Hewlett Packard Enterprise Company (HPE) Earnings Call Transcript & Summary

[Audio Gap] From the media or the press, please disconnect from the call now. The content presented on this conference call is proprietary to and/or subject to the copyrights of Jefferies or third parties. You may not externally record, transcribe publish or otherwise publicly disclose any portion of this call, including, but not limited to, the name or other identifiers of the speakers unless Jefferies permits in writing. Please note, this call is being recorded. By attending this event, you agree to all these restrictions. And with that, I'll hand it over to Paul.

In this session, you will hear from Antonio Neri, President and CEO; Monica Batchelder; Chief Sustainability Officer; and Stacy Dillow, Chief People Officer. Following our executive presentation, we will also have a Q&A session moderated by Aniket Shah, Managing Director at Jefferies. Let me start with the disclosure. This event may include forward-looking statements involving risks, uncertainties, estimates and assumptions. If the risks and uncertainties ever materialize and the estimates or assumptions prove incorrect, our results may differ perhaps materially from those expressed or implied by such forward-looking statements. HPE assumes no obligation to update such statements. Please find more information regarding forward-looking statements on our website at investors.hpe.com. Aniket, please get us started.

Wonderful. Paul, thank you very much, and good morning, good afternoon, and good evening to our clients all around the world. Thank you very much for joining. This is a call that I look forward to every year because what HPE is doing on climate, on sustainability, on building a great long-term business. This is something that I think all investors need to be aware of, and there are a lot of lessons learned for the broader investment and business community. So it's a great pleasure to introduce Antonio Neri, who is the President and CEO of HPE; Monica Batchelder, who is the -- whose title, I will get right, is the Chief Sustainability Officer; and Stacy Dillow, who is the Chief People Officer. And together, they're going to walk us through a very, very important report, which I think is, frankly, the best sustainability-oriented report out there called the Living Progress Report, which really gives a sense of how sustainability is interwoven throughout HPE's business. We're going to start with some opening remarks and then go into Q&A. Antonio, thank you very much for your leadership. Thank you very much for joining this platform to share all the great work that you're doing, and I really look forward to the discussion. So with that, over to you.

