions to offset the loss in equity earnings and related cash flows. We expect future annualized cost savings of approximately $120 million following the completion of these actions.
Non-GAAP earnings from operations and non-GAAP operating profit margin consist of earnings (loss) from operations or earnings (loss) from operations as a percentage of net revenue excluding the items mentioned above and charges relating to the amortization of intangible assets, impairment of goodwill, and transformation costs. In addition to the items previously explained above, management excludes these items for the following reasons:
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HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES
Management's Discussion and Analysis of
Financial Condition and Results of Operations (Continued)
•We incur charges relating to the amortization of intangible assets and exclude these charges for purposes of calculating these non-GAAP measures. Such charges are significantly impacted by the timing and magnitude of our acquisitions. We exclude these charges for the purpose of calculating these non-GAAP measures, primarily because they are noncash expenses and our internal benchmarking analyses evidence that many industry participants and peers present non-GAAP financial measures excluding intangible asset amortization. Although this does not directly affect our cash position, the loss in value of intangible assets over time can have a material impact on the equivalent GAAP earnings measure.
•In the second quarter of fiscal 2025, we recorded a non-cash impairment charge for the goodwill associated with our Hybrid Cloud reporting unit. HPE believes that this non-cash charge does not reflect the Company’s operating results and is not indicative of the underlying performance of the business. HPE excludes these charges for purposes of calculating these non-GAAP measures to facilitate a more meaningful evaluation of HPE’s current operating performance and comparisons to HPE’s operating performance in other periods. Although this does not directly affect our cash position, the loss in value of goodwill over time can have a material impact on the equivalent GAAP earnings measure.
•Transformation costs represent net costs related to the (i) HPE Next Plan and (ii) Cost Optimization and Prioritization Plan. We exclude these costs as they are discrete costs related to two specific transformation programs that were announced in 2017 and 2020, respectively, as multi-year programs necessary to transform the business and IT infrastructure. The primary elements of the HPE Next and the Cost Optimization and Prioritization Plan have been substantially completed by October 31, 2024. The exclusion of the transformation program costs from our non-GAAP financial measures as stated above is to provide a supplemental measure of our operating results that does not include material HPE Next Plan and Cost Optimization and Prioritization Plan costs as we do not believe such costs to be reflective of our ongoing operating cost structure.
Non-GAAP net earnings attributable to HPE, non-GAAP net earnings attributable to common stockholders, and non-GAAP diluted net earnings per share attributable to common stockholders consist of net earnings (loss) or diluted net earnings (loss) per share excluding those same charges mentioned above, as well as other items such as gain on sale of a business, adjustments for equity interests, gain or loss on equity investments, other adjustments, and adjustments for taxes. Non-GAAP net earnings attributable to HPE and non-GAAP diluted net earnings per share attributable to common stockholders includes preferred stock dividends added back to non-GAAP net earnings attributable to HPE. The Adjustments for taxes line item includes certain income tax valuation allowances and separation taxes, the impact of tax reform, structural rate adjustment, excess tax benefit from stock-based compensation, and adjustments for additional taxes or tax benefits associated with each non-GAAP item. In addition to the items previously explained, management excludes these items for the following reasons:
•Gain on sale of a business represents the gain associated with certain disposal activities. On December 1, 2024, we completed the disposition of CTG which resulted in a gain of $245 million. We consider this divestiture to be a discrete event and believe eliminating this adjustment for the purposes of calculating non-GAAP measures facilitates the evaluation of our current operating performance.
•During the six months ended April 30, 2024, we stopped reporting H3C earnings in our non-GAAP results due to the planned divestiture of the H3C investment. Per the terms of the original Put Share Purchase Agreement, we weren’t anticipating receiving dividends from this investment prospectively. However, on May 24, 2024, we entered into an Amended and Restated Put Share Purchase Agreement and an Agreement on Subsequent Arrangements, both with UNIS, which, taken together, revise the arrangements governing the aforementioned sale as previously set forth in the original Put Share Purchase Agreement. On September 4, 2024, we divested 30% of the total issued share capital of H3C. We continue to possess the option to sell the remaining 19% of the total issued share capital of H3C at a later date. We believe that eliminating these amounts for purposes of calculating non-GAAP financial measures facilitates the evaluation of our current operating performance.
•In the third quarter of fiscal 2025, Hewlett Packard Enterprise received $52 million from a settlement to resolve claims solely against Sushovan Hussain, in the ongoing Autonomy litigation. We exclude the litigation judgment for purposes of calculating non-GAAP measures to facilitate a more meaningful evaluation of our current operating performance and comparisons to our operating performance in other periods.
•We exclude gains and losses (including impairments) on our non-marketable equity investments because we do not believe they are reflective of normal continuing business operations. These adjustments are reflected in Interest and other, net in the Condensed Consolidated Statements of Earnings. We believe eliminating these adjustments for the purposes of calculating non-GAAP measures facilitates the evaluation of our current operating performance.
