Hewlett Packard Enterprise (HPE) 5 Dec 242024 Q4 Earnings call transcript

Good afternoon, and welcome to the Fourth Quarter Fiscal 2024 Hewlett Packard Enterprise Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded for replay purposes.

I would now like to turn the presentation over to your host for today's call, Paul Glaser, Head of Investor Relations. Please go ahead, sir.

Good afternoon. Head Relations Glaser, Enterprise. Hewlett Paul am of for Investor Packard I President Officer; would to Financial Call Earnings HPE's you to Officer. with Chief Fiscal Neri, I welcome Quarter our like HPE's Marie and Myers, XXXX Fourth Antonio and Chief Executive Conference

is will Before call be after call to concludes. available that call replay A the let me shortly webcast. handing you of remind Antonio, this being the webcast the

Investor the the posted the release web release on press HPE accompanying have We slide our and Relations page. presentation

Elements referenced forward-looking of of this and statements. not businesses today. on are and does to view and them as intend world forward-looking financial best HPE update the information obligation such call assumes we see based are on the no our our any

financial HPE's on estimates discussed Form note report We differ this at time the in also on XX-K based the XX, from year and that reported quarterly reflects materially ultimately this ended could available October information fiscal XXXX. on for amounts call the information

For on these to the a Please the of more for to risks, involve HPE's earnings the and refer uncertainties SEC disclaimers see statements that relating filings forward-looking discussion materials with information, risks. please detailed assumptions.

a non-GAAP release on to our financial information we our presentation today's earnings we to slide accompanying have expressed comparable the have website provided refer For details. reconciliations GAAP Please basis, on the website. on information tables and for

are unless to otherwise, rates, Throughout exclude currency. growth of presented a this impact year-over-year conference all call, and the noted on basis adjusted revenue

turn their let Marie earnings in comments. prepared With it reference to me our over and Antonio Antonio. will Finally, that, presentation

today. thank and you us Paul, you, all for Thank joining

Networks quarterly to the an provide update performance, would I I Juniper my yearly Before and comments our on share on acquisition. like

competitive South Department calendar with key We continue the and geographies world, year. of India, clearance of we the expect the United are approvals which the have from will engaged the the their European we and States, new and In Australia, have Union, see unconditional benefits review transaction. U.K., around Korea, given including received the Justice, into

for the the frame. close the HPE position a to industry. the and among combined AI. This hybrid will both cloud foundations anticipate enable part solutions The global interest enhanced deal strengthen stated companies' security that time modern, as to continue and and U.S. also networking XXXX, strong believe U.S. portfolio secure Juniper complete early will provide the to a improve of within innovator advancing us We Both ability technology in transaction offer will of essential national will HPE's networking previously transaction by compete fundamentally innovate companies.

In fourth generated to for $X.X billion, off We in the time dollar Turning record a up cap exceeding we exceptional strong $X results. had quarterly revenue year. actual history. first to year-over-year, our an billion of quarter XX% terms,

adoption the earnings in flow. QX reflect GreenLake exceeded HPE fiscal year net the share, and cash our diluted of our results acceleration AI. results for Our revenue, and of expectations free continued revenue and per growth 'XX

of build throughout consecutive We our our each in of double-digit earnings significantly quarter was consecutive rates up net Contributing to operating third diluted $X.X profit, a our server share. non-GAAP year-over-year, non-GAAP per record revenue, performance XX% revenue growth. and billion, our improved year momentum of constituted saw year-over-year the continuation positive of sequential a drove third the across we across of growth growth QX business. segments, revenue quarter

QX, pleased I share exiting to year in fiscal am Sequentially, billion with systems close fiscal our strong. AI of After year revenue $X.X QX orders since was $X.X systems up to 'XX. the billion, 'XX AI that XX% demand cumulative of remains

to $X.X over We have new AI bringing backlog orders, received systems billion.

market drove year-over-year double-digit of dynamics to orders also business our third server reflect traditional growth. quarter continued improving consecutive we as Our

revenue resulting Cloud for in revenue HPE year-over-year Cloud and XX% growth Storage. with continued XX% sequentially, increasing HPE grew of Private billion, and Hybrid revenue in $X.X

are We enhance and the to data company, pharmaceutical public Lupin meet workloads security from India like Limited, cloud large requirements. their repatriate a regulatory seeing customers and compliance

Customer to and Miami-Dade an at adoption improve we pace. lower approximately County, Alletra launch, sold HPE States, existing X,XXX Since implemented consolidate most Storage systems. MP MP county TCO footprint of Alletra rise the have Storage accelerated solutions the HPE populous sustainability. continues an our seventh United to to and in storage performance

reflecting business Edge orders consecutive expectations growth, demand its environment. Intelligent Our an our of third quarter improving for achieved

with of the driven volumes to an growth GreenLake and saw all-time we pleased data financing. We Financial demand rose strong that are AI an by Services business. growth market high HPE in important center order Aruba $X.X our Networking double-digit billion networking, quarter, for particularly for financing year-over-year HP this HPE

more need AI Cloud. capacity, or customers the Hybrid adoption to deploy to accelerate clear is It investment whether of

Our record-breaking record margin non-GAAP to operating QX million. sequentially. points resulted revenue in than with of profitability operating a XX%, profit in basis XXX performance translated That increase non-GAAP $XXX more of

