BusinessWire

HPE Reports Q3 Results

Quarter marked by strong execution and sequential growth


Company declares Q4 dividend

Q3 2020 Financial Highlights:

  • Revenue: $6.8 billion, up 13% sequentially or 14% when adjusted for currency
  • Gross Profit: $2.1 billion, up 8% sequentially
  • Operating Profit: GAAP of $12 million, up 101% sequentially and Non-GAAP of $484 million, up 33% sequentially
  • Annualized revenue run-rate (ARR): $528 million, up 11% from the prior-year period
  • Diluted net earnings per share:
  • GAAP of $0.01 due to the acceleration of transformation program, compared to ($0.02) from the prior-year period
  • Non-GAAP of $0.32, compared to $0.45 from the prior-year period
  • Cash flow from Operations of $1.5 billion, up 23% from the prior-year period
  • Free Cash Flow of $924 million, up 43% from the prior-year period
  • Q4 FY20 dividend of $0.12 a share, payable on October 7, 2020

Q3 2020 Key Highlights:

  • Reduced our Q2 FY20 backlog by more than $500 million through improved supply chain execution
  • Gained momentum in key investment areas: HPE GreenLake services orders grew a record 80% from the prior-year period or 82% when adjusted for currency
  • Announced intent to acquire SD-WAN leader Silver Peak
  • Launched next-generation HPE GreenLake cloud services, HPE Ezmeral software portfolio and the Aruba Edge Services Platform

FY 2020 Outlook:

  • Earnings per Share: Q4 2020 GAAP diluted net earnings per share of $0.02 to $0.06 and non-GAAP diluted net earnings per share of $0.32 to $0.36. FY 2020 GAAP diluted net loss per share of $0.35 to $0.31. FY 2020 non-GAAP diluted net earnings per share of $1.30 to $1.34.

SAN JOSE, Calif.--(BUSINESS WIRE)--Hewlett Packard Enterprise (NYSE: HPE) today announced financial results for its fiscal 2020 third quarter, ended July 31, 2020.

“Our Q3 results are marked by strong execution and sequential growth,” said Antonio Neri, president and CEO of Hewlett Packard Enterprise. “We significantly improved operational and supply chain execution and advanced our innovation agenda with the introduction of HPE GreenLake cloud services solutions, our new HPE Ezmeral software portfolio, and our planned acquisition of SD-WAN leader Silver Peak.”

“We gained momentum in key areas of differentiation and accelerated our as-a-service pivot with strong ARR growth and a record number of HPE GreenLake services orders,” he continued. “Navigating through the pandemic and planning for a post-COVID world have increased customers’ needs for as-a-service offerings, secure connectivity, remote work capabilities and analytics to unlock insights from data that are aligned to our strategy. We see a tremendous opportunity to help our customers drive digital transformations as they continue to adapt to operate in a new world.”

Third Quarter Fiscal Year 2020 Results

Net revenue of $6.8 billion, down 6% from the prior-year period or 4% when adjusted for currency. Revenue grew 13% sequentially or 14% when adjusted for currency driven by solid execution in clearing historic backlog by approximately $500 million during the quarter.

Annualized revenue run-rate (ARR) of $528 million, up 11% from the prior-year period. We are reiterating our 2019 Securities Analyst Meeting ARR guidance of 30-40% Compounded Annual Growth Rate from fiscal year 2019 to fiscal year 2022.

Gross Profit of $2.1 billion, up 8% sequentially due to strong operation execution.

GAAP gross profit margin of 30.3%, compared to 33.9% from the prior-year period and Non-GAAP gross profit margin of 30.4%, compared to 33.9% from the prior-year period.

GAAP Operating Profit of $12 million, up 101% sequentially and Non-GAAP operating profit of $484 million, up 33% sequentially.

GAAP operating profit margin of 0.2%, compared to (1.1%) from the prior-year period and Non-GAAP operating profit margin of 7.1%, compared to 9.9% from the prior-year period.

GAAP diluted net earnings per share (“EPS”) was $0.01 due to the acceleration of transformation program, compared to ($0.02) in the prior-year period.

Non-GAAP diluted net EPS was $0.32, compared to $0.45 in the prior-year period. Third quarter non-GAAP net earnings and non-GAAP diluted net EPS exclude after-tax adjustments of $410 million and $0.31 per diluted earnings per share, respectively, primarily related to transformation costs and amortization of purchased intangible assets.