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HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES
Management's Discussion and Analysis of
Financial Condition and Results of Operations (Continued)
•We utilize a structural long-term projected non-GAAP income tax rate in order to provide consistency across the interim reporting periods and to eliminate the effects of items not directly related to our operating structure that can vary in size, frequency and timing. When projecting this long-term rate, we evaluated a three-year financial projection. The projected rate assumes no incremental acquisitions in the three-year projection period and considers other factors including our expected tax structure, our tax positions in various jurisdictions and current impacts from key legislation implemented in major jurisdictions where we operate. For fiscal 2025, we will use a projected non-GAAP income tax rate of 15%, which reflects currently available information as well as other factors and assumptions. The non-GAAP income tax rate could be subject to change for a variety of reasons, including the rapidly evolving global tax environment, significant changes in our geographic earnings mix including due to acquisition activity, or other changes to our strategy or business operations. We will re-evaluate its long-term rate as appropriate. For fiscal 2024, we had a non-GAAP tax rate of 15%. We believe that making these adjustments for purposes of calculating non-GAAP measures, facilitates a supplemental evaluation of our current operating performance and comparisons to past operating results.
FCF is defined as cash flow from operations, less net capital expenditures (investments in PP&E and software assets less proceeds from the sale of PP&E), and adjusted for the effect of exchange rate fluctuations on cash, cash equivalents, and restricted cash. FCF does not represent the total increase or decrease in cash for the period. Our management and investors can use FCF for the purpose of determining the amount of cash available for investment in our businesses, repurchasing stock and other purposes as well as evaluating our historical and prospective liquidity.
Compensation for Limitations With Use of Non-GAAP Financial Measures
These non-GAAP financial measures have limitations as analytical tools, and these measures should not be considered in isolation or as a substitute for analysis of our results as reported under GAAP. Some of the limitations in relying on these non-GAAP financial measures are that they can have a material impact on the equivalent GAAP earnings measures and cash flows, they may be calculated differently by other companies (limiting the usefulness of those measures for comparative purposes) and may not reflect the full economic effect of the loss in value of certain assets.
We compensate for these limitations on the use of non-GAAP financial measures by relying primarily on our GAAP results and using non-GAAP financial measures only as a supplement. We also provide a reconciliation of each non-GAAP financial measure to its most directly comparable GAAP financial measure for this quarter and prior periods, and we encourage investors to review those reconciliations carefully.
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Item 3. Quantitative and Qualitative Disclosures About Market Risk.
For quantitative and qualitative disclosures about market risk affecting HPE, see “Quantitative and Qualitative Disclosures About Market Risk” in Item 7A of Part II of our Annual Report on Form 10-K for the fiscal year ended October 31, 2024. There have been no material changes in our market risk exposures since October 31, 2024.
Item 4. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act as of the end of the period covered by this report (the “Evaluation Date”). Based on this evaluation, our principal executive officer and principal financial officer concluded as of the Evaluation Date that our disclosure controls and procedures were effective such that the information related to the Company, including our consolidated subsidiaries, required to be disclosed in our SEC reports (i) is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and (ii) is accumulated and communicated to the Company's management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.
Changes in Internal Control Over Financial Reporting
There were no changes to our internal control over financial reporting during the quarter ended July 31, 2025, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings.
Information with respect to this item may be found in Note 15, “Litigation, Contingencies, and Commitments”.
Item 1A. Risk Factors.
Our operations and financial results are subject to various risks and uncertainties, including those described in Part I, Item 1A, “Risk Factors” in our Annual Report on Form 10-K for the fiscal period ended October 31, 2024, and Part II, Item IA, “Risk Factors” in our Quarterly Reports on Form 10-Q for the fiscal periods ended January 31, 2025 and April 30, 2025, which could adversely affect our business, financial condition, results of operations, cash flows, and the trading price of our common stock, including certain risks.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
Recent Sales of Unregistered Securities
There were no unregistered sales of equity securities during the period covered by this report.
Issuer Purchases of Equity Securities
| Period | Total Number of Shares Purchased and Settled | Average Price Paid per Share | Total Number of Shares Purchased and Settled as Part of Publicly Announced Plans or Programs | Approximate Dollar Value of Shares that May Yet Be Purchased under the Plans or Programs | |||||||||||||||||||
| In thousands, except per share amounts | |||||||||||||||||||||||
| Month 1 (May 2025) | — | $ | — | — | $ | 711,642 | |||||||||||||||||
| Month 2 (June 2025) | — | — | — | 711,642 | |||||||||||||||||||
| Month 3 (July 2025) | — | — | — | $ | 711,642 | ||||||||||||||||||
| Total | — | $ | — | — | |||||||||||||||||||
As of July 31, 2025, the Company had a remaining authorization of approximately $0.7 billion for future share repurchases.
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Item 5. Other Information
Trading Plans
During the fiscal quarter ended July 31, 2025, the following trading plans were adopted terminated by our directors or officers, as applicable:
| Name & Title | Date of Adoption / Termination | Character of Trading Arrangement(1) | Aggregate Number of Shares of Common Stock to be Purchased/Sold Pursuant to Trading Arrangement | Duration of Plan(2) | ||||||||||||||||||||||
Terminated | Rule 10b5-1 Trading Arrangement | Up to shares to be sold | September 12, 2024- | |||||||||||||||||||||||
Adopted | Rule 10b5-1 Trading Arrangement | Up to shares to be sold | December 9, 2025- | |||||||||||||||||||||||
Adopted | Rule 10b5-1 Trading Arrangement | Up to shares to be sold | December 11, 2025- | |||||||||||||||||||||||
Adopted | Rule 10b5-1 Trading Arrangement | Up to shares to be sold | December 9, 2025- | |||||||||||||||||||||||
Adopted | Rule 10b5-1 Trading Arrangement | Up to shares to be sold | December 11, 2025- | |||||||||||||||||||||||
(1) Each trading arrangement marked as a “Rule 10b5-1 Trading Arrangement” is intended to satisfy the affirmative defense conditions of Rule 10b5-1(c), as amended (the “Rule”).