QX share, close record-breaking least operating half free strong year, note, year-over-year, exceptional our full 'XX X% free which accelerated flow. across we of with of revenue we the our of customers management, year revenue, year disciplined diluted $XX as expense generated the billion result new topped guidance growth $X.X exceeding X,XXX cash for billion in more flow, per at $X.X earnings in portfolio. cash billion a Combined than the our and year. added exceeding fiscal on net year a performance, for our exceeding commitments We the a the As back

about very It We results working. excited clear opportunities is are is ahead with pleased and strategy our HPE. for our the

enabling and networking us hybrid stack of our a solutions full Providing accelerate us versus We meet our across cloud. and have clearly product a differentiates and services tremendous from competition our assets, for AI, extensive set shareholders. customer needs to of value edge-to-cloud, including

portfolio wave is cooling in we At the peak of for manage they QX, direct to AI customers for unique and innovation, a next liquid results next the increased further XXX% CPUs HPE In This product industry-first our cooled energy experience the additional to customers is recent decades position architecture, transformative densities. we which of continued as us Day, HPE to share. positioned enhanced innovation. is announced liquid lead in capture and our our generation clearly market liquid our investment capability in direct technologies. cooling performance to critical while industry-first and from fanless architecture GPUs and leverage of facilitating AI

supercomputing. ago, from AI announced the Slingshot our systems newest generative support our Two SCXX, workloads networking weeks are competition. These of product to and cooled differentiating at and liquid AI innovations we XXX-gigabits fabric lines, products supercomputing enhancing both direct the us engineered of performance cluster exascale HPE

in announced Department energy-efficient of fastest U.S. Capitan fastest and list. Lawrence the to among supercomputer only we has X X.X At more X the world's the HPE SCXX, Livermore it of also than the the world that has at HPE Laboratory. Energy's El the also National including delivered not supercomputer verified in deployed the numbers the top on XX X, exaflop, world, now the is world. in X fastest most supercomputers is

to for to continue of solutions to HPE expanded also launching deploy we enterprise many AI use accelerate others. Since Private all have businesses Deloitte as AI, innovate tailored C-Suite AI. AI adoption cases their such our of industry-specific sizes Cloud help to with We and help collaboration

Unleash customers' cases to ecosystem the Private introduced and partner AI use their ability grow address AI expand HPE we Cloud addition, program with In to our AI.

our pipeline days, underway. are with deals VMware simplify of closed is Cloud with us their also are which to field optimize hundreds many Private virtualization insights QX, renewable strong the interest customers them asking While in unlock the compelling HPE weather proof-of-concept leading help we a energy, We early selected RWE, during of first their costs. and company private in from still in to AI data. Customers including clouds

At VMware, Barcelona and virtualization manage Essentials, VM many launched across HP, X enables HPE weeks customers others. HPE Discover to estates we ago, their which

HPE a of Essentials, longer We and single them and acquisitions on OpsRamp, With operational giving have Xx Morpheus locked customers they achieve built lower our virtualization be TCO. vendor. to no recent allowing to can Data VM up flexibility into

across an As HPE This a we to public our innovate provide KVM solution. hybrid Essentials, reduce flexibility open to an operations suite virtualization full capabilities increasing a costs source on-premises multi-cloud customers a while and allows part environment. dramatically cloud in enterprise-grade multi-stack their of of also VM

multiprotocol In disaggregated storage Storage in AI-driven, and architecture. portfolio Alletra an to storage, cloud-native our transition we platform as we continue our to HP MP invest

revolution for high-speed optimized Alletra HPE XXXXXX high-performance new restore MP with recovery. unstructured AI and new Our a object for is in data rapid and storage Storage scale lakes designed exabyte for backup

storage in the SX-compatible Our available and deduplication object interface data market. AWS streamlines solution XXx up with to integration reduction backup and any supports

MP compared competitor to HPE in faster storage XXXXXX, the can customers performance object Xx to Storage Alletra up market. achieve solutions With

our our copilot us Aruba HPE HP capabilities cloud. Intelligent Networking into GreenLake helping Edge advance Finally, are to Central AIOps with Innovation built

experience operators announced and for we new X quarter, enhance the to our solutions networking the customers. security During

third-party is first to HPE The with OpsRamp integration monitor the devices.

telemetry analytical-based behavioral train AI detection We a where also network we and to capability, are and network to response devices. monitor IoT introduced customer models leveraging

have customers to transform IT We their that technology every to the place infrastructure am for around leading innovations team better. the a important proud day market them innovator. our HPE an I globe help as the modernize bring in members and

outperformance year exceptional I of results our am commitments in our very and several the with our fourth full resulting pleased to quarter shareholders.

accelerate the is AI, is and to value shareholders. our trends capture reshaping well our portfolio mega strategy to unique positioned networking, well and cloud product customers Our aligned and hybrid new for

customers acquisition with Juniper further edge-to-cloud to of pending We providing complete expect solutions. Networks portfolio, enhance our the

