Welcome to day two of Bank of America Global Technology Conference. I'm Wamsi Mohan. I cover IT hardware here for the bank. Delighted to welcome HPE Enterprise today to the stage. We have Shannon Cross, who's Chief Strategy Officer. A lot of you probably know Shannon Cross from her prior roles as well. Shannon, welcome. Pleasure to have you here. Thank you. Very excited to be here. It's a great time to be talking about the company. Yeah, absolutely. This has been a pretty incredible learning season from a hardware standpoint, and you guys really knocked it out of the park. The question that we get a lot is, how sustainable is this? You express confidence by giving an outlook for 2027, as well. Would love for you to frame that a little bit for everyone. Sure. Obviously, we're very pleased with what we were able to report for the quarter, how we're looking at the growth that we expect. In 2026, we took up our EPS target by 40%, and then we did provide a financial framework for 2027 that I think underscores our belief that what we're seeing is durable and sustainable. What we've been getting in terms of questions, clearly on the sustainability and durability side is far more on the server versus networking. I think networking, good story. People understand it, and I'll touch on that a bit in the future. Right now, I'll focus on server. I've been around this industry for a long time. Clearly, I think we're seeing the creation of a new TAM, the creation of a situation where servers are seen as a really critical, important component of companies' Agentic AI journey. In terms of the data points and the reasons why we think this is going to be sustainable, when we talk to our customers, they're clearly at the early days of their Agentic AI journey. They see that they want their data to be more on-prem. They want to do more of the compute on-prem. We're seeing demand at the higher end of our platforms, so more memory, more compute power. Clearly, there's a reason when you've seen ASPs increase as much as they have over the last year, that customers are still saying, "Hey, we want to buy. We're going to start new programs. We're willing to pay the higher prices because we clearly see that there's an ROI in whatever they're putting out there that justifies the purchase of the hardware." I think that's something that's different than we've seen in the past. We're also seeing customers who, when we had contracts that were not particularly advantageous for us because, remember, we used to have 90-day quote validity, we pulled that back in. We went back to our customers and we said, "Hey, we need to renegotiate. We need to look at this." They weren't all happy. I'm sure we would've been super happy in this situation, but they've seen what's gone on with the memory provider. They've seen what the stocks have done. They've seen, obviously, some of the bonus payouts and things that are being talked about right now. They realize this isn't a server situation. This is an industry situation. We were able to come to terms with a lot of those customers and work mutually beneficial arrangements. I think that plays into it. I would say that we're seeing, and we talked about this quarter, we're seeing triple-digit order growth, in the quarter. Even in light of the higher ASPs, people are buying. We have the highest backlog that we've ever had, a record backlog. Our pipeline is multiples of our backlog. The conversations we're having, clearly customers are looking at what they're going to need. I think we've talked about for a while this idea of a data center refresh. Sure, that plays in somewhat, but I do think that they're fundamentally seeing that the server is driving a higher ROI. I think about it, when we look at our company and we talk about it, we have cost of workforce, cost of our consultants, and then we, I think, are going to have cost of whatever you call the agents within the server ultimately. Again, it's become such more a part of the way that people are doing business. Now, I know there's questions about pull-ins. We are seeing minimal pull-ins. Are there some? I'm sure there are, and we have heard of some cases. In general, we believe this is just sustainable demand. We do track. We look for cancellations. We look for signs of double ordering. We're monitoring the situation very closely, but everything seems strong. Again, we're seeing now where the orders that we're placing are at ASPs that are substantially higher than earlier in 2026. When you figure you leave 2027 at that higher ASP, that also provides some underlying support. Yeah. No, that's a great framework to start with. Maybe just to rewind a little bit, what would you say specifically changed over the last 90 days from customer conversations? Is it an acknowledgment that this inflationary environment is just going to stay longer? Is it agentic? What is it that's driving this elevated level of interest that now is going to sustain itself? We think in 90-day increments, but I think a lot of the building blocks for what we're seeing now have been in place over the last six months or so. You could even go back to November when we were the first to raise prices and customers continued to buy and we continued to see some sustained demand. I will say we are hearing more about Agentic AI. I would say, if you think about our PCAI business, when we first launched it, we had small, medium, large, extra