Well, thank you, Aniket. Thank you for the opportunity for giving us the platform to all of you. So good morning, good afternoon, and good evening to all who have joined us. Today, sustainability efforts are a key driver for organizations to invest in their IT estates. With rising energy costs, operational risks and new regulations. Businesses have placed heightened focus on developing strategies that help to enhance IT efficiency and improve sustainability solutions. The rapid advancement of AI is further accelerating this need as companies face mounting pressure to responsibly scale their compute-intensive workloads. This, in turn, is driving a significant shift in the priorities of IT decision-makers. Budgets are being allocated over more energy-efficient and lower impact solutions and vendors have been selected based on their ability to help meet those critical demands. This shift has contributed to HPE success in the marketplace as we are leaders in providing these solutions to support services. And for example, IT sustainability is a major priority for KDDI, a very large Japanese customer. HPE is designing, building and implementing a multi-rack AI cluster for this leading Japanese telco provider. KDDI's AI factory will accelerate the development of large-scale Japanese generative AI models of over 1 trillion parameters. This will help KDDI unlock its initiatives to accelerate AI solutions for its customers as part of its Vision 2030 initiative. HPE's leadership in advanced hybrid cooling technology, which combines air and direct liquid cooling was a relevant factor in KDDI's decision to partner with us. Another great customer, Eni or E-N-I, 1 of the world's largest integrated energy companies turn to HPE to assist with its ambition to accelerate its research and innovation into renewable energy, climate modeling and advanced materials. At the end of the last year, Eni switched on HPC6, 1 of the world's most powerful enterprise supercomputers, built with HPE Cray EX4000 systems. This supercomputer features is on innovative liquid cool systems that dissipates 96% of the heat generated by the machine. This helps to enhance energy efficiency with cooling compute-intensive workloads. HPC6 is housed in Eni's green data center, an example of excellence in the integration of advanced technology and a commitment to greater environmental sustainability. But beyond more efficient products, customers are looking for a partner with expertise to help them optimize their IT for increased efficiency. They want partners who understand how to design and manage more sustainable IT systems from the ground up. That kind of deep hands-on experience is an important part of HPE's value proposition and sets us apart in the market. Over the past 2 years, we have refined our IT sustainability offerings roadmap to help meet customers' needs head on. In doing so, we have solidified HEP's position as a leading provider of IT sustainability solutions in the AI era. Our sustainability engagement practice, a dedicated team that partners directly with customers on IT, sustainability challenges is assisting customers with their goals to drive substantive business outcomes. In fiscal year 2024, the engagements with customers and partners in this part of our business influenced approximately $2 billion in net revenue. And the demand for robust corporate sustainability leadership remains strong. In fact, we received approximately 4,500 sustainability-related customer inquiries in our last fiscal year, and the volume of fiscal year 2025 inquires, striking a similar pace. Living Progress is our strategy for creating more sustainable and responsible IT solutions. It is inextricably linked with our business strategy, which aims to maximize competitive advantage, drive revenue and profit, create value for our stakeholders and safeguard our reputation. We expect every business unit and function at HPE to share responsibility for advancing our Living Progress strategy. This work is anchored on strong governance starting at the top with our Board of Directors, which plays an active role in shaping our strategic direction. For example, in 2024, the Board has advanced discussions about environmental sustainability efforts and approaches to meet the higher energy demands of AI growth requires. Our Board is also committed to fostering an innovative culture that emphasizes inclusion, high-performance and merit-based recognition. Leaders throughout HPE are equipped with the right skills and knowledge to oversee and execute a Living Program strategy across the business and within each leaders span of control, and we hold them accountable for doing so. At the executive committee level, 20% of executives' variable compensation is linked to Living Progress priorities like team member engagement and business-specific goals that advance our climate strategy, including the development of more energy-efficient solutions. Effective governance also requires comprehensive risk management. sustainability-related risks are categorized as a Tier 1 within HPE's enterprise risk management program alongside with cybersecurity, talent and supply chain. This means that we are proactively manage these risks rather than treat them as simply as compliance initiatives. Our success relies on the commitment and execution of our team, who share HPE's value. When I became CEO more than 7 years ago, I made culture 1 of my top priorities, and I'm incredibly proud of the investments we continue to make in our team members and culture. Our investments in people inside and outside of HPE are consistently recognized. In the past year, HPE was named to Fortune's 2025 100 Best Company to Work For list for the fourth consecutive year. HPE also ranked #1 on Just Capital Just 100 for the second consecutive year as well as received an A score on CDP's Climate List, placing us amongst the top 2% of companies recognized for leadership in climate-related transparency and action. Our success at HPE is enabled by the commitment and execution of our team who share our values and believe in serving as a force for good. I am pleased that our businesses have shared sense of responsibility for advancing our Living Progress strategy. Now I would like to hand it over to our Chief People Officer, Stacy Dillow, to talk more about how we attract and maintain an engaged high-performance workforce. Stacy, over to you.

