AI interpretation based on checked source excerpts. Issuer assertions and evidence limitations remain explicit.
Policy quality-scores-2: six equally weighted categories. The overall score requires full coverage. Missing inputs are not zero. Qualitative grades are sourced interpretations, not probabilities. 6/6 · 18/10/2026
Moat38
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
structural advantage · 1/4 · Non-cancelable leases establish limited contractual attachment. Actual competitive discounting and cost absorption outweigh that evidence as support for a broad structural advantage; intellectual property ownership alone does not establish differentiation.
durability · 1/4 · Lease commitments are concentrated in the nearer years, and operating-lease income declined over fiscal 2023–2025. No demonstrated durable renewal or technology barrier offsets these limitations.
customer dependency · 2/4 · Customers have meaningful non-cancelable lease commitments, providing some demonstrated attachment. This is indirect evidence of dependence: post-expiration switching friction and renewals are absent, while GreenLake's relationship benefits are prospective.
erosion resilience · 2/4 · Fiscal 2026 earnings and cash generation improved substantially despite competitive concessions and input-cost pressures. Acquisition and revenue mix explain much of the improvement; agreed divestiture and source-code licensing remedies introduce additional exposure without demonstrated losses yet.
Pricing power50
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
realized pricing · 2/4 · Higher server average selling prices and revenue show realized pricing improvement, primarily driven by commodity inflation. Prior heavy discounts and absorbed cost increases establish countervailing weakness, so durable discretionary pricing power is unproven.
retention · 2/4 · Non-cancelable rentals and recurring lease income demonstrate continuing contracted demand, an indirect retention indicator. Operating-lease income declined, and neither renewal rates nor GreenLake retention achievements are supplied.
margin resilience · 2/4 · GAAP gross and operating margins improved markedly in fiscal 2026. Favorable mix and the acquisition contributed substantially, while input costs and past competitive pricing actions provide adverse evidence. This supports mixed resilience rather than a durable pricing moat.
contractual freedom · 2/4 · HPE demonstrably adjusts discounts and cost pass-through and reports foreign-exchange pricing adjustments when possible. This establishes some pricing discretion, constrained by competition. The lease disclosures establish payment commitments, but do not establish unilateral repricing rights or comprehensive customer terms.
Predictability99
Five consecutive annual periods. Equal weights: nondeclining revenue frequency; revenue-growth volatility (5–40pp); positive FCF frequency; FCF-margin volatility (3–20pp). Stability indicator, not a growth forecast.
- Nondeclining revenue years (%)
- 100.00
- Revenue growth volatility (pp)
- 4.83
- Positive FCF years (%)
- 100.00
- FCF margin volatility (pp)
- 3.34
Financial strength5
Equal-weight grades: debt/FCF (1–8x), net debt/earnings before interest and tax (0–5x), interest service (1–12x), current ratio (0.75–2x). Earnings use reported operating income, or reported pretax profit plus reported interest expense when operating income is unavailable. Interest service uses earnings/interest expense; if unavailable, it uses reported operating cash flow/cash interest paid, without relabeling cash paid as accrued expense. Nonpositive cash flow/earnings score 0 for their service component; reported zero interest with a positive numerator scores 100. Net cash scores 100 for net leverage. Missing disclosures remain unavailable. General nonfinancial-company rubric, not a credit rating; exceptional and nonoperating gains are not normalized out. IFRS finance-cost and cash-flow classifications retain their reported scope.
- debtFcfGrade
- 0.00
- netDebtEbitGrade
- 0.00
- interestCoverageGrade
- 0.00
- currentRatioGrade
- 21.14
- Debt / FCF (x)
- 35.67
- Interest coverage (x)
- -0.40
- Current ratio (x)
- 1.01
Capital allocation74
Three-year equal-weight indicators: pretax return on average invested capital (0–25%; equity + debt − cash, each year and its prior year), share-count growth (0–5%, lower better), share-based cost/revenue (2–20%, lower better), consolidated FCF/net income (0–1x). Return uses reported operating income or, if unavailable, EBIT calculated from reported pretax profit plus reported interest expense; exceptional/nonoperating gains are not normalized out. Share-based cost uses the reported cash-flow add-back or, if absent, separately reported recognized compensation expense; the latter never becomes an FCF adjustment. Nonpositive net income scores 0 for cash conversion; absent income/FCF stays unavailable. Nonpositive invested capital has no defined return and remains unavailable. Does not establish acquisition quality or buyback timing.
