Good afternoon, and welcome to the First Quarter Fiscal 2025 Hewlett Packard Enterprise earnings conference call. At this time, all participants will be in a listen-only mode. We will be facilitating a question-and-answer session towards the end of the conference. Should you need assistance during the call, please signal a conference specialist by pressing the star key followed by zero. As a reminder, this conference is being recorded for replay purposes. I would now like to turn the presentation over to your host for today's call, Paul Glaser, Head of Investor Relations. Please go ahead, sir. Good afternoon. I am Paul Glaser, head of investor relations for Hewlett Packard Enterprise. I would like to welcome you to our fiscal 2025 first quarter earnings conference call with Antonio Neri, HPE's President and Chief Executive Officer, and Marie Myers, HPE's Chief Financial Officer. Before handing the call to Antonio, let me remind you that this call is being webcast. A replay of the webcast will be available shortly after the call concludes. We have posted the press release and the slide presentation accompanying the release on our HPE investor relations webpage. Elements of the financial information referenced on this call are forward-looking and are based on our best view of the world and our business as we see them today. HPE assumes no obligation and does not intend to update any such forward-looking statements. We also note that the financial information discussed on this call reflects estimates based on information available at this time and could differ materially from the amounts ultimately reported in HPE's quarterly report on Form 10-Q for the fiscal quarter ended January 31st, 2025. For more detailed information, please see the disclaimers on the earnings materials relating to forward-looking statements that involve risks, uncertainties, and assumptions. Please refer to HPE's filings with the SEC for a discussion of these risks. For financial information we have expressed on a non-GAAP basis, we have provided reconciliations to the comparable GAAP information on our website. Please refer to the tables and slide presentation accompanying today's earnings release on our website for details. Throughout this conference call, all revenue growth rates, unless noted otherwise, are presented on a year-over-year basis and adjusted to exclude the impact of currency. Finally, Antonio and Marie will reference our earnings presentation in their prepared comments. With that, let me turn it over to Antonio. Thank you, Paul. Good afternoon, everyone. Before I share my comments on our Q1 performance, I would like to start by addressing the recent decision of the Department of Justice to file a lawsuit seeking to block a proposed acquisition of Juniper Networks. The DOJ's analysis of the market is fundamentally flawed. We strongly believe this transaction will positively change the dynamics in the networking market by enhancing competition. HPE and Juniper remain fully committed to the transaction, which we expect will deliver at least $450 million in gross annual run rate synergies to shareholders within three years of the deal closing. The court has set a trial date of July 9th. We believe we have a compelling case and expect to be able to close the transaction before the end of fiscal 2025. As you know, the U.S. administration enacted tariffs on imports from Mexico and Canada, with increased tariffs on imports from China beginning March 4th. In anticipation of this decision, we have been evaluating numerous scenarios and mitigation strategies since December to assess the potential net impact. We intend to leverage our global supply chain to mitigate aspects of the expected impact, with pricing adjustments also expected. Pending further announcements from the U.S. administration, our outlook for the balance of the year reflects our best estimate of the net impact from this tariff policy. Marie will provide more details shortly. Turning to our Q1 performance, we delivered against our commitments for the quarter, including achieving strong double-digit year-over-year revenue growth. However, we could have executed better. While our Q1 operating profit outlook anticipated increased pressure on our server operating margins, three factors impacted our profitability more than expected. Near the end of the quarter, we saw that our traditional server pricing did not adequately account for the valuation of our inventory, which resulted in incremental server margin pressure. Higher discounts due to aggressive pricing competition in the market compounded this issue. And finally, our server margins were further pressured by the higher-than-normal AI inventory caused by the rapid transition of demand to next-generation GPUs and related components. We have already implemented aggressive actions to address these issues and are already seeing the positive effects of doing so. However, we do expect to see continued pressure over the next one to two quarters before we realize the full benefit of these measures, including expected higher AI revenue conversion. Looking ahead, we see additional opportunities to take incremental corporate cost actions to further strengthen our financial profile. We plan to reduce our employee base 5% over the next 12-18 months through the reduction of approximately 2,500 positions and expected attrition. Doing so will better align our cost structure to our business mix and long-term strategy. These are not easy decisions to make, as they directly affect the life of our team members. We will treat all those transitions with the highest level of care and compassion. I will touch on a few highlights from the quarter, and Marie will go through each segment in greater financial detail. At the company level, we deliver revenue and dilute net earnings per share consistent with our outlook. Q1 revenue growth of 17%, a near record, was in line with our mid-teens growth expectations. This was the fourth consecutive quarter of improved year-over-year top-line growth, driven by our server business, which grew revenue 30% year-over-year, and Hybrid Cloud, which was up 11% year-over-year. Non-GAAP operating profit dollars in the quarter were flat year-over-year. That resulted in non-GAAP diluted net earnings per share of $0.49, consistent with our Q1 outlook range. We are pleased