large, and then we realized people wanted developer sizes, so more like the extra small. We're seeing those extra small purchasers now moving up the stack and buying multiples of PCAI and also just buying bigger ones. To me, that means they're finding Agentic AI use cases that they're able to deploy. Internally, we have a multitude of use cases that we have, and we've been looking at it very closely in terms of, we've got grassroots, how do we put the enterprise framework on top of it? Part of my team is working on that. I've been talking to a lot of our other chief strategy officers or transformation officers about what their journey is. I think we're all sort of in the same camp and we're all moving forward, and we see significant opportunity. Again, underlying that is the server, the data center. I don't want to sell networking short. I think there's a significant opportunity for networking as well, and we're super happy to have Juniper in the fold. I think that's part of it. Just in general, I think the idea that customers continue to come and like I said, triple-digit order growth in the quarter, no signs of slowdown. I think all of that is kind of playing into the opportunity. One of the questions we've been getting in the conferences we've been at is, basically where is the money coming from? I think that's a legitimate question over time, but I think that right now, and certainly for the foreseeable future, technology is what's going to enable this incredible improvement that we should see in productivity, and we're right at the center of that. Anecdotally, like we've heard about basically parts of whatever was allocated within corporate, within finance, within sales and marketing, within all these other functions, HR. Money is coming from all of those to kind of support a lower cost structure and higher productivity essentially for an organization. Kind of aligns with the increased use of Agentic AI in enterprise. Maybe, Shannon, you can talk about how as a company you're thinking about the inflationary environment and how you're managing that. I think there was a lot of concern in the market that for particularly hardware OEMs, it's going to be a really difficult time with the rate and pace of DRAM and NAND price increases. How are you managing that, and what's your strategy on a go-forward basis? Are you doing anything with LTAs? Are you doing anything in terms of procuring? How much supply do you have access to? I think supply, I think you said, was a gaining factor in growth. Yeah. One thing to keep in mind is HPE has been in this business. We go back to Compaq. We've been in it for decades. We have very long, close relationships with all of the component suppliers. We've had LTAs for a long time. We've had various different agreements. Are people leaning a little more heavily into them? Sure. It's not like this is a significant change in the way we do business with our partners. I do think that our long-term relationships play in here. I also think the memory providers want to have diversity of customers. One of the areas when I talked to the head of supply chain, they're definitely very cognizant that they want to keep us healthy and our competitors healthy, frankly. It's an interesting kind of position. I think from that perspective, we're benefiting. In terms of managing the margin side of it, we were the first to raise prices back in November. Everybody else followed. We've continued to raise prices. The entire industry changed sort of the quote validity period. Again, the conversations, and I think this was a testament to the relationships and the trust our customers have in us. When we went back to them and said, "Hey, that quote we gave you 90 days ago, we can't honor it because the prices have moved so much," they worked with us, and we worked with them. I think that goes back to very tight, long-standing relationships. When I got to the company, I think that was one of the things that I found very positive, relative to maybe how I thought about the way the world works, is that our customers are sort of the who's who of, I don't know, everywhere, like all industries, we're global. It's just we're kind of there, and they do look to HPE as a trusted resource. They respect us. They take our advice. They love our technology. I think all of that kind of plays into the ability for us to have the conversations with customers and then have the positive outcomes that we have seen over the last few months. All of that kind of comes in, and it's talking to them, talking to our supply chain all the time, talking to all of our partners and working with them. I mean, it's a tough environment, don't get me wrong. As Antonio said on the call, if we had more supply, you would see upside because demand is not an issue, it's supply. I think we're managing through it in as good as could be expected. Yeah. No, it's actually impressive to see the margin results that you guys are delivering in the face of this. Maybe sticking with servers for a minute more before we switch to networking. I do want to ask about AI servers and storage because it feels as though that the AI servers, you guys have been selective about the type of deals that you do, and not maybe participating in the super competitive end of that spectrum. Whereas on the storage side, would love to also get your perspective if the server strength is translating and if