NYSE:HPE
Hewlett Packard Enterprise Co
A premier enterprise IT infrastructure provider offering hybrid cloud, AI, and sustainability-focused hardware solutions to digitalizing organizations worldwide.
Key Metrics
Investment Thesis
Bull Case
Investors might consider HPE for its strategic pivot toward the GreenLake consumption model, which aligns with long-term recurring revenue trends and reduces customer churn risk. The company's strong focus on AI infrastructure and sustainable computing positions it well to capture demand from data centers upgrading for generative AI workloads. With a healthy cash position of $5.77B and active share buybacks, HPE demonstrates management confidence in its ability to navigate the current market cycle.
Bear Case
The negative operating profit of -$437.0M combined with a retained earnings deficit of -$2.81B signals persistent structural profitability issues that investors should closely monitor. Heavy reliance on large-scale acquisitions ($12.28B) without commensurate organic growth in the revenue trend raises concerns about integration success and return on capital employed. The significant negative cash flow from investing activities alongside a sharp decline in ending cash suggests potential liquidity constraints if market conditions tighten further.
About Hewlett Packard Enterprise Co
Hewlett Packard Enterprise (HPE) is a global provider of enterprise IT infrastructure and services that empowers organizations to accelerate digital transformation. The company serves diverse markets including healthcare, government, telecommunications, and finance with its portfolio of servers, storage, networking, edge computing, and hybrid cloud solutions. HPE leverages its strong balance sheet and extensive channel network to deliver secure, sustainable technology platforms for modern enterprises.
Analysis
Management Discussion
Despite a significant one-time gain boosting net profit to $57.0M in 2025, the core operating profit remains negative at -$437.0M, indicating underlying operational challenges or large non-operating gains driving the bottom line. The company has aggressively invested in acquisitions totaling $12.28B while managing substantial cash outflows of $13.19B from investing activities, reflecting a strategy of growth through consolidation rather than organic expansion alone. While revenue grew to $34.30B from 2024 levels, the massive net change in cash of -$9.25B suggests significant liquidity pressure or divestitures impacting the balance sheet.
Industry Overview
The enterprise IT infrastructure industry is undergoing a massive transformation driven by the shift to hybrid cloud, artificial intelligence, and the urgent need for energy-efficient data centers. Companies are balancing the demand for high-performance computing with stricter environmental regulations, creating opportunities for specialized hardware providers who can deliver both power and sustainability. Market consolidation is accelerating as legacy vendors struggle against agile hyperscalers, favoring companies with strong service capabilities and flexible consumption models.
Financial Statements
Income Statement
Balance Sheet
Cash Flow
| Metric | 2023 | 2024 | 2025 |
|---|---|---|---|
| Revenue | $29.14B | $30.13B | $34.30B |
| Cost of Revenue | $0 | $0 | $0 |
| Gross Profit | $29.14B | $30.13B | $34.30B |
| Operating Expenses | $27.05B | $27.94B | $34.73B |
| Operating Income | $2.09B | $2.19B | $-437.0M |
| R&D | $2.35B | $2.25B | $2.52B |
| G&A | $5.16B | $4.87B | $5.70B |
| Stock-Based Comp | $428.0M | $430.0M | $643.0M |
| D&A | $2.62B | $2.56B | $2.74B |
| Depreciation | $2.30B | $2.30B | $2.20B |
| Amortization | $288.0M | $267.0M | $511.0M |
| Other OpEx | $19.54B | $20.82B | $26.51B |
| Non-Operating Income | $141.0M | $763.0M | $152.0M |
| Interest Expense | $709.0M | $777.0M | $1.10B |
| Interest Income | $127.0M | $197.0M | $406.0M |
| Pre-Tax Income | $2.23B | $2.95B | $-285.0M |
