Hewlett Packard Enterprise Company · NYSE:HPE
Hewlett Packard Enterprise — Q1 2025 Earnings Presentation
30 slides from Hewlett Packard Enterprise's earnings presentation, Mar 6, 2025
Slide 1: HPE Q1 FY25 Earnings
Hewlett Packard Enterprise HPE Q1 FY25 Earnings March 6", 2025
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 o
Slide 4: Delivered year-over-year revenue and EPS growth
Delivered year-over-year revenue and EPS growth HPE * Net revenue of $7.9 billion, up 17% year-over-year * Orders up double-digits year-over- year, with Al systems orders up double-digits quarter-over-quarter * Delivered GAAP and non-GAAP diluted net EPS? in-line with Q1. guidance Server Server reve
Slide 5: Q1 FY25 financial highlights
Q1 FY25 financial highlights * Net revenue of $7.9 billion is up 17%? from the prior-year period, down 7%! sequentially and above the high end of our outlook range of mid-teens year-over year growth * ARR? of $2.1 billion, up 46% from the prior-year period and up 7%! sequentially * Non-GAAP gross ma
Slide 6: Q1 FY25 business segment results
Q1 FY25 business segment results Net Revenue Year-over-Year Operating Profit $ Operating Profit VOTRGRIRC Gn millions) Revenue Growth? Gn millions) % Revenue change in OP % Revenue Server $4,290 30% $348 8.1% (3.3) pts Intelligent Edge $1,146 (4%) $314 27.4% (2.0) pts Hybrid Cloud $1,405 11% $99 7.0
Slide 7: Continued HPE GreenLake Cloud customer adoption drives strong ARR growth
Continued HPE GreenLake Cloud customer adoption drives strong 46%? y/y growth in ARR? GreenLake Customers Annualized Revenue Run-Rate2 Thousands $in millions 45 $2,400 41K 2.1B $2,100 1.9B 1.78 ‘aoe ee $1,800 $1,500 $1,200 - $900 - $600 - $300 - $o Q1'23 Q2'23 Q3'23 Q4'23 Q1'24 Q2'24 Q3'24 Q4'24 Q1'
Slide 8: AI Systems orders doubled Q/Q, with backlog increasing 29%
Al Systems orders doubled Q/Q, with backlog increasing 29% Cumulative Al systems Orders since Q1’23 Quarterly Al systems Revenues Quarterly Al systems ending backlog!” $ in billions ™Products mServices $ in billions Products ™ Services $ in billions $9.0 $1.6 ~$15 $4.0 $8.0 re 34 $3.4 $3.4 $7.0 - $3
Slide 9: Expect to generate FY25 free cash flow of ~$1.0B
Expect to generate FY25 free cash flow? of ~$1.0B7 Cash Flow Common Shareholder Return $ in billions ™ Cash flow from operations = Free cash flow? $ in millions ™ Dividend payment —_™ Share repurchase $5.0 oy $1,000 $4.0 $800 $3.0 $2.0 $600 $1.0 $400 $- $200 $(1.0) | seo | $02.0) secre pesceeeeee se
Slide 10: Outlook
Outlook? Q2 FY25 outlook Full Year FY25 outlook Revenue $7.2 -$7.6 - Revenue growth27® 7-11% Cin constant currency) GAAP diluted net EPS $0.08 - $0.14 GAAP operating profit growth (24) - (9)% Non-GAAP diluted net EPS?° $0.28 - $0.34 Non-GAAP operating profit growth?+ (10) -0% GAAP diluted net EPS $1
Slide 11: Supplemental slides
a“ 7 i Supplemental slid é E 1 waar
Slide 12: Server - Q1 FY25