Cash flow from operations of $1.5 billion, compared to $1.2 billion in the prior-year period.

Free cash flow of $924 million, compared to $648 million in the prior-year period.

Segment Results

Intelligent Edge revenue was $684 million, down 12% year over year or 11% when adjusted for currency, with 8.6% operating profit margin, compared to 6.8% from the prior-year period. Revenue grew 3% sequentially demonstrating continued momentum.

Compute revenue was $3.4 billion, flat year over year or up 1% when adjusted for currency, with 8.5% operating profit margin, compared to 12.9% from the prior-year period. Revenue grew 28% sequentially or 29% when adjusted for currency as we executed against the backlog and improved our supply chain execution.

High Performance Compute & Mission Critical Systems (HPC & MCS) revenue was $649 million, up 3% year over year, with 5.5% operating profit margin, compared to 8.1% from the prior-year period. Revenue grew 10% sequentially as installations and customer acceptance of systems improved.

Storage revenue was $1.1 billion, down 10% year over year or 9% when adjusted for currency, with 12.9% operating profit margin, compared to 16.5% from the prior-year period. Revenue grew 4% sequentially driven by improved operational execution and reduction of backlog.

Advisory & Professional Services (A&PS) revenue was $226 million, down 7% year over year or 5% when adjusted for currency, with (1.8%) operating profit margin, compared to (3.7%) from the prior-year period. Revenue was down 5% sequentially or 4% when adjusted for currency as COVID-19 impacted consulting activities of our team members. A&PS is a strategic business that pulls through significant infrastructure and operational services sales.

Financial Services revenue was $811 million, down 9% year over year or 6% when adjusted for currency and down 3% sequentially or 2% when adjusted for currency, with 8.0% operating profit margin, compared to 8.7% from the prior-year period. Net portfolio assets were up 3% year over year and up 4% sequentially or 1% when adjusted for currency, and financing volume was down 12% year over year or 9% when adjusted for currency and flat sequentially or up 1% when adjusted for currency despite the impact of COVID-19. The business delivered return on equity of 12.8%, down 3.0 points from the prior-year period.

Q4 2020 Dividend

Board of Directors have declared a regular cash dividend of $0.12 per share on the company's common stock. This dividend, the fourth in Hewlett Packard Enterprise's fiscal year 2020, is payable on October 7, 2020, to stockholders of record as of the close of business on September 9, 2020.

FY 2020 Outlook

For the fiscal 2020 fourth quarter, Hewlett Packard Enterprise estimates GAAP diluted net EPS to be in the range of $0.02 to $0.06. For fiscal 2020 full-year Hewlett Packard Enterprise estimates GAAP diluted net loss per share of $0.35 to $0.31.

For the fiscal 2020 fourth quarter, Hewlett Packard Enterprise estimates non-GAAP diluted net EPS to be in the range of $0.32 to $0.36. Fiscal 2020 fourth quarter non-GAAP diluted net EPS estimates exclude after-tax costs of approximately $0.30 per diluted share, primarily related to transformation costs and the amortization of intangible assets.

For fiscal 2020 full-year, Hewlett Packard Enterprise estimates non-GAAP diluted net EPS to be in the range of $1.30 to $1.34. Fiscal 2020 non-GAAP diluted net EPS estimates exclude after-tax costs of approximately $1.65 per diluted share, primarily related to goodwill impairment, transformation costs, amortization of intangible assets, and acquisition, disposition and other related charges.

About Hewlett Packard Enterprise

Hewlett Packard Enterprise is the global edge-to-cloud platform-as-a-service company that helps organizations accelerate outcomes by unlocking value from all of their data, everywhere. Built on decades of reimagining the future and innovating to advance the way we live and work, HPE delivers unique, open and intelligent technology solutions, with a consistent experience across all clouds and edges, to help customers develop new business models, engage in new ways, and increase operational performance. For more information, visit: www.hpe.com.