I increased opportunity am for have achieve am look year we the I value we what year significant the to our drive can extremely the in fiscal excited about forward about ahead. shareholders. to coming optimistic and

will Marie? our results over to Now for let Marie and guide provide call who quarter. about first the me the more turn details QX

do. Thank environment, infrastructure profitability, exceeded We delivered said what each well revenue on refreshes. generated in in above dynamic AI to and you, in a segment fiscal free We We as and ended cash revenue, we footing Antonio, are achieved afternoon. solid flow solid record our we sequentially investments good leading XXXX guidance. would executed and growing quarterly

from QX, grew management AI systems results. revenue and server few also In non-GAAP than target. XXXX and to met billion we our operating margin A disciplined profit. highlights our $X.X operating improved maintained non-GAAP XXX% more We cost

our transition for orders. continued storage with and We Alletra within MP portion accounting year the product meaningful total of ended storage a

storage recurring long higher-margin greater over Our will term. transition more mix of drive a software-defined revenue to the

of revised grew demand In as million We and shareholders dividends customers XXXX reflect results cash a period. $XXX cost via our $XX.X diluted end $X.X execution both improving in $X.XX Lastly, structure Non-GAAP in and billion, EPS focused our the free to Intelligent above returned our flow came Overall, Edge, strategies. total, navigated September. range X% and of AI rightsized exceeding share we revenue outlook repurchases. we of fiscal the we net to in as billion implement outlook ranges. provided digestion high we

We quarter. and XX% our both record net record the of of details revenue EPS, of end the into delivered quarterly came dive non-GAAP diluted high me in Let which guidance. second grew highest revenue the led in networking. above year-over-year Total billion. traditional and and the $X.X in recovery compute, conversion a strong X% Hybrid in by of backlog, Growth quarter within quarter-over-quarter continued refreshes was AI a performance systems Cloud, better-than-expected to

the approximately ARR customers. the to billion, preferred nearly was customers approximately XXXX, securities in $X.XX, We dilution the We report end with unique are year by since our during GreenLake despite added net non-GAAP into of from EPS the September, ending guidance which above grew factored new XX% QX HPE of convertible HPE X,XXX to diluted $X.X year-over-year primarily of not doubling XX,XXX issuance outlook. pleased high GreenLake. driven our quarter,

gross I strong XXX AI am of double-digit XX with basis This points year-over-year resulted for lower offerings, sequential to and XX.X%. $X.X mix continued basis Intelligent differentiated which points happy our billion. revenue, growth system margin in record from to revenue systems combined drove to AI report quarter-over-quarter down Edge, contribution demand

billion. and operating reported structure free year-over-year exceeded down our to flow, XXX operating points through $X.X focus margin expenses. was expenses closely points rolled were which as sequentially. Non-GAAP totaled year-over-year Non-GAAP Strong million streamlining managing and expectations quarter-over-quarter profitability are basis basis up discretionary on we our X% and and up XX.X%, decreased cash as $X cost XXX

net HXC on diluted $XXX sale on costs, Fiscal recognized we our than OI&E of of and EPS highest management. from previously investment expected diluted better-than-expected net the GAAP cash in EPS excludes dispositions. lower $X.XX and compensation related was $X.X of expense billion, net full year. benefited flow ever XXXX aggregated from free acquisition diluted GAAP net a the of EPS were from Non-GAAP HXC for non-GAAP guidance, expense other stock-based gain the and expense, our at above both primarily partial our charges amortization $X.XX EPS and primarily million intangibles. benefiting tax

let's turn the Now to segment results.

up business revenue in our GenXX as Our servers. year-over-year server the America third consecutive revenue Server grew key the has and during quarter-over-quarter are compute quarterly $X.X billion, and higher achieved for of driver new and traditional high the double record a systems to of in an X% workloads. AI server quarter. all-time ongoing year-over-year which grew Europe business with growth was and Adoption up digits its customers sequential The sequentially fourth traditional been momentum carry in strongest refreshes quarter, and AUPs. driven consecutive quarter investing continued for North by products, XX%

orders at business In the quarter grow core for the compute AI systems contributed more in during billion. AUP and were our $X.X fourth with expectations the systems, accounted our new continue to to In line quarter, approximately than of GenXX revenue we AI growth. X/X highs. to

QX, quarter orders debook orders approximately have $XXX net current leaving Subsequent to quarter, we our our at of billion. we an However, over that the received million. backlog in to the the order for $X.X bring had end

and mentioned systems XX and have can points XX.X%, XXX margin be quarter-over-quarter. we was before, lumpy year-over-year points basis basis up up this AI orders operating an quarter of Fourth As that. server example is

a grew ramp Hybrid was to quarter-over-quarter our of growth by the exceeding year-over-year billion, of $X.X MP. Cloud to Revenue Private Moving we Alletra XX% materially and continued revenue revenue XX% led increase. and guidance Cloud, slight

in we Cloud across quarter, education, that our is we the pipeline services. orders During a AI received financial and and corporations for growing regions. first Interest Private strong as verticals includes target manufacturing,