by the performance of Intelligent Edge, which recorded 2% quarter-over-quarter revenue growth, the third consecutive quarter of sequential revenue growth for the segment. With the market continuing its positive path to recovery, we delivered double-digit year-over-year orders growth across all key geographies and key products, including campus switching. During the quarter, HPE Aruba Networking attracted new large enterprise logos, underscoring the confidence of our customers in our strategy, product portfolio, and roadmap. hybrid grew 11% year-over-year, although down sequentially, following an exceptional Q4. The growth shows our storage and GreenLake cloud product strategies are working. Demand for our Alletra Storage MP was up triple digits year-over-year and now represents greater than 50% of our IP block product orders. GreenLake remains a key differentiator, enabling HPE to capture new enterprise Hybrid Cloud and AI workloads and data. We finished Q1 with more than 41,000 enterprises using HPE GreenLake cloud. AI surpassed $2 billion for the first time, up 46% year-over-year. In AI, we continue to see strong demand from model builders and service providers. We booked $1.6 billion in new AI system orders in the quarter, bringing our cumulative AI system orders to $8.3 billion. The Blackwell GPU generation of products represented approximately 70% of our new ordering tech in Q1. We exited the quarter with $3.1 billion in AI systems backlog, up 29% quarter-over-quarter, and our pipeline remains multiples of our backlog. On the revenue front, we delivered $900 million in AI systems revenue in Q1. As we have said before, the AI systems business tends to be lumpy as large deals take time to convert. We expect significantly higher AI revenue conversion in the second half of 2025, driven by the transition to Blackwell GPUs. We're proud to have achieved a new milestone three weeks ago when we announced the shipment of our first NVIDIA GB200 systems. In the enterprise AI market, we saw an accelerated adoption of a variety of AI models, including agentic AI approaches in specific market verticals and workflows. In Q1, our enterprise AI orders increased 40% year-over-year, driven by higher conversion from the proof-of-concept phase. An example is KDDI, who in partnership with HPE designed and implemented a platform which will be used both internally and externally to develop, train, and tune Japanese generative AI models for domain-specific use cases. Our enterprise AI pipeline continued to grow, with customers continuing to validate their use cases on our private cloud AI solution powered by GreenLake cloud. We see broad and increased interest from sovereign customers globally. Sovereign customers are deploying both AI systems for the development of sovereign generative AI large language models and supercomputing systems for simulation and modeling using AI. Recently, the Leibniz Supercomputer Center at the Bavarian Academy of Sciences and Humanities selected HPE to build their new supercomputer called Blue Lion. It features HPE innovations, including our industry-first 100% direct liquid cooling infrastructure with our Slingshot networking fabric. Lastly, HPE and Accenture are collaborating on a new agentic AI solution for procurement powered by Accenture AI Refinery with our private cloud AI offering. This new solution will be deployed across HPE's category and sourcing strategies, spend management, strategic relationship analysis, and contract obligation management. Shifting to the innovation front, I am proud of our new and differentiated products and services we continue to bring to market to fuel the success of our customers and growth of our business. For example, in Intelligent Edge, we announced new vertical solutions for retailers to accelerate security-first AI-driven networks. These solutions provide Intelligent Edge processing for IoT data in real time, improving security, operational efficiencies, and customer experiences for retailers. In Hybrid Cloud, last November, we introduced a new KVM-based HPE VM Essentials Software offerings. Hybrid Cloud orchestration and on-premises infrastructure virtualizations are tremendous growth opportunities for HPE. Our new VM Essentials enables customers to deploy a more cost-effective virtualization solution than VMware, with full Hybrid Cloud orchestration. Since its launch, we have had hundreds of customers in trials, demonstrating strong market interest and excitement. We are in the process of integrating our VM Essentials into our private cloud offerings. We also continue to offer it as a standalone software on HPE and multi-vendor infrastructure. In storage, we are very pleased with our triple-digit year-over-year orders growth in our Alletra MP portfolio. This validates our strategy to provide customers a disaggregated data infrastructure with subscription-based Hybrid Cloud-native services. Alletra MP now offers block and fast objects supporting a variety of data workloads, including AI. This reduces customers' need for multiple infrastructure purchases and management. Finally, in our server business, two weeks ago, we launched a new ProLiant Gen12 server platform with our next-generation iLO Quantum- Resistant Security Enclave and direct liquid cooling support. This latest generation offers the most sustainable and secure cost-per-computing core performance. One Gen12 server can replace up to 26 Gen9 servers and up to 14 Gen10 servers. This reduces power consumption by at least 65%. In closing, in Q1, we saw continued strong demand across the portfolio, driven by our new impressive innovations and customers' continued enthusiasm for our offerings. However, we could have executed better, particularly in our server segment. HPE has a proven execution track record, and we are committed to doing what is needed. We have already taken steps to improve our execution performance, and we expect our efforts will contribute to improvements in the back half of fiscal year 2025. We have made great strides at HPE in accelerating our strategy and aligning our product portfolio to market inflection points and customer needs. We will continue to make bold moves to enhance our portfolio and attract new customers in ways that accelerate value for our shareholders. Now, let me turn the call over to Marie, who will provide more