EX-99.1 2 ex-991x632025x8k.htm EX-99.1 Document

Exhibit 99.1
sam2016pressreleasev1a17a.jpg

Hewlett Packard Enterprise
1701 E. Mossy Oaks Road
Spring, TX 77389-1767

hpe.com

News Release
Hewlett Packard Enterprise Delivers Solid FY 2025 Second Quarter Results


HOUSTON June 3, 2025 – Hewlett Packard Enterprise (NYSE: HPE) today announced financial results for the second quarter ended April 30, 2025.
“We delivered a solid performance, achieving yet another quarter of year-over-year revenue growth with strength in each of our product segments,” said Antonio Neri, president and CEO of Hewlett Packard Enterprise. “In a very dynamic macro environment, we executed our strategy with discipline. We remain focused on bringing breakthrough innovation to our customers while increasing profitability and enhancing shareholder value.”
“We drove higher revenue year-over-year in Q2 across Server, Intelligent Edge, and Hybrid Cloud, and, importantly in Server, we improved margin performance over the course of the quarter,” said Marie Myers, executive vice president and CFO of Hewlett Packard Enterprise. “We are maintaining our focus on achieving efficiencies and streamlining operations across our businesses to position HPE for the future and deliver financial results aligned with our fiscal 2025 outlook.”

Second Quarter Fiscal 2025 Financial Results
Revenue: $7.6 billion, up 6% from the prior-year period in actual dollars and 7% in constant currency(1)
Annualized revenue run-rate (“ARR”)(2): $2.2 billion, up 46% from the prior-year period in actual dollars and 47% in constant currency(1)
Gross margins:
GAAP of 28.4%, down 460 basis points from the prior-year period and down 80 basis points sequentially
Non-GAAP(1) of 29.4%, down 370 basis points from the prior-year period and flat sequentially



Diluted net (loss) earnings per share (“EPS”):
GAAP of $(0.82), compared to $0.24 in the prior-year period, includes non-cash impairment of legacy goodwill impacting GAAP diluted net EPS by $1.03
Non-GAAP(1) of $0.38, down 10% from the prior-year period and down 22% sequentially, above our guidance range of $0.28 - $0.34
Cash flow from operations: $(461) million, a decrease of $1,554 million from the prior-year period
Free cash flow (“FCF”)(1)(3): $(847) million, a decrease of $1,457 million from the prior-year period
Capital returns to common shareholders: $221 million in the form of dividends and share repurchases

Second Quarter Fiscal 2025 Segment Results
Server revenue was $4.1 billion, up 6% from the prior-year period in actual dollars and up 7% in constant currency(1), with 5.9% operating profit margin, compared to 11.0% from the prior-year period.
Intelligent Edge revenue was $1.2 billion, up 7% from the prior-year period in actual dollars and 8% in constant currency(1), with 23.6% operating profit margin, compared to 21.8% from the prior-year period.
Hybrid Cloud revenue was $1.5 billion, up 13% from the prior-year period in actual dollars and 15% in constant currency(1), with 5.4% operating profit margin, compared to 1.0% from the prior-year period.
Financial Services revenue was $856 million, down 1.3% from the prior-year period in actual dollars and up 1% in constant currency(1), with 10.4% operating profit margin, compared to 9.3% from the prior-year period. Net portfolio assets of $13.3 billion, up 0.9% from the prior-year period and flat in constant currency(1). The business delivered return on equity of 17.5%, down 0.5 points from the prior-year period.
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 July 17, 2025, to stockholders of record as of the close of business on June 18, 2025.
Fiscal 2025 Third Quarter Outlook
HPE estimates revenue to be in the range of $8.2 billion and $8.5 billion. HPE estimates GAAP diluted net EPS to be in the range of $0.24 to $0.29 and non-GAAP diluted net EPS(1) to be in the range of $0.40 to $0.45. Fiscal 2025 third quarter non-GAAP diluted net EPS estimate excludes net after-tax adjustments of approximately $0.16 per diluted share primarily related to stock-based compensation expense, acquisition, disposition and other charges, the cost reduction program, and amortization of intangible assets.

Fiscal 2025 Outlook
HPE estimates fiscal 2025 revenue growth of 7% to 9%, in constant currency(1)(5), and fiscal 2025 GAAP operating profit growth to be in the range of negative 81% to negative 72%(6) and non-GAAP operating profit(1)(4) growth to be negative 7% to 0%. HPE estimates GAAP diluted net EPS to be in the range of



$0.30 and $0.42(6) and non-GAAP diluted net EPS(1) to be in the range of $1.78 to $1.90. Fiscal 2025 non-GAAP diluted net EPS estimate excludes net after-tax adjustments of approximately $1.48 per diluted share, primarily related to impairment of goodwill, stock-based compensation expense, the 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.



