Hewlett Packard Enterprise Company (HPE) Bundle
A Brief History of Hewlett Packard Enterprise Company (HPE)
Hewlett Packard Enterprise Company (HPE) was established in 2015 as a spin-off from Hewlett-Packard Company, focusing on enterprise products and services. HPE specializes in servers, storage, networking, and software, primarily targeting large businesses and organizations.
Company Structure and Operations
As of July 31, 2024, HPE operates through five reportable segments: Server, Hybrid Cloud, Intelligent Edge, Financial Services (FS), and Corporate Investments and Other. Each segment contributes to the overall revenue and operational efficiency of the company.
Financial Performance
For the three months ended July 31, 2024, HPE reported:
| Metric | Q3 2024 | Q3 2023 | % Change |
|---|---|---|---|
| Net Revenue | $7,710 million | $7,002 million | 10.1% |
| Gross Profit | $2,439 million | $2,510 million | (2.8%) |
| Net Earnings | $512 million | $464 million | 10.3% |
| Diluted EPS | $0.38 | $0.35 | $0.03 |
For the nine months ended July 31, 2024, HPE’s financials were as follows:
| Metric | 9M 2024 | 9M 2023 | % Change |
|---|---|---|---|
| Net Revenue | $21,669 million | $21,784 million | (0.5%) |
| Gross Profit | $7,272 million | $7,680 million | (5.3%) |
| Net Earnings | $1,213 million | $1,383 million | (12.3%) |
| Diluted EPS | $0.92 | $1.05 | $(0.13) |
Stockholder Equity
As of July 31, 2024, HPE’s stockholder equity was detailed as follows:
| Item | Amount (in millions) |
|---|---|
| Common Stock | $13 |
| Additional Paid-in Capital | $28,361 |
| Accumulated Deficit | $(3,240) |
| Accumulated Other Comprehensive Loss | $(3,057) |
| Total Stockholders' Equity | $22,134 |
Market Position and Strategic Initiatives
HPE has positioned itself as a leader in the Hybrid Cloud space, with the HPE GreenLake platform gaining traction among clients looking for flexible consumption models. As of July 31, 2024, HPE reported an Annualized Revenue Run-rate (ARR) of $1,723 million, reflecting a year-over-year growth rate of 35%.
Debt and Liquidity
As of July 31, 2024, HPE’s long-term debt stood at $7,939 million, down from $7,487 million as of October 31, 2023. The current portion of long-term debt was $3,129 million.
Cash flow provided by operating activities for the nine months ended July 31, 2024, was $2,311 million, compared to $1,585 million for the same period in 2023.
Recent Developments
HPE has been focusing on cost management and operational efficiencies to counteract inflation and supply chain challenges. The company continues to invest in its product offerings and expand its market presence globally.
A Who Owns Hewlett Packard Enterprise Company (HPE)
Major Shareholders
As of 2024, the ownership structure of Hewlett Packard Enterprise Company (HPE) is characterized by a mix of institutional and individual investors. The top shareholders include:
| Shareholder Type | Shareholder Name | Percentage Ownership |
|---|---|---|
| Institutional Investor | The Vanguard Group, Inc. | 8.75% |
| Institutional Investor | BlackRock, Inc. | 8.50% |
| Institutional Investor | State Street Corporation | 4.75% |
| Institutional Investor | Wellington Management Group LLP | 4.25% |
| Individual Investor | Antonio Neri (CEO) | 0.05% |
Stock Performance
HPE's stock has shown significant activity in 2024. The stock price as of July 31, 2024, was approximately $16.35, reflecting a year-to-date increase of 12.5%. The market capitalization stood at approximately $22.8 billion.
Shareholder Distribution
The shareholder distribution is as follows:
- Institutional Investors: 70%
- Retail Investors: 20%
- Company Insiders: 10%
Recent Shareholder Actions
In 2024, HPE announced a quarterly dividend of $0.13 per share, with total dividends paid to shareholders amounting to approximately $507 million for the fiscal year. The company also authorized a share repurchase program of $900 million, indicating strong cash flow management and commitment to returning value to shareholders.
Ownership Changes
Recent trends indicate a slight shift in ownership dynamics, with institutional investors increasing their stake by approximately 2% compared to the previous year. This trend suggests growing confidence in HPE's strategic direction and operational performance.
Conclusion
As of 2024, HPE continues to be predominantly owned by institutional investors, with a strong focus on enhancing shareholder value through dividends and share repurchases.
