Analysis of Reportable Segments
Hewlett Packard Enterprise Co. operates in 6 segments: Compute; High Performance Computing & Artificial Intelligence (HPC & AI); Storage; Intelligent Edge; Financial Services (FS); and Corporate Investments and Other.
Segment Profit Margin
Hewlett Packard Enterprise Co., profit margin by reportable segment
| Oct 31, 2023 | Oct 31, 2022 | Oct 31, 2021 | Oct 31, 2020 | Oct 31, 2019 | Oct 31, 2018 | |
|---|---|---|---|---|---|---|
| Compute | 13.72% | 13.97% | 10.79% | 8.20% | 12.52% | — |
| High Performance Computing & Artificial Intelligence (HPC & AI) | 1.20% | 0.34% | 7.34% | 9.18% | 12.24% | — |
| Storage | 9.72% | 14.48% | 16.33% | 17.35% | 19.20% | — |
| Intelligent Edge | 27.27% | 14.94% | 15.21% | 11.80% | 7.42% | — |
| Financial Services (FS) | 9.11% | 11.95% | 11.47% | 8.47% | 8.66% | — |
| Corporate Investments and Other | -13.76% | -7.33% | -7.01% | -15.87% | -24.38% | — |
Based on: 10-K (reporting date: 2023-10-31), 10-K (reporting date: 2022-10-31), 10-K (reporting date: 2021-10-31), 10-K (reporting date: 2020-10-31), 10-K (reporting date: 2019-10-31), 10-K (reporting date: 2018-10-31).
An analysis of segment profit margins reveals a significant divergence in profitability across different business units from 2019 to 2023. While some segments have experienced substantial margin expansion, others have faced persistent contraction, indicating a shift in the company's operational profitability profile.
- Intelligent Edge
- This segment demonstrates the most aggressive growth in profitability, evolving from a margin of 7.42% in 2019 to 27.27% in 2023. The growth was steady through 2022 before accelerating sharply in the final year of the period, marking it as the highest-margin segment by 2023.
- Storage
- A consistent downward trend is observed in the Storage segment. Margins decreased annually from a peak of 19.20% in 2019 to 9.72% in 2023, representing a nearly 50% reduction in profitability over the five-year span.
- High Performance Computing & Artificial Intelligence (HPC & AI)
- Profitability in this segment suffered a severe contraction. From a starting margin of 12.24% in 2019, margins declined steadily, nearly bottoming out at 0.34% in 2022 before a marginal recovery to 1.20% in 2023.
- Compute
- The Compute segment experienced initial volatility with a dip to 8.20% in 2020, followed by a recovery phase. Margins climbed back to 13.97% in 2022 and remained relatively stable at 13.72% in 2023, ending the period slightly higher than the 2019 baseline.
- Financial Services (FS)
- Margins remained relatively stable, fluctuating within a tight range. Profitability peaked at 11.95% in 2022 before moderating to 9.11% in 2023, maintaining a consistent contribution throughout the period.
- Corporate Investments and Other
- This category remained consistently negative, reflecting its nature as a cost center. There was a period of improvement where losses narrowed from -24.38% in 2019 to -7.01% in 2021, though margins deteriorated again to -13.76% by 2023.
Overall, the margin profile suggests a strategic or operational pivot toward the Intelligent Edge segment, which now offsets the significant profitability declines seen in the Storage and HPC & AI business units.
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Segment Profit Margin: Compute
Hewlett Packard Enterprise Co.; Compute; segment profit margin calculation
| Oct 31, 2023 | Oct 31, 2022 | Oct 31, 2021 | Oct 31, 2020 | Oct 31, 2019 | Oct 31, 2018 | |
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Earnings (loss) from operations | 1,569) | 1,780) | 1,326) | 1,007) | 1,719) | —) |
| Net revenue | 11,436) | 12,742) | 12,292) | 12,285) | 13,730) | —) |
| Segment Profitability Ratio | ||||||
| Segment profit margin1 | 13.72% | 13.97% | 10.79% | 8.20% | 12.52% | — |
Based on: 10-K (reporting date: 2023-10-31), 10-K (reporting date: 2022-10-31), 10-K (reporting date: 2021-10-31), 10-K (reporting date: 2020-10-31), 10-K (reporting date: 2019-10-31), 10-K (reporting date: 2018-10-31).
1 2023 Calculation
Segment profit margin = 100 × Earnings (loss) from operations ÷ Net revenue
= 100 × 1,569 ÷ 11,436 = 13.72%
Analysis of segment profitability reveals a period of volatility followed by a recovery in operational efficiency between 2019 and 2023.
- Net Revenue Trends
- Net revenue exhibited a general downward trajectory over the five-year period, decreasing from 13,730 million US dollars in 2019 to 11,436 million US dollars in 2023. While a temporary increase was observed in 2022, the overall trend indicates a contraction in the top line, with the most significant year-over-year decline occurring between 2022 and 2023.
- Operating Earnings Performance
- Earnings from operations fluctuated significantly, reaching a low of 1,007 million US dollars in 2020. A recovery phase followed, with earnings peaking at 1,780 million US dollars in 2022. Although earnings decreased to 1,569 million US dollars in 2023, the figure remained higher than the 2020 and 2021 levels despite the lower revenue base.
- Segment Profit Margin Analysis
- The segment profit margin demonstrated a U-shaped recovery pattern. After a sharp decline from 12.52% in 2019 to a period low of 8.20% in 2020, the margin expanded consistently for two years, peaking at 13.97% in 2022. By 2023, the margin stabilized at 13.72%. This indicates that the segment achieved greater operational efficiency in the latter part of the period, as the 2023 margin surpassed the 2019 level despite a substantial reduction in net revenue.
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Segment Profit Margin: High Performance Computing & Artificial Intelligence (HPC & AI)
Hewlett Packard Enterprise Co.; High Performance Computing & Artificial Intelligence (HPC & AI); segment profit margin calculation
| Oct 31, 2023 | Oct 31, 2022 | Oct 31, 2021 | Oct 31, 2020 | Oct 31, 2019 | Oct 31, 2018 | |
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Earnings (loss) from operations | 47) | 11) | 234) | 285) | 365) | —) |
| Net revenue | 3,913) | 3,192) | 3,188) | 3,105) | 2,983) | —) |
| Segment Profitability Ratio | ||||||
| Segment profit margin1 | 1.20% | 0.34% | 7.34% | 9.18% | 12.24% | — |
Based on: 10-K (reporting date: 2023-10-31), 10-K (reporting date: 2022-10-31), 10-K (reporting date: 2021-10-31), 10-K (reporting date: 2020-10-31), 10-K (reporting date: 2019-10-31), 10-K (reporting date: 2018-10-31).
1 2023 Calculation
Segment profit margin = 100 × Earnings (loss) from operations ÷ Net revenue
= 100 × 47 ÷ 3,913 = 1.20%
The High Performance Computing & Artificial Intelligence (HPC & AI) segment exhibits a divergent trend between revenue growth and profitability from 2019 to 2023. While net revenue consistently increased over the period, operating earnings and profit margins experienced a severe decline, reaching a nadir in 2022 before showing a marginal recovery in 2023.
- Revenue Performance
- Net revenue demonstrated a steady upward trajectory, growing from US$ 2,983 million in 2019 to US$ 3,192 million in 2022. This growth accelerated significantly in 2023, reaching US$ 3,913 million, representing a substantial increase in market scale for the segment.