Use of non-GAAP financial information

To supplement Hewlett Packard Enterprise’s condensed consolidated financial statement information presented on a generally accepted accounting principles (GAAP) basis, Hewlett Packard Enterprise provides revenue on a constant currency basis as well as non-GAAP gross profit margin, non-GAAP operating profit (non-GAAP earnings from operations), non-GAAP operating profit margin, non-GAAP income tax rate, non-GAAP net earnings, non-GAAP diluted net earnings per share, gross cash, free cash flow, net debt, net cash, operating company net debt and operating company net cash financial measures. Hewlett Packard Enterprise also provides forecasts of non-GAAP diluted net earnings per share and free cash flow. A reconciliation of adjustments to GAAP financial measures for this quarter and prior periods is included in the tables below or elsewhere in the materials accompanying this news release. In addition, an explanation of the ways in which Hewlett Packard Enterprise’s management uses these non-GAAP measures to evaluate its business, the substance behind Hewlett Packard Enterprise’s decision to use these non-GAAP measures, the material limitations associated with the use of these non-GAAP measures, the manner in which Hewlett Packard Enterprise’s management compensates for those limitations, and the substantive reasons why Hewlett Packard Enterprise’s management believes that these non-GAAP measures provide useful information to investors is included under “Use of non-GAAP financial measures” further below. This additional non-GAAP financial information is not meant to be considered in isolation or as a substitute for revenue, gross profit margin, operating profit (earnings from operations), operating profit margin, net earnings, diluted net earnings per share, cash, cash equivalents and restricted cash, cash flow from operations, investments in property, plant and equipment, or total company debt prepared in accordance with GAAP.

Forward-looking statements

This press release contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements involve risks, uncertainties and assumptions. If the risks or uncertainties ever materialize or the assumptions prove incorrect, the results of Hewlett Packard Enterprise and its consolidated subsidiaries may differ materially from those expressed or implied by such forward-looking statements and assumptions. The words “believe,” “expect,” “anticipate,” “optimistic,” “intend,” “aim,” “will,” “should” and similar expressions are intended to identify such forward-looking statements. All statements other than statements of historical fact are statements that could be deemed forward-looking statements, including but not limited to the scope and duration of the novel coronavirus pandemic (“COVID-19”) and its impact on our business, operations, liquidity and capital resources, employees, customers, partners, supply chain, financial results and the world economy; any projections of revenue, margins, expenses, effective tax rates, the impact of the U.S. Tax Cuts and Jobs Act of 2017, net earnings, net earnings per share, cash flows, backlog, benefit plan funding, deferred tax assets, share repurchases, currency exchange rates or other financial items; any projections of the amount, timing or impact of cost savings, restructuring charges, or other transformation actions; any statements of the plans, strategies and objectives of management for future operations, as well as the execution of corporate transactions or contemplated acquisitions, transformation and restructuring plans and any resulting benefit, cost savings or restructuring charges, revenue or profitability improvements; any statements concerning the expected development, performance, market share or competitive performance relating to products or services; any statements regarding current or future macroeconomic trends or events and the impact of those trends and events on Hewlett Packard Enterprise and its financial performance; any statements regarding pending investigations, claims or disputes; any statements of expectation or belief; and any statements or assumptions underlying any of the foregoing.

Risks, uncertainties and assumptions include the need to address the many challenges facing Hewlett Packard Enterprise’s businesses; the competitive pressures faced by Hewlett Packard Enterprise’s businesses; risks associated with executing Hewlett Packard Enterprise’s strategy; the impact of macroeconomic and geopolitical trends and events; the need to manage third-party suppliers and the distribution of Hewlett Packard Enterprise’s products and the delivery of Hewlett Packard Enterprise’s services effectively; the protection of Hewlett Packard Enterprise’s intellectual property assets, including intellectual property licensed from third parties and intellectual property shared with its former parent; risks associated with Hewlett Packard Enterprise’s international operations (including pandemics and public health problems, such as the outbreak of COVID-19); the development and transition of new products and services and the enhancement of existing products and services to meet customer needs and respond to emerging technological trends; the execution and performance of contracts by Hewlett Packard Enterprise and its suppliers, customers, clients and partners, including any impact thereon resulting from events such as the COVID-19 pandemic; the hiring and retention of key employees; execution, integration and other risks associated with business combination and investment transactions; the execution, timing and results of any transformation or restructuring plans, including estimates and assumptions related to the costs and anticipated benefits of implementing the transformation and restructuring plans; the effects of the U.S. Tax Cuts and Jobs Act and related guidance and regulations that may be implemented; the resolution of pending investigations, claims and disputes; and other risks that are described in Hewlett Packard Enterprise’s other filings with the Securities and Exchange Commission, including but not limited to the risks described in Hewlett Packard Enterprise’s Annual Report on Form 10-K for the fiscal year ended October 31, 2019, Hewlett Packard Enterprise’s Quarterly Reports on Form 10-Q for the fiscal quarters ended January 31, 2020 and April 30, 2020, Current Reports on Form 8-K, and in other filings made by Hewlett Packard Enterprise from time to time with the Securities and Exchange Commission.

