Hewlett Packard Enterprise reports fiscal 2024 fourth quarter results (original) (raw)
HOUSTON – December 5, 2024 – Hewlett Packard Enterprise (NYSE: HPE) today announced financial results for the fourth quarter ended October 31, 2024.
"HPE delivered an exceptional fourth quarter with record quarterly revenue, capping off a strong FY 2024. We exceeded our full-year commitments for revenue, EPS, and free cash flow,” said Antonio Neri, president and CEO of Hewlett Packard Enterprise. “Our differentiated portfolio across hybrid cloud, AI, and networking, which will be further enhanced with the pending Juniper Networks acquisition, positions us well to capitalize on the market opportunity, accelerating value for our shareholders.”
“Our exceptional revenue, profitability, and higher-than-expected free cash flow this fiscal year reflect disciplined execution and improving customer demand across our portfolio,” said Marie Myers, executive vice president and CFO of Hewlett Packard Enterprise. “We are pleased to have exceeded our commitments and look forward to the opportunities ahead in fiscal year 2025.”
Fourth Quarter Fiscal 2024 Financial Results • Revenue: $8.5 billion, up 15% from the prior-year period in actual dollars and in constant currency(1)
• Annualized revenue run-rate (“ARR”)(2): $1.9 billion, up 49% from the prior-year period in actual dollars and 48% in constant currency(1)
• Gross margins:
◦ GAAP of 30.8%, down 400 basis points from the prior-year period and down 80 basis points sequentially
◦ Non-GAAP(1) of 30.9%, down 390 basis points from the prior-year period and down 90 basis points sequentially
• Diluted net earnings per share (“EPS”):
◦ GAAP of 0.99,up1020.99, up 102% from the prior-year period and up 161% sequentially, above our guidance range of 0.99,up1020.76 to $0.81
◦ Non-GAAP(1) of 0.58,up120.58, up 12% from the prior-year period and up 16% sequentially, above our guidance range of 0.58,up120.52 to $0.57
• Cash flow from operations: 2.0billion,adecreaseof2.0 billion, a decrease of 2.0billion,adecreaseof813 million from the prior-year period
• Free cash flow (“FCF”)(1)(3): 1.5billion,adecreaseof1.5 billion, a decrease of 1.5billion,adecreaseof821 million from the prior-year period
• Capital returns to common shareholders: $219 million in the form of dividends and share repurchases
Fourth Quarter Fiscal 2024 Segment Results• Server revenue was $4.7 billion, up 32% from the prior-year period in actual dollars and up 31% in constant currency(1), with 11.6% operating profit margin, compared to 10.1% from the prior-year period.
• Intelligent Edge revenue was $1.1 billion, down 20% from the prior-year period in actual dollars and in constant currency(1), with 24.4% operating profit margin, compared to 27.1% in the prior-year period.
• Hybrid Cloud revenue was $1.6 billion, up 18% from the prior-year period in actual dollars and in constant currency(1), with 7.7% operating profit margin, compared to 3.8% from the prior-year period.
• Financial Services revenue was 893million,up2893 million, up 2% from the prior-year period in actual dollars and in constant currency(1), with 9.2% operating profit margin, compared to 8.0% from the prior-year period. Net portfolio assets of 893million,up213.6 billion, up 4% from the prior-year period in actual dollars and in constant currency(1). The business delivered return on equity of 17.0%, up 3.4 points from the prior-year period.
DividendThe HPE Board of Directors declared a regular cash dividend of $0.13 per share on the company’s common stock, payable on January 16, 2025, to stockholders of record as of the close of business on December 20, 2024.
Fiscal 2025 First Quarter OutlookHPE estimates revenue to grow by mid-teens percent when compared to revenue for the prior-year period. HPE estimates GAAP diluted net EPS to be in the range of 0.31to0.31 to 0.31to0.36 and non-GAAP diluted net EPS(1) to be in the range of 0.47to0.47 to 0.47to0.52. Fiscal 2025 first quarter non-GAAP diluted net EPS excludes net after-tax adjustments of $0.16 per diluted share primarily related to stock-based compensation, acquisition, disposition and other related charges and amortization of intangible assets.
Juniper Networks Pending Transaction Update HPE’s pending acquisition of Juniper Networks, Inc. has received approval from key jurisdictions including the European Union, United Kingdom, India, South Korea, and Australia, among others. HPE and Juniper Networks are cooperatively engaged with the U.S. Department of Justice as the agency continues to review the transaction into the new calendar year. HPE and Juniper expect that the transaction will close in the early part of 2025 — within the previously stated timeframe.
Download the Q4 FY24 earnings infographic here.
Download the Q4 FY24 full financial tables here.
1 A description of HPE’s use of non-GAAP financial information is provided below under “Use of non-GAAP financial information and key performance metrics.”
2 Annualized Revenue Run-Rate (“ARR”) is a financial metric used to assess the growth of the Consumption Services offerings. ARR represents the annualized revenue of all net HPE GreenLake cloud services revenue, related financial services revenue (which includes rental income from operating leases and interest income from finance leases), and software-as-a-Service, software consumption revenue, and other as-a-Service offerings, recognized during a quarter and multiplied by four. We use ARR as a performance metric. ARR should be viewed independently of net revenue and is not intended to be combined with it.
3 Free cash flow represents cash flow from operations, less net capital expenditures (investments in property, plant & equipment (“PP&E”) and software assets less proceeds from the sale of PP&E), and adjusted for the effect of exchange rate fluctuations on cash, cash equivalents, and restricted cash.