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Hewlett Packard Enterprise Co 8-K Report, Financial Results (Dec 5, 2024)

Reports
Earnings & Results·Regulation FD·Exhibits & Filings
Filing Date
Filed December 5, 2024
Period End
December 5, 2024
Securities
HPEHPE-PC
In the record · 2016–202610-K1010-Q338-K188

HPE filed 10 annual reports (10-K), 33 quarterly reports (10-Q) and 188 current reports (8-K) between 2016 and 2026.

  1. Restructuring8-K · Oct ’17Oct ’17
  2. Material agreement8-K · Jul ’20Jul ’20
  3. Leadership change8-K · Sep ’22Sep ’22
  4. Leadership change8-K · Jul ’26Jul ’26

01—Abstract

Summary

Summary of the 8-K filed December 5, 2024. Cited figures are marked; the original filing is the authoritative source.

Hewlett Packard Enterprise reported fiscal Q4 2024 (quarter ended October 31, 2024) with revenue of $8.5 billiona, up 15% year over year, and record quarterly revenue.

GAAP diluted EPS was $0.99b, up 102% year over year, boosted by a $733 million gain on the September 2024 sale of 30% of its H3C stake. Non-GAAP diluted EPS was $0.58, up 12%, and both GAAP and non-GAAP EPS beat the company's guidance ranges. Full-year revenue was $30.1 billion, up 3%, and full-year free cash flow was $2.3 billion, which management said exceeded its commitments.

Growth was led by Server (up 32% in the quarter) and Hybrid Cloud (up 18%), while Intelligent Edge fell 20%. Investors should weigh the strong top-line and earnings beat against softer underlying quality and cash generation. Quarterly operating cash flow fell $813 million year over year to $2.0 billionc, and free cash flow fell $821 million to $1.5 billion.

Gross margin compressed 400 basis points to 30.8% on a GAAP basis, reflecting a mix shift toward lower-margin Server revenue. Much of the GAAP EPS strength reflects the one-time H3C gain rather than recurring operations. Non-GAAP EPS of $0.58d was only modestly higher than the prior year, and the company's Intelligent Edge segment is contracting sharply.

Looking ahead, HPE guided fiscal Q1 2025 revenue growth in the mid-teens percentage range, with non-GAAP diluted EPS of $0.47 to $0.52. The company declared a regular quarterly dividend of $0.13 per share, payable January 16, 2025.

The pending acquisition of Juniper Networks has cleared several jurisdictions, including the EU and UK, but remains under U.S. Department of Justice review, with closing expected in early 2025. The outcome of that review is the key near-term event for the company's networking strategy.

02—Key points

Key Highlights

  1. Q4 FY2024 revenue of $8.5 billion, up 15% year over year and described by management as a record quarter.
  2. GAAP diluted EPS of $0.99 (up 102% YoY) included a $733 million gain on the sale of 30% of H3C; non-GAAP diluted EPS was $0.58 (up 12% YoY), above guidance of $0.52 to $0.57.
  3. Server revenue rose 32% to $4.7 billion, while Intelligent Edge fell 20% to $1.1 billion, with its operating margin down to 24.4% from 27.1%.
  4. Quarterly free cash flow declined to $1.5 billion from $2.3 billion a year earlier, and operating cash flow fell $813 million YoY to $2.0 billion.
  5. GAAP gross margin contracted 400 basis points YoY to 30.8%, and non-GAAP gross margin fell 390 basis points to 30.9%.
  6. Fiscal 2025 Q1 outlook calls for mid-teens revenue growth and non-GAAP diluted EPS of $0.47 to $0.52.
  7. Juniper Networks acquisition remains under U.S. DOJ review; the company expects closing in early 2025, and a regular $0.13 quarterly dividend was declared.

03—Questions

Frequently Asked Questions

  1. Why did GAAP EPS more than double when non-GAAP EPS grew only 12%?

    GAAP diluted EPS of $0.99 includes a one-time $733 million gain from the September 2024 sale of 30% of HPE's H3C equity interest. Non-GAAP results exclude this gain, so non-GAAP diluted EPS of $0.58 reflects core operating performance and grew a more modest 12% year over year.

  2. Is HPE's cash generation getting weaker?

    In the quarter, operating cash flow fell $813 million to $2.0 billion and free cash flow fell $821 million to $1.5 billion. Full-year free cash flow was $2.3 billion, roughly flat with the prior year. Inventory rose sharply to $7.8 billion from $4.6 billion, which partly reflects the strong server demand and contributed to the working capital build.

  3. What is the outlook for fiscal 2025 Q1?

    HPE expects revenue growth in the mid-teens percentage range year over year. It estimates GAAP diluted EPS of $0.31 to $0.36 and non-GAAP diluted EPS of $0.47 to $0.52, with the non-GAAP figure excluding about $0.16 per share of after-tax charges, mainly stock-based compensation, acquisition-related costs, and intangible amortization.

  4. What is the status of the Juniper Networks acquisition?

    The deal has received approval from the European Union, United Kingdom, India, South Korea, Australia, and other jurisdictions. It remains under review by the U.S. Department of Justice, which is expected to continue into the new calendar year. HPE and Juniper expect closing in early 2025, within the previously stated timeframe.

  5. Is the dividend safe, and what is the payout?

    HPE declared a regular quarterly dividend of $0.13 per share, payable January 16, 2025, to holders of record on December 20, 2024. Cash dividends declared for fiscal 2024 totaled $0.52 per share, up from $0.48 in fiscal 2023. Against non-GAAP EPS of $1.99 for the year, the annual dividend represents roughly a 26% payout ratio, though dividends paid in cash were $676 million for the year.

04—Continue

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