- 3-year pre-tax operating return (%)
- 4.54
- 3-year average dilution (%)
- 0.54
- 3-year average SBC / revenue (%)
- 1.59
- cashConversionGrade
- 90.13
Management63
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
capital discipline · 2/4 · Nine-month operating cash flow rose to $4.229 billion, disclosed non-GAAP free cash flow reached $2.581 billion, and debt fell from $22.365 billion to $20.244 billion. Completed repurchases and portfolio disposals show active allocation. Integration costs, mandatory preferred conversion dilution and missing acquisition-return evidence limit the conclusion.
incentive alignment · 2/4 · The proxy discloses a CEO ownership requirement, approved fiscal 2025 incentive goals and compensation links to human capital outcomes. Broad non-GAAP earnings exclusions and missing award weightings, ownership compliance and payout evidence limit demonstrated alignment. The proposed plan amendment is not treated as approved.
execution · 3/4 · Substantial improvements in GAAP operating profit and cash generation, lower debt and a completed H3C disposal provide strong demonstrated operating execution over the disclosed period. This assessment uses indirect operating evidence rather than customer retention data; acquisition effects, commodity-driven selling prices and integration costs limit its durability.
governance · 3/4 · Disclosed practices include an independent chair, separate chair and CEO roles, independent committees, annual director elections, majority voting and stockholder access rights. Nine actual Audit Committee meetings in fiscal 2025 support active oversight. These are strong disclosed structures and activity, without exceptional long-term effectiveness demonstrated.
Evidence
Operating Leases Operating lease assets included in Property, plant and equipment, net in the Consolidated Balance Sheets were as follows: As of October 31, 2025 2024 In millions Equipment leased to customers $ 6,123 $ 6,669 Accumulated depreciation (2,964) (3,037) Total $ 3,159 $ 3,632 As of October 31, 2025, minimum future rentals on non-cancelable operating leases related to leased equipment were as follows: 121 Table of Contents HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES Notes to Consolidated Financial Statements (Continued) As of October 31, 2025 Fiscal year In millions 2026 $ 1,410 2027 814 2028 325 2029 56 2030 4 Thereafter — Total $ 2,609 If a lease is classified as an operating lease, the Company records lease revenue on a straight-line basis over the lease term.
Financial statement notes: equipment operating leases and non-cancelable future rentals · Filed 18/12/2025
The following table presents amounts included in the Consolidated Statements of Earnings related to lessor activity: For the fiscal years ended October 31, Location 2025 2024 2023 In millions Interest income from sales-type leases and direct financing leases Financing income $ 767 $ 668 $ 547 Lease income from operating leases Services 2,156 2,344 2,407 Total lease income $ 2,923 $ 3,012 $ 2,954 Variable Interest Entities The Company has issued asset-backed debt securities under a fixed-term securitization program to private investors.
Financial statement notes: fiscal 2023–2025 lessor income · Filed 18/12/2025
We expect that such flexible consumption model will continue to strengthen our customer relationships and contribute to growth in recurring revenue.
MD&A: expected customer relationship and recurring revenue benefits · Filed 03/09/2026
As a consequence, and to maintain our competitive position, from time-to-time we take pricing actions to offer heavier than normal discounts or elect not to pass on cost increases to customers on the sale of certain products and services, which has had and could have a negative impact on our financial results.
Risk factors: realized discounting and absorption of customer cost increases · Filed 18/12/2025
However, from time to time our intellectual property rights have been challenged, infringed, or circumvented, and any of such rights could be further challenged, invalidated, infringed, or circumvented or such intellectual property rights may not be sufficient to permit us to take advantage of current market trends or to otherwise provide competitive advantages.
Risk factors: intellectual property challenges and limitations · Filed 18/12/2025
HPE also has agreed to grant up to two licenses to the Mist AIOps source code, with the licensees determined through an auction process.
Litigation: agreed Mist AIOps source-code licensing remedy · Filed 03/09/2026
Pursuant to the Stipulation, HPE has agreed to divest its global Instant On campus and branch business.
