Hewlett Packard Enterprise Company (HPE)

Business

From the fiscal 2025 Form 10-K, accession 0001645590-25-000130.

HPE is a global enterprise technology company selling infrastructure, servers, storage, networking, together with the software, services and financing that surround them. Its stated purpose is to let customers "capture, analyze and act upon data seamlessly from edge to cloud." Customers range from small and medium businesses to large global enterprises and governments. The company traces its legacy to the partnership founded in 1939 by William R. Hewlett and David Packard, and was itself separated from HP Inc. in 2015.

Strategy. Management organizes the portfolio around three megatrends it believes are reshaping enterprise IT: networking, cloud, and AI. In networking, the stated aim is both "AI for Networks" (using AI to make networks smarter) and "Networks for AI" (building the high-throughput, low-latency fabric that AI training and inference require); the Juniper Networks acquisition is described as the move that gave HPE a full networking technology stack. In cloud, the HPE GreenLake cloud is the centerpiece, a pay-per-use, hybrid-by-design platform spanning public clouds, data centers, colocation and the edge, and the company is pushing a transition toward proprietary HPE-developed storage (Alletra) to improve margin and reduce reliance on third-party product. In AI infrastructure, the focus is sovereign and enterprise customers, leveraging the supercomputing heritage (HPE Cray EX) and turnkey systems such as HPE Private Cloud AI. The financial services business sits alongside all of this, financing customer adoption.

Segments as reported for fiscal 2025 (five-segment basis):

• Server, general-purpose and workload-optimized servers and integrated systems for high-performance computing, supercomputing (including exascale), AI, analytics and transaction processing. Brands include HPE ProLiant, Synergy, Scale Up Servers, Edgeline, Cray EX, Cray XD and NonStop, plus attached support services.
• Hybrid Cloud, storage and private cloud: the HPE Alletra Storage portfolio, unstructured data and analytics for AI, data protection and archiving, storage networking, HPE GreenLake private cloud (virtual machines, containers, bare metal), Private Cloud AI delivered as-a-service, and infrastructure software including OpsRamp observability, Ezmeral Data Fabric and Zerto disaster recovery.
• Networking, Wi-Fi and private cellular access points; QFX, EX and CX switches; MX and PTX routers; gateways; software including Mist and Aruba Central, network access control, SD-WAN, network security, analytics and assurance; professional, maintenance and support services.
• Financial Services, leasing, financing, IT consumption and utility programs and asset management, including support for GreenLake consumption models and IT asset disposition through Technology Renewal Centers.
• Corporate Investments and Other, the Advisory and Professional Services business and Hewlett Packard Labs.

How the revenue is distributed. Approximately 61% of fiscal 2025 net revenue came from sales outside the United States. Sales run through a mix of direct coverage and a large indirect channel, resellers, distributors, master area partners, OEMs, independent software vendors, systems integrators and advisory firms, with the mix differing substantially by business and region. One distributor represented approximately 10% of total net revenue in fiscal 2025, primarily within the Server and Networking segments. The product categories exceeding 10% of consolidated net revenue in fiscal 2025 were Server products and Networking products.

Manufacturing and supply. HPE relies heavily on outsourced design and contract manufacturers worldwide, with manufacturing, final assembly and other critical operations concentrated in the United States, Puerto Rico, Vietnam, Thailand, Costa Rica, Brazil, Czech Republic, Malaysia, Mexico, China, Taiwan, India, South Korea, Saudi Arabia and Singapore. Components are typically ordered against 90-to-120-day demand forecasts. Certain parts come from single-source suppliers that are single sources for the entire market, Intel and AMD for certain x86 processors, Broadcom and others for application-specific standard products, NVIDIA for GPUs.

Backlog. Management describes the overall demand pipeline as stable but AI demand as uneven, driven by the lumpiness of large deals. AI systems demand against constrained data center space continued to drive significant AI backlog, while the GPU supply/demand environment remained uneven through the transition to next-generation parts. These dynamics left inventory elevated at times during fiscal 2025.

R&D and intellectual property. R&D expenditure was $2.5 billion in fiscal 2025, $2.2 billion in fiscal 2024 and $2.3 billion in fiscal 2023. Current initiatives span next-generation compute and liquid-cooled leadership-class systems; storage and private cloud (including software-defined deployment into AWS, turnkey systems co-engineered with NVIDIA, and the HPE VM Essentials hypervisor); and a broad networking and security roadmap covering campus, branch, data center, wide-area and SASE, Wi-Fi 7 and private cellular, firewalls and AI-based network operations. Hewlett Packard Labs works on AI, networking and fabrics, security, novel accelerators, quantum computing, future system architectures and sustainability. As of October 31, 2025 the worldwide patent portfolio comprised approximately 21,000 issued and pending patents; no single patent is described as essential.

People. Approximately 67,000 team members, who completed over 721,000 online and instructor-led courses over the past year. Leadership includes President and CEO Antonio Neri; EVP and CFO Marie Myers; EVP and Chief Operating and Legal Officer John F. Schultz; and Rami Rahim, the former Juniper Networks CEO, as EVP, President and General Manager of Networking.

Competition. In servers and data center infrastructure: Dell Technologies, Super Micro Computer, Cisco Systems and Lenovo, plus local and white-box manufacturers; in high-performance infrastructure also Fujitsu and Atos. In hybrid cloud and storage: Broadcom, Cisco, Dell, IBM, NetApp, Nutanix and Pure Storage, plus public cloud vendors Amazon Web Services, Google Cloud and Microsoft Azure. In networking: Cisco, Arista Networks, Nokia, Huawei, Ciena, NVIDIA, Extreme Networks, Palo Alto Networks, Fortinet, Zscaler, Netskope, Ruckus and Ubiquiti, and network-as-a-service vendors such as Nile and Meter. In financial services: IBM Global Financing, Dell Financial Services, Cisco Capital, banks, and ITAD competitors ERI, Ingram Micro, Sage Sustainable Electronics and Sims Recycling Solutions.