(2) Each trading arrangement marked as a “Rule 10b5-1 Trading Arrangement” only permits transactions after the indicated duration start date and, in any case, upon expiration of the applicable mandatory cooling-off period under the Rule, and until the earlier of the indicated duration end date or completion of all sales contemplated in the Rule 10b5-1 Trading Arrangement.
(3) Phil Mottram, Executive Vice President, General Manager of Intelligent Edge ceased being a Section 16 reporting person on July 2, 2025 in connection with the Merger.
Exchange Act Section 13(r) Disclosure
The following disclosure is being made under Section 13(r) of the Exchange Act:
On March 2, 2021, the U.S. Secretary of State designated the Russian Federal Security Service (“FSB”) as a party subject to the provisions of U.S. Executive Order No. 13382 issued in 2005 (“Executive Order 13382”). On the same day, the U.S. Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) updated General License 1B (“General License 1B”) which generally authorizes U.S. companies to engage in certain licensing, permitting, certification, notification, and related transactions with the FSB as may be required for the importation, distribution, or use of information technology products in the Russian Federation. Our local Russian subsidiary (“HPE Russia”) may be required to engage with the FSB as a licensing authority and to file documents. There are no gross revenues or net profits directly associated with any such dealings by HPE with the FSB and all such dealings are explicitly authorized by General License 1B. We plan to continue these activities as required to support our orderly and managed wind down of our Russia operations.
On April 15, 2021, the U.S. Government issued an executive order on Blocking Property with Respect to Specified Harmful Foreign Activities of the Government of the Russian Federation (“Executive Order 14024”), implementing additional U.S. sanctions against the Russian government and against Russian actors that threaten U.S. interests, including certain technology companies that support the Russian Intelligence Service. The U.S. Secretary of the Treasury designated Pozitiv Teknolodzhiz, AO (“Positive Technologies”) under Executive Order 14024 and Executive Order 13382. HPE Russia had dealings with Positive Technologies prior to its designation. Following the sanctions designation, HPE Russia immediately initiated procedures to terminate its relationship with Positive Technologies. HPE does not plan to engage in any further
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transactions with this entity, except wind down activities that are authorized by OFAC going forward. HPE Russia continues to have blocked property associated with Positive Technologies. No action will be taken unless and until a license is received from OFAC authorizing collection of the property. There are no identifiable gross revenues or net profits associated with HPE’s activities related to Positive Technologies for this reporting period.
Based on HPE’s current internal review, during the period of approximately December 2021 to May 2022, Hewlett-Packard Limited (“HPL”), a UK subsidiary of HPE, issued sales orders for certain software, hardware, and related support service agreements to a UK distributor. In connection with these orders, HPE delivered certain products to that UK distributor in or around January 2022 and entered into four support service agreements between May 2022 and July 2022. The ultimate end customer in these arrangements was Persia International Bank PLC (“Persia International”), a UK entity that OFAC designated as a blocked entity pursuant to Executive Order 13224. Subsequent to these arrangements, HPE has had no direct or indirect dealings with Persia International. The gross revenue from these transactions was approximately £28,129.84 (approximately $34,055.50). HPE is unable to accurately calculate the net profit from such activities. HPE and its affiliates have placed each of these contracts in blocked status and do not intend to engage in any further transactions involving Persia International, whether pursuant to these contracts or otherwise.
For a summary of our revenue recognition policies, see “Revenue Recognition” described in Note 1, “Overview and Summary of Significant Accounting Policies” to the Consolidated Financial Statements in Item 8 of Part II of our Annual Report on Form 10-K for the fiscal year ended October 31, 2024.
Item 6. Exhibits.
The Exhibit Index beginning on page 76 of this report sets forth a list of exhibits.
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HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES
EXHIBIT INDEX
| Incorporated by Reference | ||||||||||||||||||||||||||||||||
| Exhibit Number | Exhibit Description | Form | File No. | Exhibit(s) | Filing Date | |||||||||||||||||||||||||||
