HEWLETT PACKARD ENTERPRISE CO filed this 10-Q on 09/04/25
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HEWLETT PACKARD ENTERPRISE CO - 10-Q - 20250904 - FINANCIAL_STATEMENTS
Item 1. Financial Statements.
Index
 Page

6
HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES
Condensed Consolidated Statements of Earnings
(Unaudited)
 For the three months ended July 31,For the nine months ended July 31,
 2025202420252024
 In millions, except per share amounts
Net Revenue:  
Products$6,048 $4,854 $15,787 $13,134 
Services2,894 2,688 8,262 8,049 
Financing income194 168 568 486 
Total net revenue9,136 7,710 24,617 21,669 
Costs and Expenses:  
Cost of products (exclusive of amortization shown separately below)4,510 3,438 11,903 8,998 
Cost of services (exclusive of amortization shown separately below)1,829 1,708 5,201 5,032 
Financing cost125 125 377 367 
Research and development622 547 1,637 1,719 
Selling, general and administrative1,496 1,229 4,062 3,660 
Amortization of intangible assets126 60 201 198 
Impairment of goodwill— — 1,361 — 
Transformation costs— 14 2 67 
Acquisition, disposition and other charges181 42 302 131 
Total costs and expenses8,889 7,163 25,046 20,172 
Earnings (loss) from operations247 547 (429)1,497 
Interest and other, net8 (12)86 (122)
Gain on sale of a business1 — 245 — 
Earnings from equity interests32 73 74 161 
Earnings (loss) before provision for taxes288 608 (24)1,536 
Benefit (provision) for taxes17 (96)(94)(323)
Net earnings (loss) attributable to HPE305 512 (118)1,213 
Preferred stock dividends(29)— (87)— 
Net earnings (loss) attributable to common stockholders$276 $512 $(205)$1,213 
Net Earnings (Loss) Per Share Attributable to Common Stockholders:  
Basic$0.21 $0.39 $(0.16)$0.93 
Diluted$0.21 $0.38 $(0.16)$0.92 
Weighted-average Shares Used to Compute Net Earnings (Loss) Per Share:  
Basic1,325 1,312 1,321 1,308 
Diluted1,421 1,332 1,321 1,325 

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.
7

HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES
Condensed Consolidated Statements of Comprehensive Income
(Unaudited)
 For the three months ended July 31,For the nine months ended July 31,
 2025202420252024
 In millions
Net earnings (loss) attributable to HPE$305 $512 $(118)$1,213 
Other Comprehensive Income (Loss) Before Taxes
Change in Net Unrealized Gains (Losses) on Available-for-sale Securities:
Net unrealized gains (losses) arising during the period1 3 (5)6 
1 3 (5)6 
Change in Net Unrealized Components of Cash Flow Hedges:
Net unrealized gains (losses) arising during the period6 (34)(189)(69)
Net losses reclassified into earnings56 3 87 2 
62 (31)(102)(67)
Change in Unrealized Components of Defined Benefit Plans:
Net unrealized losses arising during the period10 (1)(10)(2)
Amortization of net actuarial loss and prior service benefit32 34 91 102 
Curtailments, settlements and other4 — 7 1 
46 33 88 101 
Change in Cumulative Translation Adjustment:(16)(9)(28)(17)
Other Comprehensive Income (Loss) Before Taxes93 (4)(47)23 
(Provision) Benefit for Taxes(23)5 — 4 
Other Comprehensive Income (Loss), Net of Taxes70 1 (47)27 
Comprehensive Income (Loss) $375 $513 $(165)$1,240 

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

8
HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
 As of
 July 31, 2025October 31, 2024
(Unaudited)(Audited)
 In millions, except par value and shares
ASSETS  
Current Assets:  
Cash and cash equivalents$4,571 $14,846 
Accounts receivable, net of allowances5,656 3,550 
Financing receivables, net of allowances3,777 3,870 
Inventory7,163 7,810 
Assets held for sale— 1 
Other current assets4,835 3,380 
Total current assets26,002 33,457 
Property, plant and equipment, net6,118 5,664 
Long-term financing receivables and other assets13,817 12,616 
Investments in equity interests999 929 
Goodwill23,767 18,086 
Intangible assets, net6,637 510 
Total assets$77,340 $71,262 
LIABILITIES AND STOCKHOLDERS' EQUITY  
Current Liabilities:  
Notes payable and short-term borrowings$6,799 $4,742 
Accounts payable8,662 11,064 
Employee compensation and benefits1,549 1,356 
Taxes on earnings256 284 
Deferred revenue5,311 3,904 
Liabilities held for sale— 32 
Other accrued liabilities4,770 4,591 
Total current liabilities27,347 25,973 
Long-term debt16,854 13,504 
Other non-current liabilities8,672 6,905 
Commitments and Contingencies
HPE Stockholders' Equity:  
7.625% Series C mandatory convertible preferred stock, $0.01 par value (30,000,000 shares issued and outstanding as of July 31, 2025 and October 31, 2024, respectively)
— — 
Common stock, $0.01 par value (9,600,000,000 shares authorized; 1,318,814,831 and 1,297,258,235 shares issued and outstanding as of July 31, 2025 and October 31, 2024, respectively)
13 13 
Additional paid-in capital30,199 29,848 
Accumulated deficit(2,786)(2,068)
Accumulated other comprehensive loss(3,024)(2,977)
Total HPE stockholders' equity24,402 24,816 
Non-controlling interests 65 64 
Total stockholders' equity24,467 24,880 
Total liabilities and stockholders' equity$77,340 $71,262 

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.
9

HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows (Unaudited)
 For the nine months ended July 31,
 20252024
 In millions
Cash Flows from Operating Activities:  
Net (loss) earnings attributable to HPE$(118)$1,213 
Adjustments to Reconcile Net (Loss) Earnings Attributable to HPE to Net Cash Provided by Operating Activities:  
Depreciation and amortization1,860 1,924 
Impairment of goodwill1,361 — 
Stock-based compensation expense447 341 
Provision for inventory and credit losses339 125 
Restructuring (credit) charges(13)20 
Cost reduction program148 — 
Deferred taxes on earnings (74)16 
Earnings from equity interests(74)(161)
Gain on sale of a business(245)— 
Dividends received from equity investees— 43 
H3C divestiture related severance costs97 — 
Other, net156 160 
Changes in Operating Assets and Liabilities, Net of Acquisitions:
Accounts receivable(1,130)(383)
Financing receivables(3)(311)
Inventory1,385 (3,195)
Accounts payable(2,595)3,002 
Taxes on earnings(105)108 
Restructuring(46)(144)
Other assets and liabilities(936)(447)
Net cash provided by operating activities454 2,311 
Cash Flows from Investing Activities:  
Investment in property, plant and equipment and software assets(1,651)(1,759)
Proceeds from sale of property, plant and equipment254 280 
Purchases of equity investments(7)(16)
Proceeds from sale of available-for-sale securities47 5 
Proceeds from maturities and redemptions of available-for-sale securities48 — 
Financial collateral posted(755)(728)
Financial collateral received518 638 
Payments made in connection with business acquisitions, net of cash acquired(12,278)— 
Proceeds from sale of a business210 — 
Net cash used in investing activities(13,614)(1,580)
Cash Flows from Financing Activities:  
Short-term borrowings with original maturities less than 90 days, net8 (50)
Proceeds from debt, net of issuance costs5,333 2,156 
Payment of debt(1,663)(2,794)
Net payments related to stock-based award activities(229)(69)
Repurchases of common stock(102)(100)
Cash dividends paid to non-controlling interests, net of contributions(8)(8)
Cash dividends paid to preferred stockholders(83)— 
Cash dividends paid to common stockholders(513)(507)
Net cash provided by (used in) financing activities2,743 (1,372)
Effect of exchange rate changes on cash, cash equivalents, and restricted cash9 (35)
Change in cash, cash equivalents and restricted cash(10,408)(676)
Cash, cash equivalents and restricted cash at beginning of period15,105 4,581 
Cash, cash equivalents and restricted cash at end of period$4,697 $3,905 
The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.
10
HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES
Condensed Consolidated Statements of Stockholders' Equity (Unaudited)
Common StockPreferred Stock
For the three months ended July 31, 2025Number of SharesPar Value
Number of 7.625%
Series C Mandatory
Convertible
Shares
Additional Paid-in CapitalAccumulated DeficitAccumulated
Other
Comprehensive
Loss		Equity
Attributable
to the
Company		Non-
controlling
Interests		Total
Equity
 In millions, except number of shares in thousands
Balance as of April 30, 20251,310,532 $13 30,000 $29,840 $(2,892)$(3,094)$23,867 $60 $23,927 
Net earnings attributable to HPE305 305 5 310 
Other comprehensive income70 70 70 
Comprehensive income375 5 380 
Stock-based compensation expense177 177 177 
Tax withholding related to vesting of employee stock plans(77)(77)(77)
Consideration for replacement of Juniper Networks Inc.’s equity awards239 239 239 
Issuance of common stock in connection with employee stock plans and other8,283 20 1 21 21 
Dividends on preferred stock accrued/declared
($0.95 per preferred share)
(29)(29)(29)
Cash dividends declared ($0.13 per share)
(171)(171)(171)
Balance as of July 31, 20251,318,815 $13 30,000 $30,199 $(2,786)$(3,024)$24,402 $65 $24,467 

11

Common StockPreferred Stock
For the nine months ended July 31, 2025Number of SharesPar Value
Number of 7.625%
Series C Mandatory
Convertible
Shares
Additional Paid-in CapitalAccumulated DeficitAccumulated
Other
Comprehensive
Loss		Equity
Attributable
to the
Company		Non-
controlling
Interests		Total
Equity
In millions, except number of shares in thousands
Balance as of October 31, 20241,297,258 $13 30,000 $29,848 $(2,068)$(2,977)$24,816 $64 $24,880 
Net (loss) earnings attributable to HPE(118)(118)9 (109)
Other comprehensive loss(47)(47)(47)
Comprehensive (loss) income(165)9 (156)
Stock-based compensation expense447 447 447 
Tax withholding related to vesting of employee stock plans(274)(274)(274)
Consideration for replacement of Juniper Networks Inc.’s equity awards239 239 239 
Issuance of common stock in connection with employee stock plans and other27,184 37 2 39 39 
Repurchases of common stock(5,627)(98)(2)(100)(100)
Dividends on preferred stock accrued/declared
($2.86 per preferred share)
(87)(87)(87)
Cash dividends declared ($0.39 per share)
(513)(513)(8)(521)
Balance as of July 31, 20251,318,815 $13 30,000 $30,199 $(2,786)$(3,024)$24,402 $65 $24,467 





12
Common Stock
For the three months ended July 31, 2024Number of SharesPar ValueAdditional Paid-in CapitalAccumulated DeficitAccumulated
Other
Comprehensive
Loss		Equity
Attributable
to the
Company		Non-
controlling
Interests		Total
Equity
 In millions, except number of shares in thousands
Balance as of April 30, 20241,297,931 $13 $28,308 $(3,583)$(3,058)$21,680 $54 $21,734 
Net earnings attributable to HPE512 512 3 515 
Other comprehensive income1 1 1 
Comprehensive income513 3 516 
Stock-based compensation expense80 80 80 
Tax withholding related to vesting of employee stock plans(6)(6)(6)
Issuance of common stock in connection with employee stock plans and other2,846 29 29 29 
Repurchases of common stock(2,421)(50)(50)(50)
Cash dividends declared ($0.13 per share)
(169)(169)(169)
Balance as of July 31, 20241,298,356 $13 $28,361 $(3,240)$(3,057)$22,077 $57 $22,134 