The Juniper Networks acquisition. HPE completed the Juniper Networks merger on July 2, 2025, paying $40.00 per Juniper share, cash consideration of approximately $13.4 billion, funded from cash on hand, term loan drawdowns and commercial paper. Juniper's results are consolidated from July 2, 2025, which is why fiscal 2025 and the first three quarters of fiscal 2026 contain very large Networking growth rates that are acquisition-driven rather than organic. Management targets at least $600 million of cost synergies by fiscal 2028, requiring approximately $800 million of investment in headcount, supply chain optimization and portfolio rationalization. The company notes it is carrying a larger-than-normal debt balance because of the acquisition and is prioritizing de-leveraging while committing to retain its investment-grade credit rating.

Risk factors

Condensed from the fiscal 2025 Form 10-K, accession 0001645590-25-000130. The quarterly report for the period ended July 31, 2026 incorporates these risks by reference and adds no new ones beyond those in the report for the period ended April 30, 2026.

Supply chain, components and inventory. HPE depends on outsourced and contract manufacturers and on single-source suppliers for certain customized parts and for market-wide components such as processors and GPUs. It has experienced shortages and delays, higher component and logistics prices, and periods of excess or obsolete inventory from advance purchasing and from delayed or cancelled large orders. Long-term or non-cancellable purchase commitments can leave the company buying above market price. Manufacturing concentration in specific countries exposes it to trade restrictions, sanctions, natural disasters and regional conflict.

Competition and pricing. The markets are intensely competitive and consolidating, with short product cycles. HPE spreads R&D across a wide portfolio while competing against specialists with larger resources in individual lines. Price competition is aggressive; the company at times discounts heavily or declines to pass through cost increases, which has hurt results. Vertical partners can become competitors.

AI-specific exposure. AI both drives demand and creates risk. AI systems have historically been bought by a small number of large customers and cloud service providers, so orders are lumpy, intensely competed and margin-constrained; large AI orders tie up working capital and can swing quarterly results. Separately, HPE faces risk from its own development and use of AI, flawed models, ethical and reputational exposure, an unsettled legal and regulatory landscape (including the EU AI Act), and infringement claims arising from AI-generated or AI-incorporated material.

Acquisitions, divestitures and integration. The company may fail to realize expected benefits from business combinations, may fail to integrate technology, systems, controls or people, and may face litigation, impairment of acquired goodwill and intangibles, dilution or added debt. Integration of Juniper Networks specifically has required and will continue to require sustained management attention; the report notes that procedural developments in the court's Tunney Act review of the DOJ settlement could disrupt or delay integration and the realization of synergies. Divestitures may not find buyers on acceptable terms and may leave continuing financial involvement.

Cybersecurity and IT dependence. HPE stores sensitive data and has experienced security incidents and breaches, which it states have not resulted in material negative impacts. It cites nation-state and criminal actors, ransomware and DDoS, advanced persistent threats that can go undetected, zero-day vulnerabilities, generative-AI-enabled attacks and deepfakes, and the future risk quantum computing poses to existing cryptography. Third-party and supply-chain systems introduce further exposure, as does the growing as-a-service business.

Macroeconomic, geopolitical and trade. Demand depends on general economic conditions and IT spending. Tariffs, export controls, sanctions and retaliatory measures have raised costs and softened demand. Named exposures include the Russia-Ukraine conflict (HPE is executing an exit from Russia and Belarus), instability in the Middle East, and the China-U.S. relationship, where heightened trade restrictions and the enforceability and timing of contract payments are specific concerns.

Uneven sales cycles and quarter-end concentration. Long procurement and deployment cycles, a disproportionate share of sales falling late in the quarter, and seasonality make revenue, earnings, cash flow and working capital hard to forecast and put pressure on inventory and logistics.

Financial risks. Revenue, gross margin and profitability vary by product, customer and geography. Foreign currency movements affect reported results and hedges may be ineffective. The company carries substantial debt incurred to fund the Juniper merger; it holds investment-grade ratings from Moody's, S&P and Fitch, but warns a downgrade would raise borrowing costs, reduce commercial paper capacity, possibly require collateral posting, and reduce the competitiveness of the financing business. Debt service limits flexibility, capital expenditure, dividends and repurchases. Dividend declaration and amount are uncertain; no common dividend may be paid unless all accumulated preferred dividends have been paid.

Legal, regulatory and tax. Litigation and investigations are ongoing and inherently unpredictable. Patent assertion entities are active in the industry, and acquisitions raise infringement exposure because of reduced visibility into acquired technology. Government contracts carry termination, funding, scope and procurement-policy risk, and the report specifically cites U.S. federal spending and workforce reductions producing contract terminations, delays and reduced scope. Tax exposures include intercompany transfer pricing audits, changes in tax law, and the OECD Pillar Two 15% global minimum tax.

Prior separations. HPE continues to face risk from its separation from HP Inc., including ongoing indemnification obligations and shared use of certain intellectual property rights.

Other named risks. Failure to attract and retain key personnel; failure to realize the cost reduction program's savings; dependence on third-party licensed technology and open source terms; reliance on its own and third parties' business systems; product quality and warranty exposure; sustainability ("Living Progress") commitments and the conflicting regulatory expectations around them; and stock price volatility.

Management's discussion, fiscal 2025

From the fiscal 2025 Form 10-K, accession 0001645590-25-000130. Segment figures here are on the five-segment basis.