As in prior periods, the financial information set forth in this press release, including tax-related items, reflects estimates based on information available at this time. While Hewlett Packard Enterprise believes these estimates to be reasonable, these amounts could differ materially from reported amounts in the Hewlett Packard Enterprise Quarterly Report on Form 10-Q for the third quarter ended July 31, 2020. Hewlett Packard Enterprise assumes no obligation and does not intend to update these forward-looking statements.

HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited)
(In millions, except per share amounts)

 

 

 

Three months ended

 

July 31,
2020

 

April 30,
2020

 

July 31,
2019

Net revenue

$

6,816

 

 

$

6,009

 

 

$

7,217

 

Costs and expenses:

 

 

 

 

 

Cost of sales

4,749

 

 

4,095

 

 

4,768

 

Research and development

455

 

 

450

 

 

481

 

Selling, general and administrative

1,131

 

 

1,109

 

 

1,253

 

Amortization of intangible assets

95

 

 

84

 

 

58

 

Impairment of goodwill(a)

 

 

865

 

 

 

Transformation costs

357

 

 

200

 

 

170

 

Disaster charges (b)

2

 

 

22

 

 

 

Acquisition, disposition and other related charges

15

 

 

18

 

 

563

 

Total costs and expenses

6,804

 

 

6,843

 

 

7,293

 

Earnings (loss) from operations

12

 

 

(834

 

(76

Interest and other, net

(71

 

(68

 

(70

Tax indemnification adjustments

(30

 

(35

 

(134

Non-service net periodic benefit credit

28

 

 

36

 

 

12

 

Earnings (loss) from equity interests

27

 

 

(10

 

3

 

Loss before taxes

(34

 

(911

 

(265

Benefit from taxes

43

 

 

90

 

 

238

 

Net earnings (loss)

$

9

 

 

$

(821

 

$

(27

Net earnings (loss) per share:

 

 

 

 

 

Basic

$

0.01

 

 

$

(0.64)

 

 

$

(0.02)

 

Diluted(c)

$

0.01

 

 

$

(0.64)

 

 

$

(0.02)

 

Cash dividends declared per share

$

 

 

$

0.1200

 

 

$

0.1125

 

Weighted-average shares used to compute net earnings (loss) per share:

 

 

 

 

 

Basic

1,292

 

 

1,291

 

 

1,334

 

Diluted(c)

1,300

 

 

1,291

 

 

1,334

 

 

 

 

 

HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited)
(In millions, except per share amounts)

 

 

 

Nine months ended July 31,

 

2020

 

2019

Net revenue

$

19,774

 

 

$

21,920

 

Costs and expenses:

 

 

 

Cost of sales

13,511

 

 

14,820

 

Research and development

1,390

 

 

1,404

 

Selling, general and administrative

3,458

 

 

3,678

 

Amortization of intangible assets

299

 

 

199

 

Impairment of goodwill(a)

865

 

 

 

Transformation costs

646

 

 

302

 

Disaster charges (recovery)(b)

24

 

 

(7

Acquisition, disposition and other related charges

55

 

 

710

 

Total costs and expenses

20,248

 

 

21,106

 

(Loss) earnings from operations

(474

 

814

 

Interest and other, net

(158

 

(139

Tax indemnification adjustments

(86

 

89

 

Non-service net periodic benefit credit

101

 

 

45

 

Earnings from equity interests

50

 

 

21

 

(Loss) earnings before taxes

(567

 

830

 

Benefit (provision) for taxes

88

 

 

(261

Net (loss) earnings

$

(479

 

$

569

 

Net (loss) earnings per share:

 

 

 

Basic

$

(0.37

 

$

0.42

 

Diluted(c)

$

(0.37

 

$

0.41

 

Cash dividends declared per share

$0.2400

 