Common Stock
For the nine months ended July 31, 2024Number of SharesPar ValueAdditional Paid-in CapitalAccumulated DeficitAccumulated
Other
Comprehensive
Loss		Equity
Attributable
to the
Company		Non-
controlling
Interests		Total
Equity
In millions, except number of shares in thousands
Balance as of October 31, 20231,282,630 $13 $28,199 $(3,946)$(3,084)$21,182 $56 $21,238 
Net earnings attributable to HPE1,213 1,213 9 1,222 
Other comprehensive income27 27 27 
Comprehensive income1,240 9 1,249 
Stock-based compensation expense341 341 341 
Tax withholding related to vesting of employee stock plans(132)(132)(132)
Issuance of common stock in connection with employee stock plans and other21,008 53 53 53 
Repurchases of common stock(5,282)(100)(100)(100)
Cash dividends declared ($0.39 per share)
(507)(507)(8)(515)
Balance as of July 31, 20241,298,356 $13 $28,361 $(3,240)$(3,057)$22,077 $57 $22,134 
The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.
13
HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
(Unaudited)
Note 1: Overview and Summary of Significant Accounting Policies
Background
Hewlett Packard Enterprise Company (“Hewlett Packard Enterprise,” “HPE,” or the “Company”) is a global technology leader focused on developing intelligent solutions that allow customers to capture, analyze and act upon data seamlessly from edge-to-cloud. Hewlett Packard Enterprise enables customers to accelerate business outcomes by driving new business models, creating new customer and employee experiences, and increasing operational efficiency today and into the future. Hewlett Packard Enterprise's customers range from small- and medium-sized businesses to large global enterprises and governmental entities.
On July 2, 2025, the Company completed the Juniper Networks, Inc. (“Juniper Networks”) merger (the “Merger”). Under the terms of the Agreement and Plan of Merger (the “Merger Agreement”), HPE agreed to pay $40.00 per share of Juniper Networks common stock, issued and outstanding as of July 2, 2025, representing a cash consideration of approximately $13.4 billion. The results of operations of Juniper Networks are included in the unaudited Condensed Consolidated Financial Statements commencing on July 2, 2025. See Note 8, “Acquisitions and Dispositions” to the Condensed Consolidated Financial Statements for additional information.
Basis of Presentation and Consolidation
The Condensed Consolidated Financial Statements of the Company were prepared in accordance with United States (“U.S.”) Generally Accepted Accounting Principles (“GAAP”). The Company’s unaudited Condensed Consolidated Financial Statements include the accounts of the Company and all subsidiaries and affiliates in which the Company has a controlling financial interest or is the primary beneficiary. All intercompany transactions and accounts within the consolidated businesses of the Company have been eliminated. This interim information should be read in conjunction with the Consolidated Financial Statements for the fiscal year ended October 31, 2024 in HPE’s Annual Report on Form 10-K, filed with the U.S. Securities and Exchange Commission (“SEC”) on December 19, 2024. The Condensed Consolidated Balance Sheet for October 31, 2024 was derived from audited financial statements.
Use of Estimates
The preparation of financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in HPE’s Condensed Consolidated Financial Statements and accompanying notes. Actual results may differ materially from those estimates.
Significant Accounting Policies
There have been no significant changes to the Company's significant accounting policies described in Part II, Item 8, Note 1, “Overview and Summary of Significant Accounting Policies,” of the Company's Annual Report on Form 10-K for the fiscal year ended October 31, 2024.
Recently Enacted Accounting Pronouncements
In July 2025, the Financial Accounting Standards Board (“FASB”) issued guidance to provide a practical expedient for measuring expected credit losses on current trade receivables and contract assets by assuming that current conditions remain unchanged over the life of the asset. The amendment is effective for annual and interim periods beginning after December 15, 2025, with early adoption permitted. The Company is currently evaluating the impact of this amendment on its Condensed Consolidated Financial Statements.
In November 2024, the FASB issued guidance to provide disaggregated expense disclosures in the Consolidated Financial Statements. The Company is required to adopt the guidance for its annual period ending October 31, 2028 and all interim periods thereafter, though early adoption is permitted. The Company is currently evaluating the impact of this amendment on its Condensed Consolidated Financial Statements.
In December 2023, the FASB issued guidance to provide disaggregated income tax disclosures on the effective tax rate reconciliation and income taxes paid. The Company is required to adopt the guidance in fiscal 2026, though early adoption is permitted. The Company will adopt the guidance prospectively. Adoption of this new guidance will result in increased disclosures in the “Taxes on Earnings” note in the Company’s Consolidated Financial Statements but will not impact the consolidated financial results.
14
HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements (Continued)
(Unaudited)
In November 2023, the FASB issued guidance to improve the disclosures about a public entity’s reportable segments and address requests from investors for additional, more detailed information about a reportable segment’s expenses. The Company will adopt this guidance for its annual period ending October 31, 2025 and all interim periods thereafter. The Company does not expect the adoption of this guidance to have a significant impact on its Condensed Consolidated Financial Statements.
Note 2: Segment Information
Hewlett Packard Enterprise's operations are organized into five segments for financial reporting purposes: Server, Hybrid Cloud, Networking, Financial Services (“FS”), and Corporate Investments and Other. During the third quarter of fiscal 2025, the Intelligent Edge segment was renamed to Networking. The segment name change did not result in any change to the composition of the Company’s segments and therefore no prior information was recast; further, the designation change did not impact the Company’s Condensed Consolidated Financial Statements. The results of operations of Juniper Networks are included in the Networking segment commencing on July 2, 2025. See Note 8, “Acquisitions and Dispositions” to the Condensed Consolidated Financial Statements for additional information.
Hewlett Packard Enterprise's organizational structure is based on a number of factors that the Chief Operating Decision Maker (“CODM”), who is the Chief Executive Officer, uses to evaluate, view and run the Company's business operations, which include, but are not limited to, customer base and homogeneity of products and technology. The five segments are based on this organizational structure and information reviewed by Hewlett Packard Enterprise's management to evaluate segment results. A summary of the types of products and services within each segment is as follows:
Server consists of general-purpose servers for multi-workload computing and workload-optimized servers to deliver the best performance and value for demanding applications, and integrated systems comprised of software and hardware designed to address High-Performance Computing and Supercomputing (including exascale applications), Artificial Intelligence (“AI”), Data Analytics, and Transaction Processing workloads for government and commercial customers globally. This portfolio of products includes the secure and versatile HPE ProLiant Rack and Tower servers; HPE Synergy, a composable infrastructure for traditional and cloud-native applications; HPE Scale Up Servers product lines for critical applications, including large enterprise software applications and data analytics platforms; HPE Edgeline servers; HPE Cray EX; HPE Cray XD (formerly known as HPE Apollo); and HPE NonStop. The Server segment’s offerings also include operational and support services sold with systems and as standalone services.
Hybrid Cloud offers a wide variety of cloud-native and hybrid solutions across storage, private cloud and the infrastructure software-as-a-service (“SaaS”) space. Storage includes data storage and data management offerings with the HPE Alletra Storage portfolio; unstructured data solutions and analytics for AI; data protection and archiving; and storage networking. It also includes AIOps-driven intelligence with HPE InfoSight and HPE CloudPhysics. In private cloud, the HPE GreenLake offerings include new cloud-native offerings and capabilities for virtual machines, containers, and bare metal; a full suite of private cloud offerings that enable customers to self-manage or choose a fully managed experience; and a portfolio of world-class Private Cloud AI infrastructure delivered as-a-service (“aaS”). This segment also provides self-service private cloud on-demand with HPE GreenLake for Private Cloud Business Edition, which includes an integrated VM Essentials virtualization software. Infrastructure software includes monitoring and observability for day two operations and beyond through the Company’s acquisition of OpsRamp and unified data access through HPE Ezmeral Data Fabric and analytics suite, which helps move and transform data for use in AI and other applications. The Hybrid Cloud segment also includes data lifecycle management and protection through its suite of offerings, including Zerto Disaster Recovery.
Networking develops and sells high-performance network and security products and services that empower customers of all sizes to build scalable, reliable, secure, agile, and efficient automated networks. Our platforms are purpose-built using AI to deliver secure and sustainable user experiences from the edge to the data center and cloud. Our solutions include hardware products such as Wi-Fi and private cellular access points; QFX, EX, and CX switches; MX and PTX routers; and gateways. Additionally, HPE provides software products, such as Mist and Aruba Central for cloud-based and on-premise management, network access control, software-defined wide area networking, network security, analytics and assurance, and private cellular core software. The Company also offers professional and support services and education and training programs, as well as aaS and flexible consumption models through the HPE GreenLake platform.
Financial Services provides flexible investment solutions, such as leasing, financing, IT consumption, utility programs, and asset management services for customers that facilitate unique technology deployment models and the acquisition of complete IT solutions, including hardware, software, and services from Hewlett Packard Enterprise and others. The FS segment also supports financial solutions for on-premise flexible consumption models, such as the HPE GreenLake cloud.
15
HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements (Continued)
(Unaudited)
Corporate Investments and Other includes the Advisory and Professional Services (“A & PS”) business, which primarily offers consultative-led services, HPE and partner technology expertise and advice, implementation services as well as complex solution engagement capabilities; and Hewlett Packard Labs, which is responsible for research and development.
Segment Policy
Hewlett Packard Enterprise does not allocate to its segments certain operating expenses, which it manages at the corporate level. These unallocated operating costs include certain corporate costs and eliminations, stock-based compensation expense, amortization of intangible assets, transformation costs, H3C divestiture related severance costs, severance costs associated with the cost reduction program, acquisition, disposition and other charges, and impairment of goodwill. Total assets by segment are not presented as that information is not used to allocate resources or assess performance at the segment level and is not reviewed by the CODM.
Segment Operating Results
Segment net revenue and operating results were as follows:
 ServerHybrid CloudNetworkingFinancial
Services		Corporate
Investments and Other		Total
In millions
Three months ended July 31, 2025:
     
Net revenue$4,903 $1,422 $1,732 $887 $192 $9,136 
Intersegment net revenue37 62 (2)(1)2 98 
Total segment net revenue$4,940 $1,484 $1,730 $886 $194 $9,234 
Segment earnings (loss) from operations$317 $87 $360 $88 $(14)$838 
Three months ended July 31, 2024:
     