Headline. Net revenue of $34.3 billion rose 13.8%, driven primarily by Networking revenue from the Juniper merger and higher average unit prices in Server. But gross margin fell 2.5 percentage points to 30.3% ($10.4 billion) on higher cost of sales in Server, Networking and Hybrid Cloud, and the operating margin fell 8.6 percentage points to negative 1.3%, an operating loss for the year, which management attributes primarily to the goodwill impairment and to costs associated with the merger. U.S. revenue grew 23.1% to $13.4 billion; revenue outside the U.S. grew 8.6% to $20.9 billion.

By segment (fiscal 2025 vs. fiscal 2024):

• Server revenue +$1,641 million (+10.2%), on product revenue +$1,691 million (+13.3%): higher net average unit prices contributed +$2,556 million (+20.1%), partly offset by a $827 million (-6.5%) decline in net unit volume. Gross profit fell $337 million (-8.3%) as cost of sales rose $1,978 million (+16.4%) on input cost increases and a higher mix of lower-margin product. Earnings from operations fell $461 million (-25.6%).
• Hybrid Cloud revenue +$267 million (+4.9%), on service revenue +$285 million (+11.7%) from private cloud; product revenue was roughly flat. Gross profit fell $55 million (-2.5%) as product cost rose through the transition to the software-defined Alletra platform. Earnings from operations rose $76 million (+29.3%) on a $131 million (-6.8%) reduction in operating expenses from software capitalization and cost containment.
• Networking revenue +$2,318 million (+51.1%): product +$1,444 million (+43.2%), of which Juniper contributed $1,367 million; service +$874 million (+73.6%), of which Juniper contributed $729 million and as-a-service offerings $144 million. Gross profit +$1,268 million (+44.9%); earnings from operations +$481 million (+43.1%) after a $787 million (+46.0%) increase in operating expenses attributable mainly to Juniper.
• Financial Services revenue -$8 million (-0.2%) on lower rental revenue, largely offset by higher finance income and remarketing revenue; earnings from operations +$45 million (+14.2%). Financing volume declined 17.2%. Net portfolio assets fell 3.0% as runoff exceeded new volume. Net bad debt expense was $96 million, versus $57 million in fiscal 2024.
• Corporate Investments and Other revenue -$238 million (-23.5%), driven by the divestiture of the Communications Technology Group business effective December 1, 2024.

Operating expense and below-the-line items. R&D rose $272 million (+12.1%), with Juniper contributing 17.3 points offset by 8.6 points from a higher mix of capitalized versus expensed investment. SG&A rose $833 million (+17.1%), Juniper and higher employee costs contributed 14.1 points, cost reduction program expense 3.1 points. Amortization of intangibles rose $244 million (+91%) on acquired Juniper intangibles. Acquisition, disposition and other charges rose $247 million (+117.1%), primarily the merger. Interest and other, net expense rose $58 million (+49.6%) on a $122 million higher loss on equity investments and $114 million higher net interest, partly offset by a $104 million higher non-service pension credit and a $52 million gain from the settlement resolving claims against Sushovan Hussain in the Autonomy litigation. The CTG disposition on December 1, 2024 produced net proceeds of $210 million and a gain of $248 million.

The impairment. This is the central fact of fiscal 2025's GAAP loss. HPE recorded $1.6 billion of goodwill impairment and impairment of certain fixed assets, all tied to the Hybrid Cloud reporting unit, across two tests:

• An interim test at April 30, 2025, triggered by what management describes as a rapid deterioration in the macroeconomic environment, the announcement and subsequent modification of international tariffs, escalating trade tensions and geopolitical uncertainty, which moved the inputs to the weighted-average cost of capital. The decline in Hybrid Cloud's fair value was driven primarily by the higher discount rate, and carrying value exceeded fair value by $1.4 billion, recorded as a goodwill impairment in the second quarter.
• The annual test at August 1, 2025, where the decline was driven primarily by a strategic shift away from the non-IP storage business, producing a further $0.2 billion goodwill impairment in the fourth quarter.

After the impairment, Hybrid Cloud retained $3.3 billion of goodwill with zero percent excess of fair value over carrying value at the annual test date, and the Server reporting unit had $10.2 billion of goodwill with an 11% excess. A hypothetical 10% decrease in fair value would leave every reporting unit above carrying value except Server and Hybrid Cloud. Management explicitly flags that worsening macro conditions, lower projected growth or margins, a higher cost of capital or a sustained share-price decline could produce further impairment in those two units.

Taxes. Fiscal 2025 produced an income tax benefit of $342 million against a pretax loss, an effective rate of 120.0% (fiscal 2024: $374 million expense, 12.7%), distorted by the non-deductible goodwill impairment. Discrete net benefits of $693 million included $402 million related to merger costs (inclusive of a $327 million benefit from integration transactions), $76 million from state valuation allowance releases, $61 million from statute expirations and $55 million tied to the cost reduction program. The IRS audit of fiscal 2017–2019 was effectively settled, reducing unrecognized tax benefits by approximately $340 million with no material earnings impact.

Cost actions. The board approved a cost reduction program on March 6, 2025 intended to deliver approximately $350 million of gross savings by fiscal 2027 through workforce reductions, to be implemented through fiscal 2026; it has since been folded into "Catalyst," a broader company-wide efficiency effort. Charges of $275 million were incurred in fiscal 2025. Combined with the Juniper synergy plan, the company expected approximately $1.1 billion of future cash payments related to cost savings plans as of October 31, 2025.

