Executive Summary
Hewlett Packard Enterprise (HPE) delivered a solid QQ3 2024 performance with revenue of $7.673 billion, up 9.6% year over year and 6.84% quarter over quarter, reflecting steady demand in enterprise infrastructure and services. Gross profit rose to $2.342 billion, but gross margin remained pressured at roughly 30.5% as product mix and higher services contribution moderated margin expansion. Operating income was $566 million (margin ~7.38%), and net income reached $512 million, equating to an EPS of $0.39. The quarter showcased strong operating cash flow ($1.154 billion) and free cash flow of $611 million, supporting a healthy balance sheet while preserving liquidity in a capital-intensive hardware cycle. Management commentary (where available) would typically frame this performance within continued data center refresh cycles, edge/cloud workloads, and the company’s shift toward as-a-service and consumption-based models, though transcript data is not provided in the input. Net debt appears to be a point of data inconsistency in the provided figures (netDebt shown as negative, despite debt and cash figures indicating a net debt position); this warrants clarification from primary filings. Overall, HPE demonstrates resilience in a sober hardware environment with meaningful free cash flow generation and a solid balance sheet, suggesting potential for strategic optionality and continued deleveraging or shareholder returns if cash generation remains robust.
Key Performance Indicators
Key Insights
Revenue: $7.673B (YoY +9.58%, QoQ +6.84%)
Gross Profit: $2.342B (YoY -6.69%, QoQ +2.40%), Gross Margin: 30.5%
Operating Income: $566M (Margin 7.38%), Operating Margin YoY +20.17%, QoQ +17.43%
Net Income: $512M (YoY +10.34%, QoQ +63.06%), EPS: $0.39 (YoY +8.33%, QoQ +62.50%)
EBITDA: $1.233B, EBITDA Margin: ~16.1%
Cash Flow: Operating cash flow $1.154B; Free cash flow $611M; Net change in cash +$981M
Balance Sheet: Total assets $60.85B; Total liabilities $38.72B; Total equity $22.08B
Liquidity/Lev...
Financial Highlights
Revenue: $7.673B (YoY +9.58%, QoQ +6.84%)
Gross Profit: $2.342B (YoY -6.69%, QoQ +2.40%), Gross Margin: 30.5%
Operating Income: $566M (Margin 7.38%), Operating Margin YoY +20.17%, QoQ +17.43%
Net Income: $512M (YoY +10.34%, QoQ +63.06%), EPS: $0.39 (YoY +8.33%, QoQ +62.50%)
EBITDA: $1.233B, EBITDA Margin: ~16.1%
Cash Flow: Operating cash flow $1.154B; Free cash flow $611M; Net change in cash +$981M
Balance Sheet: Total assets $60.85B; Total liabilities $38.72B; Total equity $22.08B
Liquidity/Leverage: Current ratio 0.94; Quick ratio 0.62; Cash ratio 0.13; Total debt $11.80B; Long-term debt $7.94B; Short-term debt $3.86B; Debt to equity 0.51; Debt to capitalization 0.34; Cash and equivalents $3.64B
Valuation/Peers: P/E ~12.7x; Enterprise value multiple ~27.9x; Dividend yield ~0.65% (with implied payout considerations); Industry benchmarks show modest to mid-single digit operating margins typical for the segment; Data provided for select peers indicates variability in profitability and leverage across the hardware IT sector.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
7.67B |
9.58% |
6.84% |
| Gross Profit |
2.34B |
-6.69% |
2.40% |
| Operating Income |
566.00M |
20.17% |
17.43% |
| Net Income |
512.00M |
10.34% |
63.06% |
| EPS |
0.39 |
8.33% |
62.50% |
Key Financial Ratios
operatingProfitMargin
7.09%
operatingCashFlowPerShare
$0.88
freeCashFlowPerShare
$0.47
Management Commentary
No earnings call transcript provided in the data set. Consequently, management quotes and thematic highlights from the QQ3 2024 call are not available in this input.
Forward Guidance
No explicit forward guidance is included in the provided data. Given the absence of a transcript, the analysis of management guidance is limited. Based on QQ3 fundamentals, potential guidance would likely revolve around sustaining FCF, progressing multi-year data-center refresh cycles, advancing as-a-service offerings, and balancing capex with free cash flow generation. Investors should monitor: (1) cadence of data-center infrastructure demand, (2) progression of annuity-based or consumption-based revenue models, (3) supplier and component cost dynamics, and (4) working capital efficiency given near-term sector cyclicality.