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What changed in Hewlett Packard Enterprise's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Hewlett Packard Enterprise's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+748 added−677 removedSource: 10-K (2025-12-18) vs 10-K (2024-12-19)

Top changes in Hewlett Packard Enterprise's 2025 10-K

748 paragraphs added · 677 removed · 482 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

121 edited+46 added−36 removed62 unchanged
Biggest changeWe also continue to invest in our silicon design capability to accelerate the development and delivery of our technology. 7 Table of Conte n t For a discussion of risks attendant to our R&D activities, see “Risk Factors” in Item 1A of Part I of this Annual Report on Form 10-K under the heading “If we cannot successfully execute our go-to-market strategy, including offering our entire portfolio aaS, our business, operating results, and financial performance may suffer.” Patents Our general policy is to seek patent protection for those inventions likely to be incorporated into our products and services or where obtaining such proprietary rights will improve our competitive position.
Biggest changeFor a discussion of risks attendant to our R&D activities, see “Risk Factors” in Item 1A of Part I of this Annual Report on Form 10-K under the heading “Our success depends on our ability to successfully execute our go-to-market strategy, including offering solutions as-a-Service, effectively planning and managing our resources, and continuing to develop and manage our offerings to integrate new features and solutions.” Patents and Licenses Our general policy is to seek patent protection for those inventions likely to be incorporated into our products and services or where obtaining such proprietary rights will improve our competitive position.
Our primary competitors in data center infrastructure are technology vendors, such as Dell Technologies Inc., Super Micro Computer, Inc., Cisco Systems, Inc., Lenovo Group Ltd. In certain regions, we also experience competition from local companies and from generically branded or “white-box” manufacturers.
Our primary competitors in data center infrastructure are technology vendors, such as Dell Technologies Inc., Super Micro Computer, Inc., Cisco Systems, Inc., and Lenovo Group Ltd. In certain regions, we also experience competition from local companies and from generically branded or “white-box” manufacturers.
To enable market access across the globe and aid customers in selecting more sustainable IT solutions, many of our products are certified by eco-labels such as Electronic Product Environment Assessment Tool, Energy STAR, China SEPA and the China Energy Conservation Program.
To enable market access across the globe and aid customers in selecting more sustainable IT solutions, many of our products are certified by eco-labels, such as the Electronic Product Environment Assessment Tool, Energy STAR, China SEPA, and the China Energy Conservation Program.
Neri has served as a director of Elevance Health, Inc. (formerly Anthem, Inc.), a health insurance provider in the U.S. Marie Myers; Executive Vice President, Chief Financial Officer Ms. Myers has served as our Executive Vice President, Chief Financial Officer since January 2024, responsible for leading all aspects of our finance and strategy organizations.
Neri has served as a director of Elevance Health, Inc. (formerly Anthem, Inc.), a health insurance provider in the U.S. Marie Myers; Executive Vice President and Chief Financial Officer Ms. Myers has served as our Executive Vice President and Chief Financial Officer since January 2024, responsible for leading all aspects of our finance and strategy organizations.
Prior to that, she served as Chief Financial Officer of UiPath, Inc., a robotic process automation company, from December 2018 to December 2019. John F. Schultz; Executive Vice President, Chief Operating and Legal Officer Mr.
Prior to that, she served as Chief Financial Officer of UiPath, Inc., a robotic process automation company, from December 2018 to December 2019. John F. Schultz; Executive Vice President and Chief Operating and Legal Officer Mr.
Schultz has served as our Executive Vice President, Chief Operating and Legal Officer since July 2020, responsible for overseeing all aspects of our operations and shaping our operational strategies.
Schultz has served as our Executive Vice President and Chief Operating and Legal Officer since July 2020, responsible for overseeing all aspects of our operations and shaping our operational strategies.
Furthermore, we are advancing our SaaS capabilities by creating cloud-native, cloud-based server management solutions to enhance our existing portfolio. In the high performance computing and AI sector, our investments are focused on pioneering leadership computing solutions that deliver superior performance and efficiency. These solutions feature leading edge silicon architectures, high-speed interconnects, advanced storage and innovative direct liquid cooling.
Furthermore, we are advancing our SaaS capabilities by creating cloud-native, cloud-based server management solutions to enhance our existing portfolio. In the high-performance computing and AI sector, our investments are focused on pioneering leadership class computing solutions that deliver superior performance and efficiency. These solutions feature leading edge silicon architectures, high-speed interconnects, advanced storage and innovative direct liquid cooling.
We partner with independent third-party experts to conduct annual pay assessments and identify unexplained gaps between our present state and our goal of equitable pay treatment for all team members. Where these reviews identify such gaps at a country-wide level, we adjust compensation to eliminate the gap.
We partner with independent third-party experts to conduct pay assessments and identify unexplained gaps between our present state and our goal of equitable pay treatment for all team members. Where these reviews identify such gaps at a country-wide level, we adjust compensation to eliminate the gap.
The use of outsourced and contract manufacturers is intended to generate cost efficiencies and reduce time to market for our products as well as create manufacturing flexibility in our supply chain and processes. In some circumstances, third-party OEMs produce products that we purchase and resell under our brand.
The use of outsourced design and contract manufacturers is intended to generate cost efficiencies and reduce time to market for our products, as well as create manufacturing flexibility in our supply chain and processes. In some circumstances, third-party OEMs produce products that we purchase and resell under our brand.
In addition to our use of outsourced and contract manufacturers, we currently manufacture a limited number of finished products from components and subassemblies that we acquire from a wide range of vendors. Historically, we have utilized two primary methods of fulfilling demand for products: building products to order and configuring products to order.
In addition to our use of outsourced design and contract manufacturers, we currently manufacture a limited number of finished products from components and subassemblies that we acquire from a wide range of vendors. Historically, we have utilized two primary methods of fulfilling demand for products: building products to order and configuring products to order.
We have an executive level AI Ethics Responsibility Committee and an operational AI Ethics Working Group, through which we aim to align the development, deployment, and use of AI with HPE's AI Ethical Principles, promoting privacy-enabled and secure, human focused, inclusive, robust, and responsible use of AI.
We have an executive level AI Ethics Responsibility Committee and an operational AI Ethics Working Group, through which we aim to align the development, deployment, and use of AI with HPE's AI Ethics Principles, promoting privacy-enabled and secure, human focused, inclusive, robust, and responsible use of AI.
Board Oversight - Our Board of Directors oversees our human capital management strategy and programs. Our HR and Compensation Committee provides oversight of our human resources and workforce management programs, including but not limited to those related to corporate culture; compensation plans and policies; diversity and inclusion; and talent acquisition, development, and retention.
Board Oversight - Our Board of Directors oversees our human capital management strategy and programs. Our HR and Compensation Committee provides oversight of our human resources and workforce management programs, including but not limited to those related to corporate culture; compensation plans and policies; inclusion; and talent acquisition, development, and retention.
The mix of our business conducted by direct sales or channel differs substantially by business and region. We believe that customer buying patterns and different regional market conditions require us to tailor our sales, marketing, and distribution efforts accordingly.
The mix of our business conducted by direct sales or through our sales channel differs substantially by business and region. We believe that customer buying patterns and different regional market conditions require us to tailor our sales, marketing, and distribution efforts accordingly.
Our R&D efforts in the realm of AI are particularly robust, with new server solutions designed for AI inference engines and integrated into larger HPE Private Cloud AI for inferencing, retrieval augmented generation, and model fine-tuning.
Our R&D efforts in the realm of AI are particularly robust, with new server solutions designed for AI inference engines and integrated into HPE Private Cloud AI for inferencing, retrieval augmented generation, and model fine-tuning.
Server offerings also include operational and support services sold with systems and as standalone services. Hybrid Cloud The Hybrid Cloud segment offers a wide variety of cloud-native and hybrid solutions across storage, private cloud and the infrastructure software-as-a-service (“SaaS”) space.
The Server segments’ offerings also include operational and support services sold with systems and as standalone services. Hybrid Cloud The Hybrid Cloud segment offers a wide variety of cloud-native and hybrid solutions across storage, private cloud, and the infrastructure software-as-a-service (“SaaS”) space.
MacDonald has served as Executive Vice President and General Manager of our Server business since February 2024, responsible for overseeing the day-to-day operations and shaping the strategy of the Server business unit.
MacDonald has served as Executive Vice President and General Manager of our Server business since February 2024, responsible for overseeing the day-to-day operations and shaping the strategy of the Server business.
Our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to reports filed or furnished pursuant to Sections 13(a) and 15(d) of the Securities Exchange Act of 1934, as amended, are available on our website at http://investors.hpe.com, as soon as reasonably practicable after we electronically file such reports with, or furnish those reports to, the Securities and Exchange Commission.
Our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to reports filed or furnished pursuant to Sections 13(a) and 15(d) of the Securities Exchange Act of 1934, as amended, are available, free of charge, on our website at http://investors.hpe.com, as soon as reasonably practicable after we electronically file such reports with, or furnish those reports to, the Securities and Exchange Commission.
Enterprises of all sizes are looking to digitally transform in order to develop next-generation cloud-native applications, create actionable insights from their data, and drive business growth, but they face many challenges including lack of in-house IT skills, limited budgets and options for financing, and lack of flexibility to choose the technology foundation that best meets their needs.
Enterprises of various sizes are looking to digitally transform in order to develop next-generation cloud-native applications, create actionable insights from their data, and drive business growth, but they face many challenges including lack of in-house IT skills, limited budgets and options for financing, and lack of flexibility to choose the technology foundation that best meets their needs.
This portfolio of products includes our 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.
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.
Through our FS segment, we help customers create investment capacity to accelerate their transformations by helping them free up capital, capture value from older assets, achieve sustainability goals, invest in new technologies aaS, and weather financial volatility.
Through our FS business, we help customers create investment capacity to accelerate their transformations by helping them free up capital, capture value from older assets, achieve sustainability goals, invest in new technologies aaS, and weather financial volatility.
HPE has remained committed to its focus on internalizing these values into a vibrant culture that creates a superior team member experience and a highly engaged workforce, driving improvements across our communications, our reward programs, our talent/performance programs, and our work environment.
HPE has remained committed to its focus on internalizing these values into a vibrant culture that delivers a superior team member experience and a highly engaged workforce, driving improvements across our communications, our reward programs, our talent/performance programs, and our work environment.
FS also supports financial solutions for on-premise flexible consumption models, such as the HPE GreenLake cloud.
The FS segment also supports financial solutions for on-premise flexible consumption models, such as the HPE GreenLake cloud.
We continue to invest in the storage portfolio aligned with the customers evolving data and AI needs. We have extended the deployment model from on-premise and cloud-adjacent to include software-defined cloud native deployments in Amazon Web Services.
We continue to invest in the storage portfolio aligned with customers’ evolving data and AI needs. We have extended the deployment model from on-premise and cloud-adjacent to include software-defined cloud native deployments in Amazon Web Services.
In private cloud, we are developing fully integrated hardware-software offers that simplify day-to-day management, operations and data protection, enables an on-premise public-cloud like experience while addressing security, privacy, governance, and regulatory compliance needs. The investment includes airgapped/disconnected offers and offers for heavy data traffic and latency requirements at the edge.
In private cloud, we are developing fully integrated hardware-software offers that simplify day-to-day management, operations, and data protection and enable an on-premise public-cloud like experience, while addressing security, privacy, governance, and regulatory compliance needs. This investment includes airgapped/disconnected offers and offers for heavy data traffic and latency requirements at the edge.
We support this commitment with a range of comprehensive policies, including relating to environmental, health and safety, climate, water, and electronic waste; a strict environmental management of our operations and worldwide environmental programs and services; an extensive supply chain responsibility program; and an approach to ethical standards and strong governance that are the foundations of our business.
We support this commitment with a range of comprehensive policies, including relating to environmental, health and safety, climate, water, and electronic waste; a strict 13 Table of Content environmental management of our operations and worldwide environmental programs and services; an extensive supply chain responsibility program; and an approach to ethical standards and strong governance that are the foundations of our business.
The AI market requires a modern and high-performing networking fabric as a core foundation to deliver a more efficient data-center cloud, which we offer through our AI-driven portfolio of networking solutions.
The AI market requires a modern and high-performing networking fabric as a core foundation to deliver a more efficient data-center cloud, which we offer through our AI-native portfolio of networking solutions.
Our Culture - We recognize the importance of talent and culture to the success of HPE and our ability to fulfill our purpose. We have identified four key cultural beliefs that guide how we lead on a daily basis: accelerating what’s next, bold moves, the “power of yes we can,” and being a force for good.
Our Culture - We recognize that talent and culture are integral to the success of HPE and our ability to fulfill our purpose. We have identified four key cultural beliefs that guide how we lead on a daily basis: accelerating what’s next, bold moves, the “power of yes we can,” and being a force for good.
In the AI space, we have invested in building turn-key integrated systems co-engineered with Nvidia that integrate HPE AI hardware and software technologies with Nvidia technologies to radically increase time to value of GenAI capabilities optimized for inferencing, retrieval augmented generation, and model fine-tuning.
In the AI space, we have invested in building turn-key integrated systems co-engineered with Nvidia that integrate HPE AI hardware and software technologies with Nvidia technologies to radically increase time to value of generative AI (“GenAI”) capabilities optimized for inferencing, retrieval augmented generation, and model fine-tuning.
Hewlett Packard Enterprise's Corporate Governance Guidelines, Board of Directors' committee charters (including the charters of the Audit Committee, Finance and Investment Committee, HR and Compensation Committee, Technology Committee, and Nominating, Governance and Social Responsibility Committee) and code of ethics entitled “Standards of Business Conduct” are also available at that same location on our website.
Hewlett Packard Enterprise's Corporate Governance Guidelines, Board of Directors' committee charters (including the charters of the Audit Committee, Finance and Investment Committee, HR and Compensation Committee, Technology Committee, and Nominating, Governance and Social Responsibility Committee) and code of ethics entitled “Standards of Business Conduct” are also available at that same location on our website. 16 Table of Content
Our efforts also are focused on identifying the areas where we believe we can make a unique contribution and where partnering with other leading technology companies will leverage our cost structure and maximize our customers' experiences. Expenditures for R&D were $2.2 billion in fiscal 2024, $2.3 billion fiscal 2023, and $2.0 billion in fiscal 2022.
Our efforts also are focused on identifying the areas where we believe we can make a unique contribution and where partnering with other leading technology companies will leverage our cost structure and maximize our customers' experiences. Expenditures for R&D were $2.5 billion in fiscal 2025, $2.2 billion fiscal 2024, and $2.3 billion in fiscal 2023.
Most product life cycles are relatively short, and to remain competitive we must develop new products and services, continuously enhance our existing products and services and compete effectively on the basis of the factors listed above, among others.
Within these markets, most product life cycles are relatively short, and to remain competitive, we must develop new products and services, continuously enhance our existing products and services, and compete effectively on the basis of the factors listed above, among others.
International Our products and services are available worldwide. We believe geographic diversity allows us to meet demand on a worldwide basis for our customers, draws on business and technical expertise from a worldwide workforce, provides stability to our operations, provides revenue streams that may offset geographic economic trends, and offers us an opportunity to access new markets for maturing products.
We believe geographic diversity allows us to meet demand on a worldwide basis for our customers, draws on business and technical expertise from a worldwide workforce, provides stability to our operations, provides revenue streams that may offset geographic economic trends, and offers us an opportunity to access new markets for maturing products.
As of October 31, 2024, our worldwide patent portfolio included approximately 13,000 issued and pending patents. Patents generally have a term of up to 20 years from the date they are filed. As our patent portfolio has been built over time, the remaining terms of the individual patents across our patent portfolio vary.
As of October 31, 2025, our worldwide patent portfolio included approximately 21,000 issued and pending patents. Patents generally have a term of up to 20 years from the date they are filed. As our patent portfolio has been built over time, the remaining terms of the individual patents across our patent portfolio vary.
Our company strives to be an engine of innovation, and our approximately 61,000 employees as of October 31, 2024, are proud of the ways our technology enables our customers to achieve meaningful outcomes like curing disease, modernizing farming, addressing world-hunger, and democratizing transportation through autonomous vehicles.
Our company strives to be an engine of innovation, and our approximately 67,000 employees as of October 31, 2025, are proud of the ways our technology enables our customers to achieve meaningful outcomes like curing disease, modernizing farming, addressing world-hunger, and democratizing transportation through autonomous vehicles.
We are led by our President and Chief Executive Officer, Antonio Neri, who has proven experience in developing transformative business models, building global brands, and driving sustained growth and expansion in the technology industry. Mr. Neri's experience includes more than 25 years combined at HPE and Hewlett-Packard Company (“HP Co.”) in various leadership positions.
We are led by our President and Chief Executive Officer, Antonio Neri, who has proven experience in developing transformative business models, building global brands, and driving sustained growth and expansion in the technology industry. Mr. Neri's experience includes nearly 30 years combined at HPE and Hewlett-Packard Company (“HP Co.”) in various leadership positions.
A summary of our domestic and international results is set forth in Note 2, “Segment Information,” to our Consolidated Financial Statements in Item 8 of Part II. Approximately 64% of our overall net revenue in fiscal 2024 came from sales outside the United States.
A summary of our domestic and international results is set forth in Note 2, “Segment Information,” to our Consolidated Financial Statements in Item 8 of Part II. Approximately 61% of our overall net revenue in fiscal 2025 came from sales outside the United States.
Our annual talent and succession review, conducted with our CEO and Executive Committee, aims to accelerate talent development, enhance succession pipelines, and improve diversity in our key positions. Pay Equity - We believe people should be paid equitably for what they do and how they do it, regardless of their gender, race, or other personal characteristics.
Our annual talent and succession review, conducted with our CEO and Executive Committee, aims to accelerate talent development, enhance succession pipelines, and improve inclusivity in our key positions. 11 Table of Content Pay Equity - We believe people should be paid equitably for what they do and how they do it, regardless of their gender, race, or other personal characteristics.
Supply Chain Responsibility and Human Rights We manage our supply chain to help reduce risk, improve product quality, achieve environmental and social goals, and improve overall performance and value creation for our customers, partners, and suppliers. We are conscious of the importance of the responsible use of our products.
Supply Chain Responsibility and Human Rights We manage our supply chain to help reduce risk, improve product quality, achieve environmental and social goals, and improve overall performance and value creation for our customers, partners, and suppliers. We are conscious of the importance 12 Table of Content of fostering the responsible use of our products.
A discussion of certain factors potentially affecting our operations is set forth in Item 1A of Part I, “Risk Factors.” Server Our Server segment offerings consist of general-purpose servers for multi-workload computing and workload-optimized servers to deliver the high 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, data analytics, and transaction processing workloads for government and commercial customers globally.