AI moving use to are cloud internally due cost from compliance. Cloud also and and cases performance deployed public Private have the We better

fastest storage, we a our carry company's portion in investments products storage of IP market year-over-year In long ramping against which Hybrid in due sales points up predominantly our owned balancing are remains these OpEx the takes product P&L operating Keep services controls. to Cloud better higher to deferred term. Alletra was history. and MP in XXX points software ahead and of trends. is expectations to revenue, margins X.X%, XXX translate up basis but margin the and longer benefits basis sequentially, mind,

believe recovery offset switching and customers Now $X.X path Intelligent of Sequentially, was Edge on flat by campus. saw declines down have inventories. growth in business products quarter-over-quarter. largely digested software, to on Total services, year-over-year Edge. remains we and We excess and Intelligent revenue essentially a the in partially WLAN billion, and XX%

that in are pipeline, seeing Importantly, we our deals improving. is more large confidence giving us demand

the Keep we XXX to QX points drawdown of due of of basis expectations. were backlog in basis with mind, Operating in XXX networking fiscal in but our from benefiting lower quarter-over-quarter still margin XXXX. down points XX.X% OpEx line up was year-over-year

Services. Financial Lastly,

business a year-over-year Financing $XXX new $X.X increased Our quarter-over-quarter. high up million up all-time X% Services to revenue, volumes Financial billion. X% of and XX% year-over-year of generated

basis XXX on remained ratio margin steady X.X% up equity and Our and QX year-over-year Operating totaled return XX X.X%, loss was up near XX%. points points basis quarter-over-quarter.

free billion due in $X higher cash expectations quarter, cash billion to and both flow increased of our to We Moving and of of flow the cash generated capital operating exceeded strong which and revenue allocation. collections. flow $X.X

the free nature the cycle quarter. cash $X.X year, our record full billion, $X.X from the 'XX was at X last days, quarter-over-quarter to billion, systems down Inventory of year down cash X% negative billion. guidance above days due XX business. of AI a was For QX days a up $X.X QX our conversion and XX ended from flow

inventory business. during XXXX grow fiscal backlog AI We and are focused on reducing convert our we as systems storage

We common via total of repurchases million During $XXX year. $XXX to and full via returned the a QX, $XX dividends shareholders, million respectively. we returned during million share

XXXX. for Moving to outlook QX fiscal our

time said, in early for close fiscal we transaction expect provide guidance at will XXXX, which company the Juniper XXXX. Antonio combined to As we

the some However, multiple should are indicate to let with me we conversations as provide growth. thinking thoughts spending higher how IT year. high-level about upcoming tailwinds XXXX to revenue contribute customer Overall, that in

expect sovereigns, orders continued compute and recovery expect although We competitive of growing we adoption enterprises traditional and by systems in AI to lumpy. remain and

Hybrid the strategies. throughout we recover see to In networking, demand customers projects execute to expect in modestly year. And AI transformation accelerate we order beginning are in will digital on Cloud,

we basis, with On revenue the in For quarter, the is normal this be first line growth in mid-teens. sequential a to expect seasonality. year-over-year

server to be revenue quarter-over-quarter. down We expect

flat to sequentially Server contribution following AI a systems expect closer quarter. the sequential seasonality operating to very next-gen modest to customers will the business as with XX% traditional mid-single-digit growth to in And navigate cycles a we stronger-than-seasonal flattish to sequential the We to lower of in strong due transition Hybrid operating and and first be networking, compute In historical range. margin GPUs. in growth prolonged margin in XX% expect Cloud, growth. still QX, we be decline expect around quarter managing are sales the in

We be the due to margin expect low Intelligent XX% Edge mix. in operating to range

we and net be to expected benefit net Juniper weighted sequential $X.XX to diluted revenue expect $X.XX of income with the our average X.X including EPS mix, between diluted billion $X.XX EPS margin convertible of a preferred a from more financing. Overall, GAAP estimate to associated between and our Gross higher OpEx. securities. favorable $X.XX headwinds million and contribute dilution of in $X.XX with QX cost decrease more shares than modest offsetting from based interest and will net XX is we OI&E the non-GAAP to diluted bottom line be outstanding, positively on

procure For continuing meet quarter. demand first to cash manage flow, We current needed we free inventory. systems typically and cash to intend while consume AI the components in future to

rating. of to our We our remain allocation we the to capital framework, pace in committed common and our similar intend QX. shares dividend, long to investment-grade term balanced QX, buy back a For stock at

to returning turn I'll to results we that shareholders. can and QX well generate reinvest free growth and ended business while With that, for into drive strong it positioned delivered capital over flow the profitable Q&A. also we summary, In cash XXXX fiscal

[Operator your Wamsi of question Instructions] Bank from America. today first will with And come Mohan

dilution on strong stock. and quarter Congrats the the especially given the preferred guide, from

at and the And can pipeline know shaping in AI I some sense -- But of the backlog sense how given composition comments business, quarter? how of be? AI you your some how up some of you levels that could the look we of your the dipped about can up, is As us pipeline intra-quarter. give looks you the us give maybe made backed that it's kind what

is the biggest which a Antonio. capacity pipeline, be driver I $X.X hyperscalers the of backlog day Obviously, per Yes. inside on X remember or pipeline than shared basically more is market. as Thanks, what segments Wamsi. ago, billion. Tier current to the And the provide This segment to is the as multiple of of which that they a as model GPU is The there now obviously, we continues a on X, Tier X call hour our basis. business in well demand are builders, X key