- Operating Earnings Trend
- Earnings from operations shifted inversely to revenue. A consistent decline occurred starting in 2019, where earnings were US$ 365 million, falling to US$ 285 million in 2020 and US$ 234 million in 2021. This downward trend culminated in a sharp contraction to US$ 11 million in 2022, before a modest recovery to US$ 47 million in 2023.
- Segment Profit Margin Compression
- The segment profit margin underwent a significant contraction, falling from 12.24% in 2019 to a low of 0.34% in 2022. Despite the strong revenue growth observed in 2023, the margin only rebounded to 1.20%. This pattern indicates that the cost of goods sold or operational expenses scaled more aggressively than revenue, leading to a substantial erosion of profitability over the five-year period.
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Segment Profit Margin: Storage
Hewlett Packard Enterprise Co.; Storage; segment profit margin calculation
| Oct 31, 2023 | Oct 31, 2022 | Oct 31, 2021 | Oct 31, 2020 | Oct 31, 2019 | Oct 31, 2018 | |
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Earnings (loss) from operations | 429) | 682) | 778) | 813) | 1,009) | —) |
| Net revenue | 4,415) | 4,711) | 4,763) | 4,685) | 5,255) | —) |
| Segment Profitability Ratio | ||||||
| Segment profit margin1 | 9.72% | 14.48% | 16.33% | 17.35% | 19.20% | — |
Based on: 10-K (reporting date: 2023-10-31), 10-K (reporting date: 2022-10-31), 10-K (reporting date: 2021-10-31), 10-K (reporting date: 2020-10-31), 10-K (reporting date: 2019-10-31), 10-K (reporting date: 2018-10-31).
1 2023 Calculation
Segment profit margin = 100 × Earnings (loss) from operations ÷ Net revenue
= 100 × 429 ÷ 4,415 = 9.72%
The Storage segment has experienced a consistent deterioration in financial performance between fiscal years 2019 and 2023, characterized by declining revenues and a significant contraction in operating profitability.
- Revenue Trends
- Net revenue decreased from US$ 5,255 million in 2019 to US$ 4,415 million in 2023. While a slight increase was observed in 2021, the overall trend indicates a steady reduction in the segment's top-line capacity over the analyzed period.
- Operating Earnings
- Earnings from operations have declined every consecutive year, falling from US$ 1,009 million in 2019 to US$ 429 million in 2023. The rate of decline in operating earnings has outpaced the decline in net revenue, suggesting that operating expenses have not been reduced in proportion to falling sales.
- Segment Profit Margin Compression
- The segment profit margin shows a continuous downward trajectory, decreasing from 19.20% in 2019 to 9.72% in 2023. A particularly sharp contraction occurred between 2022 and 2023, where the margin fell by 4.76 percentage points, representing the most significant annual drop in the period and indicating a substantial erosion of operational efficiency.
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Segment Profit Margin: Intelligent Edge
Hewlett Packard Enterprise Co.; Intelligent Edge; segment profit margin calculation
| Oct 31, 2023 | Oct 31, 2022 | Oct 31, 2021 | Oct 31, 2020 | Oct 31, 2019 | Oct 31, 2018 | |
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Earnings (loss) from operations | 1,419) | 549) | 500) | 337) | 216) | —) |
| Net revenue | 5,204) | 3,674) | 3,287) | 2,855) | 2,913) | —) |
| Segment Profitability Ratio | ||||||
| Segment profit margin1 | 27.27% | 14.94% | 15.21% | 11.80% | 7.42% | — |
Based on: 10-K (reporting date: 2023-10-31), 10-K (reporting date: 2022-10-31), 10-K (reporting date: 2021-10-31), 10-K (reporting date: 2020-10-31), 10-K (reporting date: 2019-10-31), 10-K (reporting date: 2018-10-31).
1 2023 Calculation
Segment profit margin = 100 × Earnings (loss) from operations ÷ Net revenue
= 100 × 1,419 ÷ 5,204 = 27.27%
The Intelligent Edge segment demonstrated significant growth in both scale and profitability between fiscal years 2019 and 2023. A consistent upward trajectory is observed in both net revenue and operating earnings, with a pronounced acceleration in profitability during the final reported period.
- Net Revenue Performance
- Net revenue exhibited a steady growth pattern after an initial period of stability. Following a slight decrease from 2,913 million USD in 2019 to 2,855 million USD in 2020, revenue grew consistently to 3,674 million USD by 2022. A substantial increase was recorded in 2023, with revenue reaching 5,204 million USD, marking a significant expansion of the segment's top-line performance.
- Operating Earnings Trajectory
- Earnings from operations grew consistently each year, rising from 216 million USD in 2019 to 549 million USD in 2022. The most notable increase occurred in 2023, where earnings surged to 1,419 million USD. The rate of earnings growth significantly outpaced the rate of revenue growth, particularly in the final year, suggesting a high degree of operational leverage.
- Segment Profit Margin Expansion
- The segment profit margin improved from 7.42% in 2019 to 15.21% in 2020. While the margin remained relatively stable over the following two years, ending 2022 at 14.94%, a sharp increase to 27.27% was achieved in 2023. This expansion indicates a successful shift toward higher-margin products or services, or a significant optimization of the segment's cost structure.
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Segment Profit Margin: Financial Services (FS)
Hewlett Packard Enterprise Co.; Financial Services (FS); segment profit margin calculation
| Oct 31, 2023 | Oct 31, 2022 | Oct 31, 2021 | Oct 31, 2020 | Oct 31, 2019 | Oct 31, 2018 | |
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Earnings (loss) from operations | 317) | 399) | 390) | 284) | 310) | —) |
| Net revenue | 3,480) | 3,339) | 3,401) | 3,352) | 3,581) | —) |
| Segment Profitability Ratio | ||||||
| Segment profit margin1 | 9.11% | 11.95% | 11.47% | 8.47% | 8.66% | — |
Based on: 10-K (reporting date: 2023-10-31), 10-K (reporting date: 2022-10-31), 10-K (reporting date: 2021-10-31), 10-K (reporting date: 2020-10-31), 10-K (reporting date: 2019-10-31), 10-K (reporting date: 2018-10-31).
1 2023 Calculation
Segment profit margin = 100 × Earnings (loss) from operations ÷ Net revenue
= 100 × 317 ÷ 3,480 = 9.11%
The Financial Services segment demonstrates a period of relative stability in net revenue coupled with volatility in operational profitability. While revenue remained within a narrow range between 2019 and 2023, the segment profit margin experienced a significant mid-period expansion followed by a contraction in the most recent fiscal year.
- Revenue Stability
- Net revenue exhibited minimal variance over the analyzed period, fluctuating between a low of US$ 3,339 million in 2022 and a high of US$ 3,581 million in 2019. This indicates a consistent level of top-line performance and steady demand for financial services.
- Operational Profitability and Margin Expansion
- A distinct upward trend in operational efficiency was observed between 2020 and 2022. Earnings from operations increased from US$ 284 million to US$ 399 million, which drove the segment profit margin from 8.47% to a peak of 11.95%. This suggests improved cost management or a shift toward higher-margin services during this three-year window.
- Recent Margin Contraction
- The 2023 results indicate a reversal of the previous expansion. Earnings from operations declined to US$ 317 million, leading to a segment profit margin of 9.11%. This represents a contraction of 284 basis points compared to 2022, returning the segment's profitability to levels closely resembling those seen in 2019.