A discussion of certain factors potentially affecting our operations is set forth in Item 1A of Part I, “Risk Factors.” Server The Server segment consists of general-purpose servers for multi-workload computing, 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), AI, Data Analytics, and Transaction Processing workloads for government and commercial customers globally.
Our inventory management and distribution practices in both building products to order and configuring products to order seek to minimize inventory holding periods by taking delivery of the inventory and manufacturing shortly before the sale or distribution of products to our customers. 5 Table of Conte n t We purchase materials, supplies, and product subassemblies from a substantial number of vendors.
Our inventory management and distribution practices in both building products to order and configuring products to order seek to minimize inventory holding periods by taking delivery of the inventory and manufacturing shortly before the sale or distribution of products to our customers. We purchase materials, supplies, and product subassemblies from a substantial number of vendors.
ITEM 1. Business 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.
ITEM 1. Business Hewlett Packard Enterprise 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. We enable our 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 primary competitors in high performance infrastructure include technology vendors that can design and build solutions that deliver performance scalability and connectivity necessary to handle super-compute and AI workloads, including Dell Technologies Inc., Super Micro Computer, Inc., Lenovo Group Ltd., Fujitsu Network Communications, Inc., and Atos Information Technology Incorporated.
Our primary competitors in high-performance infrastructure include technology vendors that can design and build solutions that deliver performance scalability and the connectivity necessary to handle super-compute and exascale workloads, such as Dell Technologies Inc., Super Micro Computer, Inc., Lenovo Group Ltd., Fujitsu Network Communications, Inc., and Atos Information Technology Incorporated.
Jeremy K. Cox; Senior Vice President, Corporate Controller, Chief Tax Officer, and Principal Accounting Officer Mr. Cox has served as our Senior Vice President, Corporate Controller, Chief Tax Officer, and Principal Accounting Officer since January 2024.
Cox has served as our Senior Vice President, Corporate Controller, Chief Tax Officer, and Principal Accounting Officer since January 2024.
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.
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 AI-native, networking operations (“AIOps”)-driven intelligence with HPE InfoSight and HPE CloudPhysics.
See “Risk factors” in Item 1A of Part I of this Annual Report on Form 10-K under the heading “Our uneven sales cycle and supply chain disruptions make planning and inventory management difficult and future financial results less predictable.” Competition We have a broad technology portfolio of enterprise IT infrastructure products, solutions, and services which includes our aaS offerings.
See “Risk Factors” in Item 1A of Part I of this Annual Report on Form 10-K under the 9 Table of Content heading “Our uneven sales cycle and supply chain disruptions make planning and inventory management difficult and future financial results less predictable.” Competition We have a broad technology portfolio of enterprise IT infrastructure products, solutions, and services, including our aaS offerings, and these offerings encounter strong competition.
The competitive environments in which our segments operate are described below: Server business operates in the highly competitive enterprise data center infrastructure market and the markets for data-intensive high performance supercomputing, analytics, and artificial intelligence infrastructure solutions, which are characterized by rapid and ongoing technological innovation.
The competitive environments in which our segments operate are described below: Server business operates in the highly competitive AI and enterprise data center infrastructure market and the market for data-intensive, high-performance supercomputing, analytics, and exascale compute solutions, which are characterized by rapid and ongoing technological innovation.
Our customers are organized by commercial and large enterprise groups, including business and public sector enterprises, and purchases of our products, solutions and services may be fulfilled directly by us or indirectly through a variety of partners, including: • resellers that sell our products and services, frequently with their own value-added products or services, to targeted customer groups; • distribution partners that supply our solutions to resellers; • original equipment manufacturers (“OEMs”) that integrate our products and services with their own products and services, and sell the integrated solution; • independent software vendors that provide their clients with specialized software products and often assist us in selling our products and services to clients purchasing their products; • systems integrators that provide expertise in designing and implementing custom IT solutions and often partner with us to extend their expertise or influence the sale of our products and services; and • advisory firms that provide various levels of management and IT consulting, including some systems integration work, and typically partner with us on client solutions that require our unique products and services.
Our customers are organized by commercial and large enterprise groups, including business and public sector enterprises, and purchases of our products, solutions and services may be fulfilled directly through us or indirectly through a variety of partners, including: • resellers that sell our products and services, frequently with their own value-added products or services, to targeted customer groups; • distribution partners that supply our solutions to resellers; • for select countries, master area partners who manage our local market presence and operate all aspects of in-country business, including all local customer and partner relationships, on our behalf; • original equipment manufacturers (“OEMs”) that integrate our products and services with their own products and services, and sell the integrated solution; • independent software vendors that provide their clients with specialized software products and often assist us in selling our products and services to clients purchasing their products; • systems integrators that provide expertise in designing and implementing custom IT solutions and often partner with us to extend their expertise or influence the sale of our products and services; and • advisory firms that provide various levels of management and IT consulting, including some systems integration work, and typically partner with us on client solutions that require our unique products and services.
We are also subject to legislation in an increasing number of jurisdictions that makes producers of electrical goods, including servers and networking equipment, subject to certain 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”).
We are also subject to legislation in an increasing number of jurisdictions that makes producers of electrical goods, including servers and networking equipment, subject to certain repairability requirements or financially responsible for specified collection, recycling, treatment, and disposal of past and future covered products.
As a result of our efforts, our most recent pay equity review demonstrated that we have achieved pay parity for base compensation and bonus targets between male and female team members in the U.S. (including among underrepresented ethnicities), and a dozen additional countries throughout the world, when accounting for job title, time-in-role, experience, and location.
Our most recent pay equity review demonstrated that we have achieved pay parity for base compensation and bonus targets between male and female team members in the U.S., and a dozen additional countries throughout the world, when accounting for job title, time-in-role, experience, and location.
Previously, he served as our Senior Vice President, Finance and Treasurer from November 2015 to May 2022. Prior to that, Mr. Karros served in a similar role at HP Co., leading its treasury and investor relations functions. 14 Table of Conte n t Available Information Our website is located at www.hpe.com.
Previously, he served as our Senior Vice President, Finance and Treasurer from November 2015 to May 2022, and prior to that, he served in a similar role at HP Co., leading its treasury and investor relations functions. Available Information Our website is located at www.hpe.com.
We encounter strong competition in all areas of our business. We compete primarily on the basis of technology, innovation, performance, price, quality, reliability, brand, reputation, distribution, range of products and services, ease of use of our products, account relationships, customer training, service and support, security, and the availability of our IT infrastructure offerings.
We compete primarily on the basis of technology, innovation, performance, price, quality, reliability, brand, reputation, distribution, range of products and services, ease of use of our products, account relationships, customer training, service and support, security, and the availability of our IT infrastructure offerings.
For a discussion of certain risks attendant to our international operations, see “Risk Factors” in Item 1A of Part I of this Annual Report on Form 10-K under the headings “Due to the international nature of our business, political or economic changes and the laws and regulatory regimes applying to international transactions or other factors could harm our future revenue, costs and expenses, and financial condition,” and “We are exposed to fluctuations in foreign currency exchange rates,” “Quantitative and Qualitative Disclosure about Market Risk” in Item 7A of Part II, and Note 13, “Financial Instruments,” to our Consolidated Financial Statements in Item 8 of Part II. 6 Table of Conte n t Research and Development Innovation is a key element of our culture and critical to our success.
For a discussion of certain risks attendant to our international operations, see “Risk Factors” in Item 1A of Part I of this Annual Report on Form 10-K under the headings “Due to the international nature of our business, political or economic changes and the laws and regulatory regimes applying to international transactions or other factors could harm our future revenue, costs and expenses, financial condition, and results of operations” and “We are exposed to fluctuations in foreign currency exchange rates,” “Quantitative and Qualitative Disclosure about Market Risk” in Item 7A of Part II, and Note 13, “Financial Instruments,” to our Consolidated Financial Statements in Item 8 of Part II of this Annual Report on Form 10-K.
Russo was Senior Vice President and General Manager of the Cloud Services business unit at VMware from May 2020 to September 2021 and the Chief Technology Officer and Executive Vice President of Global Technology & Operations at Iron Mountain, Inc. from March 2017 to May 2020. Additionally, Ms.
Russo was Senior Vice President and General Manager of the Cloud Services business unit at VMware from May 2020 to September 2021 and the Chief Technology Officer and Executive Vice President of Global Technology & Operations at Iron Mountain, Inc. from March 2017 to May 2020. Neil B. MacDonald; Executive Vice President and General Manager of Server Mr.
Finally, we have been rapidly developing an enterprise-grade hypervisor for virtual machines, along with the ability to manage cloud-native applications using containerization, or specialized workload needs with bare metal as a service. In Intelligent Edge, we are investing in a broad portfolio of networking and security capabilities, addressing remote, branch, campus, data center, and cloud use cases.
Finally, we have been rapidly developing HPE VM Essentials, an enterprise-grade hypervisor for virtual machines, along with the ability to manage cloud-native applications using containerization, or specialized workload needs with bare metal as a service. 8 Table of Content In Networking, we are investing in a broad portfolio of networking and security capabilities, addressing campus, branch, data center, wide area networking, and cloud use cases.
We have also granted and continue to grant to others licenses and other rights under our patents when we consider these arrangements to be in our interest. These license arrangements include a number of cross-licenses with third parties.
We have also granted and continue to grant others licenses and other rights under our patents when we consider these arrangements to be in our interest. These license arrangements include a number of cross-licenses with third parties. We also integrate licensed third-party technology into certain of our products.
For other customers, our businesses collaborate to manage relationships with commercial resellers targeting smaller accounts, both in the commercial and public sector space. Manufacturing and Materials We utilize a significant number of outsourced and contract manufacturers around the world to manufacture products that we design.
For other customers, our businesses collaborate to manage relationships with commercial resellers targeting smaller accounts, both in the commercial and public sector space. 6 Table of Content Manufacturing and Materials We utilize a significant number of original and outsourced design manufacturers and outsourced contract manufacturers around the world to design or assist in the design and manufacture of HPE-branded products or to manufacture HPE-branded products that HPE designs.
Kristin Major; Executive Vice President and Chief People Officer Ms. Major has served as our Executive Vice President, Chief People Officer since February 2024, leading the global HR function, driving business growth and transformation through employee engagement; performance-led talent management; comprehensive rewards; and culture development.
Stacy Dillow; Executive Vice President and Chief People Officer Ms. Dillow has served as our Executive Vice President and Chief People Officer since May 2025, leading the global HR function, driving business growth and transformation through employee engagement; performance-led talent management; comprehensive rewards; and culture development.
We use the terms “Hewlett Packard Enterprise,” “HPE,” “the Company,” “we,” “us,” and “our” to refer to Hewlett Packard Enterprise Company. Our Strategy Over the last several years, new megatrends around edge, cloud, data, and artificial intelligence (“AI”) have emerged to shape customer expectations for enterprise technology.
We use the terms “Hewlett Packard Enterprise,” “HPE,” “the Company,” “we,” “us,” and “our” to refer to Hewlett Packard Enterprise Company. Our Strategy Over the last several years, HPE has observed megatrends around networking, cloud, data, and artificial intelligence (“AI”) emerging to shape customer expectations for enterprise technology.
For a discussion of the risks associated with government regulations that may materially impact us, see “Regulatory and Government Risks” within “Risk Factors” in Item 1A of Part I.
For a discussion of the risks associated with government regulations that may materially impact us, see “Regulatory and Government Risks” within “Risk Factors” in Item 1A of Part I of this Annual Report on Form 10-K.
Our HPE GreenLake cloud provides open cloud application programming interfaces to our partners, enabling them to better offer their unique solutions to customers. 4 Table of Conte n t • Custom financial solutions.
Our HPE GreenLake cloud provides open cloud application programming interfaces to our partners, enabling them to better offer their unique solutions to customers. 5 Table of Content • Custom financial solutions.
She partners closely with the CEO to develop and execute the long-term strategy for the Company.
She partners closely with the CEO to develop and execute the 14 Table of Content long-term strategy for the Company.
See “Risk Factors” in Item 1A of Part I of this Annual Report on Form 10-K under the heading “We depend on third-party suppliers, and our financial results could suffer if we fail to manage our supplier relationships properly.” We rely on proactive inventory buffering measures in order to position ourselves well for availability of those components.
See “Risk Factors” in Item 1A of Part I of this Annual Report on Form 10-K under the heading “We depend on third-party suppliers, contract manufacturers (including original equipment and original design manufacturers), as well as single-source and limited source suppliers, and our financial results could suffer if we fail to manage these third party relationships effectively.” We rely on proactive inventory buffering measures in order to position ourselves well for availability of those components.
In some instances, our single-source suppliers (e.g., Intel and AMD as suppliers of certain x86 processors) are also the single-source suppliers for the entire market; disruptions with these suppliers would result in industry-wide dislocations and therefore would not disproportionately disadvantage us relative to our competitors.
In some instances, our single-source suppliers (e.g., Intel and AMD as suppliers of certain x86 processors Broadcom and others for industry standard Application-Specific Standard Product, or NVIDIA for Graphics Processing Units) are also the single-source suppliers for the entire market; disruptions with these suppliers would result in industry-wide dislocations and therefore would not disproportionately disadvantage us relative to our competitors.
For instance, the latest generation of HPE ProLiant Gen 11 Servers enables customers to consolidate and grow compute capabilities while lowering the cost of power, cooling, floor space, and licensing.
For instance, the latest generation of HPE ProLiant Gen 12 Servers enables customers to consolidate and grow compute capabilities, while potentially lowering the use and cost of power and cooling.
Anchored to our edge-to-cloud offerings and bolstered by our sustainability credentials, our Living Progress strategy provides us with a competitive advantage in the market as we help our customers achieve not only their business objectives, but also their IT sustainability goals. A legacy of sustainability leadership supports talent acquisition and retention and enables ongoing access to global markets.
Anchored to our edge-to-cloud offerings and bolstered by our sustainability credentials, our Living Progress strategy provides us with a competitive advantage in the market as we help our customers pursue their business objectives through more efficient and sustainable practices. A legacy of sustainability leadership supports talent acquisition and retention and enables ongoing access to global markets.
Corporate Investments and Other Corporate Investments and Other includes the Advisory and Professional Services business, which primarily offers consultative-led services, HPE and partner technology expertise and advice, implementation services as well as complex solution engagement capabilities; the Communications and Media Solutions business, which primarily offers software and related services to the telecommunications industry; and Hewlett Packard Labs, which is responsible for research and development.
Corporate Investments and Other The Corporate Investments and Other segment includes the Advisory and Professional Services 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 (“R&D”).
In 2022, we refined our approach to assessing ethical AI and rolled out AI Ethical Principles training. In 2023, we further advanced this initiative by launching three new sub-committees to help us operationalize our principles for: Products (AI we develop), Processes (AI we source to use), and Partnerships (AI we source to incorporate into our solutions).
In 2022, we refined our approach to assessing ethical AI and rolled out AI Ethics Principles training. In 2023, we further advanced this initiative by operationalizing our principles for: Products (AI we develop), Processes (AI we source to use), and Partnerships (AI we source to incorporate into our solutions).
The class of similar product categories within each segment which accounted for more than 10% of our consolidated net revenue in each of the past three years was as follows: • Fiscal 2024 - Server products, Server services, Intelligent Edge products, Hybrid Cloud products • Fiscal 2023 - Server products, Intelligent Edge products, Server services, Hybrid Cloud products • Fiscal 2022 - Server products, Server services, Hybrid Cloud products, Intelligent Edge products The Company had two distributors which represented approximately 14% and 11% of the Company's total net revenue in fiscal 2024, primarily within the Intelligent Edge and Server segments.
The classes of similar product categories within each segment which accounted for more than 10% of our consolidated net revenue in each of the past three years were as follows: • Fiscal 2025 - Server products, Networking products • Fiscal 2024 - Server products, Server services, Networking products, Hybrid Cloud products • Fiscal 2023 - Server products, Networking products, Server services, Hybrid Cloud products The Company had one distributor which represented approximately 10% of the Company's total net revenue in fiscal 2025, primarily within the Server and Networking segments.
This segment also provides self-service private cloud on-demand with HPE GreenLake for Private Cloud Business Edition. Infrastructure software includes monitoring and observability for day two operations and beyond through our acquisition of OpsRamp and unified data access through our HPE Ezmeral Data Fabric and analytics suite, which helps move and transform data for use in AI and other applications.
Infrastructure software includes monitoring and observability for day two operations and beyond through our 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.
Consumption-based IT offers solutions to these challenges by providing greater agility, which empowers people to shift from managing infrastructure to driving innovation by leveraging insights from their data, while also eliminating capital and operating expenses tied to infrastructure over-provisioning. HPE is distinctly differentiated in delivering a true consumption-based IT experience. • Open platforms.
Consumption-based IT offers solutions to these challenges by providing greater agility, which empowers people to shift from managing infrastructure to driving innovation by leveraging insights from their data, while also eliminating capital and operating expenses tied to infrastructure over-provisioning. • Global distribution and partner ecosystem.
In hybrid cloud, we have redefined the cloud space by delivering an experience that is hybrid by design with our HPE GreenLake cloud as the centerpiece of our strategy; it accelerates multi-generation IT transformation through a unified cloud-native and AI-driven experience that empowers customers to access, analyze, and extract value from their data across public clouds, data centers, colocation facilities, and at the edge.
As a centerpiece of our strategy, it accelerates multi-generation IT transformation through a unified cloud-native and AI-driven experience that empowers customers to access, analyze, and extract value from their data across public clouds, data centers, colocation facilities, and at the edge. The HPE GreenLake cloud is designed to deliver a seamless hybrid experience with true pay-per-use consumption and automated scalability.
Our vast intellectual property portfolio and global research and development capabilities are part of a broader innovation roadmap designed to help organizations take advantage of the expanding amount of data available and leverage the latest technology developments such as cloud, artificial intelligence, supercomputing, and cybersecurity to drive business transformations now and in the future.
Our vast intellectual property portfolio and global research and development capabilities are part of a broader innovation roadmap designed to help organizations take advantage of the expanding amount of data available and leverage the latest technology developments, such as cloud, artificial intelligence, supercomputing, and cybersecurity to drive business transformations now and in the future. • Strong balance sheet: We have also historically had a strong balance sheet and liquidity profile that is underpinned by a disciplined capital allocation framework and robust governance.
We have expansive go-to-market capabilities, including a large ecosystem of channel partners, which enables us to market and deliver our product offerings to customers located virtually anywhere in the world.