Liquidity. Cash, cash equivalents and restricted cash fell $9.2 billion during fiscal 2025 to $5.9 billion, from $15.1 billion. Investing outflows rose $13.1 billion, dominated by the $12.3 billion net payment for the merger (and the absence of $2.1 billion of prior-year H3C sale proceeds), moderated by $0.9 billion higher proceeds from available-for-sale securities and $0.2 billion from the CTG divestiture. Financing inflows fell $5.2 billion. Free cash flow declined $1.3 billion on lower operating cash. Fiscal 2025 debt activity included assuming $1.7 billion of Juniper senior notes, drawing $3.0 billion and $1.0 billion under the three-year and 364-day delayed-draw term loans, issuing $2.9 billion of senior notes in September 2025 and $660 million and $900 million of asset-backed securities, against redemption of $2.5 billion of 4.900% notes, repayment of the entire 364-day term loan, a $1 billion prepayment on the three-year term loan and $1.5 billion of asset-backed repayments. Future principal payments on long-term debt totaled $21.7 billion at year end, $3.8 billion due within one year, with estimated future interest of approximately $8.1 billion. HPE repurchased $202 million of stock during fiscal 2025, leaving approximately $3.6 billion authorized. Annualized revenue run-rate for as-a-service offerings grew 63% year over year, primarily from Networking following the merger.

Current quarter, third quarter of fiscal 2026 (ended July 31, 2026)

From the Form 10-Q for the quarter ended July 31, 2026, accession 0001645590-26-000080. Segment figures here are on the three-segment basis, with prior periods recast.

The turn. Net revenue of $12.2 billion rose 33.7%, an increase of $3.1 billion, which management attributes primarily to a higher average selling price in Cloud & AI and to Networking revenue from the merger. Gross margin of 40.1% ($4.9 billion) was 10.9 percentage points above the prior-year quarter, and the operating margin of 11.4% was 8.7 points higher, management ties the operating margin expansion to the gross margin improvement, and the gross margin improvement to the favorable mix of higher-margin revenue in Cloud & AI and Networking and to the Juniper acquisition. U.S. revenue rose 11.9% to $4.8 billion; revenue outside the U.S. rose 52.9% to $7.4 billion. Diluted EPS was $1.06, against $0.21 a year earlier.

For the nine months, revenue of $32.2 billion rose 30.8%, gross margin of 37.7% rose 8.7 points, and the operating margin of 8.1% rose 9.8 points, the prior-year nine-month period carried the $1.4 billion goodwill impairment, recorded against what is now the Cloud & AI (excluding Financial Services) reporting unit. Nine-month diluted EPS was $1.82 against a $(0.16) loss.

Segment results for the quarter (prior-year quarter in parentheses):

• Networking revenue rose $1,239 million (+74.9%), product +$803 million (+68.4%) and service +$436 million (+90.8%), led by Juniper. Gross profit rose $728 million (+73.3%); operating expenses rose $456 million (+72.6%), leaving segment earnings +$272 million (+74.5%). For the nine months, Networking revenue more than doubled, up $4,475 million (+117.3%).
• Cloud & AI revenue rose $1.8 billion (+25.4%), driven by Server revenue up $1.8 billion (+35.3%) predominantly on higher average selling price, which management attributes to commodity price increases, especially memory and SSDs. Gross profit rose $1.5 billion (+89.8%) on favorable mix; operating expenses rose $0.5 billion (+40.2%) on higher variable employee costs; segment earnings rose $1.0 billion (+205.4%).

Operating expenses and below the line. R&D rose $536 million (+86.2%) and SG&A $466 million (+31.1%), both on Juniper operating expenses and higher variable employee costs. Amortization of intangibles rose $189 million (+150.0%) on acquired Juniper intangibles. Acquisition, disposition and other charges fell $110 million (-60.8%) against a prior year that carried heavier merger costs; merger-related acquisition costs were $69 million in the quarter and $300 million for the nine months. Interest and other, net expense rose $83 million, from $51 million of higher net interest and the absence of the prior-year $52 million Autonomy settlement gain. The completed exit from H3C Technologies Co., Limited, the China-based joint venture in which HPE had held a 49% equity-method stake and had been selling down in stages since 2024, the last shares going in May 2026, produced a $444 million gain on sale of equity interest recorded in the quarter. Income tax expense was $222 million, a 12.6% effective rate, against a $17 million benefit and a negative 6.5% rate a year earlier.

Tax matters in progress. The IRS is auditing fiscal 2020 through 2022 and issued notices of proposed adjustment on intercompany transfer pricing in the first quarter of fiscal 2026. HPE submitted a formal settlement offer in the second quarter and recorded a $318 million increase in reserves for unrecognized tax benefits, almost entirely offset by a valuation allowance release, so the net nine-month income tax effect was not material. The audit may conclude within twelve months, and existing unrecognized tax benefits for those years may fall by up to $366 million, mostly offset by foreign tax credit adjustments carrying a full valuation allowance.

The memory and SSD squeeze. The most important operating condition described in the quarter is a worldwide shortage in memory components that began affecting the semiconductor industry during fiscal 2026, driven by accelerating AI demand, rapid AI data center expansion and compute refresh cycles. HPE expects these constraints to persist in the medium term until memory vendors shift production allocation toward the high-performance parts AI workloads require. This cuts both ways in the results: rising commodity costs are what lifted Server average selling prices and revenue, and the company is also securing memory and SSDs in advance, which it expects may further increase inventory in the medium term. Days of supply in inventory reached 145 at July 31, 2026 against 89 at October 31, 2025, while days of purchases outstanding in payables widened to 169 from 108, leaving the cash conversion cycle at 22 days versus 30. Unconditional purchase obligations stood at $30.4 billion as of July 31, 2026, of which $4.2 billion is due within fiscal 2026, against $3.3 billion disclosed at the prior fiscal year end, October 31, 2025.

Tariffs. On February 20, 2026 the United States Supreme Court struck down certain tariffs previously imposed under the International Emergency Economic Powers Act. HPE received certain tariff refunds during the quarter and has applied for more, but states the amounts are not and are not expected to be material. Following the decision the U.S. administration announced its intention to invoke other laws to collect tariffs and announced new tariffs on imports from all countries, leaving substantial uncertainty.

