Hewlett Packard Enterprise Co Q4 2024 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Wamsi Mohan - BofA Merrill Lynch - Analyst : Yeah. Thank you so much. And congrats on the strong quarter and guide, especially given the dilution from the preferred stock. As we look at your AI business, the -- can you maybe give us some sense of how your AI pipeline is shaping up, given that the backlog levels kind of dipped in the quarter? And I know you made some comments about how it's backed up intra-quarter. But can you give us some sense of how the pipeline looks and what the composition of that could be? Thank you.

Question: Meta Marshall - Morgan Stanley - Analyst : Great. Thanks and congrats on the quarter. Maybe diving into gross margins, can you just talk about some of the puts and takes on maybe particularly server margin this quarter and just kind of the weight of some of the XD servers versus El Capitan recognition? Or just some of the dynamics that play on gross margins would be helpful. Thank you.

Question: Tim Long - Barclays - Analyst : Thank you. I was hoping I could ask a two-parter on the AI service. First, can you just clarify that debook comment that came in? It sounds like $700 million debook of backlog. Was that a competitive loss or someone had double ordered or something else that was going on there? And then the second part, following on the gross margin. Can you talk a little bit about when you're looking at AI business, what are the metrics you're looking at? Are you -- do you have thresholds for gross margin or cash flow or something else that prohibits you from going at certain deals where maybe ODMs or lower gross margin OEMs would go? Thank you.

Question: Amit Daryanani - Evercore ISI - Analyst : Good afternoon. Thanks for taking my question. I guess if I just look at the corporate level, you've had a couple of quarters where gross margins

Question: Simon Leopold - Raymond James - Analyst : Thank you for taking the question. I think in your commentary on the outlook, you indicated that traditional servers would be flattish to even slightly up sequentially in the January quarter, which I think defies seasonality. So I just want to verify if I got that correct, maybe if you could unpack what's happening in that part of the business. Thank you.

Question: Aaron Rakers - Wells Fargo Securities - Analyst : Yeah, thanks for taking the question. Antonio, kind of building off of that last comment, I'm curious as we think about the Blackwell platform cycle ahead of us and your comment on the backlog build that you're seeing, can you just update us where -- I think a lot of that initial demand seems to be centered around the GB200 NVL, that rack scale system. Where does HPE stand on that platform shipping those system configurations? When do you think that those would ship in volume for HPE?? Thank you. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. DECEMBER 05, 2024 / 10:00PM, HPE.N - Q4 2024 Hewlett Packard Enterprise Co Earnings Call

Question: Toni Sacconaghi - Bernstein - Analyst : Yes, thank you. I'm not sure if you said it but perhaps you can just confirm, did your AI pipeline grow sequentially? And then on the hybrid cloud side, it was a huge jump sequentially, dramatically higher than your guidance as well and the biggest sequential increase we've ever seen. Was there any unusually large deal in there? I know you closed Morpheus also, but I don't think that was really material. Can you add any color about whether there was anything unusual? Did you pull forward deals and hence you think next quarter is going to be seasonally weaker than usual? But again, there was an enormous differentiation relative to normal history in your own guidance. Thank you.

Question: Samik Chatterjee - JPMorgan - Analyst : Hi, thanks for taking my question. If I can change gears here a bit on Intelligent Edge. You talked about the strong order patterns. But when I look at the revenue performance in the quarter, I know you were up modestly, but it did seem like overall from at least relative to some other peers that have reported, the sequential growth was a bit more limited relative to sort of quarter over quarter increases here. So I mean, is there -- how you're thinking about sort of the next year playing out? And when you look at order trends, are they coming in as expected? Or are you seeing a bit more weakness than what you would have expected maybe 90 days ago? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. DECEMBER 05, 2024 / 10:00PM, HPE.N - Q4 2024 Hewlett Packard Enterprise Co Earnings Call And within that portfolio, how are you thinking about where, as you said, enterprises are going to spend more relative to their IT budgets? What are you hearing from them in terms of priorities within that portfolio? Thank you.

Question: David Vaught - UBS - Analyst : Great guys. Thank you for the (technical difficulty) Antonio, can you dig in a little bit into the deplatforming of the orders? You mentioned risk, but can you get into specifics in terms of what was the definition of risk? And how do you think about AI going forward? I know it's lumpy but just trying to get a sense for what was particularly risky about those orders. And how should we think about that going forward? Thank you. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. DECEMBER 05, 2024 / 10:00PM, HPE.N - Q4 2024 Hewlett Packard Enterprise Co Earnings Call

Question: Matt Niknam - Deutsche Bank - Analyst : Thanks so much for taking the question. You sounded fairly constructive around IT spend, particularly heading into '25. So I'm just wondering what's changed, if anything, over the last three months mainly in terms of macro backdrop. And I guess, more specifically, have you seen any pick up or change in behavior post election? Thanks.

Question: Asiya Merchant - Citigroup - Analyst : Great. Thank you for squeezing me in. The enterprise services on the AI side of things, it looks like you continue to book services there on your orders. If you can double click on that, relative to where you were last quarter, what kind of services? Is that a growing percentage of your orders revenues? And where is HPE winning as you look at those services pipeline as well? Thank you.