in they offer some only it size doing So with our we are announcement large-sized X positive have customers available not made to that the But because I co-engineered the and the continue be those There obviously on the on X. the the hundreds comments the the and we is pleased, vary NVIDIA very other of driver. of they grow news are I'm enterprise made remarks, continue the deal see X now and AI September Marie in of the will of segments. But biggest deals that and is to fact steadily. there that we made But pipeline The what the remember that, solution size same really in are it's deal proof-of-concept. of the pipeline. June, pipeline, interesting

to collected offer, to had enhancement already X that ecosystem, we already ago, in AI partner Deloitte. with We weeks enterprise enterprise additional to be orders. X we orders So in AI. And a closed made particularly deals really, able we weeks including and collect

say, GPUs then of will transition, be So the happen to next a And that segment, in latest the to first quarters. course the over very pleased. on the This driver as XXXX is going growth I go we obviously, the few would forward.

your Stanley. from Morgan today question will Marshall next come And Meta with

the talk helpful. into and on -- just versus margins. takes margin diving on XD into AI quarter. some the gross about on the of this of puts Or server or some of gross you weight that margins the just some El just Maybe of and Capitan the dynamics would particularly servers of play recognition? maybe Congrats quarter be Can kind

some saying, And by I'll it's margin of first we up segment how you don't op but we into know, Meta, get about think all, margins. at gross level, you around me color let add just our typically Marie. the as give

service $X.X had ever the And XX.X%. all, quarter. First say, in performance with perspective, of you AI our pleased a of We actually really it, I'd if revenue from segment look, think highest server were about the we at billion.

think So there. see performance can I you the just

think In we in note. terms about and A El actually the actually of of it, Capitan the the so final to get was color to included did couple quarter how acceptances. points

finally, it look playing look there. mix result, I to been the higher revenue out mix and GenXX, been margins. And that particularly frankly, of then a costs. as obviously you discipline. about servers, can in is passing we've if think, the see far helping richer successful And inside driving of the traditional really And but GPU controls our all X/X terms we've at cost prudent the has that's Meta, OpEx really about so compute, commodity of is If also, over competitive higher structural at and And our we're both you configurations. off date, AUPs particularly it's server, us scale we you see with and

server that's thinking about So we're how margins.

us, there the Marie deployment they for to the must they depreciation X.X when of and customers power they in year-over-year But absorb Number need units million the this refreshed was number consecutive base lot installed said, think system. growth in orders the free because cooling what double-digit several and in to is are, little about up two for of that are Meta, the reaching consuming new of doing space, And are opportunity is think HPE, work a server. traditional just about this when ahead addition of one, cycle. And reasons: quarter I be very have third enterprise reaching AI, energy. they to or

opportunity So and the for both as touch it. then comes services configuration, a unit with a comes and this big obviously, a perspective with Marie that us, said, GenXX is from different

your next with Barclays. Long Tim And question from come will today

hoping X-parter could on a ask AI was I the service. I

First, just debook something can backlog. came $XXX It you clarify or was that else going someone double or in? that of there? that Was debook had competitive that on million comment ordered like a loss sounds

And thresholds then have the flow second OEMs part, following you on the margin metrics margin at that gross looking lower do margin. Can where you're deals you you're talk looking ODMs at you a prohibits going or AI gross you cash at? little -- or gross or are would bit maybe for something about else the go? certain when what business, Are from

Sure. question. And the thank for you

quarter As we were expectations. line in during said before, with the orders our

In in fact, billion $X.X booked we of QX. new orders

control we with is the manage keep quarter However, making lot debook billion. to the we sure it $X.X environment, more we ended was customer. of we up it this felt on ourselves now and already over other very had we which business. few to felt of areas as the risk, therefore, and and concern focus we that's vigilant weeks, during going continue we engage be up throughout a million very was yesterday, with same to strong And a And carried why prudent a debooked next very that about backlog and $XXX we of how risk. And specific which the a large the because in pride we a order, we

it. nothing was to So customer, It what do concern do else. with a to that's debook with decided happened. specific prudent has and competitive. We with we nothing It has had it everything to a

how about this have margin a growth. we think Yes. and use that cost we've on for pursue remain framework I price absolutely and we AI structure as on but And profitable said and our Tim, think past, disciplined systems, just our both we to look, to the it's intention pricing, we add in

of obviously market Antonio discipline. those I with strategic there and our in has balancing made I control, that then, would seen and And been gross you've out mantra. But pricing pressures add, think terms we we're that profitability margin more comment think enterprise I buys, that cost our this that the the X attach, et sectors to, earlier, to, terms see as sovereign both services referred and do cetera. time, moves of improving I where Antonio over think, in see, we

about well. to just margin as the structure as sort So that use longer-term of a think way

today next Evercore. Daryanani Your will come from Amit question with

I at guess corporate of gross year-over-year. had a have been look just if level, I the quarters you've bit a down margins couple where fair

next your margin Could low down talk growth some about gross then for think really point, gross this I fiscal we folks? quarter. of And the it was like, good this it what's talk take for revenue margin you basis the points with A, just OpEx control. given driving Could what's driving XXX this in decline? expectations year? all to just how looks can you degradation able like you you're offset OpEx But this clearly like at

It's Yes, no Marie. worries.

