Hewlett Packard Enterprise Company · NYSE:HPE
Hewlett Packard Enterprise — Q2 2025 Earnings Presentation
33 slides from Hewlett Packard Enterprise's earnings presentation, Jun 3, 2025
Slide 1: HPE Q2 FY25 Earnings
Hewlett Packard Enterprise HPE Q2 FY25 Earnings June 34 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: HPE delivered solid Q2 FY25 results
HPE delivered solid Q2 FY25 results HPE Revenue was $7.6 billion dollars, up 7% year-over-year, just above the high-end of our guidance; year-over- year revenue growth in every product segment. Non-GAAP diluted net EPS? of $0.38, above the high end of our outlook. Continue rapid pace of Al innovatio
Slide 5: Accelerating innovation in Networking and Hybrid Cloud
Accelerating innovation in Networking and Hybrid Cloud April 8 May 14 June 2 Introduced new Revealed industry's most Announced next-gen virtual private cloud and on- advanced private cloud HPE Nonstop Compute premises deployment options for portfolio powered by HPE for mission-critical HPE Aruba Net
Slide 6: Expanding our deep partnership with NVIDIA
Expanding our deep partnership with NVIDIA November 2023 (SC23) Announced preconfigured supercomputing solution for generative Al to streamline model development November 2023 (HPE Discover Barcelona) Introduced pre-configured solution for enterprises to fine- tune Al large language models with thei
Slide 7: Q2 FY25 HPE Financial results
Q2 FY25 HPE Financial results * Net revenue of $7.6 billion is up 7%! from the prior-year period, down 3%1 sequentially and at the high end of our Q2 FY25 outlook range * ARR? of $2.2 billion, up 47% from the prior-year period and up 9%! sequentially * Non-GAAP gross margin® of 29.4% was down 3.7 pt
Slide 8: Q2 FY25 Segment results
Q2 FY25 Segment results Year-over-Year change in OP % Revenue Net Revenue Year-over-Year Operating Profit $ Operating Profit Gn millions) Revenue Growth? Gn millions) % Revenue Server $4,058 7% $241 5.9% (5.1) pts Intelligent Edge $1,162 8% $274 23.6% 1.8 pts Hybrid Cloud $1,453 15% $78 5.4% 4.4 pts
Slide 9: Cumulative AI Orders doubled Y/Y with software and services revenue mix increasing
Cumulative Al Orders doubled Y/Y with software and services revenue mix increasing Cumulative Al systems . Quarterly Al systems revenues Quarterly Al systems orders? since Q1’23 UENO ayaaiare 2 - ending backlog?’ $ in billions Products ™ Services $ in billions ™ Products ® Services $ in billions $90
Slide 10: GreenLake Cloud subscription services drives strong 47% Y/Y growth in ARR
GreenLake Cloud subscription services drives strong 47% Y/Y growth in ARR2 GreenLake Customers Annualized Revenue Run-Rate2 ‘Thousands $ in millions a $2,400 ZB 2.1B ie $2,100 $1,800 35 $1,500 - $1,200 - 30 $900 - $600 - 25 $300 - 20 $o Q2'23. Q3'23 Q4'23 Q1'24 Q2'24 Q3'24 Q4'24 Q1'25 Q2'25 Q2'23 Q3
Slide 11: Expect to generate FY25 free cash flow of ~$1B
Expect to generate FY25 free cash flow? of ~$1B? $ in billions Cash Flow 1 ™Cash flow from operations ©” Free cash flow $6.0 $4.3 $4.0 $2.0 FY24 YTD25 Q224 Q225 $ in millions $1,000 Common Shareholder Return ™Dividend payment __™ Share repurchase FY24 YTD25 Q224 Q225 Returned $221 million to common
Slide 12: Outlook
Outlook? Q3 FY25 outlook Full Year FY25 outlook Revenue GAAP diluted net EPS $0.24 to $0.29 $8.2B - $8.5B 7-9% Revenue growth27® Cin constant currency) GAAP operating profit growth? (81) - (72)% Non-GAAP diluted net EPS? $0.40 - $0.45 Non-GAAP operating profit growth’* (7) -0% GAAP diluted net EPS?