Cash and balance sheet. Nine-month operating cash flow was $4,229 million, against $454 million a year earlier, an increase of $3.8 billion that management attributes to the timing of vendor payments and higher cash generated from operations. Nine-month free cash flow was $2,581 million against negative $934 million. Cash, cash equivalents and restricted cash were $6,278 million at July 31, 2026, up from $5,859 million at October 31, 2025. Total debt fell to $20,244 million from $22,365 million. Investing outflows fell $13.4 billion year over year, reflecting the prior-year $12.3 billion Juniper payment and $1.4 billion of current-period H3C proceeds; financing outflows rose $6.3 billion on $3.0 billion higher debt repayment, $2.8 billion lower debt proceeds and $0.5 billion more spent on stock-based award activity and repurchases. The company prepaid $1.25 billion of the three-year delayed-draw term loan in March 2026 and repaid the remaining $0.75 billion in May 2026, retiring that facility; it also repaid $750 million of 1.75% senior notes at maturity in April 2026, $400 million of 1.20% Juniper global notes at maturity in December 2025, and $929 million of asset-backed securities. HPE repurchased and settled $447 million of stock in the first nine months, leaving approximately $3.2 billion authorized.

Cost actions. Cost reduction program charges were $31 million in the quarter and $84 million for the nine months (prior year: $2 million and $148 million). As of July 31, 2026 HPE expected approximately $630 million of future cash payments under its cost savings plans, $30 million through the remainder of fiscal 2026 and $600 million thereafter.

Oracle collaboration. On July 2, 2026 HPE issued a warrant to Oracle Corp. to purchase up to 4,156,466 shares of HPE common stock at an exercise price of $0.01 per share, issued in connection with Oracle entering a strategic collaboration to deploy HPE's networking solutions in Oracle's AI data centers. The warrant vests in tranches on the achievement of specific milestones relating to purchases of HPE products and support by Oracle and its affiliates, and is exercisable through June 25, 2029.

Juniper antitrust settlement obligations. Under the June 2025 stipulation with the U.S. Department of Justice that permitted the merger to close, HPE agreed to divest its global Instant On campus and branch business and to grant up to two licenses to the Mist AIOps source code, with licensees determined by auction. Instant On remains within the Corporate Investments and Other segment in this report. The Attorneys General of twelve states and the District of Columbia intervened in the court's Tunney Act review; their motion to halt further integration was denied in January 2026, and the Tunney Act hearing was held on March 23, 2026.

Autonomy judgment. On March 24, 2026 the U.K. High Court entered a total judgment against the Lynch Estate of approximately $1.24 billion including interest and currency effects, reflecting an approximately $145 million offset for amounts previously recovered and excluding attorneys' fees still to be determined. The court rejected the Estate's request for permission to appeal; the Estate applied to the Court of Appeal on April 14, 2026. Under the 2015 separation agreement, HP Inc. and HPE share equally in any recovery.

India customs. On June 29, 2026 the Bangalore Customs Tribunal overturned several significant duty, interest, penalty and confiscation findings against HP India and eliminated all individual penalties. Revised amounts will be set by a damage ruling from the Customs Authority. HPE is financially responsible for 43% of HP India's liability in this matter under the 2015 separation agreement.

Subsequent events

Events occurring after the July 31, 2026 quarter end, as disclosed in the Form 10-Q for that quarter, accession 0001645590-26-000080.

• Telco Solutions divestiture completed, August 1, 2026. HPE completed the sale of its Telco Solutions business to HCLTech, pursuant to the divestiture agreement announced on December 18, 2025. The report does not disclose the consideration received or a gain or loss on the sale. Telco Solutions had been reported within the Corporate Investments and Other segment; $40 million of goodwill was reclassified to assets held for sale and reported in other current assets on the July 31, 2026 balance sheet.
• Juniper antitrust settlement approved, August 12, 2026. The court issued its ruling finding the settlement between HPE and the Department of Justice to be in the public interest and granting the motion for entry of final judgment, concluding the Tunney Act review that the Attorneys General of twelve states and the District of Columbia had intervened in.
• Autonomy appeal largely refused, August 25, 2026. The U.K. Court of Appeal denied the Lynch Estate permission to appeal on fourteen of the eighteen issues it raised. The issues on which appeal will go forward relate primarily to the calculation of the damages awarded by the U.K. High Court and to the currency in which damages will be awarded.
• Dividends declared, September 2, 2026. HPE declared a regular cash dividend of $0.1425 per share of common stock, payable on or about October 16, 2026 to holders of record as of September 17, 2026. It also declared a cash dividend of $0.953125 per share on the 7.625% Series C Mandatory Convertible Preferred Stock, paid September 1, 2026 to holders of record as of August 15, 2026.
• India customs damage ruling pending. The Customs Authority ruling that will determine revised duty, interest and penalty amounts following the June 29, 2026 Tribunal orders is expected no earlier than September 2026 and could be issued significantly later. The India Directorate of Revenue Intelligence is expected to appeal the 2026 orders to the India Supreme Court, and HP India has filed its own appeal.
• Pension funding. HPE anticipates contributing approximately $67 million to its non-U.S. pension plans over the remainder of fiscal 2026.