Thank you, Antonio, and hi, everyone. It's really great to be here with you today. I joined HPE in May and someone new to the company, I've been really impressed with the company's bold vision and its commitment to fostering an environment with team members are engaged in meaningful work, feel supported and have every opportunity to grow and thrive in their careers. The technology industry is extremely competitive and involves -- and evolves at an incredible pace. To stay ahead, we rely on a talent strategy that is just as agile and forward thinking. I'm excited to build on the great work that's been happening at HPE and to explore new ways to attract, develop and inspire the best talent in the market. So what is our people strategy. First and foremost, our people are more the employees. They are team members, and they are the foundation of our people strategy. We know that when we genuinely care for and support our teams, they thrive, they perform their best. And together, we win. Our strategy starts with we win means attracting and retaining the best talent, prioritizing innovation, rewarding success and collaborating to achieve ambitious goals to grow the business. We perform means we have a high-performance culture that includes setting bold goals, giving and receiving feedback to drive accountability and fostering career development. We care. We do this through the comprehensive benefits and programs we offer to help team members thrive in all aspects of life. Unconditional inclusion is also part of our cultural DNA. At our core, we cultivate an environment that encourages everyone to feel they belong regardless of background opinions and life experiences. We've made great progress with our people strategy, and I'm happy to highlight some of our accomplishments in 2024. Let's start with the talent column. Internal career movement is critical to engage and retain top talent and give our team members the challenging roles they need to grow. We focus significantly on internal hiring last year, posting internal requisitions, leveraging enhanced technology to increase awareness and maximize our potential to get the right team members with the right skills in the right roles. In 2024, internal hiring grew 50%, meaning half of our open roles were filled with internal candidates. This marks an increase of 18 percentage points over the past 3 years. We continue to adopt AI and machine learning-driven solutions, including Career Hub, which matches the team member skills with internal open roles, mentors, short-term opportunities and curated resources to promote skills-based learning. In 2024, we added the Career Path Builder that uses AI capabilities to help team members chart next steps aligned with their specific career goals and interests. Our university recruiting model continues to deliver impressive results and enabled us to hire over 2,200 interns, apprentices and graduates across 44 countries. These experiences support our retention strategy, which is to retain at least 95% of our top-performing talent. In 2024, our voluntary turnover rate decreased to 4.7%, remaining well below the industry average of 9.2%. Let's move to the learning and development column. Throughout 2024, we enhanced our professional development courses, coaching opportunities, performance assessment tools and goal setting support for HPE people leaders. Overall, 88% of active HPE team members took at least 1 non-mandatory training course in 2024, completing more than 820,000 online and instructor-led courses across a broad range of categories with an average of more than 10 learning hours per team member. We also invested more than $23 million in learning and development in 2024 and an 11% increase compared to the prior year. From a technical training standpoint, we have evolving needs, particularly in the areas of AI, machine learning and cloud computing. Last year, we introduced a new job architecture for the technical career path community, adding 2 new role levels to provide greater opportunities for career advancement as well as simplifying the technical promotions process. To foster development, we implemented a variety of resources, including a technical career path specific mentoring program and an AI-enabled technical career coaching tool. Lastly, we care about continuous improvement, and we measure what matters. Based on data from our 2024 annual Voice of the Workforce survey, team member engagement was at 83%, reflecting 11 percentage points of growth over the last 6 years. One more result from this survey that I'm particularly happy to share was that 86% of respondents said, they are proud to work for HPE. And as Antonio mentioned earlier, HPE continues to receive external recognition for our culture based on how we invest in our team members, treat our customers, prioritize good governance support our communities and minimize environmental impact, a real reason to be proud to work for HPE. And nearly 90 days into my HPE journey, I can attest the culture is real, and HPE is more than deserving of these awards. I'm excited to say that this year, we're continuing to design programs and experiences that exemplify and deliver our people strategy. I look forward to sharing the 2025 accomplishments with you next year. And now I'm happy to turn it over to our Chief Sustainability Officer, Monica Batchelder, who will talk about our expanding portfolio of more sustainable and responsible IT solutions. Over to you, Monica.