Hewlett Packard Enterprise Company (HPE) Mission Statement
Company Overview
Hewlett Packard Enterprise Company (HPE) is a global technology leader focused
How Hewlett Packard Enterprise Company (HPE) Works
Business Segments
Hewlett Packard Enterprise (HPE) operates through five primary segments:
- Server
- Hybrid Cloud
- Intelligent Edge
- Financial Services
- Corporate Investments and Other
Financial Performance Overview
For the three months ended July 31, 2024, HPE reported the following financial metrics:
| Metric | Q3 2024 (in millions) | Q3 2023 (in millions) | Year-over-Year Change (%) |
|---|---|---|---|
| Net Revenue | $7,710 | $7,002 | 10.1% |
| Gross Profit | $2,439 | $2,510 | (2.8)% |
| Gross Profit Margin | 31.6% | 35.8% | (4.2) pts |
| Earnings from Operations | $547 | $471 | 16.1% |
| Net Earnings | $512 | $464 | 10.3% |
| Diluted Net Earnings per Share | $0.38 | $0.35 | $0.03 |
Segment Performance
HPE's revenue and earnings from operations by segment for Q3 2024 are as follows:
| Segment | Net Revenue (Q3 2024) | Earnings from Operations (Q3 2024) | Year-over-Year Change (%) |
|---|---|---|---|
| Server | $4,280 | $464 | 35.1% |
| Hybrid Cloud | $1,300 | $66 | (6.9)% |
| Intelligent Edge | $1,121 | $251 | (23.0)% |
| Financial Services | $879 | $79 | 0.7% |
| Corporate Investments and Other | $262 | $(4) | 6.5% |
Cash Flow and Liquidity
For the nine months ended July 31, 2024, HPE reported:
| Cash Flow Metric | Amount (in millions) |
|---|---|
| Net Cash Provided by Operating Activities | $2,311 |
| Net Cash Used in Investing Activities | $(1,580) |
| Net Cash Used in Financing Activities | $(1,372) |
| Free Cash Flow | $797 |
Debt and Equity Structure
As of July 31, 2024, HPE's debt and equity metrics included:
| Metric | Amount (in millions) |
|---|---|
| Total Debt | $11,803 |
| Cash, Cash Equivalents, and Restricted Cash | $3,905 |
| Total Stockholders' Equity | $22,134 |
| Debt-to-Equity Ratio | 0.53x |
Market Trends and Future Outlook
HPE's Annualized Revenue Run-rate (ARR) as of July 31, 2024, was:
| Metric | Amount (in millions) | Year-over-Year Growth Rate (%) |
|---|---|---|
| ARR | $1,723 | 35% |
How Hewlett Packard Enterprise Company (HPE) Makes Money
Revenue Segments
Hewlett Packard Enterprise (HPE) generates revenue through five primary segments: Server, Hybrid Cloud, Intelligent Edge, Financial Services, and Corporate Investments and Other. As of July 31, 2024, the net revenue from these segments is detailed below:
| Segment | Net Revenue (Q3 2024, in millions) | Year-over-Year Change (%) | Earnings from Operations (Q3 2024, in millions) | Earnings Margin (%) |
|---|---|---|---|---|
| Server | $4,280 | 35.1% | $464 | 10.8% |
| Hybrid Cloud | $1,300 | (6.9%) | $66 | 5.1% |
| Intelligent Edge | $1,121 | (23.0%) | $251 | 22.4% |
| Financial Services | $879 | 0.7% | $79 | 9.0% |
| Corporate Investments and Other | $262 | 6.5% | $(4) | (1.5%) |
| Total | $7,710 | 10.1% | $547 | 7.1% |
Server Segment
The Server segment has shown significant growth, with net revenue increasing by $1,112 million, or 35.1%, in the third quarter of fiscal 2024 compared to the same period in 2023. The rise in revenue is attributed to higher average unit prices (AUPs) and increased unit volume across products.
Hybrid Cloud Segment
The Hybrid Cloud segment experienced a revenue decline of $97 million, or 6.9%. This decline is primarily due to reduced AUPs, although there was a slight increase in unit volume. The earnings from operations in this segment fell to $66 million, reflecting a decrease in operational efficiency.
Intelligent Edge Segment
In the Intelligent Edge segment, net revenue decreased by $335 million, or 23.0%. This decline is largely driven by lower product volumes and unfavorable product mix effects. The earnings from operations also dropped to $251 million, which represents a significant decrease in profitability in this segment.
Financial Services Segment
Financial Services reported a slight revenue increase of $6 million, or 0.7%, attributed to higher finance income from increased average finance leases. The segment's earnings from operations improved to $79 million, reflecting efficient cost management strategies.
Corporate Investments and Other
This segment recorded a revenue increase of $16 million, or 6.5%. However, it suffered an operational loss of $4 million, indicating challenges in profitability despite revenue growth.
Overall Financial Performance
For the nine months ended July 31, 2024, HPE reported total net revenue of $21.7 billion, reflecting a slight decrease of 0.5% compared to the prior year. The U.S. market saw a modest increase in revenue, while international revenues declined slightly.
| Financial Metrics | Q3 2024 (in millions) | Q3 2023 (in millions) | Change (%) |
|---|---|---|---|
| Net Revenue | $7,710 | $7,002 | 10.1% |
| Gross Profit | $2,439 | $2,510 | (2.8%) |
| Operating Profit | $547 | $471 | 16.1% |
| Net Earnings | $512 | $464 | 10.3% |
| Diluted EPS | $0.38 | $0.35 | $0.03 |
Annualized Revenue Run-rate (ARR)
As of July 31, 2024, HPE reported an ARR of $1,723 million, a year-over-year growth of 35%. This growth is attributed to the expansion of HPE GreenLake services, which has become a key driver of revenue in the cloud services market.
Cash Flow and Capital Structure
HPE's cash flow from operations for the nine months ended July 31, 2024, was $2,311 million, with free cash flow reported at $797 million. The company maintains a robust liquidity position with cash and cash equivalents amounting to $3,905 million as of July 31, 2024.
| Liquidity Metrics | As of July 31, 2024 (in millions) | As of October 31, 2023 (in millions) |
|---|---|---|
| Cash and Cash Equivalents | $3,905 | $4,581 |
| Total Debt | $11,803 | $12,355 |
| Available Borrowing Resources | $6,109 | $6,588 |
Conclusion of Segment Performance
HPE's diversified revenue streams across various segments showcase its adaptability in the evolving technology landscape. Despite challenges in some areas, the overall performance indicates resilience and ongoing strategic initiatives aimed at growth and profitability.
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