We have extensive experience in delivering innovative technological solutions to our customers in complex multi-country, multi-vendor, and/or multi-language environments. We have expansive go-to-market capabilities, including a large ecosystem of channel partners, which enables us to market and deliver our product offerings to customers located virtually anywhere in the world.
In private cloud, our Private Cloud Enterprise 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.
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”).
In the midst of the above, we continually seek feedback from our team members to better understand and improve their experiences and identify opportunities to continually strengthen our culture. Diversity, Equity, and Inclusion - At HPE, we are committed to cultivating a diverse and inclusive workplace.
In the midst of the above, we regularly seek feedback from our team members to better understand and improve their experiences and identify opportunities to continually strengthen our culture.
Our primary competitors are other infrastructure and cloud management software technology vendors, such as Broadcom/VMware, Cisco Systems Inc., Dell Technologies Inc., IBM, NetApp Inc., Nutanix, and Pure Storage and public cloud vendors like Amazon Web Services, Google Cloud, and Microsoft Azure. Our strategy is to deliver a secure and scalable cloud-like experience across any app or mission-critical workload—traditional or cloud-native.
Our primary competitors are other infrastructure and cloud management software technology vendors, such as Broadcom, Cisco Systems Inc., Dell Technologies Inc., IBM, NetApp Inc., Nutanix, and Pure Storage and public cloud vendors like Amazon Web Services, Google Cloud, and Microsoft Azure.
Hybrid Cloud is our private cloud services solutions business consisting of HPE’s GreenLake and Storage solutions, and associated private cloud software offerings. Hybrid cloud solutions enable HPE to take care of the infrastructure, so customers can focus on managing workloads and fostering innovation.
Hybrid cloud solutions enable HPE to take care of the infrastructure, so customers can focus on managing workloads and fostering innovation.
Our competitive advantage includes our broad end-to-end solutions portfolio, supported by our strong intellectual property portfolio and research and development capabilities, coupled with our global reach and partner ecosystem. Financial Services.
Our competitive advantage includes our broad end-to-end solutions portfolio, supported by our strong intellectual property portfolio and research and development capabilities, coupled with our global reach and partner ecosystem. Financial Services primarily competes with captive financing companies, such as IBM Global Financing, Dell Financial Services, and Cisco Capital, as well as banks and other financial institutions.
In our software platform for AI model development and deployment, we both compete and cooperate with cloud service providers and start-up companies that deliver platforms for AI model training, tuning, and inferencing.
In our software platform for AI model development and deployment, we both compete and cooperate with cloud service providers and start-up companies that deliver platforms for AI model training, tuning, and inferencing. Our strategy is to deliver superior products, high-value technology support services, and differentiated integrated solutions that combine our infrastructure, software, and services capabilities.
FS is also an enabler of our consumption-based IT models by helping spread our upfront solution costs over the duration of the customer contract. Through FS’ Technology Renewal Centers, we are helping customers achieve their own sustainability goals by refurbishing technology assets for reuse. • Experienced leadership team. Our management team has an extensive track record of performance and execution.
This business is also an enabler of our consumption-based IT models, in that it helps spread our upfront solution costs over the duration of the customer contract. Through our Technology Renewal Centers, we are helping customers achieve their own sustainability goals by refurbishing technology assets for reuse. • Multi-year innovation roadmap.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeBusiness and Operational Risks • If we cannot successfully execute our go-to-market strategy, including offering our entire portfolio as-a-Service, our business, operating results, and financial performance may suffer. • We depend on third-party suppliers, and our financial results could suffer if we fail to manage our supplier relationships properly. • System security risks, data protection incidents, cyberattacks and systems integration issues could disrupt our internal operations or IT services provided to customers, and any such disruption could reduce our revenue, increase our expenses, damage our reputation, and adversely affect our stock price. • Business disruptions could seriously harm our future revenue and financial condition and increase our costs and expenses. • Failure to complete the Merger with Juniper Networks may adversely affect our business and our stock price. • Failure to realize the benefits expected from the Merger with Juniper Networks could adversely affect our business or our stock price. • Any failure by us to identify, manage, and complete acquisitions and subsequent integrations, divestitures, and other significant transactions successfully could harm our financial results, business and prospects. • If we cannot continue to produce quality products and services, our reputation, business, and financial performance may suffer. • In order to be successful, we must attract, retain, train, motivate, develop, and transition key employees, and failure to do so could seriously harm us. • If we fail to manage the distribution of our products and services properly, our business and financial performance could suffer. • Issues in the development and use of artificial intelligence may result in reputational harm, liability or impact to our results of operations. • Changes in the macroeconomic environment have, at times, impacted and may in the future negatively impact our results of operations. • Failure to meet responsible and sustainable business expectations or standards or achieve our Living Progress goals could adversely affect our business, results of operations, financial condition, or stock price. • Risks arising from climate change and the transition to a lower-carbon economy may impact our business.
Biggest changeRisks Related to Our Business Strategy and Industry • Our success depends on our ability to successfully execute our go-to-market strategy, including offering solutions as-a-Service, effectively planning and managing our resources, and continuing to develop and manage our offerings to integrate new features and solutions. • We depend on third-party suppliers, contract manufacturers (including original equipment and original design manufacturers), as well as single-source and limited source suppliers, and our financial results could suffer if we fail to manage these third party relationships effectively. • System security risks, data protection incidents, cyberattacks and systems integration issues could disrupt our internal operations or IT services provided to customers, and any such disruption could reduce our revenue, increase our expenses, damage our reputation, and adversely affect our stock price. • We operate in an intensely competitive industry, and competitive pressures could harm our business and financial performance • Any failure by us to identify, manage, and complete acquisitions and subsequent integrations (including the integration of Juniper Networks following the Merger), divestitures, and other significant transactions successfully could harm our financial results, business, prospects, and stock price. • Uncertainty and fluctuations in geopolitical and macroeconomic conditions may adversely impact our business, financial condition, and operating results. • If we experience or fail to properly manage disruption in the distribution of our products and services properly, our business and financial performance could suffer. • Business disruptions could seriously harm our future revenue and financial condition and increase our costs and expenses. • Long sales and implementation cycles for our offerings and dynamics related to large orders may cause our revenues and operating results to vary significantly from quarter-to-quarter. • Our uneven sales cycle and supply chain disruptions make planning and inventory management difficult and future financial results less predictable. • Our ability to achieve our strategy could be harmed if we are unable to attract, retain, train, motivate, develop, and transition key personnel. • Risks arising from climate change and the transition to a lower-carbon economy may impact our business.
We also rely on third-party suppliers for the provision of contingent workers, and our failure to manage our use of such workers effectively could adversely affect our results of operations. We have been exposed to various legal claims relating to the status of contingent workers in the past and could face similar claims in the future.
We also rely on third-party suppliers for the provision of contingent workers, and our failure to effectively manage our use of such workers could adversely affect our results of operations. We have been exposed to various legal claims relating to the status of contingent workers in the past and could face similar claims in the future.
Interest and other expenses have varied, and could continue to vary, materially from expectations depending on changes in interest rates, borrowing costs, currency exchange rates, costs of hedging activities, and the fair value of derivative instruments.
Interest and other expenses have varied, and could continue to vary, materially from expectations depending on changes in borrowing costs, currency exchange rates, costs of hedging activities, and the fair value of derivative instruments.
Additionally, to the extent we carry insurance coverage for such possibilities, we cannot be certain that any such coverage will be adequate or otherwise protect us with respect to claims, expenses, fines, penalties, business loss, data loss, litigation, regulatory actions, or other impacts arising from security breaches or incidents, or that such coverage will continue to be available on acceptable terms or at all.
To the extent we carry insurance coverage for such possibilities, we cannot be certain that any such coverage will be adequate or otherwise protect us with respect to claims, expenses, fines, penalties, business loss, data loss, litigation, regulatory actions, or other impacts arising from security breaches or incidents, or that such coverage will continue to be available on acceptable terms or at all.
Financial Risks Adverse developments affecting our liquidity, capital position, borrowing costs, and access to capital markets could adversely impact our business, financial condition, and results of operations or those of the third parties with whom we do business. We currently maintain investment grade credit ratings with Moody's Investors Service, Standard & Poor's Ratings Services, and Fitch Ratings Services.
Adverse developments affecting our liquidity, capital position, borrowing costs, and access to capital markets could adversely impact our business, financial condition, and results of operations or those of the third parties with whom we do business. We currently maintain investment grade credit ratings with Moody's Investors Service, Standard & Poor's Ratings Services, and Fitch Ratings Services.
A significant portion of our hardware revenues come from international sales. Any changes to current environmental legal requirements may increase our cost of doing business internationally and impact our hardware revenues from the EU, U.S., China, India and/or other countries proposing or adopting similar environmental legal requirements.
Since a significant portion of our hardware revenues come from international sales, any changes to current environmental legal requirements may increase our cost of doing business internationally and impact our hardware revenues from the EU, U.S., China, India and/or other countries proposing or adopting similar environmental legal requirements.
Further, there has been an increase in the frequency and sophistication of such attacks, and we expect these activities to continue to increase, including malicious actors potentially leveraging AI to develop malicious code or sophisticated phishing attempts.
Further, there has been an increase in the frequency and sophistication of attacks, and we expect these activities to continue to increase, including malicious actors potentially leveraging AI to develop malicious code or sophisticated phishing attempts.
We have invested, and expect to continue to invest, significant resources to build and support the development of these capabilities and manufacturing processes, and if our AI-related offerings fail to operate as anticipated or as well as competing offerings or otherwise do not meet customer needs or if we are unable to bring AI-related offerings to market as effectively as our competitors, we may fail to recoup our investments in AI, our competitive position may be harmed, and our business and reputation may be adversely impacted.
We have invested, and expect to continue to invest, significant resources to use, acquire, build, and support the development of these capabilities and manufacturing processes, and if our AI-related offerings fail to operate as anticipated or as well as competing offerings or otherwise do not meet customer needs or if we are unable to bring AI-related offerings to market as effectively as our competitors, we may fail to recoup our investments in AI, our competitive position may be harmed, and our business and reputation may be adversely impacted.
Management’s attention or other resources may be diverted during business combination and investment transactions and may be further impacted if we fail to successfully complete or integrate business combination and investment transactions that further our strategic objectives .
Management’s attention or other resources may be diverted during business combination and investment transactions and may be further impacted if we fail to successfully complete or integrate such transactions that further our strategic objectives.
Additionally, we have acquired and may continue to acquire companies with cybersecurity vulnerabilities or different security standards, which exposes us to related cybersecurity, operational, and financial risks.
Additionally, we have acquired and may continue to acquire companies with cybersecurity vulnerabilities, gaps or different security standards, which exposes us to related cybersecurity, operational, and financial risks.
Our revenue depends on the overall demand for our products and services, which is difficult to accurately predict, varies from time to time, may be uneven across our portfolio of offerings, and is subject to industry-wide or broader macroeconomic market dynamics, all of which have in the past adversely impacted, and may again in the future adversely impact, our business and financial condition.
Our revenue depends on the overall demand for our products and services, which is difficult to accurately predict, varies from time to time, may be uneven across our portfolio of offerings and our geographies, and is subject to industry-wide or broader macroeconomic market dynamics, all of which have in the past adversely impacted, and may in the future adversely impact, our business and financial condition.
Dividends on the Preferred Stock are discretionary and cumulative. Holders of Preferred Stock will only receive dividends on their shares when, as and if declared by our board of directors.
Dividends on the Preferred Stock are discretionary and cumulative. Holders of Preferred Stock will only receive dividends on their shares when and if declared by our board of directors.
There is no assurance that we will be able to implement these adjustments in a timely or cost-effective manner, or that we will be able to realize all or any of the expected benefits from them. Our HPE GreenLake solutions generally are multiyear agreements, which result in recurring revenue streams over the term of the arrangement.
There is no assurance that we will be able to implement these adjustments in a timely or cost-effective manner, or that we will be able to realize all or any of the expected benefits from them. Our HPE GreenLake and networking solutions generally are multiyear agreements, which result in recurring revenue streams over the term of the arrangement.
We continue to face a number of risks related to our separation from HP Inc., our former parent, including those associated with ongoing indemnification obligations, which could adversely affect our financial condition and results of operations, and shared use of certain intellectual property rights, which could in the future adversely impact our reputation.
Risks Related to Prior Separations • We continue to face a number of risks related to our separation from HP Inc., our former parent, including those associated with ongoing indemnification obligations, which could adversely affect our financial condition and results of operations, and shared use of certain intellectual property rights, which could in the future adversely impact our reputation.
If we are unable to determine the cause, find an appropriate solution or offer a temporary fix (or “patch”) to address quality issues with our products, we may delay shipment to customers, which could delay revenue recognition and receipt of customer payments and could adversely affect our revenue, cash flows, and profitability.
If we are unable to determine the cause, find an appropriate solution or offer a temporary fix (or “patch”) to address quality issues with our offerings, we may delay shipment to customers, which could delay revenue recognition and receipt of customer payments and could adversely affect our revenue, cash flows, and profitability.
Such variables have in the past negatively impacted our financial performance, and may do so again in the future. Delays or reductions in discretionary IT spending by our customers or potential customers have had, and in the future could have a material adverse effect on demand for our products and services, which could result in a significant decline in revenue.
Such variables have in the past negatively impacted our financial performance, and may do so again in the future. Delays or reductions in discretionary IT spending by our customers or potential customers have had, and in the future, could have an adverse effect on demand for our products and services, which could result in a significant decline in revenue.
Our stock price, like that of other technology companies, can be volatile and can be affected by, among other things, speculation, coverage, or sentiment in the media or the investment community; the announcement and anticipated timing of new, planned or contemplated products, services, technological innovations, acquisitions, divestitures, or other significant transactions by us or our competitors; developments in our as-a-service business model; our perceived progress in integrating acquired companies; our quarterly financial results and comparisons to estimates by the investment community or financial outlook provided by us; the financial results and business strategies of our competitors; inflation; market volatility or downturns caused by outbreaks, epidemics, pandemics, geopolitical tensions or conflicts, or other macroeconomic dynamics; developments relating to pending investigations, claims, and disputes; or the timing and amount of our share repurchases.
Our stock price, like that of other technology companies, can be volatile and can be affected by, among other things, speculation, coverage, or sentiment in the media or the investment community; the announcement and anticipated timing of new, planned or contemplated products, services, technological innovations, acquisitions, divestitures, or other significant transactions by us or our competitors; developments in our aaS business model; our perceived progress in integrating acquired companies; our quarterly financial results and comparisons to estimates by the investment community or financial outlook provided by us; the financial results and business strategies of our competitors; inflation; market volatility or downturns caused by outbreaks, epidemics, pandemics, geopolitical tensions or conflicts, or other macroeconomic dynamics; developments relating to pending investigations, claims, and disputes; or the timing and amount of our share repurchases.
Evolving stakeholder expectations and our efforts and ability to manage these issues and accomplish our goals present numerous operational, regulatory, reputational, financial, legal, and other risks, any of which may be outside of our control or could have adverse impacts on our business, including on our stock price.
Evolving stakeholder expectations and our efforts and ability to manage these issues present numerous operational, regulatory, reputational, financial, legal, and other risks, any of which may be outside of our control or could have adverse impacts on our business, including on our stock price.
However, the products, services, and solutions that we offer are complex, and our regular testing and quality control efforts may not be effective in controlling or detecting all quality issues or errors, particularly with respect to faulty components manufactured by third parties.
However, the solutions that we offer are complex, and our regular testing and quality control efforts may not be effective in controlling or detecting all quality issues or errors, particularly with respect to faulty components manufactured by third parties.
As customer demand for our aaS offerings increases, we have experienced, and will continue to experience, differences in the timing of revenue recognition between our traditional offerings (for which revenue is generally recognized at the time of delivery) and our aaS offerings (for which revenue is generally recognized ratably over the term of the arrangement).
As customer demand for our aaS offerings increases, we have experienced, and will continue to experience, differences in the timing of revenue recognition between our traditional offerings (for which revenue is generally recognized at the time of delivery) and our aaS offerings (for which revenue is generally recognized ratably over the term of the contract).
This collective 30 Table of Conte n t amount of debt could have important adverse consequences to us and our investors, including requiring a substantial portion of our cash flow from operations to make principal and interest payments; making it more difficult to satisfy other obligations; increasing the risk of a future credit ratings downgrade of our debt, which could increase future debt costs and limit the future availability of debt financing; increasing our vulnerability to general adverse economic and industry conditions; reducing the cash flows available to fund capital expenditures and other corporate purposes and to grow our business; limiting our flexibility in planning for, or reacting to, changes in our business and industry; and limiting our ability to borrow additional funds as needed or take advantage of business opportunities as they arise, pay cash dividends or repurchase our common stock.
This collective amount of debt could have important adverse consequences to us and our investors, including requiring a substantial portion of our cash flow from operations to make principal and interest payments; making it more difficult to satisfy other obligations; increasing the risk of a future credit ratings downgrade of our debt, which could increase future debt costs and limit the future availability of debt financing; increasing our vulnerability to general adverse economic and industry conditions; reducing the cash flows available to fund capital expenditures and other corporate purposes and to grow our business; limiting our flexibility in planning for, or reacting to, changes in our business and industry; and limiting our ability to borrow additional funds as needed or take advantage of business opportunities as they arise, pay cash dividends or repurchase our common stock.
In the course of conducting our business, we must adequately address quality issues associated with our products, services, and solutions (whether developed by us or by a company we acquire), including defects in our engineering, design, and manufacturing processes and unsatisfactory performance under service contracts, as well as defects in third-party components included in our products and unsatisfactory performance or even malicious acts by third-party contractors or subcontractors or their employees.
In the course of conducting our business, we must adequately address quality issues associated with our products, services, and solutions (whether developed by us or by a company we acquire), including defects in our engineering, design, and manufacturing processes and unsatisfactory performance under service contracts, as well as defects in third-party components included in our products and unsatisfactory performance or malicious acts by third-party contractors or subcontractors.
Additionally, changes in underlying regulatory requirements that vary across the geographies in which we operate could increase compliance costs and risks. Such failures could also cause reputational damage to our business. In addition, in the US, we will continue to be subject to qui tam litigation brought by private individuals on behalf of the government relating to our government contracts.
Additionally, changes in underlying regulatory requirements that vary across the geographies in which we operate could increase compliance costs and risks. Such failures could also cause reputational damage to our business. In addition, in the U.S., we will continue to be subject to qui tam litigation brought by private individuals on behalf of the government relating to our government contracts.
It is also possible that incidents may embolden other malicious actors to perpetrate future attacks that may result in material misappropriation, system disruptions or shutdowns, malicious alteration, or destruction of our confidential or personal information or that of third parties.