1 A description of HPE’s use of non-GAAP financial information is provided below under “Use of non-GAAP financial information and key performance metrics.”
2 Annualized Revenue Run-Rate (“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 from operating leases and interest income from finance leases), and software-as-a-Service, software consumption revenue, and other as-a-Service offerings, recognized during a quarter and multiplied by four. We use ARR as a performance metric. ARR should be viewed independently of net revenue and is not intended to be combined with it.
3 Free cash flow represents cash flow from operations, less net capital expenditures (investments in property, plant & 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.
4 FY25 non-GAAP operating profit excludes costs of approximately $2.5 billion primarily related to impairment of goodwill, stock-based compensation expense, the cost reduction program, acquisition, disposition and other charges, amortization of intangible assets, and H3C divestiture related severance costs.
5 Hewlett Packard Enterprise provides certain guidance on a non-GAAP basis. In reliance on the exception provided by Item 10(e)(1)(i)(B) of Regulation S-K, Hewlett Packard Enterprise is unable to provide a reconciliation to the most directly comparable GAAP financial measure without unreasonable efforts, as the Company cannot predict some elements that are included in such directly comparable GAAP financial measure. These elements could have a material impact on the Company’s reported GAAP results for the guidance period. Refer to the discussion of non-GAAP financial measures below for more information.
6 Includes the impact of $1.4 billion impairment of goodwill recorded in Q2 of fiscal 2025.

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
Laura.Keller@hpe.com
Investor Contact:



Paul Glaser
investor.relations@hpe.com



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 operating profit growth, non-GAAP diluted net earnings per share, 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 from 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 is not intended to be combined with it.



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, 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, order backlog, goodwill, impairment charges, 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 supply chain constraints, heightening global trade restrictions, the use and development of artificial intelligence, the uncertain inflationary environment, 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 related guidance; 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
 April 30, 2025January 31, 2025April 30, 2024
In millions, except per share amounts
Net revenue$7,627 $7,854 $7,204 
Costs and Expenses:
Cost of sales (exclusive of amortization shown separately below)5,458 5,559 4,828 
Research and development540 475 590 
Selling, general and administrative1,298 1,268 1,215 
Amortization of intangible assets37 38 67 
Impairment of goodwill
1,361 — — 
Transformation (credit) costs(13)15 33 
Acquisition, disposition and other charges55 66 46 
Total costs and expenses8,736 7,421 6,779 
(Loss) earnings from operations(1,109)433 425 
Interest and other, net(1)
39 39 (22)
Gain on sale of a business— 244 — 
Earnings (loss) from equity interests25 17 42 
(Loss) earnings before provision for taxes(1,045)733 445 
Provision for taxes(5)(106)(131)
Net (loss) earnings attributable to HPE(1,050)627 314 
Preferred stock dividends(29)(29)— 
Net (loss) earnings attributable to common stockholders$(1,079)$598 $314 
Net (Loss) Earnings Per Share Attributable to Common Stockholders:
Basic$(0.82)$0.45 $0.24 
Diluted(0.82)0.44 0.24 
Cash dividends declared per share0.13 0.13 0.13 
Cash dividends accrued per preferred share$0.95 $0.95 $— 
Weighted-average Shares Used to Compute Net (Loss) Earnings Per Share:
Basic1,322 1,316 1,311 
Diluted1,322 1,409 1,325 




HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES
Condensed Consolidated Statements of Earnings
(Unaudited)
 For the six months ended
April 30, 2025April 30, 2024
In millions, except per share amounts
Net revenue$15,481 $13,959 
Costs and Expenses:
Cost of sales (exclusive of amortization shown separately below)11,017 9,126 
Research and development1,015 1,172 
Selling, general and administrative2,566 2,431 
Amortization of intangible assets75 138 
Impairment of goodwill1,361 — 
Acquisition, disposition and other charges121 89 
Total costs and expenses16,157 13,009 
(Loss) earnings from operations(676)950 
Interest and other, net(1)
78 (110)
Gain on sale of a business244 — 
Earnings from equity interests42 88 
Loss (earnings) before provision for taxes(312)928 
Provision for taxes(111)(227)
Net (loss) earnings attributable to HPE(423)701 
Preferred stock dividends(58)— 
Net (loss) earnings attributable to common stockholders$(481)$701 
Net (Loss) Earnings Per Share Per Share Attributable to Common Stockholders:
Basic$(0.36)$0.54 
Diluted(0.36)0.53 
Cash dividends declared per share0.26 0.26 
Cash dividends accrued per preferred share$1.91 $— 
Weighted-average Shares Used to Compute Net (Loss) Earnings Per Share:
Basic1,319 1,306 
Diluted1,319 1,320 
















HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES
Reconciliation of GAAP to Non-GAAP measures
(Unaudited)
For the three months ended
April 30, 2025January 31, 2025April 30, 2024
 Dollars in millions
GAAP net revenue$7,627 $7,854 $7,204 
GAAP cost of sales5,458 5,559 4,828 
GAAP gross profit2,169 2,295 2,376 
Non-GAAP Adjustments
Stock-based compensation expense13 17 14 
Acquisition, disposition and other charges— (3)(7)
Cost reduction program46 — — 
H3C divestiture related severance costs16 — 
Non-GAAP gross profit$2,244 $2,310 $2,383 
GAAP gross profit margin28.4 %29.2 %33.0 %
Non-GAAP adjustments1.0 %0.2 %0.1 %
Non-GAAP gross profit margin29.4 %29.4 %33.1 %

For the six months ended
April 30, 2025April 30, 2024
Dollars in millions
GAAP net revenue$15,481 $13,959 
GAAP cost of sales11,017 9,126 
GAAP gross profit4,464 4,833 
Non-GAAP Adjustments
Stock-based compensation expense30 30 
Acquisition, disposition and other charges(3)(32)
Cost reduction program46 — 
H3C divestiture related severance costs17 — 
Non-GAAP gross profit$4,554 $4,831 
GAAP gross profit margin28.8 %34.6 %
Non-GAAP adjustments0.6 %— %
Non-GAAP gross profit margin29.4 %34.6 %








For the three months ended
April 30, 2025January 31, 2025April 30, 2024
Dollars in millions
GAAP (loss) earnings from operations$(1,109)$433 $425 
Non-GAAP Adjustments
Amortization of intangible assets37 38 67 
Impairment of goodwill1,361 — — 
Transformation (credit) costs(13)15 33 
Stock-based compensation expense116 154 120 
H3C divestiture related severance costs20 77 — 
Cost reduction program146 — — 
Acquisition, disposition and other charges 55 63 39 
Non-GAAP earnings from operations$613 $780 $684 
GAAP operating profit margin(14.5)%5.5 %5.9 %
Non-GAAP adjustments22.5 %4.4 %3.6 %
Non-GAAP operating profit margin8.0 %9.9 %9.5 %


For the six months ended
April 30, 2025April 30, 2024
Dollars in millions
GAAP (loss) earnings from operations$(676)$950 
Non-GAAP Adjustments
Amortization of intangible assets75 138 
Impairment of goodwill1,361 — 
Transformation costs53 
Stock-based compensation expense270 261 
H3C divestiture related severance costs97 — 
Cost reduction program146 — 
Acquisition, disposition and other charges 118 57 
Non-GAAP earnings from operations$1,393 $1,459 
GAAP operating profit margin(4.4)%6.8 %
Non-GAAP adjustments13.4 %3.7 %
Non-GAAP operating profit margin9.0 %10.5 %





HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES
Reconciliation of GAAP to Non-GAAP measures
(Unaudited)
For the three months ended
April 30, 2025Diluted Net EPSJanuary 31, 2025Diluted Net EPSApril 30, 2024Diluted Net EPS
Dollars in millions, except per share amounts
GAAP net (loss) earnings attributable to HPE$(1,050)$(0.82)$627 $0.44 $314 $0.24 
Non-GAAP Adjustments:
Amortization of intangible assets37 0.03 38 0.03 67 0.05 
Impairment of goodwill1,361 1.03 — — — — 
Transformation (credit) costs(13)(0.01)15 0.01 33 0.03 
Stock-based compensation expense116 0.09 154 0.11 120 0.09 
Gain on sale of a business— — (244)(0.17)— — 
H3C divestiture related severance costs20 0.02 77 0.05 — — 
Cost reduction program146 0.11 — — — — 
Acquisition, disposition and other charges55 0.04 63 0.04 39 0.03 
Adjustments for equity interests— — — — (42)(0.03)
(Gain) loss on equity investments, net(7)(0.01)(2)— — — 
Adjustments for taxes(91)(0.08)(15)— 31 0.02 
Other adjustments(2)
(29)(0.02)(29)(0.02)(1)(0.01)
Non-GAAP net earnings attributable to HPE(3)
545 $0.38 684 $0.49 561 $0.42 
Preferred stock dividends(29)(29)— 
Non-GAAP net earnings attributable to common stockholders$516 $655 $561 





