Hewlett Packard Enterprise Company · NYSE:HPE
Hewlett Packard Enterprise — Q3 2024 Earnings Presentation
42 slides from Hewlett Packard Enterprise's earnings presentation, Sep 4, 2024
Slide 1: HPE Q3 FY24 Earnings Announcement
Slide 2: Forward-looking statements
Forward-looking statements This presentation contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements involve risks, uncertainties, and assumptions. If the risks or uncertainties ever materialize or
Slide 3: Use of non-GAAP financial information
Use of non-GAAP financial information HPE’s management uses net revenue on a constant currency basis, including at the business segment level as more than half of HPE's revenue is generated outside of the U.S., non-GAAP gross profit, non-GAAP gross profit margin, non-GAAP operating profit, non-GAAP
Slide 4: Accelerating AI demand drives HPE revenue growth; profit increases
Accelerating Al demand drives HPE revenue growth; profit increases Financial Performance * Net revenue of $7.7 billion, up 10% Y/Y driven by Al systems revenue increase of 39% Q/Q, to $1.3 billion * Achieved 7% non-GAAP opex? reduction Y/Y with sequential non-GAAP operating profit expansion through
Slide 5: Delivering on our HPE Strategy
Delivering on our HPE Strategy HPE GreenLake Cloud <> Aruba Central (Networking Ops) | Morpheus (DevOps) | OpsRamp (ITOps) | Al Ops | Security | Marketplace (Data Protection Ops) | Sustainability Insight Center (GreenOps)| Consumption Analytics (FinOps) e HPE Hybrid Cloud <> HPE Al HPE ProLiant Serv
Slide 6: Accelerating AI innovation across our portfolio
Accelerating Al innovation across our portfolio y Generated strong response to new HPE Private Cloud Al, an offering within the NVIDIA Al Further expanding NVIDIA partnership by integrating NVIDIA NIM Agent Blueprints into HPE Strengthened HPE Aruba Networking cyber defenses with new Al-powered netw
Slide 7: NVIDIA AI Computing by HPE
NVIDIA Al Computing by HPE HPE Private Cloud Al ce Peto zi] r cccaet SS a eee = —— Lsieai-eied bart fet fesse - EET * Small * Medium * [——{" Large af * Extra Large Inferencing i Inferencing + RAG Inferencing + RAG +Fine Tuning Inferencing + RAG +Fine Tuning 4 or 8 NVIDIA L40S GPUs 30 TB to 248 TB 8
Slide 8: AI Models
Al Models Al Software Al Infrastructure Al Services Small NVIDIA Al Computing by HPE HPE Private Cloud Al HPE GreenLake Cloud Community + Partner + Custom Setup, inventory, IT and NVIDIA NIM | NIM Agent Blueprints Asset Lifecycle Management HPE Al Essentials i i NVIDIA Al Enterprise Workload provisi
Slide 9: Delivering new hybrid cloud and networking innovation to meet customers' emerging needs
Delivering new hybrid cloud and networking innovation to meet customers' emerging needs Acquired Morpheus Data to complete HPE’s hybrid cloud stack and add multi- cloud automation and orchestration Introduced new HPE virtualization capability delivered by HPE GreenLake to offer customers greater cho
Slide 10: Q3 FY24 financial highlights
Q3 FY24 financial highlights — Net revenue of $7.7 billion is up 10%! from the prior-year period, up 7% sequentially and toward the high end of our outlook range of $7.4 to $7.8 billion : — ARR? of $1.7 billion, up 39% from the prior-year period and up 15% sequentially — Non-GAAP gross margin? of 31
Slide 11: Q3 FY24 business segment results
Q3 FY24 business segment results Net Revenue Year-over-Year Operating Profit $ Operating Profit iC ana Gin millions) Revenue Growth" (in ns) % Revenue sie OP % Revenue Server $4,280 35% $464 10.8% 0.7 pts Intelligent Edge $1,121 ~Q3% $251 22.4% (5.2) pts Hybrid Cloud $1,300 (7%) $66 5.1% (0.3) pts H
Slide 12: Double-digit q/q growth in AI Systems orders and revenue
Double-digit q/q growth in Al Systems orders and revenue Cumulative Al systems Quarterly Al systems Quarterly Al systems orders! since Q1’23 revenues ending backlog $ in billions ‘S.in billions $ in billions ™ Products ™ Services = Products m Services $7.0 $15 $4.0 $6.2 \ $1.3 $3.4 $3.4 $3.4 $6.0 $1
Slide 13: Continued customer adoption of HPE GreenLake drives strong y/y growth in ARR
itinued customer Beepnon of HPE Greenlake _ drives strong 39%! y/y growth in ARR GreenLake Soa Annualized Revenue Run-Rate* $ in millions 34K 31K ; —Q4'230 « Q1'24) «=Q2'24) =—Q3'24 $2,000 37K $1,500 1.78 158 1.48 138 138 1.18 1.0B $1,000 $500 $0 Q2'23. Q3'23) Q4'23) «Q1'24 «—Q2'24 = Q3'24 :/Service
