Hewlett Packard Enterprise (HPE) Financial History

Proposals to reform U.S.

Our contracts with federal, state, provincial, and local governmental customers are subject to various government procurement laws and regulations, required contract provisions, and other requirements relating to cont…

For example, as a result of laws and regulations concerning responsible and sustainable business practices, we face increasing complexity related to product design, safety and compliance; the use of regulated, hazardo…

We are subject to various US (federal, state, and local), and foreign laws, regulations, executive orders and policies affecting the sale of our products and services in a number of areas.

In connection with the preparation of our Consolidated Financial Statements, we use certain estimates and assumptions based on historical experience and other factors.

economic environment and affect our ability to incur debt at reasonable prices or our desire to incur further debt at all.

In addition to our current total carrying debt, we may also incur additional indebtedness in the future.

Conducting business in currencies other than the U.S.

Furthermore, the relationship between China and the U.S., and any subsequent action that may be taken by either country, may significantly vary the results our operations and financial performance from that region.

Our revenue, gross margin, and profitability have historically varied among our diverse products and services, customer groups, and geographic markets.

Our failure or perceived failure to achieve our Living Progress objectives, maintain responsible and sustainable business practices, integrate newly acquired companies into our sustainability programs, continue monito…

Our sustainable and responsible business expectations and actions towards achieving our Living Progress objectives may expose us to operational, legal, or reputational risks and could adversely affect our business, re…

In the course of conducting our business, we must adequately address quality issues associated with our products, services, and solutions (whether developed by us or by a company we acquire), including defects in our…

Some of our business processes depend upon our IT systems.

Much of our business and many of our products rely on key technologies developed or licensed by third parties.

We implement policies, procedures, and training designed to facilitate compliance with anti-corruption laws around the world, including the U.S.

Any or all of these factors has or could have an adverse impact on our business, financial condition, and results of operations.

•difficulties associated with repatriating earnings in restricted countries, and changes in tax policies, treaties, or laws that could have an unfavorable business impact, or which introduces uncertainty to our result…

•local content and manufacturing requirements and trade protection measures such as import tariffs or import or export restrictions, which have impacted, and could further impact, our ability to sell into those markets;

•managing our geographically dispersed workforce, which has necessitated, and may in the future require, incurring costs to promote seamless workforce connectivity and to comply with changing laws, regulations, and ou…

•local labor conditions and regulations, including local labor issues faced by specific suppliers, vendors, and manufacturers, or changes to immigration and labor law policies which may adversely impact our access to…

•impact of ongoing uncertainties as a result of instability or changes in geopolitical tensions, including trade protection measures, such as import tariffs or import or export restrictions (which may limit our access…

Sales outside the United States constituted approximately 61% of our net revenue in fiscal year 2025.

In addition, economic weakness, tariffs, and geopolitical uncertainty have, at times caused, and could, in the future cause our financial performance to vary materially from our expectations.

We derive a substantial portion of our revenues from our international operations, and we plan to continue our business in international markets.

We rely upon patent, copyright, trademark, trade secret, and other intellectual property laws in the United States, similar laws in other countries, and agreements with our employees, customers, suppliers, and other p…

Further, incorporating AI gives rise to litigation risk and risk of non-compliance and unknown cost of compliance, as AI is an emerging technology for which the legal and regulatory landscape is not fully developed an…

We believe the proliferation of AI, especially as it relates to our products and solutions that enable AI workloads, has had a significant impact on customer preferences and market dynamics in our industry, and our ab…

The increasing concerns over climate change could also result in transition risks, such as efforts and expenditures related to carbon abatement, shifting customer preferences, or compliance risks from changing regulat…

Climate change serves as a risk multiplier that could increase both the frequency and severity of natural disasters that may affect our worldwide business operations and those of suppliers and customers.

Our failure to successfully hire executives and key employees or the loss of any executives and key employees could have a significant impact on our operations and our ability to execute our strategy.

competitive, or if we do not obtain the stockholder approval required to continue granting equity-based incentive awards in the amounts we believe are necessary.