Thanks, Stacy. And so great to have you join us this year. For this year's webcast, I want to highlight how we advance more sustainable and responsible technology solutions in alignment with the major forces shaping our industry. We're helping customers with their ambitions to scale AI responsibly, to decarbonize their IT estates across networking, hybrid cloud and AI and to build towards a lower carbon supply chain. And we're doing all of this while strengthening HPE's long-term differentiation and growth. Scaling AI responsibly means embedding sustainability and ethical considerations into how these systems are built, deployed and managed. At HPE, we work to address this through a number of strategic approaches, through transparency, efficiency and through tools and services that help our customers take action. We start with responsible use of technology. Our AI ethics principles are built into product development, sales, partnerships and operations and they are backed by our AI governance and enablement Hub, which brings to their frameworks, risk assessment tools and training that help teams operationalize those principles across the business. So when a team is working on an AI solution, we pair them with internal ethics reviewers to explore the use case, to identify potential risks and offer tailored recommendations quickly and collaboratively. And one of the things I'm most proud of is that this isn't theoretical. It's practical, action-oriented, and we're seeing the momentum. Last year, we saw a tenfold increase in internal engagement. Thanks to a streamlined high-trust process that's designed to enable progress, not slow it down. Our responsible AI is in just about ethics and governance, it's also about increasing efficiency. As AI workload scale, our consumption is becoming a critical constraint. This means sustainability efforts and ambitions are no longer a separate side conversation. It's right at the center of how our customers think about deploying AI. More and more, our customers are turning to HPE as a trusted partner to help them scale AI in ways that support their ambitions to minimize environmental impact and energy use while still getting value from their investments. Our approach starts with bringing together a more energy-efficient infrastructure, deep technical expertise and the actionable data customers need to make informed decisions, whether that's real-time power usage or emissions estimates. This holistic view is what keeps us ahead of the curve, helping customers manage both the environmental and the financial impact of AI's rising energy demand. That focus on increasing efficiency runs across our portfolio. From AI infrastructure to supercomputing, we design for increased sustainability at every layer. Our latest ProLiant Gen12 servers can deliver significant energy savings, and we've brought our energy and water-efficient direct liquid cooling to mainstream workloads, not just those [ run on ] supercomputers. We're also leading in performance, 11 of the top 20 most energy-efficient supercomputers in the world are HPE made-systems. That includes LUMI, 1 of the fastest, which runs entirely on renewable electricity, is a powerful example of how performance and sustainability can go hand in hand. But what sets us apart is more than just hardware. It's our ability to combine cutting-edge technology with data and insight. With solutions like the HPE Sustainability Insight Center and Energy & Emissions Reporting for GreenLake, which, by the way, now includes our new premium offering for high-performance workloads, we can offer customers the visibility they need to support their ambitions to help reduce energy use emissions and costs across their entire IT estate. And our services portfolio played a key role as well. With HPE Financial Services, we recover and refurbish used IT equipment, putting money back in our customers' pockets to help fund their transformations. And our IT sustainability consulting services help customers embed sustainability efforts into their AI strategies from the ground up, from workloads and data centers to infrastructure. The result is strategies that help balance performance, cost and resilience, and we're seeing strong traction here. This portfolio is now delivering meaningful revenue within our A&PS business. Now shifting very slightly. About 2/3 of HPE's total carbon footprint comes from the electricity our customers use to run the solutions I've just been talking about. And while that's mostly outside of our direct control, it's the most important area we focus on when it comes to our climate impact. Even with rising demand for compute-intensive technologies, especially those powering AI, we made real progress in 2024. We reduced our Scope 3 emissions by 13% year-over-year. That's driven primarily by cleaner energy grids, where our products are deployed and shifts in the types of products we sold. And across the full value chain, our carbon intensity dropped by 15%, and it shows that more sustainable innovation is possible even as demand grows. Now upstream, we work directly with our top production suppliers with a focus on improving data transparency helping them reduce energy use and supporting their transition to clean power, and it's paying off. Last year, emissions from our manufacturing suppliers dropped by 23% compared to the previous year, and they're down 35% since 2020. Most of that progress comes from increased use of renewable electricity in their operations, and that's a big shift in just a few years. We're also encouraging our suppliers to set their own climate goals. As of last year, 58% of our suppliers by spend have set or committed to set science-based targets within the next 2 years. Now while our operational footprint makes up just 2% of our total emissions, this is an area where we continue to make steady progress. In 2024, 58% of the electricity we source was renewable, which means we exceeded our 2025 target for the third consecutive year. And since 2020, we've cut our Scope 1 and 2 emissions by 34%, which puts us on track to meet our 70% reduction target by 2030. We're proud of that progress, and we know we have to keep pushing further. Looking ahead, we're focused on continuing to decarbonize our supply chain, expand access to cleaner, lower carbon energy and we're evolving our technology portfolio to help customers in their efforts to minimize the environmental footprint of their growing IT needs. So with that, I'll hand it back so we can open the conversation for Q&A. Aniket?

Wonderful. Thank you very much, Antonio, Stacy and Monica. That was comprehensive and a really, really valuable overview. I have several questions for you. So let me just get started. You mentioned AI a lot for obvious reasons. Can you just talk me through your reflections of using AI internally at HPE? What have you learned what's working, what isn't working? Just any perspective you can share on that would be great.

Well absolutely. And obviously, we want to take a leadership position in this place -- in this space. And I just came out of 3 days planning with my team. where we had a long discussion of how we accelerate the great progress that we have been driving over the last year or so, where we're tapping to the transformative power of AI especially with Agentic AI Generative AI. And I'll give you a few examples. Look, AI is making a tremendous positive impact in many aspects of our organization. For example, in finance, in finance operations, we are enabling the team to be even more efficient and data-driven. We have created a platform to automate and improve financial analysis, provide them real-time insights and coming down to the strategic recommendations. Additionally, we leverage AI-driven tools to craft investor communications like this today. And before perform sentiment analysis, enabling more informed and impactful engagement strategies. But there are other main examples, right, including the AI solution developed by a little team that enabled us to be more efficiently tackle complex regulatory requirements, we live in an environment where the regulatory demands are increasing every day, particularly if you think about the export controls, as well as our HPE operations, which leverages various AI use cases to enhance the customer experience, optimize the material location, warehouse space and forecast demand for each of our skills, imagine our portfolio is very, very large. But ultimately, HPE strategic implementation of AI across various departments is driving improvements in efficiencies, decision-making and also customer satisfaction. So in the last 3 days, we spent a lot of time with the team talking about this, and how as we go forward here in the second half of '25 and in '26, will lean in even more aggressively because we all understand the transformative impact AI can have to improve experience and reduce cost and be more efficient in everything we do.