So basis. and so you that said, for rightly QX, as so we're I why take one? On on year-on-year margin, down both XX.X% a don't Q-on-Q gross was it

the at contribution mix, inside revenue product of higher a of lower Amit, And revenue. the And back fact, one servers overall for contribution largest If was it drivers is of and systems the the entire look we you just in really Edge Intelligent in had actually and year. QX, revenue the mix. perhaps obviously, the step lowest of AI

and grew that actually dollars I gross we gross year-on-year So Q-on-Q. what say both headwind, profit that would despite impacted margin. But is obviously

improved Edge prepared of mix do Intelligent X by the the things I in think to business to and I see be that But from my forward, just modestly actually predominantly, going in we Now mind. in expect perspective, longer-term said terms remarks a gross that's keep driven up margin will mix.

gross a when be has closed both on going of is positive a and that First and operating. obviously, all, Juniper, very big driver we to impact

move the more that expect particularly secondly, going think expect, in enterprise. space, we into of XX% We will those answered I sovereign the seeing as operating higher-margin forward come adoption I question, earlier and when opportunities we AI profit Tim's mentioned do of as from Juniper. And I

we've really to of far throughout the more side in been so company, gen using into Amit, inside cost using finance of on work it productivity. as at really We're pleased the AI help productivity. drive moving date. house, areas we're 'XX. to actually with the discretionary costs the We've On done we look 'XX, focused

So a of throughout as opportunity, HPE, there's that company. we just the at like Amit. I would plenty opportunities as say large see company

And Simon will today James. from come Raymond your with next question Leopold

you sequentially in indicated your outlook, that servers slightly think which to I think in even up the commentary the January defies I on flattish traditional seasonality. quarter, be would

unpack just I correct. I business. verify happening if got So if could that of the in that part what's you Maybe want to

Yes.

So Marie here, Simon. is this

So I of about servers. as we've in think server mention lumpy see systems bear yes, think said AI so that did is a correct mix I think you of terms did in as I that terms mind we in in my get lower the did prepared you this it. past, you business remarks just QX. And in that in And

business, the servers traditional and outlook on of really changed. nothing's terms the In

to continue the in business. see momentum We that

and the very it at well mix when traditional is described in servers, mentioned continuing. already Antonio he earlier see that think we I X/X GenXX of

systems environment just competitive AI pretty out fundamentally. But -- in So and that it's remember, both change both don't expect market. now servers for traditional there, to a right the

way I'd the it. think about that's So sort of

to now. backlog XX% why we've it prudent, So felt we given to got XX% the was guide that's right current

for the ago happened gone seasonality to the we yearly years few when to traditional seasonality, recovery used that adjust to normal back COVID and the obviously, Also, that. the we in a after have now Simon, addition have we

backlog more On is Blackwell-related. than the AI -- side, X/X our of X/X

Blackwell-related. And billion trajectory of that -- so consider than $X.X you being that more need to the

You that Marie revenue intake. orders mentioned we had with pleased sometime revenue. conversion or of But to the time need the revenue that's in And why the lumpiness QX. notwithstanding, very are convert into we

are We the transition silicon. this as we GPUs in type confident continued to about XXXX growth the of new

today your with will And come Aaron question Wells from next Fargo. Rakers

those on I on for us that to NVL, think you rack off just Where of would When lot Blackwell scale last of I'm think backlog those us system. volume ahead demand your of the you're kind that we initial around think comment -- you update that Antonio, of Yes. cycle as that does ship seeing. about Can that comment, platform and a platform stand do the build HPE that configurations? be centered HPE? the where seems building GBXXX in curious system shipping

Yes.

I think right, Aaron. you're

operate technology, I in segmentation, They like to model going to builders. the transition provider, the think latest happen and it, call I'd 'XX. is and and lead with that over X again, tend service segment within to hyperscalers, the X,

we we those shipping will And XXXX. the so customers NVIDIA and they as are in with working be available, become in and volume obviously,

sovereign And don't say, you the first year, that's seeing will In case. about I is the that in you growth XXXX in calendar think right, space, start so of platform. when the I half when think

the of minus when now and deployment because multiple about simplicity are in you about at an mix the it's more or they look X today, the Blackwell. Grace Private because of value. And is N why HPE I Blackwell a or that's Cloud less enterprise enterprise, will on think I argue, HXXX. configurations based is to AI workloads. different of all X our then type And the be time it It's

And or a whether plenty model they dragging inferencing. or that's it's what for doing do, fine-tuning so -- model a and

X people obviously, build or the and can computing latest and So to will generations stay the first that all here, models with And because, transition lead the technology they will generalize it's then but train things that's will of why they'll XXXX. business fair in enterprise half X need behind the you power. say in to

from question next today will Bernstein. come your Sacconaghi Toni with And

usual? pull you differentiation forward normal also was hence, there said know and to can just whether And in than guidance that side, your if you guidance. you But sure but weaker higher there going it don't deals seasonally unusually increase a enormous Hybrid is sequentially, was than on in think was an then Was the your any closed large not we've own sequentially? any pipeline grow I think dramatically add quarter your there the Did deal history did as there? but huge you really AI it sequential seen. material. Can Morpheus anything jump and next you color Cloud was confirm, perhaps I'm you unusual? be relative again, ever biggest about to well I