Slide 14: Expect to generate $1.9 billion of free cash flow in FY24
Expect to generate$1.9 billion of free cash flow! in FY24 Cash Flow Shareholder Return $in billions "Cash flow from operations ™Free cash flow? $ inmillons ® Dividend payment —™ Share repurchase $5.0 ‘ $1,200 $4.4 $4.0 $1,000 $800 $3.0 $2.3 $600 2.0 $1.5 $400 iy $1.0 $1.2 FY23 YTD24 Q3'23 Q3'24 FY23
Slide 15: Outlook
Outlook : Full Year FY24 outlook 1-3% Revenue growth? in constant currency) GAAP operating profit growth 2-6% Non-GAAP operating profit 0-2% growth? GAAP diluted net EPS $1.68 - $1.73 Non-GAAP diluted $1.92 - $1.97 $1.9 AP financialinformation is provided on the side titled “Use of non-GAAP financia
Slide 16: Supplemental slides
Supplemental slides
Slide 17: Server
Server Q3 FY24 Revenue" Operating profit® Americas bh% $4,280 nition $464 ition Rovere EMEA 31% + 35% yly, 11% q/q CC? 10.8% of revenue ™ Asia Pacific 25% + 35% yly CC $ in billions A Overview ae _ « Revenue up 35% y/y CC? and up 11% q/q CC? $4.0 16% ¢ Operating margin of 10.8% is up 70 bps y/y and
Slide 18: Intelligent Edge
Intelligent Edge Revenue! Operating profit® S 1, 12 1 million $2 ) 1 million V 23% yly, 3% q/q CC? 22.4% of revenue 23% y/y CC? Overview « Revenue down 23% y/y CC?and up 3% q/q CC? ¢ Intelligent Edge ARR* up 55% y/y ¢ Operating margin of 22.4%, down 520 bps y/y and up 60 bps q/q 4, For definition of
Slide 19: Hybrid Cloud
| Hybrid Cloud Operating profit? $66 million 5.1% of revenue Revenue’ $1,300 million V7%yly, 44% q/q C2 V7%yly CC? Overview « Revenue down 7% y/y CC?and up 4% q/q CC? ¢ Operating margin of 5.1%, down 30 bps y/y and up 430 bps q/q Q3 FY24 Revenue $ in billions ll Revenue 1. Segment net revenue is cal
Slide 20: Financial Services
Financial Services Q3 FY24 Revenue" Operating profit® Americas 5A% $879 million oy f°) million Revenue m EMEA 30% 1% yly, 1% q/q C2 9.0% of revenue ® Asia Pacific 16% A1% yly CC? Overview ie i OP % revenue llliRevenue « Financing volume was down 10% y/y CC? and revenue was up 1% y/y a 12% cc? : 10%
Slide 21: Q3 FY24 balance sheet
Q3 FY24 balance sheet Operating Company*° Financing Company *° Net Cash 2.9B° $ $13.2B Wiis Net Portfolio Assets > Capital Structure ™ FS Gross Debt* ™FS Cash 1. Operating Company = Total HPE excluding Financial Services (FS); Financing Company = HPE Financial Services (FS) 2. Operating company net
Slide 22: 22
22
Slide 23: 4, Other non-recurring
4, Other non-recurring 5. Other operating exp
Slide 24: Q2 FY24 GAAP to non-GAAP bridge
Slide 25: 4, Other non-recurring
Net earnings Diluted net EPS 4, Other non-recurring 5. Other operating exp
Slide 26: Tax rate
Tax rate Net earnings Diluted net EPS 2. Other operating exp
Slide 27: Tax rate
Tax rate Net earnings Diluted net EPS 2. Other operating exp
Slide 28: Income tax
Income tax Tax rate Net earnings Diluted net EPS 2. Other operating exp
Slide 29: 1. For the purposes
Net earnings Diluted net EPS 1. For the purposes 0
Slide 30: 4. For the purpo
Net earnings Diluted net EPS 4. For the purpo 2. Represents the.
Slide 31: Tax rate
Tax rate Net earnings Diluted net EPS 1. For the purposes of 2. Other operating exper
Slide 32: Income ta
Income ta Tax rate Net earnings Diluted net EPS 1. For the purposes of 2. Other operating exper
Slide 33: 1. For the purposes of
Net earnings Diluted net EPS 1. For the purposes of 2. Other operating exper
Slide 34: 1. For the purposes of
Net earnings Diluted net EPS 1. For the purposes of 2. Other operating exper
Slide 35: For the purposes
Net earnings Diluted net EPS 1 For the purposes 0 2, Other operating exp
Slide 36: Income t
Income t Tax rate Net earnings Diluted net EPS
Slide 37: 2. Other operating
Net earnings Diluted net EPS 2. Other operating
Slide 38: Net earnings
Net earnings Diluted net EPS
Slide 39: Net earnings
Net earnings Diluted net EPS
Slide 40: Income t
Income t Tax rate Net earnings Diluted net EPS 2. Other operating
Slide 41: Reconciliation of Operating Cash Flow to Free Cash Flow
Slide 42: Reconciliation of Segment Operating Profit to GAAP & Non-GAAP Operating Profit
Hewlett Packard Enterprise Company — Q3 2024 Earnings Presentation on 6ix