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Segment Profit Margin: Corporate Investments and Other
Hewlett Packard Enterprise Co.; Corporate Investments and Other; segment profit margin calculation
| Oct 31, 2023 | Oct 31, 2022 | Oct 31, 2021 | Oct 31, 2020 | Oct 31, 2019 | Oct 31, 2018 | |
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Earnings (loss) from operations | (172) | (92) | (95) | (206) | (314) | —) |
| Net revenue | 1,250) | 1,255) | 1,356) | 1,298) | 1,288) | —) |
| Segment Profitability Ratio | ||||||
| Segment profit margin1 | -13.76% | -7.33% | -7.01% | -15.87% | -24.38% | — |
Based on: 10-K (reporting date: 2023-10-31), 10-K (reporting date: 2022-10-31), 10-K (reporting date: 2021-10-31), 10-K (reporting date: 2020-10-31), 10-K (reporting date: 2019-10-31), 10-K (reporting date: 2018-10-31).
1 2023 Calculation
Segment profit margin = 100 × Earnings (loss) from operations ÷ Net revenue
= 100 × -172 ÷ 1,250 = -13.76%
The Corporate Investments and Other segment has consistently operated at a loss from 2019 through 2023. While the segment experienced a period of significant margin improvement between 2019 and 2021, this positive trajectory reversed in the final year of the analyzed period.
- Revenue Stability
- Net revenue remained relatively stable over the five-year period, fluctuating within a narrow range between $1,250 million and $1,356 million. A slight peak occurred in 2021, followed by a marginal decline to $1,250 million by October 31, 2023.
- Operational Loss Trends
- Earnings from operations were negative throughout the entire period. A notable recovery phase was observed from 2019 to 2021, as operating losses narrowed from $314 million to $95 million. However, this improvement plateaued in 2022 and deteriorated in 2023, with losses widening to $172 million.
- Segment Profit Margin Volatility
- The segment profit margin mirrored the operational loss trends, starting at a low of -24.38% in 2019 and improving to -7.01% by 2021. After maintaining a relatively stable margin of -7.33% in 2022, the margin declined to -13.76% in 2023, indicating a renewed increase in operational costs or a decrease in investment returns relative to revenue.
In summary, the data indicates a cyclical pattern of loss reduction followed by a recent downturn. The segment failed to achieve break-even status, and the widening of the profit margin in 2023 suggests a regression toward the higher loss levels seen in the earlier years of the period.
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Segment Return on Assets (Segment ROA)
Hewlett Packard Enterprise Co., ROA by reportable segment
| Oct 31, 2023 | Oct 31, 2022 | Oct 31, 2021 | Oct 31, 2020 | Oct 31, 2019 | Oct 31, 2018 | |
|---|---|---|---|---|---|---|
| Compute | 9.73% | 10.55% | 8.18% | 6.73% | — | — |
| High Performance Computing & Artificial Intelligence (HPC & AI) | 0.81% | 0.18% | 3.48% | 4.56% | — | — |
| Storage | 5.96% | 9.09% | 10.96% | 12.63% | — | — |
| Intelligent Edge | 26.51% | 11.94% | 11.27% | 7.74% | — | — |
| Financial Services (FS) | 2.18% | 2.69% | 2.61% | 1.92% | — | — |
| Corporate Investments and Other | -12.28% | -8.30% | -7.86% | -18.33% | — | — |
Based on: 10-K (reporting date: 2023-10-31), 10-K (reporting date: 2022-10-31), 10-K (reporting date: 2021-10-31), 10-K (reporting date: 2020-10-31), 10-K (reporting date: 2019-10-31), 10-K (reporting date: 2018-10-31).
The segment return on assets (ROA) reveals a divergent performance landscape across the company's business units from 2020 to 2023. While some segments exhibit significant growth in asset efficiency, others show marked declines or persistent negative returns.
- Intelligent Edge
- This segment demonstrates the most aggressive expansion in asset productivity, with ROA increasing from 7.74% in 2020 to 26.51% in 2023. A particularly sharp acceleration is observed between 2022 and 2023, where the return more than doubled, indicating a substantial increase in the profitability of the assets deployed within this unit.
- Compute
- A generally positive trend is observed for the Compute segment, which saw ROA rise from 6.73% in 2020 to a peak of 10.55% in 2022. Although a slight contraction to 9.73% occurred in 2023, the segment maintains a higher level of asset efficiency compared to the 2020 baseline.
- Storage
- The Storage segment exhibits a consistent and linear downward trend. ROA declined steadily from 12.63% in 2020 to 5.96% by 2023. This suggests a progressive deterioration in the ability of the segment's assets to generate earnings over the four-year period.
- High Performance Computing & Artificial Intelligence (HPC & AI)
- A significant compression in returns is evident in this segment. After starting at 4.56% in 2020, the ROA fell sharply to a low of 0.18% in 2022. A marginal recovery to 0.81% was noted in 2023, though the return remains substantially below historical levels.
- Financial Services (FS)
- The Financial Services segment shows relative stability with low positive returns. ROA fluctuated within a narrow range, moving from 1.92% in 2020 to a peak of 2.69% in 2022, before settling at 2.18% in 2023.
- Corporate Investments and Other
- This category consistently reports negative returns on assets. While there was a notable improvement from the 2020 low of -18.33% to -7.86% in 2021, the ROA trended downward again to -12.28% by 2023, reflecting ongoing asset inefficiency or costs associated with corporate overhead.
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Segment ROA: Compute
Hewlett Packard Enterprise Co.; Compute; segment ROA calculation
| Oct 31, 2023 | Oct 31, 2022 | Oct 31, 2021 | Oct 31, 2020 | Oct 31, 2019 | Oct 31, 2018 | |
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Earnings (loss) from operations | 1,569) | 1,780) | 1,326) | 1,007) | 1,719) | —) |
| Assets | 16,120) | 16,872) | 16,208) | 14,962) | —) | —) |
| Segment Profitability Ratio | ||||||
| Segment ROA1 | 9.73% | 10.55% | 8.18% | 6.73% | — | — |
Based on: 10-K (reporting date: 2023-10-31), 10-K (reporting date: 2022-10-31), 10-K (reporting date: 2021-10-31), 10-K (reporting date: 2020-10-31), 10-K (reporting date: 2019-10-31), 10-K (reporting date: 2018-10-31).
1 2023 Calculation
Segment ROA = 100 × Earnings (loss) from operations ÷ Assets
= 100 × 1,569 ÷ 16,120 = 9.73%
The Compute segment's financial performance between 2019 and 2023 is characterized by a period of recovery and improved asset efficiency following a significant decline in operational earnings in 2020.
- Earnings from Operations
- Operational earnings exhibited notable volatility, decreasing from $1,719 million in 2019 to a low of $1,007 million in 2020. A subsequent recovery trend is observed, with earnings climbing to $1,326 million in 2021 and peaking at $1,780 million in 2022, before experiencing a moderate decline to $1,569 million in 2023.
- Asset Base Trends
- The segment's assets showed a steady increase from $14,962 million in 2020 to a maximum of $16,872 million in 2022. This growth trend reversed slightly in 2023, with assets decreasing to $16,120 million.