Server - Q1 FY25 125 Revenue’ Operating profit® Americas 40% $4,290 million $348 million Revenue __EMEA 34% 429% yly, y 8% a/q CC? 8.1% of revenue Asia Pacific 26% 4 30% y/y CC? * $ in billions Overview uo soy « Revenue up 30% y/y CC? and down 8% q/q CC? $40 16% ¢ Operating margin of 8.1% is down 33
Slide 13: Intelligent Edge - Q1 FY25
Intelligent Edge - Q1 FY25 Revenue! Operating profit® 1 14 14 Americas 45% 9 6 million 3 Revenue EMEA 39% V 5% yly, 42% a/q CC 27.4% of revenue ™@ Asia Pacific 16% vA%yly CC * $ in billions Overview wo - « Revenue down 4% y/y CC? and up 2% q/q CC? $14 28% « Intelligent Edge ARR‘ up 40% y/y a2 BES 3
Slide 14: Hybrid Cloud - Q1 FY25
Hybrid Cloud - Q1 FY25 av23 0223 03:23 Qw'23 a124 724, 324, aw24, avs Revenue? Operating profit® @ Americas 36% S 1,405 million $99 million Revenue “EMEA 42% 410% yly, y 12% q/q CC? 7.0% of revenue ™ Asia Pacific 22% 411% y/y CC? ° $ in bil Overview ea fee * Revenue up 11% y/y CC2and down 12% q/q CC
Slide 15: Financial Services - Q1 FY25
Financial Services — Q1 FY25 Revenue! Operating profit® @ Americas 53% $873 million $82 million Revenue EMEA 30% flat y/y, flat q/q CC? 9.4% of revenue ™@ Asia Pacific 17% N2% yly CC? fo) * verview 10% ¢ Financing volume was down 14% y/y CC? and revenue was up 2% y/y CC2 8% 2 ¢ Write-off % of assets
Slide 16: Q1 FY25 balance sheet
Q1 FY25 balance sheet Operating Company?> Financing Company*> Net Cash $6.6B $13.0B Cash Debt Net Portfolio Assets > Capital Structure mFS Gross Debt* = FS Cash Committed to investment grade rating and healthy balance sheet 1. Operating Company = Total HPE excluding Financial Services (FS); Financin
Slide 17: Appendix
Slide 18: Q1 FY25 bridge
Q1 FY25 GAAP to non-GAAP bridge“ Acquisition, _Stock-based Inmilions, except taxrate and per sha aap Transformation Sipation and competion fasting! sented Gainonsaleofa | Gainon ee pom Revenue $ 7,854 $ 7,854 Cost of sales 5,559 3 an ) 5,5hb Gross profit 2,295 @ 17 1 2,310 Total operating expenses 1
Slide 19: FY24 bridge
FY24 GAAP to non-GAAP bridge? Losson Immilions, except taxrateand per share casp Tratsfomation Disster_epeifon and comometon ven este “tani investments wet Cp mea charges Revenue $ 30,127 $ 30,127 Cost of sales 20,249 43 49) ©) 20,234 Gross profit 9,878 43) 49 9 9,893 Total operating expenses 7,688
Slide 20: Q4 FY24 bridge
Q4 FY24 GAAP to non-GAAP bridge? Inmillions, except tax rate and per share aap. Tansformation Disaster dlapostion and cae eareg Amortization of aygsgmave Adjustments for CD tom amounts costs recovery other related creation intangible assets ents equity interests? charges Revenue $ 8,458 $ 8,458 Cost
Slide 21: Q3 FY24 bridge
Q3 FY24 GAAP to non-GAAP bridge? i _ Gain on Inmilins, Transformatio Disaster disposition and STOCKB*E4 —ieatinyreAMortizaton vestments, Earnings from Thrpt ott and per sae amounts cane Tomtermae Pee gee aed cnmeaon uychitas onic MEN ieee Non AAP charges Revenue $7,710 $7,710 Cost of sales 5,271 7 (
Slide 22: Q2 FY24 bridge
