10-K 0001645590-25-000130 (2025-12-18) vs 10-K 0001645590-24-000139 (2024-12-19)
| Section | Compared text | Words now | Changed |
| Risk Factors | Item 1A | 20,514 |
39.1% |
| MD&A | Item 7 | 14,081 |
41.0% |
| Legal Proceedings | Item 3, via Note 17 – Litigation, Contingencies, and Commitments | 2,145 |
44.5% |
| Accounting Policies | Item 8, Note 1 – Overview and Summary of Significant Accounting Policies | 7,341 |
13.8% |
The redline: what was cut and what was added
In each section, the paragraph that changed most, marked against last year's 10-K:
cut words struck through, new words highlighted and underlined.
Risk Factors 472 words changed in this paragraph; it is 33% similar to last year's version.
Changes make it difficult to accurately forecast revenues and operating results, effectively plan business actions and allocate resources, and manage our contract manufacturer relationships and other expenses and to make decisions about future investments. In addition, economic and/or geopolitical instability or uncertainty resulting from inflationary pressures, recessionary risks, tariffs and other trade restrictions in macroeconomic conditions the U.S. and internationally, trade conflicts, the effects of global health emergencies, the ongoing conflict between Russia and Ukraine, the continuous geopolitical instability in the Middle East, and efforts of governments to stimulate or stabilize the economy have, at times, affected and may in the future affect consumer and enterprise spending, and as a result, our customers have postponed or cancelled, and may also in the future postpone or cancel, spending in response to numerous reasons, continue to, put pressure on economic conditions, including but not limited to volatility in credit global and equity regional financial markets, negative financial news and/or declines in which has led and could lead to reduced income or asset values, all reduced demand for our offerings, delays or reductions in spending on and implementation of IT investments, and/or higher costs of production which may could have an adverse effect on the demand for our products and/or result in changes in our product prices. Other factors that have had, and could again in the future have, an adverse effect on demand for our products, business, financial condition condition, and results of operations include inflation, slower economic growth or economic recession, conditions in the labor market, healthcare costs, access to credit, consumer confidence, operations. Such geopolitical and other macroeconomic factors affecting consumer and business spending behavior. These changes could can happen rapidly rapidly, and we may not be able to react quickly to prevent or limit our losses or exposures. Additionally, other macroeconomic developments, such as efforts any of governments to stimulate or stabilize the economy, international conflicts, trade disputes, sanctions, increased tariffs internationally, including between the United States and China and on imports into the United States from various countries, above dynamics could result in price concessions in certain markets, with certain customer groups, and/or for certain offerings. These events have at times impacted, and may in the future impact our business in an adverse manner, whether directly or indirectly, such as through their impacts on the financial positions and operations of our customers, suppliers, and other third parties with whom we do business or on whom we rely, and as a consequence, their ability to perform their obligations under their agreements with us. Persistent inflation has negatively affected In addition, we may not be able to react quickly enough to prevent or limit our losses or exposures from such geopolitical or macroeconomic events or changes, and any mitigation plans or response we do employ may not mitigate the adverse impacts on our business in recent quarters completely, or at all. Any such failure could have an adverse effect on our reputation, demand for our products, and could do so again in the future, as well. A general weakening of, and related declining corporate confidence in, the global economy or the curtailment in government or corporate spending have at times caused current or potential customers to reduce their IT budgets or be unable to fund data storage products, which have led them to delay, decrease or cancel purchases of consequently, our products or to not pay us or to delay paying us for previously purchased products and services, all of which may occur again in the future. financial condition.
Source: Item 1A, 10-K 0001645590-25-000130 vs Item 1A, 10-K 0001645590-24-000139
MD&A 218 words changed in this paragraph; it is 48% similar to last year's version.
Recent Tax Developments: The Proposals to reform U.S. and foreign tax laws could significantly impact how U.S. multinational corporations are taxed on foreign earnings and could increase the U.S. corporate tax rate. Several of the proposals currently being considered, if enacted into law, could have an adverse impact on our effective tax rate, income tax expense, and cash flows. Our future effective tax rate may also be impacted by judicial decisions, changes in interpretation of regulations, as well as additional legislation and guidance. Further, the Organisation for Economic Co-operation and Development (“OECD”), an international association of 38 countries including the United States, has proposed changes to numerous long-standing tax principles, namely, its Pillar Two framework, which imposes a global minimum corporate tax rate of 15%. To date, 43 60 countries have enacted portions, or all, of the OECD proposal and a further 22 countries have drafted, or have announced an intent to draft, legislation enacting the proposed rules. proposal. Where enacted, the rules begin to be are effective for us in fiscal 2025. Under US GAAP, the OECD Pillar Two rules are considered an alternative minimum tax and therefore deferred taxes would not be recognized or adjusted for the estimated effects of the future minimum tax. As a result, there was no impact to our fiscal 2024 results. The adoption and effective dates of these rules may vary by country and could increase tax complexity and uncertainty and may adversely affect our provision for income taxes. We currently do There was not expect a material impact to our fiscal 2025 results. results from Pillar Two legislation. While we do not anticipate a material adverse impact to our financial position in fiscal 2026, additional changes to global tax laws are likely to occur. For instance, some countries have enacted, and others have proposed, taxes based on gross receipts applicable to digital services, regardless of profitability. Such changes may adversely affect our tax liability.
Source: Item 7, 10-K 0001645590-25-000130 vs Item 7, 10-K 0001645590-24-000139
Accounting Policies 181 words changed in this paragraph; it is 33% similar to last year's version.