Slide 13: Supplemental slides
Supplemental slid abe
Slide 14: Server - Q2 FY25
Server - Q2 FY25 Revenue’ Operating profit® Americas 42% $4,0 5 8 million S24 1 million Revenue ™ EMEA 37% + b% yly, Y5%q/q CC2 5.9% of revenue ™@ Asia Pacific 21% 47% yly CC $ in billions * Overview uo soy « Revenue up 7% y/y CC? and down 5% q/q CC? $40 16% © Operating margin of 5.9%, down 510 bps
Slide 15: Intelligent Edge - Q2 FY25
Intelligent Edge - Q2 FY25 Revenue! Operating profit® 1 1 2 274 Americas 47% 9 6 million Revenue EMEA 37% AT% yly, 42% q/q CC2 23.6% of revenue @ Asia Pacific 16% 4 8% y/y C2 . $ in billions Overview wo - « Revenue up 8% y/y CC? and up 2% q/q CC? $14 28% « Intelligent Edge ARR‘ up 44% y/y a2 BES 3 A
Slide 16: Hybrid Cloud - Q2 FY25
Hybrid Cloud - Q2 FY25 Revenue? Operating profit® 1 4 @ Americas 38% 9 5 Smition S78 million Revenue EMEA 40% 413% yly, 44% q/q CC 5.4% of revenue ® Asia Pacific 22% 415% y/y CC? . $ in billions Overview ue ton ¢ Revenue up 15% y/y CC2and up 4% q/q CC? Ms es $14 14% ¢ Operating margin of 5.4%, up 44
Slide 17: Financial Services - Q2 FY25
Financial Services - Q2 FY25 Revenue’ Operating profit® @ Americas 5A% $856 million $89 million Revenue "EMEA 30% WV 1% yly,2% q/q CC2 10.4% of revenue @ Asia Pacific 16% 41% y/y CC? $ Overview eee al * Financing volume was down 20% y/y CC? and revenue was Aon ¥ 2 $08 up 1% y/y CC E ¢ Write-off .63%
Slide 18: Q2 FY25 balance sheet
Q2 FY25 balance sheet Operating Company?> Financing Company*> Net Cash $5.2B $13.3B Cash Debt Net Portfolio Assets > Capital Structure FS Gross Debt * = FS Cash Committed to investment grade rating and healthy balance sheet 1. Operating Company = Total HPE excluding Financial Services (FS); Financin
Slide 19: Appendix
Slide 20: Q2 FY25
Q2 FY25 GAAP to non-GAAP bridge? Acquisition, _Stockbased 4, of H3Cdivestiture er disposition, and compensation ; nv ninie meee related moe other charges expense ansible assets severance costs investments net In millions, except tax rate and per ‘Transformation Impairmentof Cost reduction share amou
Slide 21: Q1 FY25
Q1 FY25 GAAP to non-GAAP bridge? Inmillons except tax rat and per sh aap Transformation as gen comestion Fame stonet sented Gainonsaleofa | Gainon ee pom Revenue $ 7,854 $ 7,854 Cost of sales 5,559 3 an ) 5,544 Gross profit 2,295 @ 17 1 2,310 Total operating expenses 1,862 as) (66) (137) 38) (76) 1,
Slide 22: FY24
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 23: Q4 FY24
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 24: Q3 FY24
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 25: Q2 FY24
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 26: Q1 FY24
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 27: FY23
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 28: Q4 FY23
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 29: Q3 FY23
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 30: Q2 FY23
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 31: Q1 FY23
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 32: Reconciliation of Operating Cash Flow to Free Cash Flow
Reconciliation of Operating Cash Flow to Free Cash Flow? Q1'24 Q2'24 Q3'24 Q4'24 Q1'25 Q2'25 Net cash provided by (used in) operating activities $64 $1,093 $1,154 $2,030 ($390) ($461) Investment in property, plant and equipment and software assets (656) G60) (543) (608) G28) G4) Proceeds from sale o
Slide 33: Reconciliation of Segment Operating Profit to Non-GAAP Operating Profit
Cc Reconciliation of Segment Operating Profit to & Non-GAAP Operating Profit GAAP Q1'23 Q2’23 Q3'23 Q4'23 Q1'24 Q2'24 Q3'24 Q4'24 Q1’25 Q2’25 Intelligent Edge $227 $332 $402 $382 $353 $237 $251 $274 $314 $274 Server) 675 467 317 356 379 423 461 541 348, 241 Hybrid Cloud’? 83 32 77 55 51 13 69 126 99
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