that? take to want you Marie, Yes,

I really year-on-year Alletra the mentioned, quarter-on-quarter, HPE revenue of ongoing just Cloud so MP and driven by with And don't quarter. really first address Why XX% both just and say, XX% performance Toni. of almost Yes. as we're up was I'd Cloud, pleased really was look, the strong Hybrid start in Look, growth. It Hybrid of out all, the you adoption frankly, Cloud Private Storage. and

those think of I both great just contribution. So drivers were of

the fastest our that GreenLake. ever in customers the I deck think, we see the company. history one think is the had And I from you of investor on storage, deck, MP the in of XX,XXX -- adoptions

up fact, starting as pass you're think through. in to those was I benefits XX% So see ARR well. And

overall, the you business, margin continuing all the really with QX scale guide frankly, paying the rightly the momentum off. And does on a cost manage said, of top our good we're perspective the well, on structure, line, to margin. trajectory the as pleased continue some So from and of as that's actually

that relatively strong We sequential Cloud. with sort expect given do have line which expect in to to flattish. modest decrease the in the a more And is we Hybrid on QX, be of sequentially revenue,

to continue, So very over want overall, to it Toni. I'll pleased that and now. I think trajectory Antonio turn

couple there, of I answer Toni, the question. Just to add a AI before things and

company, deferred revenue higher. led that $X with needs scale, subscription basis. And introduction actually the why now platform, infrastructure. Cloud. Storage excited data. be annualized including a I'm software is a on the ancillary MP Cloud is of the history hard of already remember, first the plus So And Hybrid we services. quarters all many, work platform many all, by the today Remember, storage in result fastest-ever see billion of plus of product GreenLake Alletra the ramp Hybrid the in of gets latest remember, platform particularly of that because because exabyte And portion Storage for addresses the with to MPXXXXXX a the of scale so it's unstructured at could AI the that that's the But focus the the

is proud, sold Alletra new really I'm second X,XXX The systems. MP, the way, and by we on thing already

the and obviously, a ransomware Data with design HPE. protection Zerto Morpheus year, true And with it. is FinOps, platform the the people Throughout to infrastructure and hybrid GreenOps, we than XX,XXX deliver the realize we on plus more On now how that the new and core customers. has logos OpsRamp, X,XXX GreenLake, is that by added GreenLake the the comes software

Cloud really current the platform. the component So than -- yes, And the subscription And of that's keeps my And grown $X.X very of the I on quarter-over-quarter. what's AI, the then through growth it's huge backlog as composition side the grew more has that enterprise pipeline come a pipeline there that because the to available also Hybrid the billion, has driving the also what GreenLake more for on now it's of Aruba at space. And said, multiple pleased a in ordering shifting. back but is I'm of the offer for rapidly customers. the

next And question with Samik from today your Chatterjee will come JPMorgan.

here bit Edge. If I can change gears a Intelligent on

talked you from some it You I up that growth the relative at increases were peers a patterns. when like to have bit here. limited of to in look more sort the sequential I but quarter, order at know was quarter-over-quarter relative strong But did modestly, overall about the least the other reported, revenue seem performance

-- are more XX at year days as priorities thinking to out? playing you you And trends, more And IT of is weakness mean, you expected? portfolio? that maybe order you're terms as are look relative seeing ago? spend their Or within going about hearing that are where, are would when of a they So have there next how are how you you you budgets? enterprises said, in thinking to within What portfolio, the them bit from expected I sort what in than about coming

the thank for question. you and Absolutely,

in my revenue, I you consecutive flattish. like in had said third see don't the more growth But Intelligent which fully order translating looks we as Edge. yet So into remarks,

In areas because even very that accelerated based. fact, for QX are that's the much is case the growth subscription

is a SASE quarter. SD-WAN SSE, framework, this nice with the very had called So

to The second excited GreenLake seeing is customers HPE to very at orders for you way related is again. what I campus some it's are brings powered look services also when also to the we're had using Ethernet why least, networking you campus over see will is important to your center to today, access I'm Wi-Fi X Aruba has the point, yet we returned growth you manage that, Central, what X. to port. switching But in quarters data your but has points not [ then subscription want area say is that CNX from the as features platform need now points, And necessary more And infrastructure. ] our intelligent not is that the table because reason access very we the the switching upgrade that the future But itself. double-digit which placing last switching. And upgrade at fully

high-performance Juniper obviously, center, excited complementarity data so with the requires Once really router. center a big X data combination a see about bring Number with when And you are to inside need at unique why And you the look opportunities. That that fabric. that's I the because basically I center. to the XXX-gig. a interconnectivity data AI, one, has I'm platform leading within portfolio. And Juniper Networks

announced market the believe why other 'XX. to contribution row. And the on the weeks biggest to the center rack HPE a row on, early networking businesses, will X lay of is inside has 'XX role, will rack growth. of what rack on need already, said especially pipes an consider I upside and brings inside I and the a you This And You massive just quarters itself, open X of in that high-performance Marie I argued able And connect margins be the the to and need points ago XXX-gig the silicon connectivity. and question as the to data of is Slingshot have played each of what HPE recovery, in believe the Slingshot to is just in X that is context data type this need we customers architecture they environment. then that's out. But what

