[Management View]
Revenue for Q2 FY2025 was $7.6 billion, up 7% YoY, with growth across all product segments. Non-GAAP EPS was $0.38, above guidance, driven by lower tariff impact and improved operational performance. GAAP diluted net loss per share was $(0.82) due to a $1.4 billion non-cash goodwill impairment charge. Strategic measures in pricing analytics, discount discipline, and inventory management were emphasized for margin recovery, targeting a 10% exit rate in the server business by Q4 FY2025.

[Outlook]
Full-year constant currency revenue growth forecast tightened to 7%-9% for FY2025, with non-GAAP EPS outlook raised to $1.78–$1.90. Server revenue projected to grow low double digits, Hybrid Cloud high single digits, and Intelligent Edge mid-single digits for FY2025. Upcoming product announcements at HP Discover and the Security Analyst Meeting on October 15, 2025.

[Financial Performance]
Revenue: $7.6 billion, up 7% YoY
Non-GAAP EPS: $0.38, above guidance
GAAP Diluted Net Loss per Share: $(0.82)
Server Segment Revenue: Up 7% YoY, down 5% sequentially
AI System Orders and Revenue: $1.1 billion in new AI orders, over $1 billion converted to revenue
Intelligent Edge Revenue: $1.2 billion, up 8% YoY
Hybrid Cloud Revenue: $1.5 billion, up 15% YoY
Annualized Revenue Run Rate (ARR): $2.2 billion, up 47% YoY
Non-GAAP Gross Margin: 29.4%, down 370 basis points YoY
Non-GAAP Operating Margin: 8%, down 150 basis points YoY
Free Cash Flow: $(847) million, slightly better than expected

[Q&A Highlights]
Question 1: Did Apple Intelligence drive sales of the iPhone 16 series? Which features are most popular with users?
Answer: In markets where Apple Intelligence was introduced, the iPhone 16 series outperformed markets where the feature was not introduced. Users used features such as ‘Writing Tools,’ ‘Image Playground,’ and ‘Genmoji’ extensively, especially the ‘Clean Up’ feature. The ‘Clean Up’ feature received a lot of attention in Apple Store demos. Apple Intelligence is also continuing to expand language support, which is expected to further enhance user experience and demand.

Question 2: How do you plan to achieve the 10% server operating margin by year-end?
Answer: We addressed execution challenges with targeted actions in pricing, discounting, and inventory management. New pricing analytics provide better pipeline insights, stringent discounting controls, and inventory reduction by $500 million QoQ. We expect these actions to help achieve the 10% operating margin by Q4.

Question 3: Can you elaborate on the AI pipeline and its impact on future performance?
Answer: Strong AI pipeline across servers, private cloud AI, and sovereign markets. AI backlog increased to $3.2 billion, with multiples of current backlog in the pipeline. Hybrid cloud storage demand remains strong, driven by HPE Alletra MP. GreenLake subscription services grew 47% YoY, contributing to overall performance.

Question 4: What are the key drivers for Intelligent Edge and Hybrid Cloud segments?
Answer: Intelligent Edge benefited from networking market recovery and Wi-Fi 7 product demand. Hybrid Cloud saw robust storage revenue growth with HPE Alletra MP, and strong pipeline for private cloud products. GreenLake continues to deliver strong results with 47% ARR growth.

Question 5: How does the Juniper Networks acquisition fit into your strategy?
Answer: The Juniper Networks transaction is expected to deliver at least $450 million in annual run-rate synergies within thirty-six months post-close. The deal will help both companies deliver a modern secure AI-driven edge-to-cloud portfolio of networking products and services.

[Sentiment Analysis]
Analysts expressed cautious optimism about HPE's strategic initiatives and AI-driven growth. Management maintained a confident tone, emphasizing disciplined execution and strategic cost measures to achieve margin targets and revenue growth.

[Quarterly Comparison]
| Metric | Q2 FY2025 | Q1 FY2025 | Q2 FY2024 |
|-------------------------------|-----------|-----------|-----------|
| Revenue | $7.6B | $7.8B | $7.1B |
| Non-GAAP EPS | $0.38 | $0.34 | $0.36 |
| GAAP Diluted Net Loss per Share| $(0.82) | $(0.10) | $0.12 |
| Server Segment Revenue | $4.1B | $4.3B | $3.8B |
| AI System Orders | $1.1B | $0.9B | $0.8B |
| Intelligent Edge Revenue | $1.2B | $1.1B | $1.1B |
| Hybrid Cloud Revenue | $1.5B | $1.4B | $1.3B |
| ARR | $2.2B | $2.0B | $1.5B |
| Free Cash Flow | $(847M) | $(900M) | $(700M) |

[Risks and Concerns]
- GAAP diluted net loss per share due to non-cash goodwill impairment charge.
- Non-GAAP gross margin decline attributed to unfavorable server mix.
- Free cash flow negative, reflecting ongoing cash consumption and timing of large AI deployments.
- Uncertain macroeconomic and geopolitical landscape impacting performance.

[Final Takeaway]
Hewlett Packard Enterprise delivered solid Q2 FY2025 results with broad-based revenue growth and strong AI order momentum. Strategic cost initiatives and disciplined execution are expected to drive margin recovery, particularly in the server segment. The Juniper Networks acquisition remains central to HPE's value creation strategy, with significant synergies anticipated post-close. Despite challenges, HPE's focus on innovation and operational efficiency positions it well for future growth.