Litigation: agreed Instant On business divestiture · Filed 03/09/2026
Server net revenue increased by $1.8 billion, or 35.3%, predominantly due to an increase in the average selling price.
MD&A: quarterly server revenue growth and average selling prices · Filed 03/09/2026
The increase in average selling price was primarily driven by commodity price increases, especially memory and SSDs.
MD&A: commodity-driven quarterly average selling price increase · Filed 03/09/2026
This increase was due to favorable mix of higher-margin revenues, partially offset by higher commodity and input costs.
MD&A: nine-month Cloud & AI gross profit mix and input-cost pressure · Filed 03/09/2026
The increases were primarily due to the favorable mix of higher-margin revenues in the Cloud & AI and Networking segments and the acquisition of Juniper Networks.
MD&A: consolidated gross margin improvement attributed to mix and acquisition · Filed 03/09/2026
Financial Results The following table summarizes our condensed consolidated GAAP financial results: For the three months ended July 31, For the nine months ended July 31, 2026 2025 Change 2026 2025 Change Dollars in millions, except per share amounts Net revenue $ 12,213 $ 9,136 33.7% $ 32,192 $ 24,617 30.8% Gross profit $ 4,899 $ 2,672 83.3% $ 12,139 $ 7,136 70.1% Gross profit margin 40.1 % 29.2 % 10.9pts 37.7 % 29.0 % 8.7pts Earnings (loss) from operations $ 1,393 $ 247 464.0% $ 2,610 $ (429) 708.4% Operating profit margin 11.4 % 2.7 % 8.7pts 8.1 % (1.7) % 9.8pts Net earnings (loss) attributable to HPE $ 1,540 $ 305 404.9% $ 2,616 $ (118) N/M Net earnings (loss) attributable to common stockholders $ 1,511 $ 276 447.5% $ 2,529 $ (205) N/M Diluted net earnings (loss) per share attributable to common stockholders(1) $ 1.06 $ 0.21 $0.85 $ 1.82 $ (0.16) $1.98 Cash flow provided by operations $ 1,641 $ 1,305 $336 $ 4,229 $ 454 $3,775 44 Table of Content HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued) The following table summarizes our condensed consolidated non-GAAP financial results: For the three months ended July 31, For the nine months ended July 31, 2026 2025 Change 2026 2025 Change Dollars in millions, except per share amounts Non-GAAP gross profit $ 4,928 $ 2,732 80.4% $ 12,268 $ 7,286 68.4% Non-GAAP gross profit margin 40.4 % 29.9 % 10.5pts 38.1 % 29.6 % 8.5pts Non-GAAP earnings from operations $ 1,979 $ 777 154.7% $ 4,584 $ 2,170 111.2% Non-GAAP operating profit margin 16.2 % 8.5 % 7.7pts 14.2 % 8.8 % 5.4pts Non-GAAP net earnings attributable to HPE $ 1,610 $ 631 155.2% $ 3,676 $ 1,860 97.6% Non-GAAP net earnings attributable to common stockholders $ 1,581 $ 602 162.6% $ 3,589 $ 1,773 102.4% Non-GAAP diluted net earnings per share attributable to common stockholders(1) $ 1.11 $ 0.44 $0.67 $ 2.55 $ 1.32 $1.23 Free cash flow $ 958 $ 790 $168 $ 2,581 $ (934) $3,515 N/M - Not meaningful (1)For purposes of calculating diluted net earnings (loss) per share (“EPS”), the 7.625% Series C mandatory convertible preferred stock (“Preferred Stock”) dividends are added back to the net earnings attributable to common stockholders and the diluted weighted-average share calculation assumes the Preferred Stock was converted at issuance or as of the beginning of the reporting period.
MD&A: comparative GAAP results, operating cash flow and non-GAAP free cash flow · Filed 03/09/2026
Liquidity Our cash, cash equivalents, restricted cash, total debt, and available borrowing resources were as follows: As of July 31, 2026 October 31, 2025 In millions Cash, cash equivalents and restricted cash $ 6,278 $ 5,859 Total debt 20,244 22,365 Available borrowing resources 6,531 6,122 Commercial paper programs(1) 5,128 5,069 Uncommitted lines of credit(2) $ 1,403 $ 1,053 (1) The maximum borrowing amounts available under the commercial paper programs and revolving credit facility are $5.75 billion and $5.25 billion, respectively, as of both July 31, 2026 and October 31, 2025.