Your next with question David today will Vogt UBS. come from

of definition Antonio, the dig can And going risky I but in terms mentioned a going lumpy it's how particularly forward? a what And AI we to trying think the risk? that about about should how about but deplatforming know into specifics little orders. forward? for can think was sense you of You what bit the you owners you in into just get get that of risk, do orders? was

they stringent particular we lot a ability that Obviously, I And of the risk mean, right angles. fulfill of user, do. risk the thing And payment obviously allocated variety associated felt components had and controls. to customers our a listen, from like. the and the because to fulfill my that we with to orders verify was look not ability the of to the it end is we decided view at and this of

a Yes. strong just HPE environment. very I'd add, control has look, And

and backlog are As cancellations to subject prior and we've pushouts before, said rev orders to the booking rec.

we So controls. tight maintain those

from Deutsche Matt today Your next Niknam will Bank. with question come

You particularly sounded heading constructive fairly around spend, into 'XX. IT

any post pick what's wondering up guess, I'm in in just X more last have the macro if behavior mainly changed, or terms I months over you seen And So backdrop. anything, of specifically, election? change

to community. Matt, welcome. of the Well, here. to first Pleased all, Welcome you have

both more a Focus Obviously, where So win of question with a they areas at customers are flexible innovation. hybrid those a core the are a on the versus macro Definitely, hybrid Focus that's is because workload area. And has model clearly AI to spaces, AI very is on the unique attention. play more focus the workload. a unique agenda. big on and whatsoever. and ago the implementing year paying high right and has HPE no another improved, environment data-intensive

continues be biggest very A and workload in very consumption. when improve lot about TCO modernization was well I server, was the on then Matt, to the cyber said But little to then next ago are the for conference ever obviously, 'XX a to also Europe drive earlier, cost as beyond. me, talked This and a of But in as in I we the think I and footprint as sustainability. per of I believe maybe of areas, networking obvious power earlier, cycle I combination bit. needs weeks of reinforce demands sustainability. very topic for But with the workload. context Barcelona. We X to HPE keen going varies efficiency up had so of the per Juniper we important. customers will one on geography, by than of I the catch again, solutions that that in why understand And what our is that's X,XXX to networking be and all the clearly wave more of AI. to And innovation. said is to important focus

and only to efficiency AI want have opportunities my why reduction. But the at So things we is means are yet in about I pretty than side. commentary focused I early value. to on the about our cost are the excitement, I And scale. XX% of early use right, which I business productivity innovation. one that's what use bigger It's have which Marie we're to deployed talked many and the we already see. time which many, When much more cases, to us case, performance many, And which the focused we delivering we do QX, will do speak to the in that customers, in of very come time, in wrap much enterprise if are some on many word: still even the delivered allows and much that's production,

from Our more innovation-driven customers value an us, that eventually more strategy us makes that relevant, buy is strategy increases shareholders. that for

pending at then are positioned And with it's as the testament working. even address So and customer trends for the that mega those needs, acquisition a is these Juniper we to look me, strategy the needs. uniquely I

Citigroup. And come from will your final Asiya question with Merchant today

the you services there side like to on continue on it orders. AI of The book enterprise looks your things, services

you click as those of you that growing were relative to where as a revenues? last on that, services? If well? Is pipeline HPE at quarter, percentage you And where your is double kind can of look winning what orders services

Thank you for question. the

Our up services went AI related to quarter-over-quarter. orders

customers, The so run are day and also looking X, X implement, way. -- it, bring to have is you essential. a cases, process-oriented ways X, if all like many And help the you the practices. day define we They investment these for is important therefore, X partnerships quite the and you will. where business And X and So is other it. on type HPE X and of day return customers positioned X. to companies in that on by mentioned about approach design is like. the day the And focus define uniquely also to the customers The see I bit to and day with the the Deloitte, you use days, upfront. But is reach are more engagement X we and additional is can of day AI where a conversations, think different use services

the the expect in has weeks, the more And so the has proven Cloud then designing call their then do design own co-locations. they few hear has land not on time, disposition what I the into be instances run in approach that stacks enterprise to go services the we help with of for many enterprises next and AI all Private margin and on need. data don't would it have Private the center, But that continued is we will implementing, on HPE already want X land our this the will right these we of have these running, as with on deploy many the And side, turn You ready implementing that. And they use cases. don't can forward. which they because why source are should Cloud and that improvement when that expertise, to HPE value few AI proposition unique there. And gross those the that's and obviously, can about them partner announcements time, a capabilities on

good. That you our last if have... Antonio, question. was Very

today. We capping everyone are right pleased in on our very with participating results thank time, and QX, for I very year. a to very, strong want off Again,

the that's we excited bottom number operating the did mean about fundamentally profit record dollars. XXXX. said. I'm see we metrics there. But And can revenue, of We of what momentum a line. You I had

profitable said through will have we drive set the my working amazing value. an And in think we're growth to I process. Juniper continue of and as remarks, shareholder the that assets acquisition, drive pending I

of part the close XXXX. the early And DOJ. we collaborative with working very, are confident very are in will this We

would So pause nothing not gives happen. that me

to you, I don't holidays you and speak in reconvene to and early family, happy if we'll So your XXXX.

conference for presentation. now The today's has concluded. attending Thank you

now disconnect. You may