# Hewlett Packard Enterprise Co (HPE)

Informational only - not investment advice.

CIK: 0001645590
SIC: 3570 Computer & office Equipment
SIC breadcrumb: [Manufacturing](/division/D/) > [Industrial And Commercial Machinery And Computer Equipment](/major-group/35/) > [SIC 3570 Computer & office Equipment](/industry/3570/)
Latest 10-K filed: 2025-12-18
SEC page: https://www.sec.gov/edgar/browse/?CIK=1645590
Filing source: https://www.sec.gov/Archives/edgar/data/1645590/000164559025000130/hpe-20251031.htm

## At a glance

FY2025 · period end 2025-10-31 · filed 2025-12-18 · accession 0001645590-25-000130 · source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001645590.json

| Metric | Value | FY | Provenance |
| --- | ---: | ---: | --- |
| Revenue | 34,296,000,000 USD | 2025 | verified |
| Net income | 57,000,000 USD | 2025 | verified |
| Assets | 75,906,000,000 USD | 2025 | verified |
| Free cash flow | 627,000,000 USD | 2025 | computed |
| Net margin | 0.17% | 2025 | computed |
| Operating margin | -1.27% | 2025 | computed |
| Revenue YoY | +13.84% | 2025 | computed |
| ROE | 0.23% | 2025 | computed |

Computed values are grepcent-computed from the verified facts above and may differ from ratios the company itself reports. Free cash flow = operating cash flow − capital expenditures. Net margin = net income ÷ revenue. Operating margin = operating income ÷ revenue. Revenue YoY = FY2025 revenue ÷ FY2024 revenue − 1 (consecutive fiscal years only). ROE = net income ÷ period-end stockholders' equity.

No market price, no rating, no forecast on this site. Not investment advice.

### Peer percentile fingerprint

| Ratio | HPE | Peer median | Percentile | N |
| --- | ---: | ---: | ---: | ---: |
| Net margin | 0.2% | 7.7% | 16 | 110 |
| Operating margin | -1.3% | 13.1% | 9 | 104 |
| Revenue growth | 13.8% | 5.8% | 71 | 111 |
| FCF margin | 1.8% | 9.6% | 18 | 103 |
| ROE | 0.2% | 11.7% | 19 | 108 |
| ROA | 0.1% | 5.6% | 17 | 111 |
| Liabilities / equity | 2.07 | 1.10 | 79 | 108 |
| Current ratio | 1.01 | 2.02 | 12 | 110 |

Percentile = share of the N covered peers reporting that ratio whose value is lower (ties counted half); computed among grepcent-covered companies in SIC major-group 35 Industrial And Commercial Machinery And Computer Equipment, not the whole market. A higher percentile means a higher value of the ratio, not a better company. Ratios with fewer than 8 reporting peers are omitted. Latest reported values per company; fiscal periods may differ. Descriptive arithmetic - not a score, rating, or ranking.

## Selected Fundamentals
| Metric | Value | Unit | FY | Filed |
| --- | ---: | --- | ---: | --- |
| Revenue | 34296000000 | USD | 2025 | 2025-12-18 |
| Net income | 57000000 | USD | 2025 | 2025-12-18 |
| Assets | 75906000000 | USD | 2025 | 2025-12-18 |

## Financials

Annual standardized facts from SEC companyfacts as of latest extracted filing date 2025-12-18. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001645590.json. Derived margins, ratios, and free cash flow are computed from the extracted annual SEC facts.

