Segment Information | Segment Information Hewlett Packard Enterprise's operations are organized into six segments for financial reporting purposes: Compute, High Performance Computing & Artificial Intelligence ("HPC & AI"), Storage, Intelligent Edge, Financial Services ("FS"), and Corporate Investments and Other. Hewlett Packard Enterprise's organizational structure is based on a number of factors that the Chief Operating Decision Maker, who is the Chief Executive Officer, uses to evaluate, view, and run the Company's business operations, which include, but are not limited to, customer base and homogeneity of products, services and technology. The six segments are based on this organizational structure and information reviewed by Hewlett Packard Enterprise's management to evaluate segment results. A summary description of each segment follows: Compute includes both general purpose servers for multi-workload computing and workload optimized servers to deliver the best performance and value for demanding applications. This portfolio of products includes the HPE ProLiant Compute rack and tower servers and HPE Synergy servers. Compute offerings also include operational and support services and HPE GreenLake for Compute that provides flexible compute as-a-service ("aaS") IT infrastructure on a consumption basis through the HPE GreenLake edge-to-cloud platform. HPC & AI offers integrated systems comprised of software and hardware designed to address HPC, AI, data analytics, and transaction processing workloads for government and commercial customers globally. The solutions are segmented into HPC and data solutions. The HPC portfolio of products includes HPE Cray Supercomputing, HPE Cray XD (formerly known as HPE Apollo) and converged edge systems (formerly known as Edge Compute) hardware, software, and data management appliances that are often sold as supercomputing systems, including exascale supercomputers. The data solutions portfolio includes the mission critical compute portfolio and HPE NonStop. The mission critical compute portfolio includes the HPE Superdome Flex and HPE Integrity product lines for critical applications including large enterprise software applications and data analytics platforms. The HPE NonStop portfolio includes high-availability, fault-tolerant software and appliances that power applications such as credit-card transaction processing that require large scale and high availability. HPC & AI offerings also include operational and support services sold with its systems and as standalone services, and also offers various of its solutions aaS on a consumption basis through the HPE GreenLake edge-to-cloud platform. Storage provides data storage and management offerings, which include cloud-native primary storage with the HPE Alletra Storage portfolio, self-service private cloud on-demand with HPE GreenLake for Private Cloud Business Edition, data storage and management services with HPE GreenLake for Block Storage and HPE GreenLake for File Storage, disaster recovery and ransomware recovery with Zerto, data protection services with HPE GreenLake for Backup and Recovery, and big data solutions running on HPE Alletra 4000 Data Storage Servers. Storage also provides solutions for unstructured data and analytics workloads and traditional tape, storage networking, and disk products, such as HPE MSA and HPE XP. Storage also provides data-driven intelligence with HPE InfoSight and HPE CloudPhysics along with operational and support services and data management solutions delivered through the HPE GreenLake edge-to-cloud platform. Intelligent Edge offers wired and wireless local area network, campus and data center switching, software-defined wide-area-network, network security, and associated services to enable secure connectivity for businesses of any size. The HPE Aruba Networking product portfolio includes hardware products such as Wi-Fi access points, switches and gateways. The HPE Aruba Networking software and services portfolio includes cloud-based management, network management, network access control, analytics and assurance, location services software, and professional and support services, as well as aaS and consumption models through the HPE GreenLake edge-to-cloud platform for the Intelligent Edge portfolio of products. Intelligent Edge offerings are consolidated in the edge service platform which takes a cloud-native approach that provides customers a unified framework to meet their connectivity, security, and financial needs across campus, branch, data center, and remote worker environments . Financial Services provides flexible investment solutions, such as leasing, financing, IT consumption, utility programs, and asset management services, for customers that facilitate unique technology deployment models and the acquisition of complete IT solutions, including hardware, software, and services from Hewlett Packard Enterprise and others. FS also supports financial solutions for on-premise flexible consumption