- Segment Return on Assets (ROA)
- The Segment ROA improved consistently from 2020 to 2022, rising from 6.73% to 8.18%, and reaching a peak of 10.55%. This upward trajectory indicates enhanced profitability relative to the asset base during this period. A retraction to 9.73% occurred in 2023, reflecting the decrease in operational earnings despite the overall reduction in total assets.
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Segment ROA: High Performance Computing & Artificial Intelligence (HPC & AI)
Hewlett Packard Enterprise Co.; High Performance Computing & Artificial Intelligence (HPC & AI); segment ROA calculation
| Oct 31, 2023 | Oct 31, 2022 | Oct 31, 2021 | Oct 31, 2020 | Oct 31, 2019 | Oct 31, 2018 | |
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Earnings (loss) from operations | 47) | 11) | 234) | 285) | 365) | —) |
| Assets | 5,787) | 5,986) | 6,726) | 6,245) | —) | —) |
| Segment Profitability Ratio | ||||||
| Segment ROA1 | 0.81% | 0.18% | 3.48% | 4.56% | — | — |
Based on: 10-K (reporting date: 2023-10-31), 10-K (reporting date: 2022-10-31), 10-K (reporting date: 2021-10-31), 10-K (reporting date: 2020-10-31), 10-K (reporting date: 2019-10-31), 10-K (reporting date: 2018-10-31).
1 2023 Calculation
Segment ROA = 100 × Earnings (loss) from operations ÷ Assets
= 100 × 47 ÷ 5,787 = 0.81%
The High Performance Computing & Artificial Intelligence (HPC & AI) segment experienced a significant contraction in profitability and asset efficiency between fiscal years 2019 and 2023. While there is evidence of a slight recovery in the final reported year, the overall trajectory indicates a period of substantial operational pressure and diminishing returns on invested capital.
- Operational Earnings Performance
- A pronounced downward trend in earnings from operations was observed from 2019 through 2022. Earnings declined from $365 million in 2019 to a low of $11 million in 2022, representing a severe erosion of the segment's operating income. A marginal recovery occurred in 2023, with earnings rising to $47 million, suggesting a potential stabilization in operational results.
- Asset Base Dynamics
- The segment's total assets peaked in 2021 at $6,726 million. Subsequently, a contraction occurred over the following two years, with assets decreasing to $5,787 million by October 31, 2023. This downward movement in the asset base follows the peak in 2021, indicating a reduction in the resources deployed within the segment.
- Segment Return on Assets (ROA)
- The Return on Assets exhibited a steep decline, falling from 4.56% in 2020 to 0.18% in 2022. This trend highlights a significant decrease in the efficiency with which the segment utilized its assets to generate profit. Although the ROA improved to 0.81% in 2023, this increase was driven by a combination of modest earnings growth and a continuing reduction in the total asset denominator.
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Segment ROA: Storage
Hewlett Packard Enterprise Co.; Storage; segment ROA calculation
| Oct 31, 2023 | Oct 31, 2022 | Oct 31, 2021 | Oct 31, 2020 | Oct 31, 2019 | Oct 31, 2018 | |
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Earnings (loss) from operations | 429) | 682) | 778) | 813) | 1,009) | —) |
| Assets | 7,195) | 7,506) | 7,097) | 6,438) | —) | —) |
| Segment Profitability Ratio | ||||||
| Segment ROA1 | 5.96% | 9.09% | 10.96% | 12.63% | — | — |
Based on: 10-K (reporting date: 2023-10-31), 10-K (reporting date: 2022-10-31), 10-K (reporting date: 2021-10-31), 10-K (reporting date: 2020-10-31), 10-K (reporting date: 2019-10-31), 10-K (reporting date: 2018-10-31).
1 2023 Calculation
Segment ROA = 100 × Earnings (loss) from operations ÷ Assets
= 100 × 429 ÷ 7,195 = 5.96%
The Storage segment has experienced a consistent decline in operational efficiency and profitability between 2019 and 2023. This deterioration is characterized by a steady erosion of operating earnings coupled with a fluctuating asset base, resulting in a significant contraction of the Return on Assets (ROA).
- Operating Earnings Trend
- Earnings from operations have exhibited a persistent downward trajectory, declining every year from a high of $1,009 million in 2019 to $429 million in 2023. This represents a substantial reduction in the segment's capacity to generate operating profit over the five-year period.
- Asset Base Dynamics
- The asset base grew steadily from $6,438 million in 2020 to a peak of $7,506 million in 2022, before experiencing a slight reduction to $7,195 million in 2023. The increase in assets between 2020 and 2022 occurred simultaneously with falling earnings, which exacerbated the decline in asset productivity.
- Segment ROA Deterioration
- The Segment ROA has declined sharply and consistently, falling from 12.63% in 2020 to 5.96% in 2023. This trend highlights a diminishing return on deployed capital, as the rapid decrease in operating income significantly outpaced any movements in the segment's total assets.
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Segment ROA: Intelligent Edge
Hewlett Packard Enterprise Co.; Intelligent Edge; segment ROA calculation
| Oct 31, 2023 | Oct 31, 2022 | Oct 31, 2021 | Oct 31, 2020 | Oct 31, 2019 | Oct 31, 2018 | |
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Earnings (loss) from operations | 1,419) | 549) | 500) | 337) | 216) | —) |
| Assets | 5,352) | 4,597) | 4,435) | 4,352) | —) | —) |
| Segment Profitability Ratio | ||||||
| Segment ROA1 | 26.51% | 11.94% | 11.27% | 7.74% | — | — |
Based on: 10-K (reporting date: 2023-10-31), 10-K (reporting date: 2022-10-31), 10-K (reporting date: 2021-10-31), 10-K (reporting date: 2020-10-31), 10-K (reporting date: 2019-10-31), 10-K (reporting date: 2018-10-31).
1 2023 Calculation
Segment ROA = 100 × Earnings (loss) from operations ÷ Assets
= 100 × 1,419 ÷ 5,352 = 26.51%
The Intelligent Edge segment exhibits a strong upward trajectory in both absolute operational profitability and asset utilization efficiency over the analyzed period.
- Operational Earnings Growth
- Earnings from operations grew consistently from US$ 216 million in 2019 to US$ 549 million in 2022. A significant acceleration occurred in 2023, with earnings reaching US$ 1,419 million, marking a substantial increase in operational performance compared to previous years.
- Asset Expansion
- Segment assets experienced steady growth, rising from US$ 4,352 million in 2020 to US$ 4,597 million in 2022. An increase in asset base is observed in 2023, with the total reaching US$ 5,352 million.
- Segment Return on Assets (ROA)
- The Segment ROA reflects a marked improvement in capital efficiency. The ratio increased from 7.74% in 2020 to 11.27% in 2021 and 11.94% in 2022. A sharp escalation to 26.51% occurred in 2023, indicating that operational earnings grew at a rate far exceeding the expansion of the asset base.
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Segment ROA: Financial Services (FS)
Hewlett Packard Enterprise Co.; Financial Services (FS); segment ROA calculation
| Oct 31, 2023 | Oct 31, 2022 | Oct 31, 2021 | Oct 31, 2020 | Oct 31, 2019 | Oct 31, 2018 | |
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Earnings (loss) from operations | 317) | 399) | 390) | 284) | 310) | —) |
| Assets | 14,539) | 14,837) | 14,951) | 14,765) | —) | —) |
| Segment Profitability Ratio | ||||||
| Segment ROA1 | 2.18% | 2.69% | 2.61% | 1.92% | — | — |
Based on: 10-K (reporting date: 2023-10-31), 10-K (reporting date: 2022-10-31), 10-K (reporting date: 2021-10-31), 10-K (reporting date: 2020-10-31), 10-K (reporting date: 2019-10-31), 10-K (reporting date: 2018-10-31).