In order to achieve our growth strategy and capture the market opportunities presented by networking, hybrid cloud, and AI, we must attract, retain, train, motivate, develop, and transition qualified executives and ot…

In some of our businesses, our quarterly sales have periodically reflected a pattern in which a disproportionate percentage of each quarter's total sales occurs towards the end of the quarter.

Our worldwide operations and supply chain could be disrupted by natural or human-induced events including, but not limited to, earthquakes; tsunamis; floods; hurricanes, cyclones or typhoons; fires; other extreme weat…

Our inventory management is complex, as we continue to sell a significant mix of products through distributors.

Our financial results could be adversely affected due to distribution channel conflicts, if the financial conditions of our channel partners were to weaken, if we experience the loss or deterioration of any alliance o…

We use a variety of direct and indirect distribution methods that differ by business and region to sell our products and services to end-users around the world.

If we experience or fail to properly manage disruption in the distribution of our products and services properly, our business and financial performance could suffer.

disclosures made or actions taken by third parties or their representatives.

•We may not successfully combine product or service offerings or realize all of the anticipated benefits of any particular business combination and investment transaction, which may result in (1) failure to execute on…

As part of our strategy, we may acquire businesses, divest businesses or assets, enter into strategic alliances and joint ventures, and make investments to further our business (collectively, “business combination and…

Any failure by us to identify, manage, and complete acquisitions and subsequent integrations (including the integration of Juniper Networks following the Merger), divestitures, and other significant transactions succe…

We face aggressive price competition.

competitors do, and our competitors may have greater financial, technical, and marketing resources available to them compared to the resources allocated to our products and services that compete against theirs.

The markets that we serve are rapidly evolving and highly competitive and include well-established companies.

Additionally, we have acquired and may continue to acquire companies with cybersecurity vulnerabilities, gaps or different security standards, which exposes us to related cybersecurity, operational, and financial risks.

With our business increasingly providing aaS offerings, malicious parties could target such services, potentially resulting in an increased risk of compromise of customer or employee data resulting in regulatory expos…

•Single-Source Suppliers.

•Excess Supply.

supply to meet total market demand.

Our operations depend on our ability to anticipate our needs for components, products, and services, as well as the ability of our manufacturers (including original equipment manufacturers, original and outsourced des…

We depend on third-party suppliers, contract manufacturers (including original equipment and original design manufacturers), as well as single-source and limited source suppliers, and our financial results could suffe…

Having developed a cloud platform product in HPE GreenLake and the hardware capabilities to support AI computing, we must be able to continue integrating new features that are relevant to our customers and to scale qu…

Our ongoing process of improving HPE GreenLake; expanding our offerings across all our businesses (including cloud, AI, and networking offerings); enhancing existing hardware, software, and cloud-based solutions; and…

Our long-term go-to-market strategy is focused on leveraging our portfolio composed of hardware, software, and services as we deliver global edge-to-cloud platform as-a-Service (“aaS”) to help customers accelerate out…

•Our sustainable and responsible business expectations and actions towards achieving our Living Progress objectives may expose us to operational, legal, or reputational risks and could adversely affect our business, r…

•If we experience or fail to properly manage disruption in the distribution of our products and services properly, our business and financial performance could suffer.

•Any failure by us to identify, manage, and complete acquisitions and subsequent integrations (including the integration of Juniper Networks following the Merger), divestitures, and other significant transactions succ…

•We depend on third-party suppliers, contract manufacturers (including original equipment and original design manufacturers), as well as single-source and limited source suppliers, and our financial results could suff…

You should carefully consider the following risks and other information in this Annual Report on Form 10-K in evaluating Hewlett Packard Enterprise.

We obtained private letter rulings from the IRS regarding certain U.S.

If the distribution of Everett SpinCo or Seattle SpinCo, as applicable, together with certain related transactions, failed to qualify as a transaction that is generally tax-free, for U.S.