Filings that contain financial statements

• 8-K filed December 4, 2025 (accession 0001645590-25-000126), Exhibit 99.1 furnishes HPE's fiscal 2025 fourth-quarter and full-year results: condensed consolidated statements of earnings (three months and year ended October 31, 2025, with October 31, 2024 comparatives), balance sheet as of October 31, 2025, statement of cash flows for the year, and segment detail.
• 8-K filed March 9, 2026 (accession 0001645590-26-000028), Exhibit 99.1 furnishes fiscal 2026 first-quarter results: statements of earnings for the quarter ended January 31, 2026 (with October 31, 2025 and January 31, 2025 comparatives), balance sheet as of January 31, 2026, cash flow statement, and segment detail reflecting the new Networking / Cloud & AI / Corporate Investments and Other segment structure adopted for fiscal 2026.
• 8-K filed June 1, 2026 (accession 0001645590-26-000052), Exhibit 99.1 furnishes fiscal 2026 second-quarter results: statements of earnings for the three and six months ended April 30, 2026, balance sheet as of April 30, 2026, cash flow statement for the six-month period, and segment detail.
• 8-K filed September 2, 2026 (accession 0001645590-26-000078), Exhibit 99.1 furnishes fiscal 2026 third-quarter results: statements of earnings for the three and nine months ended July 31, 2026, balance sheet as of July 31, 2026, cash flow statement for the nine-month period, and segment detail.

Earnings and guidance

Q4 and full-year fiscal 2025 (quarter ended October 31, 2025), reported December 4, 2025, accession 0001645590-25-000126. Revenue was $9.7 billion, up 14% year over year, a record quarter; full-year revenue was $34.3 billion. GAAP diluted EPS was $0.11 for the quarter and a loss of $0.04 for the full year (full-year GAAP results included $1.6 billion of impairment charges); non-GAAP diluted EPS was $0.62 for the quarter, above the outlook range. HPE raised its fiscal 2026 full-year guidance, including diluted GAAP EPS to $0.62–$0.82, non-GAAP diluted EPS to $2.25–$2.45, and free cash flow guidance to $1.7–$2.0 billion.

Q1 fiscal 2026 (quarter ended January 31, 2026), reported March 9, 2026, accession 0001645590-26-000028. Revenue was $9.3 billion, up 18% year over year. GAAP diluted EPS was $0.31; non-GAAP diluted EPS was $0.65, above the outlook range. Networking revenue (now combining the former Intelligent Edge segment with Juniper Networks) grew 151.5% year over year. HPE raised full-year fiscal 2026 GAAP diluted EPS guidance to $1.02–$1.22 and non-GAAP diluted EPS guidance to $2.30–$2.50, and raised free cash flow guidance to at least $2.0 billion. Beginning this quarter, HPE realigned its reportable segments into Networking, Cloud & AI (combining the former Server, Hybrid Cloud and Financial Services segments), and Corporate Investments and Other.

Q2 fiscal 2026 (quarter ended April 30, 2026), reported June 1, 2026, accession 0001645590-26-000052. Revenue was $10.7 billion, up 40% year over year, a record quarter. GAAP diluted EPS was $0.44; non-GAAP diluted EPS was $0.79, above the outlook range. HPE raised full-year fiscal 2026 guidance sharply: GAAP diluted EPS to $2.42–$2.52, non-GAAP diluted EPS to $3.35–$3.45, and free cash flow to at least $3.5 billion, a level the company said exceeded what it had projected achieving by fiscal 2028 at its October 2025 Securities Analyst Meeting. HPE also introduced an initial fiscal 2027 growth framework (revenue growth of 8%–12%, non-GAAP diluted EPS growth of 12%–16%, free cash flow of at least $4.5 billion).

Q3 fiscal 2026 (quarter ended July 31, 2026), reported September 2, 2026, accession 0001645590-26-000078. Revenue was $12.2 billion, up 34% year over year, a record quarter, with GAAP operating profit up 464% and non-GAAP operating profit up 155% year over year. GAAP diluted EPS was $1.06; non-GAAP diluted EPS was $1.11, both above the outlook range. Results included a $444 million gain on sale of equity interest tied to the completed H3C divestiture. HPE again raised full-year fiscal 2026 guidance (GAAP diluted EPS to $2.93–$3.03, non-GAAP diluted EPS to $3.75–$3.85, free cash flow to at least $3.75 billion) and raised its fiscal 2027 growth framework (revenue growth to 13%–17%, non-GAAP diluted EPS growth to 16%–20%, free cash flow of at least $5.0 billion). Management said it plans to return at least 75% of free cash flow to shareholders in the fiscal fourth quarter.

Each quarterly earnings release also announced a regular common dividend of $0.1425 per share (the fourth such declaration in fiscal 2026), and HPE's board separately declared cash dividends on the 7.625% Series C Mandatory Convertible Preferred Stock on a quarterly cadence (accessions 0001645590-26-000006, -000040, and -000074, dated February 4, May 4, and August 4, 2026, respectively).

H3C divestiture

HPE fully exited its equity stake in H3C Technologies Co., Limited between November 2025 and May 2026, completing a multi-year divestiture:

• November 17, 2025 (accession 0001645590-25-000121): H3C Holdings Limited, an HPE subsidiary, signed share purchase agreements to sell an aggregate 10% of H3C's issued share capital to five China-based counterparties (including Unisplendour International Technology Limited, "UNIS") for approximately $714 million, plus a side letter amending prior arrangements with UNIS.
• November 28, 2025 (accession 0001645590-25-000123): H3C Holdings signed additional share purchase agreements to sell a further 9% of H3C's issued share capital to three counterparties for approximately $643 million.
• May 13, 2026 (accession 0001645590-26-000045): HPE closed on the sale of 13.8% of H3C's issued share capital to the counterparties named above for approximately $986.8 million, executing the agreements signed in November 2025.
• June 1, 2026 (accession 0001645590-26-000052): HPE disclosed it closed on May 28, 2026 on the sale of the remaining 5.2% of H3C's issued share capital to UNIS for approximately $370.4 million, completing the divestiture. HPE said it received total pretax consideration of approximately $3.5 billion for its H3C stake since announcing its intention to exit the joint venture. The Q3 fiscal 2026 earnings release (accession 0001645590-26-000078) reflects a $444 million gain on sale of equity interest related to this completed transaction.

