Hewlett Packard Enterprise (HPE) CEO Antonio Neri has revealed how the company’s focus on AI (artificial intelligence) has generated revenue growth for the first quarter ended January 31, 2025.
HPE’s first-quarter fiscal 2025 results indicated 16 percent rise in revenue to $7.9 billion. HPE said annualized revenue run-rate (ARR) surged 45 percent to $2.1 billion.
HPE’s cumulative AI system orders have shown significant growth since the first quarter of 2023. The orders have increased steadily each quarter, reflecting strong demand for AI-related products and services.
As of Q1 2024, cumulative AI system orders reached $6.7 billion, and by Q1 2025, they climbed further to $8.3 billion. The growth indicated that HPE has been capitalizing on the AI market expansion. The distribution of orders between products and services shows that products contribute a major share, but services also play a substantial role in overall revenue growth.
Quarterly AI system revenues have also demonstrated strong momentum. In Q1 2023, revenue stood at $0.5 billion and remained stable through Q2 and Q3 2023. However, there was a noticeable increase in Q4 2023, with revenues jumping to $0.9 billion. This growth continued in Q1 2024, reaching $1.3 billion, and further rising to $1.5 billion in Q1 2025. The data shows a strong sequential growth trend, particularly in the latter half of 2023 and into 2024. This suggests that HPE is not only securing more AI-related orders but also converting them into revenue.
The quarterly AI system ending backlog provides insight into future revenue potential. The backlog has been on an upward journey since Q1 2023, rising from $1.3 billion to $3.4 billion in Q4 2023. However, in Q1 2024 and Q1 2025, the backlog declined to $3.1 billion.
The doubling of AI system orders quarter-over-quarter and a 29 percent increase in backlog indicate that HPE gained traction in the AI market.
“HPE achieved our fourth consecutive quarter of year-over-year revenue growth, increasing revenue by double digits in Q1,” Antonio Neri said in the earnings report.
Segment Results
HPE has generated revenue of $4.3 billion (up 29 percent) from server; $1.1 billion (down 5 percent) from Intelligent Edge; $1.4 billion (up 10 percent) from Hybrid Cloud; and $873 million (flat) from Financial Services.
HPE estimates second-quarter revenue of $7.2 billion – $7.6 billion. HPE estimates growth of 7 percent – 11 percent in 2025 fiscal year.
Meanwhile, HPE is facing a delay in closing the acquisition of Juniper Networks. On January 30, 2025, the U.S. Department of Justice filed a complaint in the United States District Court for the Northern District of California seeking to block the deal between HPE and Juniper Networks. The court set a trial commencement date of July 9, 2025. HPE intends to defend against the Department of Justice’s interpretation of antitrust laws.
Baburajan Kizhakedath