models, such as the HPE GreenLake edge-to-cloud platform. Corporate Investments and Other includes the Advisory and Professional Services ("A & PS") business, which primarily offers consultative-led services, HPE and partner technology expertise and advice, implementation services as well as complex solution engagement capabilities; the Communications and Media Solutions business ("CMS"), which primarily offers software and related services to the telecommunications industry and Athonet, which provides private mobile core networks to enterprises and communication services providers; the HPE Software business, which offers the HPE Ezmeral Software Container Platform and HPE Ezmeral Software Data Fabric; OpsRamp which provides a SaaS platform for managed service providers and enterprise IT teams to monitor and manage their cloud and on-premises (“hybrid”) infrastructure; and Hewlett Packard Labs, which is responsible for research and development. Segment Policy Hewlett Packard Enterprise does not allocate to its segments certain operating expenses, which it manages at the corporate level. These unallocated operating costs include certain corporate costs and eliminations, stock-based compensation expense, amortization of initial direct costs, amortization of intangible assets, transformation costs, disaster recovery (charges), and acquisition, disposition and other related charges. Segment Operating Results Segment net revenue and operating results were as follows: Compute HPC & AI Storage Intelligent Edge Financial Corporate Total In millions Three months ended July 31, 2023: Net revenue $ 2,557 $ 804 $ 1,040 $ 1,412 $ 871 $ 318 $ 7,002 Intersegment net revenue 67 32 34 3 2 — 138 Total segment net revenue $ 2,624 $ 836 $ 1,074 $ 1,415 $ 873 $ 318 $ 7,140 Segment earnings (loss) from operations $ 285 $ (7) $ 115 $ 420 $ 73 $ (38) $ 848 Three months ended July 31, 2022: Net revenue $ 2,978 $ 806 $ 1,114 $ 940 $ 813 $ 300 $ 6,951 Intersegment net revenue 49 24 15 1 4 — 93 Total segment net revenue $ 3,027 $ 830 $ 1,129 $ 941 $ 817 $ 300 $ 7,044 Segment earnings (loss) from operations $ 408 $ 28 $ 161 $ 155 $ 96 $ (31) $ 817 Nine months ended July 31, 2023: Net revenue $ 8,600 $ 2,624 $ 3,229 $ 3,834 $ 2,590 $ 907 $ 21,784 Intersegment net revenue 241 108 75 12 14 — 450 Total segment net revenue $ 8,841 $ 2,732 $ 3,304 $ 3,846 $ 2,604 $ 907 $ 22,234 Segment earnings (loss) from operations $ 1,314 $ (8) $ 339 $ 1,018 $ 239 $ (140) $ 2,762 Nine months ended July 31, 2022: Net revenue $ 8,941 $ 2,269 $ 3,286 $ 2,704 $ 2,474 $ 951 $ 20,625 Intersegment net revenue 141 61 43 5 8 1 259 Total segment net revenue $ 9,082 $ 2,330 $ 3,329 $ 2,709 $ 2,482 $ 952 $ 20,884 Segment earnings (loss) from operations $ 1,261 $ (19) $ 445 $ 421 $ 304 $ (66) $ 2,346 The reconciliation of segment operating results to Condensed Consolidated Statements of Earnings was as follows: For the three months ended July 31, For the nine months ended July 31, 2023 2022 2023 2022 In millions Net Revenue: Total segments $ 7,140 $ 7,044 $ 22,234 $ 20,884 Eliminations of intersegment net revenue (138) (93) (450) (259) Total consolidated net revenue $ 7,002 $ 6,951 $ 21,784 $ 20,625 Earnings Before Taxes: Total segment earnings from operations $ 848 $ 817 $ 2,762 $ 2,346 Unallocated corporate costs and eliminations (130) (88) (327) (222) Stock-based compensation expense (91) (64) (357) (306) Amortization of initial direct costs — (1) — (3) Amortization of intangible assets (72) (73) (216) (220) Transformation costs (65) (80) (227) (289) Disaster recovery (charges) 2 (36) (2) (160) Acquisition, disposition and other related charges (21) (9) (51) (25) Interest and other, net (50) (74) (129) (79) Tax indemnification and related adjustments 45 (30) 50 (47) Non-service net periodic benefit (cost) credit (3) 34 (2) 106 Earnings from equity interests 73 68 180 132 Total earnings before provision for taxes $ 536 $ 464 $ 1,681 $ 1,233 Segment Assets Hewlett Packard Enterprise allocates assets to its business segments based on the segments primarily benefiting from the assets. Total assets by segment and the reconciliation of segment assets to total assets as per Condensed Consolidated Balance Sheets were as follows: As of July 31, 2023 October 31, 2022 In millions Compute $ 15,334 $ 16,881 HPC & AI 5,536 5,997 Storage 7,023 7,484 Intelligent Edge 5,113 4,594 Financial Services 14,804 14,837 Corporate Investments and Other 1,327 1,110 Corporate and unallocated assets 7,278 6,220 Total assets $ 56,415 $ 57,123 Geographic Information Net revenue by geographic region was as follows: For the three months ended July 31, For the nine months ended July 31, 2023 2022 2023 2022 In millions Americas: United States $ 2,433 $ 2,261 $ 7,713 $ 6,737 Americas excluding U.S. 539 481 1,628 1,409 Total Americas 2,972 2,742 9,341 8,146 Europe, Middle East and Africa 2,434 2,512 7,605 7,550 Asia Pacific and Japan 1,596 1,697 4,838 4,929 Total consolidated net revenue $ 7,002 $ 6,951 $ 21,784 $ 20,625 |