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Speaker 1: The CEO of Hewlet Packard Enterprise joining us right now,

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Speaker 1: Antonio Nery right on the heels of his earnings report

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Speaker 1: here where we saw fiscal third quarter revenue coming in

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Speaker 1: line with estimates here and of course a focus on

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Speaker 1: three of your units here, two units which saw relative softness,

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Speaker 1: and one unit in particular, that Intelligent Edge business to

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Speaker 1: show the fifty percent jump in revenue, and that has

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Speaker 1: become what a lot of investors, Antonio, have started to

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Speaker 1: focus on.

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Speaker 2: Well, good afternoon, Romaine, thanks for having me again. We

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Speaker 2: are very pleased with the results of our third quarter,

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Speaker 2: which was again very solid. We saw continued revenue growth

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Speaker 2: and margin expansion once again, and that's driven by the

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Speaker 2: intentional shift in our strategy to focus on high growth,

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Speaker 2: high growth margin areas. And you talked about that Intelligent

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Speaker 2: Edge which had the stellar performance with fifty three percent

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Speaker 2: year over ear revenue growth and unoperative margin improvement of

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Speaker 2: more than thirteen hundred bases points. And if we think

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Speaker 2: about the composition of the company today, the Intelligent Engine

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Speaker 2: represent twenty percent of the total company revenue two years

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Speaker 2: ago was ten percent, and now almost fifty percent of

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Speaker 2: the company profits. So overall, I'm astonishing settle results, and

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Speaker 2: that allows us to continue to invest in the business

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Speaker 2: as we think about the next wave of growth, which

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Speaker 2: obviously is going to be AI in hybridcloud.

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Speaker 1: I am curious as to how that works out down

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Speaker 1: the road. Antonio. When you were elevated to CEO about

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Speaker 1: five years or so ago, you made a very clear

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Speaker 1: point to investors that you wanted to diversify their company.

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Speaker 1: At least on paper, it appears that you have already

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Speaker 1: done that. But now the question becomes, has the pendulum

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Speaker 1: flung too far? Are you going to be too dependent

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Speaker 1: on that intelligent business, intelligent cloud business relative to some

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Speaker 1: of the other business units.

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Speaker 2: Well, thank you for referring to that, because when I

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Speaker 2: became CEO, I said that the enterprises of the future

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Speaker 2: will be edge centric, cloud enabling, data driven. The edge

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Speaker 2: was the next frontier, and we invested quite significant in

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Speaker 2: our business and we have more than double our business

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Speaker 2: in five years and that's the result of all the

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Speaker 2: hard work. In twenty nineteen, I said, we're going to

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Speaker 2: deliver everything we do in the company as a service,

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Speaker 2: and you see HP Green Lake. HP green Lake now

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Speaker 2: represent a significant part of a deferm revenue, which is

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Speaker 2: all readable and including the profit. And in this quarter

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Speaker 2: we cross the twelve billion dollars total communitative contract value

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Speaker 2: and we grew that one point five billion dollars quarter

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Speaker 2: over quarter, and that resulted in a forty eight percent

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Speaker 2: AI increase. And so those are two examples are a

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Speaker 2: great testamental when we focus on we execute with deliver

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Speaker 2: value for shareholder. Now, the third part of this is AI.

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Speaker 2: But I'm very pleased about the EDGE because now we

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Speaker 2: create a new baseline. The baseline has been fueled also

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Speaker 2: with new capabilities, expansion of time into the areas of

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Speaker 2: security software de fined why they are a network and

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Speaker 2: core five G and private five G who has yet

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Speaker 2: to play into our number. So as we think about

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Speaker 2: twenty four and beyond, you will see the growth from

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Speaker 2: those areas fueling the governmental we have in the EDGE.

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Speaker 3: I want to talk a little bit more though about

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Speaker 3: the compute and the storage units, because if you look

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Speaker 3: at sales in the compute unit that includes data centers

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Speaker 3: and service, of course it declined thirteen percent. That's slightly

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Speaker 3: worse than what analysts had been estimating. What does that

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Speaker 3: say about the appetite for corporate spend in this environment

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Speaker 3: when do you expect that cycle to maybe stabilize a bit?

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Speaker 2: Sure? Okay. I mean we have that six magnificent cord

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Speaker 2: I call it in our revenue growth and significant operating

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Speaker 2: margins way above the industry average. And now we're seeing

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Speaker 2: the normalization of what I call the ongoing compute cyclicality

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Speaker 2: that happens every few years. And so customers obviously pulling

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Speaker 2: a lot of the orders last year because of the

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Speaker 2: supply chain challenges, those have now returned to normalized levels,

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Speaker 2: and so now we see that digestion. But as I

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Speaker 2: think about twenty four, we see a couple of three

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Speaker 2: things coming in our fail or. Number one is that

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Speaker 2: we have a generational shift to new products, that's what

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Speaker 2: we call JEN eleven. Number two, we're going to see

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Speaker 2: in twenty four increase in commodity costs. That's natural evolution

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Speaker 2: of the industry as demand improves. And number three, you're

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Speaker 2: going to see more content towards AI, particularly what I

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Speaker 2: call AI infernt solutions, which is going to drive an

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Speaker 2: increase in the percentage of the mix. And so over

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Speaker 2: time we're going to see that. But let me be clear,

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Speaker 2: at this quarter, we saw demand improving on the unit

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Speaker 2: level on a quarter over quarter basis, and when you

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Speaker 2: add the hpc ANDI compute as well on an aggregate,

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Speaker 2: the sober category actually grew on the unit very nicely,

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Speaker 2: which drove a double digit growth in our attached related

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Speaker 2: to operational services, which obviously is the most profitable part

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Speaker 2: of the business.

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Speaker 3: And Antonio, we only have about forty five seconds left

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Speaker 3: with you, but I do want to talk about the

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Speaker 3: c suite a little bit. Of course, earlier this month

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Speaker 3: you announced that your CFO would depart. Where are you

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Speaker 3: on the search for replacement? Do you have any sense

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Speaker 3: of timing there?

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Speaker 2: Sure? I mean my goal is in the next sixty

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Speaker 2: no more than ninety days, to have a new CFO.

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Speaker 2: I have want to say, I'm very proud of Taek.

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Speaker 2: I had the pursuit to become a CEO of a

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Speaker 2: public company, Tartak nine. I have done some unique things

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Speaker 2: to position the company into the future. I'm very proud

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Speaker 2: that the work has done. But for me, you know,

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Speaker 2: it's important that we focus on the next profile, which

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Speaker 2: is continue to execute the strategy and continue to drive

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Speaker 2: the financial architectures that you just saw in our number.

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Speaker 2: So we will take our time. We want to find

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Speaker 2: obviously a great CFO, but obviously there is a process

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Speaker 2: which look both internally and external. They will have a

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Speaker 2: fantastic finance team in this company.

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Speaker 3: Well, Antonio, it's great to get some time with you today.

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Speaker 3: I really appreciate it. That is Antonio and Neerry, of course,

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Speaker 3: the Hewlett Packard Enterprise CEO,