The Company includes the results of operations of acquired businesses in the Company's consolidated results prospectively from the date of acquisition. The Company allocates the fair value of purchase consideration to the assets acquired including in-process research and development (“IPR&D”), liabilities assumed, and non-controlling interests in the acquired entity based on their fair values at Upon the acquisition date. IPR&D is initially capitalized at fair value as an intangible asset with an indefinite life and assessed for impairment thereafter. The excess of the fair value of purchase consideration over a business, the fair value of the assets acquired, acquired and liabilities assumed are estimated, which may require judgment regarding the identification of acquired assets and non-controlling interests in liabilities assumed. Once the acquired entity is recorded as goodwill. The primary items that generate goodwill include assets and assumed liabilities are identified, the fair value of the synergies between the acquired company assets and the Company liabilities are estimated using a variety of approaches, including relief from royalty and the value of the acquired assembled workforce, neither of which qualifies for recognition as an multi-period excess earnings method that require significant judgments. For intangible asset. Acquisition-related expenses assets, significant judgments include, but are not limited to, future revenue and post-acquisition restructuring costs are recognized separately from the business combination and are expensed as incurred. operating margins, customer
Source: Item 8, Note 1 – Overview and Summary of Significant Accounting Policies, 10-K 0001645590-25-000130 vs Item 8, Note 1 – Overview and Summary of Significant Accounting Policies, 10-K 0001645590-24-000139
Legal Proceedings 160 words changed in this paragraph; it is 68% similar to last year's version.
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 In September 2025, the Court of Appeals ruled in favor of HPE’s Civil Appeal, annulling the previously-stayed sanctions that, if enforced, would have barred HPE Brazil expects from participating in public tenders for five years. HPE has filed a resolution of motion to recover legal costs incurred during the decision on appeal. ECT has filed a motion requesting the merits Court to take several years. clarify the merits.
Source: Item 3, via Note 17 – Litigation, Contingencies, and Commitments, 10-K 0001645590-25-000130 vs Item 3, via Note 17 – Litigation, Contingencies, and Commitments, 10-K 0001645590-24-000139
Every change, by type
Sentences and paragraphs of HPE's Risk Factors and MD&A, 10-K 2025-12-18 against 10-K 2024-12-19.
Each links to the text at sec.gov.
Quiet changes are sentences kept from last year with one to four words changed, at least one of them a hedge, a modal or a qualifier
(may, could, will, not, significant, material…). A year or date rolling forward is not counted.
The full word list
adverse, adversely, all, although, anticipate, anticipates, any, approximately, believe, believes, can, cannot, certain, could, expect, expects, generally, however, if, intend, intends, largely, likely, many, material, materially, may, might, most, must, never, no, not, possible, primarily, probable, should, significant, significantly, some, substantial, substantially, unlikely, will, would
AddedRisk Factors
•Our success depends on our ability to successfully execute our go-to-market strategy, including offering solutions as-a-Service, effectively planning and managing our resources, and continuing to develop and manage our offerings to integrate new features and solutions.
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AddedRisk Factors
•Uncertainty and fluctuations in geopolitical and macroeconomic conditions may adversely impact our business, financial condition, and operating results.
Read it in 10-K 2025-12-18 at sec.gov ↗
AddedRisk Factors
•Long sales and implementation cycles for our offerings and dynamics related to large orders may cause our revenues and operating results to vary significantly from quarter-to-quarter.
Read it in 10-K 2025-12-18 at sec.gov ↗
AddedRisk Factors
•We may not achieve some or all of the expected benefits of our cost reduction actions, some or all of which may be disruptive to our business.
Read it in 10-K 2025-12-18 at sec.gov ↗
AddedRisk Factors
•We rely on the performance of our business systems and processes, as well as those of third-parties with whom we do business.
Read it in 10-K 2025-12-18 at sec.gov ↗
AddedRisk Factors
•Our revenue, profitability, and margins have historically varied, and we expect them to continue to vary over time.
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AddedRisk Factors
•Unfavorable results of legal proceedings, investigations, and other disputes could harm our business and result in substantial costs.
Read it in 10-K 2025-12-18 at sec.gov ↗
AddedRisk Factors
Our success depends on our ability to successfully execute our go-to-market strategy, including offering solutions as-a-Service, effectively planning and managing our resources, and continuing to develop and manage our offerings to integrate new features and solutions.
Read it in 10-K 2025-12-18 at sec.gov ↗
AddedRisk Factors
To successfully execute our strategy in a rapidly evolving market, we must maintain effective planning, forecasting, and management processes to enable us to continue to improve cost structures, align sales coverage with strategic goals, improve channel execution, and strengthen our capabilities in our areas of strategic focus, while continuing to pursue new product innovation in areas such as edge computing, hybrid cloud, AI, high performance computing, and networking. We must also make sufficient long-term investments in strategic growth areas to develop, obtain, and protect our intellectual property, and commit to transition significant research and development (“R&D”) and other resources before knowing whether our projections will align with customer demand for our solutions.
Read it in 10-K 2025-12-18 at sec.gov ↗
AddedRisk Factors
•Supply Chain Disruption. Any disruptions to our supply chain, significant increase in component costs or logistics costs, or shortages of critical components, could decrease our sales, earnings, and liquidity or otherwise adversely affect our business and result in increased costs. Disruptions could occur as a result of any number of events, including, but not limited to: an extended closure of, or any slowdown at our suppliers' plants or shipping delays; market shortages due to the surge in demand from other purchasers for critical components; increases in prices (including fuel prices and increases in prices due to inflation); the imposition of regulations, quotas, embargoes, or tariffs on components; labor stoppages; transportation delays, including due to labor strikes; third-party interference in the integrity of the products sourced through the supply chain; cyberattacks; the unavailability of raw materials; severe weather conditions and adverse effects of climate change, or natural disasters; geopolitical developments, war or terrorism; and disruptions in utilities and other services, some of which we have experienced. In addition, the development, licensing, or acquisition of new products in the future may increase the complexity of supply chain management. Failure to effectively manage the supply of components and products would adversely affect our business. Our ongoing efforts to geographically diversify and optimize the efficiency of our supply chain could cause supply disruptions and be more expensive, time-consuming, and resource-intensive than expected, and such impacts may be more pronounced as a result of increased tariffs between the U.S. and its trading partners. In this environment of heightened trade restrictions, we have experienced, and may continue to experience, cost increases from certain of our suppliers that result in price increases for some of our offerings and could subsequently limit demand for such offerings. If we are unable to pass on all or some of such cost increases to our customers, such increased prices may reduce our current margins and future margins. Furthermore, certain of our suppliers have discontinued conducting business with us or failed to perform under their contracts with us.