It is possible that such incidents may embolden other malicious actors to perpetrate future attacks that may result in material misappropriation, system disruptions or shutdowns, malicious alteration, or destruction of our confidential or personal information or that of third parties.
Even if we believe that intellectual property claims are without merit, they can be time-consuming and costly to defend against and may divert management's attention and resources away from our business.
Even if we believe that intellectual property and non-compliance claims are without merit, they can be time-consuming and costly to defend against and may divert management's attention and resources away from our business.
We experience some seasonal trends in the sale of our products that also have produced, and may in the future produce, variations in our quarterly results and financial condition. Many of the factors that create and affect seasonal trends are beyond our control.
We experience some seasonal trends in the sale of our solutions that also have produced, and may in the future produce, variations in our quarterly results and financial condition. Many of the factors that create and affect seasonal trends are beyond our control.
In particular, we face an increasingly complex global regulatory environment and patchwork of state laws in the U.S., increasing the risks addressing these regulatory requirements and in responding to potential security and data incidents.
In particular, we face an increasingly complex global regulatory environment and patchwork of state laws in the U.S., increasing the risks associated with addressing these regulatory requirements and in responding to potential security and data incidents.
For example, as a result of laws and regulations concerning responsible and sustainable business practices, we face increasing complexity related to product design, safety and compliance; the use of regulated, hazardous, and scarce materials; the management, movement and disposal of hazardous substances and waste; the associated energy consumption and efficiency related to operations and the 32 Table of Conte n t use of products, services, and solutions; the transportation and shipping of products and other materials; supply chain due diligence; climate change adaptation and mitigation; greenhouse gas emissions; sustainability-related regulations and reporting requirements; and the reuse, recycling and/or disposal of products and their components at end-of-use or useful life and associated operational or financial responsibility.
For example, as a result of laws and regulations concerning responsible and sustainable business practices, we face increasing complexity related to product design, safety and compliance; the use of regulated, hazardous, and scarce materials; the management, movement and disposal of hazardous substances and waste; the associated energy consumption and efficiency related to operations and the use of products, services, and solutions; the transportation and shipping of products and other materials; supply chain due diligence; climate change adaptation and mitigation; greenhouse gas emissions; sustainability-related regulations and reporting requirements; and the reuse, recycling and/or disposal of products and their components at end-of-use or useful life and associated operational or financial responsibility.
In California, to mitigate wildfire risk, electric utilities have, at times periodically deployed, and may in the future, periodically deploy public safety power shutoffs, which affect electricity reliability to our facilities and our communities.
In California, to mitigate wildfire risk, electric utilities have periodically deployed, and may in the future, periodically deploy public safety power shutoffs, which affect electricity reliability to our facilities and our communities.
As competition for highly skilled employees in our industry has grown increasingly intense, we have in the past experienced, and may in the future experience, higher than anticipated levels of employee attrition, which has resulted in increased costs to hire new employees with the desired skills and may do so again in the future.
As competition for highly skilled employees in our industry has grown increasingly intense, we have in the past experienced, and may in the future experience, higher than anticipated levels of employee attrition, which has resulted in increased costs to hire new employees with desired skills.
ITEM 1A. Risk Factors. You should carefully consider the following risks and other information in this Form 10-K in evaluating Hewlett Packard Enterprise. Any of the following risks could materially and adversely affect our results of operations or financial condition.
ITEM 1A. Risk Factors. You should carefully consider the following risks and other information in this Annual Report on Form 10-K in evaluating Hewlett Packard Enterprise. Any of the following risks could materially and adversely affect our results of operations or financial condition.
As a result, we may invest less in certain areas of our business than our competitors do, and our competitors may have greater financial, technical, and marketing resources available to them compared to the resources allocated to our products and services that compete against theirs.
As a result, we may invest less in certain areas of our business than our 23 Table of Content competitors do, and our competitors may have greater financial, technical, and marketing resources available to them compared to the resources allocated to our products and services that compete against theirs.
Despite these investment grade credit ratings at this time, we may experience downgrades in our credit ratings for various reasons, including but not limited to for reasons in connection with the substantial amount of debt we have incurred and expect to assume in connection with the Merger.
Despite these investment grade credit ratings at this time, we may experience downgrades in our credit ratings for various reasons, including but not limited to for reasons in connection with the substantial amount of debt we have incurred in connection with the Merger.
HPE is continuing to execute on the exit of our remaining business in Russia and Belarus as planned; however, we cannot provide any assurance that such exit will be efficient or uninterrupted, which may negatively impact our operational expenses. 28 Table of Conte n t We implement policies, procedures, and training designed to facilitate compliance with anti-corruption laws around the world, including the U.S.
HPE is continuing to execute on the exit of our remaining business in Russia and Belarus as planned; however, we cannot provide any assurance that such exit will be efficient or uninterrupted, which may negatively impact our operational expenses. We implement policies, procedures, and training designed to facilitate compliance with anti-corruption laws around the world, including the U.S.
We have in the past experienced, and may experience again in the future, delays and shortages of certain components as a result of strong demand, supplier transitions, raw material or capacity constraints, and other problems experienced by suppliers in certain geographies and markets, resulting in insufficient supply to meet total market demand.
We have experienced, and may experience again in the future, delays and shortages of certain components as a result of strong demand, supplier transitions, raw material or capacity constraints, and other problems experienced by suppliers in certain geographies and markets, resulting in insufficient 20 Table of Content supply to meet total market demand.
In addition, significant or prolonged turnover or revised hiring priorities may negatively impact our operations and culture, as well as our ability to successfully maintain our processes and procedures, including due to the loss of historical, technical, and other expertise.
In addition, significant or prolonged turnover or revised hiring priorities may negatively impact our operations and our ability to successfully maintain our processes and procedures, including due to the loss of historical, technical, and other expertise.
These risks to attracting and retaining the necessary talent may be exacerbated by labor constraints, such as immigration policies which may impair the ability to recruit technical and professional talent, and inflationary pressures, which impact employee wages and benefits.
These risks to attracting and retaining highly qualified talent may be exacerbated by labor constraints, such as immigration policies which may impair the ability to recruit technical and professional talent, and inflationary pressures, which impact employee wages and benefits.
Additionally, implementing this business model also means that our historical results, especially those from before the transition, may not be indicative of future results, which may adversely affect our ability to accurately forecast our future operating results.
Additionally, implementing this business model means that our historical results, especially those from before the Merger, may not be indicative of future results, which may adversely affect our ability to accurately forecast our future operating results.
International Risks Due to the international nature of our business, political or economic changes and the laws and regulatory regimes applying to international transactions or other factors could harm our future revenue, costs and expenses, and financial condition.
Due to the international nature of our business, political or economic changes and the laws and regulatory regimes applying to international transactions or other factors could harm our future revenue, costs and expenses, financial condition, and results of operations.
While we are predominantly self-insured to mitigate the impact of most catastrophic events, the occurrence of business disruptions could, among other impacts, harm our revenue, profitability, and financial condition; adversely affect our competitive position; increase our costs and expenses; make it difficult or impossible to provide our offerings to our customers or to receive components from our suppliers; create delays and inefficiencies in our supply chain; or require substantial expenditures and recovery time in order to fully resume operations.
While we are predominantly self-insured to mitigate the impact of most catastrophic events, the occurrence of business disruptions could, among other impacts, harm our revenue, profitability, and financial condition; cause derivative impacts on our employees; adversely affect our competitive position; increase our costs and expenses; make it difficult or impossible to provide our offerings to our customers or to receive components from our suppliers; create delays and inefficiencies in our supply chain; or 26 Table of Content require substantial expenditures and recovery time in order to fully resume operations.
Our corporate headquarters is located in Spring, Texas, which suffers from floods, hurricanes, and other extreme weather, and a portion of our research and development activities are located in California, which suffers from drought conditions and catastrophic wildfires, each affecting the health and safety of our employees.
Our corporate headquarters is located in Spring, Texas, which suffers from floods, hurricanes, and other extreme weather, and a portion of our research and development activities are located in California, which suffers from drought conditions and catastrophic wildfires, each potentially affecting the health and safety of our employees and our business in these locations.
Our debt obligations may adversely affect our business and our ability to meet our obligations and pay dividends. In addition to our current total carrying debt, we may also incur additional indebtedness in the future. In order to consummate the Merger, we have incurred a substantial amount of debt, and plan to incur further debt, as well.
Our debt obligations may adversely affect our business and our ability to meet our obligations and pay dividends. In addition to our current total carrying debt, we may also incur additional indebtedness in the future. In order to consummate the Merger, we have incurred a substantial amount of debt.
We have a large portfolio of products and services and must allocate our financial, personnel, and other resources across all of our products and services while competing with companies that have smaller portfolios or specialize in one or more of our product or service lines.
We have a large portfolio of products and services and must allocate our financial, personnel, and other resources, including R&D efforts, across all of our products and services while competing with companies that have smaller portfolios or specialize in one or more of our product or service lines.
While we seek to mitigate business risks, including those associated with climate change, through site selection, infrastructure technological investments, business continuity planning, and robust environmental programs, this may require us to incur substantial costs, and we may be unsuccessful in doing so as there are inherent climate-related risks wherever business is conducted.
While we seek to mitigate business risks, through site selection, infrastructure technological investments, business continuity planning, and robust environmental programs, this may require us to incur substantial costs, and we may be unsuccessful in doing so as there are inherent climate-related risks wherever business is conducted.
In 29 Table of Conte n t addition, it is possible that as a consequence of a merger or acquisition, we may acquire intellectual property subject to licensing obligations to third parties, other third parties may obtain licenses to some of our intellectual property rights or our business may be subject to certain restrictions that were not in place prior to such transaction.
In addition, it is possible that as a consequence of a merger or acquisition, we may acquire intellectual property subject to licensing obligations to third parties, other third parties may obtain licenses to some of our intellectual property rights or our business may be subject to certain restrictions that were not in place prior to such transaction.
If we commit to purchasing components or services for prices in excess of the then-current market price, we may be at a disadvantage to competitors who have access to components or services at lower prices, our gross margin could suffer, and we could incur charges relating to inventory obsolescence. • Contingent workers.
If we commit to purchasing components or services for prices in excess of the then-current market price, we may be at a disadvantage to competitors who have access to components or services at lower prices, our gross margin could suffer, and we could incur charges relating to inventory obsolescence. • Single-Source Suppliers.
Ineffective or inadequate AI development or deployment practices by us or others could result in incidents that impair the 24 Table of Conte n t acceptance of AI solutions or cause harm to individuals or society. These deficiencies and other failures of AI systems could subject us to competitive harm, regulatory action, legal liability, and brand or reputational harm.
Ineffective or inadequate AI development or deployment practices by us or others could result in incidents that impair the acceptance of AI solutions or cause harm to individuals or society. These deficiencies and other failures of AI systems could subject us to competitive harm, regulatory action, legal liability, and brand or reputational harm.
Any violation of government contracting laws and regulations or contract terms could result in the imposition of various civil and criminal penalties, which may include termination of contracts, forfeiture of profits, suspension of payments and fines, treble damages, and suspension from future government contracting.
Any violation of government contracting laws and regulations or contract terms could result in the imposition of various civil and criminal penalties, termination of federal government contracts, forfeiture of profits, suspension of payments and fines, treble damages, and suspension from future government contracting.
In addition, should we successfully consummate the Merger, the process of integrating and streamlining our offerings (including integrating Juniper Networks’ offerings with ours) or developing new solutions based on our respective technological portfolios may be complex, costly, time-consuming, and uncertain, and failure by us to successfully do so could adversely impact our future results of operations and financial performance.
The process of integrating and streamlining our offerings (including integrating Juniper Networks’ offerings with ours) or developing new solutions based on our respective technological portfolios may be complex, costly, time-consuming, and uncertain, and failure by us to successfully do so could adversely impact our future results of operations and financial performance.
Our reputation also may be harmed by the perceptions that our stakeholders have about our action or inaction on certain sustainability- and corporate responsibility-related issues, or because they may disagree with our goals and initiatives, either of which may cause us to face scrutiny, lawsuits, or other market access restrictions from certain parties related to our action or inaction on such issues.
Our reputation also may be harmed by the perceptions that our stakeholders have about our action or inaction on certain sustainability- and corporate responsibility-related issues, or because they may disagree with our strategy and initiatives, either of which may cause us to face scrutiny, legal and/or regulatory proceedings, or other market access restrictions from certain parties related to our action or inaction on such issues.
The process of improving our HPE GreenLake cloud offerings, enhancing existing hardware, software, and cloud-based solutions, and developing and improving the systems necessary for new and evolving data-intensive artificial intelligence-based workloads are all complex, costly, and uncertain, and any failure by us to anticipate customers’ changing needs and emerging technological trends accurately, to invest sufficiently in strategic growth areas, or to otherwise successfully execute this strategy could significantly harm our market share, results of operations, and financial performance.
Our ongoing process of improving HPE GreenLake; expanding our offerings across all our businesses (including cloud, AI, and networking offerings); enhancing existing hardware, software, and cloud-based solutions; and developing and improving the systems necessary for new and evolving data-intensive AI-based workloads are all complex, costly, and uncertain, and any failure by us to anticipate customers’ changing needs and emerging technological trends accurately, to invest sufficiently in strategic growth areas, or to otherwise successfully execute this strategy could significantly harm our market share, results of operations, and financial performance.
Furthermore, our data centers depend on predictable and reliable energy and networking capabilities, the cost or availability of which could be adversely affected or 20 Table of Conte n t disrupted by a variety of factors, including but not limited to the effects of climate change.
Furthermore, our data centers depend on predictable and reliable energy and networking capabilities, the cost or availability of which could be adversely affected or disrupted by a variety of factors, including, but not limited to, the effects of climate change.
(which could, among other things, impact the enforceability of certain contracts or the timing and form of certain payments); • inflationary pressures, which have in the past increased, and may in the future increase costs for materials, supplies, and services, including those of third parties with whom we do business; • adverse or uncertain macroeconomic conditions, including a changing interest rate environment and fears of a potential global economic downturn or recession, which have at times in the past slowed customer demand for our products and services, and may do so again in the future; • network security, privacy, and data sovereignty concerns, which could make foreign customers reluctant to purchase products and services from U.S.-based technology companies; • longer collection cycles and financial instability among customers, which could impact our ability to collect on accounts receivable and consequently recognize revenue; • local labor conditions and regulations, including local labor issues faced by specific suppliers and OEMs, or changes to immigration and labor law policies which may adversely impact our access to technical and professional talent; • managing our geographically dispersed workforce, which has necessitated, and may in the future require, incurring costs to promote seamless workforce connectivity and to comply with changing laws, regulations and workers’ rights councils across multiple jurisdictions; • differing technology standards or customer requirements, which have required us to incur additional development and production costs to modify or adapt our offerings, and may do so again in the future; • local content and manufacturing requirements, which have impacted, and could further impact, our ability to sell into those markets; • difficulties associated with repatriating earnings in restricted countries, and changes in tax laws, which introduces uncertainty to our results of operations and financial performance; and • fluctuations in freight costs, limitations on shipping and receiving capacity, and other disruptions in the transportation and shipping infrastructure at important geographic points of exit and entry for our products and shipments, which have from time to time adversely impacted, and any of which could in the future adversely impact, our results of operations and ability to meet customer demand.
(which could, among other things, impact trade dynamics and the enforceability of certain contracts or the timing and form of certain payments); • inflationary pressures, which have in the past increased, and may in the future increase costs for materials, supplies, and services, including those of third parties with whom we do business; • adverse or uncertain macroeconomic conditions, including a changing interest rate environment and fears of a potential global economic downturn or recession, which have at times in the past slowed customer demand for our products and services, and may do so again; • network security, privacy, geopolitical, and data sovereignty concerns, which could make foreign customers reluctant to purchase products and services from U.S.-based technology companies; • longer collection cycles and financial instability among customers, which could impact our ability to collect on accounts receivable and consequently recognize revenue; • local labor conditions and regulations, including local labor issues faced by specific suppliers, vendors, and manufacturers, or changes to immigration and labor law policies which may adversely impact our access to technical and professional talent; • managing our geographically dispersed workforce, which has necessitated, and may in the future require, incurring costs to promote seamless workforce connectivity and to comply with changing laws, regulations, and our obligations to engage with works councils or other employee representation bodies across multiple jurisdictions; • differing technology regulations, standards, or customer requirements, which have required us to incur additional development and production costs to modify or adapt our offerings, and may do so again in the future; • local content and manufacturing requirements and trade protection measures such as import tariffs or import or export restrictions, which have impacted, and could further impact, our ability to sell into those markets; • difficulties associated with repatriating earnings in restricted countries, and changes in tax policies, treaties, or laws that could have an unfavorable business impact, or which introduces uncertainty to our results of operations and financial performance; and • fluctuations in freight costs, limitations on shipping and receiving capacity, and other disruptions in the transportation and shipping infrastructure at important geographic points of exit and entry for our products and shipments, which have from time to time adversely impacted, and any of which could in the future adversely impact, our results of operations and ability to meet customer demand.
The following risk factors should be read in conjunction with Part II, Item 7, “Management's Discussion and Analysis of Financial Condition and Results of Operation” and the Consolidated Financial Statements and related notes in Part II, Item 8, “Financial Statements and Supplementary Data” of this Form 10-K.
The following risk factors should be read in conjunction with Part II, Item 7, “Management's Discussion and Analysis of Financial Condition and Results of Operation,” and the Consolidated Financial Statements and related notes in Part II, Item 8, “Financial Statements and Supplementary Data” of this Annual Report Form 10-K.
If we are unable to effectively manage these complicated relationships with vertical partners, our business and results of operations could be adversely affected. We face aggressive price competition and may continue to do so.
If we are unable to effectively manage these complicated relationships with vertical partners, our business and results of operations could be adversely affected. We face aggressive price competition.
Conducting business in currencies other than the U.S. dollar, including the euro, the Japanese yen, and British pound has, from time to time, adversely impacted, and could in the future, have an adverse impact on our results as expressed in U.S. dollars. Currency volatility contributes to variations in our sales of products and services in impacted jurisdictions.
Conducting business in currencies other than the U.S. dollar has, from time to time, adversely impacted, and could in the future, have an adverse impact on our results as expressed in U.S. dollars. Currency volatility contributes to variations in our sales of products and services in impacted jurisdictions.
Furthermore, our efforts, and the efforts of third parties on whom we rely, to address these problems, at times, have not been, and may in the future not be successful and could result in interruptions, delays, cessation of service, compromise of sensitive information, and loss of existing or potential customers, any of which may impede our sales, manufacturing, distribution or other critical functions.