| Metric | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Revenue | 30,280,000,000 | 28,871,000,000 | 30,852,000,000 | 29,135,000,000 | 26,982,000,000 | 27,784,000,000 | 28,496,000,000 | 29,135,000,000 | 30,127,000,000 | 34,296,000,000 |
| Net income | 3,161,000,000 | 344,000,000 | 1,908,000,000 | 1,049,000,000 | -322,000,000 | 3,427,000,000 | 868,000,000 | 2,025,000,000 | 2,579,000,000 | 57,000,000 |
| Operating income | 3,903,000,000 | 564,000,000 | 1,737,000,000 | 1,274,000,000 | -329,000,000 | 1,132,000,000 | 782,000,000 | 2,089,000,000 | 2,190,000,000 | -437,000,000 |
| Diluted EPS | 1.82 | 0.21 | 1.23 | 0.77 | -0.25 | 2.58 | 0.66 | 1.54 | 1.93 | -0.04 |
| Operating cash flow | 5,056,000,000 | 1,335,000,000 | 2,964,000,000 | 3,997,000,000 | 2,240,000,000 | 5,871,000,000 | 4,593,000,000 | 4,428,000,000 | 4,341,000,000 | 2,919,000,000 |
| Capital expenditures | 3,280,000,000 | 3,137,000,000 | 2,956,000,000 | 2,856,000,000 | 2,383,000,000 | 2,502,000,000 | 3,122,000,000 | 2,828,000,000 | 2,367,000,000 | 2,292,000,000 |
| Dividends paid | 373,000,000 | 428,000,000 | 570,000,000 | 608,000,000 | 618,000,000 | 625,000,000 | 621,000,000 | 619,000,000 | 676,000,000 | 684,000,000 |
| Share buybacks | 2,662,000,000 | 2,556,000,000 | 3,568,000,000 | 2,249,000,000 | 355,000,000 | 213,000,000 | 512,000,000 | 421,000,000 | 150,000,000 | 202,000,000 |
| Assets | 79,629,000,000 | 61,406,000,000 | 20,469,000,000 | 51,803,000,000 | 54,015,000,000 | 57,699,000,000 | 57,123,000,000 | 57,153,000,000 | 71,262,000,000 | 75,906,000,000 |
| Stockholders' equity | 31,448,000,000 | 23,466,000,000 | -5,775,000,000 | 17,098,000,000 | 16,049,000,000 | 19,971,000,000 | 19,864,000,000 | 21,182,000,000 | 24,816,000,000 | 24,688,000,000 |
| Cash and cash equivalents | 12,987,000,000 | 9,579,000,000 | 4,880,000,000 | 3,753,000,000 | 4,233,000,000 | 3,996,000,000 | 4,163,000,000 | 4,270,000,000 | 14,846,000,000 | 5,773,000,000 |
| Free cash flow | 1,776,000,000 | -1,802,000,000 | 8,000,000 | 1,141,000,000 | -143,000,000 | 3,369,000,000 | 1,471,000,000 | 1,600,000,000 | 1,974,000,000 | 627,000,000 |

### Ratios

ROE and ROA use period-end equity/assets. Liabilities / equity uses total liabilities divided by stockholders' equity. Current ratio uses current assets divided by current liabilities when both are reported.

| Metric | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Net margin | 10.44% | 1.19% | 6.18% | 3.60% | -1.19% | 12.33% | 3.05% | 6.95% | 8.56% | 0.17% |
| Operating margin | 12.89% | 1.95% | 5.63% | 4.37% | -1.22% | 4.07% | 2.74% | 7.17% | 7.27% | -1.27% |
| Return on equity | 10.05% | 1.47% |  | 6.14% | -2.01% | 17.16% | 4.37% | 9.56% | 10.39% | 0.23% |
| Return on assets | 3.97% | 0.56% | 9.32% | 2.02% | -0.60% | 5.94% | 1.52% | 3.54% | 3.62% | 0.08% |
| Liabilities / equity | 1.53 | 1.62 |  | 2.03 | 2.37 | 1.89 | 1.88 | 1.70 | 1.87 | 2.07 |
| Current ratio | 1.28 | 1.13 | 1.00 | 0.79 | 0.88 | 0.91 | 0.88 | 0.87 | 1.29 | 1.01 |

## As-reported value updates

6 tracked differences above grepcent's stated thresholds were found between the earliest XBRL-filed value and the value currently on file for the same fiscal period.

Ledger: /company/HPE/revisions/


## Quarterly

Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-06-02. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001645590.json.