For the six months ended
April 30, 2025Diluted Net EPSApril 30, 2024Diluted Net EPS
Dollars in millions, except per share amounts
GAAP net (loss) earnings attributable to HPE$(423)$(0.36)$701 $0.53 
Non-GAAP Adjustments:
Amortization of intangible assets75 0.06 138 0.10 
Impairment of goodwill1,361 1.03 — — 
Transformation costs— 53 0.04 
Stock-based compensation expense270 0.20 261 0.20 
Gain on sale of a business(244)(0.18)— — 
H3C divestiture related severance costs97 0.07 — — 
Cost reduction program146 0.11 — — 
Acquisition, disposition and other related charges118 0.08 57 0.05 
Adjustments for equity interests— — (88)(0.07)
(Gain) loss on equity investments, net(9)(0.01)61 0.05 
Adjustments for taxes(106)(0.09)15 0.01 
Other adjustments(2)
(58)(0.04)— 
Non-GAAP net earnings attributable to HPE(3)
1,229 0.87 1,199 0.91 
Preferred stock dividends(58)— 
Non-GAAP net earnings attributable to common stockholders$1,171 $1,199 



For the three months ended
April 30, 2025January 31, 2025April 30, 2024
In millions
Net cash (used in) provided by operating activities$(461)$(390)$1,093 
Investment in property, plant and equipment and software assets(547)(528)(560)
Proceeds from sale of property, plant and equipment80 84 122 
Effect of exchange rate changes on cash, cash equivalents, and restricted cash81 (43)(45)
Free cash flow$(847)$(877)$610 
For the six months ended
April 30, 2025April 30, 2024
In millions
Net cash (used in) provided by operating activities$(851)$1,157 
Investment in property, plant and equipment and software assets(1,075)(1,216)
Proceeds from sale of property, plant and equipment164 218 
Effect of exchange rate changes on cash, cash equivalents, and restricted cash38 (31)
Free cash flow$(1,724)$128 



HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
 As of
 April 30, 2025October 31, 2024
(Unaudited)(Audited)
In millions, except par value
ASSETS
Current Assets:
Cash and cash equivalents$11,667 $14,846 
Accounts receivable, net of allowances3,899 3,550 
Financing receivables, net of allowances3,907 3,870 
Inventory8,096 7,810 
Assets held for sale— 
Other current assets4,002 3,380 
Total current assets31,571 33,457 
Property, plant and equipment, net5,407 5,664 
Long-term financing receivables and other assets12,674 12,616 
Investments in equity interests965 929 
Goodwill and intangible assets17,237 18,596 
Total assets $67,854 $71,262 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Notes payable and short-term borrowings$5,152 $4,742 
Accounts payable9,316 11,064 
Employee compensation and benefits1,055 1,356 
Taxes on earnings277 284 
Deferred revenue4,172 3,904 
Accrued restructuring39 61 
Liabilities held for sale— 32 
Other accrued liabilities4,527 4,530 
Total current liabilities 24,538 25,973 
Long-term debt12,378 13,504 
Other non-current liabilities7,011 6,905 
Commitments and Contingencies
Stockholders’ Equity
HPE stockholders' Equity:
7.625% Series C mandatory convertible preferred stock, $0.01 par value (30 shares issued and outstanding as of April 30, 2025 and October 31, 2024, respectively)
— — 
Common stock, $0.01 par value (9,600 shares authorized; 1,311 and 1,297 shares issued and outstanding as of April 30, 2025 and October 31, 2024, respectively)
13 13 
Additional paid-in capital29,840 29,848 
Accumulated deficit(2,892)(2,068)
Accumulated other comprehensive loss(3,094)(2,977)
Total HPE stockholders’ equity23,867 24,816 
Non-controlling interests60 64 
Total stockholders’ equity23,927 24,880 
Total liabilities and stockholders’ equity $67,854 $71,262 




HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(Unaudited)
For the six months ended
April 30, 2025April 30, 2024
In millions
Cash Flows from Operating Activities:
Net (loss) earnings attributable to HPE$(423)$701 
Adjustments to Reconcile Net Earnings Attributable to HPE to Net Cash (Used in) Provided by Operating Activities:
Depreciation and amortization1,173 1,299 
Impairment of goodwill1,361 — 
Stock-based compensation expense270 261 
Provision for inventory and credit losses190 113 
Restructuring (credit) charges(13)18 
Cost reduction program146 — 
Deferred taxes on earnings(43)— 
Earnings from equity interests(42)(88)
Gain on sale of a business(244)— 
H3C divestiture related severance costs97 — 
Other, net41 128 
Changes in Operating Assets and Liabilities, Net of Acquisitions:
Accounts receivable(372)(376)
Financing receivables25 (327)
Inventory(435)(2,808)
Accounts payable(1,698)3,026 
Taxes on earnings(36)95 
Restructuring(32)(121)
Other assets and liabilities(816)(764)
Net cash (used in) provided by operating activities(851)1,157 
Cash Flows from Investing Activities:
Investment in property, plant and equipment and software assets(1,075)(1,216)
Proceeds from sale of property, plant and equipment164 218 
Purchases of investments
(1)(16)
Proceeds from maturities and sales of investments
41 
Financial collateral posted(638)(499)
Financial collateral received287 401 
Proceeds from divestiture210 — 
Net cash used in investing activities(1,012)(1,107)
Cash Flows from Financing Activities:
Short-term borrowings with original maturities less than 90 days, net(11)(45)
Proceeds from debt, net of issuance costs257 1,075 
Payment of debt(1,061)(2,218)
Net payments related to stock-based award activities(171)(94)
Repurchases of common stock(102)(48)
Cash dividends paid to non-controlling interests, net of contributions(8)(8)
Cash dividends paid to preferred stockholders(54)— 
Cash dividends paid to common stockholders(342)(338)
Net cash (used in) provided by financing activities(1,492)(1,676)
Effect of exchange rate changes on cash, cash equivalents, and restricted cash38 (31)
Change in cash, cash equivalents and restricted cash(3,317)(1,657)
Cash, cash equivalents and restricted cash at beginning of period15,105 4,581 
Cash, cash equivalents and restricted cash at end of period$11,788 $2,924 

HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES
Segment Information
(Unaudited)
 For the three months ended
 April 30, 2025January 31, 2025April 30, 2024
In millions
Net Revenue:
Server(4)
$4,058 $4,290 $3,841 
Hybrid Cloud(4)
1,453 1,405 1,282 
Intelligent Edge1,162 1,146 1,086 
Financial Services856 873 867 
Corporate Investments and other194 197 252 
Total segment net revenue7,723 7,911 7,328 
Elimination of intersegment net revenue(96)(57)(124)
Total consolidated net revenue$7,627 $7,854 $7,204 
Earnings Before Taxes:
Server(4)
$241 $348 $423 
Hybrid Cloud(4)
78 99 13 
Intelligent Edge274 314 237 
Financial Services89 82 81 
Corporate Investments and other(10)(2)(9)
Total segment earnings from operations672 841 745 
Unallocated corporate costs and eliminations(59)(61)(61)
Stock-based compensation expense(116)(154)(120)
Amortization of intangible assets(37)(38)(67)
Impairment of goodwill(1,361)— — 
Transformation credit (costs)13 (15)(33)
Gain on sale of a business— 244 — 
H3C divestiture related severance costs(20)(77)— 
Cost reduction program(146)— — 
Acquisition, disposition and other charges(55)(63)(39)
Interest and other, net(1)
39 39 (22)
Earnings (loss) from equity interests25 17 42 
Total pretax (loss) earnings$(1,045)$733 $445 
 




HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES
Segment Information
(Unaudited)
 For the six months ended
 April 30, 2025April 30, 2024
In millions
Net Revenue:
Server(4)
$8,348 $7,168 
Hybrid Cloud(4)
2,858 2,555 
Intelligent Edge2,308 2,287 
Financial Services1,729 1,740 
Corporate Investments and other391 490 
Total segment net revenue15,634 14,240 
Elimination of intersegment net revenue(153)(281)
Total consolidated net revenue$15,481 $13,959 
Earnings Before Taxes:
Server(4)
$589 $802 
Hybrid Cloud(4)
177 64 
Intelligent Edge588 590 
Financial Services171 155 
Corporate Investments and other(12)(19)
Total segment earnings from operations1,513 1,592 
Unallocated corporate costs and eliminations(120)(133)
Stock-based compensation expense(270)(261)
Amortization of intangible assets(75)(138)
Impairment of goodwill(1,361)— 
Transformation costs(2)(53)
Gain on sale of a business244 — 
H3C divestiture related severance costs(97)— 
Cost reduction program(146)— 
Acquisition, disposition and other charges(118)(57)
Interest and other, net(1)
78 (110)
Earnings from equity interests42 88 
Total pretax (loss) earnings$(312)$928 




HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES
Segment Information
(Unaudited)
 For the three months endedChange (%)
 April 30, 2025January 31, 2025April 30, 2024Q/QY/Y
Dollars in millions
Net Revenue:
Server(4)
$4,058 $4,290 $3,841 (5%)6%
Hybrid Cloud(4)
1,453 1,405 1,282 313
Intelligent Edge1,162 1,146 1,086 17
Financial Services856 873 867 (2)(1)
Corporate Investments and other194 197 252 (2)(23)
Total segment net revenue7,723 7,911 7,328 (2)5
Elimination of intersegment net revenue(96)(57)(124)68(23)
Total consolidated net revenue$7,627 $7,854 $7,204 (3%)6%

 For the six months ended
 April 30, 2025April 30, 2024Y/Y
Dollars in millions
Net Revenue:
Server(4)
$8,348 $7,168 17%
Hybrid Cloud(4)
2,858 2,555 12
Intelligent Edge2,308 2,287 1
Financial Services1,729 1,740 (1)
Corporate Investments and other391 490 (20)
Total segment net revenue15,634 14,240 10
Elimination of intersegment net revenue(153)(281)(46)
Total consolidated net revenue$15,481 $13,959 11%




HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES
Segment Operating Margin Summary Data
(Unaudited)
 For the three months endedChange in operating profit margin (pts)
 April 30, 2025January 31, 2025April 30, 2024Q/QY/Y
Segment Operating Profit Margin:
Server(4)
5.9 %8.1 %11.0 %(2.2)(5.1)
Hybrid Cloud(4)
5.4 %7.0 %1.0 %(1.6)4.4
Intelligent Edge23.6 %27.4 %21.8 %(3.8)1.8
Financial Services10.4 %9.4 %9.3 %1.01.1
Corporate Investments and other(5.2 %)(1.0 %)(3.6 %)(4.2)(1.6)
Total segment operating profit margin8.7 %10.6 %10.2 %(1.9)(1.5)

For the six months endedChange in operating profit margin (pts)
April 30, 2025April 30, 2024Y/Y
Segment Operating Profit Margin:
Server(4)
7.1 %11.2 %(4.1)
Hybrid Cloud(4)
6.2 %2.5 %3.7
Intelligent Edge25.5 %25.8 %(0.3)
Financial Services9.9 %8.9 %1.0
Corporate Investments and other(3.1 %)(3.9 %)0.8
Total segment operating profit margin9.7 %11.2 %(1.5)






HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES
Calculation of Diluted Net Earnings Per Share
(Unaudited)
 For the three months ended
 April 30, 2025January 31, 2025April 30, 2024
In millions, except per share amounts
Numerator:
GAAP net (losses) earnings attributable to common stockholders - Basic$(1,079)$598 $314 
Plus: 7.625% Series C mandatory convertible preferred stock dividends— 29 — 
GAAP net earnings attributable to HPE - Diluted$(1,079)$627 $314 
Non-GAAP net earnings attributable to common stockholders - Basic$516 $655 $561 
Plus: 7.625% Series C mandatory convertible preferred stock dividends29 29 — 
Non-GAAP net earnings attributable to HPE - Diluted$545 $684 $561 
Denominator:
GAAP Weighted-average shares used to compute basic net EPS1,322 1,316 1,311 
Dilutive effect of employee stock plans(5)
— 17 14 
Dilutive effect of 7.625% Series C mandatory convertible preferred stock(5)
— 76 — 
GAAP Weighted-average shares used to compute diluted net EPS1,322 1,409 1,325 
Non-GAAP Weighted-average shares used to compute basic net EPS1,322 1,316 1,311 
Dilutive effect of employee stock plans(5)
10 17 14 
Dilutive effect of 7.625% Series C mandatory convertible preferred stock(5)
87 76 — 
Non-GAAP Weighted-average shares used to compute diluted net EPS1,419 1,409 1,325 
GAAP Net (loss) Earnings Per Share
Basic$(0.82)$0.45 $0.24 
Diluted$(0.82)$0.44 $0.24 
Non-GAAP Net EPS
Basic$0.39 $0.50 $0.43 
Diluted(3)
$0.38 $0.49 $0.42 