details on the quarter. Marie. Thank you, Antonio, and good afternoon, everyone. During the first quarter of fiscal 2025, we saw increased demand for servers, storage, and networking products. Our revenue grew 17% compared to last year, marking the fourth straight quarter of accelerated revenue growth. We met our outlook, achieving double-digit growth in server and Hybrid Cloud. Intelligent Edge also performed better than we expected and is set to grow further in this quarter. We reported Non-GAAP diluted net earnings per share of $0.49, aligning with our outlook, showing strong profitability in Hybrid Cloud and Intelligent Edge. However, we faced some challenges in the service segment, which we are addressing. Here's a closer look at the details of the quarter. Our first quarter revenue was $7.9 billion, up 17% year-over-year, but down 7% quarter-over-quarter, reflecting typical seasonality and lower AI systems revenue. Our annual recurring revenue was $2.1 billion, up 46% year-over-year, driven by AI and Intelligent Edge. Non-GAAP gross margin was 29.4%, down 680 basis points year-over-year and 150 basis points quarter-over-quarter. On a year-over-year basis, gross margin was impacted by a higher mix of server revenue and lower contribution from Intelligent Edge. And we faced challenges in server that pressured margin both year-over-year and sequentially. Non-GAAP operating margin was 9.9%, down 160 basis points year-over-year and 120 basis points sequentially, primarily due to headwinds in gross margin. Operating margin partially benefited from a 9% decrease in non-GAAP operating expenses, reflecting lower variable compensation and continued cost discipline. In my first year as CFO, we implemented cost-saving measures by targeting discretionary spending, reducing non-GAAP operating expenses from 24% in fiscal 2023 to 22% of revenue in fiscal 2024. In Q1, these actions lowered operating expenses to a record low of 19% of revenue. This year, we aim to target more structural cost savings. Free cash flow was - $877 million, in line with normal seasonal patterns. GAAP diluted net earnings per share was $0.44, above guidance of $0.31-$0.36, due to a gain recognized on the sale of a communications technology group, or CTG, and lower than expected Juniper-related costs. Non-GAAP diluted net earnings per share of $0.49 was within our guided range of $0.47-$0.52. Non-GAAP diluted net earnings per share excludes $57 million in net costs primarily related to stock-based compensation expense, H3C divestiture-related severance costs, acquisition, disposition, and other charges, and amortization of intangible assets, primarily offset by the gain recognized on the sale of CTG. Now, let's break down the segment results. Server revenue was $4.3 billion, up 30% year-over-year. Revenue fell sequentially, primarily due to the timing of AI systems deals. In traditional compute, our Gen11 value proposition resonated with customers, contributing to year-over-year AUP growth. Gen11 accounts for the majority of our traditional compute sales, and we expect to begin shipping the new Gen12 portfolio later this year. In AI systems, we signed $1.6 billion in net orders and added enterprise and sovereign customers, although most demand is still from model builders. We recognize roughly $900 million of revenue, up from about $400 million last year, but down sequentially as expected due to chip availability and customer readiness. We expect these factors will continue to affect our AI systems business. Server operating margin was well below expectations at 8.1%. While our guidance of 10%-11% assumed impact from the GPU transition and competitive pricing, market pressures were greater than expected, and execution issues further impacted operating margin. We have made improvements and taken additional steps to reduce costs, expecting server operating margin to be around 10% by Q4. Let me provide further details. In traditional compute, we faced challenges in pricing strategies and discounting. We now have a more rigorous discount framework with increased deal mix scrutiny. These changes will take time to impact our P&L as we work through our backlog. In addition, we expect pricing adjustments may negatively impact top-line growth in the near term. In AI, our margins were affected by the transition to new GPUs and managing older GPU inventory. We believe this is an industry-wide challenge that will improve as supply and demand align. We have implemented actions to reduce inventory. Now on to Intelligent Edge, which exceeded our expectations and is ready for growth in Q2. Revenue was $1.1 billion, up 2% quarter-over-quarter, ahead of guidance of flattish growth. Revenue was down 4% year-over-year as we moved past post-pandemic-related backlog. We saw double-digit year-over-year growth in SASE and data center switching, with notable order growth for wireless LAN and campus switching. Despite some pressure from weaker federal spending, we grew orders double digits year-over-year in all major regions. We expect the business to return to year-over-year growth in Q2, given order trends and normalized channel inventory. Operating margin was 27.4%, down 200 basis points year-over-year, but up 300 basis points quarter-over-quarter due to higher revenue and cost controls. Moving to Hybrid Cloud, we saw broad-based strength, growing revenue 11% year-over-year to $1.4 billion, in line with our guidance. Sequentially, the business declined 12%. Our HPE Alletra MP platform is ramping nicely, adding over 150 new logos this quarter. HPE Alletra MP's higher deferred revenue will benefit the long-term P&L, but impacts near-term growth and margin. The transition to Alletra MP pulls through more owned IP, which benefits profit. HPE Private Cloud AI continues to attract customers with fast deployment and competitive ROI. We continue to grow our pipeline with opportunities spanning regions and sectors. During the quarter, we received orders for small, medium, and large configurations, with use cases varying from inferencing and fine-tuning to manufacturing and life sciences. Hybrid Cloud operating margin was 7%, up 300 basis points year-over-year, primarily due to cost controls, but down 80 basis points sequentially. Lastly, financial services. Our financial services business generated $873 million of revenue, up 2% year-over-year