Net revenue(1)
$4,192 $1,269 $1,110 $877 $262 $7,710 
Intersegment net revenue63 56 11 2 — 132 
Total segment net revenue(1)
$4,255 $1,325 $1,121 $879 $262 $7,842 
Segment earnings (loss) from operations(1)
$461 $69 $251 $79 $(4)$856 
Nine months ended July 31, 2025:
Net revenue$13,202 $4,182 $4,035 $2,616 $582 $24,617 
Intersegment net revenue86 160 3 (1)3 251 
Total segment net revenue$13,288 $4,342 $4,038 $2,615 $585 $24,868 
Segment earnings (loss) from operations$906 $264 $948 $259 $(26)$2,351 
Nine months ended July 31, 2024:
Net revenue(1)
$11,199 $3,718 $3,384 $2,616 $752 $21,669 
Intersegment net revenue224 162 24 3 — 413 
Total segment net revenue(1)
$11,423 $3,880 $3,408 $2,619 $752 $22,082 
Segment earnings (loss) from operations(1)
$1,263 $133 $841 $234 $(23)$2,448 
(1)     Effective at the beginning of the first quarter of fiscal 2025, in order to align its segment financial reporting more closely with its current business structure, HPE implemented an organizational change with the transfer of certain managed services, previously reported within the Server segment, to the Hybrid Cloud segment.
16
HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements (Continued)
(Unaudited)
    The reconciliation of segment operating results to Condensed Consolidated Statements of Earnings was as follows:
 For the three months ended July 31,For the nine months ended July 31,
 2025202420252024
 In millions
Net Revenue:   
Total segments$9,234 $7,842 $24,868 $22,082 
Eliminations of intersegment net revenue(98)(132)(251)(413)
Total consolidated net revenue$9,136 $7,710 $24,617 $21,669 
Earnings (Loss) Before Taxes:   
Total segment earnings from operations$838 $856 $2,351 $2,448 
Unallocated corporate costs and eliminations(61)(85)(181)(218)
Stock-based compensation expense(177)(80)(447)(341)
Amortization of intangible assets(126)(60)(201)(198)
Impairment of goodwill— — (1,361)— 
Transformation costs— (14)(2)(67)
Gain on sale of a business1 — 245 — 
H3C divestiture related severance costs— — (97)— 
Cost reduction program(2)— (148)— 
Acquisition, disposition and other charges(1)
(225)(70)(343)(127)
Interest and other, net(2)
8 (12)86 (122)
Earnings from equity interests32 73 74 161 
Total earnings (loss) before provision for taxes$288 $608 $(24)$1,536 
(1)     Includes disaster recovery and divestiture related exit costs. For the three and nine months ended July 31, 2025, Acquisition, disposition and other charges include non-cash amortization of fair value adjustment for inventory in connection with the acquisition of Juniper Networks, which was recorded in cost of sales.
(2)    The three and nine months ended July 31, 2025, include a $52 million litigation settlement received in the third quarter of fiscal 2025.
Geographic Information
Net revenue by geographic region was as follows:
For the three months ended July 31,For the nine months ended July 31,
2025202420252024
In millions
Americas:
United States$4,278 $2,882 $9,535 $7,760 
Americas excluding United States464 528 1,900 1,595 
Total Americas4,742 3,410 11,435 9,355 
Europe, Middle East and Africa2,740 2,555 8,159 7,443 
Asia Pacific and Japan1,654 1,745 5,023 4,871 
Total consolidated net revenue$9,136 $7,710 $24,617 $21,669 
Note 3: Transformation Programs
Transformation programs are comprised of the Cost Optimization and Prioritization Plan and the HPE Next Plan. The primary elements of both plans were completed by the end of fiscal 2024.
17
HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements (Continued)
(Unaudited)
No transformation charges were recorded for either plan during the three months ended July 31, 2025. For the nine months ended July 31, 2025, the transformation charges relating to both plans were $2 million. For the three and nine months ended July 31, 2024, the transformation charges relating to both plans were $15 million and $70 million, respectively.
Restructuring activities related to the Company's employees and infrastructure under the Cost Optimization and Prioritization Plan and HPE Next Plan are presented in the table below:
Cost Optimization and Prioritization PlanHPE Next Plan
Employee
Severance		Infrastructure
and other		Infrastructure
and other
In millions
Liability as of October 31, 2024
$67 $94 $23 
Credits— (10)(3)
Cash payments(26)(16)(4)
Non-cash items2 (2)(1)
Liability as of July 31, 2025
$43 $66 $15 
Total costs incurred to date, as of July 31, 2025
$823 $543 $265 
Total expected costs to be incurred as of July 31, 2025
$823 $543 $265 
The current restructuring liability related to the transformation programs reported in Other accrued liabilities in the Condensed Consolidated Balance Sheets was $49 million and $78 million as of July 31, 2025 and October 31, 2024, respectively. The non-current restructuring liability related to the transformation programs, reported in Other non-current liabilities in the Condensed Consolidated Balance Sheets as of July 31, 2025 and October 31, 2024, was $75 million and $106 million, respectively.
Note 4: Retirement Benefit Plans
The Company's net pension benefit (credit) cost for defined benefit plans recognized in the Condensed Consolidated Statements of Earnings was as follows:
 For the three months ended July 31,For the nine months ended July 31,
 2025202420252024
 In millions
Service cost$13 $12 $37 $36 
Interest cost(1)
96 101 274 304 
Expected return on plan assets(1)
(157)(136)(452)(410)
Amortization and Deferrals(1):
   
Actuarial loss34 37 96 111 
Prior service benefit(1)(2)(3)(6)
Net periodic benefit (credit) cost(15)12 (48)35 
Settlement loss and special termination benefits(1)
4 1 7 3 
Total net benefit (credit) cost$(11)$13 $(41)$38 
(1)These non-service components were included in Interest and other, net in the Condensed Consolidated Statements of Earnings.
Note 5: Taxes on Earnings
Benefit (Provision) for Taxes
For the three months ended July 31, 2025 and 2024, the Company recorded income tax benefit of $17 million and income tax expense of $96 million, respectively, which reflects an effective tax rate of (6.5)% and 15.8%, respectively. For the nine months ended July 31, 2025 and 2024, the Company recorded income tax expense of $94 million and $323 million, respectively, which reflects an effective tax rate of (359.9)% and 21.0%, respectively. For the three and nine months ended July 31, 2025 and the three months ended July 31, 2024 the effective tax rate generally differs from the U.S. federal statutory rate of
18
HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements (Continued)
(Unaudited)
21.0% due to favorable tax rates associated with certain earnings from the Company’s operations in lower tax jurisdictions throughout the world but is also impacted by discrete tax adjustments during each fiscal period. The effective tax rate for the nine months ended July 31, 2025 also included the effects of the non-deductible goodwill impairment.
For the three and nine months ended July 31, 2025, the Company recorded $106 million and $217 million of net income tax benefits, respectively, related to various items discrete to the period. For the three months ended July 31, 2025, this amount primarily included $76 million of net income tax benefits related to the release of certain state valuation allowances and $21 million of net income tax benefits related to costs incurred as a result of the Merger, and $4 million of net income tax benefits related to acquisition, disposition and other related charges. For the nine months ended July 31, 2025, this amount primarily included $76 million of net income tax benefits related to the release of certain state valuation allowances, $33 million of net income tax benefits related to the cost reduction program, $33 million of net income tax benefits related to the favorable resolution of non-U.S. tax litigation matters, $30 million of net excess tax benefits related to stock-based compensation, $29 million of net income tax benefits related to costs incurred as a result of the Merger, $16 million of net income tax benefits related to the settlement of U.S. tax audit matters, and $9 million of net income tax benefits related to acquisition, disposition and other related charges, partially offset by $22 million of net income tax charges resulting from the gain on the Communications Technology Group (“CTG”) divestiture.
For the three and nine months ended July 31, 2024, the Company recorded immaterial net income tax benefits related to various items discrete to the period.
Uncertain Tax Positions
As of July 31, 2025 and October 31, 2024, the amount of unrecognized tax benefits was $485 million and $724 million, respectively, of which up to $345 million and $344 million, respectively, would affect the Company's effective tax rate if realized as of their respective periods. During the second quarter of fiscal 2025, the Company effectively settled with the U.S. Internal Revenue Service ("IRS") regarding its audit of the Company’s fiscal 2017 through 2019 U.S. federal income tax returns, resulting in a reduction in the Company's unrecognized tax benefits of approximately $340 million; however, the effective settlement did not result in a material impact to the Company’s Condensed Consolidated Statement of Earnings and Condensed Consolidated Balance Sheet. The resolution of the audit resulted in the release of tax reserves that were predominantly related either to adjustments to foreign tax credits that carried a full valuation allowance or to the timing of intercompany royalty revenue recognition, neither of which affected the Company’s effective tax rate. Unrecognized tax benefits increased $111 million due to the Merger.

For tax liabilities pertaining to unrecognized tax benefits, the Company recognizes interest income from favorable settlements and interest expense and penalties in Benefit (provision) for taxes in the Condensed Consolidated Statements of Earnings. The Company recognized $7 million of interest income for the nine months ended July 31, 2025 and the interest expense was not material for the nine months ended July 31, 2024. The increase in interest income resulted from the favorable resolution of non-U.S. tax litigation matters, partially offset with the addition of interest accrued on unrecognized tax benefits due to the Merger. As of July 31, 2025 and October 31, 2024, the Company had accrued $52 million and $58 million, respectively, for interest and penalties in the Condensed Consolidated Balance Sheets.