 For the six months ended
 April 30, 2025April 30, 2024
In millions, except per share amounts
Numerator:
GAAP net earnings attributable to common stockholders - Basic$(481)$701 
Plus: 7.625% Series C mandatory convertible preferred stock dividends— — 
GAAP net earnings attributable to HPE - Diluted$(481)$701 
Non-GAAP net earnings attributable to common stockholders - Basic$1,171 $1,199 
Plus: 7.625% Series C mandatory convertible preferred stock dividends58 — 
Non-GAAP net earnings attributable to HPE - Diluted$1,229 $1,199 
Denominator:
Weighted-average shares used to compute basic net EPS1,319 1,306 
Dilutive effect of employee stock plans(5)
— 14 
Dilutive effect of 7.625% Series C mandatory convertible preferred stock(5)
— — 
Weighted-average shares used to compute diluted net EPS1,319 1,320 
Denominator(Non-GAAP):
Weighted-average shares used to compute basic net EPS1,319 1,306 
Dilutive effect of employee stock plans(5)
14 14 
Dilutive effect of 7.625% Series C mandatory convertible preferred stock(5)
76 — 
Weighted-average shares used to compute diluted net EPS1,409 1,320 
GAAP Net EPS
Basic$(0.36)$0.54 
Diluted$(0.36)$0.53 
Non-GAAP Net EPS
Basic$0.89 $0.92 
Diluted(3)
$0.87 $0.91 

(1)    Interest and other, net includes tax indemnification and other adjustments, non-service net periodic benefit credit, and interest and other, net.
(2)    Other adjustments includes non-service net periodic benefit credit and tax indemnification and other adjustments.
(3)    For purposes of calculating diluted net EPS, the preferred stock dividends are added back to the 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.
(4)    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 reportable segment, to the Hybrid Cloud reportable segment.
(5)    The impact of dilutive effect of employee stock plans is calculated under the treasury stock method, and the impact of dilutive effect of the 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.




Use of non-GAAP financial measures
To supplement Hewlett Packard Enterprise’s condensed consolidated financial statement information presented on a GAAP basis, Hewlett Packard Enterprise provides non-GAAP 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, non-GAAP net earnings attributable to common stockholders, non-GAAP diluted net earnings per share attributable to common stockholders, and 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.
These non-GAAP financial measures are not computed in accordance with, or as an alternative to, GAAP 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 operating profit (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. 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 above or elsewhere in the materials accompanying this news release.
Usefulness of non-GAAP financial measures to investors
Hewlett Packard Enterprise believes that providing the non-GAAP financial measures stated above, in addition to the related GAAP measures provides investors with greater transparency to the information used by Hewlett Packard Enterprise’s management in its financial and operational decision making and allows investors to see Hewlett Packard Enterprise’s results “through the eyes” of management. Hewlett Packard Enterprise further believes that providing this information provides Hewlett Packard Enterprise’s investors with a supplemental view to understand the Company’s historical and prospective operating performance and to evaluate the efficacy of the methodology and information used by Hewlett Packard Enterprise’s management to evaluate and measure such performance. Disclosure of these non-GAAP financial measures also facilitates the comparisons of Hewlett Packard Enterprise’s 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 and material limitations associated with non-GAAP financial measures used by Hewlett Packard Enterprise
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 the Company’s 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. 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. Non-GAAP operating profit (non-GAAP earnings from operations) and non-GAAP operating profit margin (non-GAAP earnings from operations as a percentage of net revenue) consist of earnings from operations or earnings 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 (credit) costs. Non-GAAP net earnings net earnings attributable to HPE and non-GAAP net earnings attributable to common stockholders and non-GAAP diluted net earnings per share attributable to common stockholders consist of net earnings or diluted net earnings per share excluding the charges previously stated, as well 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.
Hewlett Packard Enterprise believes that excluding the items mentioned above from the non-GAAP financial measures provides a supplemental view to management and investors of its consolidated financial performance and presents the