and flat quarter-over-quarter. Financing volumes decreased 14% year-over-year to $1.2 billion after a record high last quarter. Our Q1 loss ratio was 0.6%, and return on equity totaled 16.4%. Operating margin was solid at 9.4%, up 90 basis points year-over-year and up 20 basis points quarter-over-quarter. Moving to cash flow and capital allocation. Reflecting normal seasonality, we consumed $390 million of operating cash flow in the quarter, and free cash flow was an outflow of $877 million. Inventory totaled $8.6 billion at the end of the period, up $767 million quarter-over-quarter, primarily to support AI systems orders signed during the quarter. We are focused on reducing inventory levels to normal ranges. Q1 cash conversion cycle was positive five days, up 17 days from last quarter, primarily due to an increase in the days of inventory to support purchases for AI systems, partially offset by an increase in days payable due to timing of vendor payments. We returned $171 million through dividends and $52 million via share repurchases to common shareholders, respectively. Overall, the quarter was within our guidance, but given the performance in server, we took immediate actions to limit hiring, travel, and discretionary expenses. We also decided to take further actions in the form of workforce reductions and attrition management to better align our cost structure with the current business needs. This tough decision will help streamline our organization, improve productivity, and speed up decision-making. We will support affected team members with resources and assistance during this transition. We expect to achieve at least $350 million in gross savings by fiscal 2027, with about 20% of the savings achieved by the end of this year. The timing of reductions will vary by geography. Total cash charges will be around $350 million through fiscal 2026. These savings are in addition to the synergies we will realize after closing the Juniper acquisition. Before I get into the details of our guidance, let me first provide some context. Recent tariff announcements have created uncertainty for our industry, primarily affecting our server business. We are working on plans to mitigate these impacts through supply chain measures and pricing actions. Through these efforts, we expect to mitigate to a significant degree the impact on the second half of the year and, to a lesser extent, the impact on Q2, as it takes time to implement mitigations. The guidance we are providing today reflects our best estimate of the impacts of the March 4 tariffs and our mitigation plans. Also, because we now expect to close Juniper by the end of this fiscal year, we will provide full-year standalone guidance. For fiscal 2025, we expect constant currency revenue growth of 7%- 11%, with revenue weighted towards the second half. We estimate currency impacts of around 150 basis points. By segment, we expect Intelligent Edge will grow sequentially through the year, equating to year-over-year growth in the mid-single digits. For Hybrid Cloud, revenue is expected to grow in the high single digits. And for server, we anticipate revenue will slow to low double-digit growth, with AI systems revenue ramping meaningfully in the back half. In addition, we expect to see more pronounced server seasonality in Q3, given the expected timing of AI shipments. Our outlook assumes non-GAAP gross margin will be below 30% for the full year, with quarterly rates impacted by the timing of AI systems deals. We expect full-year non-GAAP operating margin of around 9% at the midpoint, but we expect to exit the year approaching normal ranges. By segment, we expect Hybrid Cloud operating margin in the mid to high single digits and Intelligent Edge to remain in the mid-20% range. Server is expected to improve in the back half, exiting the year with operating margin around 10%. We expect OI&E will be a net expense of approximately $15 million. We are guiding GAAP diluted net earnings per share between $1.15 and $1.35, and our non-GAAP diluted net earnings per share between $1.70 and $1.90, weighted to the second half. Non-GAAP diluted net earnings per share outlook assumes Q4 will account for a higher percentage of our annual non-GAAP net earnings compared to recent periods. We expect free cash flow will be approximately $1 billion, including operating profit of roughly $3 billion at the midpoint, negative working capital, and the restructuring charges related to the cost savings we announced today. For Q2, we expect revenue will be between $7.2 billion and $7.6 billion. This range includes a return to year-over-year growth in Intelligent Edge, with operating margin in the mid-20% range. For Hybrid Cloud, we expect revenue will be down slightly sequentially, with operating margin in the mid-single digits, reflecting seasonality. For server, we forecast a sequential decline in the mid to high single digits, including a modest decline in AI systems revenue. Q2 will be the trough for server operating margin in the mid-single digits due to both the timing of tariff implementation and the corrective actions we are taking in the business. We expect GAAP diluted net earnings per share to be between $0.08 and $0.14, and Non-GAAP diluted net earnings per share between $0.28 and $0.34. Lower earnings combined with investments in our AI business will be a headwind to Q2 free cash flow, resulting in abnormal seasonality. As such, we expect Q2 will be our weakest cash generation quarter during 2025. In summary, we are confident in our measures to improve our server business. In 2025, we will focus on right-sizing our cost structure while leveraging AI technologies to enhance our processes, aiming to make HPE more agile and positioned for the long term. We remain a leader in innovation, encouraged by the strong demand for products like HPE Alletra MP and Private Cloud AI. The networking market is recovering, and our business is performing well. We look forward to closing the Juniper acquisition later this year. With that, I'll open the floor for questions. We will now begin the question and answer session. To ask a question, you may press star, then one on your touch-tone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. And to withdraw your question, please press star, then two. In the interest of time, we request that you please ask only