Read it in 10-K 2025-12-18 at sec.gov ↗
AddedRisk Factors
•Alternative Sources of Supply. The development of alternate sources for components is time-consuming, complex, and costly. For some components, such as customized components, alternative sources may not exist, we may not be able to locate alternative sources in a timely manner, or we may be unable to secure quantities of those components necessary to satisfy our production requirements. As a result, if an existing source of supply is unable to provide components in quantities sufficient to meet our requirements on a timely basis, we may not be able to deliver, or be delayed in delivering, products and services to our customers, which may affect present and future sales. If we are unable to buy components in quantities sufficient to meet our requirements on a timely basis, we will not be able to deliver products and services to our customers, which would seriously affect present and future sales, and would, in turn, adversely affect our business, financial condition, and results of operations.
Read it in 10-K 2025-12-18 at sec.gov ↗
AddedRisk Factors
In the ordinary course of business, we store sensitive data, including intellectual property, personal data, our proprietary business information and that of our employees, contractors, customers, vendors, partners, suppliers, and other third parties with whom we do business. In addition, we store sensitive data through cloud-based services that may be hosted by third parties and in data center infrastructure maintained by third parties. We have been, and expect to be, subject to cyberattacks and other attempted intrusions into our networks and systems by a wide range of actors, including, but not limited to, nation state actors, criminal enterprises, terrorist organizations, and other organizations or individuals, as well as errors, wrongful conduct or malfeasance by employees and third-party service providers, (collectively, “malicious parties”) who have at times been able to circumvent or bypass our cyber security measures. Geopolitical tensions or conflicts may also heighten the risk of such cyberattacks or exacerbate system vulnerabilities, considering our continued hybrid work environment and our globally dispersed operations, employees, contractors, suppliers, developers, partners, and other third parties.
Read it in 10-K 2025-12-18 at sec.gov ↗
RemovedRisk Factors
•Failure to complete the Merger with Juniper Networks may adversely affect our business and our stock price.
Read it in 10-K 2024-12-19 at sec.gov ↗
RemovedRisk Factors
•Failure to realize the benefits expected from the Merger with Juniper Networks could adversely affect our business or our stock price.
Read it in 10-K 2024-12-19 at sec.gov ↗
RemovedRisk Factors
•Changes in the macroeconomic environment have, at times, impacted and may in the future negatively impact our results of operations.
Read it in 10-K 2024-12-19 at sec.gov ↗
RemovedRisk Factors
•The revenue and profitability of our operations have historically varied, which makes our future financial results less predictable.
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RemovedRisk Factors
•The stock distribution in either or both of the completed separations of our former Enterprise Services business and our former Software segment could result in significant tax liability, and DXC Technology Company or Micro Focus International plc (as applicable) may in certain cases be obligated to indemnify us for any such tax liability imposed on us.
Read it in 10-K 2024-12-19 at sec.gov ↗
RemovedRisk Factors
on price increases to our customers. If we cannot adequately address supply issues, we may have to reengineer some product or service offerings, which could result in further costs and delays.
Read it in 10-K 2024-12-19 at sec.gov ↗
RemovedRisk Factors
As a leading technology firm, we are exposed to attacks from criminals, nation state actors, malicious insiders, and activist hackers (collectively, “malicious parties”) who have at times been able to circumvent or bypass our cyber security measures. Although some of these attacks have caused disruptions or exposure of information, so far, these attacks have not resulted in material negative impacts to HPE, nor have any of HPE’s consumers, customers, or employees informed HPE that these attacks resulted in material harm to them. While we investigate and remediate incidents, there can be no assurance that we will do so comprehensively or that the threat actor will not identify alternative means of intrusion or opportunities to otherwise utilize the information it accessed to adversely affect our business or results of operations. It is also possible that incidents may embolden other malicious actors to perpetrate future attacks that may result in material misappropriation, system disruptions or shutdowns, malicious alteration, or destruction of our confidential or personal information or that of third parties. Further, there has been an increase in the frequency and sophistication of such attacks, and we expect these activities to continue to increase, including malicious actors potentially leveraging AI to develop malicious code or sophisticated phishing attempts. Malicious parties may also be able to otherwise develop and deploy viruses, worms, ransomware, and other malicious software programs that attack our products or otherwise exploit any security vulnerabilities of our products, including within our cloud-based environments and offerings, such that we may be unable to anticipate such malicious parties’ techniques, implement adequate preventative measures, or remediate any intrusion on a timely or effective basis even if our security measures are appropriate, reasonable, and comply with applicable legal requirements. Further, cyberattacks or incidents have in the past gone, and could in the future go, undetected in our environments for a period of time, and we may discover additional impacts of earlier incidents that we believe were remediated. For example, as previously disclosed in our Form 8-K filed with the Securities and Exchange Commission on January 24, 2024, we learned in December 2023 that, beginning in May 2023, a nation-state-
Read it in 10-K 2024-12-19 at sec.gov ↗
RemovedRisk Factors
associated threat actor gained unauthorized access to and exfiltrated data from HPE’s cloud-based email and SharePoint environments. While this incident has been investigated and remediated with no material impact experienced by HPE to date, this may have nevertheless resulted in harm to our reputation and customer relationships (and may do so in the future, as well), and there can be no assurance that the threat actor will not utilize the information accessed to adversely affect our business or results of operations. Given our broad and diverse network environment, resource limitations, and operational constraints, we have in the past failed, and may in the future fail, to patch certain security vulnerabilities in time to prevent successful disruptions of our infrastructure or exposure of information.