$0.3375

Weighted-average shares used to compute net (loss) earnings per share:

 

 

 

Basic

1,294

 

1,367

Diluted(c)

1,294

 

1,380

 

 

 

 

 

 

 

 

HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP MEASURES
(Unaudited)
(In millions, except percentages and per share amounts)

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months
ended July 31,
2020

 

Diluted net
earnings
per share

 

Three months
ended April 30,
2020

 

Diluted net
earnings
per share

 

Three months
ended July 31,
2019

 

Diluted net
earnings
per share

GAAP net earnings (loss)

$

9

 

 

$

0.01

 

 

$

(821)

 

 

$

(0.64)

 

 

$

(27)

 

 

$

(0.02)

 

Non-GAAP adjustments:

 

 

 

 

 

 

 

 

 

 

 

Amortization of initial direct costs

3

 

 

 

 

3

 

 

 

 

 

 

 

Amortization of intangible assets

95

 

 

0.07

 

 

84

 

 

0.07

 

 

58

 

 

0.04

 

Impairment of goodwill(a)

 

 

 

 

865

 

 

0.67

 

 

 

 

 

Transformation costs

357

 

 

0.27

 

 

200

 

 

0.15

 

 

170

 

 

0.13

 

Disaster charges(b)

2

 

 

 

 

22

 

 

0.02

 

 

 

 

 

Acquisition, disposition and other related charges

15

 

 

0.01

 

 

25

 

 

0.02

 

 

563

 

 

0.42

 

Tax indemnification adjustments

30

 

 

0.03

 

 

35

 

 

0.03

 

 

134

 

 

0.10

 

Non-service net periodic benefit credit

(28

 

(0.02

 

(36

 

(0.03

 

(12

 

(0.01

Earnings from equity interests(d)

36

 

 

0.03

 

 

37

 

 

0.03

 

 

38

 

 

0.03

 

Adjustments for taxes

(100

 

(0.08

 

(129

 

(0.10

 

(321

 

(0.24

Non-GAAP net earnings

$

419

 

 

$

0.32

 

 

$

285

 

 

$

0.22

 

 

$

603

 

 

$

0.45

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP earnings (loss) from operations

12

 

 

 

 

(834)

 

 

 

 

(76)

 

 

 

Non-GAAP adjustments

 

 

 

 

 

 

 

 

 

 

 

Amortization of initial direct costs

3

 

 

 

 

3

 

 

 

 

 

 

 

Amortization of intangible assets

95

 

 

 

 

84

 

 

 

 

58

 

 

 

Impairment of goodwill(a)

 

 

 

 

865

 

 

 

 

 

 

 

Transformation costs

357

 

 

 

 

200

 

 

 

 

170

 

 

 

Disaster charges(b)

2

 

 

 

 

22

 

 

 

 

 

 

 

Acquisition, disposition and other related charges

15

 

 

 

 

25

 

 

 

 

563

 

 

 

Non-GAAP earnings from operations

$

484

 

 

 

 

$

365

 

 

 

 

$

715

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP operating profit margin

0.2

%

 

 

 

(13.9

)%

 

 

 

(1.1

)%

 

 

Non-GAAP adjustments

6.9

%

 

 

 

20.0

%

 

 

 

11.0

%

 

 

Non-GAAP operating profit margin

7.1

%

 

 

 

6.1

%

 

 

 

9.9

%

 

 

HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP MEASURES
(Unaudited)
(In millions, except percentages and per share amounts)

 

 

 

 

 

 

 

Three months ended
July 31, 2020

 

Three months ended
April 30, 2020

 

Three months ended
July 31, 2019

GAAP net revenue

$

6,816

 

 

$

6,009

 

 

$

7,217

 

GAAP cost of sales

4,749

 

 

4,095

 

 

4,768

 

GAAP gross profit

$

2,067

 

 

$

1,914

 

 

$

2,449

 

 

 

 

 

 

 

Non-GAAP adjustments

 

 

 

 

 

Amortization of initial direct costs

$

3

 

 

$

3

 

 

$

 

Acquisition, disposition and other related charges(e)

 

 

7

 

 

 

Non-GAAP gross profit

$

2,070

 

 

$

1,924

 

 

$

2,449

 

 

 

 

 

 

 

GAAP gross profit margin

30.3

%

 

31.9

%

 