one question. At this time, we will pause momentarily to assemble our roster. And your first question today will come from Meta Marshall with Morgan Stanley. Please go ahead. Great. Thanks. I appreciate the question. Marie, it sounds like you anticipated some of the pricing pressure kind of on the GPU market when you gave the original 10%-11% operating margin guidance. But I just wanted to get a sense of the 250 basis points shortfall. How much of that was CPU versus kind of pricing inventory, additional pricing and inventory on GPUs? Thank you. Yeah. Hi, Meta. And thanks for your question. I think you're referring to Q1, so I'm going to answer you in terms of the Q1 actuals. So, as you know, in our original guide, we actually had 10%-11% for server, and that did actually include some of the pressures that Antonio mentioned in his prepared remarks in terms of the AI GPU transitions. However, the magnitude of that impact was greater than we expected. What I would say was unanticipated was the pricing challenges that we experienced in traditional compute. That was not in our Q1 guide. Hopefully, that gives you some context there, Meta. Yeah. To your next question. Thank you. Your next question today will come from Aaron Rakers with Wells Fargo. Please go ahead. Yeah. Thanks for taking a question. Just kind of building on Meta's question there. When we look at the gross margin profile of your AI server revenue and thinking about the monetization of the backlog as we move forward, I'm curious of how that's changed or how your views have kind of structurally changed over the course of the last three months and whether or not the gross margin pressure you might be seeing? Is there any kind of inventory charges or write-downs that are more transitory in the model? And just any context on how margin profile looks, thinking about the hopper going to the Blackwell product cycle would be helpful. Thank you. Yeah. Thanks, Aaron. This is Antonio. So, when I think about the AI market again and the AI margin in that context, I see three segments, right? So, you talk about the service provider, model builders. They lead with time to market with the latest technologies. And that's why in Q1, we saw a quite significant amount of orders on Blackwell. In fact, I think I said 70% of the mix of the $1.6 billion was Blackwell. When you go to the other two segments, the sovereign and the enterprise AI, that's not the case. They go with a combination of prior technologies and maybe new technologies in the sovereign. And in enterprise market, definitely it's N minus one or even minus two for that matter. That's why that inventory in the AI that was higher than normal is because now it will take a little bit longer for us to basically transition that inventory as we go through the other two segment consumption, while the service providers and the model builders will shift much more quickly into the latest technologies. That working capital, because in the end, it's all working capital, pressure is not so much the margin pressure of what you sold when is what compounded the issue in Q1. It will take, like we said, one or two quarters to convert that backlog, the $3.1 billion into revenue, plus new orders are coming in, and then return the traditional server business to what I would call more normal operating margins because that was mostly impacted by what I call the higher discounting. And that one time thing, we would call it the value of our inventory itself. Okay. Thank you, Aaron. Next question, please. And your next question today comes from Wamsi Mohan with Bank of America. Please go ahead. Yes. Thanks for the question. Your guidance implies over $2 billion year-on-year growth in revenue, but at the midpoint, almost $150 million year-on-year decline in operating profit dollars. But can you just help us think through how much of operating profit dollar headwind you are baking in explicitly from your tariff assumptions? And if you could bridge that similarly for free cash flow on a year-on-year basis where you're going from north of $2 billion- $1 billion, how much of that is tariffs versus competitive pricing versus inventory? That'd be helpful. Thank you. Yeah. Hey, Wamsi, good afternoon. Maybe I'll take the second part of your question first in terms of cash itself. So, for the full-year guide, as you know, in my prepared remarks, I mentioned at least $1 billion. The way to think about cash flow is you take out net earnings at the midpoint of 180. The biggest driver is really working capital, and then also the announcement that we made around the cost efficiency program. So, they're the two biggest drivers that sort of influence cash flow from a year-on-year basis. Then, obviously, the tariff impact flows straight into the earnings at the midpoint. In terms of tariffs, Wamsi, you know how to answer that. What we've got in the guide is actually $0.07 for the year, and that gets you to the midpoint of the 180 on the guide. I would add, though, the way to think about tariffs is we're working, we've worked, obviously, on mitigation effects, but it does take time to see those mitigation effects take place. So, as a result, literally $0.04 of that $0.07 is actually going to be in Q2, and it's also in the server business, which is where we see the greatest extent of that server impact, sorry, of the tariff impact. So, tariffs, $0.07 in a year, but the sort of like the hardest part of the tariff sort of impact is really going to be born in Q2. Very good. Thank you, Wamsi. Next question, please. And your next question today will come from Tim Long with Barclays. Please go ahead. Thank you. Sorry to keep beating the AI server horse here, but maybe, Antonio, just on the strategy side, just curious, it seems like from the outside, a year, year and a half, two years ago, some of your peers were really chasing model builders, lower gross margin business. You guys seemed much more focused on supercomputing and areas that had better margin to it. It seems like that strategy has changed, and now HPE is more willing to get into some of these lower margin businesses like the GB200, NVL72. I imagine it's very low gross margin. Am I right in that strategy change? And in the future, should we expect that chasing the model builder business may never get better on a gross margin basis? So, that might be something