Q2 FY24 GAAP to non-GAAP bridge? Stock-based In mill ‘Transformati i nn ; Amortization of Earnings f ity a eee carte can Tamfomeien ouanraavey emer compan Asien iat ey otter Non-GAAP Revenue $7,204 $7,204 Cost of sales 4,828 7 4) 4,821 Gross profit 2,376 qa” 14 2,383 Total operating expenses 1,951 G
Slide 23: Q1 FY24 bridge
Q1 FY24 GAAP to non-GAAP bridge? Acquisition, Stock-based Inmillions, ‘Transformatic Disaster (rec > dicpositic . ‘Amortization of Loss; Earnings from an Gaap —Traniomeastz charges 8Postion andother compensation istangibleassets._ investments net! equity interests Other! Non-GAAP Revenue $6,755 $6,7
Slide 24: FY23 bridge
FY23 GAAP to non-GAAP bridge? Revenue $29,135 $29,135 Cost of sales 18,896 13 an 18,862 Gross profit 10,239 a3) 47 10,273 Mets 8,150 (283) @ (0) 81) 288) 7,128 RED 2,349 161) 2,188 SG&A 5,160 220) 4,940 Others? 644 (283) w 9) - (288) - Operating profit 2,089 283 a2 69 428 288 3,145 Interest & other,
Slide 25: Q4 FY23 bridge
Q4 FY23 GAAP to non-GAAP bridge? Revenue $7,351 $7,351 Cost of sales 4,792 10 cc) 4,793 Gross profit 2,559 (10) 9 2,558 Mets 2,052 (56) 4 as) 2) a) 1,848 R&D 578 [éx9) 545 SG&A 1,332 (29) 1,303 Others? 142 (56) 4 (18) - (72) A Operating profit 507 56 a4) 18 71 72 710 Interest & other, net (23) 1 40
Slide 26: Q3 FY23 bridge
Q3 FY23 GAAP to non-GAAP bridge? In millions, ie i oo ition, Stock-based _ Non-servicenet carmingsin equity T®xindemnification Excess tax benefits ‘Transformation Disaster disposition, and " Amortization of Aedk Earnings in equity ‘Structural rate f tax rate and GAAP tion, Amor’ odie benefit . ‘and
Slide 27: Q2 FY23 bridge
Inmillions, Q2 FY23 GAAP to non-GAAP bridge? ; np TSSrty poy Stockbased —pmortzationot NEPSETMEEO caringsinegury —THIndemaaion Srcartane HESSTneHS qxcepttaxrateandper cone hges“iherrtea<OMPENAONanghieaee Pes bent intrest imrclated Sjartment —oMstockebased Non Revenue $6,973 $6,973 Cost of sales 4h a
Slide 28: Q1 FY23 bridge
Q1 FY23 GAAP to non-GAAP bridge? In millions, a 5 ‘Stock-based Non-service net ae . Tax indemnification Excess tax benefits A Gaap Transformation Disaster foam eer rcecey Earnings in equity Structuralrate F4cess fax rane except taxrateandper cone hges“iherrtea<OMPENAONanghieaee Pes bent interest aur
Slide 29: Reconciliation of Operating Cash Flow to Free Cash Flow
Cc Reconciliation of Operating Cash Flow to Free Cash Flow? Q1'24 Q2'24 Q3'24 Q4'24 Q1'25 Net cash provided by (used in) operating activities $64 $1,093 $1,154 $2,030 ($390) Investment in property, plant and equipment and software assets (656) G60) (543) (608) (528) Proceeds from sale of property, p
Slide 30: Reconciliation of Segment Operating Profit to GAAP & Non-GAAP Operating Profit
Reconciliation of Segment Operating Profit to GAAP & Non-GAAP Operating Profit Q1'23 Q2’23 Q3'23 Q4'23 Q1'24 Q2'24 Q3'24 Q4'24 Q1’'25 Intelligent Edge $227 $332 $402 $382 $353 $237 $251 $274 $314 Server) 672 464 315 355 379 423 461 541 348, Hybrid Cloud? 86 35 79 56 51 13 69 126 99 HPEFS 63 76 72 70
Hewlett Packard Enterprise Company — Q1 2025 Earnings Presentation on 6ix