Hewlett Packard Enterprise Company (NYSE: HPE) Q2 2025 Earnings Call | 6/3/2025

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Hewlett Packard Enterprise (HPE) delivered solid Q2 2025 results, reporting revenue of $7.63 billion—a 6% year-over-year increase and ahead of analyst expectations. Growth was broad-based, with Server revenue up 6% to $4.1 billion, Hybrid Cloud up 13% to $1.5 billion, and Intelligent Edge up 7% to $1.2 billion. The company’s annualized revenue run rate (ARR) surged 47% to $2.2 billion, reflecting strong momentum in AI systems, Intelligent Edge, and GreenLake Cloud subscription services. Adjusted earnings per share (EPS) came in at $0.38, beating consensus estimates by nearly 19%, though down from $0.42 a year ago. Despite this operational strength, HPE posted a net loss of $1.05 billion (or $0.82 per share), driven by a $1.36 billion non-cash goodwill impairment charge related to its Hybrid Cloud business. Non-GAAP gross margin declined 370 basis points year-over-year to 29.4%, mainly due to an unfavorable product mix in the Server segment. Free cash flow was negative $847 million, but slightly better than anticipated. The company distributed $221 million to shareholders via dividends and buybacks during the quarter. HPE continues to invest in AI and private cloud innovation, highlighted by new product launches and deepening partnerships with NVIDIA. Looking ahead, HPE raised its full-year non-GAAP EPS guidance to $1.78–$1.90 and expects FY25 revenue growth of 7%–9%. For Q3, the company forecasts revenue between $8.2 billion and $8.5 billion, with improving operating margins in the Server segment. CEO Antonio Neri emphasized continued focus on efficiency, innovation, and shareholder value, while acknowledging ongoing macroeconomic and geopolitical challenges. Key Q2 2025 Metrics: Revenue: $7.63 billion (+6% YoY) Adjusted EPS: $0.38 (beat by $0.06) Net loss: $1.05 billion (impairment-driven) Server revenue: $4.1 billion (+6%) Hybrid Cloud revenue: $1.5 billion (+13%) Intelligent Edge revenue: $1.2 billion (+7%) ARR: $2.2 billion (+47%) Free cash flow: -$847 million FY25 EPS guidance raised to $1.78–$1.90 #HPE #EarningsCall #Q22025 #AI #HybridCloud #GreenLake #StockMarket #Investing #InsideTicker