The Company engages in continuous discussion and negotiation with tax authorities regarding tax matters in various jurisdictions. The Company is no longer subject to U.S. federal tax audits for years prior to 2020. The IRS is conducting audits of the Company's fiscal 2020 through 2022 U.S. federal income tax returns. Tax years of Juniper Networks through 2018 have been audited by the IRS, and Juniper Networks is not currently under examination by the IRS for other tax years. The Company does not expect complete resolution of any IRS audit cycle within the next 12 months. With respect to major state and foreign tax jurisdictions, the Company is no longer subject to tax authority examinations for years prior to 2005. It is reasonably possible that certain foreign tax issues may be concluded in the next 12 months, including issues involving resolution of certain intercompany transactions and other matters. The Company believes it is reasonably possible that its existing unrecognized tax benefits may be reduced by an amount up to $58 million within the next 12 months.
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HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements (Continued)
(Unaudited)
Deferred Tax Assets and Liabilities
Deferred tax assets and liabilities included in the Condensed Consolidated Balance Sheets were as follows:
 As of
 July 31, 2025October 31, 2024
 In millions
Deferred tax assets$2,477 $2,396 
Deferred tax liabilities(428)(373)
Deferred tax assets net of deferred tax liabilities$2,049 $2,023 
Net deferred tax assets increased $26 million as a result of discrete tax benefits from the release of certain state valuation allowances of $76 million and the settlement of U.S. tax audit matters of $16 million, which were partially offset by a decrease of $65 million due to the Merger.
Note 6: Balance Sheet Details
Cash, Cash Equivalents and Restricted Cash
As of
July 31, 2025October 31, 2024
In millions
Cash and cash equivalents $4,571 $14,846 
Restricted cash(1)
126 259 
Total$4,697 $15,105 
(1)    The Company included restricted cash in Other current assets in the accompanying Condensed Consolidated Balance Sheets.
Inventory
 As of
 July 31, 2025October 31, 2024
 In millions
Purchased parts and fabricated assemblies$4,455 $5,441 
Finished goods2,708 2,369 
Total $7,163 $7,810 
The Company values inventory at the lower of cost or net realizable value. Cost is computed using standard cost which approximates actual cost on a first-in, first-out basis. At each reporting period, the Company assesses the value of its inventory and writes down the cost of inventory to its net realizable value if required, for estimated excess or obsolescence. Factors influencing these adjustments include changes in future demand forecasts, market conditions, technological changes, product life-cycle and development plans, component cost trends, product pricing, physical deterioration, and quality issues. If in any period the Company anticipates a change in those factors to be less favorable than its previous estimates, additional inventory write-downs may be required and could materially impact gross margin. The write down for excess or obsolescence is charged to the provision for inventory, which is a component of cost of sales in the Condensed Consolidated Statements of Earnings. At the point of the loss recognition, a new, lower cost basis for that inventory is established, and subsequent changes in facts and circumstances do not result in the restoration or increase in that newly established cost basis. The Company recorded a net provision for excess or obsolete inventory to cost of sales totaling $122 million and $271 million for the three and nine months ended July 31, 2025, respectively. For the fiscal year ended October 31, 2024, the Company recorded a net provision for excess or obsolete inventory to cost of sales totaling $89 million.
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HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements (Continued)
(Unaudited)
Property, Plant and Equipment, net
 As of
 July 31, 2025October 31, 2024
 In millions
Land$306 $66 
Buildings and leasehold improvements2,088 1,696 
Machinery and equipment, including equipment held for lease10,607 10,392 
Gross property, plant and equipment13,001 12,154 
Accumulated depreciation(6,883)(6,490)
Property, plant and equipment, net$6,118 $5,664 
Supplier Financing Arrangements
The Company enters into supplier financing arrangements with external financial institutions. Under these arrangements, suppliers can choose to settle outstanding payment obligations at a discount. The Company holds no economic interest in suppliers' participation, nor does it provide guarantees or pledge assets under these arrangements. Invoices are settled with the financial institutions based on the original supplier payment terms. These arrangements do not alter the Company's rights and obligations towards suppliers, including scheduled payment terms. Liabilities associated with the funded participation in these arrangements, are presented within Accounts payable on the Consolidated Balance Sheets, amounted to $435 million, and $466 million as of July 31, 2025 and October 31, 2024, respectively.
Warranties
The Company's aggregate product warranty liabilities and changes for the nine months ended July 31, 2025, and the fiscal year ended October 31, 2024 were as follows:
 As of
July 31, 2025October 31, 2024
 In millions
Balance at beginning of period$301 $318 
Charges162 173 
Adjustments related to pre-existing warranties(53)(5)
Settlements made (125)(185)
Balance at end of period(1)
$285 $301 
(1)The Company included the current portion in Other accrued liabilities, and amounts due after one year in Other non-current liabilities in the accompanying Consolidated Balance Sheets.
Severance Charges
The Company incurs costs related to employee severance and records a liability for these costs when it is probable that employees will be entitled to termination benefits and the amounts can be reasonably estimated. As of July 31, 2025, $164 million and $42 million was recorded in Other Accrued Liabilities and Other Non-current liabilities, respectively.
The following table presents the activity related to the Company’s severance liability for the period indicated:
 As of
July 31, 2025
 In millions
Balance at beginning of period$49 
Severance charges256 
Cash paid and other(99)
Balance at end of period$206 
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HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements (Continued)
(Unaudited)
The following table presents severance charges as included in the Condensed Consolidated Statements of Earnings for the periods indicated:
 For the three months ended July 31, 2025For the nine months ended July 31, 2025
 In millions
Cost of sales— $63 
Research and development— 31 
Selling, general and administrative— 147 
Acquisition, disposition and other charges15 15 
Total severance charges$15 $256 
Contract Balances
The Company’s contract balances consist of contract assets, contract liabilities, and costs to obtain a contract with a customer.
Contract Assets
A summary of accounts receivable, net, including unbilled receivables was as follows:
As of
July 31, 2025October 31, 2024
In millions
Accounts receivable$5,260 $3,236 
Unbilled receivables414 324 
Allowances(18)(10)
Total$5,656 $3,550 
The allowances for credit losses related to accounts receivable and changes for the nine months ended July 31, 2025, and the fiscal year ended October 31, 2024 were as follows:
 As of
 July 31, 2025October 31, 2024
 In millions
Balance at beginning of period$10 $37 
Provision for credit losses20 41 
Adjustments to existing allowances, including write offs(12)(68)
Balance at end of period$18 $10 
Sale of Trade Receivables
The Company has third-party revolving short-term financing arrangements intended to facilitate the working capital requirements of certain customers. For the three and nine months ended July 31, 2025, the Company sold $1.0 billion and $2.8 billion of trade receivables, respectively. For the fiscal year ended October 31, 2024, the Company sold $3.1 billion of trade receivables. The Company recorded an obligation of $70 million and $62 million within Notes payable and short-term borrowings in its Condensed Consolidated Balance Sheets as of July 31, 2025 and October 31, 2024, respectively, related to the trade receivables sold and collected from the third-party for which the revenue recognition was deferred.
Contract Liabilities and Remaining Performance Obligations
Contract liabilities consist of deferred revenue and customer deposits. A summary of contract liabilities were as follows:
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HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements (Continued)
(Unaudited)
 As of
 July 31, 2025October 31, 2024
 LocationIn millions
Customer depositsOther accrued liabilities$580 $289 
Customer deposits - non-currentOther non-current liabilities73 7 
Total customer deposits$653 $296 
Deferred revenueDeferred revenue$5,311 $3,904 
Deferred revenue - non-currentOther non-current liabilities4,837 3,578 
Total deferred revenue$10,148 $7,482 
For the nine months ended July 31, 2025, approximately $3.0 billion of revenue was recognized relating to contract liabilities recorded as of October 31, 2024.
Revenue allocated to remaining performance obligations represents contract work that has not yet been performed and does not include contracts where the customer is not committed. Remaining performance obligations estimates are subject to change and are affected by several factors, including contract terminations, changes in the scope of contracts, adjustments for revenue that has not materialized and adjustments for currency. As of July 31, 2025, the aggregate amount of deferred revenue, was $10.1 billion. The Company expects to recognize approximately 18% of this balance over fiscal 2025 with the remainder to be recognized thereafter. The Company receives payments in advance of completion of its contractual obligations; these payments are considered customer deposits. As customer acceptance milestones are met, the Company will recognize revenue and reduce the amount of contract liabilities. As of July 31, 2025, the aggregate amount of customer deposits was $653 million. The Company expects to recognize $580 million over the next twelve months and the remaining balance thereafter.
Costs to Obtain a Contract
As of July 31, 2025, the current and non-current portions of the capitalized costs to obtain a contract were $122 million and $147 million, respectively. As of October 31, 2024, the current and non-current portions of the capitalized costs to obtain a contract were $88 million and $136 million, respectively. The current and non-current portions of the capitalized costs to obtain a contract were included in Other current assets, and Long-term financing receivables and other assets, respectively, in the Condensed Consolidated Balance Sheets. For the three and nine months ended July 31, 2025, the Company amortized $88 million and $142 million, of capitalized costs to obtain a contract. For the three and nine months ended July 31, 2024 the Company amortized $27 million and $79 million respectively, of capitalized costs to obtain a contract. The amortized capitalized costs to obtain a contract are included in Selling, general and administrative expense in the Condensed Consolidated Statements of Earnings.
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HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements (Continued)
(Unaudited)
Note 7: Accounting for Leases as a Lessor
Financing receivables represent sales-type and direct-financing leases of the Company and third-party products. These receivables typically have terms ranging from two to five years and are usually collateralized by a security interest in the underlying assets. Financing receivables also include billed receivables from operating leases. The allowance for credit losses represents future expected credit losses over the life of the receivables based on past experience, current information and forward-looking economic considerations. The components of financing receivables were as follows:
 As of
 July 31, 2025October 31, 2024
 In millions
Minimum lease payments receivable$10,194 $10,266 
Unguaranteed residual value680 599 
Unearned income(1,246)(1,218)
Financing receivables, gross9,628 9,647 
Allowance for credit losses
(206)(194)
Financing receivables, net9,422 9,453 
Less: current portion(3,777)(3,870)
Amounts due after one year, net$5,645 $5,583 
Sale of Financing Receivables
The Company enters into arrangements to transfer the contractual payments due under certain financing receivables to third party financial institutions. For the three and nine months ended July 31, 2025, the Company sold $17 million and $164 million of financing receivables, respectively. For the fiscal year ended October 31, 2024, the Company sold $93 million of financing receivables.
Credit Quality Indicators
Due to the homogeneous nature of its leasing transactions, the Company manages its financing receivables on an aggregate basis when assessing and monitoring credit risk. Credit risk is generally diversified due to the large number of entities comprising the Company's customer base and their dispersion across many different industries and geographic regions. The Company evaluates the credit quality of an obligor at lease inception and monitors that credit quality over the term of a transaction. The Company assigns risk ratings to each lease based on the creditworthiness of the obligor and other variables that augment or mitigate the inherent credit risk of a particular transaction and periodically updates the risk ratings when there is a change in the underlying credit quality. Such variables include the underlying value and liquidity of the collateral, the essential use of the equipment, the term of the lease, and the inclusion of credit enhancements, such as guarantees, letters of credit or security deposits.
The credit risk profile of gross financing receivables, based on internal risk ratings as of July 31, 2025, presented on amortized cost basis by year of origination was as follows:
 
As of July 31, 2025
Risk Rating
LowModerateHigh
Fiscal YearIn millions
2025$1,451 $746 $6 
20242,400 1,020 36 
20231,371 738 51 
2022733 426 30 
2021 and prior275 261 84 
Total$6,230 $3,191 $207 
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HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements (Continued)
(Unaudited)
The credit risk profile of gross financing receivables, based on internal risk ratings as of October 31, 2024, presented on amortized cost basis by year of origination was as follows:
 As of October 31, 2024
Risk Rating
LowModerateHigh
Fiscal YearIn millions
2024$2,630 $1,120 $19 
20231,804 948 54 
20221,128 665 46 
2021440 317 52 
2020 and prior158 193 73 
Total$6,160 $3,243 $244 
Accounts rated low risk typically have the equivalent of a Standard & Poor's rating of BBB– or higher, while accounts rated moderate risk generally have the equivalent of BB+ or lower. The Company classifies accounts as high risk when it considers the financing receivable to be impaired or when management believes there is a significant near-term risk of impairment. The credit quality indicators do not reflect any mitigation actions taken to transfer credit risk to third parties.
Allowance for Credit Losses
The allowance for credit losses for financing receivables as of July 31, 2025 and October 31, 2024 and the respective changes for the nine and twelve months then ended were as follows:
 As of
 July 31, 2025October 31, 2024
 In millions
Balance at beginning of period$194 $243 
Provision for credit losses56 50 
Adjustment to the existing allowance(2)(4)
Write-offs(42)(95)
Balance at end of period$206 $194 
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HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements (Continued)
(Unaudited)
Non-Accrual and Past-Due Financing Receivables
The following table summarizes the aging and non-accrual status of gross financing receivables:
 As of
 July 31, 2025October 31, 2024
 In millions
Billed:(1)
  
