Hewlett Packard Enterprise Company

Strategic execution · Merger acquisition and divestiture risks

Any failure by us to identify, manage and complete acquisitions and subsequent integrations, divestitures and other significant transactions successfully could harm our financial results, business and prospects. We may not successfully combine product or service offerings or fully realize all of the anticipated benefits of any particular business combination and investment transaction.

Market position and competition · Competitive pressure and market share loss

We operate in an intensely competitive industry, and competitive pressures could harm our business and financial performance. We encounter aggressive competition from numerous and varied competitors in all areas of our business. We have a large portfolio of products and services and must allocate our financial, personnel, and other resources across all of our products and services while competing with companies that have smaller portfolios or specialize in one or more of our product or service lines.

Market position and competition · Market cyclicality and demand volatility

The revenue and profitability of our operations have historically varied, which makes our future financial results less predictable. Our revenue depends on the overall demand for our products and services, which is difficult to accurately predict, varies from time to time, and may be uneven across our portfolio of offerings.

Digital transformation and innovation · Artificial intelligence and automation

Issues in the development and use of artificial intelligence may result in reputational harm or liability. AI algorithms and training methodologies may be flawed. Ineffective or inadequate AI development or deployment practices could result in incidents that impair the acceptance of AI solutions or cause harm to individuals or society.

Cybersecurity and data protection · Data breaches and cyber attacks

System security risks, data protection incidents, cyberattacks and systems integration issues could disrupt our internal operations or IT services provided to customers. As a leading technology firm, we are exposed to attacks from criminals, nation state actors, malicious insiders, and activist hackers. Malicious parties may compromise our manufacturing supply chain and embed malicious software or hardware in our products, thereby compromising our customers.

Information management · Technology vendor dependence

Our products and services depend in part on intellectual property and technology licensed from third parties. These third-party software components may become obsolete, defective, or incompatible with future versions of our products, or our relationship with the third party may deteriorate or cease.

Industry regulation · Regulatory compliance and changes

Our business is subject to various federal, state, local and foreign laws and regulations that could result in costs or other sanctions that adversely affect our business and results of operations. We face increasing complexity related to product design, safety and compliance, the use of regulated, hazardous, and scarce materials, and environmental regulations.

Legal and litigation · Intellectual property disputes

Third-party claims of intellectual property infringement, including patent infringement, are commonplace in our industry and successful third-party claims may limit or disrupt our ability to sell our products and services. If we cannot license, or replace, allegedly infringed intellectual property on reasonable terms, our operations could be adversely affected.

Geopolitical and trade · International conflicts and tensions

Due to the international nature of our business, political or economic changes and the laws and regulatory regimes applying to international transactions could harm our future revenue, costs and expenses, and financial condition. Sales outside the United States constituted approximately 64% of our net revenue in fiscal 2023. The ongoing conflict between Russia and Ukraine and the trade sanctions imposed have negatively impacted business and financial performance in that region.

Natural and catastrophic events · Climate change and environmental impact

Risks arising from climate change and the transition to a lower-carbon economy may impact our business. Climate change serves as a risk multiplier that could increase both the frequency and severity of natural disasters. Our corporate headquarters is located in Spring, Texas, which suffers from floods, hurricanes, and other extreme weather, and a portion of our research and development activities are located in California, which suffers from drought conditions and catastrophic wildfires.

Natural and catastrophic events · Natural disasters and extreme weather

Our worldwide operations and supply chain could be disrupted by natural or human-induced disasters including earthquakes, tsunamis, floods, hurricanes, fires, and other extreme weather conditions. The manufacture of product components and critical operations are concentrated in certain geographic locations including the United States, Puerto Rico, Czech Republic, Mexico, China, Malaysia, Taiwan, South Korea, and Singapore.

Stakeholder relations · Supplier and vendor relationships

If we fail to manage the distribution of our products and services properly, our business and financial performance could suffer. Our financial results could be materially adversely affected due to distribution channel conflicts or if the financial conditions of our channel partners were to weaken.

Reputation and brand · Esg environmental social governance performance

Failure to meet ESG expectations or standards or achieve our ESG goals could adversely affect our business, results of operations, financial condition, or stock price. Our failure or perceived failure to achieve our ESG goals, maintain ESG practices, or comply with emerging ESG regulations could harm our reputation and adversely impact our ability to attract and retain customers and talent.

International and currency · Transfer pricing and taxation

Unanticipated changes in our tax provisions, the adoption of new tax legislation or exposure to additional tax liabilities could affect our financial performance. We are subject to income and other taxes in the United States and numerous foreign jurisdictions. Tax authorities may disagree with our intercompany charges and cross-jurisdictional transfer pricing.

International and currency · Foreign exchange and currency exposure

We are exposed to fluctuations in foreign currency exchange rates. Currencies other than the U.S. dollar, including the euro, the Japanese yen, and British pound have, from time to time, adversely impacted, and could in the future, have an adverse impact on our results as expressed in U.S. dollars.

Capital structure and performance · Credit rating and cost of capital

Adverse developments affecting our liquidity, capital position, borrowing costs, and access to capital markets could adversely impact our business, financial condition, and results of operations. Despite our investment grade credit ratings, any future downgrades could increase the cost of borrowing under any indebtedness we may incur.

Credit and liquidity · Debt service and covenant compliance

Our debt obligations may adversely affect our business and our ability to meet our obligations and pay dividends. This collective amount of debt could have important adverse consequences to us and our investors, including requiring a substantial portion of our cash flow from operations to make principal and interest payments.

Core operations · Quality control and product defects

If we cannot continue to produce quality products and services, our reputation, business, and financial performance may suffer. The products, services, and solutions that we offer are complex, and our regular testing and quality control efforts may not be effective in controlling or detecting all quality issues or errors.

Human capital and workforce · Talent acquisition and retention

In order to be successful, we must attract, retain, train, motivate, develop, and transition key employees, and failure to do so could seriously harm us. As competition for highly skilled employees in our industry has grown increasingly intense, we have experienced higher than anticipated levels of employee attrition, which has resulted in increased costs to hire new employees.

Human capital and workforce · Talent acquisition and retention

In order to be successful, we must attract, retain, train, motivate, develop, and transition key employees, and failure to do so could seriously harm us... As competition for highly skilled employees in our industry has grown increasingly intense, we have experienced, and may continue to experience, higher than anticipated levels of employee attrition.