| 2.1 | Separation and Distribution Agreement, dated as of October 31, 2015, by and among Hewlett-Packard Company, Hewlett Packard Enterprise Company and the Other Parties Thereto | 8-K | 001-37483 | 2.1 | November 5, 2015 | |||||||||||||||||||||||||||
| 2.2 | Transition Services Agreement, dated as of November 1, 2015, by and between Hewlett-Packard Company and Hewlett Packard Enterprise Company | 8-K | 001-37483 | 2.2 | November 5, 2015 | |||||||||||||||||||||||||||
| 2.3 | Employee Matters Agreement, dated as of October 31, 2015, by and between Hewlett-Packard Company and Hewlett Packard Enterprise Company | 8-K | 001-37483 | 2.4 | November 5, 2015 | |||||||||||||||||||||||||||
| 2.4 | Real Estate Matters Agreement, dated as of October 31, 2015, by and between Hewlett-Packard Company and Hewlett Packard Enterprise Company | 8-K | 001-37483 | 2.5 | November 5, 2015 | |||||||||||||||||||||||||||
| 2.5 | Master Commercial Agreement, dated as of November 1, 2015, by and between Hewlett-Packard Company and Hewlett Packard Enterprise Company | 8-K | 001-37483 | 2.6 | November 5, 2015 | |||||||||||||||||||||||||||
| 2.6 | Information Technology Service Agreement, dated as of November 1, 2015, by and between Hewlett-Packard Company and HP Enterprise Services, LLC | 8-K | 001-37483 | 2.7 | November 5, 2015 | |||||||||||||||||||||||||||
| 2.7 | Agreement and Plan of Merger, dated as of May 24, 2016, by and among Hewlett Packard Enterprise Company, Everett SpinCo, Inc., Computer Sciences Corporation, and Everett Merger Sub, Inc. | 8-K | 001-37483 | 2.1 | May 26, 2016 | |||||||||||||||||||||||||||
| 2.8 | Separation and Distribution Agreement, dated as of May 24, 2016, by and between Hewlett Packard Enterprise Company and Everett SpinCo, Inc. | 8-K | 001-37483 | 2.2 | May 26, 2016 | |||||||||||||||||||||||||||
| 2.9 | Agreement and Plan of Merger, dated as of September 7, 2016, by and among Hewlett Packard Enterprise Company, Seattle SpinCo, Inc., Micro Focus International plc, Seattle Holdings, Inc. and Seattle MergerSub, Inc. | 8-K | 001-37483 | 2.1 | September 7, 2016 | |||||||||||||||||||||||||||
| 2.10 | Separation and Distribution Agreement, dated as of September 7, 2016, by and between Hewlett Packard Enterprise Company and Seattle SpinCo, Inc. | 8-K | 001-37483 | 2.2 | September 7, 2016 | |||||||||||||||||||||||||||
| 2.11 | First Amendment to the Agreement and Plan of Merger, dated as of November 2, 2016, by and among Hewlett Packard Enterprise Company, Everett SpinCo, Inc., New Everett Merger Sub Inc., Computer Sciences Corporation, and Everett Merger Sub, Inc. | 8-K | 001-37483 | 2.1 | November 2, 2016 | |||||||||||||||||||||||||||
| 2.12 | First Amendment to the Separation and Distribution Agreement, dated as of November 2, 2016, by and between Hewlett Packard Enterprise Company and Everett SpinCo, Inc. | 8-K | 001-37483 | 2.2 | November 2, 2016 | |||||||||||||||||||||||||||
| 2.13 | Tax Matters Agreement, dated March 31, 2017, by and among Hewlett Packard Enterprise Company, Everett SpinCo, Inc., and Computer Sciences Corporation | 8-K | 001-38033 | 2.2 | April 6, 2017 | |||||||||||||||||||||||||||
| 2.14 | IP Matters Agreement, dated March 31, 2017, by and between Hewlett Packard Enterprise Company, Hewlett Packard Enterprise Development LP, and Everett SpinCo, Inc. | 8-K | 001-38033 | 2.3 | April 6, 2017 | |||||||||||||||||||||||||||
| 2.15 | Transition Services Agreement, dated March 31, 2017, by and between Hewlett Packard Enterprise Company and Everett SpinCo, Inc. | 8-K | 001-38033 | 2.4 | April 6, 2017 | |||||||||||||||||||||||||||
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| 2.16 | Real Estate Matters Agreement, dated March 31, 2017, by and between Hewlett Packard Enterprise Company and Everett SpinCo, Inc. | 8-K | 001-38033 | 2.5 | April 6, 2017 | |||||||||||||||||||||||||||
| 2.17 | Fourth Amendment to the Separation and Distribution Agreement, dated March 31, 2017, by and between Hewlett Packard Enterprise Company and Everett SpinCo, Inc. | 8-K | 001-38033 | 2.6 | April 6, 2017 | |||||||||||||||||||||||||||
| 2.18 | Tax Matters Agreement, dated September 1, 2017, by and among Hewlett Packard Enterprise Company, Seattle SpinCo, Inc., and Micro Focus International plc | 8-K | 001-37483 | 2.1 | September 1, 2017 | |||||||||||||||||||||||||||
| 2.19 | Intellectual Property Matters Agreement, dated September 1, 2017, by and between Hewlett Packard Enterprise Company, Hewlett Packard Enterprise Development LP, and Seattle SpinCo, Inc. | 8-K | 001-37483 | 2.2 | September 1, 2017 | |||||||||||||||||||||||||||
| 2.20 | Transition Services Agreement, dated September 1, 2017, by and between Hewlett Packard Enterprise Company and Seattle SpinCo, Inc. | 8-K | 001-37483 | 2.3 | September 1, 2017 | |||||||||||||||||||||||||||
| 2.21 | Real Estate Matters Agreement, dated September 1, 2017, by and between Hewlett Packard Enterprise Company and Seattle SpinCo, Inc. | 8-K | 001-37483 | 2.4 | September 1, 2017 | |||||||||||||||||||||||||||