Flow metrics use discrete quarter-length periods from 10-Q/10-Q/A filings. Q4 revenue and net income are derived only when annual FY and nine-month YTD facts exist for the same fiscal year; derived Q4 values are labeled. EPS Q4 is not derived.

| Quarter | End date | Revenue | Net income | Diluted EPS | Method |
| --- | --- | ---: | ---: | ---: | --- |
| 2022-Q3 | 2022-07-31 |  |  | 0.31 | reported discrete quarter |
| 2023-Q1 | 2023-01-31 |  |  | 0.38 | reported discrete quarter |
| 2023-Q2 | 2023-04-30 |  |  | 0.32 | reported discrete quarter |
| 2023-Q3 | 2023-07-31 | 7,002,000,000 | 464,000,000 | 0.35 | reported discrete quarter |
| 2023-Q4 | 2023-10-31 | 7,351,000,000 | 642,000,000 |  | derived Q4 = FY annual - nine-month YTD |
| 2024-Q1 | 2024-01-31 | 6,755,000,000 | 387,000,000 | 0.29 | reported discrete quarter |
| 2024-Q2 | 2024-04-30 | 7,204,000,000 | 314,000,000 | 0.24 | reported discrete quarter |
| 2024-Q3 | 2024-07-31 | 7,710,000,000 | 512,000,000 | 0.38 | reported discrete quarter |
| 2024-Q4 | 2024-10-31 | 8,458,000,000 | 1,366,000,000 |  | derived Q4 = FY annual - nine-month YTD |
| 2025-Q1 | 2025-01-31 | 7,854,000,000 | 627,000,000 | 0.44 | reported discrete quarter |
| 2025-Q2 | 2025-04-30 | 7,627,000,000 | -1,050,000,000 | -0.82 | reported discrete quarter |
| 2025-Q3 | 2025-07-31 | 9,136,000,000 | 305,000,000 | 0.21 | reported discrete quarter |
| 2025-Q4 | 2025-10-31 | 9,679,000,000 | 175,000,000 |  | derived Q4 = FY annual - nine-month YTD |
| 2026-Q1 | 2026-01-31 | 9,301,000,000 | 452,000,000 | 0.31 | reported discrete quarter |
| 2026-Q2 | 2026-04-30 | 10,678,000,000 | 624,000,000 | 0.44 | reported discrete quarter |

## Filed narrative (10-K & 10-Q)

## Business

Verbatim Item 1 Business section from HPE's latest 10-K: [/company/HPE/business/](/company/HPE/business/).

## Risk Factors

Verbatim Item 1A Risk Factors from HPE's latest 10-K: [/company/HPE/risk-factors/](/company/HPE/risk-factors/).

## Latest quarter (10-Q)

Latest 10-Q source: https://www.sec.gov/Archives/edgar/data/1645590/000164559026000055/hpe-20260430.htm

Extracted structurally from real Item 2 body heading to real Item 3/4 boundary.
Confidence: high
Filing date: 2026-06-02
Report date: 2026-04-30

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.

HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES

For purposes of this Management's Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) section, we use the terms “HPE”, the “Company”, “we”, “us” and “our” to refer to Hewlett Packard Enterprise Company.

We intend the discussion of our financial condition and results of operations that follows to provide information that will assist the reader in understanding our Condensed Consolidated Financial Statements, changes in certain key items in these financial statements from period-to-period and the primary factors that accounted for these changes, as well as how certain accounting principles, policies, and estimates affect our Condensed Consolidated Financial Statements. This discussion should be read in conjunction with our Condensed Consolidated Financial Statements and the related notes that appear elsewhere in this document.

The financial discussion and analysis in the following MD&A compares the three and six months ended April 30, 2026 to the comparable prior-year period and where appropriate, as of April 30, 2026, unless otherwise noted.

This MD&A is organized as follows:

•Trends and Uncertainties. 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, supply chain constraints and related cost increases for certain components, increased inventory levels, conservative customer spending environment (though recovering), persistent inflation, foreign exchange pressures, recent tax developments, and competitive pricing pressures.

•Executive Overview. A discussion of our business and a summary of our financial performance and other highlights, including Generally accepted accounting Principles (“GAAP”) and non-GAAP financial measures, affecting the Company in order to provide context to the remainder of the MD&A.

