Hewlett Packard Enterprise CEO Antonio Neri provided the financial outlook for fiscal year 2022 as well as details on the company’s strategy, customer trends, and growth opportunities.
HPE CEO highlighted three distinct trends
#1 the explosion of data at the edge, driven by the proliferation of devices and things, which requires secure connectivity
#2 the mandate for a cloud-everywhere experience that allows customers to manage data and workloads across a distributed enterprise
#3 growing need to extract value from data to generate insights and build new business models
“Each of these market trends, as well as increased customer demand for consuming IT as a service, represents a significant area of addressable growth for HPE,” said Neri. “We are particularly focused on the segments that will deliver the most profitable growth, and we are actively investing in both organic and inorganic innovation to ensure we capitalize on these margin-rich opportunities.”
Neri reviewed HPE’s market leadership, innovation, and results in each of the megatrend areas, placing particular emphasis on the company’s momentum with the HPE GreenLake edge-to-cloud platform.
HPE GreenLake, which has more than 1,100 enterprise customers, is making significant contributions to the company’s 33 percent year over year growth in Annualized Recurring Revenue (ARR) as of Q3 2021 and 46 percent as-a-service order growth.
Tarek Robbiati, executive vice president and CFO, provided a financial update including an outlook for FY22.
“We have the right edge-to-cloud strategy aligned to dominant market trends with the right financial architecture,” said Robbiati. “Our long-term financial model delivers 15-20 percent free cash flow growth that enables balanced investments for growth with substantial capital returns to maximize value for shareholders.”
FY22 Outlook
HPE expects FY22 financial results to continue the momentum from FY21. HPE expects its revenue growth to be 3-4 percent and non-GAAP operating profit growth of approximately 10-15 percent year-over-year.
HPE provided its financial model for FY22-FY24. HPE expects a compound annual revenue growth rate of 2-4 percent. The prior three-year view was 1-3 percent. HPE expects the growth drivers to be Edge, High Performance Compute & Artificial Intelligence, and the as-a-Service businesses. HPE expects as-a-Service ARR growth to accelerate to 35-45 percent to more than $2.3 billion in FY24 revenue.
The company expects its progress on its strategic imperatives will translate into a stronger financial architecture including sustainable, profitable growth and increasing recurring revenue at higher gross margins over time.