Furthermore, our efforts to address these problems, at times, have not been, and may in the future not be, successful and have resulted and could result in interruptions, delays, cessation of service, compromise of sensitive information, and loss of existing or potential customers, any of which may impede our sales, manufacturing, distribution or other critical functions.
Having developed a cloud platform product in HPE GreenLake and the hardware capabilities to support artificial intelligence computing, we must be able to continue integrating new features that are relevant to our customers and to scale quickly, while also managing costs and preserving margins, which means accurately forecasting volumes, mixes of products, and configurations that meet customer requirements, which we may not succeed at doing.
Having developed a cloud platform product in HPE GreenLake and the hardware capabilities to support AI computing, we must be able to continue integrating new features that are relevant to our customers and to scale quickly, while also managing costs and preserving margins, which means accurately forecasting volumes, mixes of products, and configurations that meet customer requirements.
The manufacture of product components, the final assembly of our products and other critical operations are concentrated in certain geographic locations, including the United States, Puerto Rico, Costa Rica, Czech Republic, Malaysia, Mexico, China, Taiwan, South Korea, and Singapore.
The manufacture of product components, the final assembly of our products and other critical operations are concentrated in certain geographic locations, including the United States, Puerto Rico, Vietnam, Thailand, Costa Rica, Brazil, Czech Republic, Malaysia, Mexico, China, Taiwan, India, South Korea, Saudi Arabia, and Singapore.
If we do not sufficiently invest in new technologies, successfully adapt to industry developments and changing demand, and evolve and expand our business at sufficient speed and scale to keep pace with the demands of the markets we serve, we may be unable to develop and maintain a competitive advantage and execute on our growth strategy, which would adversely affect our business, results of operations, and financial condition.
If we do not sufficiently manage our cost structure and R&D priorities while investing in new technologies, successfully adapt to industry developments and changing demand, and evolve and expand our business at sufficient speed and scale to keep pace with the demands of the markets we serve, we may be unable to develop and maintain a competitive advantage and execute on our growth strategy, which would adversely affect our business, results of operations, and financial condition.
Industry consolidation may also affect competition by creating larger, more homogeneous, and potentially stronger 26 Table of Conte n t competitors in the markets in which we operate. Additionally, our competitors may affect our business by entering into exclusive arrangements with our existing or potential customers or suppliers.
Industry consolidation may also affect competition by creating larger, more homogeneous, and potentially stronger competitors in the markets in which we operate. Additionally, our competitors may affect our business by entering into exclusive arrangements with our existing or potential customers or suppliers.
Further, incorporating AI gives rise to litigation risk and risk of non-compliance and unknown cost of compliance, as AI is an emerging technology for which the legal and regulatory landscape is not fully developed and which may vary from jurisdiction to jurisdiction, creating complex compliance issues (including potential liability for breaching intellectual property or privacy rights or laws or for the misuse of personal data).
Further, incorporating AI gives rise to litigation risk and risk of non-compliance and unknown cost of compliance, as AI is an emerging technology for which the legal and regulatory landscape is not fully developed and which may vary from jurisdiction to jurisdiction, creating complex compliance issues (including potential liability for breaching intellectual property or privacy rights or laws or for the misuse of personal data and the lack of effective legal protections for software source code created with the assistance of AI).
Our ability to implement solutions for our customers, anticipate and respond to rapid and continuing changes in technology (such as cloud-, AI-, and security-related offerings, which are continually evolving), and develop new service offerings or incorporate technological improvements into our offerings that meet current and prospective customers’ needs, as well as evolving industry standards, is critical to our competitiveness and success.
Our ability to implement solutions for our customers, anticipate and respond to rapid and continuing changes in technology (such as cloud-, AI-, networking- and security-related offerings), and develop new service offerings or incorporate technological improvements into our existing offerings that meet our customers’ needs and evolving industry standards, is critical to our competitiveness and success.
Our actual or perceived failure to comply with applicable laws and regulations or other obligations relating to these topics could subject us to liability to our customers, data subjects, suppliers, business partners, employees, and others, give rise to legal and/or regulatory action, could damage our reputation or could otherwise materially harm our business, any of which could have an adverse effect on our business, operating results, and financial condition.
Our actual or perceived failure to comply with applicable laws and regulations or other obligations relating to these topics could subject us to liability to our customers, data subjects, suppliers, business partners, employees, and others; give rise to legal and/or regulatory action; could damage our reputation; could limit or restrict our ability to sell to government customers in the U.S. and abroad; or could otherwise materially harm our business, any of which could have an adverse effect on our business, operating results, and financial condition.
Portions of our IT infrastructure also have experienced, and may experience, interruptions, delays, or cessations of service or produce errors in connection with systems integration or migration work that takes place from time to time.
Some of our business processes depend upon our IT systems. Portions of our IT infrastructure have experienced, and may experience, interruptions, delays, or cessations of service or produce errors in connection with systems integration or migration work that takes place from time to time.
In order to secure components for our products or services, at times we may make advance payments to suppliers or enter into long term agreements, non-cancellable commitments, or other inventory management arrangements with vendors.
In order to secure components for our products or services, at times we have made advance payments to suppliers or entered into long term agreements, non-cancellable commitments, or other inventory management arrangements with vendors.
Volatility in the price of our securities could result in the filing of securities class action litigation matters, which could result in substantial costs and the diversion of management time and resources. 35 Table of Conte n t ITEM 1B. Unresolved Staff Comments. None.
Volatility in the price of our securities could result in the filing of securities class action litigation matters, which could result in substantial costs and the diversion of management time and resources. 40 Table of Content ITEM 1B. Unresolved Staff Comments. None.
Certain of such suppliers have, in the past decided, and may in the future decide, to discontinue manufacturing components used in our products, which may cause us to discontinue certain products, incur additional costs to redesign our products so as not to incorporate such discontinued components, or incur time and expense to find replacement suppliers.
Certain single source suppliers have discontinued, and may again in the future discontinue, manufacturing components used in our products, which may cause us to discontinue certain products, incur additional costs to redesign our products so as not to incorporate such discontinued components, or incur time and expense to find replacement suppliers.
While we have policies and procedures designed to facilitate compliance with global trade laws and regimes around the world, such measures may not guarantee compliance. Sales outside the United States constituted approximately 64% of our net revenue in fiscal 2024.
While we have policies and procedures designed to facilitate compliance with global trade laws and regimes around the world, such measures may not guarantee compliance. 30 Table of Content Sales outside the United States constituted approximately 61% of our net revenue in fiscal year 2025.
These offerings face competition from peer companies with their own cloud platform and artificial intelligence computing offerings, and any delay in the development, production, or marketing of a new product, service, or solution could result in our offerings being late to reach the market, which could harm our competitive position.
These offerings face competition from peer companies, and any delay in our development, production, or marketing of a new product, service, or solution could result in our offerings being late to reach the market, which could harm our competitive position.
The costs associated with cybersecurity tools and infrastructure and competition for cybersecurity and IT talent have at times limited, and may in the future limit, our ability and the ability of third parties on whom we rely to efficiently identify, eliminate, or remediate cyber or other security vulnerabilities or problems or enact changes to minimize the attack surface of our network.
The costs associated with cybersecurity tools and infrastructure and competition for cybersecurity and IT talent have limited, and may in the future continue to limit, our ability to efficiently identify, eliminate, or remediate cyber or other security vulnerabilities or problems or enact changes to minimize the attack surface of our network.
We are subject to various US (federal, state, and local), and foreign laws and regulations. Laws and regulations may change in ways that will require us to modify our business model and objectives or affect our returns on investments by restricting existing activities and products, subjecting them to escalating costs or prohibiting them outright.
Laws and regulations may change in ways that will require us to modify our business model and objectives or affect our returns on investments by restricting existing activities and products, subjecting them to escalating costs or prohibiting them outright.
To the extent such disruptions adversely affect our business, results of operations, financial condition, and stock price, they may also have the effect of heightening many of the other risks described in this Item 1A of Part I of this Form 10-K . Failure to complete the Merger with Juniper Networks may adversely affect our business and our stock price.
To the extent such disruptions adversely affect our business, results of operations, financial condition, and stock price, they may also have the effect of heightening many of the other risks described in this Item 1A of Part I of this Annual Report on Form 10-K.
Certain sites located in the United States, Middle East, China, and India experience exposure to extreme heat and water stress, which could potentially jeopardize the health and well-being of our employees, consequently impacting our operations.
Certain sites located in the United States, Middle East, China, and India experience exposure to extreme heat and water stress, which could potentially strain our operational continuity and also jeopardize the health and well-being of our employees, both of which may consequently impact our operations.
If we were to violate or become liable under laws or regulations associated with privacy or security or the use of AI, we could incur substantial costs or be exposed to potential regulatory fines, civil or criminal sanctions, third-party claims, and reputational damage.
If we were to violate or become liable or subject to enforcement action under laws or regulations associated with any of the above laws or regulations, we could incur substantial costs or be exposed to potential regulatory fines, civil or criminal sanctions, third-party claims, and reputational damage.
If the anticipated value of such equity-based incentive awards does not materialize, if our equity-based compensation otherwise ceases to be viewed as a valuable benefit, if our total compensation package is not 23 Table of Conte n t viewed as being competitive, or if we do not obtain the stockholder approval needed to continue granting equity-based incentive awards in the amounts we believe are necessary, our ability to attract, retain, and motivate executives and key employees could be weakened.
Our ability to attract, retain, and motivate highly qualified executives and key employees could be adversely affected if the anticipated value of our equity-based incentive awards does not materialize, if our equity-based compensation otherwise ceases to be viewed as a valuable benefit, if our total compensation package is not viewed as being 27 Table of Content competitive, or if we do not obtain the stockholder approval required to continue granting equity-based incentive awards in the amounts we believe are necessary.
As part of our strategy, we may acquire businesses, divest businesses or assets, enter into strategic alliances and joint ventures, and make investments to further our business (collectively, “business combination and investment transactions”), and also handle any post-closing issues, such as integration.
As part of our strategy, we may acquire businesses, divest businesses or assets, enter into strategic alliances and joint ventures, and make investments to further our business (collectively, “business combination and investment transactions”).
Geopolitical tensions or conflicts, such as the ongoing conflicts between Russia and Ukraine or in the Middle East, may heighten the risk of such cyberattacks or exacerbate system vulnerabilities, considering our continued hybrid work environment and our globally dispersed operations, employees, contractors, suppliers, developers, partners, and other third parties.
Geopolitical tensions or conflicts may also heighten the risk of such cyberattacks or exacerbate system vulnerabilities, considering our continued hybrid work environment and our globally dispersed operations, employees, contractors, suppliers, developers, partners, and other third parties.
In order to address quality issues, we work extensively with our customers and suppliers and engage in product testing to determine the causes of problems and to develop and implement appropriate solutions.
We work with our customers and suppliers and engage in product testing to identify the causes of quality issues and to develop and implement appropriate solutions.
Additional impacts from cybersecurity incidents could include reimbursement of remediation costs to our customers, suppliers, or distributors, such as liability for stolen assets or information, repairs of system damage, and incentives for continued business; lost revenue resulting from the unauthorized use of proprietary information or the failure to retain or attract business partners following an incident; increased insurance premiums; and damage to our competitiveness, stock price, and long-term shareholder value.
Additional impacts from cybersecurity incidents have included and could include reimbursement of remediation costs to our customers, suppliers, or distributors; lost revenue resulting from the unauthorized use of proprietary information or the failure to retain or attract business partners following an incident; increased insurance premiums; and damage to our competitiveness, reputation, stock price, and long-term shareholder value.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeThe ERM organization supports management by facilitating a semi-annual risk assessment, which documents the priority and status of these risks and aligns them with our strategic mitigation efforts. ERM is structured using a framework based on guidance from the Committee of Sponsoring Organizations of the Treadway Commission on Enterprise Risk Management Integrating Strategy with Performance.
Biggest changeTo aide in assessing material risks from cybersecurity threats, our enterprise risk management (“ERM”) program incorporates cybersecurity risks as part of its process to assess overall risk of the Company. The ERM organization supports management by facilitating a semi-annual risk assessment, which documents the priority and status of these risks and aligns them with our strategic mitigation efforts.
ITEM 1C. Cybersecurity. Risk Management and Strategy Our Cybersecurity and Digital Risk Management (“CDRM”) organization, under the leadership of a Global Chief Information Security Officer (“Global CISO”), operates a cybersecurity program that is designed to help us assess, identify, manage, and mitigate risks relating to cybersecurity threats and incidents.
ITEM 1C. Cybersecurity. Risk Management and Strategy Our Cybersecurity and Digital Risk Management (“CDRM”) organization, under the leadership of a Global Chief Information Security Officer (“Global CISO”), operates a cybersecurity program that is designed to help us identify, assess, manage, and mitigate risks relating to cybersecurity threats and incidents.
From time to time, we conduct third-party-administered, as well as internally administered, tabletop exercises, which simulate cybersecurity threats, to assess our existing cybersecurity infrastructure and incident response processes. We also periodically conduct offensive security assessments and vulnerability tests, and continuously monitor our computing environments to gain visibility into our security posture and detect vulnerabilities, abnormalities, or signs of compromise.
From time to time, we conduct third-party-administered, as well as internally administered, tabletop exercises that simulate cybersecurity threats, to assess our existing cybersecurity infrastructure and incident response processes. We also periodically conduct offensive security assessments and vulnerability tests, and continuously monitor our computing environments to gain visibility into our security posture and detect vulnerabilities, abnormalities, or signs of compromise.
If we experience a cybersecurity incident, the CDC activates an incident response plan, which includes processes to enable us to triage, assess severity of, escalate, contain, investigate, and remediate the incident, as well as to comply with applicable legal obligations and mitigate brand and reputational harm.
If we experience a cybersecurity incident, the CDC activates our incident response plan, which includes processes to enable us to triage, assess severity of, escalate, contain, investigate, and remediate the incident, as well as to comply with applicable legal obligations and mitigate brand and reputational harm.
We design our cybersecurity standards, policies, processes and controls to operate in an integrated manner, leveraging applicable industry standards and security frameworks, including the NIST Cybersecurity Framework, as guides in supporting our ability to perform such functions.
We design our cybersecurity standards, policies, processes and controls to operate in an integrated manner, leveraging applicable industry standards and security frameworks, including the NIST Cybersecurity Framework, as guidance in supporting our ability to perform such functions.
Additionally, the COLO and Global CISO may provide ad hoc updates to the Board of Directors and/or the Audit Committee if necessitated by a security incident or other significant developments. HPE, like all organizations operating in the technology landscape, faces significant and persistent cybersecurity risks.
Additionally, the COLO and Global CISO may provide ad hoc updates to the Board of Directors and/or the Audit Committee if necessitated by a security incident or other significant developments. HPE, like all organizations operating in the technology landscape, faces significant and persistent cybersecurity risks, which influence business strategy and operations.
The Global CISO periodically meets with the Cyber Governance and Incident Disclosure Committee, our enterprise risk management function and chief-level executives to discuss cybersecurity risks, as well as related mitigation and remediation activities.
The Global CISO periodically meets with the Cyber Governance and Incident Disclosure Committee, our enterprise risk management function, and chief-level executives, as well as the Audit Committee of our Board of Directors, to discuss cybersecurity risks, as well as related mitigation and remediation activities.
In addition to monitoring risks from threats to our own assets, we administer third-party risk management practices that endeavor to help identify and manage supply chain and vendor risk arising from some of our key suppliers and other service provider organizations.
In addition to monitoring risks from threats to our own assets, we apply third-party risk management practices that endeavor to help identify and manage supply chain and vendor risk arising from our critical suppliers and other service provider organizations.
Such presentations to the Audit Committee and Board of Directors, as applicable, are made by our COLO and Global CISO and address topics such as cybersecurity threats, incidents, risks, results from internal and third-party assessments, progress towards risk-mitigation goals, the functioning of our incident response program, and regulatory developments.
Such presentations to the Audit Committee and Board of Directors, as applicable, are made by our COLO and Global CISO, utilizing performance metrics established by CDRM and reported through the ERM framework, and address topics such as cybersecurity threats, incidents, risks, results from internal and third-party assessments, progress towards risk-mitigation goals, the functioning of our incident response program, and regulatory developments.
CDRM manages our cybersecurity program, including by fostering collaboration with partners across business units and functional areas to identify and assess material cybersecurity threats, evaluate their severity, and explore ways to mitigate and manage such risks. Business units and functional areas are responsible for managing risks and implementing our policies and standards within the respective business unit or function.
CDRM manages our cybersecurity program, including by fostering collaboration with partners across business units and global functions to identify and assess material cybersecurity threats, evaluate their severity, and establish actions to mitigate and manage such risks. Business units and global functions are responsible for addressing risks and implementing our policies and standards within the respective business unit or function.
Additional information on the cybersecurity risks we face can be found in the section titled “Risk Factors” in Item 1A of Part I of this Annual Report on Form 10-K. Our prior Global CISO departed HPE at the end of October 2024.
Additional information on the cybersecurity risks we face can be found in the section titled “Risk Factors” in Item 1A of Part I of this Annual Report on Form 10-K.
The CDC monitors the prevention, detection, investigation, mitigation, response to, and remediation of cybersecurity incidents, and regularly reports to our CISO of Cyber Defense, who then subsequently reports to the Global CISO. Our Board of Directors is responsible for overseeing cybersecurity risk, primarily through the Audit Committee.
The CDC monitors the detection, investigation, mitigation, response to, and remediation of cybersecurity incidents, and regularly reports to our Global CISO, engaging with the Executive Committee and the Cyber Crisis Management Team, as appropriate. Our Board of Directors is responsible for overseeing cybersecurity risk, primarily through the Audit Committee.
Additionally, we have established a Cyber Crisis Management Team, responsible for addressing and responding to the most severe cyber incidents. If warranted, senior management notifies the Audit Committee and/or the full Board of Directors, as appropriate. Throughout this process, the CDC continues to investigate the incident and, as its understanding of the incident evolves, updates its severity assessment, as necessary.
Additionally, we have established a Cyber Crisis Management Team, which is responsible for addressing and responding to the most severe cyber incidents. If warranted, senior management notifies the Audit Committee and/or the full Board of Directors, as appropriate.
Our Global CISO is supported by the CISO of Cyber Defense and the CISO of Cyber Governance – both of whom have extensive experience in private sector cybersecurity roles – and a team of cybersecurity professionals with relevant educational and industry experience.