| 3.1 | Registrant's Restated Certificate of Incorporation | 8-K | 001-37483 | 3.2 | April 12, 2024 | |||||||||||||||||||||||||||
| 3.2 | Registrant's Second Amended and Restated Bylaws effective September 27, 2023 | 8-K | 001-37483 | 3.1 | September 28, 2023 | |||||||||||||||||||||||||||
| 3.3 | Certificate of Designation of Series A Junior Participating Redeemable Preferred Stock of Hewlett Packard Enterprise Company | 8-K | 001-37483 | 3.1 | March 20, 2017 | |||||||||||||||||||||||||||
| 3.4 | Certificate of Designation of Series B Junior Participating Redeemable Preferred Stock of Hewlett Packard Enterprise Company | 8-K | 001-37483 | 3.2 | March 20, 2017 | |||||||||||||||||||||||||||
| 3.5 | Corrected Certificate of Designations of 7.625% Series C Mandatory Convertible Preferred Stock of Hewlett Packard Enterprise Company | 8-K | 001-37483 | 3.8 | December 19, 2024 | |||||||||||||||||||||||||||
| 4.1 | Indenture, dated as of October 9, 2015, between Hewlett Packard Enterprise Company and The Bank of New York Mellon Trust Company, N.A., as Trustee | 8-K | 001-37483 | 4.1 | October 13, 2015 | |||||||||||||||||||||||||||
| 4.2 | Fifth Supplemental Indenture, dated as of October 9, 2015, between Hewlett Packard Enterprise Company and The Bank of New York Mellon Trust Company, N.A., as Trustee, relating to Hewlett Packard Enterprise Company's 4.900% notes due 2025 (including the form of 4.900% notes due 2025) | 8-K | 001-37483 | 4.6 | October 13, 2015 | |||||||||||||||||||||||||||
| 4.3 | Sixth Supplemental Indenture, dated as of October 9, 2015, between Hewlett Packard Enterprise Company and The Bank of New York Mellon Trust Company, N.A., as Trustee, relating to Hewlett Packard Enterprise Company's 6.200% notes due 2035 (including the form of 6.200% notes due 2035) | 8-K | 001-37483 | 4.7 | October 13, 2015 | |||||||||||||||||||||||||||
| 4.4 | Seventh Supplemental Indenture, dated as of October 9, 2015, between Hewlett Packard Enterprise Company and The Bank of New York Mellon Trust Company, N.A., as Trustee, relating to Hewlett Packard Enterprise Company's 6.350% notes due 2045 (including the form of 6.350% notes due 2045) | 8-K | 001-37483 | 4.8 | October 13, 2015 | |||||||||||||||||||||||||||
| 4.5 | Eighteenth Supplemental Indenture, dated as of July 17, 2020, between Hewlett Packard Enterprise Company and The Bank of New York Mellon Trust Company, N.A., as Trustee, relating to Hewlett Packard Enterprise Company's 1.750% notes due 2026 (including the form of 1.750% notes due 2026) | 8-K | 001-37483 | 4.3 | July 17, 2020 | |||||||||||||||||||||||||||
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| 4.6 | Twenty-First Supplemental Indenture, dated as of June 14, 2023, between Hewlett Packard Enterprise Company and The Bank of New York Mellon Trust Company, N.A., as Trustee, relating to Hewlett Packard Enterprise Company’s 5.250% notes due 2028 (including the form of 5.250% notes due 2028) | 8-K | 001-37483 | 4.3 | June 14, 2023 | |||||||||||||||||||||||||||
| 4.7 | Twenty-Second Supplemental Indenture, dated as of September 26, 2024, between Hewlett Packard Enterprise Company and The Bank of New York Mellon Trust Company, N.A., as Trustee, relating to Hewlett Packard Enterprise Company’s 4.450% notes due 2026 (including the form of 4.450% notes due 2026) | 8-K | 001-37483 | 4.2 | September 26, 2024 | |||||||||||||||||||||||||||
| 4.8 | Twenty-Third Supplemental Indenture, dated as of September 26, 2024, between Hewlett Packard Enterprise Company and The Bank of New York Mellon Trust Company, N.A., as Trustee, relating to Hewlett Packard Enterprise Company’s 4.400% notes due 2027 (including the form of 4.400% notes due 2027) | 8-K | 001-37483 | 4.3 | September 26, 2024 | |||||||||||||||||||||||||||
| 4.9 | Twenty-Fourth Supplemental Indenture, dated as of September 26, 2024, between Hewlett Packard Enterprise Company and The Bank of New York Mellon Trust Company, N.A., as Trustee, relating to Hewlett Packard Enterprise Company’s 4.550% notes due 2029 (including the form of 4.550% notes due 2029) | 8-K | 001-37483 | 4.4 | September 26, 2024 | |||||||||||||||||||||||||||
| 4.10 | Twenty-Fifth Supplemental Indenture, dated as of September 26, 2024, between Hewlett Packard Enterprise Company and The Bank of New York Mellon Trust Company, N.A., as Trustee, relating to Hewlett Packard Enterprise Company’s 4.850% notes due 2031 (including the form of 4.850% notes due 2031) | 8-K | 001-37483 | 4.5 | September 26, 2024 | |||||||||||||||||||||||||||
| 4.11 | Twenty-Sixth Supplemental Indenture, dated as of September 26, 2024, between Hewlett Packard Enterprise Company and The Bank of New York Mellon Trust Company, N.A., as Trustee, relating to Hewlett Packard Enterprise Company’s 5.000% notes due 2034 (including the form of 5.000% notes due 2034) | 8-K | 001-37483 | 4.6 | September 26, 2024 | |||||||||||||||||||||||||||