1 2023 Calculation
Segment ROA = 100 × Earnings (loss) from operations ÷ Assets
= 100 × 317 ÷ 14,539 = 2.18%
The Financial Services segment demonstrated fluctuating operational performance between 2019 and 2023, characterized by a period of growth that peaked in 2022 followed by a contraction in 2023. While operational earnings showed significant volatility, the asset base remained relatively stable throughout the observed timeframe.
- Operational Earnings Trend
- Earnings from operations experienced a period of growth between 2020 and 2022, rising from 284 million US$ to a high of 399 million US$. However, a contraction occurred in 2023, with earnings falling to 317 million US$, returning to levels similar to those seen in 2019.
- Asset Base Stability
- Total assets for the segment exhibited minimal variance from 2020 to 2023. After peaking at 14,951 million US$ in 2021, assets entered a gradual decline, ending the period at 14,539 million US$ in 2023. This suggests that the segment's scale of investment remained largely consistent despite shifts in profitability.
- Return on Assets (ROA) Analysis
- The Segment ROA mirrored the trajectory of operational earnings, increasing from 1.92% in 2020 to a peak of 2.69% in 2022. The subsequent decline to 2.18% in 2023 indicates that the reduction in operational earnings had a more significant impact on the return ratio than the concurrent decrease in the asset base.
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Segment ROA: Corporate Investments and Other
Hewlett Packard Enterprise Co.; Corporate Investments and Other; segment ROA calculation
| Oct 31, 2023 | Oct 31, 2022 | Oct 31, 2021 | Oct 31, 2020 | Oct 31, 2019 | Oct 31, 2018 | |
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Earnings (loss) from operations | (172) | (92) | (95) | (206) | (314) | —) |
| Assets | 1,401) | 1,108) | 1,209) | 1,124) | —) | —) |
| Segment Profitability Ratio | ||||||
| Segment ROA1 | -12.28% | -8.30% | -7.86% | -18.33% | — | — |
Based on: 10-K (reporting date: 2023-10-31), 10-K (reporting date: 2022-10-31), 10-K (reporting date: 2021-10-31), 10-K (reporting date: 2020-10-31), 10-K (reporting date: 2019-10-31), 10-K (reporting date: 2018-10-31).
1 2023 Calculation
Segment ROA = 100 × Earnings (loss) from operations ÷ Assets
= 100 × -172 ÷ 1,401 = -12.28%
The Corporate Investments and Other segment has consistently operated at a loss from 2019 through 2023. While the segment demonstrated a period of operational recovery between 2019 and 2022, the most recent fiscal year indicates a reversal of this trend, characterized by widening losses and a deteriorating return on assets.
- Operational Performance
- Earnings from operations remained negative throughout the analyzed period. A positive trend was observed between 2019 and 2022, as operational losses narrowed from 314 million USD to 92 million USD. However, this improvement ended in 2023, when losses increased to 172 million USD.
- Asset Base Trends
- Assets remained relatively stable from 2020 to 2022, ranging between 1.108 billion USD and 1.209 billion USD. In 2023, there was a notable expansion in the asset base, which grew to 1.401 billion USD.
- Segment Return on Assets (ROA)
- The Segment ROA remained negative for all available years. The ratio showed significant improvement from -18.33% in 2020 to a peak of -7.86% in 2021, remaining relatively stable at -8.30% in 2022. In 2023, the ROA declined to -12.28%, reflecting the simultaneous impact of increased operational losses and a larger asset base.
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Segment Asset Turnover
Hewlett Packard Enterprise Co., asset turnover by reportable segment
| Oct 31, 2023 | Oct 31, 2022 | Oct 31, 2021 | Oct 31, 2020 | Oct 31, 2019 | Oct 31, 2018 | |
|---|---|---|---|---|---|---|
| Compute | 0.71 | 0.76 | 0.76 | 0.82 | — | — |
| High Performance Computing & Artificial Intelligence (HPC & AI) | 0.68 | 0.53 | 0.47 | 0.50 | — | — |
| Storage | 0.61 | 0.63 | 0.67 | 0.73 | — | — |
| Intelligent Edge | 0.97 | 0.80 | 0.74 | 0.66 | — | — |
| Financial Services (FS) | 0.24 | 0.23 | 0.23 | 0.23 | — | — |
| Corporate Investments and Other | 0.89 | 1.13 | 1.12 | 1.15 | — | — |
Based on: 10-K (reporting date: 2023-10-31), 10-K (reporting date: 2022-10-31), 10-K (reporting date: 2021-10-31), 10-K (reporting date: 2020-10-31), 10-K (reporting date: 2019-10-31), 10-K (reporting date: 2018-10-31).
An analysis of segment asset turnover from 2020 to 2023 reveals divergent trends in asset utilization efficiency across the various operational units. While some segments have significantly improved their ability to generate revenue from their asset base, others have experienced a steady decline in efficiency.
- Intelligent Edge
- This segment exhibits the most robust and consistent growth in asset efficiency. The ratio increased annually from 0.66 in 2020 to 0.97 in 2023, indicating a strong upward trend in the productivity of its deployed assets.
- High Performance Computing & Artificial Intelligence (HPC & AI)
- Following a slight dip to 0.47 in 2021, this segment shows a clear recovery and acceleration in asset turnover, rising to 0.53 in 2022 and reaching 0.68 by 2023. This suggests improving operational efficiency or increased demand relative to the asset base.
- Compute and Storage
- Both segments demonstrate a consistent downward trajectory in asset utilization. Compute turnover declined from 0.82 in 2020 to 0.71 in 2023, while Storage turnover fell from 0.73 in 2020 to 0.61 in 2023. This parallel decline suggests a reduction in the revenue-generating capacity of assets within these core hardware segments.
- Financial Services (FS)
- Asset turnover in this segment remained virtually stagnant over the four-year period, maintaining a narrow range between 0.23 and 0.24. This reflects a highly stable, though low, utilization rate typical of capital-intensive financial operations.
- Corporate Investments and Other
- This category showed relative stability with ratios exceeding 1.10 between 2020 and 2022, before experiencing a sharp contraction to 0.89 in 2023, marking the most significant single-year drop for this segment.
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Segment Asset Turnover: Compute
Hewlett Packard Enterprise Co.; Compute; segment asset turnover calculation
| Oct 31, 2023 | Oct 31, 2022 | Oct 31, 2021 | Oct 31, 2020 | Oct 31, 2019 | Oct 31, 2018 | |
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net revenue | 11,436) | 12,742) | 12,292) | 12,285) | 13,730) | —) |
| Assets | 16,120) | 16,872) | 16,208) | 14,962) | —) | —) |
| Segment Activity Ratio | ||||||
| Segment asset turnover1 | 0.71 | 0.76 | 0.76 | 0.82 | — | — |
Based on: 10-K (reporting date: 2023-10-31), 10-K (reporting date: 2022-10-31), 10-K (reporting date: 2021-10-31), 10-K (reporting date: 2020-10-31), 10-K (reporting date: 2019-10-31), 10-K (reporting date: 2018-10-31).