that's more challenging to continue to compete in if we're going to be talking single-digit gross margins for that? Thank you. Yeah. Thank you, Tim. So, no, our strategy has not changed. If you look at the Q1 performance on our server operating margins, it was not particularly driven by the AI gross margins or operating margins in many ways of the pricing of the deals. We participate in service provider where we believe through scale and other mixes that we drive in that deal, whether it's services, manufacturing, the like, we can make the math work to ultimately deliver that overall 10% server margin combined with the rest of the server business. What was different in Q1 for us was, again, the higher than anticipated discounting on the traditional server business and the fact that, unfortunately, this is on us. It's the bad news, good news in many ways, right? Is that the cost that we saw in our valuation of the inventory was not completely factored in that pricing for traditional servers, compounded by the higher than anticipated discounting. And then, obviously, the GPU transition on the working capital that Marie just described, which obviously had an impact on the AI margin, but not because the pricing was off or anything. So, in many ways, I'm confident, obviously, we have put the right actions in place. The cost issue has been taken care. We found that the near end of the Q1. So, I'm personally very disappointed about that. It's on us. It's on me. And we feel we have the corrective actions in place. But our focus is really on the mix of the three segments. Clearly, huge focus on enterprise AI. As I said in my remarks, 40% year-over-year orders growth. We have a great platform there. We drive additional services, particularly on the maintenance and the GreenLake subscription on that. And then the balance on sovereign between generative AI and supercomputing, which is very good for us. And then in the service provider, where it makes sense. And so, for me, that's the approach. And again, in Q1, we had this unique set of situations that we know we're going to fix. And that's why at the end of Q4, we're going to basically drive to the normalized what I call 10% overall server margin in the full segment. Thank you, Tim. Next question, please. And your next question today will come from Simon Leopold with Raymond James. Please go ahead. Thank you very much. I wanted to see if you could talk a little bit about your customer mix and how it might be changing. To be transparent, I'm wondering, are you targeting more of the cloud builders right now? And is that affecting some of the assumptions so you're in a more aggressive space? Or are we seeing issues where perhaps your federal market, which I assume is very profitable, is weaker in the mix? So, trying to get a little bit of unpacking, particularly around compute, around what's going on in the verticals that might be affecting margin. Thank you. Well, thank you, Simon. No, I mean, I don't think this is new news, but in the service provider model builders, we obviously target those who value our intellectual property. Now, obviously, direct liquid cooling, 100% fanless. This is what we shipped three weeks ago for the first time, and that takes a lot of work, both on the capital side, but as well on the manufacturing side. But that's a market that's super concentrated. I mean, when you think about it, the model builders, maybe you can count it with the finger of two hands, maybe less. And then on the service providers, probably 15-20 that make a difference, right? And that's why you need to find a balanced approach. I'm particularly targeting the tens of thousands of enterprise customers that now are adopting a variety of AI models and more agentic approaches. And while the value of the order transaction is much lower, obviously, it comes with a complete different margin profile. And what I'm pleased is that we now see the acceleration of that and a significant pipeline. And our channel motion is actually an advantage for us. So, you may end up, obviously, everybody thinks about what's going to happen with the CapEx deployment in one segment of the market. That may be slowed down at some point. I don't know, but right now it feels solid. And then a growth on enterprise, which will benefit our mix between the segments. And in between, the sovereign, right? When you think about a sovereign, when it comes down to supercomputers, I think we win three out of four very easily. And then on top of that, you add now this generative AI and like the University of Bristol or Japan AIST or many others that are coming through the pipeline. And that's where we find the balance for the server business. And in the meantime, drive the refresh in the traditional compute, which has been very solid. In fact, we had, again, double-digit year-over-year orders growth. And ultimately, now with Gen 12, we have another great platform to transition the install base to lower cost per core with more sustainability with 65% energy reduction. Thank you, Simon. Next question, please. Your next question today will come from Amit Daryanani with Evercore. Please go ahead. Yep. Thanks for taking my question. I guess, Antonio, Marie, if I look at the fiscal 2025 guide that you folks are giving out right now, it sort of implies that revenue growth will be close to double digits, 9.5%, 10% in the back half of the year. And at the same time, I think you're implying about $1 EPS in the back half. So, that would, I think, mathematically get to about a 250 basis points step up in operating margins in H2 versus the Q2 levels. Can you spend some time on what's giving you the confidence that, A, revenues will actually snap up this way? And then, B, if the revenues are really going to snap up with AI servers, how do you get that sort of operating margin expansion in the back half of the year? Yeah. So, good afternoon. Let me take that one there. So, first of all, in terms of the back half, you're correct. We are very weighted in terms of both revenue and profitability in the back half. And it's not that dissimilar to fiscal 2024. A couple of things to bear in mind. As I said in my prepared remarks, we do see the timing of AI systems sort of moving into the back half as well. So, that will drive some of the revenue to the point that you just raised. And then secondly, I