Excellent. Just a follow-up to that, Antonio. We, at Jefferies are really focused on the impact of AI on the workforce. And just in general, the impact on labor markets. We just hosted actually a full summit on this with around 1,000 clients, just a few hours ago, talking through different perspectives on how AI will impact labor markets going forward. And as you know very well, there are lots of different perspectives on this topic. Right now, some people who think that AI will cause mass unemployment, others who think this is just sort of normal technology and will incorporate into our daily workflow. Can you just tell me what is your perspective on the piece at which AI will impact the labor market? And how are you thinking about AI adoption within your long-term workforce strategy.

Maybe I start, and I would like to pass it on to Stacy because, again, in these past 3 days, we talk about our workforce planning, talent development and use of technology. But in the end, look, our jobs are all changing, including my job, right, as a CEO. But 1 of the principles we have is that how we create a workforce that's savvy using these type of technologies. And 1 of the principle is how everyone gets an AI -- minor in AI. All of us have to be comfortable using these technologies. And then as we use them, as we adopt them, how we transform the way we work. And I believe we are within 3 years of making a radical transformational change in our workforce. And the question is how we adopt that in a way that we can transform the skill sets of our employees as we adopt these technologies. Maybe, Stacy, you want to add more about what we discussed with the team, and how you see it from a market perspective.

Yes. Thanks, Antonio, and I agree completely with you. AI is already changing the job market, and we'll continue to do so at a rapid pace. While AI will disrupt things, it also brings new opportunities. And it's really these opportunities that we need to embrace as it is so much about how we think, how we learn and then how we adapt. In the short term, trends anticipate that AI will mostly enhance jolts rather than replace workers. Over time, a balance will emerge as humans and AI work together in this transformed labor market. To navigate this transition, it's important that governments, businesses and workers prioritize reskilling, ethical AI use and then leveraging AI for positive outcomes. As Antonio mentioned, he is known for encouraging every team member to have a minor in AI. And at HPE team members are hungry to learn more about AI and how they can use it. At HPE, we're committed to approaching our AI journey thoughtfully and ethically while encouraging team members to actively acquire AI literacy and skills. And to support this vision, we've launched initiatives to foster education and collaboration, helping team members embrace AI as a tool for growth and innovation, again, while using it ethically. Additionally, as I mentioned before, we've introduced several AI learning resources and collaborative forms to empower our teams with knowledge and tools they need to thrive in this rapidly evolving landscape. I think we really need to treat AI as a thought partner versus a threat to replace jobs. It will help us unlearn boundaries and move past this is where we've always done it mentality and enable true more critical thinking. I'm genuinely excited about the opportunities AI presents to drive innovation, foster growth and create meaningful value in brand new ways.

Great. Super helpful. And thanks for that optimism, Stacy, that's really important. And Antonio, I love this minor in AI. I have a PhD, but I think I need to get a minor in AI myself. So yes, I can work on that now. But thank you. That's really helpful and very practical. I want to talk about corporate culture. And Antonio, 1 of the reasons I personally admire your leadership so much is your focus on corporate culture. It's not us being a good CEO for the purposes of having people be happy. Our work has shown that corporate culture is so clearly tied to financial performance in the long term. And so it makes sense to do this from a commercial perspective as well. Congratulations, by the way, on being ranked in the 100 Best Companies to Work For again. That study, we find very powerful at Jefferies. And our work has shown that over the long term, those companies truly do outperform their peers in the equity market. So that is a very important signal. Can you just talk to me please about your reflections on the 100 Best Companies to Work for list, and how -- and just more details about how you performed in the survey this year. And maybe if you could just add some thoughts about how you think companies on this list will engage with AI perhaps differently than companies that are not on this list. How do companies that are great places to work incorporate AI in perhaps ways that others don't?