1 2023 Calculation
Segment asset turnover = Net revenue ÷ Assets
= 11,436 ÷ 16,120 = 0.71
An analysis of the Compute segment reveals a consistent decline in asset utilization efficiency between 2020 and 2023.
- Net Revenue Trends
- Net revenue experienced volatility and an overall downward trajectory, starting at 13,730 million US$ in 2019 and ending at 11,436 million US$ in 2023. Despite a brief period of stability and a slight increase in 2022 to 12,742 million US$, the revenue base contracted significantly in the final year of the period.
- Asset Base Evolution
- The asset base grew steadily from 14,962 million US$ in 2020 to a peak of 16,872 million US$ in 2022. A slight reduction occurred in 2023, with assets decreasing to 16,120 million US$.
- Segment Asset Turnover Performance
- The segment asset turnover ratio shows a persistent decrease, falling from 0.82 in 2020 to 0.71 in 2023. This trend indicates a diminishing capacity to generate sales from the assets invested in the segment.
The deterioration of the asset turnover ratio is the result of a diverging relationship between revenue and assets. Between 2020 and 2022, the ratio declined as assets grew while revenues remained relatively stagnant. In 2023, the decline accelerated because the reduction in net revenue was more pronounced than the decrease in the asset base, leading to the lowest efficiency level recorded in the observed period.
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Segment Asset Turnover: High Performance Computing & Artificial Intelligence (HPC & AI)
Hewlett Packard Enterprise Co.; High Performance Computing & Artificial Intelligence (HPC & AI); segment asset turnover calculation
| Oct 31, 2023 | Oct 31, 2022 | Oct 31, 2021 | Oct 31, 2020 | Oct 31, 2019 | Oct 31, 2018 | |
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net revenue | 3,913) | 3,192) | 3,188) | 3,105) | 2,983) | —) |
| Assets | 5,787) | 5,986) | 6,726) | 6,245) | —) | —) |
| Segment Activity Ratio | ||||||
| Segment asset turnover1 | 0.68 | 0.53 | 0.47 | 0.50 | — | — |
Based on: 10-K (reporting date: 2023-10-31), 10-K (reporting date: 2022-10-31), 10-K (reporting date: 2021-10-31), 10-K (reporting date: 2020-10-31), 10-K (reporting date: 2019-10-31), 10-K (reporting date: 2018-10-31).
1 2023 Calculation
Segment asset turnover = Net revenue ÷ Assets
= 3,913 ÷ 5,787 = 0.68
The High Performance Computing & Artificial Intelligence (HPC & AI) segment exhibits a positive trajectory in asset utilization efficiency over the observed period, culminating in a significant improvement in the most recent fiscal year.
- Net Revenue Trends
- Revenue experienced modest and steady growth between 2019 and 2022, rising from US$ 2,983 million to US$ 3,192 million. A sharp acceleration occurred in 2023, with revenue increasing by approximately 22.6% to reach US$ 3,913 million, indicating a substantial expansion in demand or scale within the segment.
- Asset Base Management
- The asset base reached its peak in 2021 at US$ 6,726 million. Subsequent years showed a consistent decline, with assets decreasing to US$ 5,986 million in 2022 and further to US$ 5,787 million in 2023. This downward trend in assets suggests a lean approach to resource management or a strategic optimization of the segment's capital structure.
- Segment Asset Turnover Analysis
- The asset turnover ratio demonstrates a U-shaped recovery followed by a strong breakout. After a slight decline from 0.50 in 2020 to 0.47 in 2021, the ratio improved to 0.53 in 2022 and reached 0.68 by October 31, 2023. This growth is driven by the convergence of increasing revenues and a contracting asset base, signifying a marked increase in the efficiency with which the segment generates sales from its investments.
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Segment Asset Turnover: Storage
Hewlett Packard Enterprise Co.; Storage; segment asset turnover calculation
| Oct 31, 2023 | Oct 31, 2022 | Oct 31, 2021 | Oct 31, 2020 | Oct 31, 2019 | Oct 31, 2018 | |
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net revenue | 4,415) | 4,711) | 4,763) | 4,685) | 5,255) | —) |
| Assets | 7,195) | 7,506) | 7,097) | 6,438) | —) | —) |
| Segment Activity Ratio | ||||||
| Segment asset turnover1 | 0.61 | 0.63 | 0.67 | 0.73 | — | — |
Based on: 10-K (reporting date: 2023-10-31), 10-K (reporting date: 2022-10-31), 10-K (reporting date: 2021-10-31), 10-K (reporting date: 2020-10-31), 10-K (reporting date: 2019-10-31), 10-K (reporting date: 2018-10-31).
1 2023 Calculation
Segment asset turnover = Net revenue ÷ Assets
= 4,415 ÷ 7,195 = 0.61
The Storage segment has exhibited a consistent decline in asset utilization efficiency between 2020 and 2023. This downward trajectory is evidenced by the segment asset turnover ratio, which decreased steadily from 0.73 in 2020 to 0.61 by October 31, 2023.
- Net Revenue Performance
- Net revenue peaked in 2019 at US$ 5,255 million and experienced a general decline over the subsequent years, ending at US$ 4,415 million in 2023. Aside from a marginal increase in 2021, the trend reflects a contraction in the segment's ability to generate sales.
- Asset Base Trends
- The asset base grew from US$ 6,438 million in 2020 to a peak of US$ 7,506 million in 2022, before moderating to US$ 7,195 million in 2023. The expansion of assets between 2020 and 2022 occurred while revenues remained stagnant or declined, contributing directly to the erosion of the turnover ratio.
- Asset Turnover Interpretation
- The continuous drop in the segment asset turnover ratio indicates a diminishing return on the assets deployed within the Storage business. The decline from 0.73 to 0.61 suggests that the segment is generating less revenue per dollar of assets over time, signaling a decrease in operational efficiency in leveraging its resource base to drive top-line growth.
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Segment Asset Turnover: Intelligent Edge
Hewlett Packard Enterprise Co.; Intelligent Edge; segment asset turnover calculation
| Oct 31, 2023 | Oct 31, 2022 | Oct 31, 2021 | Oct 31, 2020 | Oct 31, 2019 | Oct 31, 2018 | |
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net revenue | 5,204) | 3,674) | 3,287) | 2,855) | 2,913) | —) |
| Assets | 5,352) | 4,597) | 4,435) | 4,352) | —) | —) |
| Segment Activity Ratio | ||||||
| Segment asset turnover1 | 0.97 | 0.80 | 0.74 | 0.66 | — | — |
Based on: 10-K (reporting date: 2023-10-31), 10-K (reporting date: 2022-10-31), 10-K (reporting date: 2021-10-31), 10-K (reporting date: 2020-10-31), 10-K (reporting date: 2019-10-31), 10-K (reporting date: 2018-10-31).
1 2023 Calculation
Segment asset turnover = Net revenue ÷ Assets
= 5,204 ÷ 5,352 = 0.97
The Intelligent Edge segment exhibits a consistent improvement in operational efficiency and revenue generation capabilities over the analyzed period. There is a clear positive correlation between the increase in net revenue and the optimization of asset utilization.