Our Global CISO is supported by a leadership team managing Cyber Defense; Governance, Risk, and Compliance; Security Strategy; Cybersecurity Architecture and Engineering; and Identity and Access Management, all of whom have extensive experience in private sector cybersecurity roles. Supporting these leaders is a team of cybersecurity professionals with relevant educational and industry experience.
We have identified a successor, who will join HPE in January 2025, previously served in relevant leadership positions at other public and private companies, and will bring over two decades of technology experience spanning information security and IT, including serving as CISO at other large companies.
Our Global CISO joined HPE in January 2025, and previously held relevant leadership positions at other 41 Table of Content public and private companies. He brings over two decades of technology experience spanning information and cyber security, including serving as CISO at other large companies.
Within CDRM, our Cybersecurity Defense Center (“CDC”) has established policies, processes, and controls that are designed to monitor, detect, investigate, respond to, and escalate management of cybersecurity threats and incidents.
ERM is structured using a framework based on guidance from the Committee of Sponsoring Organizations of the Treadway Commission on Enterprise Risk Management Integrating Strategy with Performance. Within CDRM, our Cybersecurity Defense Center (“CDC”) has established policies, processes, and controls that are designed to monitor, detect, investigate, respond to, and escalate management of cybersecurity threats and incidents.
We do so in a variety of ways, such as gathering information on third parties’ cybersecurity programs and controls, performing due diligence, undertaking cybersecurity reviews and/or audits, and/or mandating certain contractual requirements, such as notification of cybersecurity incidents. 36 Table of Conte n t Governance Our Global CISO, who reports to our Chief Operating and Legal Officer (“COLO”), has principal management-level responsibility for our cybersecurity program, which includes assessing and managing our cybersecurity risks, along with developing and implementing cybersecurity processes, policies, and controls that are used for managing cybersecurity risk across the Company.
Governance Our Global CISO, who reports to our Chief Operating and Legal Officer (“COLO”), has principal management-level responsibility for our cybersecurity program, which includes assessing and managing our cybersecurity risks, along with developing and implementing cybersecurity processes, policies, and controls that are used for managing cybersecurity risk across the Company.
We also require mandatory cybersecurity training for employees and periodically conduct Company-wide phishing simulations. To aide in assessing material risks from cybersecurity threats, our enterprise risk management (“ERM”) program incorporates cybersecurity risks as part of its process to assess overall risk of the Company.
As part of our cybersecurity program, we also evaluate data collected from our attack surface management tools using a framework that quantifies the likelihood and severity of risks to produce a prioritized set of vulnerabilities for remediation. We also require mandatory cybersecurity training for employees and periodically conduct Company-wide phishing simulations.
Removed
Compliance with our policies and standards is assessed by CDRM in conjunction with our internal audit function, through periodic cybersecurity audits. As part of our cybersecurity program, we maintain a Cyber Risk Management Program that seeks to address key risk management concepts, including mission and vision, escalation path for risk mitigation, risk assessments, and risk treatment.
Added
Compliance with our policies and standards is assessed by our internal audit organization, through periodic cybersecurity audits. The results of these audits, together with our learnings from internal and external threats, drive periodic reassessment of and structured updates to our cybersecurity framework, as deemed necessary or appropriate.
Removed
We do so by conducting a variety of planning and preparedness activities, including employing monitoring tools to identify suspicious or anomalous activity, vulnerabilities, or signs of compromise across our networks, systems, and data. We utilize data from attack surface management tools to produce a prioritized set of vulnerabilities for remediation.
Added
Throughout this process, the CDC continues to investigate the incident and, as its understanding of the incident evolves, updates its severity assessment, as necessary.
Removed
Based on initial investigation into such incident’s impact to the Company, the actor(s) involved, and other factors, the CDC assigns a severity level to an incident, which dictates the escalation path for a given incident.
Added
We do so in a variety of ways, such as gathering information on third parties’ cybersecurity programs and controls, performing due diligence, undertaking cybersecurity reviews and/or audits, and/or mandating certain contractual requirements, such as notification of cybersecurity incidents and return or destruction of all HPE data upon termination of the relationship.
Removed
For incidents rising to higher levels of severity, the Cyber Governance and Incident Disclosure Committee, a cross-functional committee spanning cybersecurity, IT, legal, finance, enterprise risk management, and compliance teams, assesses the severity and potential materiality of such incidents and, as appropriate, escalates to designated members of our senior management for further assessment, response, and remediation.
Removed
In the interim, our CDRM organization has been and will be led by our CISO of Cyber Defense and CISO of Cyber Governance, both reporting directly to our COLO.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeProduct Development, Services and Manufacturing The location of our major product development, services, manufacturing, and Hewlett Packard Labs facilities are as follows: Americas Puerto Rico— Aguadilla United States— Alpharetta, Andover, Chippewa Falls, Colorado Springs, Fort Collins, Houston, Milpitas, Roseville, Santa Clara, Spring, Sunnyvale Europe, Middle East, Africa United Kingdom —Erskine Asia Pacific China —Beijing India —Bangalore Japan —Tokyo Singapore — Singapore Taiwan — Taipei ITEM 3.
Biggest changeProduct Development, Services and Manufacturing The location of our major product development, services, manufacturing, and Hewlett Packard Labs facilities are as follows: 42 Table of Content Americas Puerto Rico— Aguadilla United States— Alpharetta, Andover, Chippewa Falls, Colorado Springs, Fort Collins, Herndon, Houston, Milpitas, Roseville, San Jose, Spring, Sunnyvale, Westford Europe, Middle East, Africa Netherlands —Amsterdam United Kingdom —Erskine Asia Pacific India —Bangalore Singapore — Singapore Taiwan — Taipei ITEM 3.
ITEM 2. Properties. As of October 31, 2024, we owned or leased approximately 11 million square feet of space worldwide, which included 3 million square feet of vacated space. A summary of the Company's operationally utilized space is provided below.
ITEM 2. Properties. As of October 31, 2025, we owned or leased approximately 13 million square feet of space worldwide, which included 3 million square feet of vacated space. A summary of the Company's operationally utilized space is provided below.
Legal Proceedings. Information with respect to this item may be found in Note 17, “Litigation, Contingencies, and Commitments,” to the Consolidated Financial Statements in Item 8 of Part II, which is incorporated herein by reference. ITEM 4. Mine Safety Disclosures. Not applicable. 38 Table of Conte n t PART II
Legal Proceedings. Information with respect to this item may be found in Note 17, “Litigation, Contingencies, and Commitments,” to the Consolidated Financial Statements in Item 8 of Part II, which is incorporated herein by reference. ITEM 4. Mine Safety Disclosures. Not applicable. 43 Table of Content PART II
Substantially all of our properties are utilized in whole or in part by our Server, Hybrid Cloud, and Intelligent Edge segments. 37 Table of Conte n t Principal Executive Offices Our principal executive offices, including our global headquarters, are located at 1701 East Mossy Oaks Road, Spring, Texas, 77389, United States of America.
Substantially all of our properties are utilized in whole or in part by our Server, Hybrid Cloud, and Networking segments. Principal Executive Offices Our principal executive offices, including our global headquarters, are located at 1701 East Mossy Oaks Road, Spring, Texas, 77389, United States of America.
As of October 31, 2024 Owned Leased Total (Square feet in millions) Administration and support 2 4 6 (Percentage) 33 % 67 % 100 % Core data centers, manufacturing plants, research and development facilities, and warehouse operations 1 1 2 (Percentage) 50 % 50 % 100 % Total 3 5 8 (Percentage) 37 % 63 % 100 % We believe that our existing properties are in good condition and are suitable for the conduct of our business.
As of October 31, 2025 Owned Leased Total (Square feet in millions) Administration and support 1 5 6 (Percentage) 17 % 83 % 100 % Core data centers, manufacturing plants, research and development facilities, and warehouse operations 2 2 4 (Percentage) 50 % 50 % 100 % Total 3 7 10 (Percentage) 30 % 70 % 100 % We believe that our existing properties are in good condition and are suitable for the conduct of our business.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeIssuer Purchases of Equity Securities Fourth Quarter of Fiscal 2024 Total Number of Shares Purchased and Settled Average Price Paid per Share Total Number of Shares Purchased 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 (August 2024) 115 $ 19.84 115 $ 861,886 Month 2 (September 2024) — — — 861,886 Month 3 (October 2024) 2,363 20.35 2,363 $ 813,792 Total 2,478 $ 20.33 2,478 On October 13, 2015, the Company's Board of Directors approved a share repurchase program with a $3.0 billion authorization, which was refreshed with additional share repurchase authorizations of $3.0 billion, $5.0 billion and $2.5 billion on May 24, 2016, October 16, 2017 and February 21, 2018, respectively.
Biggest changeIssuer Purchases of Equity Securities Fourth Quarter of Fiscal 2025 Total Number of Shares Purchased and Settled Average Price Paid per Share Total Number of Shares Purchased 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 (August 2025) — $ — — $ 711,642 Month 2 (September 2025) 1,310 24.69 1,310 679,298 Month 3 (October 2025) 2,787 24.28 2,787 $ 3,611,641 Total 4,097 $ 24.41 4,097 On October 13, 2015, the Company's Board of Directors approved a share repurchase program with a $3.0 billion authorization, which was refreshed with additional share repurchase authorizations of $3.0 billion, $5.0 billion, $2.5 billion and $3.0 billion on May 24, 2016, October 16, 2017, February 21, 2018 and October 15, 2025 respectively.
We also declared a cash dividend of $0.82604167 per share of our 7.625% Series C Mandatory Convertible Preferred Stock (the “Preferred Stock”), which was paid on December 1, 2024, to holders of record as of the close of business on November 15, 2024.
We also declared a cash dividend of $0.953125 per share of our 7.625% Series C Mandatory Convertible Preferred Stock (the “Preferred Stock”), which was paid on December 1, 2025, to holders of record as of the close of business on November 15, 2025.
ITEM 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Market Information The common stock of Hewlett Packard Enterprise is listed on the New York Stock Exchange with the ticker symbol “HPE.” Holders As of December 9, 2024, there were 43,102 stockholders of record of Hewlett Packard Enterprise common stock.
ITEM 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Market Information The common stock of Hewlett Packard Enterprise is listed on the New York Stock Exchange with the ticker symbol “HPE.” Holders As of December 10, 2025, there were 40,736 stockholders of record of Hewlett Packard Enterprise common stock.
As of October 31, 2024, the Company had a remaining authorization of approximately $0.8 billion for future share repurchases. Stock Performance Graph and Cumulative Total Return The graph below shows a comparison of cumulative total stockholder return, the S&P 500 Index, and the S&P Information Technology Index. This graph covers the period from October 31, 2019 through October 31, 2024.
As of October 31, 2025, the Company had a remaining authorization of approximately $3.6 billion for future share repurchases. Stock Performance Graph and Cumulative Total Return The graph below shows a comparison of cumulative total stockholder return, the S&P 500 Index, and the S&P Information Technology Index. This graph covers the period from October 31, 2020 through October 31, 2025.
Dividends During fiscal 2024, we paid a quarterly dividend of $0.13 per share of common stock to our holders of common stock. On December 5, 2024 we declared a quarterly dividend of $0.13 per share of common stock, payable on January 16, 2025, to stockholders of record as of the close of business on December 20, 2024.
Dividends During fiscal 2025, we paid a quarterly dividend of $0.13 per share of common stock to our holders of common stock. On December 4, 2025 we declared a quarterly dividend of $0.1425 per share of common stock, payable on January 16, 2026, to stockholders of record as of the close of business on December 19, 2025.
This graph assumes the investment of $100 in the stock or the index on October 31, 2019 (and the reinvestment of dividends thereafter). 39 Table of Conte n t The comparisons in the graph below are based on historical data and are not indicative of, or intended to forecast, future performance of our common stock. 10/2019 10/2020 10/2021 10/2022 10/2023 10/2024 Hewlett Packard Enterprise $ 100.00 $ 54.88 $ 96.26 $ 96.84 $ 107.55 $ 140.18 S&P 500 Index $ 100.00 $ 109.70 $ 156.75 $ 133.82 $ 147.36 $ 203.35 S&P Information Technology Index $ 100.00 $ 134.47 $ 197.56 $ 157.53 $ 206.12 $ 311.72
This graph assumes the investment of $100 in the stock or the index on October 31, 2020 (and the reinvestment of dividends thereafter). 44 Table of Content The comparisons in the graph below are based on historical data and are not indicative of, or intended to forecast, future performance of our common stock. 10/2020 10/2021 10/2022 10/2023 10/2024 10/2025 Hewlett Packard Enterprise $ 100.00 $ 175.41 $ 176.48 $ 195.99 $ 255.45 $ 328.65 S&P 500 Index $ 100.00 $ 142.89 $ 122.00 $ 134.35 $ 185.38 $ 225.10 S&P Information Technology Index $ 100.00 $ 146.93 $ 117.16 $ 153.30 $ 231.83 $ 318.88 ITEM 6. [Reserved] 45 Table of Content

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

134 edited+95 added−87 removed67 unchanged
Biggest changeOther companies may calculate and define similarly labeled items differently, which may limit the usefulness of this measure for comparative purposes. 47 Table of Contents HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES 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 fiscal years ended October 31, 2024 2023 2022 Dollars % of Revenue Dollars % of Revenue Dollars % of Revenue Dollars in millions Net revenue $ 30,127 100.0 % $ 29,135 100.0 % $ 28,496 100.0 % Cost of sales (exclusive of amortization shown separately below) 20,249 67.2 % 18,896 64.9 % 18,990 66.6 % Gross profit 9,878 32.8 % 10,239 35.1 % 9,506 33.4 % Research and development 2,246 7.5 % 2,349 8.1 % 2,045 7.2 % Selling, general and administrative 4,871 16.2 % 5,160 17.7 % 4,941 17.3 % Amortization of intangible assets 267 0.9 % 288 1.0 % 293 1.0 % Impairment of goodwill — — % — — % 905 3.2 % Transformation costs 93 0.3 % 283 1.0 % 473 1.7 % Disaster charges 7 — % 1 — % 48 0.2 % Acquisition, disposition and other related charges 204 0.6 % 69 0.1 % 19 0.1 % Earnings from operations 2,190 7.3 % 2,089 7.2 % 782 2.7 % Interest and other, net (117) (0.4) % (104) (0.3) % (121) (0.4) % Gain on sale of equity interest 733 2.4 % — 0.1 % — — % Earnings from equity interests 147 0.5 % 245 0.8 % 215 0.8 % Earnings before provision for taxes 2,953 9.8 % 2,230 7.8 % 876 3.1 % Provision for taxes (374) (1.2) % (205) (0.7) % (8) (0.1) % Net earnings attributable to HPE 2,579 8.6 % 2,025 7.0 % 868 3.0 % Preferred stock dividends (25) (0.1) % — — % — — % Net earnings attributable to common stockholders $ 2,554 8.5 % $ 2,025 7.0 % $ 868 3.0 % Fiscal 2024 compared with fiscal 2023 Net revenue In fiscal 2024, total net revenue of $30.1 billion represented an increase of $992 million, or 3.4% (increased 3.3% on a constant currency basis).
Biggest changeRESULTS OF OPERATIONS Results of operations in dollars and as a percentage of net revenue were as follows: For the fiscal years ended October 31, 2025 2024 2023 Dollars % of Revenue Dollars % of Revenue Dollars % of Revenue Dollars in millions Net revenue $ 34,296 100.0 % $ 30,127 100.0 % $ 29,135 100.0 % Cost of sales (exclusive of amortization shown separately below) 23,919 69.7 20,249 67.2 18,896 64.9 Gross profit 10,377 30.3 9,878 32.8 10,239 35.1 Research and development 2,518 7.3 2,246 7.5 2,349 8.1 Selling, general and administrative 5,704 16.6 4,871 16.2 5,160 17.7 Amortization of intangible assets 511 1.5 267 0.9 288 1.0 Impairment charges 1,621 4.7 — — — — Transformation costs 2 — 93 0.3 283 1.0 Acquisition, disposition and other charges 458 1.3 211 0.7 70 0.2 (Loss) earnings from operations (437) (1.3) 2,190 7.3 2,089 7.2 Interest and other, net (175) (0.5) (117) (0.4) (104) (0.4) Gain on sale of equity interest — — 733 2.4 — — Gain on sale of a business 248 0.7 — — — — Earnings from equity interests 79 0.2 147 0.5 245 0.8 (Loss) earnings before provision for taxes (285) (0.9) 2,953 9.8 2,230 7.6 Benefit (provision) for taxes 342 1.0 (374) (1.2) (205) (0.7) Net earnings attributable to HPE 57 0.2 2,579 8.6 2,025 7.0 Preferred stock dividends (116) (0.3) (25) (0.1) — — Net (loss) earnings attributable to common stockholders $ (59) (0.2) % $ 2,554 8.5 % $ 2,025 7.0 % 54 Table of Contents HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued) Fiscal 2025 compared with fiscal 2024 Net revenue In fiscal 2025, total net revenue of $34.3 billion represented an increase of $4.2 billion, or 13.8%.
These amounts primarily included: • $104 million of net income tax charges resulting from the gain on the H3C divestiture, which includes $215 million of U.S. and foreign income tax charges offset by $111 million of income tax benefit for the release of an uncertain tax benefit related to the prior divestiture, partially offset by • $54 million of income tax benefits related to transformation costs, and acquisition, disposition and other related charges and • $11 million of net excess tax benefits related to stock-based compensation.
These amounts primarily included: • $104 million of net income tax charges resulting from the gain on the H3C divestiture, which includes $215 million of U.S. and foreign income tax charges offset by $111 million of income tax benefit for the release of an uncertain tax benefit related to the prior divestiture, partially offset by • $54 million of income tax benefits related to transformation costs, and acquisition, disposition and other charges and • $11 million of net excess tax benefits related to stock-based compensation.
Determining the income tax provision for these potential assessments and recording the related effects requires management judgments and estimates. The amounts ultimately paid on resolution of an audit could be materially different from the amounts previously included in our income tax provision and, therefore, could have a material impact on our Provision for taxes, Net earnings and cash flows.
Determining the income tax provision for these potential assessments and recording the related effects requires management judgments and estimates. The amounts ultimately paid on resolution of an audit could be materially different from the amounts previously included in our income tax provision and, therefore, could have a material impact on our Benefit (provision) for taxes, Net earnings and cash flows.
The impact of our outstanding interest rate swaps as of October 31, 2024 was factored into the calculation of the future interest payments on long-term debt. Operating lease obligations We enter into various leases as a lessee for assets including office buildings, data centers, vehicles, and aviation.
