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HPE says tariffs will have a smaller than expected impact on sales this year. AI revenue also beat and assessimates, but the company continues to face headwinds, and that includes an activist investor. HPE CEO Anthony and Ery joins us, Now, I find what you said about tariffs and how that's reflected in the numbers so interesting because the Hyperscalers, for example, told us that one reason capital expenditures were raised in that period is the reflection of the higher cost of
doing business because of tariffs. For you, it's like almost the opposite story.
Yeah, good morning, Ed, thanks for having me. Look, we'll raise our guide thence for a number of factors. Number one, because of all the war we have done throughout a very diversified supply chain, we find ways to admit together the TARA Obviously the USMCA plays a role in that. But at the same time, we know we are performing better in many of our businesses and we have had a number of targeted actions to continue to mitigate any impact from the tariff. And that's US today as we
know it. But the reality is that the original impact we communicated at the earnest call in Q one now is significant lesser and therefore, together with the cost actions, together with the better performance of the business and the lesser impact on tariff, will raise the bottom range of our guide by eight cents.
Antonia, is it possible for you to quantify for us the sort of sales channel impact that you provide from video? So we talk endlessly about all of the projects domestic and overseas, and videos involved in the great build out. But as you know so well, and I spend hours tearing servers apart, nothing happens without HPE and others assembling the desigre. I just want a number on it, that's the thing.
Yeah, Well, hard to put a number because you know, many of these buildouts are happening as we speak, and it takes a little bit of time to go from a you know, an agreement with a customer working with US and Nvidia, to building a deploying it and then eventually putting in production. But I can tell you, look, we are have a deep, long standing relationship with Nvidia. We are covering all segments of the market where it's these big, large buildouts in the service provider space. Whether
it's sovereign or enterprise. And one of the things I'm really proud is that the work we put together with Nvidia last last year when we announced the Nvidia competing by HP and a private cloud, AI is growing very rapidly. In fact, one third of the net new orders we poked Q in Q two we're from enterprise. But at the same time we are completing one of the largest deployed MENS on the GB two hundred as we speak,
and that's a very large deployment. And then we said that our backlog grew quarter over quarter now is three point two billion dollars on a commulative basis. For the last two years, we book over nine billion dollars and we have a multiples of the backlog in our pipeline.
That one billion you attributed to AI in particular is good, but it's not as much as Dell, for example. I hate to put it so on the nose in that way, Antonio, but how much is perhaps Elliott on your board or others around you sort of saying, look, capitalize on AI even more.
Yeah, now there has nothing to do. Look the previous quarter that we book ourselves a very large order, which is the one we are deploying today and that was not the all didn't do that. So this is a lumping business and you will see us also talking about some of the large order as we may get in the current quarter of subsequent quarter. So you know this
goes back and forth. But ultimately you have to play with discipline and our goal is to grow in the eye and the rest of the business with a capital structure that works because the reality is that there is revenue growth, then there is profit accretion, and then is working capital. And our working capital is something you have to work very very closely because the timing from winning a deal to the time of revenue recognition in these large deals can be long and therefore you impact cash
flow from operation. So we're trying to balance all of that while we deliver on our commitments both on the revenue growth and on the EPs growth.
Well, you delivered in terms of six percent revenue growth on the court. We appreciate it Antonio andry Hpeco for joining us.