•Results of Operations. A discussion of the results of operations at the consolidated level is followed by a discussion of the results of operations at the segment level.

•Critical Accounting Policies and Estimates. A discussion of accounting policies and estimates that we believe are important to understanding the assumptions and judgments incorporated in our reported financial results.

•Liquidity and Capital Resources. An analysis of changes in our cash flows, financial condition, liquidity, and cash requirements and commitments.

•GAAP to Non-GAAP Reconciliations. Each non-GAAP financial measure has been reconciled to the most directly comparable GAAP financial measure. This section also includes a discussion of the use, usefulness and economic substance of the non-GAAP financial measures, along with a discussion of material limitations, and compensation for those limitations, associated with the use of non-GAAP financial measures.

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Management's Discussion and Analysis of

Financial Condition and Results of Operations (Continued)

TRENDS AND UNCERTAINTIES

During the first six months of fiscal 2026, the effects of the evolving macroeconomic environment on demand for information technology products and supply for components 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 volume of data at the edge continues to grow, driven by the proliferation of devices. As a result, the need for a unified cloud experience everywhere has grown, in order to manage the growth of data at the edge. Increasing demand for AI is also contributing to changes in the competitive landscape. With the abundance of data, there are opportunities to develop AI tools with powerful computational abilities to extract insights and value from the captured data. Secure networking that is purpose-built for AI workloads is the foundation that enables users to seamlessly connect and apply AI learnings to such data that lives in various ecosystems. While we believe our recent acquisition of Juniper Networks Inc. (“Juniper Networks”) positions us to capitalize on the growing market opportunities across AI-accelerated computing, data, cloud and networking, our major competitors and emerging competitors are expanding their product and service offerings with integrated products and solutions and exerting increased competitive pressure. We expect these market dynamics and trends to continue in the longer term.

Macroeconomic Uncertainty: The evolving macroeconomic environment has impacted industry-wide demand, as customers have been taking longer to work through prior orders and continue to adopt a more strategic approach to discretionary IT spending. While this dynamic has been easing, it 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. Additionally, there continues to be significant uncertainty surrounding the tariff environment and import/export regulations due to numerous factors, including but not limited to tariff imposition delays, changes to tariff rates and policies, and enactment of reciprocally restrictive trade policies and measures around the world. These have enhanced global trade uncertainty and contributed to higher prices of components and end products and services. While we have sought to mitigate these adverse impacts by relying on our global supply chain and implementing pricing measures, we expect the current macroeconomic environment to continue with the potential to impact revenue and margin growth in the near term.

Supply Chain: We experienced supply chain constraints for certain components, including graphics processing units (“GPUs”), accelerated processing units, solid-state drives (“SSDs”), and other memory components. We are affected by the worldwide shortage in memory components that began to impact the semiconductor industry in the first half of fiscal year 2026 primarily due to the accelerating growth in AI usage and the related rapid expansion in AI data centers and compute refresh cycles. In the first half of fiscal year 2026, we experienced supply chain constraints due to these component shortages and expect such dynamics to continue in the medium term as memory supply constraints may continue until memory vendors transition greater production allocations towards high performance memory components required by AI. The future remains uncertain due to the macroeconomic environment and dynamics discussed above, which have thus far impacted our ability to import and export components and finished products and increased our costs. Additionally, logistics costs have been, and may continue to remain, high due to changes in trade policies and ongoing geopolitical uncertainties and tensions. We have experienced higher-than-normal inventory levels, primarily due to frequent component part updates, customers transitioning to the next generation of GPUs, our efforts to secure supply ahead of demand, and longer customer acceptance timelines on AI-related orders. In addition, our current efforts to secure memory components and SSDs to meet forecasted demand may further increase our inventory levels in the medium term. 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. We have experienced, and expect to continue experiencing, rising input component costs due to various factors, including but not limited to global trade uncertainties and the competitive pricing environment, all of which may impact our financial results. We are taking actions through continued disciplined cost pricing management and supply chain diversification to mitigate the impact of these dynamics. However, such actions may not fully mitigate any impact on our financial condition.