| 4.12 | Twenty-Seventh Supplemental Indenture, dated as of September 26, 2024, between Hewlett Packard Enterprise Company and The Bank of New York Mellon Trust Company, N.A., as Trustee, relating to Hewlett Packard Enterprise Company’s 5.600% notes due 2054 (including the form of 5.600% notes due 2054) | 8-K | 001-37483 | 4.7 | September 26, 2024 | |||||||||||||||||||||||||||
| 4.13 | Form of Subordinated Indenture between Hewlett Packard Enterprise Company and The Bank of New York Mellon Trust Company, N.A., as Trustee | S-3ASR | 333-222102 | 4.5 | December 15, 2017 | |||||||||||||||||||||||||||
| 4.14 | Form of 7.625% Series C Mandatory Convertible Preferred Stock (included in Exhibit 3.1 to the Registrant’s Form 8-K filed on September 13, 2024, which is incorporated by reference) | 8-K | 001-37483 | 4.12 | September 13, 2024 | |||||||||||||||||||||||||||
| 4.15 | Description of the Registrant's Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934 | 10-K | 001-37483 | 4.18 | December 19, 2024 | |||||||||||||||||||||||||||
| 4.16 | Indenture, dated March 3, 2011, by and between Juniper Networks, Inc. and The Bank of New York Mellon Trust Company, N.A., as trustee‡ | |||||||||||||||||||||||||||||||
| 4.17 | First Supplemental Indenture, dated as of March 3, 2011,between Juniper Networks, Inc. and The Bank of New York Mellon Trust Company, N.A., as Trustee‡ | |||||||||||||||||||||||||||||||
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| 4.18 | Sixth Supplemental Indenture, dated as of August 26, 2019, by and between Juniper Networks, Inc. and The Bank of New York Mellon Trust Company, N.A., as Trustee‡ | |||||||||||||||||||||||||||||||
| 4.19 | Seventh Supplemental Indenture, dated as of December 10, 2020, by and between Juniper Networks, Inc. and The Bank of New York Mellon Trust Company, N.A., as Trustee‡ | |||||||||||||||||||||||||||||||
| 4.20 | Form of Note for Juniper Networks, Inc.’s 5.950% Senior Notes due 2041 (contained in exhibit 4.17 hereto)‡ | |||||||||||||||||||||||||||||||
| 4.21 | Form of Note for Juniper Networks, Inc.’s 3.750% Senior Notes due 2029 (contained in exhibit 4.18 hereto)‡ | |||||||||||||||||||||||||||||||
| 4.22 | Form of Note for Juniper Networks, Inc.’s 1.200% Senior Notes due 2025 (contained in exhibit 4.19 hereto)‡ | |||||||||||||||||||||||||||||||
| 4.23 | Form of Note for Juniper Networks, Inc.’s 2.000% Senior Notes due 2030 (contained in exhibit 4.19 hereto)‡ | |||||||||||||||||||||||||||||||
| 10.1 | Hewlett Packard Enterprise Company 2015 Stock Incentive Plan (amended and restated January 25, 2017)* | 8-K | 001-37483 | 10.1 | January 30, 2017 | |||||||||||||||||||||||||||
| 10.2 | Hewlett Packard Enterprise Company 2021 Stock Incentive Plan* | S-8 | 333-255839 | 4.4 | May 6, 2021 | |||||||||||||||||||||||||||
| 10.3 | Amendment No. 1 to the Hewlett Packard Enterprise Company 2021 Stock Incentive Plan* | S-8 | 333-265378 | 4.7 | June 2, 2022 | |||||||||||||||||||||||||||
| 10.4 | Amendment No. 2 to the Hewlett Packard Enterprise Company 2021 Stock Incentive Plan* | 8-K | 001-37483 | 10.1 | April 6, 2023 | |||||||||||||||||||||||||||
| 10.5 | Amendment No. 3 to the Hewlett Packard Enterprise Company 2021 Stock Incentive Plan* | 8-K | 001-37483 | 10.1 | April 12, 2024 | |||||||||||||||||||||||||||
| 10.6 | Amendment No 4 to the Hewlett Packard Enterprise Company 2021 Stock Incentive Plan* | 8-K | 001-37483 | 10.1 | April 4, 2025 | |||||||||||||||||||||||||||
| 10.7 | Hewlett Packard Enterprise Severance and Long-Term Incentive Change in Control Plan for Executive Officers* | 10-12B/A | 001-37483 | 10.4 | September 28, 2015 | |||||||||||||||||||||||||||
| 10.8 | Hewlett Packard Enterprise Grandfathered Executive Deferred Compensation Plan* | S-8 | 333-207679 | 4.4 | October 30, 2015 | |||||||||||||||||||||||||||
| 10.9 | Form of Non-Qualified Stock Option Grant Agreement* | 8-K | 001-37483 | 10.4 | November 5, 2015 | |||||||||||||||||||||||||||
| 10.10 | Cloud Technology Partners, Inc. 2011 Equity Incentive Plan* | S-8 | 333-221254 | 4.3 | November 1, 2017 | |||||||||||||||||||||||||||
| 10.11 | Amendment to the Cloud Technology Partners, Inc. 2011 Equity Incentive Plan* | S-8 | 333-221254 | 4.4 | November 1, 2017 | |||||||||||||||||||||||||||
| 10.12 | Plexxi Inc. 2011 Stock Plan* | S-8 | 333-226181 | 4.3 | July 16, 2018 | |||||||||||||||||||||||||||
| 10.13 | Hewlett Packard Enterprise Company 2015 Employee Stock Purchase Plan (as amended and restated on July 18, 2018, effective as of October 8, 2015)* | 10-Q | 001-37483 | 10.29 | September 4, 2018 | |||||||||||||||||||||||||||
| 10.14 | Amendment No. 1 to the Hewlett Packard Enterprise Company 2015 Employee Stock Purchase Plan (effective as of April 2, 2025)* | 8-K | 001-37483 | 10.2 | April 4, 2025 | |||||||||||||||||||||||||||
| 10.15 | Hewlett Packard Enterprise Executive Deferred Compensation Plan (as amended and restated December 1, 2018)* | 10-K | 001-37483 | 10.27 | December 12, 2018 | |||||||||||||||||||||||||||