Current 1-30 days$318 $334 
Past due 31-60 days34 29 
Past due 61-90 days13 12 
Past due > 90 days78 79 
Unbilled sales-type and direct-financing lease receivables9,185 9,193 
Total gross financing receivables$9,628 $9,647 
Gross financing receivables on non-accrual status(2)
$214 $214 
Gross financing receivables 90 days past due and still accruing interest(2)
$97 $82 
(1)Includes billed operating lease receivables and billed sales-type and direct-financing lease receivables.
(2)Includes billed operating lease receivables and billed and unbilled sales-type and direct-financing lease receivables.    
The following table presents amounts included in the Condensed Consolidated Statements of Earnings related to lessor activity:
For the three months ended July 31,For the nine months ended July 31,
2025202420252024
LocationIn millions
Interest income from sales-type leases and direct financing leasesFinancing Income$194 $168 $568 $486 
Lease income from operating leasesServices542 578 1,628 1,771 
Total lease income$736 $746 $2,196 $2,257 
Variable Interest Entities
The Company has issued asset-backed debt securities under a fixed-term securitization program to private investors. The asset-backed debt securities are collateralized by the U.S. fixed-term financing receivables and leased equipment in the offering, which is held by a Special Purpose Entity (“SPE”). The SPE meets the definition of a Variable Interest Entity (“VIE”) and is consolidated, along with the associated debt, into the Condensed Consolidated Financial Statements as the Company is the primary beneficiary of the VIE. The SPE is a bankruptcy-remote legal entity with separate assets and liabilities. The purpose of the SPE is to facilitate the funding of customer receivables and leased equipment in the capital markets.
The Company’s risk of loss related to securitized receivables and leased equipment is limited to the amount by which the Company’s right to receive collections for assets securitized exceeds the amount required to pay interest, principal, and fees and expenses related to the asset-backed securities.
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HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements (Continued)
(Unaudited)
The following table presents the assets and liabilities held by the consolidated VIE as of July 31, 2025 and October 31, 2024, which are included in the Condensed Consolidated Balance Sheets. The assets in the table below include those that can be used to settle the obligations of the VIE. Additionally, general creditors of the Company do not have recourse to the assets of the VIE.
As of
 July 31, 2025October 31, 2024
Assets held by VIE:In millions
Other current assets$109 $189 
Financing receivables
Short-term820 872 
Long-term1,124 1,079 
Property, plant and equipment, net775 1,033 
Liabilities held by VIE:
Notes payable and short-term borrowings, net of unamortized debt issuance costs1,109 1,433 
Long-term debt, net of unamortized debt issuance costs$1,068 $965 
For the nine months ended July 31, 2025, the financing receivables and leased equipment transferred via securitization through the SPE were $0.7 billion and $0.3 billion, respectively. For the fiscal year ended October 31, 2024, financing receivables and leased equipment transferred via securitization through the SPE were $1.2 billion and $0.6 billion, respectively.
Note 8: Acquisitions and Dispositions
Acquisition of Juniper Networks
On July 2, 2025, the Company completed the Merger. Under the terms of the Merger Agreement, HPE agreed to pay $40.00 per share of Juniper Networks common stock, issued and outstanding as of July 2, 2025, representing a cash consideration of approximately $13.4 billion, which was paid through cash on hand, including proceeds and term loan drawdowns from the financings in fiscal 2024, and commercial paper issuances.
Juniper Networks is a leader in AI-native networks, and will be reported in the Networking segment. The Company acquired Juniper Networks to advance HPE’s portfolio mix shift toward higher-growth solutions and strengthen its networking business.
Purchase Consideration
The following table summarizes the purchase consideration for the Merger:
In millions
Cash paid for outstanding Juniper Networks common stock$13,386 
Consideration for replacement of Juniper Networks equity awards239 
Total purchase consideration$13,625 
In connection with the Merger, each of the outstanding and unvested equity awards of Juniper Networks which was comprised of restricted stock units, performance stock awards and stock options which had been previously issued to employees, was converted into HPE equity awards utilizing an exchange ratio of approximately 2.1. The exchange ratio was calculated as purchase consideration per share divided by HPE’s 10-day average stock price prior to July 2, 2025. The acquisition date fair value of the replacement equity awards has been determined using the Hull-White I Lattice model for options, and for restricted stock units by adjusting HPE’s Merger date close price for expected dividends as applicable. The fair value of the replacement awards was $927 million, of which $239 million is included in the Merger consideration. At the date of the acquisition, the Company converted Juniper Networks’ equity awards into approximately 46 million HPE equity awards, of which approximately 10 million restricted stock units vested in July 2025. As of July 31, 2025, there was $563 million of unrecognized pre-tax stock-based compensation expense related to unvested restricted stock units, which the Company expects to recognize over the remaining weighted-average vesting period of 1.5 years.
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HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements (Continued)
(Unaudited)
For the three and nine months ended July 31, 2025, HPE recorded stock-based compensation expense of $87 million related to these assumed awards.
A summary of the preliminary allocation of the total purchase price for the Merger is presented as follows:
In millions
Cash and cash equivalents$1,098 
Inventory1,060 
Other current assets1,827 
Goodwill7,042 
Intangible assets6,211 
Long-term financing receivables and other assets1,786 
Total assets acquired19,024 
Other accrued liabilities(1)
2,592 
Long-term debt1,232 
Other non-current liabilities1,575 
Total liabilities assumed5,399 
Total purchase consideration$13,625 
(1)Includes the current portion of long-term debt.
This acquisition has been accounted for as a business combination under FASB Topic Accounting Standards Codification 805 using the acquisition method. Tangible and identifiable intangible assets acquired, and liabilities assumed were recorded at the respective preliminary estimated fair values. The excess of the consideration transferred over the estimated fair value of the net assets received has been recorded as goodwill. The factors that contributed to the recognition of goodwill primarily relate to acceleration of the company’s portfolio mix shift to higher-margin, higher-growth areas. Goodwill also reflects the expectation that the Merger will position the company for long-term profitable growth. Goodwill created as a result of the Merger is not deductible for tax purposes.
The purchase price allocation is preliminary as the final review of intangible assets, certain tangible assets, income tax balances, liabilities assumed, and residual goodwill related to this acquisition is not complete. These amounts are subject to revision as additional information about fair value of assets acquired and liabilities assumed is obtained within the measurement period, which is up to one year from the acquisition date.
Purchased Intangible Assets
The weighted-average useful life for intangible assets acquired was 6.5 years, the following table presents preliminary details of the purchased intangible assets acquired:
Useful Life
(in Years)		In millions
Customer contracts, customer lists and distribution agreements8$3,031 
Developed and core technology and patents52,915 
Trade name and trademarks6265 
Total intangible assets(1)
$6,211 
(1)Amortization expense for the three and nine months ended July 31, 2025, was $88 million.
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HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements (Continued)
(Unaudited)
Long-term Debt
The following table presents long-term debt assumed at closing:
Maturity DatePar ValueFair Value
In millions
1.200% fixed-rate notes
December 2025$400 $394 
3.750% fixed-rate notes
August 2029500 486 
2.000% fixed-rate notes
December 2030400 348 
5.950% fixed-rate notes
March 2041$400 $398 
Results of Operations and Pro forma Financial Information
The following table presents revenues and net earnings for Juniper Networks since the acquisition date, July 2, 2025 through July 31, 2025:
In millions
Total revenue$480 
Earnings from operations(1)
$76 
(1)     This amount does not include certain corporate costs which are managed at the corporate level.
The unaudited pro forma results of operations for HPE as if the Merger had occurred on November 1, 2023 are presented in the table below:
For the three months ended July 31,For the nine months ended July 31,
2025202420252024
In millions
Total revenue$10,119 $8,900 $28,407 $25,372 
Net earnings (loss)$280 $195 $(271)$2 
These pro forma results were based on estimates and assumptions, which the Company believes are reasonable. The pro forma financial information is presented for informational purposes only and is not indicative of the results of operations that would have been achieved if the acquisition and the cost of financing the acquisition had taken place at the beginning of fiscal 2024. The unaudited pro forma information includes adjustments to amortization for intangible assets acquired, stock-based compensation expense, interest expense for acquisition financing, and depreciation for property and equipment acquired.
Acquisition costs related to the Merger were primarily included within Acquisition, disposition and other charges in the Condensed Consolidated Statements of Earnings. For the three and nine months ended July 31, 2025, acquisition costs were $159 million and $231 million, respectively. For the three and nine months ended July 31, 2024, acquisition costs were $23 million and $77 million, respectively.
Disposition of Communications Technology Group
On May 23, 2024, HPE announced plans to divest the CTG business to HCL Tech. CTG was included in the Communications and Media Solutions business, which was reported in the Corporate Investments and Other segment. This divestiture includes the platform-based software solutions portions of the CTG portfolio, including systems integration, network applications, data intelligence, and the business support systems groups. On December 1, 2024, the Company completed the disposition of CTG. The Company received net proceeds of $210 million and recognized a gain of $245 million included in Gain on sale of a business in the Condensed Consolidated Statements of Earnings.
Note 9: Goodwill
Goodwill is tested for impairment at the reporting unit level. As of November 1, 2024, the Company reassessed its
29
HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements (Continued)
(Unaudited)
reporting units and determined that the former Compute and High Performance Computing & Artificial Intelligence reporting units (within the Server segment) met the criteria to qualify as a single Server reporting unit. As of July 31, 2025, the Company's reporting units are consistent with the reportable segments identified in Note 2, “Segment Information”, with the exception of Networking and Corporate Investments and Other segments. The Networking segment contains two reporting units: Intelligent Edge and Juniper Networks. The Corporate Investments and Other segment contains the A & PS reporting unit. The following table represents the carrying value of goodwill, by segment as of July 31, 2025 and October 31, 2024.
 ServerHybrid CloudNetworkingFinancial ServicesCorporate Investments and OtherTotal
 In millions
Balance as of October 31, 2024
$10,194 $4,839 $2,909 $144 $— $18,086 
Goodwill acquired during the period— — 7,042 — — 7,042 
Goodwill impairment— (1,361)— — — (1,361)
Balance as of July 31, 2025(1)
$10,194 $3,478 $9,951 $144 $— $23,767 
(1)     Goodwill is net of accumulated impairment losses of $3.1 billion. Accumulated impairment increased by $1.2 billion from October 31, 2024 due to a $1.4 billion Hybrid Cloud reporting unit impairment, partially offset by a decrease due to the disposition of CTG (the Communications and Media Solutions reporting unit).
Goodwill is tested annually for impairment, as of the first day of the fourth quarter and whenever events or changes in circumstances indicate the carrying amount of goodwill may not be recoverable. The Company performed interim goodwill impairment tests as of November 1, 2024 and April 30, 2025.
November 1, 2024 Interim Impairment Test
An interim impairment test was performed as of November 1, 2024 based on organizational changes impacting the Hybrid Cloud and Server reporting units. The interim impairment test did not result in an impairment of goodwill.
April 30, 2025 Interim Impairment Test
During the second quarter of fiscal 2025, the macroeconomic environment experienced a rapid deterioration, primarily driven by the announcement and subsequent modifications of international tariffs, an escalation in global trade tensions, and increasing geopolitical uncertainty. These events have contributed to significant movement in inputs used to determine the weighted-average cost of capital. As of April 30, 2025, the Company determined that an indicator of potential impairment existed to require an interim quantitative goodwill impairment test for its reporting units.
Based on the results of the interim quantitative impairment test performed as of April 30, 2025, the fair value of the Hybrid Cloud reporting unit was below the carrying value assigned to Hybrid Cloud. The decline in the fair value of the Hybrid Cloud reporting unit was primarily driven by an increase in the discount rate used in the discounted cash flows analysis, which reflected heightened macroeconomic uncertainty and changes in market conditions. The fair value of the Hybrid Cloud reporting unit was based on a weighting of fair values derived most significantly from the income approach, and to a lesser extent, the market approach. Under the income approach, the Company estimates the fair value of a reporting unit based on the present value of estimated future cash flows which HPE considers to be a level 3 unobservable input in the fair value hierarchy.
Prior to the quantitative goodwill impairment test, the Company tested the recoverability of long-lived assets and other assets of the Hybrid Cloud reporting unit and concluded that such assets were not impaired. The quantitative goodwill impairment test indicated that the carrying value of the Hybrid Cloud reporting unit exceeded its fair value by $1.4 billion. As a result, the Company recorded a goodwill impairment charge of $1.4 billion in the second quarter of fiscal 2025.
Subsequent to the impairment of the Hybrid Cloud reporting unit, the indicated fair values of the reporting units exceeded their respective carrying amounts by a range of 0% to 112%. In order to evaluate the sensitivity of the estimated fair value of the reporting units in the goodwill impairment test, the Company applied a hypothetical 10% decrease to the fair value of each reporting unit. Based on the results of this hypothetical 10% decrease, all of the reporting units had an excess of fair value over carrying amount, except Server and Hybrid Cloud.
The Hybrid Cloud reporting unit has remaining goodwill of $3.5 billion as of July 31, 2025 and an excess of fair value over carrying value of net assets of 0% as of the interim test date. Hybrid Cloud business is transitioning to a more cloud-native,
30
HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements (Continued)
(Unaudited)
software-defined platform with HPE Alletra. Translating this growth to revenue and operating income will take time because a greater mix of high margin business, such as ratable software and services, are deferred and recognized in future periods.
The excess of fair value over carrying amount for the Server reporting unit was 3%. The fair value of the Server reporting unit was also impacted by an increase in the discount rate used in the discounted cash flow analysis, driven by heightened macroeconomic uncertainty. The Server reporting unit has a goodwill balance of $10.2 billion as of July 31, 2025. In the current macroeconomic and inflationary environment, customers have invested selectively, resulting in moderate unit growth and competitive pricing in the traditional servers business. While the AI servers business is growing at a faster pace, because graphics processing units represent a large portion of the solutions, the pricing is very competitive and margins are limited. The Server business continues to focus on capturing market share in both traditional and AI servers, while maintaining operating margin and leveraging its strong portfolio of products.
If the global macroeconomic or geopolitical conditions worsen, projected revenue growth rates or operating margins decline, weighted-average cost of capital increases, or if the Company has significant or sustained decline in its stock price, it is possible its estimates about the Hybrid Cloud and Server reporting units’ ability to successfully address the current challenges may change, which could result in the carrying value of the Hybrid Cloud and Server reporting units exceeding their estimated fair value and potential impairment charges.
Note 10: Fair Value
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the measurement date.
The Company uses valuation techniques that are based upon observable and unobservable inputs. Observable inputs are developed using market data such as publicly available information and reflect the assumptions market participants would use, while unobservable inputs are developed using the best information available about the assumptions market participants would use.
31
HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements (Continued)
(Unaudited)
The following table presents the Company's assets and liabilities that are measured at fair value on a recurring basis:
 As of July 31, 2025As of October 31, 2024
 Fair Value
Measured Using		Fair Value
Measured Using
 