there's more yet to come on the storage side, and how do you see that playing out? When it comes to AI server, we've been pretty upfront. If you go back two years ago, we announced that we're going to buy Juniper. It's a $14 billion acquisition, largest company's done. We levered up to do it. As you sort of move through the AI server journey, we wanted to focus on making sure that we maintain investment grade, that we paid down the debt, that we were very prudent with the way that we approached working capital, and that we also focused on where we thought we had the right truly to win and to add extra. When you add extra, that drives more margin. From our perspective, and I think it's played out, we focused on sovereign and enterprise. We do, I mean, we bid for hyperscale deals. We will play in there where it makes sense and it fits our framework. So far, I think our strategy has definitely been working, and clearly from a Juniper perspective or from a balance sheet perspective, if you look at it right now, we're now going to be at 2x net leverage by the end of 2026, which is a year ahead of our plan. We're super happy about how that's working out. I do think there are areas that you should remember. We'll get to networking, I think don't disregard the fact that when we think about the hyperscale opportunity and the large model builder opportunity, networking is going to play a significant role. We've come from a very small position in what we call networks for AI just a few quarters ago, to now talking about having over $2 billion in cumulative orders by the end of 2026. We may not lean super heavily into the lower margin opportunities for hyperscalers and AI server, but we're certainly looking at what we can do from a networking perspective. We're also interested. We work very closely with NVIDIA, but we're also very interested in what we can do with Helios, because on the AMD side, we actually have the Juniper technology that's been designed into the system for scale up, and then we have our server technology. That, I think, may be an entree for us to be maybe a little more aggressive on the hyperscale server side as well. Okay. What about storage? Are you seeing any pull in? I think it's still early for storage. We're happy with what we're seeing in terms of Alletra MP demand. We had triple-digit growth there for, I can't remember what number, consecutive quarter. We're doing well in that space. I think it's still coming. What I really do like, though, is the quality. We're not the biggest server or storage provider out there. Sure that's a surprise to anybody. When I talk to the customers and I talk to the leadership in that business, it's really the technology that's pulling customers along. They're very happy with the idea that they can have one platform that has file block and object on it. We are seeing both, and this is really important storage, because another thing I didn't quite realize when I was on your side of the table was just how sticky storage is. It's really hard to rip and replace. What we're seeing here is not just a refresh of our installed base, but also significant new logos coming to the platform. It's a smaller part, but it also, just like networking, has a really nice margin profile. Yeah. Maybe now switching to networking. Clearly you're now showing some better traction with the Juniper acquisition. If you just think back to SAM versus now, you obviously, I think people felt like your guidance at SAM might have been conservative. It now feels like it is conservative. What are some of the opportunities that you think were not properly calibrated by the market from a Juniper standpoint? Let's start with the revenue side. Right solutions. I think it's fair, because we have consistently raised our revenue expectation through the year. I'm not sure it was just market, it was how we were looking at things. I do think, look, this is the largest acquisition the company had done. We had to bring together sales forces, we had to bring together products, which we still are. We had to bring customers along on the journey with us. I think we approached guide for 2026 for a networking perspective very prudently. Clearly too conservatively, given what we're seeing. I also think that things have played in that are better than we expected. Clearly campus and branch is doing well. Wi-Fi 7 refresh, there's significant demand there. Our orders were a high 20% this quarter. We're seeing positive moves there. I think from where there's really excitement, and I think probably we were too conservative, is you think about networks for AI and the opportunity in data center scale out, scale across. What we're seeing in terms of the routing opportunities is strong. Again, in the $2 billion, it's both data center networking as well as data center interconnect. There's a combination there. I think whether Juniper could have gotten there themselves, I think having HPE for the scale and the scope, some of the introductions has really helped. We're at the table with a lot of the large logos that you guys would all be very excited about, because they do want alternatives. We're time to market, first to market with Tomahawk 6 in terms of direct liquid cooling, and we're 100% direct liquid cooled there. That's something we started investing in months ago. We started investing in the Helios stack many months ago before it was really maybe something