| 10.16 | First Amendment to the Hewlett Packard Enterprise Company Severance and Long-Term Incentive Change in Control Plan for Executive Officers* | 10-K | 001-37483 | 10.29 | December 12, 2018 | |||||||||||||||||||||||||||
| 10.17 | BlueData Software Inc. 2012 Stock Incentive Plan* | S-8 | 333-229449 | 4.3 | January 31, 2019 | |||||||||||||||||||||||||||
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| 10.18 | Cray Inc. 2013 Equity Incentive Plan (as amended and restated June 11, 2019)* | S-8 | 333-234033 | 4.3 | October 1, 2019 | |||||||||||||||||||||||||||
| 10.19 | Termination and Mutual Release Agreement dated as of October 30, 2019 by and between HP Inc. and Hewlett Packard Enterprise Company | 10-K | 001-37483 | 10.31 | December 13, 2019 | |||||||||||||||||||||||||||
| 10.20 | Aircraft Time Sharing Agreement, dated as of December 13, 2019, between Hewlett Packard Enterprise and Antonio Neri* | 10-Q | 001-37483 | 10.32 | March 9, 2020 | |||||||||||||||||||||||||||
| 10.21 | Silver Peak Systems, Inc. 2014 Equity Incentive Plan, as amended* | S-8 | 333-249731 | 4.4 | October 29, 2020 | |||||||||||||||||||||||||||
| 10.22 | 2021 Stock Incentive Plan – Form of Restricted Stock Units Grant Agreement* | 10-K | 001-37483 | 10.30 | December 10, 2021 | |||||||||||||||||||||||||||
| 10.23 | 2021 Stock Incentive Plan – Form of Performance-Adjusted Restricted Stock Units Grant Agreement* | 10-K | 001-37483 | 10.31 | December 10, 2021 | |||||||||||||||||||||||||||
| 10.24 | 2021 Stock Incentive Plan - Form of Performance-Adjusted Restricted Stock Units Grant Agreement (for grants beginning December 2022)* | 10-K | 001-37483 | 10.31 | December 8, 2022 | |||||||||||||||||||||||||||
| 10.25 | 2021 Stock Incentive Plan - Form of Non-Employee Director Restricted Stock Units Grant Agreement (for grants beginning April 2023)* | 10-Q | 001-37483 | 10.32 | June 2, 2023 | |||||||||||||||||||||||||||
| 10.26 | OpsRamp, Inc. 2014 Equity Incentive Plan* | 10-Q | 001-37483 | 10.33 | June 2, 2023 | |||||||||||||||||||||||||||
| 10.27 | Put Share Purchase Agreement, dated May 26, 2023, among H3C Holdings Limited, Izar Holding Co., and Unisplendour International Technology Limited (certain schedules, exhibits, and portions omitted pursuant to Regulation S-K Item 601(a)(5) and Item 601(b)(10)(iv)) | 10-Q | 001-37483 | 10.34 | June 2, 2023 | |||||||||||||||||||||||||||
| 10.28 | 2021 Stock Incentive Plan - Form of Restricted Stock Units Grant Agreement (for grants beginning December 2023)* | 10-K | 001-37483 | 10.34 | December 22, 2023 | |||||||||||||||||||||||||||
| 10.29 | 2021 Stock Incentive Plan - Form of Performance-Adjusted Restricted Stock Units Grant Agreement (for grants beginning December 2023)* | 10-K | 001-37483 | 10.35 | December 22, 2023 | |||||||||||||||||||||||||||
| 10.30 | Amended and Restated Put Share Purchase Agreement, dated May 24, 2024, among H3C Holdings Limited, Izar Holding Co., and Unisplendour International Technology Limited (certain schedules, exhibits, and portions omitted pursuant to Regulation S-K Item 601(a)(5) and Item 601(b)(10)(iv)) | 10-Q | 001-37483 | 10.37 | September 5, 2024 | |||||||||||||||||||||||||||
| 10.31 | Agreement on Subsequent Arrangements, dated May 24, 2024, between H3C Holdings Limited and Unisplendour International Technology Limited (certain schedules, exhibits, and portions omitted pursuant to Regulation S-K Item 601(a)(5) and Item 601(b)(10)(iv)) | 10-Q | 001-37483 | 10.38 | September 5, 2024 | |||||||||||||||||||||||||||
| 10.32 | Five-Year Credit Agreement, dated as of September 12, 2024, among Hewlett Packard Enterprise Company, the Borrowing Subsidiaries from time to time party thereto, the Lenders party thereto, JPMorgan Chase Bank, N.A., as Administrative Processing Agent and Co-Administrative Agent, and Citibank, N.A., as Co-Administrative Agent. | 8-K | 001-37483 | 10.1 | September 12, 2024 | |||||||||||||||||||||||||||
| 10.33 | 364-Day Term Loan Credit Agreement, dated as of September 12, 2024, among Hewlett Packard Enterprise Company, the Lenders party thereto, JPMorgan Chase Bank, N.A., as Administrative Processing Agent and Co-Administrative Agent, and Citibank, N.A., as Co-Administrative Agent. | 8-K | 001-37483 | 10.2 | September 12, 2024 | |||||||||||||||||||||||||||
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| 10.34 | Three-Year Term Loan Credit Agreement, dated as of September 12, 2024, among Hewlett Packard Enterprise Company, the Lenders party thereto, JPMorgan Chase Bank, N.A., as Administrative Processing Agent and Co-Administrative Agent, and Citibank, N.A., as Co-Administrative Agent. | 8-K | 001-37483 | 10.3 | September 12, 2024 | |||||||||||||||||||||||||||
| 10.35 | HPE Offer Letter to Rami Rahim, dated as of January 9, 2024 (certain schedules and exhibits omitted pursuant to Regulation S-K Item 601(a)(5))*‡ | |||||||||||||||||||||||||||||||
| 10.36 | Juniper Networks, Inc. 2015 Equity Incentive Plan, as amended and restated* | S-8 | 333-288473 | 4.3 | July 2, 2025 | |||||||||||||||||||||||||||