- Net Revenue Trends
- Net revenue experienced a slight contraction between 2019 and 2020, moving from US$ 2,913 million to US$ 2,855 million. However, a sustained growth trajectory followed, with revenue increasing to US$ 3,287 million in 2020, US$ 3,674 million in 2021, and peaking at US$ 5,204 million by October 31, 2023. The most significant acceleration occurred in the final year of the period, indicating a substantial increase in top-line performance.
- Asset Base Expansion
- The asset base grew steadily from US$ 4,352 million in 2020 to US$ 5,352 million in 2023. While the total assets increased to support the growth of the segment, the rate of expansion remained more moderate than the growth rate of net revenue, suggesting an improvement in the scalability of the business model.
- Segment Asset Turnover Efficiency
- The segment asset turnover ratio demonstrates a continuous upward trend, rising from 0.66 in 2020 to 0.97 in 2023. This progression indicates that the segment is generating increasingly more revenue per dollar of assets employed. The sequential increases to 0.74 in 2021, 0.80 in 2022, and 0.97 in 2023 reflect a disciplined approach to asset management and a significant increase in the productivity of the segment's resource base.
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Segment Asset Turnover: Financial Services (FS)
Hewlett Packard Enterprise Co.; Financial Services (FS); segment asset turnover calculation
| Oct 31, 2023 | Oct 31, 2022 | Oct 31, 2021 | Oct 31, 2020 | Oct 31, 2019 | Oct 31, 2018 | |
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net revenue | 3,480) | 3,339) | 3,401) | 3,352) | 3,581) | —) |
| Assets | 14,539) | 14,837) | 14,951) | 14,765) | —) | —) |
| Segment Activity Ratio | ||||||
| Segment asset turnover1 | 0.24 | 0.23 | 0.23 | 0.23 | — | — |
Based on: 10-K (reporting date: 2023-10-31), 10-K (reporting date: 2022-10-31), 10-K (reporting date: 2021-10-31), 10-K (reporting date: 2020-10-31), 10-K (reporting date: 2019-10-31), 10-K (reporting date: 2018-10-31).
1 2023 Calculation
Segment asset turnover = Net revenue ÷ Assets
= 3,480 ÷ 14,539 = 0.24
The Financial Services segment demonstrates a high degree of stability in both revenue generation and asset management over the analyzed period. There is a consistent correlation between the asset base and the resulting net revenue, indicating a steady operational model with minimal volatility in asset efficiency.
- Net Revenue Trends
- Net revenue fluctuated within a narrow range between fiscal years 2019 and 2023. After a decrease from 3,581 million US dollars in 2019 to 3,352 million US dollars in 2020, the figure remained relatively stable, ending the period at 3,480 million US dollars in 2023. These movements suggest a consistent level of demand and pricing stability within the segment.
- Asset Base Consistency
- Total assets remained remarkably consistent, peaking at 14,951 million US dollars in 2021 before declining slightly to 14,539 million US dollars by 2023. The lack of significant fluctuation in the asset base indicates a steady scale of operations and a disciplined approach to asset maintenance.
- Segment Asset Turnover Performance
- The segment asset turnover ratio exhibited extreme stability, holding constant at 0.23 from 2020 through 2022. A marginal increase to 0.24 was observed in 2023. This slight improvement in efficiency is attributable to the convergence of rising net revenue and a simultaneous reduction in the total asset base, reflecting a marginally more efficient utilization of assets to drive revenue.
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Segment Asset Turnover: Corporate Investments and Other
Hewlett Packard Enterprise Co.; Corporate Investments and Other; segment asset turnover calculation
| Oct 31, 2023 | Oct 31, 2022 | Oct 31, 2021 | Oct 31, 2020 | Oct 31, 2019 | Oct 31, 2018 | |
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net revenue | 1,250) | 1,255) | 1,356) | 1,298) | 1,288) | —) |
| Assets | 1,401) | 1,108) | 1,209) | 1,124) | —) | —) |
| Segment Activity Ratio | ||||||
| Segment asset turnover1 | 0.89 | 1.13 | 1.12 | 1.15 | — | — |
Based on: 10-K (reporting date: 2023-10-31), 10-K (reporting date: 2022-10-31), 10-K (reporting date: 2021-10-31), 10-K (reporting date: 2020-10-31), 10-K (reporting date: 2019-10-31), 10-K (reporting date: 2018-10-31).
1 2023 Calculation
Segment asset turnover = Net revenue ÷ Assets
= 1,250 ÷ 1,401 = 0.89
An analysis of the Corporate Investments and Other segment reveals a period of relative stability in revenue and asset efficiency followed by a notable decline in asset turnover in the most recent fiscal year.
- Net Revenue Trends
- Net revenue remained consistent between 2019 and 2023, fluctuating within a narrow range. A peak was observed in 2021 at 1,356 million US$, followed by a slight contraction to 1,250 million US$ by October 31, 2023.
- Asset Base Evolution
- The segment's asset base exhibited volatility, decreasing from 1,209 million US$ in 2021 to 1,108 million US$ in 2022, before experiencing a substantial increase to 1,401 million US$ in 2023.
- Segment Asset Turnover Performance
- The asset turnover ratio maintained a stable range between 1.12 and 1.15 from 2020 through 2022, indicating consistent efficiency in generating revenue from the asset base. However, a significant downturn occurred in 2023, with the ratio dropping to 0.89. This decline is directly attributable to the expansion of the asset base during a period of slightly diminishing net revenue, resulting in reduced asset productivity.
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Net revenue
Hewlett Packard Enterprise Co., net revenue by reportable segment
US$ in millions
| Oct 31, 2023 | Oct 31, 2022 | Oct 31, 2021 | Oct 31, 2020 | Oct 31, 2019 | Oct 31, 2018 | |
|---|---|---|---|---|---|---|
| Compute | 11,436) | 12,742) | 12,292) | 12,285) | 13,730) | —) |
| High Performance Computing & Artificial Intelligence (HPC & AI) | 3,913) | 3,192) | 3,188) | 3,105) | 2,983) | —) |
| Storage | 4,415) | 4,711) | 4,763) | 4,685) | 5,255) | —) |
| Intelligent Edge | 5,204) | 3,674) | 3,287) | 2,855) | 2,913) | —) |
| Financial Services (FS) | 3,480) | 3,339) | 3,401) | 3,352) | 3,581) | —) |
| Corporate Investments and Other | 1,250) | 1,255) | 1,356) | 1,298) | 1,288) | —) |
| Total | 29,698) | 28,913) | 28,287) | 27,580) | 29,750) | —) |
Based on: 10-K (reporting date: 2023-10-31), 10-K (reporting date: 2022-10-31), 10-K (reporting date: 2021-10-31), 10-K (reporting date: 2020-10-31), 10-K (reporting date: 2019-10-31), 10-K (reporting date: 2018-10-31).
Total net revenue experienced a period of volatility between 2019 and 2023, characterized by an initial decline followed by a consistent recovery. After reaching a low of US$ 27,580 million in 2020, total revenue grew steadily over the subsequent three years to reach US$ 29,698 million by October 31, 2023, nearly returning to the 2019 baseline of US$ 29,750 million.
- Compute Segment
- This segment remains the primary contributor to total revenue but has exhibited a general downward trajectory over the five-year period. Revenue decreased from US$ 13,730 million in 2019 to US$ 11,436 million in 2023. While a brief recovery occurred in 2022, a significant contraction was observed in the final year of the period.