Quoted Prices in Active Markets for Identical Assets
(Level 1)
Significant Other Observable Remaining Inputs (Level 2)
Significant Other Unobservable Remaining Inputs
(Level 3)
Total
Quoted Prices in Active Markets for Identical Assets
(Level 1)
Significant Other Observable Remaining Inputs (Level 2)
Significant Other Unobservable Remaining Inputs
(Level 3)
Total
 In millions
Assets
Cash Equivalents:
Commercial paper$— $3 $— $3 $— $— $— $— 
Time deposits— 945 — 945 — 601 — 601 
Money market funds1,413 — — 1,413 12,639 — — 12,639 
Total cash equivalents1,413 948 — 2,361 12,639 601 — 13,240 
Available-for-sale Debt Investments:
Asset-backed and mortgage-backed securities— 134 — 134 — — — — 
Certificates of deposit— 16 — 16 — — — — 
Corporate debt securities— 366 — 366 — — — — 
Commercial paper— 47 — 47 — — — — 
U.S. government agency securities— 38 — 38 — — — — 
U.S. government securities105 32 — 137 — — — — 
Foreign bonds1 107 — 108 — 102 1 103 
Other debt securities (1)
— — 47 47 — — 14 14 
Total available-for-sale debt investments106 740 47 893 — 102 15 117 
Equity Investments:
Mutual funds— 56 — 56 — — — — 
Equity securities in public companies6 — — 6 — — — — 
Equity securities— — 54 54 — — 88 88 
Total equity investments6 56 54 116 — — 88 88 
Derivatives Instruments:
Foreign currency contracts— 196 — 196 — 299 — 299 
Other derivatives— 1 — 1 — — — — 
Total assets1,525 1,941 101 3,567 12,639 1,002 103 13,744 
Liabilities
Derivatives Instruments:
Interest rate contracts— 72 — 72 — 58 — 58 
Foreign currency contracts— 302 — 302 — 103 — 103 
Other derivatives— 1 — 1 — 2 — 2 
Total liabilities$— $375 $— $375 $— $163 $— $163 
(1) Available-for-sale debt securities with carrying values that approximate fair value.
32
HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements (Continued)
(Unaudited)
Other Fair Value Disclosures
Short-Term and Long-Term Debt: As of July 31, 2025, the estimated fair value and carrying value of the Company's short-term and long-term debt was $23.6 billion and $23.7 billion, respectively. As of October 31, 2024, the estimated fair value and carrying value of the Company's short-term and long-term debt was $18.3 billion and $18.2 billion, respectively. If measured at fair value in the Condensed Consolidated Balance Sheets, short-term and long-term debt would be classified in Level 2 of the fair value hierarchy.
Other Financial Instruments: For the balance of the Company's financial instruments, primarily accounts receivable, accounts payable and financial liabilities included in other accrued liabilities, the carrying amounts approximate fair value due to their short-term nature. If measured at fair value in the Condensed Consolidated Balance Sheets, these other financial instruments would be classified in Level 2 or Level 3 of the fair value hierarchy.
Non-Recurring Fair Value Measurements
Equity Investments without Readily Determinable Fair Value: Equity investments are recorded at cost and measured at fair value when they are deemed to be impaired or when there is an adjustment from observable price changes. For the three months ended July 31, 2025 and 2024, the Company recognized unrealized gains of $1 million and $7 million, respectively, on these investments. For the nine months ended July 31, 2025, the Company recognized a net loss of $1 million primarily resulting from an impairment on these investments. If measured at fair value in the Condensed Consolidated Balance Sheets, these would generally be classified in Level 3 of the fair value hierarchy. For investments still held as of July 31, 2025, the cumulative upward adjustments for observable price changes was $83 million and cumulative downward adjustments for observable price changes and impairments was $89 million. Refer to Note 11 “Financial Instruments,” for further information about equity investments.
Non-Financial Assets: The Company's non-financial assets, such as intangible assets, goodwill, and property, plant and equipment, are recorded at cost. The Company records right-of-use assets based on the lease liability, adjusted for lease prepayments, lease incentives received, and the lessee's initial direct costs. Fair value adjustments are made to these non-financial assets in the period an impairment charge is recognized.
In the second quarter of fiscal 2025, the Company recorded a goodwill impairment charge of $1.4 billion associated with the Hybrid Cloud reporting unit. The fair values of the Company's reporting units were classified in Level 3 of the fair value hierarchy due to the significance of unobservable inputs developed using company-specific information. For more information on the goodwill impairment, see Note 9 “Goodwill”.
33
HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements (Continued)
(Unaudited)
Note 11: Financial Instruments
Cash Equivalents and Available-for-Sale Debt Investments
Cash equivalents and available-for-sale debt investments were as follows:
 As of July 31, 2025As of October 31, 2024
 CostGross Unrealized Gains (Losses)Fair
Value		CostGross Unrealized Gains (Losses)Fair
Value
 In millions
Cash Equivalents      
Commercial paper$3 $— $3 $— $— $— 
Time deposits945 — 945 601 — 601 
Money market funds1,413 — 1,413 12,639 — 12,639 
Total cash equivalents2,361 — 2,361 13,240 — 13,240 
Available-for-sale Investments      
Debt Securities:
Asset-backed and mortgage-backed securities134 — 134 — — — 
Certificates of deposit16 — 16 — — — 
Corporate debt securities367 (1)366 — — — 
Commercial paper47 — 47 — — — 
U.S. government agency securities38 — 38 — — — 
U.S. government securities137 — 137 — — — 
Foreign bonds107 1 108 101 2 103 
Other debt securities44 3 47 8 6 14 
Total debt securities890 3 893 109 8 117 
Equity Securities:
Equity securities in public companies9 (3)6 — — — 
Mutual funds55 1 56 — — — 
Total equity securities64 (2)62 — — — 
Total available-for-sale investments954 1 955 109 8 117 
Total cash equivalents and available-for-sale investments$3,315 $1 $3,316 $13,349 $8 $13,357 
As of July 31, 2025 and October 31, 2024, the carrying amount of cash equivalents approximated fair value due to the short period of time to maturity. Time deposits were primarily issued by institutions outside the U.S. as of July 31, 2025 and October 31, 2024. The estimated fair value of the available-for-sale debt investments may not be representative of values that will be realized in the future.
Contractual maturities of investments in available-for-sale debt securities were as follows:
 As of July 31, 2025
 Amortized CostFair Value
 In millions
Due in one year$322 $322 
Due in one to five years454 453 
Due in more than five years114 118 
Total$890 $893 
34
HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements (Continued)
(Unaudited)
Equity Investments
Non-marketable equity investments in privately held companies are included in Long-term financing receivables and other assets in the Condensed Consolidated Balance Sheets. These non-marketable equity investments are carried either at fair value or under measurement alternative. Measurement alternative equity investments are recorded at cost and measured at fair value when they are deemed to be impaired or when there is an adjustment from observable price changes.
The carrying amount of those non-marketable equity investments accounted for under the fair value option was $54 million and $88 million as of July 31, 2025 and October 31, 2024, respectively. For the nine months ended July 31, 2025, the Company recognized a total gain of $5 million on these investments, of which $4 million was unrealized and $1 million was realized. During the nine months ended July 31, 2025, the Company sold $38 million of these investments. For the three and nine months ended July 31, 2024, the Company recognized an unrealized gain of $7 million and an unrealized loss of $47 million on these investments. This amount is reflected in Interest and other, net in the Condensed Consolidated Statements of Earnings.
The carrying amount of those non-marketable equity investments accounted for under the measurement alternative was $252 million and $200 million as of July 31, 2025 and October 31, 2024, respectively. For the three months ended July 31, 2025 and 2024, the Company recognized unrealized gains of $1 million and $7 million, respectively, on these investments. For the nine months ended July 31, 2025, the Company recognized a loss of $1 million primarily resulting from an impairment on these investments. These amounts are reflected in Interest and other, net in the Condensed Consolidated Statements of Earnings.
Fair Value of Derivative Instruments in the Condensed Consolidated Balance Sheets
The gross notional and fair value of derivative instruments in the Condensed Consolidated Balance Sheets were as follows:
 As of July 31, 2025As of October 31, 2024
  Fair Value Fair Value
 Outstanding
Gross
Notional		Other
Current
Assets		Long-Term
Financing
Receivables
and Other
Assets		Other
Accrued
Liabilities		Long-Term
Other
Liabilities		Outstanding
Gross
Notional		Other
Current
Assets		Long-Term
Financing
Receivables
and Other
Assets		Other
Accrued
Liabilities		Long-Term
Other
Liabilities
 In millions
Derivatives Designated as Hedging Instruments
Fair Value Hedges:          
Interest rate contracts$3,100 $— $— $14 $58 $2,500 $— $— $58 $— 
Cash Flow Hedges:          
Foreign currency contracts7,601 51 25 142 79 7,809 107 59 31 25 
Net Investment Hedges:
Foreign currency contracts2,015 29 21 22 18 1,986 38 44 12 13 
Total derivatives designated as hedging instruments12,716 80 46 178 155 12,295 145 103 101 38 
Derivatives Not Designated as Hedging Instruments
Foreign currency contracts5,974 68 2 40 1 5,528 46 5 18 4 
Other derivatives141 1 — 1 — 147 — — 2 — 
Total derivatives not designated as hedging instruments6,115 69 2 41 1 5,675 46 5 20 4 
Total derivatives$18,831 $149 $48 $219 $156 $17,970 $191 $108 $121 $42 
Offsetting of Derivative Instruments
The Company recognizes all derivative instruments on a gross basis in the Condensed Consolidated Balance Sheets. The Company's derivative instruments are subject to master netting arrangements and collateral security arrangements. The Company does not offset the fair value of its derivative instruments against the fair value of cash collateral posted under
35
HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements (Continued)
(Unaudited)
collateral security agreements. The information related to the potential effect of the Company's use of the master netting agreements and collateral security agreements were as follows:
 As of July 31, 2025
 In the Condensed Consolidated Balance Sheets 
 (i)(ii)(iii) = (i)–(ii)(iv)(v)(vi) = (iii)–(iv)–(v)
    Gross Amounts Not Offset 
 Gross
Amount
Recognized		Gross
Amount
Offset		Net Amount
Presented		DerivativesFinancial
Collateral		Net Amount
 In millions
Derivative assets$197 $— $197 $150 $7 
(1)
$40 
Derivative liabilities$375 $— $375 $150 $181 
(2)
$44 
 As of October 31, 2024
 In the Condensed Consolidated Balance Sheets 
 (i)(ii)(iii) = (i)–(ii)(iv)(v)(vi) = (iii)–(iv)–(v)
    Gross Amounts Not Offset 
 Gross
Amount
Recognized		Gross
Amount
Offset		Net Amount
Presented		DerivativesFinancial
Collateral		Net Amount
 In millions
Derivative assets$299 $— $299 $138 $90 
(1)
$71 
Derivative liabilities$163 $— $163 $138 $27 
(2)
N/A
(1)Represents the cash collateral posted by counterparties as of the respective reporting date for the Company's asset position, net of derivative amounts that could be offset, as of, generally, two business days prior to the respective reporting date.
(2)Represents the collateral posted by the Company in cash or through the re-use of counterparty cash collateral as of the respective reporting date for the Company's liability position, net of derivative amounts that could be offset, as of, generally, two business days prior to the respective reporting date. As of July 31, 2025, of the $181 million of collateral posted, $174 million was in cash and $7 million was through the re-use of counterparty collateral. As of October 31, 2024, $27 million of collateral posted was entirely through the re-use of counterparty collateral.
The amounts recorded on the Condensed Consolidated Balance Sheets related to cumulative basis adjustments for fair value hedges were as follows:
Carrying Amount of the Hedged LiabilitiesCumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount of the Hedged Liabilities
As ofAs of
July 31, 2025October 31, 2024July 31, 2025October 31, 2024
In millions
Notes payable and short-term borrowings$(2,486)$(2,440)$14 $58 
Long-term debt$(744)$— $3 $— 
36
HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements (Continued)
(Unaudited)
The pre-tax effect of derivative instruments in cash flow and net investment hedging relationships recognized in Other Comprehensive Income (“OCI”) were as follows:
Gains (Losses) Recognized in OCI on Derivatives
For the three months ended July 31,For the nine months ended July 31,
2025202420252024
In millions
Derivatives in Cash Flow Hedging Relationship:
Foreign exchange contracts$6 $(34)$(189)$(69)
Derivatives in Net Investment Hedging Relationship:
Foreign exchange contracts(12)32 (33)13 
Total$(6)$(2)$(222)$(56)
As of July 31, 2025, the Company expects to reclassify an estimated net accumulated other comprehensive loss of approximately $63 million, net of taxes, to earnings in the next twelve months along with the earnings effects of the related forecasted transactions associated with cash flow hedges.
Effect of Derivative Instruments on the Condensed Consolidated Statements of Earnings
The following table represents the pre-tax effect of derivative instruments on total amounts of income and expense line items presented in the Condensed Consolidated Statements of Earnings in which the effects of fair value hedges and derivatives not designated as hedging instruments are recorded:
Gains (Losses) Recognized in Income
For the three months ended July 31,For the nine months ended July 31,
2025202420252024
Net RevenueInterest and Other, netNet RevenueInterest and Other, netNet RevenueInterest and Other, netNet RevenueInterest and Other, net
In millions
Total net revenue and interest and other, net$9,136 $8 $7,710 $(12)$24,617 $86 $21,669 $(122)
Gains (Losses) on Derivatives in Fair Value Hedging Relationships:
Interest Rate Contracts
Hedged items$— $(11)$— $(37)$— $(41)$— $(69)
Derivatives designated as hedging instruments— 11 — 37 — 41 — 69 