that everybody else wanted to lean in on. I think that it's a testament to the Juniper and Aruba combined management team that they had the foresight to put the money and the dollars in those places. We've made the right bets, I think, and they're coming through. If you went back to October, a lot of that was just in very infancy stage, so we weren't necessarily sure where that was going to play out. I think, overall, the reaction has been extremely positive. The combination of the sales force, that's always a risk, right? You have one salesperson at one account, then you got the HPE and the Juniper, and you put them together and you figure out who's the best. Either you keep both or you probably don't. All of that can cause disruptions, and I think we've managed it exceptionally well. That is one thing too, I would say. While we didn't want the extra time, and obviously, some of it was pencils down as we were dealing with the DOJ and all of that, I do think that this integration has been extremely well planned out, gone through. There are issues. Everything's going to have an issue, but I think it's been very smooth relative to what could have happened. I think that's a testament to the leadership that we have. Yeah. No. Your execution has been obviously very strong here. It's a complicated deal. It's a very big deal and complicated portfolio merging, technology merging, so great job on that. You mentioned data center interconnect. What's the sort of IP that you're able to bring to the table on DCI, and how do you think about that opportunity? We have our own silicon, and I think maybe that's something that people don't necessarily appreciate as much. Whether it's parts of campus and branch, whether it's routing, obviously we work with Broadcom in other areas too. HPE has, and Juniper has their own silicon, and I think it does create a competitive differentiator that, again, I probably underappreciated it, I'm guessing it's maybe not necessarily as well understood out there. That's part of it. I think AIOps and some of the technology we have, obviously the Mist platform is extremely popular and provides customers with significant savings and better quality of service, and just their experience. Some of that we're able to bring over, just and put in, I think that's pretty key. Juniper's been doing this for a very long time. They helped to build the original backbone of the internet for those of you who I remember back then. I do too. Some people, yeah, investors get younger every day or every year. Yeah, no, I think it's the quality of the IP too, and I think that's something where maybe it hasn't had the opportunity to shine as much as both the market and the acquisition and the support we've given them have allowed them to do. When you think about the scale up opportunity, is there room for also scale out within the AMD system that you referred to? Well, we'll provide the technology there as well. I think the key here is this is the first opportunity for us to do scale up, right? We had Slingshot and we had some. Yeah That goes back to the Cray technology for supercomputing. This is when an AI server rack that we can do scale up, and then of course we can do top-of-rack and scale out as well. Yeah. That's obviously more on the Broadcom side. Yes. Pivoting a little bit to margins. Your networking margin guide is pretty strong, I think, when you look at considering where pre-acquisition Juniper margins were and where HPE's margins were. Really strong performance. What's driving some of that? I know you've been leading Catalyst. There's been a whole bunch of other things that have been happening at HPE. How should we think about the trajectory and the step up here in margins? I think part of this is obviously you have the synergies coming together, and we're at or ahead of our synergy targets. That's positive. What we're seeing, what we thought was going to happen is coming through. I think that's been a big positive in terms of bringing the companies together. I want to make sure everybody realizes we do appreciate that we spent $14 billion on Juniper from an HPE perspective, so we're not going to starve the company. We continue to invest and that's seen in what we've talked about with Helios and what we're seeing in terms of scale across and the silicon investments and everything we're doing there. We do continue to invest while we're getting these margins out. I think, gross margins, there's been some benefit from that perspective, too, in terms of bringing the supply chains together and all of that. Scale, frankly. You get scale leverage as we're growing revenues. We're talking about around 10% revenue growth for Juniper for this year, and we guided to 8%-12% for next year. Within that, there's opportunity. The Catalyst program, we're bringing in, I think, OpEx discipline, which is key. We're not double counting. We are very careful that we have the synergies and we have obviously what we're doing in Catalyst. I think overall from a company perspective, we're thinking about how can we do processes better? How can we then layer on AI? You don't want to just throw out like, "Hey, go use Copilot," or, "Hey, go do this." You have to actually change how people do work. I think that's a pretty key part of it. Yeah, no, I would give Marie Myers huge credit, our CFO. She's exceptionally focused on making sure every single dollar we spend