Hewlett Packard Enterprise CoHPE
Hewlett Packard Enterprise Co Goodwill & Intangibles Disclosure
Goodwill and Intangible Assets
(1)This table does not include $899 million of software development costs and IPR&D that are not amortizable as they are in-process.
Goodwill
Goodwill and related changes in the carrying amount by reportable segment were as follows:
Server | Hybrid Cloud | Networking | Financial Services | Corporate Investments & Other | Total | ||||||||||||||||||||||||||||||
Balance at October 31, 2024 | $ | 10,194 | $ | 4,839 | $ | 2,909 | $ | 144 | $ | — | $ | 18,086 | |||||||||||||||||||||||
| Goodwill from acquisitions | — | — | 7,272 | — | — | 7,272 | |||||||||||||||||||||||||||||
Impairment of goodwill | — | (1,578) | — | — | — | (1,578) | |||||||||||||||||||||||||||||
| Changes due to foreign currency | — | — | (10) | — | — | (10) | |||||||||||||||||||||||||||||
Balance at October 31, 2025(1) | $ | 10,194 | $ | 3,261 | $ | 10,171 | $ | 144 | $ | — | $ | 23,770 | |||||||||||||||||||||||
(1)Goodwill is net of accumulated impairment losses of $3.3 billion. Accumulated impairment increased by approximately $1.5 billion from October 31, 2024 due to $1.6 billion of Hybrid Cloud reporting unit impairments, partially offset by a decrease due to the disposition of CTG (the Communications and Media Solutions reporting unit).
2025 Interim and Annual Goodwill Impairment Reviews
During fiscal 2025, the Company performed the following goodwill impairment tests, two of which resulted in goodwill impairment:
•Impairment test performed as of November 1, 2024 based on organizational changes impacting the composition of reporting units as of that date did not result in an impairment;
•Interim test performed as of April 30, 2025 due to indicators of potential impairment, resulted in the Hybrid Cloud reporting unit being impaired; and
•Annual impairment test, which was performed as of August 1, 2025, resulted in the Hybrid Cloud reporting unit being impaired.
April 30, 2025 Interim Impairment Test
During the second quarter of fiscal 2025, the macroeconomic environment experienced a rapid deterioration, primarily driven by the announcement and subsequent modifications of international tariffs, an escalation in global trade tensions, and increasing geopolitical uncertainty. These events contributed to significant movement in inputs used to determine the weighted-average cost of capital. As of April 30, 2025, the Company determined that an indicator of potential impairment existed to require an interim quantitative goodwill impairment test for its reporting units.
Based on the results of the interim quantitative impairment test performed as of April 30, 2025, the fair value of the Hybrid Cloud reporting unit was below the carrying value assigned to Hybrid Cloud. The decline in the fair value of the Hybrid Cloud reporting unit was primarily driven by an increase in the discount rate used in the discounted cash flows analysis, which reflected heightened macroeconomic uncertainty and changes in market conditions. The fair value of the Hybrid Cloud reporting unit was based on a weighting of fair values derived most significantly from the income approach, and to a lesser extent, the market approach. Under the income approach, the Company estimates the fair value of a reporting unit based on the present value of estimated future cash flows which HPE considers to be a level 3 unobservable input in the fair value hierarchy.
Prior to the quantitative goodwill impairment test, the Company tested the recoverability of long-lived assets and other assets of the Hybrid Cloud reporting unit and concluded that such assets were not impaired. The quantitative goodwill impairment test indicated that the carrying value of the Hybrid Cloud reporting unit exceeded its fair value by $1.4 billion. As a result, the Company recorded a goodwill impairment charge of $1.4 billion in the second quarter of fiscal 2025.
August 1, 2025 Annual Impairment Test
Based on the results of the annual quantitative impairment test performed as of August 1, 2025, the fair value of the Hybrid Cloud reporting unit was below the carrying value assigned to Hybrid Cloud. The decline in the fair value of the Hybrid Cloud reporting unit was primarily driven by a strategic shift away from the Non-IP storage business. The fair value of the Hybrid Cloud reporting unit was based on a weighting of fair values derived most significantly from the income approach, and to a lesser extent, the market approach. Under the income approach, the Company estimates the fair value of a reporting unit based on the present value of estimated future cash flows which HPE considers to be a level 3 unobservable input in the fair value hierarchy.
Prior to the quantitative goodwill impairment test, the Company tested the recoverability of long-lived assets and other assets of the Hybrid Cloud reporting unit and concluded that such assets were not impaired. The quantitative goodwill impairment test indicated that the carrying value of the Hybrid Cloud reporting unit exceeded its fair value by $0.2 billion. As a result, the Company recorded a goodwill impairment charge of $0.2 billion in the fourth quarter of fiscal 2025.
Subsequent to the impairment of the Hybrid Cloud reporting unit, the indicated fair values of the reporting units exceeded their respective carrying amounts by a range of 0% to 240%.
The Hybrid Cloud reporting unit has remaining goodwill of $3.3 billion as of October 31, 2025 and an excess of fair value over carrying value of net assets of 0% as of the annual test date. Hybrid Cloud business is transitioning to a more cloud-native, software-defined platform with HPE Alletra. Translating this growth to revenue and operating income will take time because a greater mix of high margin business, such as ratable software and services, are deferred and recognized in future periods.