Liquidity: cash, debt and borrowing resources · Filed 03/09/2026
In connection with the share repurchase program previously authorized by our Board of Directors, we repurchased and settled an aggregate amount of $447 million, during the first nine months of fiscal 2026.
Liquidity and capital resources: completed fiscal 2026 share repurchases · Filed 03/09/2026
In connection with the integration of Juniper Networks, we incurred acquisition costs of $69 million and $300 million, for the three and nine months ended July 31, 2026, respectively.
MD&A: incurred Juniper integration acquisition costs · Filed 03/09/2026
Unless converted earlier in accordance with its terms, each share of Preferred Stock will automatically convert on the mandatory conversion date, which is expected to be September 1, 2027, into between 2.5352 shares and 3.1056 shares of common stock, in each case, subject to customary anti-dilution adjustments described in the certificate of designations related to the Preferred Stock (the “Certificate of Designations”).
Financial statement notes: mandatory preferred-stock conversion terms · Filed 18/12/2025
Board conduct and oversight Independence and participation Stockholder rights •Development and oversight of Company strategy and execution •Rigorous stock ownership guidelines, including a 7x base salary requirement for the CEO •Regular, conscientious risk assessment •Standards of Business Conduct, applied to all directors, executive officers, and team members •Annual review of developments in best practices •Significant time devoted to succession planning and leadership development efforts •Annual evaluations of Board, committees, and individual directors •11 of 12 director nominees are independent by New York Stock Exchange (“NYSE”) standards •Independent Chair of the Board •Executive sessions of non-management directors are generally held at each Board and committee meeting •All committees of the Board consist entirely of independent directors •Separate Chair and CEO roles •Participation in one-on-one meetings with management •Robust engagement directly with stockholders •Frequent participation at customer and stakeholder events •Proxy access right for eligible stockholders holding 3% or more of outstanding common stock for at least three years to nominate up to 20% of the Board •Special meeting right for stockholders of an aggregate of 25% of voting stock •All directors annually elected; no staggered Board •Majority voting in uncontested director elections •No “poison pill” •No supermajority voting requirements to change organizational documents Director independence Our Corporate Governance Guidelines provide that a substantial majority of the Board will consist of independent directors and that the Board can include no more than three directors who are not independent directors.
Proxy governance overview: ownership requirements, board structure and stockholder rights · Filed 11/02/2026
For fiscal 2025, management made an initial recommendation of goals, which were discussed and approved by the HRC Committee after consultation with FW Cook.
Executive compensation: approved fiscal 2025 incentive goals · Filed 11/02/2026
82 HPE 2026 PROXY STATEMENT Executive compensation 2.Fiscal 2025 non-GAAP earnings from operations consist of GAAP earnings from operations and exclude after-tax costs related to the amortization of intangible assets, impairment charges, transformation costs, disaster (recovery) charges, stock-based compensation expense, divestiture related exit costs, and acquisition, disposition and other related charges.
Executive compensation: exclusions from fiscal 2025 non-GAAP operating earnings · Filed 11/02/2026
During fiscal 2025, the Audit Committee met a total of nine times.
Audit Committee report: actual fiscal 2025 meeting frequency · Filed 11/02/2026
Management goals and executive compensation are tied to human capital factors related to talent development and retention.
Proxy human capital discussion: management compensation links · Filed 11/02/2026
In May 2026, we completed the sale of our equity interest in H3C.
Liquidity and capital resources: completed H3C equity-interest sale · Filed 03/09/2026
This Amendment will become effective upon approval by the Company’s stockholders at the Company’s 2026 annual meeting.
Annex A: stockholder-approval condition for proposed incentive-plan amendment · Filed 11/02/2026
We utilize a comprehensive hedging strategy intended to mitigate the impact of foreign currency volatility over time, and we adjust pricing when possible to further minimize foreign currency impacts.
MD&A: pricing adjustments when possible to mitigate foreign exchange impacts · Filed 03/09/2026