Recurring Revenue and Consumption Models: We continue to strengthen our core server and storage-oriented offerings and expand our offerings on the HPE GreenLake cloud, to deliver our entire portfolio as-a-service (“aaS”) and become the edge-to-cloud company of choice for our customers and partners. We expect that such flexible consumption model will continue to strengthen our customer relationships and contribute to growth in recurring revenue.

Foreign Currency Exposure: We have a large global presence, with more than half of our revenue generated outside of the U.S. As a result, our financial results can be, and particularly in recent periods have been, impacted by fluctuations in

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Management's Discussion and Analysis of

Financial Condition and Results of Operations (Continued)

foreign currency exchange rates. We utilize a comprehensive hedging strategy intended to mitigate the impact of foreign currency volatility over time, and we adjust pricing when possible to further minimize foreign currency impacts.

Public Sector: We have a number of engagements with various public sector entities, including the U.S. federal government and its agencies, as direct or indirect customers of our IT services and hardware. Significant staffing and resource reductions at certain public sector entities create an uncertain environment and as a result, our financial results have been, and may continue to be, impacted in the near term.

Recent Tax Developments: Proposals to reform U.S. and foreign tax laws could significantly impact how U.S. multinational corporations are taxed on foreign earnings. Several of the proposals currently being considered, if enacted into law, could have an impact on our effective tax rate, income tax expense, and cash flows. Our future effective tax rate may also be impacted by judicial decisions, changes in interpretation of regulations, as well as additional legislation and guidance. 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, approximately 65 countries have enacted portions, or all, of the OECD proposal. 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. While we do not anticipate a material adverse impact to our financial position in fiscal 2026, additional changes to global tax laws are likely to occur. For instance, some countries have enacted, and others have proposed, taxes based on gross receipts applicable to digital services, regardless of profitability. Such changes may adversely affect our tax liability. In addition, the United States has considered, and may adopt, reciprocal tax measures in response to such regimes. These developments could increase our global tax burden, result in double taxation, and adversely affect our tax liability.

The Internal Revenue Service (“IRS”) is conducting audits of our fiscal 2020 through 2022 U.S. federal income tax returns. During the first quarter of fiscal 2026, the IRS issued notices of proposed adjustments (“NOPAs”) for fiscal 2020, 2021, and 2022 relating to our intercompany transfer pricing. During the second quarter of fiscal 2026, we submitted a formal settlement offer to the IRS to facilitate the closing of th

[Excerpt truncated for page length; source filing is linked above.]

## Latest 10-K MD&A (excerpt)

Latest 10-K Item 7 source: https://www.sec.gov/Archives/edgar/data/1645590/000164559025000130/hpe-20251031.htm
Complete FY 2025 MD&A: /company/HPE/mda/fy2025/

Extracted structurally from real Item 7 body heading to real Item 7A/8 boundary.
Confidence: high
Filing date: 2025-12-18
Report date: 2025-10-31

ITEM 7. Management's Discussion and Analysis of Financial Condition and Results of Operations.

For purposes of this Management's Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) section, we use the terms “Hewlett Packard Enterprise,” “HPE,” “the Company,” “we,” “us,” and “our” to refer to Hewlett Packard Enterprise Company.

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. 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.

We intend the discussion of our financial condition and results of operations that follows to provide information that will assist the reader in understanding our Consolidated Financial Statements, changes in certain key items in these financial statements from year to year, and the primary factors that accounted for these changes, as well as how certain accounting principles, policies and estimates affect our Consolidated Financial Statements. This discussion should be read in conjunction with our Consolidated Financial Statements and the related notes that appear elsewhere in this document.

This MD&A is organized as follows:

•Trends and Uncertainties. 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. 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 accounting policies and estimates that we believe are important to understanding the assumptions and judgments incorporated in our reported financial results.

•Results of Operations. A discussion of the results of operations at the consolidated level is followed by a discussion of the results of operations at the segment level.