The excess of fair value over carrying amount for the Server reporting unit was 11%. The Server reporting unit has a goodwill balance of $10.2 billion as of October 31, 2025. In the current macroeconomic and inflationary environment,
customers have invested selectively, resulting in moderate unit growth and competitive pricing in the traditional servers business. While the AI servers business is growing at a faster pace, because graphics processing units represent a large portion of the solutions, the pricing is very competitive and margins are limited. The Server business continues to focus on capturing market share in both traditional and AI servers, while maintaining operating margin and leveraging its strong portfolio of products.
If the global macroeconomic or geopolitical conditions worsen, projected revenue growth rates or operating margins decline, weighted-average cost of capital increases, or if the Company has significant or sustained decline in its stock price, it is possible its estimates about the Hybrid Cloud and Server reporting units’ ability to successfully address the current challenges may change, which could result in the carrying value of the Hybrid Cloud and Server reporting units exceeding their estimated fair value and potential impairment charges.
2024 Interim and Annual Goodwill Impairment Reviews
As of October 31, 2024, the Company’s reporting units with goodwill were consistent with the reportable segments identified in Note 2, “Segment Information,” to the Consolidated Financial Statements in Item 8 of Part II, with the exception of Server, which contained two reporting units: Compute and High Performance Compute & AI, and Corporate Investments and Other which contained two reporting units: Advisory and Professional Services, and legacy Communications and Media Solutions.
During fiscal 2024, the Company performed the following goodwill impairment tests, none of which resulted in goodwill impairment:
•Impairment test performed as of November 1, 2023 based on organizational changes impacting the composition of reporting units as of that date;
•Annual goodwill impairment test, which was performed as of the first day of the fourth quarter of fiscal 2024. The excess of fair value over carrying amount for the reporting units ranged from approximately 8% to 198% of the respective carrying amounts and;
•Interim goodwill impairment test as of September 30, 2024 for Compute and Hybrid Cloud reporting units.
2023 Annual Goodwill Impairment Review
The Company’s fiscal 2023 annual impairment test did not result in any impairment charges.
Intangible Assets
| As of October 31, 2025 | As of October 31, 2024 | ||||||||||||||||||||||||||||||||||
| Gross | Accumulated Amortization | Net | Gross | Accumulated Amortization | Net | ||||||||||||||||||||||||||||||
| In millions | |||||||||||||||||||||||||||||||||||
| Customer contracts, customer lists and distribution agreements | $ | 2,634 | $ | (215) | $ | 2,419 | $ | 219 | $ | (70) | $ | 149 | |||||||||||||||||||||||
| Developed and core technology and patents | 3,253 | (780) | 2,473 | 747 | (443) | 304 | |||||||||||||||||||||||||||||
| Trade name and trademarks | 464 | (21) | 443 | 6 | (5) | 1 | |||||||||||||||||||||||||||||
| Capitalized software development costs | 232 | (27) | 205 | 56 | — | 56 | |||||||||||||||||||||||||||||
IPR&D | 828 | — | 828 | — | — | — | |||||||||||||||||||||||||||||
| Total intangible assets | $ | 7,411 | $ | (1,043) | $ | 6,368 | $ | 1,028 | $ | (518) | $ | 510 | |||||||||||||||||||||||
For fiscal 2025, the increase in gross intangible assets was primarily due to $6.2 billion of acquired intangible assets related to the Merger and $0.2 billion related to capitalized software development costs.
As of October 31, 2025, the weighted-average remaining useful lives of the Company's finite-lived intangible assets were as follows:
| Weighted-Average Remaining Useful Lives | |||||
| In years | |||||
| Customer contracts, customer lists and distribution agreements | 9 | ||||
| Developed and core technology and patents | 3 | ||||
| Trade name and trademarks | 10 | ||||
| Capitalized software development costs | 3 | ||||
As of October 31, 2025, estimated future amortization expense related to finite-lived intangible assets was as follows:
| Fiscal year | In millions | ||||
| 2026 | $ | 1,220 | |||
| 2027 | 1,093 | ||||
| 2028 | 963 | ||||
| 2029 | 632 | ||||
| 2030 | 279 | ||||
| Thereafter | 1,282 | ||||
Total(1) | $ | 5,469 | |||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Dec 18, 2025 | Showing above |
| 2024 | Dec 19, 2024 | |
| 2023 | Dec 22, 2023 | |
| 2022 | Dec 8, 2022 | |
| 2021 | Dec 10, 2021 | |
| 2020 | Dec 10, 2020 | |
| 2019 | Dec 13, 2019 | |
| 2018 | Dec 12, 2018 | |
| 2017 | Dec 15, 2017 | |
| 2016 | Dec 15, 2016 | |
| 2015 | Dec 17, 2015 | |
About Goodwill & Intangibles Disclosures
Goodwill and intangible asset disclosures reveal the premium paid in acquisitions and how management assesses whether that premium retains its value. Since goodwill is no longer amortized under US GAAP, the annual impairment test is the only mechanism that adjusts carrying values downward — making the assumptions behind that test critically important for investors.
Key signals: a history of goodwill impairments suggests management consistently overpays for acquisitions. Watch the gap between reporting unit fair value and carrying amount — when fair value exceeds carrying amount by less than 10-20%, a small decline in business performance could trigger a write-down. For finite-lived intangibles, examine useful life assumptions across customer relationships, technology, and trade names; aggressive estimates inflate near-term earnings. Compare total intangibles-to-total-assets ratios against peers to assess acquisition dependency. Rising goodwill as a percentage of equity can signal balance sheet fragility.