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Hewlett Packard Enterprise
Tuesday, June 04, 2024, 5:00 PM Eastern
transitioning through that throughout the quarter. And if you look at the market and where it's at
right now, I'd say that our channel inventory right now is in really good shape. And we did
mention in the guide that we do expect a modest sequential improvement in networking in the
back-half of the year.
Antonio Neri
Yes. And I will say in addition to what Marie said, what I'm really excited is that we see
interesting areas of growth happening now. If you go back to Mobile World Congress and you
see even announcements like we made yesterday, the enterprise private 5G is picking up
significant momentum. Of my almost 40 meetings I had in Barcelona, more than half were
about enterprise private 5G. And, so yesterday, we announced the most complete enterprise
private 5G on the back of the Athonet acquisition.
Jeff Kvaal
Thanks very much Mary, Gary...
Operator
The next question is from Toni Sacconaghi with Bernstein. Please go ahead.
Toni Sacconaghi
Yes, good afternoon and thank you for taking my question. I just wanted to follow-up on the
guidance. You talked about enthusiasm for the second half, but you beat revenues this quarter
relative to your expectations by $400 million and by guiding up an additional percent, you're
actually only guiding up the full year by $300 million. So, I'm wondering, are you just being
conservative, given the commentary around enthusiasm and forces at work in the second half or
how do we reconcile that discrepancy? And then also just on AI servers for the second half, I
think you talked about 6 weeks to 12 weeks lead times. So, if you have $3 billion in backlog and
lead times for 6 weeks to 12 weeks, why can't you deliver $3 billion in AI systems like next
quarter or certainly in the second half? Thank you.
Marie Myers
Yes. Hi Toni, good afternoon. So, this is Marie. I'm going to take the first question just on the
guide. So let me just clarify the guidance in terms of how we put it together. So, we raised the
guide from…to 1.85 to 1.95, and that actually was the pass-through on that 19% stake in H3C.
So, we actually put $0.03 related to the 19% stake. What I did point to though, Toni, is I pointed
to the higher end of the range, so that's really what's giving us confidence based on the
increase that we made on revenue. So, you're seeing that higher top-line and then also the
confidence I got around just the cost discipline. So you've seen that just in the last couple of
quarters where we've had a really strong scrutiny and focus around OPEX. And plus, we did
have some favorability in OI&E this quarter, that albeit, that was actually just a one-timer. So, I
just want to make that point of clarification. So, overall, Toni, keeping the guide at 1.85 to 1.95,
but really pointing to the higher end of the guide in terms of just the confidence that you
articulated. So, I'll turn it over to Antonio to cover the second question.
Antonio Neri
Yes. Toni, I think there is an opportunity to potentially exceed that. I think the limiting factor is
not the supply, to be honest with you, it's the availability of data center space. I made this
comment in Q1, if you recall, data center space and power and cooling. And so, some…we are
working with the customers to time everything correctly, 6 to 12 weeks, think about it, maybe
less than a quarter, but then you have to go and install it. And there is a nice percentage of our
deals in generative AI, which are all actually GreenLake. And so, while we can recognize the