Hewlett Packard : Quarterly Results (hpe q1 2025 press release)

Published: 2025-03-06 16:14:15 ET HPE

Exhibit 99.1

Hewlett Packard Enterprise

1701 E. Mossy Oaks Road

Spring, TX 77389-1767

hpe.com

News Release

Hewlett Packard Enterprise reports fiscal 2025 first quarter results

Delivered year-over-year revenue and EPS growth

HOUSTON - March 6, 2025 - Hewlett Packard Enterprise (NYSE: HPE) today announced financial results for the first quarter ended January 31, 2025.

"HPE achieved our fourth consecutive quarter of year-over-year revenue growth, increasing revenue by double digits in Q1," said Antonio Neri, president and CEO of Hewlett Packard Enterprise. "I am particularly proud of the exciting innovation we introduced in the quarter, which was met with customer enthusiasm. HPE has a proven track record of consistent, disciplined execution, but we could have executed better in some areas in the quarter. I am confident in our ability to keep winning in the market, which will, in turn, drive shareholder returns."

"We are pleased that we met our revenue guidance estimate as we navigated the quarter," said Marie Myers, executive vice president and CFO of Hewlett Packard Enterprise. "We took actions in the quarter to streamline costs, which helped us offset other impacts to profitability. We continue to align our strategy and execution with long-term growth trends that will fuel our performance."

First Quarter Fiscal 2025 Financial Results

First Quarter Fiscal 2025 Segment Results

Dividend

The HPE Board of Directors declared a regular cash dividend of $0.13 per share on the company's common stock, payable on or about April 18, 2025, to stockholders of record as of the close of business on March 21, 2025.

Fiscal 2025 Second Quarter Outlook

HPE estimates revenue to be in the range of $7.2 billion and $7.6 billion. HPE estimates GAAP diluted net EPS to be in the range of $0.08 to $0.14 and non-GAAP diluted net EPS(1) to be in the range of $0.28 to $0.34. Fiscal 2025 second quarter non-GAAP diluted net EPS estimate excludes net after-tax adjustments of approximately $0.20 per diluted share primarily related to a cost reduction program, stock-based compensation, acquisition, disposition and other charges, amortization of intangible assets, and H3C divestiture related severance costs.

Fiscal 2025 Outlook

HPE estimates fiscal 2025 revenue growth of 7% to 11%, in constant currency(1)(5), and fiscal 2025 GAAP operating profit growth to be in the range of negative 24% to negative 9% and non-GAAP operating profit(1)(4) growth to be negative 10% to 0%. HPE estimates GAAP diluted net EPS(6) to be in the range of $1.15 and $1.35 and non-GAAP diluted net EPS(1) to be in the range of $1.70 to $1.90. Fiscal 2025 non- GAAP diluted net EPS estimate excludes net after-tax adjustments of approximately $0.55 per diluted share, primarily related to stock-based compensation expense, a cost reduction program, acquisition, disposition and other charges, amortization of intangible assets, and H3C divestiture related severance costs. HPE estimates free cash flow(1)(3)(5) of approximately $1 billion.

Juniper Networks Proposed Transaction Update

On January 30, 2025, the U.S. Department of Justice filed a complaint in the United States District Court for the Northern District of California seeking to block the proposed merger of HPE and Juniper Networks, Inc. On February 10, 2025, HPE and Juniper filed answers to the Department of Justice's complaint disputing those claims. The court set a trial commencement date of July 9, 2025. HPE intends to vigorously defend against the Department of Justice's overreaching interpretation of antitrust laws and will demonstrate how the transaction will provide customers with greater innovation and choice, positively change the dynamics in the networking market by enhancing competition, and strengthen the backbone of U.S. networking infrastructure.

About Hewlett Packard Enterprise

Hewlett Packard Enterprise (NYSE: HPE) is a global technology leader focused on developing intelligent solutions that allow customers to capture, analyze, and act upon data seamlessly. The company innovates across networking, hybrid cloud, and AI to help customers develop new business models, engage in new ways, and increase operational performance. For more information, visit: www.hpe.com.