Capital markets: senior notes offering

• March 16, 2026 (accession 0001140361-26-010222): HPE launched and priced an underwritten public offering of $2.0 billion in aggregate principal amount of senior unsecured notes, in four tranches: $300 million of Floating Rate Notes due 2028, $500 million of 4.500% Notes due 2028, $600 million of 4.600% Notes due 2029, and $600 million of 5.250% Notes due 2033. The underwriters were Barclays Capital, BofA Securities, SG Americas Securities, and Wells Fargo Securities.
• March 23, 2026 (accession 0001140361-26-010765): HPE completed the notes offering, issuing all four tranches under supplemental indentures to its existing 2015 senior indenture with The Bank of New York Mellon Trust Company, N.A. as trustee.

Board, management and governance

• February 3, 2026 (accession 0001645590-26-000010): Director Raymond E. Ozzie notified the board he does not intend to seek re-election at the 2026 annual meeting; his term ended when it expired at that meeting.
• April 1, 2026 (accession 0001645590-26-000036): At its 2026 annual meeting, HPE stockholders elected 12 directors, ratified Ernst & Young LLP as auditor for fiscal 2026, approved Amendment No. 5 to the 2021 Stock Incentive Plan (increasing shares reserved for issuance by 22 million), approved an advisory vote on executive compensation, and voted down (by a wide margin) a stockholder proposal on discrimination in charitable support.
• May 29, 2026 (disclosed in the June 1, 2026 8-K, accession 0001645590-26-000052): HPE and Elliott Investment Management amended their July 2025 cooperation agreement to cap the board at 14 directors through the 2027 annual meeting. Concurrently, pursuant to that cooperation agreement, the board appointed Christopher P. Hsu, a Partner at Elliott, as a director, effective immediately.
• July 24, 2026 (accession 0001645590-26-000072): HPE appointed David I. Goulden, former CFO of Booking Holdings Inc. and a former senior HPE/EMC executive, to the board, effective that day.

Material developments without a standalone 8-K

• Juniper Networks acquisition, integration and antitrust resolution. The acquisition (completed July 2, 2025, for approximately $13.4 billion) has no standalone 8-K disclosing fiscal 2026 developments; they are disclosed in the Q3 fiscal 2026 10-Q (accession 0001645590-26-000080), which describes ongoing integration, including a target of at least $600 million in cost synergies by fiscal 2028 and repayment of the related delayed-draw term loan financing in March and May 2026, and the status of the Department of Justice's antitrust challenge to the merger. Following a January 8, 2026 hearing, the court denied a group of state attorneys general's motion to hold HPE and Juniper separate pending review, allowing further integration to proceed; a Tunney Act hearing on the proposed settlement with the DOJ was held March 23, 2026; and on August 12, 2026 the court ruled the settlement to be in the public interest and granted entry of final judgment.
• Telco Solutions divestiture, completed. HPE announced plans to divest its Telco Solutions business (part of the Corporate Investments and Other segment) to HCLTech on December 18, 2025, and completed the sale on August 1, 2026. Neither transaction was reported in a standalone 8-K; both dates are disclosed in Note 7 to the Q3 fiscal 2026 10-Q (accession 0001645590-26-000080), corroborated by the FY2025 10-K's disclosure of the pending divestiture (accession 0001645590-25-000130). The consideration and any gain or loss on the sale are not disclosed; the only related figure reported is $40 million of goodwill reclassified to assets held for sale.

About this file

HPE annual income statement, balance sheet and cash flow

Taken from the SEC filings and normalized to actual dollars.

HPE quarterly income statement, balance sheet and cash flow

Taken from the SEC filings and normalized to actual dollars.

HPE year-to-date income statement and cash flow

Taken from the SEC filings and normalized to actual dollars.

HPE trailing twelve month income statement and cash flow

Derived by AI from the figures the filings report. No filing prints these, so none of them is linked.

• Derivation. fiscal 2025 as reported in the FY2025 10-K, plus the nine months ended July 31, 2026, less the nine months ended July 31, 2025, both as reported in the Q3 FY2026 10-Q

Adjustments

Prior year to date

Taken from the SEC filings and normalized to actual dollars.