Read it in 10-K 2024-12-19 at sec.gov ↗
RemovedRisk Factors
Public health crises, such as the COVID-19 pandemic, and the measures taken in response to such events have in the past negatively impacted, and may again in the future negatively impact, our operations and workforce, as well as those of our partners, customers and suppliers. Additionally, concerns over the economic impact of such events have, from time to time, caused increased volatility in financial and other capital markets, adversely impacting our stock price, our ability to access the capital markets, and our ability to fund liquidity needs, and may do so again in the future. The negative impacts of any such events on business operations and demand for our offerings will depend on future developments and actions taken in response to such events, which may be outside our control, highly uncertain, and cannot be predicted at this time.
Read it in 10-K 2024-12-19 at sec.gov ↗
RemovedRisk Factors
Failure to complete the Merger with Juniper Networks may adversely affect our business and our stock price.
Read it in 10-K 2024-12-19 at sec.gov ↗
RemovedRisk Factors
In January 2024, we entered into a definitive agreement to acquire Juniper Networks, Inc., a leader in AI-native networks. Consummation of the Merger is subject to the satisfaction or waiver of certain conditions, including but not limited to (i) the adoption of the Agreement and Plan of Merger (the “Merger Agreement”), by and among Juniper Networks, HPE and Jasmine Acquisition Sub, Inc., a Delaware corporation and a wholly owned subsidiary of HPE (“Merger Sub”), by Juniper Networks’ stockholders (which was completed on April 2, 2024); (ii) the absence of any injunction, order or law preventing, prohibiting or making illegal the consummation of the Merger; (iii) the expiration or termination of the waiting period (or extension thereof) under the Hart-Scott-Rodino Antitrust Improvement Act of 1976, as amended, and the receipt of all other required approvals, consents or clearances under specified foreign antitrust laws and foreign investment laws without imposition of a Burdensome Condition (as defined in the Merger Agreement); and (iv) in the case of the obligations of HPE and Merger Sub to effect the Merger, the absence of a material adverse effect with respect to Juniper Networks that is continuing as of the closing. There can be no assurance that these or other closing conditions will be satisfied in a timely manner or at all. Any delay in completing the Merger could cause us not to realize some or all of the anticipated benefits when expected, if at all.
Read it in 10-K 2024-12-19 at sec.gov ↗
RemovedRisk Factors
If the Merger is not completed, our stock price could be impacted to the extent it reflects an assumption that we will complete the Merger, and additionally, we may suffer other consequences that could adversely affect our business, results of operations, and stock price, including incurring significant acquisition costs that we would be unable to recover, negative publicity, and a negative impression of us in the investment community. Furthermore, under certain specified circumstances, including the termination of the Merger Agreement by either us or Juniper Networks because certain required regulatory clearances are not obtained or the terms of the Merger Agreement are materially breached by us, upon termination we would be required to pay Juniper Networks a termination fee of $815 million.
Read it in 10-K 2024-12-19 at sec.gov ↗
RewordedRisk Factors
Additionally, other macroeconomic developments, such as efforts of governments to stimulate or stabilize the economy, international conflicts, trade disputes, sanctions, increased tariffs internationally, including between the United States and China and on imports into the United States from various countries, These events have at times impacted, and may in the future impact our business in an adverse manner, whether directly or indirectly, such as through their impacts on the financial positions and operations of our customers, suppliers, and other third parties with whom we do business or on whom we rely, and as a consequence, their ability to perform their obligations under their agreements with us.
Read it in 10-K 2025-12-18 at sec.gov ↗
RewordedRisk Factors
Our financial results could be materially adversely affected due to distribution channel conflicts or conflicts, if the financial conditions of our channel partners were to weaken. weaken, if we experience the loss or deterioration of any alliance or distribution arrangement, or if our wholesale distributors are not able to withstand changes in business conditions, including economic weakness, industry consolidation, tariffs, and/or market trends.
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RewordedRisk Factors
Given the wide variety of solutions that we offer, offer; the large and diverse distribution of our suppliers and contract manufacturers, manufacturers; and the long lead times required to manufacture, assemble, and deliver certain products and solutions, problems have, from time to time in the past, arisen, and could in the future arise, in production, planning, and inventory management that could harm have harmed our business. business at times, and may do so again in the future.
Read it in 10-K 2025-12-18 at sec.gov ↗
RewordedRisk Factors
While new AI initiatives, laws, and regulations are emerging and evolving, what they ultimately will look like remains uncertain, We may not always be able to anticipate how to respond to these legal frameworks, and our obligation to comply with them could entail significant costs, negatively affect our business, or entirely limit our ability to incorporate certain AI capabilities into our offerings. offerings and operations.
Read it in 10-K 2025-12-18 at sec.gov ↗
RewordedRisk Factors
Government demand and payment for our products and services may be has been impacted by public sector staffing and available resources, and government payments may in the future be impacted or delayed for the same reasons (including recent actions taken to reduce the size of the U.S. federal workforce), budgetary cycles and funding authorizations, including in connection with an extended government shutdown, with funding reductions, or delays adversely affecting public sector demand for our products and services.
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RewordedRisk Factors
These goals reflect This strategy reflects our current plans and aspirations, are is based on available data and estimates, and are is not guarantees a guarantee that we will be able to achieve them. such plans and aspirations or that we will not refine or modify such plans and aspirations in the future.
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RewordedRisk Factors
Any financial turmoil Turmoil affecting the banking system and financial markets, markets or any significant financial services institution failures could negatively impact our treasury operations, as the financial condition of such parties may deteriorate rapidly and without notice in times of market volatility and disruption. operations.
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RewordedRisk Factors
In addition, newer geographic market opportunities entry into new markets may be relatively less profitable profitable, due to our high upfront investments associated with entering those markets and the need to operate within local pricing pressures, and cost structures, and we may have difficulty establishing and and/or maintaining the operating infrastructure necessary to support the high margin-rich growth rate associated with in some of those markets.
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RewordedRisk Factors
As a result, we may invest less in certain areas of our business than our competitors do, and our competitors may have greater financial, technical, and marketing resources available to them compared to the resources allocated to our products and services that compete against theirs.