Media Contact:

Laura Keller

[email protected]

Investor Contact:

Paul Glaser [email protected]

Use of non-GAAP financial information and key performance metrics

To supplement Hewlett Packard Enterprise's condensed consolidated financial statement information presented on a generally accepted accounting principles ("GAAP") basis, Hewlett Packard Enterprise provides financial measures, including revenue on a constant currency basis (including at the business segment level), non-GAAP gross profit, non-GAAP gross profit margin, non- GAAP operating profit (non-GAAP earnings from operations), non-GAAP operating profit margin (non-GAAP earnings from operations as a percentage of net revenue), non-GAAP income tax rate, non-GAAP net earnings attributable to HPE and non- GAAP net earnings attributable to common stockholders, non-GAAP diluted net earnings per share attributable to common stockholders, and free cash flow ("FCF"). Hewlett Packard Enterprise also provides forecasts of revenue growth on a constant currency basis, non-GAAP diluted net earnings per share, non-GAAP operating profit growth, and FCF. Reconciliations of each of these non-GAAP financial measures to their most directly comparable GAAP measures for this quarter and prior periods are included in the tables below or elsewhere in the materials accompanying this news release. In addition an explanation of the ways in which Hewlett Packard Enterprise's management uses these non-GAAP measures to evaluate its business, the substance behind Hewlett Packard Enterprise's decision to use these non-GAAP measures, the material limitations associated with the use of these non-GAAP measures, the manner in which Hewlett Packard Enterprise's management compensates for those limitations, and the substantive reasons why Hewlett Packard Enterprise's management believes that these non-GAAP measures provide supplemental useful information to investors is included further below. This additional non-GAAP financial information is not meant to be considered in isolation or as a substitute for revenue, gross profit, gross profit margin, operating profit (earnings from operations), operating profit margin (earnings from operations as a percentage of net revenue), net earnings, diluted net earnings per share, and cash flow from operations prepared in accordance with GAAP.

In addition to the supplemental non-GAAP financial information, Hewlett Packard Enterprise also presents annualized revenue run-rate ("ARR") as performance metric. ARR is a financial metric used to assess the growth of the Consumption Services offerings. ARR represents the annualized revenue of all net HPE GreenLake cloud services revenue, related financial services revenue (which includes rental income for operating leases and interest income from finance leases), and software-as-a-service ("SaaS"), software consumption revenue, and other as-a-service offerings, recognized during a quarter and multiplied by four. ARR should be viewed independently of net revenue and deferred revenue and are not intended to be combined with any of these items.

Forward-looking statements

This press release 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 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 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, net earnings, net earnings per share, cash flows, liquidity and capital resources, inventory, order backlog, 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 related potential impacts on our financial reporting therefrom; any projections or estimations of orders, including as-a-service 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 programs, corporate transactions or contemplated acquisitions (including our proposed acquisition of Juniper Networks, Inc.) and dispositions (including disposition of shares of H3C Technologies Co., Limited 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 impact of those trends and events on Hewlett Packard Enterprise and our financial performance and our actions to mitigate such impacts to our business; any statements regarding future regulatory trends and the resulting legal and reputational exposure, including but not limited to those relating to environmental, social, and governance, cybersecurity, data privacy, and artificial intelligence issues, among others; any statements regarding pending investigations, claims, or disputes, including but not limited to the litigation enjoining the closing of the proposed acquisition of Juniper Networks, Inc.; 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 heightened global trade restrictions, the use and development of artificial intelligence, the inflationary environment (though easing), the ongoing conflicts between Russia and Ukraine and in the Middle East, and the relationship between China and the U.S.; 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 public health crises, such as pandemics or epidemics, and 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 prospect of a shutdown of the U.S. federal government or dramatic shifts in public sector staffing and resources; the hiring and retention of key employees; the execution, consummation, integration, and other risks associated with business combination, disposition, and investment

transactions, including but not limited to the risks associated with the disposition of shares of H3C Technologies Co., Limited and the receipt of proceeds therefrom and completion of our proposed acquisition of Juniper Networks, Inc. and our ability to integrate and implement our plans, forecasts, and other expectations with respect to the consolidated business; the execution, timing, and results of any cost reduction programs, including estimates and assumptions related to the costs and anticipated benefits of implementing such plans; 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, including but not limited to the litigation enjoining the closing of the proposed acquisition of Juniper Networks, Inc.; the impacts of legal and regulatory changes; and other risks that are described in Hewlett Packard Enterprise's Annual Report on Form 10-K for the fiscal year ended October 31, 2024, subsequent Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and in other filings made by Hewlett Packard Enterprise from time to time with the Securities and Exchange Commission.

As in prior periods, the financial information set forth in this press release, including tax-related items, reflects estimates based on information available at this time. While Hewlett Packard Enterprise believes these estimates to be reasonable, these amounts could differ materially from reported amounts in the filings made by Hewlett Packard Enterprise from time to time 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.

HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES

Condensed Consolidated Statements of Earnings

(Unaudited)

For the three months ended

January 31, 2025

October 31, 2024

January 31, 2024

In millions, except per share amounts

Net revenue

7,854

8,458

6,755

Costs and Expenses:

Cost of sales (exclusive of amortization shown separately below)

5,559

5,852

4,298

Research and development

475

527

582

Selling, general and administrative

1,268

1,211

1,216

Amortization of intangible assets

Transformation costs

Acquisition, disposition and other charges

Total costs and expenses

7,421

7,765

6,230

Earnings from operations

433

693

525

Interest and other, net(1)

(88)

Gain on sale of a business

244

Gain on sale of equity interest

733

Earnings (loss) from equity interests

(14)

Earnings before provision for taxes

733

1,417

483

Provision for taxes

(106)

(51)

(96)

Net earnings attributable to HPE

627

1,366

387

Preferred stock dividends

(29)

(25)

Net earnings attributable to common stockholders

598

1,341

387

Net Earnings Per Share Attributable to Common Stockholders:

Basic

0.45

1.02

0.30

Diluted

0.44

0.99

0.29

Cash dividends declared per share

0.13

Cash dividends accrued per preferred share

0.95

0.83

Weighted-average Shares Used to Compute Net Earnings Per Share:

Basic

1,316

1,312

1,301

Diluted

1,409

1,375

1,316

HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES

Reconciliation of GAAP to Non-GAAP measures

(Unaudited)

GAAP net revenue

GAAP cost of sales

GAAP gross profit

Non-GAAP Adjustments

Stock-based compensation expense

Acquisition, disposition and other charges

H3C divestiture related severance costs

Non-GAAP gross profit

GAAP gross profit margin

Non-GAAP adjustments

Non-GAAP gross profit margin

GAAP earnings from operations

Non-GAAP Adjustments Amortization of intangible assets Transformation costs Stock-based compensation expense

H3C divestiture related severance costs Acquisition, disposition and other charges

Non-GAAP earnings from operations

GAAP operating profit margin

Non-GAAP adjustments

Non-GAAP operating profit margin

For the three months ended

January 31, 2025

October 31, 2024

January 31, 2024

Dollars in millions

7,854

8,458

6,755

5,559

5,852

4,298

2,295

2,606

2,457

(3)

(4)

(25)

2,310

2,612

2,448

29.2 %

30.8 %

36.4 %

0.2 %

0.1 %

(0.2)%

29.4 %

30.9 %

36.2 %

For the three months ended

January 31, 2025

October 31, 2024

January 31, 2024

Dollars in millions

433

693

525

154

141

780

938

775

5.5 %

8.2%

7.8 %

4.4 %

2.9 %

3.7 %

9.9 %

11.1 %

11.5 %

HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES

Reconciliation of GAAP to Non-GAAP measures

(Unaudited)

For the three months ended

GAAP net earnings attributable to HPE

Non-GAAP Adjustments: Amortization of intangible assets Transformation costs Stock-based compensation expense Gain on sale of a business

H3C divestiture related severance costs Acquisition, disposition and other charges Gain on sale of equity interest Adjustments for equity interests

(Gain) loss on equity investments, net Adjustments for taxes

Other adjustments(2)

Non-GAAP net earnings attributable to HPE(3) Preferred stock dividends

Non-GAAP net earnings attributable to common stockholders

January 31,

Diluted net

October 31,

Diluted net

January 31,

Diluted net

earnings per

2025

2024

Dollars in millions, except per share amounts

627

0.44

1,366

0.99

387

0.29

0.03

0.05

0.01

0.02

154

0.11

0.06

141

0.11

(244)

(0.17)

0.05

0.04

0.01

(733)

(0.53)

0.02

(46)

(0.03)

(2)

(34)

(0.02)

0.05

(15)

(89)

(0.06)

(16)

(0.02)

(29)

(0.02)

0.01

684

0.49

795

0.58

638

0.48

(29)

(25)

655

770

638

For the three months ended

January 31, 2025

October 31, 2024

January 31, 2024

In millions

Net cash (used in) provided by operating activities

(390)

2,030

Investment in property, plant and equipment and software assets

(528)

(608)

(656)

Proceeds from sale of property, plant and equipment

Effect of exchange rate changes on cash, cash equivalents, and restricted

(43)

(12)

cash

Free cash flow

(877)

1,500

(482)

Disclaimer

Hewlett Packard Enterprise Co. published this content on March 06, 2025, and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on March 06, 2025 at 21:13:09.512.