Notes

• Schema: the standard industrial/technology template (revenue, cost of revenue, gross profit, operating income, net earnings, per-share amounts; cash, debt, assets and equity; operating cash flow, capital expenditures and free cash flow). Hewlett Packard Enterprise is a technology hardware, software and services company, so this is the frame that makes it legible; segment revenue and segment operating earnings are carried alongside because the business is managed and discussed by segment.
• Periods presented here are exactly the ones these two filings print. The FY2025 10-K (accession 0001645590-25-000130) presents fiscal 2025, 2024 and 2023 statements of earnings and cash flows and balance sheets as of October 31, 2025 and 2024; the Q3 FY2026 10-Q (accession 0001645590-26-000080) presents the three and nine months ended July 31, 2026 and 2025 and a balance sheet as of July 31, 2026.
• Hewlett Packard Enterprise's fiscal year ends October 31, so FY2025 runs from November 1, 2024 to October 31, 2025 and the third quarter of fiscal 2026 runs from May 1, 2026 to July 31, 2026.
• Gross profit and total cost of revenue: the statements of earnings do not print a gross profit subtotal. Total cost of revenue here is cost of products plus cost of services plus financing cost, and gross profit is total net revenue less that sum, the same computation the company uses for the GAAP gross profit it reports in its quarterly earnings releases. The results tie to the releases exactly: $4,899 million for the third quarter of fiscal 2026 and $2,672 million a year earlier (accession 0001645590-26-000078), and $10,377 million for fiscal 2025 and $9,878 million for fiscal 2024 (accession 0001645590-25-000126). Fiscal 2023 gross profit of $10,239 million is the same computation applied to the fiscal 2023 column of the FY2025 10-K.
• Discrete three-month cash flow: the Q3 FY2026 10-Q presents cash flow statements for the nine-month periods only. The operating cash flow, capital expenditures and free cash flow shown for the third quarter of fiscal 2026 and for the third quarter of fiscal 2025 therefore come from the results tables of the earnings release furnished with the 8-K dated September 2, 2026 (accession 0001645590-26-000078), which prints those three-month columns. Each quarter records that accession alongside its cash flow block.
• Two free cash flow figures are carried. free_cash_flow is operating cash flow less capital expenditures. company_reported_free_cash_flow is the measure the company itself publishes, which also adds proceeds from the sale of property, plant and equipment and the effect of exchange rate changes on cash; it is a non-GAAP measure taken from the earnings releases (accessions 0001645590-26-000078 and 0001645590-25-000126).
• Diluted earnings per share: the company has 7.625% Series C mandatory convertible preferred stock outstanding, and when that stock is dilutive the diluted per-share calculation adds the preferred dividends back to the numerator under the if-converted method. net_income_attributable_to_common_stockholders is the basic numerator (net earnings less preferred dividends) and net_income_available_to_common_stockholders is the diluted numerator the company prints in its earnings-per-share note. For fiscal 2025 and for the nine months ended July 31, 2025 the preferred stock and employee stock plans were anti-dilutive, so the two numerators are the same.
• Fiscal 2023 has no balance sheet here: the FY2025 10-K presents balance sheets as of October 31, 2025 and 2024 only. The third quarter of fiscal 2025 has no balance sheet either, because the Q3 FY2026 10-Q's comparative balance sheet column is October 31, 2025, not July 31, 2025.
• Total liabilities is not printed as a subtotal on either balance sheet; total_liabilities_derived is the sum of total current liabilities, long-term debt and other non-current liabilities, and equals total assets less total stockholders' equity. total_debt is notes payable and short-term borrowings plus long-term debt.
• Sign conventions: amounts that are cash outflows, capital expenditures, share repurchases and dividends paid, are stated as positive amounts. Net cash flow subtotals, the income tax line and the net loss from operations keep the sign the statement prints, so a tax provision and a loss appear as negative figures.
• Segments were realigned effective at the beginning of the first quarter of fiscal 2026: the Server, Hybrid Cloud and Financial Services segments were merged into a new Cloud & AI segment, and the Telco and Instant On businesses moved from Networking to Corporate Investments and Other. The annual periods therefore carry the five segments the FY2025 10-K reports (Server, Hybrid Cloud, Networking, Financial Services, Corporate Investments and Other) and the fiscal 2026 quarters and nine-month periods carry the three segments the 10-Q reports (Networking, Cloud & AI, Corporate Investments and Other), with the fiscal 2025 quarter and nine months recast onto the new structure by the company. Segment figures are not comparable across that boundary.
• Two things shape fiscal 2025. The Juniper Networks merger closed on July 2, 2025: cash paid for business acquisitions was $12,278 million, goodwill rose to $23,770 million from $18,086 million and intangible assets, net, to $6,368 million from $510 million. Separately, the company recorded $1,621 million of impairment charges during the year, goodwill of the Hybrid Cloud reporting unit, $1.4 billion in the second quarter and $0.2 billion in the fourth, together with certain fixed assets, which the 10-K attributes primarily to an increase in the discount rate used in the valuation and a strategic shift away from the Non-IP storage business. Fiscal 2025 revenue of $34,296 million is the highest of the three years these statements present, while the year shows a $437 million loss from operations and a $59 million net loss attributable to common stockholders.
• The trailing twelve months ended July 31, 2026 is derived, not filed: fiscal 2025 plus the nine months ended July 31, 2026 less the nine months ended July 31, 2025. It is given for revenue, gross profit, operating income, pretax income, net earnings and the main cash flow lines only; no per-share amount is shown for it, because the weighted share counts of the three component periods cannot be added.
• The FY2025 10-K balance sheet prints taxes on earnings and assets/liabilities held for sale as separate lines; the 10-Q folds taxes on earnings into other accrued liabilities (for October 31, 2025 the 10-Q shows $5,074 million where the 10-K shows $4,755 million of other accrued liabilities plus $319 million of taxes on earnings). The annual periods follow the 10-K's presentation and the July 31, 2026 balance sheet follows the 10-Q's.

Uncertainties

• The discrete three-month cash flow figures for the third quarter of fiscal 2026 and the third quarter of fiscal 2025 are taken from an earnings release furnished with an 8-K (accession 0001645590-26-000078), not from a 10-Q. The 10-Q itself prints nine-month cash flows only, and no 10-Q column can confirm these three-month amounts.
• No discrete three-month figures are available for the other cash flow lines (depreciation and amortization, investing and financing totals, dividends paid, share repurchases), so the quarters carry operating cash flow, capital expenditures, proceeds from property sales and free cash flow only.
• Fiscal 2023 gross profit and total cost of revenue are computed from the fiscal 2023 column of the FY2025 10-K using the company's own definition. Unlike fiscal 2024 and fiscal 2025, there is no published gross profit figure for fiscal 2023 among these filings to check the result against.
• The trailing-twelve-month view is an arithmetic combination of three filed periods and is not a period the company reports.
• The company-reported free cash flow figure for fiscal 2023 is not given: the earnings releases available here cover fiscal 2025, fiscal 2024 and the fiscal 2026 quarters.

Company details

Fiscal period

Source filings