| 10.37 | 128 Technology, Inc. Amended and Restated 2014 Equity Incentive Plan* | S-8 | 333-288473 | 4.4 | July 2, 2025 | |||||||||||||||||||||||||||
| 10.38 | Apstra, Inc. Amended and Restated 2014 Equity Incentive Plan* | S-8 | 333-288473 | 4.5 | July 2, 2025 | |||||||||||||||||||||||||||
| 10.39 | Mist Systems, Inc. 2014 Equity Incentive Plan* | S-8 | 333-288473 | 4.6 | July 2, 2025 | |||||||||||||||||||||||||||
| 10.40 | Juniper Networks, Inc. Deferred Compensation Plan* | S-8 | 333-288473 | 4.7 | July 2, 2025 | |||||||||||||||||||||||||||
| 10.41 | Form of Stock Option Agreement effective as of May 19, 2015*‡ | |||||||||||||||||||||||||||||||
| 10.42 | Amended and Restated Juniper Networks, Inc. Form of Restricted Stock Unit Agreement effective as of December 1, 2021*‡ | |||||||||||||||||||||||||||||||
| 10.43 | Cooperation Agreement, between Hewlett Packard Enterprise Company, Elliott Investment Management L.P., Elliott Associates, L.P., and Elliott International, L.P., dated July 16, 2025 | 8-K | 001-37483 | 10.1 | July 16, 2025 | |||||||||||||||||||||||||||
| 19 | Insider Trading Policy | 10-K | 001-37483 | 19 | December 19, 2024 | |||||||||||||||||||||||||||
| 31.1 | Certification of Chief Executive Officer pursuant to Rule 13a- 14(a) and Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended‡ | |||||||||||||||||||||||||||||||
| 31.2 | Certification of Chief Financial Officer pursuant to Rule 13a- 14(a) and Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended‡ | |||||||||||||||||||||||||||||||
| 32 | Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002† | |||||||||||||||||||||||||||||||
| 97 | Hewlett Packard Enterprise Company Dodd-Frank Clawback Policy | 10-K | 001-37483 | 97 | December 22, 2023 | |||||||||||||||||||||||||||
| 101.INS | Inline XBRL Instance Document‡ | |||||||||||||||||||||||||||||||
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document‡ | |||||||||||||||||||||||||||||||
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document‡ | |||||||||||||||||||||||||||||||
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document‡ | |||||||||||||||||||||||||||||||
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document‡ | |||||||||||||||||||||||||||||||
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document‡ | |||||||||||||||||||||||||||||||
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) | |||||||||||||||||||||||||||||||
* Indicates management contract or compensation plan, contract or arrangement
‡ Filed herewith
† Furnished herewith
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The registrant agrees to furnish to the Commission supplementally upon request a copy of any instrument with respect to long-term debt not filed herewith as to which the total amount of securities authorized thereunder does not exceed 10% of the total assets of the registrant and its subsidiaries on a consolidated basis.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| HEWLETT PACKARD ENTERPRISE COMPANY | ||||||||
| /s/ Marie Myers | ||||||||
Marie Myers Executive Vice President and Chief Financial Officer (Principal Financial Officer) | ||||||||
Date: September 4, 2025
83
FAQ
What was the purchase price and timing of HPE's acquisition of Juniper Networks?
HPE completed the Merger on July 2, 2025, paying $40.00 per Juniper share for an aggregate cash consideration of approximately $13.4 billion.
How did the Juniper acquisition affect HPE's financial statements in the quarter?
Juniper results were consolidated beginning July 2, 2025; acquisition-related effects include increased revenue in Networking, conversion of Juniper equity into ~46 million HPE equity awards, and related stock-based compensation with $563 million of unrecognized pre-tax expense.
What material impairment or charges did HPE record in fiscal 2025?
HPE recorded a $1.4 billion goodwill impairment related to the Hybrid Cloud reporting unit in the second quarter of fiscal 2025.
What were HPE's reported revenues and margins for the quarter and nine months?
Three months ended July 31, 2025: $9.1 billion revenue (up 18.5%), gross margin 29.2%, operating margin 2.7%. Nine months: $24.6 billion revenue (up 13.6%), gross margin 29.0%, operating margin (1.7)%.
How did HPE fund the Juniper acquisition?
Funding included cash on hand, commercial paper issuances, and borrowings under delayed-draw term loans: $3.0 billion (three-year) and $1.0 billion (364-day) drawn in July 2025, plus issuance of $900 million asset-backed debt securities.
What tax impacts and discrete items were recorded in the quarter?
For the three months ended July 31, 2025, HPE recorded an $17 million income tax benefit (effective tax rate (6.5)%). The quarter included $76 million of tax benefits from release of certain state valuation allowances and $21 million related to Merger costs; nine-month discrete tax benefits totaled $217 million.
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