Well, look, for me, these have been 1 principle that has stayed truth throughout my career not just HP and HPE, but even before then, which is basically how you do things really, really matter. And when I became CEO 7.5 years ago, I put a tremendous amount of focus and emphasis on our culture because in the end, it's everything. It's your brand, it's how employees see themselves when they come to work and it's is the value that we bring to our customers that ultimately generate shareholder value. And I have to say, it has been a rewarding experience, but it's never enough, right? It's never enough. Look, along the way, you get this recognition like HPE was once again included in the Fortune 100 Best Companies to Work With -- For for 4 years in a row, and we need to be proud about that. But the question is how we think about the future, how we see the future of our innovation, and how we bring that innovation to market, how we see the role of each of the employees play in the journey. And then ultimately, how they also achieve their own beliefs and needs in the context of where they want to be in 3, 5, 10 years out. When I became CEO, I was here for 23 years. 23 years before then, I never really thought that I will become the CEO. But ultimately, we have to create an environment where people can come and that environment needs to be an environment where they can learn, they can grow and contribute. And I believe companies that are great places to work like HPE are driving that type of culture. And I think AI is another element you have to include in the culture because those who disrupt themselves are the winners. And I think AI will force us to think very, very differently how we're going to work going forward. And if you involve the employees in our journey early on, allow them to be participative in the decision-making, how we use these technologies, ultimately together with now almost 70,000 employees because we just included the Juniper employees, we can shape the culture for what comes next. And HP and HPE always had great culture, but that culture needs to be constantly modernize. And I think AI will play a big role in how we shape the next journey, the next part of our journey with AI and also now with Juniper.

Excellent. Thanks for that, Antonio. And again, just to double underlying, this is just -- it's really impressive to hear a CEO talk so clearly about this and not just aspirationally, but very practically as well. So thank you for that. I want to switch gears a little bit and talk about supply chains. The Living Progress report mentions that you're 1 of the first companies in the IT industry to set supply chain SBTI targets, this is just a science-based targets initiative. Can you talk about this? And can you talk about if you got any pushback from your suppliers when you start putting some of these burdens on them.

So Monica, you want to take that? Because obviously, Monica works with our team and establishing these targets. And the only thing I will say, look, I always push the team and the team embraces our challenge with the spirit to be better at everything we do. And the reality is that you get what you measure, but we want to achieve these goals the right way. And therefore, having a process where you have science-based targets that you can constantly measure progress against to and include the entire ecosystem that comes with it is super, super important. So maybe Monica, you talk more about how we're approaching this [indiscernible] execution practical perspective.

SP109230416 Yes, absolutely. To your point, it's critical that we set these ambitious goals, but it's equally important that we bring our supply chain and our value chain along with us. So HPE has been a leader in setting credible science-based targets across our value chain. As you mentioned, we were 1 of the first global IT companies to set supply chain science-based targets back in 2015. And then in 2022, we were actually among the first companies to have a net zero target approved under the science-based target initiative net zero standard. That essentially reflects the best practices in setting climate goals, and it's something we're really proud of. As I mentioned earlier, minimizing upstream emissions is a priority for us. About 1/3 of HPE's total carbon footprint comes from our supply chain. And reducing that isn't just an HPE's challenge, it's an industry-wide issue. So 1 ongoing hurdle is the limited availability of renewable energy in some of the regions where our suppliers operate. But we are starting to see encouraging improvements on that front with more and more suppliers finding pathways to cleaner power. On your question whether we got pushback, not to the degree you might expect. So yes, there are challenges. This kind of transformation does require long-term investment and coordination. But I think broadly speaking, our suppliers want to move in the same direction. They see this as a shared opportunity, and we support them with tools and better data visibility and resources that help them streamline reporting and pinpoint emissions hotspots. And as I mentioned, that work is paying off. We saw a 23% drop in emissions from our production suppliers year-over-year, and that's mostly thanks to greater adoption of renewable electricity, especially among semiconductor manufacturers. So while the work is complex, I'd say we are encouraged by the level of collaboration and commitment that we're seeing across our supply chain, and we're going to keep building on that momentum.

Great. Monica, thank you. That was very clear and helpful. Final question for me is actually goes back to the labor question, and workforce question. I noticed that in your nonfinancial materiality matrix, you include talent recruitment development and retention as both high impact to society and high impact to your enterprise value. Can you just talk a little bit about that finding?