•Liquidity and Capital Resources. An analysis of changes in our cash flows, financial condition, liquidity, and cash requirements and commitments.

•GAAP to Non-GAAP Reconciliations. Each non-GAAP financial measure has been reconciled to the most directly comparable GAAP financial measure. This section also includes a discussion of the use, usefulness and economic substance of the non-GAAP financial measures, along with a discussion of material limitations, and compensation for those limitations, associated with the use of non-GAAP financial measures.

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 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. With the abundance of data, there are opportunities to develop AI tools with powerful computational abilities to extract insights and value from the captured data. Secure networking that is purpose-built for AI workloads is the foundation that enables users to seamlessly connect and apply AI learnings to such data that lives in various ecosystems. While we believe our recent acquisition of Juniper Networks positions us to capitalize on the growing market opportunities across AI-accelerated computing, data, cloud and networking, our major competitors and emerging competitors are expanding their product and service offerings with integrated products and solutions and exerting increased competitive pressure. We expect these market dynamics and trends to continue in the longer term.

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Management's Discussion and Analysis of

Financial Condition and Results of Operations (Continued)

Macroeconomic Uncertainty: The evolving macroeconomic environment has impacted industry-wide demand, as customers have been taking longer to work through prior orders and, to this day, have been adopting a more strategic approach to discretionary IT spending. 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. Additionally, there continues to be significant uncertainty surrounding the tariff environment and import/export regulations due to numerous factors, including but not limited to tariff imposition delays, changes to tariff rates and policies, and enactment of reciprocally restrictive trade policies and measures around the world. These have enhanced global trade uncertainty and contributed to higher prices of components and end products and services. While we have sought to mitigate these adverse impacts by relying on our global supply chain and implementing pricing measures, we expect such a mixed macroeconomic environment to largely continue and possibly limit revenue and margin growth in the near term.

Supply Chain: We experienced supply chain constraints for certain components, including graphics processing units (“GPUs”) and accelerated processing units. Though they have eased at times during the fiscal year, we are once again experiencing such constraints and expect such dynamics to continue in the medium term. The future remains uncertain due to the macroeconomic dynamics discussed above, which have thus far impacted our ability to import and export components and finished products and the costs of doing so. Additionally, logistics costs have been, and may continue to remain, high with such changes in trade policies. 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. 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. We plan to mitigate the impact of these dynamics through continued disciplined cost and pricing management and supply chain diversification; however, such actions may not be successful.

Recurring Revenue and Consumption Models: We continue to strengthen our core server and storage-oriented offerings and expand our offerings on the HPE GreenLake cloud, to deliver our entire portfolio as-a-service (“aaS”) and become the edge-to-cloud company for our customers and partners. We expect that such flexible consumption model will continue to strengthen our customer relationships and contribute to growth in recurring revenue.

Foreign Currency Exposure: We have a large global presence, with more than half of our revenue generated outside of the U.S. As a result, our financial results can be, and particularly in recent periods have been, impacted by fluctuations in foreign currency exchange rates. We utilize a comprehensive hedging strategy intended to mitigate the impact of foreign currency volatility over time, and we adjust pricing when possible to further minimize foreign currency impacts.

Public Sector: We have a number of engagements with various public sector entities, including the U.S. federal government and its agencies, as direct or indirect customers of our IT services and hardware. Significant staffing and resource reductions at certain public sector entities create an uncertain environment and as a result, our financial results have been, and may continue to be, impacted in the near term.

Recent Tax Developments: Proposals to reform U.S. and foreign tax laws could significantly impact how U.S. multinational corporations are taxed on foreign earnings and could increase the U.S. corporate tax rate. Several of the proposals currently being considered, if enacted into law, could have an adverse impact on our effective tax rate, income tax expense, and cash flows. Our future effective tax rate may also be impacted by judicial decisions, changes in interpretation of regulations, as well as additional legislation and guidance. 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. 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. While we do not anticipate a material adverse impact to our financial position in fiscal 2026, additional changes to global tax laws are likely to occur. For instance, some countries have enacted, and others have proposed, taxes based on gross receipts applicable to digital services, regardless of profitability. Such changes may adversely affect our tax liability.