Each opinion of outside counsel was based upon and relied on, among other things, certain facts and assumptions, as well as certain representations, statements and undertakings of us, Everett SpinCo and CSC, or us, Se…

The completed separations and mergers of our former Enterprise Services business with DXC Technology Company (“DXC”) (the “Everett Transaction” or “Everett”) and our Software Segment with Micro Focus International plc…

The stock distribution in either or both of the completed separations of our former Enterprise Services business and our former Software segment could result in significant tax liability, and DXC Technology Company or…

conduct business.

Government contracts impose additional challenges and risks to our sales efforts.

In addition, our business is subject to an ever-growing number of laws and regulations addressing privacy and information security, including the use of AI.

Separately, periodic supply chain shortages and constraints have, in some instances, resulted in, and may result in, increases to the costs of production of our hardware products that we have, at times, not been able…

In some of our businesses, our quarterly sales have periodically reflected a pattern in which a disproportionate percentage of each quarter's total sales occurs towards the end of the quarter.

Competition, lawsuits, investigations, increases in component and manufacturing costs that we are unable to pass on to our customers, component supply disruptions, and other risks affecting our businesses may have a s…

The revenue and profitability of our operations have historically varied, which makes our future financial results less predictable.

In addition to our current total carrying debt, we may also incur additional indebtedness in the future.

Our obligation to consummate the Merger is not subject to a financing condition, and as such, may be subject to events beyond our control, such as the timing of receipt of regulatory approvals.

addition, it is possible that as a consequence of a merger or acquisition, we may acquire intellectual property subject to licensing obligations to third parties, other third parties may obtain licenses to some of our…

in price increases for our offerings, which subsequently limited demand or reduced margins for our offerings, all of which may impact us again from time to time in the future.

Our business and financial performance also could be adversely affected by changes in U.S.

Even if we are able to maintain or increase market share for a particular product, its financial performance could decline because the product is in a maturing industry or market segment or contains technology that is…

Because our business model is based on providing innovative and high-quality products and services, we may spend a proportionately greater amount of our revenues on R&D than some of our competitors.

competitors in the markets in which we operate.

There has been an increased focus from regulators and stakeholders on sustainability and corporate responsibility matters.

Changes in macroeconomic conditions have, at times, affected and may in the future affect consumer and enterprise spending, and as a result, our customers have postponed or cancelled, and may also in the future postpo…

Changes in the macroeconomic environment have, at times, impacted and may in the future negatively impact our results of operations.

As with many innovations, AI presents risks, challenges, and unintended consequences that could affect its adoption, and therefore our business and our overall strategy.

In order to be successful, we must attract, retain, train, motivate, develop, and transition key employees, and failure to do so could seriously harm us.

Management’s attention or other resources may be diverted during business combination and investment transactions and may be further impacted if we fail to successfully complete or integrate business combination and i…

•For an acquisition or other combination, the acquisition partner may have differing or inadequate cybersecurity and data protection controls, which could impact our exposure to data security incidents and potentially…

•In order to complete a business combination and investment transaction, we may issue common stock, potentially creating dilution for our existing stockholders or we may enter into financing arrangements, which could…

If we do not successfully manage these issues and the other challenges inherent in integrating an acquired business, then we may not achieve the anticipated benefits of the Merger on our anticipated timeframe or at al…

•integrating employees and related human capital management systems and benefits, maintaining employee morale and retaining key employees.

•coordinating and integrating operations, including in countries in which we have not previously operated; and

•coordinating sales and marketing efforts to effectively position our capabilities;

•consolidating and integrating corporate, information technology, finance and administrative infrastructures;

•integrating financial forecasting and controls, procedures and reporting cycles;

•preserving customer and other important relationships of Juniper Networks and attracting new business and operational relationships;

There can be no assurance that we will realize any of the significant benefits that we expect to result from the Merger, or realize them within the anticipated timeframe.

Failure to realize the benefits expected from the Merger with Juniper Networks could adversely affect our business or our stock price.

If the Merger is not completed, our stock price could be impacted to the extent it reflects an assumption that we will complete the Merger, and additionally, we may suffer other consequences that could adversely affec…

In January 2024, we entered into a definitive agreement to acquire Juniper Networks, Inc., a leader in AI-native networks.