financial results of the business without costs that Hewlett Packard Enterprise’s management does not believe to be reflective of ongoing operating results. Exclusion of these items can have a material impact on the equivalent GAAP measure and cash flows thus limiting their use as analytical tools. These limitations are discussed below or elsewhere in the materials accompanying this news release. More specifically, Hewlett Packard Enterprise’s management excludes each of those items mentioned above for the following reasons:
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 employees, HPE excludes these charges for the purpose of calculating these non-GAAP measures, primarily because they are non-cash expenses, and the Company’s internal benchmarking analyses evidence that many industry participants and peers present non-GAAP financial measures excluding stock-based compensation expense.
HPE incurred costs related to its acquisition, disposition and other charges. Charges include expenses associated with acquisitions, disposal activities, and disaster (recovery) charges. HPE excludes these costs because the Company’s management considers these charges to be discrete events and does not believe they are reflective of normal continuing business operations. For the three and six months ended April 30, 2025, acquisition charges were driven by costs associated with the proposed acquisition of Juniper Networks and miscellaneous disposition related charges. For the three months ended January 31, 2025, these charges were driven by costs associated with the proposed acquisition of Juniper Networks and the acquisition of Morpheus Data, in addition to prior acquisitions of Axis, Athonet and OpsRamp. For the three and six months ended April 30, 2024, acquisition charges were driven by the proposed acquisition of Juniper Networks, in addition to 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.
HPE incurred H3C divestiture related severance costs in connection with the disposition of total issued share capital of H3C. On September 4, 2024, HPE 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. HPE expects future annualized cost savings of approximately $120 million following the completion of these actions.
HPE incurs charges relating to the amortization of intangible assets and excludes these charges for purposes of calculating these non-GAAP measures. Such charges are significantly impacted by the timing and magnitude of the Company’s acquisitions. HPE excludes these charges for the purpose of calculating these non-GAAP measures, primarily because they are non-cash expenses and the Company’s 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 HPE’s 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, HPE recorded a non-cash impairment charge for the goodwill associated with its 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 the Company’s cash position, the loss in value of goodwill over time can have a material impact on the equivalent GAAP earnings measure.
Transformation (credit) costs represent net costs related to the (i) HPE Next Plan and (ii) Cost Optimization and Prioritization Plan. HPE excludes 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 cost from the non-GAAP financial measures as stated above, is to provide a supplemental measure of the Company’s operating results that do not include material HPE Next Plan and Cost Optimization and Prioritization Plan costs as the Company’s management does not believe such costs to be reflective of its ongoing operating cost structure.
Gain on sale of a business represents the gain associated with certain disposal activities. On December 1, 2024, HPE completed the disposition of the Company’s Communication Technology Group which resulted in a gain of $244 million. The Company’s management considers this divestiture to be a discrete event and believes eliminating



this adjustment for the purposes of calculating non-GAAP measures facilitates the evaluation of its current operating performance.
During the six months ended April 30, 2024, HPE stopped reporting H3C earnings in the Company’s non-GAAP results due to the planned divestiture of the H3C investment. Per the terms of the original Put Share Purchase Agreement described in Note 19 “Equity Interests” to the Consolidated Financial Statements in Item 8 of Part II of the Company’s Annual Report on Form 10-K for the fiscal year ended October 31, 2024, the Company was not anticipating receiving dividends from this investment prospectively. However, on May 24, 2024, HPE entered into an Amended and Restated Put Share Purchase Agreement and an Agreement on Subsequent Arrangements, both with UNIS, revised the arrangements governing the aforementioned sale as previously set forth in the original Put Share Purchase Agreement. On September 4, 2024, HPE divested 30% of the total issued share capital of H3C. HPE continues to possess the option to sell the remaining 19% of the total issued share capital of H3C at a later date. The Company’s management believes that eliminating these amounts for purposes of calculating non-GAAP financial measures facilitates the evaluation of the Company’s current operating performance.
HPE excludes gains and losses (including impairments) on its non-marketable equity investments because the Company does 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. The Company believes eliminating these adjustments for the purposes of calculating non-GAAP measures facilitates the evaluation of its current operating performance.
Hewlett Packard Enterprise utilizes 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 the Company’s operating structure that can vary in size and frequency. When projecting this long-term rate, HPE evaluated a three-year financial projection. The projected rate assumes no incremental acquisitions in the three-year projection period and considers other factors including the Company’s expected tax structure, its tax positions in various jurisdictions and current impacts from key legislation implemented in major jurisdictions where HPE operates. For fiscal 2025, the Company 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 the Company’s geographic earnings mix including due to acquisition activity, or other changes to the Company’s strategy or business operations. HPE will re-evaluate its long-term rate as appropriate. For fiscal 2024, HPE had a non-GAAP tax rate of 15%. HPE believes that making these adjustments for purposes of calculating non-GAAP measures, facilitates a supplemental evaluation of the Company’s current operating performance and comparisons to past operating results.
FCF is defined as cash flow from operations, less net capital expenditures (investments in property, plant & 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. FCF does not represent the total increase or decrease in cash for the period. Hewlett Packard Enterprise’s management and investors can use FCF for the purpose of determining the amount of cash available for investment in the Company’s businesses, repurchasing stock and other purposes as well as evaluating its historical and prospective liquidity.
Compensation for material 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 Hewlett Packard Enterprise’s 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. Hewlett Packard Enterprise compensates for these limitations on the use of non-GAAP financial measures by relying primarily on its GAAP results and using non-GAAP financial measures only as a supplement. Hewlett Packard Enterprise also provides a reconciliation of each non-GAAP financial measure to its most directly comparable GAAP financial measure for this quarter and prior periods within this news release and in other written materials that include these non-GAAP financial measures, and Hewlett Packard Enterprise encourages investors to review those reconciliations carefully.