HPE’s revenue up 1% despite Intelligent Edge focus

Business technology major Hewlett Packard Enterprise (HPE) reported financial results for the third quarter, ended July 31, 2021.
HPE revenue performance
HPE reported revenue of $6.9 billion, up 3 percent sequentially and in-line with Q3 outlook of normal sequential seasonality; up 1 percent from the prior-year period or down 2 percent when adjusted for currency.

Year-on-year performance

HPE’s Intelligent Edge revenue was $867 million, up 27 percent, with 15.8 percent operating profit margin, compared to 10.4 percent. Switching was up over 20 percent, WLAN was up mid-single digits percentage, and Aruba SaaS offering was up triple-digits.

HPE’s High Performance Compute & Mission Critical Systems (HPC & MCS) revenue was $741 million, up 11 percent, with 3.9 percent operating profit margin, compared to 7.0 percent. HPE remains on track to achieve our full year and 3-year revenue growth CAGR target of 8 percent to 12 percent.

HPE’s Compute revenue was $3.1 billion, down 9 percent, with 11.2 percent operating profit margin, compared to 9.3 percent. Revenue was up 4 percent, and in-line with normal sequential seasonality.

HPE’s Storage revenue was $1.2 billion, up 4 percent, with 15.1 percent operating profit margin, compared to 15.0 percent. Notable strength in software-defined solutions, including Nimble, with strong momentum in dHCI growing double-digits. All flash Arrays grew over 30 percent led by Primera, up strong double-digits.

HPE’s Financial Services revenue was $844 million, up 4 percent, with 11.1 percent operating profit margin, compared to 8.1 percent.

HPE CEO Antonio Neri said: “The impacts of the pandemic continue to accelerate the shift we predicted years ago to an edge-centric, cloud-enabled and data-driven world. Companies need secure connectivity, faster insights from data, and a cloud experience everywhere. We expect those trends to continue. Digital transformation is no longer a priority but a strategic imperative.”

Annualized revenue run-rate (ARR) of $705 million, up 33 percent from the prior-year period and total as-a-Service orders were up 46 percent.

Based on strong customer demand and recent wins, HPE today reiterated 2020 Securities Analyst Meeting ARR guidance of 30-40 percent Compounded Annual Growth Rate from fiscal year 2020 to fiscal year 2023.