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RewordedRisk Factors
Our use of AI technologies, whether created by us for internal or customer use cases or otherwise incorporated from external sources into our offerings, could lead to violation claims of infringement of third-party intellectual property rights, and could require us to incur significant expenses to modify our solutions and processes or otherwise engage in efforts to remain in compliance allegations of non-compliance with the law.
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RewordedRisk Factors
In order We must provide a competitive compensation package, including cash and equity-based compensation to attract and retain executives and other key employees in a competitive marketplace, we must provide a competitive compensation package, including cash and equity-based compensation. marketplace.
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RewordedRisk Factors
The Our ongoing process of improving HPE GreenLake; expanding our HPE GreenLake cloud offerings, offerings across all our businesses (including cloud, AI, and networking offerings); enhancing existing hardware, software, and cloud-based solutions, solutions; and developing and improving the systems necessary for new and evolving data-intensive artificial intelligence-based AI-based workloads are all complex, costly, and uncertain, and any failure by us to anticipate customers’ changing needs and emerging technological trends accurately, to invest sufficiently in strategic growth areas, or to otherwise successfully execute this strategy could significantly harm our market share, results of operations, and financial performance.
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Quiet changesRisk Factors
Should Further, should such efforts fail to produce actionable insights, or our offerings not perform as designed or promised, our business results and financial condition may be adversely affected.
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Quiet changesRisk Factors
Distributors They may also may adjust their orders in response to the supply of our products and the products of our competitors and seasonal fluctuations in end-user demand.
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Quiet changesRisk Factors
However, such measures may do not guarantee compliance, and our employees and third parties with whom we work may take actions in violation of such policies or such anti-corruption laws.
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Quiet changesRisk Factors
Despite these investment grade credit ratings at this time, we may experience downgrades in our credit ratings for various reasons, including but not limited to for reasons in connection with the substantial amount of debt we have incurred and expect to assume in connection with the Merger.
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Quiet changesRisk Factors
Our board of directors will have has the discretion to determine whether any dividends on our common stock will be declared, when dividends, if any, are declared, and the amount of such dividends.
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AddedMD&A
Public Sector: We have a number of engagements with various public sector entities, including the U.S. federal government and its agencies, as direct or indirect customers of our IT services and hardware. Significant staffing and resource reductions at certain public sector entities create an uncertain environment and as a result, our financial results have been, and may continue to be, impacted in the near term.
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AddedMD&A
The Internal Revenue Service (“IRS”) is conducting audits of our fiscal 2020 through 2022 U.S. federal income tax returns. In the second quarter of fiscal 2025, the IRS issued a Revenue Agent Report (“RAR”) regarding the audit of our fiscal
Read it in 10-K 2025-12-18 at sec.gov ↗
AddedMD&A
2017 through 2019 U.S. federal income tax returns, with which we agreed. The audit cycle for fiscal 2017 through 2019 is now considered effectively settled, resulting in a reduction of existing unrecognized tax benefits of approximately $340 million, which did not result in a material impact to our Consolidated Statement of Earnings and our 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 our effective tax rate.
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AddedMD&A
On July 4, 2025, the U.S. government enacted the One Big Beautiful Bill Act (“OB3”) into law. OB3 introduces several changes to tax regulations, including the permanent restoration of 100% depreciation and the permanent restoration of immediate deductibility of costs associated with research and development activities performed in the United States. There was not a material impact of OB3 to our fiscal 2025 results, and we do not expect a material impact in fiscal 2026, but we will continue to evaluate the full impact of these changes on our future results.
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AddedMD&A
Other Trends and Uncertainties: The impacts of geopolitical volatility (including the continued instability in the Middle East, the ongoing conflict in Ukraine, and the relationship between China and the U.S.) may impact our operations, financial performance, and ability to conduct business in some non-U.S. markets. We have, in the past, entered into contracts for the sale of certain products and services that reflect heavier-than-normal discounting due to competitive pressures, which have resulted in lower margins than expected, and we expect will continue to negatively impact our margins in the near term. We have been monitoring and seeking to mitigate these risks with adjustments to our manufacturing, supply chain, and distribution networks, as well as our pricing and discounting practices. We remain focused on executing our key strategic priorities, building long-term value creation for our stakeholders, and addressing our customers’ needs while continuing to make prudent decisions in response to the environment.
Read it in 10-K 2025-12-18 at sec.gov ↗
AddedMD&A
On July 2, 2025, we completed the Juniper Networks merger (the “Merger”). Under the terms of the Agreement and Plan of Merger, dated January 9, 2024, by and among Juniper Networks, HPE and Jasmine Acquisition Sub, Inc., a Delaware corporation and a wholly owned subsidiary of HPE (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 cash consideration of approximately $13.4 billion. The results of operations of Juniper Networks are included in the Consolidated Financial Statements commencing on July 2, 2025. See Note 10, “Acquisitions and Dispositions,” to the Consolidated Financial Statements for additional information.
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AddedMD&A
On November 17, 2025, our subsidiary, H3C Holdings Limited (“H3C Holdings”), entered into (i) share purchase agreements with five counterparties, including Unisplendour International Technology Limited (“UNIS”), whereby such counterparties, in the aggregate, agreed to purchase 10% of the total issued share capital of H3C Technologies Co., Limited (“H3C”) for cash consideration of approximately $714 million and (ii) a side letter with UNIS, amending the Agreement on Subsequent Arrangements that was previously entered into on May 24, 2024, whereby, among other things, H3C Holdings and UNIS shall retain their put option and call option, respectively, relating to the remaining issued share capital of H3C held by H3C Holdings and have the right to exercise their respective option rights in respect of such shares up to three times, subject to the timing and terms as set forth therein. The agreement referenced in clause (ii) above revises the arrangements governing the sale of all of the remaining issued share capital of H3C held by us through H3C Holdings. On November 28, 2025, H3C Holdings entered into three additional share purchase agreements, including one with UNIS, whereby such counterparties, in the aggregate, agreed to purchase the remaining 9% of the total issued share capital of H3C for cash consideration of approximately $643 million. Such transactions and the transactions referenced in clause (i) remain subject to regulatory approvals.