Gains (Losses) on Derivatives in Cash Flow Hedging Relationships:
Foreign Exchange Contracts
Amount of gains (losses) reclassified from accumulated other comprehensive income into income(66)11 37 (40)17 (102)83 (85)
Interest Rate Locks
Amount of losses reclassified from accumulated other comprehensive income into income— (1)— — — (2)— — 
Gains (Losses) on Derivatives not Designated as Hedging Instruments:
Foreign exchange contracts— 1 — 12 — (75)— 30 
Other derivatives— (2)— 5 — 2 — 4 
Total gains (losses)$(66)$9 $37 $(23)$17 $(177)$83 $(51)
37
HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements (Continued)
(Unaudited)
Note 12: Borrowings
Notes Payable, Short-Term Borrowings and Long-Term Debt    
Notes payable, short-term borrowings, including the current portion of long-term debt, and long-term debt were as follows:
As of
July 31, 2025October 31, 2024
In millions
Current portion of long-term debt(1)
$5,050 $3,969 
Commercial paper625 649 
Notes payable to banks, lines of credit and other1,124 124 
Total notes payable and short-term borrowings6,799 4,742 
Long-term debt16,854 13,504 
Total$23,653 $18,246 
(1)    As of July 31, 2025 and October 31, 2024, the Current portion of long-term debt, net of discount and issuance costs, included $1.1 billion and $1.4 billion associated with the asset-backed debt securities issued by the Company, respectively.
Asset-backed Debt Securities
In July 2025, the Company issued $900 million of asset-backed debt securities in six tranches at a weighted-average price of 99.99% and a weighted-average interest rate of 4.673%, payable monthly from September 2025 with a stated final maturity date of March 2033.
Commercial Paper
Hewlett Packard Enterprise maintains two commercial paper programs, “the Parent Programs”, and a wholly-owned subsidiary maintains a third program. The Parent Program in the U.S. provides for the issuance of U.S. dollar-denominated commercial paper up to a maximum aggregate principal amount of $4.75 billion. The Parent Program outside the U.S. provides for the issuance of commercial paper denominated in U.S. dollars, euros or British pounds up to a maximum aggregate principal amount of $3.0 billion or the equivalent in those alternative currencies. The combined aggregate principal amount of commercial paper outstanding under those two programs at any one time cannot exceed the $4.75 billion as authorized by Hewlett Packard Enterprise's Board of Directors. In addition, the Hewlett Packard Enterprise subsidiary's euro Commercial Paper/Certificate of Deposit Program provides for the issuance of commercial paper in various currencies of up to a maximum aggregate principal amount of $1.0 billion. As of July 31, 2025 and October 31, 2024, no borrowings were outstanding under the Parent Programs. As of July 31, 2025 and October 31, 2024, $625 million and $649 million, respectively, were outstanding under the subsidiary’s program.
Revolving Credit Facility
In September 2024, the Company terminated its prior senior unsecured revolving credit facility that was entered into in December 2021, and entered into a new senior unsecured revolving credit facility with an aggregate lending commitment of $5.25 billion for a period of five years. The commitment initially comprised of (i) $4.75 billion of commitments available immediately and (ii) $500 million of commitments available from and subject to the closing of the Merger and refinancing of Juniper Networks’ credit agreement in connection with the closing of such acquisition. With the completion of the acquisition and the associated refinancing, the full $5.25 billion commitment under the new facility is now available to the Company. As of July 31, 2025 and October 31, 2024, no borrowings were outstanding under this credit facility.
Uncommitted Credit Facility
The Company maintains an uncommitted short-term advance facility with Societe Generale that was entered into in September 2023 with a principal amount of up to $500 million for a period of 5 years. As of July 31, 2025 and October 31, 2024, no borrowings were outstanding under this credit facility.
38
HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements (Continued)
(Unaudited)
Juniper Networks Acquisition Financing
In September 2024, the Company entered into term loan agreements with JPMorgan Chase Bank, N.A, Citibank, N.A., and Mizuho Bank, Ltd. for approximately $12.0 billion of senior unsecured delayed draw term loan facilities, comprised of an approximately $9.0 billion 364-day tranche and a $3.0 billion three-year tranche, subject to customary conditions. The Company has since further reduced the commitments under the 364-day term loan to $1.0 billion.
HPE funded the aggregate consideration for the Merger through a combination of cash from its balance sheet, commercial paper issuances, and borrowings pursuant to the aforementioned three-year delayed-draw term loan credit facility of $3.0 billion and the 364-day delayed-draw term loan credit facility of $1.0 billion.
The 364-day loan is scheduled for full repayment on July 1, 2026. The three-year loan is subject to quarterly amortization at 1.25%, with the remaining balance due at maturity on June 30, 2028. Under both loans, interest was initially calculated using the Alternate Base Rate until July 8, 2025 with payment due in September 2025. Thereafter, the rate transitioned to the Term Benchmark Rate (defined as Adjusted Term SOFR plus the Applicable Rate), payable monthly in accordance with the terms of both credit agreements.
As of July 31, 2025, $3.0 billion was outstanding under the three-year delayed-draw term loan credit facility and $1.0 billion was outstanding under the 364-day delayed-draw term loan credit facility.
Future Maturities of Borrowings
As of July 31, 2025, aggregate future maturities of the Company's borrowings at face value (excluding a fair value adjustment related to hedged debt of $17 million, a net discount of $49 million, unamortized debt issuance costs of $81 million, and adjusted for fair value to par accretion relating to debt assumed as a result of the Merger of $72 million), including finance lease obligations were as follows:
Fiscal Year
In millions
2025$2,978 
20263,411 
20271,812 
20283,750 
20292,345 
Thereafter7,827 
Total$22,123 
Note 13: Stockholders' Equity
The components of accumulated other comprehensive loss, net of taxes as of July 31, 2025, and changes for the nine months ended July 31, 2025 were as follows:
Net unrealized gains (losses)
on
available-for-sale
securities		Net unrealized (losses) gains
on cash
flow hedges		Unrealized
components
of defined
benefit plans		Cumulative
translation
adjustment		Accumulated
other
comprehensive
loss
 In millions
Balance at beginning of period$8 $(16)$(2,342)$(627)$(2,977)
Other comprehensive loss before reclassifications(5)(189)(10)(28)(232)
Reclassifications of losses into earnings— 87 98 — 185 
Tax benefit (provision) — 16 (16)— — 
Balance at end of period$3 $(102)$(2,270)$(655)$(3,024)
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HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements (Continued)
(Unaudited)
The components of accumulated other comprehensive loss, net of taxes as of July 31, 2024, and changes for the nine months ended July 31, 2024 were as follows:
 Net unrealized
 gains on
available-for-sale
securities		Net unrealized
gains (losses)
on cash
flow hedges		Unrealized
components
of defined
benefit plans		Cumulative
translation
adjustment		Accumulated
other
comprehensive
loss
 In millions
Balance at beginning of period$— $61 $(2,507)$(638)$(3,084)
Other comprehensive income (loss) before reclassifications6 (69)(2)(17)(82)
Reclassifications of losses into earnings— 2 103 — 105 
Tax benefit (provision)— 15 (12)1 4 
Balance at end of period$6 $9 $(2,418)$(654)$(3,057)
Share Repurchase Program
For the nine months ended July 31, 2025, the Company repurchased and settled 5.7 million shares under its share repurchase program through open market repurchases, which included 0.1 million shares that were unsettled open market repurchases as of October 31, 2024. As of July 31, 2025, the Company did not have any unsettled open market repurchases. Shares repurchased for the nine months ended July 31, 2025 were recorded as a $100 million reduction to stockholders' equity. As of July 31, 2025, the Company had a remaining authorization of approximately $0.7 billion for future share repurchases.
Note 14: Net Earnings (Loss) Per Share
The Company calculates basic net earnings (loss) per share (“EPS”) using net earnings (loss) and the weighted-average number of shares outstanding during the reporting period.
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HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements (Continued)
(Unaudited)
The reconciliations of the numerators and denominators of each of the basic and diluted net EPS calculations were as follows:
 For the three months ended July 31,For the nine months ended July 31,
 2025202420252024
 In millions, except per share amounts
Numerator:  
Net earnings (loss) attributable to common stockholders - Basic$276 $512 $(205)$1,213 
Plus: 7.625% Series C mandatory convertible preferred stock dividends
29 — — — 
Net earnings (loss) - Diluted$305 $512 $(205)$1,213 
Denominator:  
Weighted-average shares used to compute basic net EPS1,325 1,312 1,321 1,308 
Dilutive effect of employee stock plans(1)
16 20 — 17 
Dilutive effect of 7.625% Series C mandatory convertible preferred stock(1)
80 — — — 
Weighted-average shares used to compute diluted net EPS1,421 1,332 1,321 1,325 
Net EPS:
Basic$0.21 $0.39 $(0.16)$0.93 
Diluted$0.21 $0.38 $(0.16)$0.92 
Anti-dilutive Share Count(1)(2):
Employee stock plans18 — 55 — 
7.625% Series C mandatory convertible preferred stock
— — 78 — 
Total anti-dilutive weighted-average stock18 — 133 — 
(1)The impact of dilutive effect of employee stock plans is calculated under the treasury stock method, and the impact of dilutive effect of the 7.625% Series C mandatory convertible preferred stock (“Preferred Stock”) is calculated under the if-converted method. The effect of employee stock plans and Preferred Stock is excluded when calculating diluted net loss per share as it would be anti-dilutive.
(2)The Company excludes shares potentially issuable under employee stock plans that could dilute basic net EPS in the future from the calculation of diluted net EPS, as their effect, if included, would have been anti-dilutive for the periods presented.
Note 15: Litigation, Contingencies, and Commitments
Litigation
The Company and certain of its subsidiaries are involved in various lawsuits, claims, investigations and proceedings including those consisting of intellectual property, commercial, securities, employment, employee benefits, and environmental matters, which arise in the ordinary course of business. In addition, as part of the Separation and Distribution Agreement (the “Separation and Distribution Agreement”) entered into in connection with HPE's spin-off from HP Inc. (formerly known as “Hewlett-Packard Company”) (the “Separation”), HPE and HP Inc. agreed to cooperate with each other in managing certain existing litigation related to both parties' businesses. The Separation and Distribution Agreement included provisions that allocate liability and financial responsibility for pending litigation involving the parties, as well as provide for cross-indemnification of the parties against liabilities to one party arising out of liabilities allocated to the other party. The Separation and Distribution Agreement also included provisions that assign to the parties responsibility for managing pending and future litigation related to the general corporate matters of HP Inc. arising prior to the Separation. HPE records a liability when it believes that it is both probable that a liability has been incurred and the amount of loss can be reasonably estimated. Significant judgment is required to determine both the probability of having incurred a liability and the estimated amount of the liability. HPE reviews these matters at least quarterly and adjusts these liabilities to reflect the impact of negotiations, settlements, rulings, advice of legal counsel, and other updated information and events pertaining to a particular matter. Litigation is inherently unpredictable. However, HPE believes it has valid defenses with respect to legal matters pending against us.
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HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements (Continued)
(Unaudited)
Nevertheless, cash flows or results of operations could be materially affected in any particular period by the resolution of one or more of these contingencies. HPE believes it has recorded adequate provisions for any such matters and, as of July 31, 2025, it was not reasonably possible that a material loss had been incurred in connection with such matters in excess of the amounts recognized in its financial statements.
Litigation, Proceedings, and Investigations
Department of Justice Action on the Proposed Acquisition of Juniper Networks. As previously disclosed, on January 9, 2024, the Company entered into the Merger Agreement with Juniper Networks and Jasmine Acquisition Sub, Inc., providing for the acquisition of Juniper Networks by HPE. On January 30, 2025, the Antitrust Division of the United States Department of Justice (the “DOJ”) filed a complaint in the United States District Court for the Northern District of California, seeking to enjoin the closing of the Merger, alleging that the Merger is likely to substantially lessen competition in violation of Section 7 of the Clayton Act. On February 10, 2025, HPE and Juniper Networks filed answers to the DOJ’s complaint, disputing these claims. On June 27, 2025, HPE, Juniper Networks, and the DOJ filed an Asset Preservation and Hold Separate Stipulation and Order (“Stipulation”) and Proposed Final Judgment with the Court. Pursuant to the Stipulation, HPE has agreed to divest its global InstantOn campus and branch business. HPE also has agreed to grant up to two licenses to the Mist AIOps source code, with the licensees determined through an auction process. In exchange, the DOJ has agreed to dismiss its action to enjoin the Merger, subject to the Court’s approval of the Proposed Final Judgment. On June 30, 2025, the Court signed the Stipulation, allowing the Merger to proceed to closing.