drives value, has an ROI. I'm not saying it wasn't part of the core fabric of the company before, but it is absolutely something that we talk about, focus on, track very carefully. I think that's a mind shift in the company that I think is very beneficial because everything I do at the company, I'm constantly focused on, again, given my history, given shareholder dollars, is there a return? You care about your employees, you care about your customers, absolutely. We definitely need to think about what can flow through the bottom line, and I think you're seeing that in terms of the EPS guides that we've given for both 2026 and 2027. On the 2026, 2027, particularly 2027, are you baking in continued price increases and an inflationary environment as you think through? It feels like it's going to be that way, but I'm curious how you thought about it. I think what we've said is we expect a continued inflated environment. We're not giving any specifics on units versus pricing, but we expect to see continued pressure in terms of the supply that's out there as you look at next year. Clearly DRAM, it's over 60% of the BOM now. I'm not even sure exactly where it's at. That's an area to watch when you think about what you would expect for pricing. There are other inflationary parts, but that's clearly the biggest focus, and I think that's on the server side. In terms of networking, there's a bit less pressure there, but clearly from a supply chain perspective, given the significant ramp in demand that we're seeing, you have to kind of manage that through. It's not the same. I think there's been a lot of learnings. Think back to some of the challenges that everybody had in AI server when everything was ramping, and there were just shortages of various random pieces. I think we're working very carefully to try to alleviate any of those concerns before they really become an issue. Yeah. Now, you also completed your H3C divestiture, and that's been great. I think it was, I don't know, we don't mind two years ago, and people had no idea if this money would come your way or not. The team did a great job. Yeah, you guys have executed on that, so kudos to you. Now that you have that, as you think about maintaining a certain level of leverage and then capital return, how are you thinking about that? Well, I don't think there's been a change to how we're thinking about capital return, except that we brought it forward a year. We had said that by the end of 2027, we'd get to two times net leverage and then kick in our 75% return of cash to shareholders. We are now bringing that forward to the end of 2026. You can expect that we'll be out buying back stock more aggressively starting in 2027, as well as maintaining our dividend. When we announced our dividend increase, I think it was Sam, I can't Anyway, whenever we did that, we talked about the fact that we'd like to Obviously, it's a board decision. Our goal is to be a dividend growth company, so that's how we think about that as well. Okay. Well, we're coming up on time. Only a couple minutes left. Shannon, any message you want to give investors on how to think about HPE? I'll say that when the stock was at $20, we thought it was super undervalued. It was one of the stocks I told people, it was something that could double within my portfolio, like a stock that would be potential double, and you're already 3x. Now I guess it still seems that the revisions are outpacing any expectation that people might have had. Would love to put that in context and your message to investors. Sure. I'm super excited. I joined the company two years ago. I saw the vision that Antonio had about what we could create. I think the Juniper acquisition has been a home run and will continue to benefit us. It's beyond just thinking about what Juniper was when we bought the company. It's where Juniper and the networking industry can go over the next several years, and the key position that networking will play as sort of the orchestration level of the data center and what we're doing in AI data center. I think on the server side, we are sort of in a new renaissance for server. Again, I've been around a long time. I think this is beyond just your typical cycle. I do think that servers and the value of servers are changing, and I think that that's being reflected in what customers are doing. I also would say, underlying all of this is a level of operational discipline that we place in the company that I think, again, the Catalyst program is becoming more of sort of the fabric of how we run the company. I think that also provides us with support from a profit perspective. Overall, we've got the cash flow, and I think that's something that's going to be really important. We feel very comfortable with how we're managing cash. Now that we're kind of through paying down Juniper, we're going to be returning to shareholders, and I think that will be helpful as well. I'm super excited. I don't think we're done. I think there's a ton of opportunities we look forward, and I think we're just starting this journey, and I think we're in an incredibly good position. As Antonio says, we've got hybrid cloud server and networking, and that's kind of the core of where people are going to be investing going forward. Amazing. Well, with that, we'll have to wrap. Thank you so much, Shannon. Really appreciate you being over here. Thank you. Thank you, Wamsi. Yeah.