would say this in terms of, as you think about profitability and the fact that I think we said in the prepared remarks, we do expect our server business to exit the year in around about the 10% range as well. The factors underpinning that are obviously three sort of critical areas. One, the actions that Antonio referred to around server execution. You'll see those impacts. Obviously, they trough in Q2, and they will continue to flow through the P&L in Q3 and Q4. Secondly, we would have had time to mitigate tariffs. So, that's another contributor as well. And then third, we will see the impact of the cost efficiency program. So, it's really those three drivers that will sort of influence profitability. And then finally, like I said, just reiterating just the timing of AI systems, which really, you know, those deals, as we've said in the past, are very lumpy, and they sort of obviously can drive a sort of different seasonality in terms of your quarterly revenue. So, bear all that in mind when you think about the guide. But it's actually Q4. It is really going to account for a higher percentage of our full-year earnings compared to what you've seen in terms of some of our recent years. I will add only one more thing to what Marie said: the fact that our networking business will continue its recovery, right? Again, we talk about three consecutive quarters of sequential growth supported by now double-digit orders growth on a year-over-year basis. So, this was the last quarter, technically, that we lapped the higher compares. And then from here on, right, we expect it to be in the mid-single-digit revenue growth for the balance of the year. So, that's why, you know, and that obviously comes with a completely different profile. And as you know, in Q1, we delivered 27% operating margins. And that's a big opportunity for us. And that's why we are also committed to the Juniper deal, because the combination of the two will accelerate the profit recovery later when the deal closes in the back of probably Q4 and then obviously in 2026. Thank you for the question, Amit. Next question, please. And your next question today will come from Samik Chatterjee with JP Morgan. Please go ahead. Yep. Hi. Thanks for taking my question. I guess, Antonio, Marie, you're talking about the mitigation efforts that you're doing in relation to the tariffs. I was curious, how should I think about the sort of focus relative to supply chain flexibility versus pricing to mitigate the impact of tariffs? Which one is sort of the bigger focus you are going into the back half? And particularly when it comes to pricing, how are you thinking about sort of the level of confidence in taking pricing, particularly when you're mentioning certain end markets where discounting is more aggressive than you thought? And how should we think about the sort of level of visibility or confidence into getting those pricing actions done without really impacting demand? Thank you. Yeah. So, first of all, we have a very holistic and global supply chain, which allows us to mitigate some of the impact of the tariffs. We build products around the globe close to the customer because obviously we need to be close to them to meet the turnaround times that they require. But we're able to shift productions from one side to the other side because of our flexibility that we have. Separately, on the pricing side, no question, we will adjust pricing accordingly while we continue to drive that working capital down per the comments Marie made and therefore create more flexibility in our pricing as we manage discounting more tightly. What I don't know, and this is best guess for everyone, what the overall tariffs increases and how they materialize in the end in the market will do to demand maybe in the second half of the year. But we are confident in our revenue guide that we provided, which I think one of your colleagues spot on, the 9.5% at the midpoint, which is very high for us, right? In the very, very high single digit, perhaps even double digits. And we feel good about that. It could impact maybe some aspects, but overall, that range is very comfortable for us at this point in time. Thank you, Samik. Next question, please. And your next question today will come from David Vogt with UBS. Please go ahead. Great. Thank you, guys, for taking my question. Marie, I thought I heard you say on the call the cost restructuring savings are in addition to the Juniper savings. So, does that mean I couldn't hear you clearly, but does that mean the savings that you're announcing today impact more the server storage side of the business and not Aruba and Intelligent Edge? I'm just trying to get a sense for how that layers in over the next couple of years. And if that's the case, is the $425 million or $450 million that you mentioned regarding Juniper all from the Juniper side of the transaction if it closes? Thanks. Yes, David. Hey, good afternoon. It's Marie. So, just to clarify, yes. So, first of all, the Juniper, at least $450 million, is completely tied to Juniper as a standalone. And then in terms of the $350 million of gross annual run rate savings that we announced today, that actually ties to our current organization, our current company. So, as I mentioned, we expect to achieve these numbers over the course of 2025 and 2026. And this is really much more focused around what I would describe as cost efficiency. And I think we mentioned in terms of eliminating around about 2,500 jobs inside the company as it is today. So, think about them as sort of two separate initiatives and two separate plans. You know, I mean, this is very simple. We had the plan to close the transaction at the end of Q1. It is very disappointing that the DOJ decided to file a lawsuit. But if we had the plan also to announce what we felt was the opportunity to go forward to take incremental cost out. If you take the two programs together, it's at least $100 million. But we have not closed the Juniper transaction. Therefore, we have to wait for that. And we are committed to deliver at least $450 million once the transaction closes. In the meantime, we are moving forward with the $350 million that Marie talked about. And that's why I think it's the right time to do so. Also, in the context of what the market is expecting and what's happening with tariff and the like. And