The impact of our outstanding interest rate swaps as of October 31, 2025 was factored into the calculation of the future interest payments on long-term debt. Operating lease obligations We enter into various leases as a lessee for assets including office buildings, data centers, vehicles, and aviation.
Debt benefiting FS totaled $11.8 billion and $11.6 billion at October 31, 2024 and 2023, 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. FS equity at October 31, 2024 and 2023, was $1.7 billion and $1.7 billion, respectively.
Debt benefiting FS totaled $11.6 billion and $11.8 billion at October 31, 2025 and 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. FS equity at October 31, 2025 and 2024, was $1.7 billion.
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.
Economic Substance of non-GAAP Financial Measures 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.
In September 2024, we terminated the 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.
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.
We also provide a reconciliation of each non-GAAP financial measure to its most directly comparable GAAP financial measure for this fiscal year and prior periods, and we encourage investors to review those reconciliations carefully. 65 Table of Contents
We also provide a reconciliation of each non-GAAP financial measure to its most directly comparable GAAP financial measure for this fiscal year and prior periods, and we encourage investors to review those reconciliations carefully. 71 Table of Contents
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 shareholder dividend payments.
We believe that internally generated cash flows will be generally sufficient to support our operating businesses, capital expenditures, product development initiatives, 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.
Segment Information Hewlett Packard Enterprise's organizational structure is based on a number of factors that the Chief Operating Decision Maker, who is the CEO, uses to evaluate, view, and run our business operations, which include, but are not limited to, customer base and homogeneity of products and technology.
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.
Discussions of fiscal 2022 items and year-to-year comparisons between fiscal 2023 and fiscal 2022 that are not included in this Form 10-K can be found in “Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations” of the Company's Annual Report on Form 10-K for the fiscal year October 31, 2023, as filed with the SEC on December 22, 2023, which is available on the SEC's website at www.sec.gov.
Discussions of fiscal 2023 items and year-to-year comparisons between fiscal 2024 and fiscal 2023 that are not included in this Form 10-K can be found in “Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations” of the Company's Annual Report on Form 10-K for the fiscal year October 31, 2024, as filed with the SEC on December 19, 2024, which is available on the SEC's website at www.sec.gov.
Our cash balances are held in numerous locations throughout the world, with a substantial amount held in the U.S. as of October 31, 2024. 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.
Our cash balances are held in numerous locations throughout the world, with a substantial amount held outside the U.S. as of October 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.
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, during fiscal 2024, we repurchased and settled an aggregate amount of $150 million.
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, during fiscal 2025, we repurchased and settled an aggregate amount of $202 million.
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.
The Adjustments for taxes line item includes certain income tax valuation allowances and separation taxes, the impact of tax law changes, structural rate adjustment, excess tax benefit from stock-based compensation, and adjustments for additional taxes or tax benefits associated with each non-GAAP item.
As of October 31, 2024, our finance lease obligations, including interest, was $42 million, of which $7 million is to be due within one year. For more information on our debt, see Note 14, “Borrowings,” to the Consolidated Financial Statements in Item 8 of Part II.
As of October 31, 2025, our finance lease obligations, including interest, was $35 million, of which $7 million is to be due within one year. For more information on our debt, see Note 14, “Borrowings,” to the Consolidated Financial Statements in Item 8 of Part II.
We maintain a revolving credit facility and two commercial paper programs, “the Parent Programs”, and a wholly-owned subsidiary maintains a third program.
We maintain a revolving credit facility and two commercial paper programs, “the Parent Programs,” and a wholly-owned subsidiary maintains a third program.
Our 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 may also be materially impacted by discrete tax adjustments during the fiscal year.
Our 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 the fiscal year.
As of October 31, 2024, operating lease obligations, net of sublease rental income totaled $1.7 billion, of which $286 million is due within one year. For more information on our leases, see Note 8, “Accounting for Leases as a Lessee,” to the Consolidated Financial Statements in Item 8 of Part II.
As of October 31, 2025, operating lease obligations, net of sublease rental income totaled $1.8 billion, of which $342 million is due within one year. For more information on our leases, see Note 8, “Accounting for Leases as a Lessee,” to the Consolidated Financial Statements in Item 8 of Part II.
For fiscal 2024, we used a projected non-GAAP income tax rate of 15%, which reflects currently available information as well as other factors and assumptions. For fiscal 2023 we used a non-GAAP income tax rate of 14%.
For fiscal 2025 and 2024, we used a projected non-GAAP income tax rate of 15%, which reflects currently available information as well as other factors and assumptions.
This section of this Form 10-K generally discusses fiscal 2024 and fiscal 2023 items and year-to-year comparisons between fiscal 2024 and fiscal 2023.
This section of this Form 10-K generally discusses fiscal 2025 and fiscal 2024 items and year-to-year comparisons between fiscal 2025 and fiscal 2024.
(“Juniper Networks”). • 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. • Critical Accounting Policies and Estimates.
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. • Critical Accounting Policies and Estimates.
TRENDS AND UNCERTAINTIES During fiscal 2024, 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.
TRENDS AND UNCERTAINTIES During 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 AI, hybrid cloud, edge computing, data security capabilities, and related offerings.
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 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 net earnings is net earnings. The GAAP measure most directly comparable to non-GAAP diluted net earnings per share is diluted net earnings per share. The GAAP measure most directly comparable to FCF is cash flow from operations.
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.
Based on the results of this hypothetical 10% decrease all of the reporting units had an excess of fair value over carrying amount, except for HPC & AI and Hybrid Cloud.
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.
Non-GAAP earnings from operations and non-GAAP operating profit margin 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, transformation costs and acquisition, disposition and other related charges.
Non-GAAP earnings from operations and non-GAAP operating profit margin 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 charges, and transformation costs.
Unconditional purchase obligations 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. As of October 31, 2024, unconditional purchase obligations totaled $1.3 billion, of which $556 million is due within one year.
Unconditional purchase obligations 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. As of October 31, 2025, unconditional purchase obligations totaled $3.3 billion, of which $2.0 billion is due within one year.
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 aaS offerings, recognized during a quarter and multiplied by four.
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.
Financing Volume For the fiscal years ended October 31, 2024 2023 2022 In millions Financing volume $ 6,616 $ 6,412 $ 6,252 Financing volume, which represents the amount of financing provided to customers for equipment and related software and services, including intercompany activity, increased by 3.2% in fiscal 2024 as compared to the prior-year period.
Financing Volume For the fiscal years ended October 31, 2025 2024 2023 In millions Financing volume $ 5,475 $ 6,616 $ 6,412 Financing volume, which represents the amount of financing provided to customers for equipment and related software and services, including intercompany activity, decreased by 17.2% in fiscal 2025 as compared to the prior-year period.
Non-GAAP net earnings and non-GAAP diluted net earnings per share consist of net earnings or diluted net earnings per share excluding those same charges mentioned above, as well as other items such as adjustments for equity interests, gain or loss on equity investments, other adjustments, and adjustments for taxes.
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 or diluted net earnings 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.
Transaction price is adjusted for variable consideration which may be offered in contracts with customers, partners, and distributors and may include rebates, volume-based discounts, price protection, and other incentive programs. Significant judgment is applied in determining the transaction price as we may be required to estimate variable consideration at the time of revenue recognition.
Transaction price is adjusted for variable consideration, including rebates, which may be offered in contracts with customers, partners, and distributors. Significant judgment is applied in determining the transaction price as we may be required to estimate variable consideration at the time of revenue recognition.
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.
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 non-GAAP gross profit is gross profit. The GAAP measure most directly comparable to non-GAAP gross profit margin is gross profit margin.
As of October 31, 2024, future interest payments relating to our long-term debt is estimated to be approximately $7.6 billion, of which $0.9 billion is expected to be due within one year.
As of October 31, 2025, future interest payments relating to our long-term debt is estimated to be approximately $8.1 billion, of which $1.0 billion is expected to be due within one year.
In order for us to realize our deferred tax assets, we must be able to generate sufficient taxable income, of the appropriate character, in the jurisdictions in which the deferred tax assets are located, prior to their expiration under applicable tax laws.
In order for us to realize our deferred tax assets, we must be able to generate sufficient taxable income, of the appropriate character, in the jurisdictions in which the deferred tax assets are located, prior to their expiration under applicable tax laws. We are subject to routine corporate income tax audits in the U.S. and numerous foreign jurisdictions.
For more information on our unconditional purchase obligations, see Note 17, “Litigation, Contingencies, and Commitments,” to the Consolidated Financial Statements in Item 8 of Part II. Retirement Benefit Plan Funding In fiscal 2024, we anticipate making contributions of $189 million to our non-U.S. pension plans.
In connection with the Merger, our unconditional purchase obligations increased by $1.5 billion. For more information on our unconditional purchase obligations, see Note 17, “Litigation, Contingencies, and Commitments,” to the Consolidated Financial Statements in Item 8 of Part II. Retirement Benefit Plan Funding In fiscal 2026, we anticipate making contributions of $220 million to our non-U.S. pension plans.
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.
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.
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%.
Further, 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.
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. 63 Table of Contents HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued) • Disaster recoveries include direct costs or recovery of these costs related to the exit of the Company’s businesses in Russia and Belarus.
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. 69 Table of Contents HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued) • We incur costs related to our acquisition, disposition and other charges.
The following tables represent the way in which management reviews cash flows: For the fiscal years ended October 31, 2024 2023 2022 In millions Net cash provided by operating activities $ 4,341 $ 4,428 $ 4,593 Net cash used in investing activities (53) (3,284) (2,087) Net cash provided by (used in) financing activities 6,283 (1,362) (1,796) Effect of exchange rate changes on cash, cash equivalents, and restricted cash (47) 36 (279) Change in cash, cash equivalents and restricted cash $ 10,524 $ (182) $ 431 Free cash flow $ 2,297 $ 2,238 $ 1,794 Operating Activities Net cash provided by operating activities decreased by $87 million for fiscal 2024, as compared to fiscal 2023.
The following tables represent the way in which management reviews cash flows: For the fiscal years ended October 31, 2025 2024 2023 In millions Net cash provided by operating activities $ 2,919 $ 4,341 $ 4,428 Net cash used in investing activities (13,190) (53) (3,284) Net cash provided by (used in) financing activities 1,046 6,283 (1,362) Effect of exchange rate changes on cash, cash equivalents, and restricted cash (21) (47) 36 Change in cash, cash equivalents and restricted cash $ (9,246) $ 10,524 $ (182) Free cash flow $ 986 $ 2,297 $ 2,238 Operating Activities Net cash provided by operating activities decreased by $1.4 billion for fiscal 2025, as compared to fiscal 2024.
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.
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.
(3) The maximum aggregate capacity under the uncommitted lines of credit is $1.5 billion of which $0.6 billion was primarily utilized towards issuances of bank guarantees.
(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 as of October 31, 2025.
The portfolio assets and ratios derived from the segment balance sheets for FS were as follows: As of October 31 2024 2023 Dollars in millions Financing receivables, gross $ 9,647 $ 8,814 Net equipment under operating leases 3,632 4,100 Capitalized profit on intercompany equipment transactions (1) 396 263 Intercompany leases (1) 119 109 Gross portfolio assets 13,794 13,286 Allowance for doubtful accounts (2) 177 178 Operating lease equipment reserve 30 36 Total reserves 207 214 Net portfolio assets $ 13,587 $ 13,072 Reserve coverage 1.5 % 1.6 % Debt-to-equity ratio (3) 7.0x 7.0x (1) Intercompany activity is eliminated in consolidation.
The portfolio assets and ratios derived from the segment balance sheets for FS were as follows: As of October 31 2025 2024 Dollars in millions Financing receivables, gross $ 9,740 $ 9,647 Net equipment under operating leases 3,159 3,632 Capitalized profit on intercompany equipment transactions (1) 388 396 Intercompany leases (1) 134 119 Gross portfolio assets 13,421 13,794 Allowance for doubtful accounts (2) 189 177 Operating lease equipment reserve 51 30 Total reserves 240 207 Net portfolio assets $ 13,181 $ 13,587 Reserve coverage 1.8 % 1.5 % Debt-to-equity ratio (3) 7.0x 7.0x (1) Intercompany activity is eliminated in consolidation.
CTG is included in our Communications and Media Solutions business, which is 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 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.
For the fiscal years ended October 31, 2024 2023 2022 In millions Net cash provided by operating activities $ 4,341 $ 4,428 $ 4,593 Investment in property, plant and equipment and software assets (2,367) (2,828) (3,122) Proceeds from sale of property, plant and equipment 370 602 602 Effect of exchange rate changes on cash, cash equivalents, and restricted cash (47) 36 (279) Free cash flow $ 2,297 $ 2,238 $ 1,794 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, non-GAAP diluted net earnings per share, and FCF.
For the fiscal years ended October 31, 2025 2024 2023 In millions Net cash provided by operating activities $ 2,919 $ 4,341 $ 4,428 Investment in property, plant and equipment and software assets (2,292) (2,367) (2,828) Proceeds from sale of property, plant and equipment 380 370 602 Effect of exchange rate changes on cash, cash equivalents, and restricted cash (21) (47) 36 Free cash flow $ 986 $ 2,297 $ 2,238 Use of non-GAAP Financial Measures The non-GAAP financial measures presented are 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.
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.
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.
(2) Segment earnings from operations exclude certain unallocated corporate costs and eliminations, stock-based compensation expense, amortization of intangible assets, impairment of goodwill, transformation costs, disaster charges, divestiture related exit costs, and acquisition, disposition and other related charges.
(2) Segment earnings (loss) from operations exclude certain unallocated corporate costs and eliminations, stock-based compensation expense, amortization of intangible assets, impairment charges, transformation costs, H3C divestiture related severance costs, severance costs related to the cost reduction program, and acquisition, disposition and other charges.
Provision for taxes For fiscal 2024 and 2023, we recorded income tax expense of $374 million and $205 million, respectively, which reflect effective tax rates of 12.7% and 9.2%, respectively.
Benefit (provision) for taxes For fiscal 2025 and 2024, we recorded income tax benefit of $342 million and income tax expense of $374 million, respectively, which reflect effective tax rates of 120.0% and 12.7%, respectively.
As of October 31, 2024, we had a remaining authorization of approximately $0.8 billion for future share repurchases. For more information on our share repurchase program, refer to Note 15, “Stockholders' Equity,” to the Consolidated Financial Statements in Item 8 of Part II. On May 23, 2024, we announced plans to divest our Communications Technology Group (“CTG”) business to HCLTech.
As of October 31, 2025, we had a remaining authorization of approximately $3.6 billion for future share repurchases. For more information on our share repurchase program, refer to Note 15, “Stockholders' Equity,” to the Consolidated Financial Statements in Item 8 of Part II.
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.
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. 62 Table of Contents HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued) DSO measures the average number of days our receivables are outstanding.
Capital Resources Debt Levels As of October 31, 2024 2023 2022 Dollars in millions Short-term debt $ 4,742 $ 4,868 $ 4,612 Long-term debt $ 13,504 $ 7,487 $ 7,853 Weighted-average interest rate 5.4 % 5.4 % 4.0 % 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.
Capital Resources Debt Levels As of October 31, 2025 2024 2023 Dollars in millions Short-term debt $ 4,609 $ 4,742 $ 4,868 Long-term debt $ 17,756 $ 13,504 $ 7,487 Weighted-average interest rate 4.8 % 5.4 % 5.4 % 63 Table of Contents HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued) 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 believe that eliminating these amounts for purposes of calculating non-GAAP financial measures facilitates the evaluation of our current operating performance. • 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.
We exclude the litigation judgment for purposes of calculating non-GAAP measures to facilitate a supplemental evaluation of the Company’s current operating performance and comparisons to past operating results. • 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.
The excess of fair value over carrying amount for our reporting units ranged from approximately 8% to 198% of the respective carrying amounts. In order to evaluate the sensitivity of the estimated fair value of our reporting units in the goodwill impairment test, we applied a hypothetical 10% decrease to the fair value of each reporting unit.
In order to evaluate the sensitivity of the estimated fair value of our reporting units in the goodwill impairment test, we applied a hypothetical 10% decrease to the fair value of each reporting unit.
A discussion of material events and uncertainties known to management, such as the mixed macroeconomic environment of supply chain constraints (though easing), uneven demand across our portfolio, increased demand for and adoption of new technologies, conservative (though recovering) customer spending environment, persistent inflation, foreign exchange pressures, recent tax developments, and pending merger with Juniper Networks, Inc.
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.
Other Trends and Uncertainties: The impacts of trade protection measures, including increases in tariffs and trade barriers, changes in government policies and international trade arrangements, geopolitical volatility (including the ongoing conflict in the Middle East), and global macroeconomic challenges (including 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.
Other Trends and Uncertainties: The impacts of geopolitical volatility (including the continued instability in the Middle East, the ongoing conflict 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.
Financial Results The following table summarizes our consolidated GAAP financial results: For the fiscal years ended October 31, 2024 2023 Change In millions, except per share amounts Net revenue $ 30,127 $ 29,135 3.4% Gross profit $ 9,878 $ 10,239 (3.5)% Gross profit margin 32.8 % 35.1 % (2.3)pts Earnings from operations $ 2,190 $ 2,089 4.8% Operating profit margin 7.3 % 7.2 % 0.1pts Net earnings attributable to HPE $ 2,579 $ 2,025 27.4% Net earnings attributable to common stockholders 2,554 2,025 26.1% Diluted net earnings per share attributable to common stockholders (1) 1.93 1.54 $0.39 Cash flow from operations $ 4,341 $ 4,428 $(87) 43 Table of Contents HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued) The following table summarizes our consolidated non-GAAP financial results: For the fiscal years ended October 31, 2024 2023 Change In millions, except per share amounts Net revenue in constant currency $ 30,107 $ 29,135 3.3% Non-GAAP gross profit $ 9,893 $ 10,273 (3.7)% Non-GAAP gross profit margin 32.8 % 35.3 % (2.5)pts Non-GAAP earnings from operations $ 3,168 $ 3,145 0.7% Non-GAAP operating profit margin 10.5 % 10.8 % (0.3)pts Non-GAAP net earnings attributable to HPE $ 2,655 $ 2,832 (6.3)% Non-GAAP net earnings attributable to common stockholders 2,630 2,832 (7.1)% Non-GAAP diluted net earnings per share attributable to common stockholders (1) 1.99 2.15 $(0.16) Free cash flow $ 2,297 $ 2,238 $59 (1) 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.