India Directorate of Revenue Intelligence Proceedings. On April 30 and May 10, 2010, the India Directorate of Revenue Intelligence (the “DRI”) issued notices to Hewlett-Packard India Sales Private Ltd (“HP India”), a subsidiary of HP Inc., seven HP India employees and one former HP India employee alleging that HP India underpaid customs duties while importing products and spare parts into India and seeking to recover an aggregate of approximately $370 million, plus penalties. On April 11, 2012, the Bangalore Commissioner of Customs issued an order on the products-related notices affirming duties and penalties against HP India and the named individuals for approximately $386 million (plus interests). On April 20, 2012, the Commissioner issued an order on the spare parts-related notice affirming duties and penalties against HP India and certain of the named individuals for approximately $17 million. HP India filed appeals of the Commissioner's orders before the Customs Tribunal. The Customs Department filed cross-appeals before the Customs Tribunal. On October 27, 2014, the Customs Tribunal commenced hearings on the cross-appeals of the Commissioner's orders. The Customs Tribunal rejected HP India's request to return the matter to the Commissioner on procedural grounds. After multiple delays and postponements over the last decade, the Customs Tribunal began hearing the parties’ cross-appeals on April 21, 2025. The hearings on the cross-appeals were completed in June 2025. The Company expects a ruling from the Customs Tribunal in 2025. Either party may appeal the ruling to the India Supreme Court.
ECT Proceedings. In January 2011, the postal service of Brazil, Empresa Brasileira de Correios e Telégrafos (“ECT”), notified a former subsidiary of HP Inc. in Brazil (“HP Brazil”) that it had initiated administrative proceedings to consider whether to suspend HP Brazil's right to bid and contract with ECT related to alleged improprieties in the bidding and contracting processes whereby employees of HP Brazil and employees of several other companies allegedly coordinated their bids and fixed results for three ECT contracts in 2007 and 2008. In late July 2011, ECT notified HP Brazil it had decided to apply the penalties against HP Brazil and suspend HP Brazil's right to bid and contract with ECT for five years, based upon the evidence before it. In August 2011, HP Brazil appealed ECT's decision. In April 2013, ECT rejected HP Brazil's appeal, and the administrative proceedings were closed with the penalties against HP Brazil remaining in place. In parallel, in September 2011, HP Brazil filed a civil action against ECT seeking to have ECT's decision revoked. HP Brazil also requested an injunction suspending the application of the penalties until a final ruling on the merits of the case, which was denied. HP Brazil appealed the denial of its request for injunctive relief to the intermediate appellate court, which issued a preliminary ruling denying the request for injunctive relief but reducing the length of the sanctions from five to two years. HP Brazil appealed that decision and, in December 2011, obtained a ruling staying enforcement of ECT's sanctions until a final ruling on the merits of the case. HP Brazil expects a resolution of the decision on the merits to take several years.
Autonomy-Related Legal Proceedings. In 2015, four Hewlett Packard Enterprise subsidiaries (Autonomy Corporation Limited, Hewlett Packard Vision BV, Autonomy Systems Limited, and Autonomy, Inc., hereinafter the “Claimants”) initiated civil proceedings in the U.K. High Court of Justice against two members of Autonomy’s former management, Michael Lynch and Sushovan Hussain, for breach of their fiduciary duties in causing Autonomy group companies to engage in improper transactions and accounting practices before and in connection with the 2011 acquisition of Autonomy. Trial concluded in January 2020. In May 2022, the court issued its liability judgment, finding that the Claimants had succeeded on substantially all
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HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements (Continued)
(Unaudited)
claims against Messrs. Lynch and Hussain, and dismissing a counterclaim filed by Mr. Lynch. In February 2024, the court held a two-week trial on damages. The Claimants sought recovery for $4 billion in losses. In May 2025, Claimants reached an agreement with Mr. Hussain to resolve claims against him. On July 22, 2025, the court issued its ruling on the quantum of damages, finding that the Lynch estate owed £740 million. The court has set a hearing for the week of November 17, 2025, to address additional matters, including attorneys’ fees, pre-judgment interest, and the relevant date to use for the exchange rate to convert the recovery from pounds to dollars. The damages award is also subject to a set-off for prior settlements. Pursuant to the terms of the 2015 Separation and Distribution Agreement, HP and Hewlett Packard Enterprise will share equally in any recovery.
Shared Litigation with HP Inc., DXC Technology Company and Micro Focus International plc. As part of the Separation and Distribution Agreements between HPE and HP Inc., HPE and DXC Technology Company (“DXC”), and HPE and Seattle SpinCo (“Micro Focus”), the parties to each agreement agreed to cooperate with each other in managing certain existing litigation related to both parties' businesses. The Separation and Distribution Agreements also included provisions that assign to the parties responsibility for managing pending and future litigation related to the general corporate matters of HP Inc. (in the case of the separation of HPE from HP Inc.) or of HPE (in the case of the separation of DXC from HPE and the separation of Micro Focus from HPE), in each case arising prior to the applicable separation.
Environmental
The Company's operations and products are or may in the future become subject to various federal, state, local, and foreign laws and regulations concerning the environment, including laws addressing the discharge of pollutants into the air and water; supply chain due diligence; sustainability, environment, and emissions-related reporting; environmental claims and statements; the management, movement, and disposal of hazardous substances and wastes; the clean-up of contaminated sites; product safety and compliance; the energy consumption of products, services, and operations; and the operational or financial responsibility for recycling, treatment, and disposal of those products. This includes legislation that makes producers of electrical goods, including servers and networking equipment, responsible for repairability requirements or financially responsible for specified collection, recycling, treatment, and disposal of past and future covered products (sometimes referred to as “product take-back legislation”). The Company could incur substantial costs, its products could be restricted from entering certain jurisdictions, and it could face other sanctions, if it were to violate or become liable under environmental laws, including those related to addressing climate change, sustainability, and other environmental related issues, or if its products become non-compliant with such environmental laws. The Company's potential exposure includes impacts on revenue, fines and civil or criminal sanctions, third-party environmental or property damage or personal injury claims or actions, and clean-up costs. The amount and timing of costs to comply with environmental laws are difficult to predict.
In particular, the Company may become a party to, or otherwise involved in, proceedings brought by U.S. or state environmental agencies under the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”), known as “Superfund,” or other federal, state or foreign laws and regulations addressing the clean-up of contaminated sites, and may become a party to, or otherwise involved in, proceedings brought by private parties for contribution towards clean-up costs. The Company is also contractually obligated to make financial contributions to address actions related to certain environmental liabilities, both ongoing and arising in the future, pursuant to its Separation and Distribution Agreement with HP Inc.
Unconditional Purchase Obligations
As of July 31, 2025, the Company had unconditional purchase obligations of approximately $3.0 billion. These unconditional purchase obligations include agreements to purchase goods or services that are enforceable and legally binding on the Company and that specify all significant terms, including fixed or minimum quantities to be purchased, fixed, minimum or variable price provisions and the approximate timing of the transaction, as well as settlements that the Company has reached with third parties, requiring it to pay determined amounts over a specified period of time. These unconditional purchase obligations are related principally to inventory purchases, software maintenance and support services and other items. Unconditional purchase obligations exclude agreements that are cancellable without penalty. The Company expects the commitments to total $463 million, $1,314 million, $385 million, $375 million, $346 million, and $91 million for fiscal years 2025, 2026, 2027, 2028, 2029, and thereafter, respectively.
Guarantees
In the ordinary course of business, the Company may issue performance guarantees to certain of its clients, customers,
43
HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements (Continued)
(Unaudited)
and other parties pursuant to which the Company has guaranteed the performance obligations of third parties. Some of those guarantees may be backed by standby letters of credit or surety bonds. In general, the Company would be obligated to perform over the term of the guarantee in the event a specified triggering event occurs as defined by the guarantee. The Company believes the likelihood of having to perform under a material guarantee is remote.
The Company has entered into service contracts with certain of its clients that are supported by financing arrangements. If a service contract is terminated as a result of the Company's non-performance under the contract or failure to comply with the terms of the financing arrangement, the Company could, under certain circumstances, be required to acquire certain assets related to the service contract. The Company believes the likelihood of having to acquire a material amount of assets under these arrangements is remote.
The maximum potential future payments under performance guarantees and financing arrangements was $320 million as of July 31, 2025.
Indemnifications
In the ordinary course of business, the Company enters into contractual arrangements under which the Company may agree to indemnify a third party to such arrangement from any losses incurred relating to the services they perform on behalf of the Company or for losses arising from certain events as defined within the particular contract, which may include, for example, litigation or claims relating to past performance. The Company also provides indemnifications to certain vendors and customers against claims of IP infringement made by third parties arising from the use by such vendors and customers of the Company's software products and support services and certain other matters. Some indemnifications may not be subject to maximum loss clauses. Historically, payments made related to these indemnifications have been immaterial.
Note 16: Subsequent Events
On August 18, 2025, the Company elected to redeem the entire $2.5 billion aggregate principal amount of its outstanding 4.900% Notes due 2025, on September 17, 2025 (the “Redemption Date”). The Notes will be redeemed at par, along with any accrued and unpaid interest up to, but not including, the Redemption Date.
Subsequent to the quarter end, the Company sold approximately $739 million of available-for-sale investments and recognized a realized gain of approximately $2 million.
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