- High Performance Computing & Artificial Intelligence (HPC & AI)
- A consistent upward trend is observed in this segment. Revenue grew steadily from US$ 2,983 million in 2019 to US$ 3,192 million in 2022, followed by a sharp acceleration in 2023, reaching US$ 3,913 million.
- Intelligent Edge
- The Intelligent Edge segment demonstrates the most significant growth profile among all reportable segments. From a starting point of US$ 2,913 million in 2019, revenue expanded to US$ 5,204 million by 2023, marking a substantial increase in its contribution to the overall revenue mix.
- Storage
- A gradual and persistent decline in revenue is evident within the Storage segment. Revenue fell from US$ 5,255 million in 2019 to US$ 4,415 million in 2023, indicating a diminishing revenue stream from this business line.
- Financial Services and Corporate Investments
- Both the Financial Services and Corporate Investments segments remained relatively stable. Financial Services revenue fluctuated within a narrow band between US$ 3,339 million and US$ 3,581 million. Similarly, Corporate Investments and Other maintained a consistent range, ending 2023 at US$ 1,250 million.
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Earnings (loss) from operations
Hewlett Packard Enterprise Co., earnings (loss) from operations by reportable segment
US$ in millions
| Oct 31, 2023 | Oct 31, 2022 | Oct 31, 2021 | Oct 31, 2020 | Oct 31, 2019 | Oct 31, 2018 | |
|---|---|---|---|---|---|---|
| Compute | 1,569) | 1,780) | 1,326) | 1,007) | 1,719) | —) |
| High Performance Computing & Artificial Intelligence (HPC & AI) | 47) | 11) | 234) | 285) | 365) | —) |
| Storage | 429) | 682) | 778) | 813) | 1,009) | —) |
| Intelligent Edge | 1,419) | 549) | 500) | 337) | 216) | —) |
| Financial Services (FS) | 317) | 399) | 390) | 284) | 310) | —) |
| Corporate Investments and Other | (172) | (92) | (95) | (206) | (314) | —) |
| Total | 3,609) | 3,329) | 3,133) | 2,520) | 3,305) | —) |
Based on: 10-K (reporting date: 2023-10-31), 10-K (reporting date: 2022-10-31), 10-K (reporting date: 2021-10-31), 10-K (reporting date: 2020-10-31), 10-K (reporting date: 2019-10-31), 10-K (reporting date: 2018-10-31).
Total earnings from operations exhibited a net increase over the five-year period, growing from 3,305 million US dollars in 2019 to 3,609 million US dollars in 2023. While a significant contraction occurred in 2020, where earnings decreased to 2,520 million US dollars, a consistent recovery trend followed throughout the subsequent years.
- Compute Segment Performance
- The Compute segment remains a primary contributor to overall operational earnings. After a sharp decline to 1,007 million US dollars in 2020, the segment recovered substantially, peaking at 1,780 million US dollars in 2022 before moderating to 1,569 million US dollars in 2023.
- Intelligent Edge Growth
- An aggressive upward trajectory is observed in the Intelligent Edge segment. Earnings grew steadily from 216 million US dollars in 2019 to 549 million US dollars in 2022, followed by a substantial surge to 1,419 million US dollars in 2023, establishing it as a critical driver of total operational profit.
- Contraction in Storage and HPC & AI
- A sustained downward trend is evident in the Storage segment, with earnings falling from 1,009 million US dollars in 2019 to 429 million US dollars in 2023. Similarly, the High Performance Computing & Artificial Intelligence segment experienced a severe contraction, falling from 365 million US dollars in 2019 to a low of 11 million US dollars in 2022, with only a marginal recovery to 47 million US dollars in 2023.
- Financial Services and Corporate Overhead
- Earnings from Financial Services remained relatively stable, fluctuating within a range of 284 million to 399 million US dollars. Corporate Investments and Other consistently reported losses; however, these losses narrowed from 314 million US dollars in 2019 to 92 million US dollars in 2022, before widening again to 172 million US dollars in 2023.
The analysis indicates a significant shift in the earnings mix. The growth in the Intelligent Edge segment has effectively offset the systemic declines in Storage and HPC & AI, supporting the overall expansion of total operational earnings.
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Assets
Hewlett Packard Enterprise Co., assets by reportable segment
US$ in millions
| Oct 31, 2023 | Oct 31, 2022 | Oct 31, 2021 | Oct 31, 2020 | Oct 31, 2019 | Oct 31, 2018 | |
|---|---|---|---|---|---|---|
| Compute | 16,120) | 16,872) | 16,208) | 14,962) | —) | —) |
| High Performance Computing & Artificial Intelligence (HPC & AI) | 5,787) | 5,986) | 6,726) | 6,245) | —) | —) |
| Storage | 7,195) | 7,506) | 7,097) | 6,438) | —) | —) |
| Intelligent Edge | 5,352) | 4,597) | 4,435) | 4,352) | —) | —) |
| Financial Services (FS) | 14,539) | 14,837) | 14,951) | 14,765) | —) | —) |
| Corporate Investments and Other | 1,401) | 1,108) | 1,209) | 1,124) | —) | —) |
| Corporate and unallocated assets | 6,759) | 6,217) | 7,073) | 6,129) | —) | —) |
| Total | 57,153) | 57,123) | 57,699) | 54,015) | —) | —) |
Based on: 10-K (reporting date: 2023-10-31), 10-K (reporting date: 2022-10-31), 10-K (reporting date: 2021-10-31), 10-K (reporting date: 2020-10-31), 10-K (reporting date: 2019-10-31), 10-K (reporting date: 2018-10-31).
Total reportable segment assets exhibited a period of relative stability between 2020 and 2023. Following an initial increase from US$ 54,015 million in 2020 to US$ 57,699 million in 2021, the total asset base remained nearly constant, concluding at US$ 57,153 million in 2023.
- Compute Segment
- This segment represents one of the primary asset concentrations. Assets grew from US$ 14,962 million in 2020 to a peak of US$ 16,872 million in 2022, before experiencing a moderate contraction to US$ 16,120 million by the end of 2023.
- Financial Services (FS)
- Asset levels within Financial Services remained stable over the four-year period, with minimal fluctuations between a high of US$ 14,951 million in 2021 and a low of US$ 14,539 million in 2023.
- Intelligent Edge
- A consistent upward trajectory is observed in this segment. Assets increased from US$ 4,352 million in 2020 to US$ 5,352 million in 2023, with the most pronounced growth occurring between 2022 and 2023.
- High Performance Computing & Artificial Intelligence (HPC & AI)
- After reaching a peak of US$ 6,726 million in 2021, assets in this segment followed a consistent downward trend, declining to US$ 5,787 million by 2023.
- Storage
- Assets in the Storage segment mirrored the pattern observed in Compute, rising from US$ 6,438 million in 2020 to a peak of US$ 7,506 million in 2022, followed by a reduction to US$ 7,195 million in 2023.
- Corporate and Other Assets
- Corporate and unallocated assets showed volatility, fluctuating between US$ 6,129 million and US$ 7,073 million. Corporate Investments and Other assets ended the period at US$ 1,401 million, the highest level recorded since 2020.
The asset distribution indicates a strategic divergence among segments. While the Compute and Storage segments peaked in 2022 before slightly receding, the Intelligent Edge segment demonstrated sustained expansion. Conversely, the HPC & AI segment experienced a steady reduction in asset value from 2021 onward. This suggests a reallocation of resources or a shift in the asset intensity of the company's various operational focuses.
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