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AddedMD&A
On March 6, 2025, the Board of Directors approved a cost reduction program (the "Program") intended to reduce structural operating costs and continue advancing our ongoing commitment to profitable growth. The Program is expected to be
Read it in 10-K 2025-12-18 at sec.gov ↗
AddedMD&A
implemented through fiscal year 2026 and deliver gross savings of approximately $350 million by fiscal year 2027 through reductions in our workforce. The Program has since become a part of Catalyst, a set of broader company-wide actions to reduce costs and enhance efficiency throughout the Company.
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AddedMD&A
The estimates of the duration of the Program, the charges and expenditures that we expect to incur in connection therewith, and the timing thereof are subject to a number of assumptions, including local law requirements in various jurisdictions, and actual amounts may differ materially from estimates. In addition, we may incur other charges or cash expenditures not currently contemplated due to unanticipated events that may occur, including in connection with the implementation of the Program. In connection with the Program, we incurred charges of $275 million in fiscal 2025.
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AddedMD&A
In addition, the Company expects to achieve at least $600 million in cost savings from synergies by fiscal 2028, related to the integration of Juniper Networks. These synergies will require approximately $800 million of investment, primarily tied to headcount, supply chain optimization, and portfolio rationalization.
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AddedMD&A
We account for acquired businesses using the acquisition method of accounting, which requires that once control is obtained, all the assets acquired and liabilities assumed are recorded at their respective fair values at the date of acquisition. The determination of fair values of identifiable assets and liabilities requires significant judgment in determining critical estimates and assumptions. Critical estimates in valuing intangible assets include the projected revenues, technology obsolescence rate, royalty rates, and discount rates for developed technology and IPR&D; the projected revenues, customer retention rate, forecasted growth in earnings before interest, taxes, depreciation & amortization, and discount rate for the customer contracts, customer lists and distribution agreements. Although the Company believes its estimates of fair value are reasonable, actual financial results could differ from those estimates due to the inherent uncertainty involved in making such estimates. Changes in assumptions concerning future financial results or other underlying assumptions could have a significant impact on the determination of the fair value of the intangible assets acquired. Third-party valuation specialists are utilized for certain estimates.
Read it in 10-K 2025-12-18 at sec.gov ↗
RemovedMD&A
offerings, including our own. We expect such mixed macroeconomic environment to largely continue (though ease slightly) and possibly limit revenue growth in the near term.
Read it in 10-K 2024-12-19 at sec.gov ↗
RemovedMD&A
The Internal Revenue Service (“IRS”) is conducting audits of our fiscal 2017 through 2022 U.S. federal income tax returns. During fiscal 2023, the IRS issued notices of proposed adjustments (“NOPAs”) for 2017, 2018, and 2019 relating to our intercompany transfer pricing. During the first quarter of fiscal 2024, the IRS issued a Revenue Agent Report finalizing their position on the NOPAs for the same issues and same fiscal years. However, we disagreed with the IRS’ adjustments and believe the positions taken on our tax returns are more likely than not to prevail on technical merits and have continued with settlement discussions with the IRS. During the third quarter of fiscal 2024, we submitted a formal settlement offer to the IRS to facilitate the closing of the audit and recorded increased reserves for unrecognized tax benefits of $122 million. The impact of the increase in reserves is almost entirely offset with a valuation allowance release, and the net impact to income tax expense for fiscal 2024 was not material. It is reasonably possible that the IRS audit for fiscal 2017 through 2019 may be concluded in the next 12 months, and it is reasonably possible that existing unrecognized tax benefits related to these years may be reduced by an amount up to $358 million within the next 12 months, the majority of which relates to adjustments to foreign tax credits that carry a full valuation allowance or to the timing of intercompany royalty revenue recognition, neither of which affects the Company’s effective tax rate.
Read it in 10-K 2024-12-19 at sec.gov ↗
RemovedMD&A
Other Trends and Uncertainties: The impacts of trade protection measures, including increases in tariffs and trade barriers, changes in government policies and international trade arrangements, geopolitical volatility (including the ongoing conflict in the Middle East), and global macroeconomic challenges (including the relationship between China and the U.S.), may impact our operations, financial performance, and ability to conduct business in some non-U.S. markets. We monitor and seek to mitigate these risks with adjustments to our manufacturing, supply chain, and distribution networks.
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RemovedMD&A
Pending Merger with Juniper Networks, Inc: On January 9, 2024, we entered into a definitive Agreement and Plan of Merger (the “Merger Agreement”) under which we will acquire Juniper Networks in an all-cash transaction for $40.00 per share (the “Merger”), representing an equity value of approximately $14 billion. On April 2, 2024, Juniper Networks shareholders approved the transaction. The transaction is expected to be funded based on senior unsecured delayed draw term loans from a syndicate of banks, the post-tax proceeds from our sale to Unisplendour International Technology Limited (“UNIS”) of 30% of the total issued share capital of H3C Technologies Co., Limited (“H3C”), the net proceeds (including after repayments of maturing debt) of our September 2024 issuances of senior unsecured notes and the Preferred Stock (as further described in Note 15, “Stockholders’ Equity” to the Consolidated Financial Statements in Item 8 of Part II), and cash on the balance sheet. The closing of the transaction remains subject to receipt of regulatory approvals and satisfaction of other customary closing conditions.
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RemovedMD&A
The foregoing summary of the Merger, the adoption of the Merger Agreement, and the transactions contemplated thereby does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Merger Agreement, which is filed as Exhibit 2.1 to our Current Report on Form 8-K filed with the Securities and Exchange Commission on January 10, 2024.
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RemovedMD&A
Our pivot to aaS continues its strong momentum with the addition of HPE GreenLake cloud services. Our mix of ARR is becoming more software-rich as we build our HPE GreenLake cloud, which is improving our margin profile. We will continue to invest aggressively in HPE GreenLake cloud services to provide a true cloud experience and operating model, whether at the edge, on-premises or across multiple clouds.