| Income Tax | $205.0M | $374.0M | $-342.0M |
| Continuing Ops | $2.02B | $2.58B | $57.0M |
| Discontinued Ops | $11.0M | $16.0M | $0 |
| Net Income | $2.04B | $2.60B | $57.0M |
| Minority Interest | $0 | $0 | $0 |
| Net to Common | $2.04B | $2.60B | $57.0M |
| Metric | 2023 | 2024 | 2025 |
|---|---|---|---|
| Current Assets | $18.95B | $33.46B | $24.99B |
| Cash & Equivalents | $4.27B | $14.85B | $5.77B |
| Accounts Receivable | $3.48B | $3.55B | $5.29B |
| Inventory | $4.61B | $7.81B | $6.35B |
| Other Current Assets | $6.59B | $7.25B | $7.58B |
| Long-Term Assets | $38.20B | $37.80B | $50.91B |
| PP&E (Net) | $5.99B | $5.66B | $6.00B |
| Intangibles | $654.0M | $510.0M | $6.37B |
| Goodwill | $17.99B | $18.09B | $23.77B |
| Operating Leases | $980.0M | $1.41B | $1.53B |
| Other LT Assets | $10.40B | $11.21B | $12.28B |
| Total Assets | $57.15B | $71.26B | $75.91B |
| Current Liabilities | $21.88B | $25.97B | $24.64B |
| Accounts Payable | $7.14B | $11.06B | $7.73B |
| Current Debt | $4.02B | $3.97B | $3.80B |
| Current Leases | $194.0M | $261.0M | $316.0M |
| Deferred Revenue | $3.66B | $3.90B | $5.36B |
| Other Current Liab | $6.87B | $6.78B | $7.44B |
| Long-Term Liabilities | $14.03B | $20.41B | $26.51B |
| LT Operating Leases | $966.0M | $1.31B | $1.40B |
| Other LT Liab | $9.55B | $15.36B | $19.95B |
| Total Liabilities | $35.91B | $46.38B | $51.15B |
| Shareholders' Equity | $21.24B | $24.88B | $24.75B |
| Retained Earnings | $-3.95B | $-2.07B | $-2.81B |
| AOCI | $-3.08B | $-2.98B | $-2.75B |
| Total L&E | $57.15B | $71.26B | $75.91B |
| Metric | 2023 | 2024 | 2025 |
|---|---|---|---|
| Net Income (CFO) | $2.04B | $2.60B | $57.0M |
| Non-Cash Adjustments | $5.29B | $-6.85B | $7.61B |
| Working Capital Changes | $-2.90B | $8.59B | $-4.75B |
| Cash from Operations | $4.43B | $4.34B | $2.92B |
| Cash from Investing | $-3.28B | $-53.0M | $-13.19B |
| Share Buybacks | $421.0M | $150.0M | $202.0M |
| Dividends Paid | $619.0M | $676.0M | $684.0M |
| Cash from Financing | $-1.36B | $6.28B | $1.05B |
| FX Effect | $36.0M | $-47.0M | $-21.0M |
| Net Change in Cash | $-182.0M | $10.52B | $-9.25B |
| Beginning Cash | $4.76B | $4.58B | $15.11B |
| Ending Cash | $4.58B | $15.11B | $5.86B |
Frequently Asked Questions
How does Hewlett Packard Enterprise Co make money?
The company generates revenue primarily through its Infrastructure Group (servers, storage, networking), Edge Computing Group (analytics and AI at the edge), HPE GreenLake (as-a-service hybrid cloud platform), and Software & Services. These segments collectively address the needs of customers migrating workloads to the cloud while optimizing their on-premise operations.
What are the main risks for HPE?
Intense competition from hyperscalers like AWS, Azure, and Google Cloud poses a threat to traditional hardware margins and market share. The company faces exposure to foreign exchange fluctuations given its significant international revenue streams and global supply chain dependencies. High levels of goodwill ($23.77B) create vulnerability to impairment charges if acquisition synergies do not materialize as expected. Shifts in macroeconomic conditions could dampen enterprise IT spending, particularly among customers sensitive to interest rate changes.
What is HPE's competitive advantage?
HPE possesses a robust channel partner ecosystem that provides deep market penetration and rapid deployment capabilities across global industries. The company's 'sustainability-first' strategy differentiates its hardware through energy-efficient designs that reduce total cost of ownership for large-scale data centers. HPE GreenLake offers a unique consumption-based pricing model that allows customers to scale IT resources flexibly without heavy upfront capital expenditure.
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Not financial advice. All content is for informational purposes only. Data may contain errors. Consult a qualified financial advisor before making investment decisions.