Innovating and executing in Q3 to drive growth and profitability
AUGUST 30, 2022 • BLOG POST • ANTONIO NERI, PRESIDENT AND CEO
IN THIS ARTICLE
- HPE increased revenue, profit, and margin during a period of ongoing supply-chain constraints
- Enduring demand underscored customers’ prioritization of technology investments and the relevancy of HPE’s portfolio
Revenue and margins grow with enduring demand
As HPE reports our third quarter results for fiscal year 2022 today, I am pleased with our ability to deliver for customers and shareholders in such a dynamic market. HPE grew revenue, increased profit, and strengthened gross margins through steady operational focus and execution – all despite tight supply conditions and unfavorable foreign exchange fluctuations.
This quarter’s results clearly demonstrate demand for our industry-leading portfolio. Customers continue to find HPE’s solutions relevant in today’s complex macroeconomic environment where technology innovation is critical to delivering important business outcomes. This demand validates our strategy and the compelling value proposition we offer our customers. It also enabled us to accelerate our recurring revenue this fiscal year.
Highlights from our Q3 earnings report include:
- Total HPE revenue increased 4%1 year-over-year to $7 billion dollars, which was also above the sequential outlook we had given.
- Profit, measured by non-GAAP diluted net earnings per share2, was 48 cents -- a 9 percent sequential rise and 2 percent year-over-year.
- Gross margins remain resilient, expanding to 34.7%2, despite ongoing supply chain constraints and inflationary environment.
- Orders growth rates moderated this quarter, as we had expected they would after an entire year of orders growth at 20% or higher; orders were still robust and exceeded our expectations.
Customers tell us they need to drive their important digital transformation work while also managing costs, and it is clear HPE can meet those needs with our edge-to-cloud portfolio delivered through the HPE GreenLake platform. Our HPE GreenLake customer base is growing, and our customers are voting with their workloads and data. In Q3, we doubled HPE GreenLake new logo growth year-over-year, and our existing HPE GreenLake customers continue to renew and expand contracts with us. The HPE GreenLake platform now has an exabyte of data under management, and customers worldwide connect more than two million devices to it.
This momentum is reflected in our Annualized Revenue Run-Rate3, up 28%1, and total as-a-service orders3 up 39% year-over-year – bringing our year-to-date as-a-service orders growth to 86%. These indicators show enduring demand for our as-a-service solutions even while supply constraints limited some installations.
I am proud of HPE’s Q3 performance, and the progress we are making to cement our position as the leading edge-to-cloud company. When I speak with customers, it’s very rewarding to hear how they are using our industry-leading portfolio to solve their most critical business problems. Of course, none of what we do would be possible without the dedication of our 60,000 team members who continue to drive HPE forward; it is because of their bold innovations and disciplined execution that HPE has been able to solidify its essential position with the customers and communities we serve.
We have crafted a strategy at HPE that is winning in the marketplace, and I am confident in our ability to execute on our commitments with strong demand, a solid pipeline and a unique edge-to-cloud offering that is delivering revenue growth and expanded gross and operating margins for our company.
1 Adjusted to eliminate the effects of currency. A description of HPE’s use of non-GAAP financial information is provided in the earnings presentation at https://Investors.hpe.com.
2 Reconciliation of specific adjustments to GAAP results for the current and prior periods and description of HPE’s use of non-GAAP financial information are included in the earnings presentation at https://Investors.hpe.com.
3 For definition of as-a-Service orders and ARR, please refer to the earnings presentation at https://Investors.hpe.com.
This blog contains forward-looking statements subject to risks; results could differ materially. For more cautionary language regarding forward-looking statements, refer to the earnings presentation at investors.hpe.com.