33.9

%

Non-GAAP adjustments

0.1

%

 

0.1

%

 

%

Non-GAAP gross profit margin

30.4

%

 

32.0

%

 

33.9

%

 

 

 

 

 

 

Net cash provided by operating activities

$

1,472

 

 

$

100

 

 

$

1,196

 

Investment in property, plant and equipment

(620

 

(591

 

(625

Proceeds from sale of property, plant and equipment

72

 

 

89

 

 

77

 

Free cash flow

$

924

 

 

$

(402

 

$

648

 

HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP MEASURES
(Unaudited)
(In millions, except percentages and per share amounts)

 

Nine months
ended July 31,
2020

 

Diluted net
earnings
per share

 

Nine months
ended July 31,
2019

 

Diluted net
earnings per
share

GAAP net (loss) earnings

$

(479

 

$

(0.37

 

$

569

 

 

$

0.41

 

Non-GAAP adjustments:

 

 

 

 

 

 

 

Amortization of initial direct costs

9

 

 

0.01

 

 

 

 

 

Amortization of intangible assets

299

 

 

0.23

 

 

199

 

 

0.14

 

Impairment of goodwill(a)

865

 

 

0.67

 

 

 

 

 

Transformation costs

646

 

 

0.49

 

 

302

 

 

0.22

 

Disaster charges (recovery)(b)

24

 

 

0.02

 

 

(7

 

(0.01

Acquisition, disposition and other related charges

82

 

 

0.06

 

 

710

 

 

0.51

 

Tax indemnification adjustments

86

 

 

0.07

 

 

(89

 

(0.06

Non-service net periodic benefit credit

(101

 

(0.08

 

(45

 

(0.03

Earnings from equity interests(d)

110

 

 

0.09

 

 

114

 

 

0.08

 

Adjustments for taxes

(262

 

(0.21

 

19

 

 

0.02

 

Non-GAAP net earnings

$

1,279

 

 

$

0.98

 

 

$

1,772

 

 

$

1.28

 

 

 

 

 

 

 

 

 

GAAP (loss) earnings from operations

(474

)

 

 

 

$

814

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP adjustments

 

 

 

 

 

 

 

Amortization of initial direct costs

9

 

 

 

 

 

 

 

Amortization of intangible assets

299

 

 

 

 

199

 

 

 

Impairment of goodwill(a)

865

 

 

 

 

 

 

 

Transformation costs

646

 

 

 

 

302

 

 

 

Disaster charges (recovery)(b)

24

 

 

 

 

(7

 

 

Acquisition, disposition and other related charges

82

 

 

 

 

710

 

 

 

Non-GAAP earnings from operations

$

1,451

 

 

 

 

$

2,018

 

 

 

 

 

 

 

 

 

 

 

GAAP operating profit margin

(2.4

)%

 

 

 

3.7

%

 

 

Non-GAAP adjustments

9.7

%

 

 

 

5.5

%

 

 

Non-GAAP operating profit margin

7.3

%

 

 

 

9.2

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP MEASURES
(Unaudited)
(In millions, except percentages and per share amounts)

 

 

 

 

 

Nine months ended July
31, 2020

 

Nine months ended July
31, 2019

GAAP net revenue

$

19,774

 

 

$

21,920

 

GAAP cost of sales

13,511

 

 

14,820

 

GAAP gross profit

$

6,263

 

 

$

7,100

 

 

 

 

 

Non-GAAP adjustments

 

 

 

Amortization of initial direct costs

$

9

 

 

$

 

Acquisition, disposition and other related charges(e)

27

 

 

 

Non-GAAP gross profit

$

6,299

 

 

$

7,100

 

 

 

 

 

GAAP gross profit margin

31.7

%

 

32.4

%

Non-GAAP adjustments

0.2

%

 

%

Non-GAAP gross profit margin

31.9

%

 

32.4

%

 

 

 

 

Net cash provided by operating activities

$

1,493

 

 

$

2,565

 

Investment in property, plant and equipment

(1,779

 

(2,153

Proceeds from sale of property, plant and equipment

623

 

 

448

 

Free cash flow

$

337

 

 

$

860

 


Contacts

Editorial contact
Stefanie Notaney
stefanie.notaney@hpe.com

Investor contact
Sonalee Parekh
investor.relations@hpe.com


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