The Internal Revenue Service (“IRS”) is conducting audits of our fiscal 2020 through 2022 U.S. federal income tax returns. In the second quarter of fiscal 2025, the IRS issued a Revenue Agent Report (“RAR”) regarding the audit of our fiscal

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Financial Condition and Results of Operations (Continued)

2017 through 2019 U.S. federal income tax returns, with which we agreed. The audit cycle for fiscal 2017 through 2019 is now considered effectively settled, resulting in a reduction of existing unrecognized tax benefits of approximately $340 million, which did not result in a material impact to our Consolidated Statement of Earnings and our Consolidated Balance Sheet. The resolution of the audit resulted in the release of tax reserves that were predominantly related either to adjustments to foreign tax credits that carried a full valuation allowance or to the timing of intercompany royalty revenue recognition, neither of which affected our effective tax rate.

On July 4, 2025, the U.S. government enacted the One Big Beautiful Bill Act (“OB3”) into law. OB3 introduces several changes to tax regulations, including the permanent restoration of 100% depreciation and the permanent r

[Excerpt truncated for page length; the complete text is on the linked full-MD&A page.]

Read the full FY 2025 MD&A: /company/HPE/mda/fy2025/
All MD&A years: /company/HPE/mda/


## MD&A history

Prior-year 10-K MD&A spans are extracted from SEC filings with the same bounded parser used for the latest filing. Each year's full verbatim text is on its own sub-page.

- [FY 2024 MD&A](/company/HPE/mda/fy2024/): filed 2024-12-19; accession 0001645590-24-000139 (https://www.sec.gov/Archives/edgar/data/1645590/000164559024000139/hpe-20241031.htm)
- [FY 2023 MD&A](/company/HPE/mda/fy2023/): filed 2023-12-22; accession 0001645590-23-000117 (https://www.sec.gov/Archives/edgar/data/1645590/000164559023000117/hpe-20231031.htm)
- [FY 2022 MD&A](/company/HPE/mda/fy2022/): filed 2022-12-08; accession 0001645590-22-000071 (https://www.sec.gov/Archives/edgar/data/1645590/000164559022000071/hpe-20221031.htm)
- [FY 2021 MD&A](/company/HPE/mda/fy2021/): filed 2021-12-10; accession 0001645590-21-000068 (https://www.sec.gov/Archives/edgar/data/1645590/000164559021000068/hpe-20211031.htm)




## Macro cross-references

Indicators mapped to this company's SIC classification (industry 3570 Computer & office Equipment) by grepcent's deterministic macro-sector crosswalk. A navigational mapping, not a statistical or causal claim.

- [INDPRO](/indicator/INDPRO/): Industrial Production: Total Index
- [TCU](/indicator/TCU/): Capacity Utilization: Total Index
- [PPIACO](/indicator/PPIACO/): Producer Price Index by Commodity: All Commodities
- [GDPC1](/indicator/GDPC1/): Real Gross Domestic Product
- [DGS10](/indicator/DGS10/): Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity
- [FEDFUNDS](/indicator/FEDFUNDS/): Federal Funds Effective Rate
- [CES0500000003](/indicator/CES0500000003/): Average Hourly Earnings of All Employees, Total Private
- [PAYEMS](/indicator/PAYEMS/): All Employees, Total Nonfarm

Macro-to-micro threads including this sector: [Inflation (CPI / PCE / PPI)](/thread/inflation-cpi-pce-ppi/), [US labor market](/thread/us-labor-market/), [Growth & output](/thread/growth-output/), [Money & trade](/thread/money-trade/), [Government finances](/thread/government-finances/), [Sector employment](/thread/sector-employment/), [Industrial orders & inventories](/thread/industrial-orders/), [Trade & external](/thread/trade-external/).

All macro indicators: /indicators/


## For LLMs & downloads

Markdown twin: /company/HPE.md · JSON record: /company/HPE.json · verified financials: /company/HPE/financials.json / /company/HPE/financials.csv · machine TOC for the whole site: /llms.txt