Financial Results The following table summarizes our consolidated GAAP financial results: For the fiscal years ended October 31, 2025 2024 Change In millions, except per share amounts Net revenue $ 34,296 $ 30,127 13.8% Gross profit $ 10,377 $ 9,878 5.1% Gross profit margin 30.3 % 32.8 % (2.5)pts (Loss) earnings from operations $ (437) $ 2,190 (120.0)% Operating profit margin (1.3) % 7.3 % (8.6)pts Net earnings attributable to HPE $ 57 $ 2,579 (97.8)% Net (loss) earnings attributable to common stockholders $ (59) $ 2,554 (102.3)% Diluted net (loss) earnings per share attributable to common stockholders (1) $ (0.04) $ 1.93 $(1.97) Cash flow provided by operations $ 2,919 $ 4,341 $(1,422) The following table summarizes our consolidated non-GAAP financial results: For the fiscal years ended October 31, 2025 2024 Change In millions, except per share amounts Non-GAAP gross profit $ 10,805 $ 9,893 9.2% Non-GAAP gross profit margin 31.5 % 32.8 % (1.3)pts Non-GAAP earnings from operations $ 3,353 $ 3,168 5.8% Non-GAAP operating profit margin 9.8 % 10.5 % (0.7)pts Non-GAAP net earnings attributable to HPE $ 2,753 $ 2,655 3.7% Non-GAAP net earnings attributable to common stockholders $ 2,637 $ 2,630 0.3% Non-GAAP diluted net earnings per share attributable to common stockholders (1) $ 1.94 $ 1.99 $(0.05) Free cash flow $ 986 $ 2,297 $(1,311) 49 Table of Contents HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued) (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.
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 2023, the increase in DPO by 36 days in the current period was primarily due to higher inventory purchases.
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 by 31 days in the current period was primarily due to higher shipments for large deals and lower purchases due to seasonality.
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. • Transformation costs represent net costs related to the (i) HPE Next Plan and (ii) Cost Optimization and Prioritization Plan and include restructuring charges, program design and execution costs, costs incurred to transform our IT infrastructure, net gains from the sale of real estate and any impairment charges on real estate identified as part of the initiatives.
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.
The commitment is 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 Juniper Networks acquisition and refinancing of Juniper Networks’ credit agreement in connection with the closing of the Juniper Networks acquisition.
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.
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 41 Table of Contents HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued) offerings, including our own.
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.
Portfolio Assets and Ratios The FS business model is asset intensive and uses certain internal metrics to measure its performance against other financial services companies, including a segment balance sheet that is derived from our internal management reporting system. The accounting policies used to derive FS amounts are substantially the same as those used by the Company.
The decrease was primarily driven by lower financing of both HPE and third-party product sales and services. Portfolio Assets and Ratios The FS business model is asset intensive and uses certain internal metrics to measure its performance against other financial services companies, including a segment balance sheet that is derived from our internal management reporting system.
Non-GAAP gross profit and non-GAAP gross profit margin are defined to exclude charges related to the amortization of initial direct costs, stock-based compensation expense, and disaster charges. 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.
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.
FCF increased by $0.1 billion, as compared to the corresponding period in fiscal 2023. This was primarily due to lower net capital expenditures, 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.
FCF decreased by $1.3 billion in fiscal 2025, as compared to fiscal 2024, primarily due to lower cash provided by operating activities. For more information on our FCF, refer to the section entitled “GAAP to non-GAAP Reconciliations” included in this MD&A.
We anticipate that the funds made available, including the debt funding related to the pending merger with Juniper Networks, proceeds from issuance of the Preferred Stock and proceeds from the sale of 30% of the total issued share capital of H3C, and 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 (including for the payment of consideration to consummate the Juniper Networks transaction) and for the foreseeable future thereafter.
We anticipate that the funds made available and 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.
For the fiscal years ended October 31, 2024 2023 Dollars % of Revenue Dollars % of Revenue In millions GAAP earnings from operations $ 2,190 7.3 % $ 2,089 7.2 % Non-GAAP adjustments: Amortization of intangible assets 267 0.9 % 288 1.0 % Transformation costs 93 0.3 % 283 1.0 % Disaster recovery (51) (0.2) % (12) — % Stock-based compensation expense 430 1.4 % 428 1.5 % Divestiture related exit costs 35 0.1 % — — % Acquisition, disposition and other related charges 204 0.7 % 69 0.2 % Non-GAAP earnings from operations $ 3,168 10.5 % $ 3,145 10.8 % Reconciliation of GAAP net earnings and diluted net earnings per share to non-GAAP net earnings and diluted net earnings per share.
For the fiscal years ended October 31, 2025 2024 Dollars % of Revenue Dollars % of Revenue Dollars In millions GAAP (loss) earnings from operations $ (437) (1.3) % $ 2,190 7.3 % Non-GAAP adjustments: Amortization of intangible assets 511 1.5 % 267 0.9 % Impairment charges 1,621 4.7 % — — % Transformation costs 2 — % 93 0.3 % Stock-based compensation expense 643 1.9 % 430 1.4 % H3C divestiture related severance costs 97 0.3 % — — % Cost reduction program 275 0.8 % — — % Acquisition, disposition and other charges (1) 641 1.9 % 188 0.6 % Non-GAAP earnings from operations $ 3,353 9.8 % $ 3,168 10.5 % (1) Includes disaster recovery and divestiture related exit costs.
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.
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.
We have, in fact, been experiencing higher-than-normal inventory levels, primarily due to customers transitioning to the next generation of GPUs, our securing supply ahead of demand, and longer customer acceptance timelines on AI-related orders; we expect this trend to continue in the medium term.
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.
Financial Services For the fiscal years ended October 31, 2024 2023 2022 2024 vs 2023 % Change 2023 vs 2022 % Change Dollars in millions Net revenue $ 3,512 $ 3,480 $ 3,339 0.9 % 4.2 % Earnings from operations $ 316 $ 281 $ 387 12.5 % (27.4) % Earnings from operations as a % of net revenue 9.0 % 8.1 % 11.6 % Fiscal 2024 compared with fiscal 2023 FS net revenue increased by $32 million, or 0.9% (increased 0.6% on a constant currency basis) primarily due to higher finance income from higher average finance leases in a higher interest rate environment, along with favorable currency fluctuations, partially offset by lower rental revenue on lower average operating leases and lower asset management lease buyout revenue.
Financial Services For the fiscal years ended October 31, 2025 2024 2023 2025 vs 2024 % Change Dollars in millions Net revenue $ 3,504 $ 3,512 $ 3,480 (0.2) % Cost of sales 2,856 2,923 2,919 (2.3) % Gross profit 648 589 561 10.0 % Operating expenses 287 273 280 5.1 % Earnings from operations $ 361 $ 316 $ 281 14.2 % Earnings from operations as a % of net revenue 10.3 % 9.0 % 8.1 % Fiscal 2025 compared with fiscal 2024 FS net revenue decreased by $8 million, or 0.2%, primarily due to lower rental revenue on lower average operating leases, largely offset by higher finance income from higher average finance leases, higher asset management remarketing revenue, and asset recovery services revenue.
The decrease was moderated by favorable working capital, as compared to the prior-year period. 57 Table of Contents HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued) Our working capital metrics and cash conversion impacts were as follows: As of October 31, 2024 2023 2022 Days of sales outstanding in accounts receivable (“DSO”) 38 43 47 Days of supply in inventory (“DOS”) 120 87 88 Days of purchases outstanding in accounts payable (“DPO”) (170) (134) (149) Cash conversion cycle (12) (4) (14) The cash conversion cycle is the sum of DSO and DOS less DPO.
Our working capital metrics and cash conversion impacts were as follows: As of October 31, 2025 2024 2023 Days of sales outstanding in accounts receivable (“DSO”) 49 38 43 Days of supply in inventory (“DOS”) 89 120 87 Days of purchases outstanding in accounts payable (“DPO”) (108) (170) (134) Cash conversion cycle 30 (12) (4) The cash conversion cycle is the sum of DSO and DOS less DPO.
(2) 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. 62 Table of Contents HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued) Reconciliation of net cash provided by operating activities to free cash flow.
(5) 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. Shares used to calculate Non-GAAP diluted net EPS.
As of October 31, 2024, our cash, cash equivalents and restricted cash were $15.1 billion, compared to $4.6 billion as of October 31, 2023, representing an increase of $10.5 billion. CRITICAL ACCOUNTING POLICIES AND ESTIMATES Our Consolidated Financial Statements are prepared in accordance with U.S.
As of October 31, 2025, our cash, cash equivalents and restricted cash were $5.9 billion, compared to $15.1 billion as of October 31, 2024, representing a decrease of $9.2 billion. 50 Table of Contents HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued) CRITICAL ACCOUNTING POLICIES AND ESTIMATES Our Consolidated Financial Statements are prepared in accordance with U.S.
U.S. net revenue increased by $521 million, or 5.0% to $10.9 billion, and net revenue from outside of the U.S. increased by $471 million, or 2.5%, to $19.2 billion.
U.S. net revenue increased by $2.5 billion, or 23.1% to $13.4 billion, and net revenue from outside of the U.S. increased by $1.7 billion, or 8.6%, to $20.9 billion.
However, on May 24, 2024, we entered into an 64 Table of Contents HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued) Amended and Restated Put Share Purchase Agreement and an Agreement on Subsequent Arrangements, both with UNIS, as described in Note 19 “Equity Interests” to the Consolidated Financial Statements in Item 8 of Part II, which, taken together, revise the arrangements governing the aforementioned sale as previously set forth in the original Put Share Purchase Agreement.
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.
We are permitted to conduct a qualitative assessment to determine whether it is necessary to perform a quantitative goodwill impairment test.
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 and our annual impairment test as of August 1, 2025.
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. 46 Table of Contents HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued) Annual Goodwill Impairment Review Our annual goodwill impairment analysis, which we performed as of the first day of the fourth quarter of fiscal 2024, did not result in any impairment charges.
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. 52 Table of Contents HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued) 2025 Interim and Annual Goodwill Impairment Reviews During fiscal 2025, we performed the following goodwill impairment tests, two of which resulted in goodwill impairment: • Impairment test performed as of November 1, 2024 based on organizational changes impacting the composition of reporting units as of that date did not result in an impairment; • Interim test performed as of April 30, 2025 due to indicators of potential impairment resulted in the Hybrid Cloud reporting unit being impaired; and • Annual impairment test, which was performed as of August 1, 2025, resulted in the Hybrid Cloud reporting unit being impaired.
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 55 Table of Contents HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued) foreign withholding tax.
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.
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 currently do not expect a material impact to our fiscal 2025 results. The Internal Revenue Service (“IRS”) is conducting audits of our fiscal 2017 through 2022 U.S. federal income tax returns.
Where enacted, the rules are effective for us in fiscal 2025. 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. There was not a material impact to our fiscal 2025 results from Pillar Two legislation.
We have experienced, and expect to continue experiencing, rising input component costs and a competitive pricing environment, which may impact our financial results. We plan to mitigate the impact of these dynamics through continued disciplined cost and pricing management.
We have experienced, and expect to continue experiencing, rising input component costs due to various factors, including but not limited to the global trade uncertainties referenced above and a competitive pricing environment, all of which may impact our financial results.
The components of the weighted net revenue change by segment were as follows: For the fiscal years ended October 31, 2024 2023 Percentage Points Server 6.4 (3.9) Hybrid Cloud (0.4) 0.9 Intelligent Edge (2.9) 5.3 Financial Services 0.1 0.5 Corporate Investments and Other 0.1 (0.1) Total segment 3.3 2.7 Elimination of intersegment net revenue and other 0.1 (0.5) Total HPE 3.4 2.2 48 Table of Contents HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued) Fiscal 2024 compared with fiscal 2023 From a segment perspective, the primary factors contributing to the change in total net revenue are summarized as follows: • Server net revenue increased $1,844 million, or 12.8%, primarily due to higher AUPs • Hybrid Cloud net revenue decreased $107 million, or 1.9%, primarily due to lower AUPs • Intelligent Edge net revenue decreased $847 million, or 15.7%, primarily due to lower volume and product mix effect • Financial Services net revenue increased $32 million, or 0.9%, primarily due to higher finance income • Corporate Investments and Other net revenue increased $29 million, or 2.9%, primarily due to revenue growth from Advisory and Professional Services (“A & PS”) Fiscal 2023 compared with fiscal 2022 From a segment perspective, the primary factors contributing to the change in total net revenue are summarized as follows: • Server net revenue decreased $1,111 million, or 7.2%, primarily due to lower server unit volume and unfavorable currency fluctuations • Hybrid Cloud net revenue increased $260 million, or 5.0%, primarily due to higher unit volume • Intelligent Edge net revenue increased $1,522 million, or 39.5%, primarily due to increased AUPs and volume and product mix effect • Financial Services net revenue increased $141 million, or 4.2%, primarily due to higher rental revenue from higher average operating leases and higher finance income on finance leases due to an increasing interest rate environment • Corporate Investments and Other net revenue decreased $27 million, or 2.7%, primarily due to unfavorable currency fluctuations Gross Profit Fiscal 2024 total gross profit margin of 32.8% represents a decrease of 2.3 percentage points as compared to the respective prior year period.
The components of the weighted net revenue change by segment were as follows: For the fiscal years ended October 31, 2025 2024 Percentage Points Server 5.4 6.3 Hybrid Cloud 0.9 (0.3) Networking 7.7 (2.9) Financial Services — 0.1 Corporate Investments and Other (0.8) 0.1 Total segment 13.2 3.3 Elimination of intersegment net revenue and other 0.6 0.1 Total HPE 13.8 3.4 Fiscal 2025 compared with fiscal 2024 From a segment perspective, the primary factors contributing to the change in total net revenue are summarized as follows: • Server net revenue increased $1,641 million, or 10.2%, primarily due to higher net AUPs • Hybrid Cloud net revenue increased $267 million, or 4.9%, primarily due to higher Hybrid Cloud service revenue • Networking net revenue increased $2,318 million, or 51.1%, primarily due to revenue attributable to Juniper Networks • Financial Services net revenue decreased $8 million, or 0.2%, primarily due to lower rental revenue on lower average operating leases • Corporate Investments and Other net revenue decreased $238 million, or 23.5%, primarily due to the divestiture of the Communications Technology Group (“CTG”) business Gross profit Fiscal 2025 total gross profit margin of 30.3% represents a decrease of 2.5 percentage points as compared to the respective prior year period.
Earnings from equity interests In fiscal 2024, Earnings from equity interests decreased by $98 million or 40%, primarily due to lower net income earned by H3C and the disposition of 30% of the total issued share capital of H3C, partially offset by lower amortization expense from basis difference in the current period.
Earnings from equity interests In fiscal 2025, Earnings from equity interests decreased by $68 million, or 46.3%, primarily due to lower earnings from our equity interest in H3C as a result of the disposition of 30% of the total issued share capital of H3C in fiscal 2024.
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 following material divestiture transactions in 2017 and in response to COVID-19 and an evolving product portfolio in fiscal 2020.
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.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

8 edited+0 added−0 removed11 unchanged
Biggest changeThe sensitivity analyses indicated that a hypothetical 10% adverse movement in interest rates would result in a loss in the fair values of our debt, debt investments and net portfolio assets, net of interest rate swaps, of $233 million and $41 million at October 31, 2024 and 2023, respectively.
Biggest changeThe sensitivity analyses indicated that a hypothetical 10% adverse movement in interest rates would result in a loss in the fair values of our debt, debt investments and net portfolio assets, net of interest rate swaps, of $261 million and $233 million at October 31, 2025 and 2024, respectively.
We have performed sensitivity analyses as of October 31, 2024 and 2023, using a modeling technique that measures the change in the fair values arising from a hypothetical 10% adverse movement in the levels of foreign currency exchange rates relative to the U.S. dollar, with all other variables held constant.
We have performed sensitivity analyses as of October 31, 2025 and 2024, using a modeling technique that measures the change in the fair values arising from a hypothetical 10% adverse movement in the levels of foreign currency exchange rates relative to the U.S. dollar, with all other variables held constant.
We have performed sensitivity analyses as of October 31, 2024 and 2023, using a modeling technique that measures the change in the fair values arising from a hypothetical 10% adverse movement in the levels of interest rates across the entire yield curve, with all other variables held constant.
We have performed sensitivity analyses as of October 31, 2025 and 2024, using a modeling technique that measures the change in the fair values arising from a hypothetical 10% adverse movement in the levels of interest rates across the entire yield curve, with all other variables held constant.
The analyses cover all of our foreign currency derivative contracts offset by underlying exposures. The foreign currency exchange rates we used in performing the sensitivity analysis were based on market rates in effect at October 31, 2024 and 2023, respectively.
The analyses cover all of our foreign currency derivative contracts offset by underlying exposures. The foreign currency exchange rates we used in performing the sensitivity analysis were based on market rates in effect at October 31, 2025 and 2024, respectively.
The analyses cover our debt, debt investments, net portfolio assets, and interest rate swaps. The analyses use actual or approximate maturities for the debt, debt investments, net portfolio assets, and interest rate swaps. The discount rates used were based on the market interest rates in effect at October 31, 2024 and 2023, respectively.
The analyses cover our debt, debt investments, net portfolio assets, and interest rate swaps. The analyses use actual or approximate maturities for the debt, debt investments, net portfolio assets, and interest rate swaps. The discount rates used were based on the market interest rates in effect at October 31, 2025 and 2024, respectively.
The sensitivity analyses indicated that a hypothetical 10% adverse movement in foreign currency exchange rates would result in a foreign exchange fair value loss of $44 million and $48 million at October 31, 2024 and 2023, respectively.
The sensitivity analyses indicated that a hypothetical 10% adverse movement in foreign currency exchange rates would result in a foreign exchange fair value loss of $53 million and $44 million at October 31, 2025 and 2024, respectively.
For more information about our debt, use of derivative instruments, forward contracts and investments, Refer to Note 1, “Overview and Summary of Significant Accounting Policies”, Note 13, “Financial Instruments”, and Note 14, “Borrowings”, of the Notes to the Consolidated Financial Statements section included in this report. 66 Table of Contents
For more information about our debt, use of derivative instruments, forward contracts and investments, Refer to Note 1, “Overview and Summary of Significant Accounting Policies,” Note 13, “Financial Instruments,” and Note 14, “Borrowings,” of the Notes to the Consolidated Financial Statements section included in this report. 72 Table of Contents
We transact business in approximately 40 currencies worldwide, of which the most significant foreign currencies to our operations for fiscal 2024 were the euro, Japanese yen, and Indian rupee.
We transact business in approximately 40 currencies worldwide, of which the most significant foreign currencies to our operations for fiscal 2025 were the euro, Japanese yen, and British pound.

Other HPE 10-K year-over-year comparisons