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RemovedMD&A
We calculate our current and deferred tax provisions based on estimates and assumptions that could differ from the final positions reflected in our income tax returns. We adjust our current and deferred tax provisions based on our tax returns which are generally filed in the third or fourth quarters of the subsequent fiscal year.
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RemovedMD&A
We recognize deferred tax assets and liabilities for the expected tax consequences of temporary differences between the tax bases of assets and liabilities and their reported amounts using enacted tax rates in effect for the year in which we expect the differences to reverse.
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RemovedMD&A
Our effective tax rate includes the impact of certain undistributed foreign earnings and basis differences for which we have not provided for U.S. federal taxes because we plan to reinvest such earnings and basis differences indefinitely outside the U.S. We will remit non-indefinitely reinvested earnings of our non-U.S. subsidiaries for which deferred U.S. state income and foreign withholding taxes have been provided where excess cash has accumulated and when we determine that it is advantageous for business operations, tax, or cash management reasons.
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RemovedMD&A
The HPC & AI reporting unit has goodwill of $2.0 billion as of October 31, 2024, and excess of fair value over carrying value of 11% as of the annual test date. The HPC & AI business is growing at a very fast pace driven primarily by the AI demand from model builders, but as GPUs represent a large portion of the solutions, the pricing is very competitive and margins are limited. With the growth of AI in enterprise and sovereign customer segments and key strategic differentiators, such as direct liquid cooling, we believe that there is a potential for continued growth over time.
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RemovedMD&A
In September 2024, HPE sold 30% of the total issued share capital of H3C to UNIS. The equity investment in H3C primarily benefits the Compute and Hybrid Cloud reporting units. Subsequent to the sale, on September 30, 2024, we performed an interim goodwill impairment analysis for Compute and Hybrid Cloud reporting units. The excess of fair value over carrying amount for these reporting units was 6% for Compute and 5% for Hybrid Cloud. We also applied a hypothetical 10% decrease to the fair value of Compute and Hybrid Cloud, noting that neither had an excess of fair value over carrying amount.
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RemovedMD&A
Revenue from our international operations has historically represented, and we expect will continue to represent, a majority of our overall net revenue. As a result, our revenue growth has been impacted, and we expect will continue to be impacted, by fluctuations in foreign currency exchange rates. In order to provide a framework for assessing performance excluding the impact of foreign currency fluctuations, we present the year-over-year percentage change in revenue on a constant currency basis, which assumes no change in foreign currency exchange rates from the prior-year period and does not adjust for any repricing or demand impacts from changes in foreign currency exchange rates. This change in revenue on a constant currency basis is calculated as the quotient of (a) current year revenue converted to U.S. dollars using the prior-year period's foreign currency exchange rates divided by (b) the prior-year period revenue. This information is provided so that revenue can be viewed without the effect of fluctuations in foreign currency exchange rates, which is consistent with how management evaluates our revenue results and trends. This constant currency disclosure is provided in addition to, and not as a substitute for, the year-over-year percentage change in revenue on a GAAP basis. Other companies may calculate and define similarly labeled items differently, which may limit the usefulness of this measure for comparative purposes.
Read it in 10-K 2024-12-19 at sec.gov ↗
RewordedMD&A
Amortization of intangible assets 511 0.39 267 0.20 288 0.22 Impairment charges 1,621 1.22 — — Transformation costs 2 — 93 0.07 283 0.22 Disaster recovery (51) (0.04) (12) (0.01) Stock-based compensation expense 643 0.49 430 0.32 428 0.33 Divestiture Gain on sale of a business (248) (0.19) — — H3C divestiture related exit severance costs 35 0.03 97 0.07 — — Cost reduction program 275 0.21 — — Acquisition, disposition and other related charges 204 0.16 69 0.05 charges(2) 641 0.49 188 0.15 Litigation judgment (52) (0.04) — — Gain on sale of equity interest — — (733) (0.55) — — Adjustments for equity interests (107) (0.08) 18 0.01 Loss on equity investments, net 13 0.01 40 0.03 140 0.10 (94) (0.07) Adjustments for taxes (828) (0.64) (95) (0.07) (255) (0.20) Other adjustments(1) adjustments(3)(4) (106) (0.12) 20 0.01 (52) (0.04) Non-GAAP net earnings attributable to HPE(2) HPE(5) 2,753 1.94 2,655 1.99 2,832 2.15 Preferred stock dividends (116) (25) — Non-GAAP net earnings attributable to common stockholders $ 2,637 $ 2,630 $ 2,832
Read it in 10-K 2025-12-18 at sec.gov ↗
RewordedMD&A
The following table summarizes our consolidated GAAP financial results:For the fiscal years ended October 31, 2025 2024 2023 Change In millions, except per share amounts Net revenue $ 30,127 $29,135 3.4% 34,296 $30,127 13.8% Gross profit $ 9,878 $10,239 (3.5)% 10,377 $9,878 5.1% Gross profit margin 32.8 30.3 % 35.1% (2.3)pts Earnings 32.8% (2.5)pts (Loss) earnings from operations $ 2,190 $2,089 4.8% (437) $2,190 (120.0)% Operating profit margin 7.3 (1.3) % 7.2% 0.1pts 7.3% (8.6)pts Net earnings attributable to HPE $ 2,579 $2,025 27.4% 57 $2,579 (97.8)% Net (loss) earnings attributable to common stockholders 2,554 2,025 26.1% $ (59) $2,554 (102.3)% Diluted net (loss) earnings per share attributable to common stockholders(1) 1.93 1.54 $0.39 $ (0.04) $1.93 $(1.97) Cash flow from provided by operations $ 4,341 $4,428 $(87) 2,919 $4,341 $(1,422)