also what happened to us in Q1, which we feel confident we will address. But think about the whole thing. It can be quite sizable. But in the meantime, we're addressing the standalone because that's who we are. Very good. Thank you, David. Next question, please. And your next question today will come from Michael Ng with Goldman Sachs. Please go ahead. Hi. Good afternoon. Thank you very much for the question. Antonio, I just wanted to ask about the AI systems orders momentum throughout the quarter. The $1.6 billion implies a little bit of a slowdown in December and January after the $1 billion plus order in November. Has the demand environment for AI systems changed? What have you seen during the quarter and then in the couple of months since? And if I could just ask Marie a quick follow-up on free cash flow, anything other than the $250 million of cash restructuring that impacts the outlook? Just wanted to see if there was anything unusual there. Thank you. Yeah. Thank you, Michael. I think you're correct. I mean, obviously, we started strong the quarter and then obviously vacations and the like. But remember, this is a lumpy business, right? You may have strong spurts of demand happening one month and then perhaps not so much the next month. But on aggregate, right, when you think about it, we booked $8.3 billion. That was up double digits, and we doubled it quarter over quarter. I think that's the message, right, so our AI systems net orders in the quarter were twice as big as the Q4. That said, what I'm particularly proud of is the fact that the AI enterprise is strong, and that, to me, is a testament that our customers are deploying the solutions, particularly in inferencing, and the inferencing where all the value gets realized, and the pipeline remains multiples on every segment of the AI, whether it's sovereign, enterprise AI, or model builders and service providers, and just to clarify on the cash flow, the number for FY25 is $400 million, $250 million, which comes from the cost efficiency program that we just announced, and we also have some carryover from prior period restructuring programs. So, that's what gets you to $400 million in terms of the cash walk that I did earlier. Thank you, Mike. Next question, please. And your next question today will come from Matt Niknam with Deutsche Bank. Please go ahead. Hey, thanks so much for squeezing me in. I'm wondering, has the macro backdrop and specifically around tariff uncertainty, has that had any impact on customer purchasing or demand to date? And just in a similar vein, are you baking in any incremental softness from U.S. Fed as a result of some of the DOGE initiatives? Thank you. Yeah, thank you. No. So far, no. In fact, as we said in our prepared remarks, we have double-digit order growth in all our business units. That's true for networking. That was true for servers. That was true for AI systems. That was true for storage. It was actually triple digits. And now the electronics represents more than 50% of the mix. So, demand was very, very strong. We don't see yet the full impact of the tariffs in the market. I think it will take another month or two. On the federal side, it depends on which agency you're working with. So far, not a significant slowdown. But remember, the HPE company provides core tech infrastructure for the Department of Defense and the Department of Energy and many agencies that provide national security of sorts. And therefore, that has not been seen. But we'll see what happens next. Hard to predict at this point in time. Okay. Thank you, Matt. We are ready for our last question. And your last question today will come from Ananda Baruah with Loop Capital. Please go ahead. Hey, yes. Thanks, guys. Good afternoon. Hey, Antonio, just a quick question on getting the AI server mix as you guys are thinking about it for fiscal 2025. And I guess really what I'm interested in is any context on how much of what you're looking at in the backlog pipeline would go into GreenLake versus the revenues in the traditional sales sets. And then any sense of how your mix might change from SPs and model builders relative to enterprise and sovereign. And that's it for me. Thanks. Yeah, thank you. When I think about enterprise AI, there is a big component that goes through the GreenLake because there is a subscription of the software to the GreenLake platform. All that software that we co-engineer with NVIDIA, so that's what we call NVIDIA Computing by HPE, is actually a subscription into the GreenLake platform with a CapEx on the infrastructure attached to it. Think about it that way. While the growth is very nice and you saw the 40% growth in orders, it actually takes time to see it, right? And now, remember, we have now $2 billion + in AIR that you will be adding to it as we grow that installed base. But on the service providers or the model builders, those have been, at least in the last couple of quarters, all CapEx purchases. And therefore, there is no GreenLake Flex offer associated at this point in time with that one. So, that's why it's more CapEx on one. And over time, you have a CapEx plus a subscription on the other one. Okay. Well, I think we are at the end of the call. Thank you for joining the call. Again, I will leave you with this. Number one is we delivered a solid quarter, but we could have executed better. I'm really proud of the demand that we've seen. That tells me the innovation and the strategy is right. But ultimately, we could have executed better in the server operating margin side where a couple of things were under our control. And obviously, we are committed to go fix that. Confident to return the normalized EPS by Q4 and the 10% server margin at the exit Q4. And then we took aggressive action on incremental cost that we can take out now. And also, we factored the tariff impact now. So, you have one complete view of what fiscal year 2025 looks like. And last but not least, we are totally committed to the Juniper deal. We believe we have a very strong case, and we expect to close that transaction in the second half of 2025, and the good news, at least, there is a trial date now set for July 9th, and we believe we have a compelling case to get the favorable ruling. Thank you for your time today, and I hope to talk to you soon. The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.