HPE Q3 results reflect edge momentum and portfolio mix shift

Houston office of Hewlett Packard Enterprise | HPE’s Q3 results reflect edge momentum and portfolio mix shift

Hewlett Packard Enterprise has announced its third quarter financial results demonstrating an edge momentum and portfolio mix shift, driving modest revenue growth.

In the quarter ended July 31, 2023, the multinational tech company saw its revenue reach $7.0bn, up one percent year-on-year and 3.5 percent in constant currency, signaling its efforts to adapt its business strategies to the changing market conditions.

Antonio Neri, president and CEO of Hewlett Packard Enterprise, said during the earnings call that the results were mainly being driven by its intentional ongoing mix shift to higher growth – higher margin parts of the portfolio that are critical priorities to customers. 

“Our success in shifting the portfolio delivered a 120 basis points YoY non-GAAP gross margin expansion, driven by exceptional performance in areas like the Intelligent Edge, where revenue has set its fifth consecutive record quarter, and HPE GreenLake, which continues to accelerate our strategic pivot, generating higher recurring revenue and gross profit across our four product segments, driven by the increased mix of high margin software and services.”

Through its strategic shift towards edge, hybrid cloud and AI, delivered through the HPE GreenLake cloud platform’s momentum and strong execution, HPE has raised its full-year non-GAAP diluted net earnings per share guidance. 

Non-GAAP, diluted net earnings per share increased to $2.30 at the midpoint, while maintaining both full-year constant currency revenue growth guidance of four to six percent and full-year free cash flow guidance of $1.9bn to $2.1bn. 

In terms of HPE’s general direction, Neri shared that they continue to see strong interest in AI and supercomputing offerings from enterprise customers who are incorporating AI into their businesses.

“This is translating into significantly higher demand for our HPC and AI business segment as customers discover HPE’s unique capabilities to power unprecedented level of performance for AI at scale, including using our market-leading supercomputers built with sustainability in mind to train and tune their AI models,” Neri added. 

Some key collaborations HPE has recently announced include French cloud services provider Inedys selecting HPE GreenLake edge-to-cloud platform for its new IT architecture and HPE beginning to manufacture some of its high-volume servers in India as part of the ‘Make in India’ government initiative.