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RewordedMD&A
For the fiscal years ended October 31, 2025 2024 2023 Change In millions, except per share amounts Net revenue in constant currency $ 30,107 $29,135 3.3% Non-GAAP gross profit $ 9,893 $10,273 (3.7)% $10,805 $9,893 9.2% Non-GAAP gross profit margin 32.8 % 35.3% (2.5)pts 31.5% 32.8% (1.3)pts Non-GAAP earnings from operations $ 3,168 $3,145 0.7% $3,353 $3,168 5.8% Non-GAAP operating profit margin 10.5 % 10.8% (0.3)pts 9.8% 10.5% (0.7)pts Non-GAAP net earnings attributable to HPE $ 2,655 $2,832 (6.3)% $2,753 $2,655 3.7% Non-GAAP net earnings attributable to common stockholders 2,630 2,832 (7.1)% $2,637 $2,630 0.3% Non-GAAP diluted net earnings per share attributable to common stockholders(1) 1.99 2.15 $(0.16) $1.94 $1.99 $(0.05) Free cash flow $ 2,297 $2,238 $59 $986 $2,297 $(1,311)
Read it in 10-K 2025-12-18 at sec.gov ↗
RewordedMD&A
Amortization of intangible assets 511 1.5% 267 0.9% 288 1.0% Impairment charges 1,621 4.7% — —% Transformation costs 2 —% 93 0.3% 283 1.0% Disaster recovery (51) (0.2)% (12) —% Stock-based compensation expense 643 1.9% 430 1.4% 428 1.5% Divestiture H3C divestiture related exit severance costs 35 0.1% 97 0.3% — —% Cost reduction program 275 0.8% — —% Acquisition, disposition and other related charges 204 0.7% 69 0.2% charges(1) 641 1.9% 188 0.6% Non-GAAP earnings from operations $ 3,353 9.8% $ 3,168 10.5% $ 3,145 10.8%
Read it in 10-K 2025-12-18 at sec.gov ↗
RewordedMD&A
We anticipate that the funds made available, including the debt funding related to the pending merger with Juniper Networks, proceeds from issuance of the Preferred Stock and proceeds from the sale of 30% of the total issued share capital of H3C, available and cash generated from our operations, along with our access to capital markets, will be sufficient to meet our liquidity requirements for at least the next twelve months (including for the payment of consideration to consummate the Juniper Networks transaction) and for the foreseeable future thereafter.
Read it in 10-K 2025-12-18 at sec.gov ↗
RewordedMD&A
For the fiscal years ended October 31, 2025 2024 2023 Dollars % of Dollars % of Revenue Revenue Dollars In millions GAAP net revenue $ 30,127 34,296 100.0% $ 29,135 30,127 100.0% GAAP cost of sales 23,919 69.7% 20,249 67.2% 18,896 64.9% GAAP gross profit 10,377 30.3% 9,878 32.8% 10,239 35.1% Non-GAAP adjustments Stock-based compensation expense 49 0.1% 47 49 0.2% Disaster recovery (43) Acquisition, disposition and other charges(1) 236 0.7% (34) (0.1)% (13) Cost reduction program 126 0.4% — —% Divestiture H3C divestiture related exit severance costs 9 17 —% — —% Non-GAAP gross profit $ 10,805 31.5% $ 9,893 32.8% $ 10,273 35.3%
Read it in 10-K 2025-12-18 at sec.gov ↗
RewordedMD&A
For the fiscal years ended October 31, 2025 2024 2023 Dollars Diluted net earnings per share Net EPS(1) Dollars Diluted net earnings per share Net EPS Dollars in millions except per share amounts GAAP net (loss) earnings attributable to common stockholders $ (59) $ (0.04) $ 2,554 $ 1.93 Preferred stock dividends 116 25 GAAP net earnings attributable to HPE 57 $ (0.04) 2,579 $ 1.93 $ 2,025 $ 1.54 Non-GAAP adjustments:
Read it in 10-K 2025-12-18 at sec.gov ↗
RewordedMD&A
In fiscal 2024, 2025, Earnings from equity interests decreased by $98 million $68 million, or 40%, 46.3%, primarily due to lower net income earned by earnings from our equity interest in H3C and as a result of the disposition of 30% of the total issued share capital of H3C, partially offset by lower amortization expense from basis difference H3C in the current period. fiscal 2024.
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RewordedMD&A
The gross operating profit margin of 32.8% (or $9.9 billion) (1.3)%, represents a decrease of 2.3 8.6 percentage points from the prior-year period period, primarily due to decline in revenue in the Intelligent Edge segment impairment of goodwill and higher mix of lower margin products in costs associated with the Server segment. Merger.
Read it in 10-K 2025-12-18 at sec.gov ↗
RewordedMD&A
The 49% 63% year over year increase in ARR was primarily due to growth in our Hybrid Cloud, Server and Intelligent Edge segments, which was the Networking segment due to the Merger and an expanding customer installed base, an expanded range of HPE GreenLake Flex Solutions, Server aaS, and Intelligent Edge aaS activity. base.
Read it in 10-K 2025-12-18 at sec.gov ↗
RewordedMD&A
Net revenue of $30.1 $34.3 billion represented an increase of 3.4% (increased 3.3% on a constant currency basis) 13.8%, primarily due to higher revenue in the Networking segment from the Merger and higher average unit prices (“AUPs”) in the Server segment, moderated by lower volume and product mix effect in the Intelligent Edge segment.
Read it in 10-K 2025-12-18 at sec.gov ↗
RewordedMD&A
The gross profit margin of 32.8% 30.3% (or $9.9 $10.4 billion) represents a decrease of 2.3 2.5 percentage points from the prior-year period period, primarily due to decline an increase in revenue cost of sales in the Intelligent Edge segment Server, Networking, and higher mix of lower margin products in the Server segment. Hybrid Cloud segments.
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Quiet changesMD&A
Our effective tax rate generally differs from the U.S. federal statutory rate of 21% due to favorable tax rates associated with certain earnings from our operations in lower tax jurisdictions throughout the world but may is also be materially impacted by discrete tax adjustments during the fiscal year.
Read it in 10-K 2025-12-18 at sec.gov ↗