Yes. Monica, do you want to take that because obviously, that's a disclosure we agreed to include, right, in our reports.

Yes, absolutely. So our nonfinancial materiality assessment isn't just about meeting disclosure expectations. It's really about making sure we're integrating relevant sustainability topics into HPE's overall business strategy. So our most recent update was completed in May of last year with support from a third party, and they helped us engage a broad range of stakeholders in that process, investors, suppliers, customers, in order to get a clearer picture of where they see the greatest risks and impacts and expectations. And through that assessment, talent, specifically, as you mentioned, recruitment, development, retention, it emerged as a top priority, both to business and society. And I think that's because, as Stacy mentioned, it really reflects the importance of having the right capabilities to keep up with the fast-changing business needs while also making sure we're taking care of our people and supporting the communities around us. At the end of the day, I think our stakeholders want HPE to be a company that treats people well. That's part of our DNA, as Stacy and Antonio has spoken to. And it's something we're really proud to see recognized externally as well, including being named 1 of America's Most Just Companies for the second year in a row earlier this year.

Excellent. Okay.

This is not -- what I would say, it's not just theoretical. Look, everything we do, we do it with a purpose, and I always align it to our strategy. The way I come from [ that is ] engineer. Talent drives innovation, but it's not just innovation and product innovation across the entire enterprise and ultimately drives also customer success and long-term resilience because we are as good as the innovation of the people we have in the company. And that's why we focus on that, fostering [indiscernible] high-performance culture. And Stacy talked about this, in the end, you have to perform and you have to win. But you have to do it with a clear purpose, aligning to share goals, holding ourselves accountable and through transparent leadership. That's the key. And the transparent leadership is also disclosing how we are doing against our goals. And that's also the way we pay compensate along the way. And that's why we tie executive compensation to the talent outcomes such as retention and engagement, it's super important. And that ensures you're not just talking about the importance of talent, we are actually embracing it into how we operate, and how we live.

Antonio, thank you for that. The combination of your leadership, the first culture the technological sort of frontier at which you operate the organizational structure and governance. It's really a unique combination. And Antonio, I must just say to you as a CEO, you speaking openly about these topics so clearly and from a commercial perspective, when, frankly, a lot of your peers are not anymore also is worth noting. And it's something that I know, my clients know this, and it's just something that we should all listen to and appreciate, which is that sustainability is a commercial differentiator for companies and for leadership. And it's just very refreshing to hear from you and your team on these topics. So thank you for that. That brings us to the end. Maybe I'll just ask the 3 of you if there are any final comments that you have, final prospect that you want to share with investors today before we let you go?

Start with Monica. Any final comments for you, Monica?

No, I think you nailed it. In a time where people are sort of walking back their commitments here, we're doubling down because we understand it's critical to our business success. It's what our customers are looking for, what our investors are looking for. So we'll continue to drive towards our goals.

Stacy, anything on your side?

Yes. What I would add is, again, it's just been 3 months in, but the culture was 1 of the main attractions of what brought me here. So I'm thrilled and couldn't be happier than I am to actually now be a part of embracing it, building it, fostering it. So yes, very happy to be here.

So again, Stacy, welcome to our company. And Aniket, thank you for the kind words. And thank you for giving us the platform to speak to our investors and prospect investors about what we do and why this is so important. HPE has been going through a significant transformation journey. I'm proud of the work we have done, but I'm more excited about what comes next. And obviously, we continue to transform ourself across the portfolio, across our processes, across our -- including our culture. So I think HPE is uniquely positioned to really ride the wave of what comes next. And that's our strategy is to deliver against the market opportunity we do -- we see in a very sustainable way that will drive long-term shareholder value as we are now showing in the last couple of years.

Well, Antonio, thank you very much for that. And again, thanks to all 3 of you for the work that you do and for sharing these perspectives on this platform. We look forward to working with you. For folks on the line if you want to be in dialogue with HPE more closely, please just let us know, and we're happy to introduce you to this team. And we hope, Antonio, you and your colleagues work with us in the future in as many ways as possible because we learn a lot from you guys. So thank you very much for your time. Thank you to our clients for joining, and we look forward to the next one.

Thank you.

Thanks. Buh-bye.