Combining a relevant strategy with strong execution to deliver a record-setting Q1 performance
MARCH 2, 2023 • BLOG POST • ANTONIO NERI, PRESIDENT AND CEO
IN THIS ARTICLE
- We have leveraged our strengths to deliver a record-setting first quarter
- Our performance reflects the relevance of HPE’s edge-to-cloud strategy
- We have generated our highest first quarter revenue since 2016
HPE delivers record-setting Q1 performance and raises fiscal 2023 guidance
As we report HPE’s first quarter results today, I am extremely pleased with our performance. After delivering an outstanding fourth quarter last year, we leveraged that strength to deliver a record-setting Q1. Our performance reflects the relevance of our strategy that addresses megatrends around edge, cloud and AI. It also shows the transformation of our industry-leading portfolio and the outstanding execution of our team. Here are a few highlights from the quarter:
- HPE generated our highest Q1 revenue since 2016, with total revenue climbing 18%1 year-over-year to $7.8 billion, significantly above the high end of our outlook.
- We again expanded non-GAAP operating margin, this time to a record 11.8%2, up 80 basis points year-over-year.
- Non-GAAP diluted net earnings per share (EPS)2 increased 19% year-over-year to $0.63, our highest ever.
- We raised revenue and non-GAAP diluted net EPS guidance for the full fiscal year, reflecting continued confidence in our long-term strategy and execution.
Enhancing innovation through strategic acquisitions
Our differentiated portfolio continues to gain traction. In addition to driving organic innovation across the company, we continue to make strategic acquisitions that enhance what we can offer to our customers. We’ve recently announced several exciting acquisition agreements that complement and expand our offerings, including:
- Cloud security provider Axis Security, announced today, which will help fortify network security and strengthen our Secure Access Service Edge (SASE) solutions.
- Athonet, announced last week, which will place HPE at the forefront of the growing private cellular networking market by creating one of the most complete portfolios in private 5G and wireless connectivity.
- TidalScale, announced in Q1, has introduced scalable compute software technologies to our portfolio, adding additional choice points for customers to meet their compute and data-intensive workload needs.
- Pachyderm, also announced in Q1, allows us to integrate reproducible AI software with our supercomputing and AI solutions, further expanding our AI-at-scale capabilities.
HPE has a successful track record of anticipating what comes next for our customers and investing in innovation that addresses their data-first modernization needs, with an unmatched set of edge-to-cloud solutions.
Driving business momentum
Since we began our edge-to-cloud transformation in 2019, we have consistently grown our as-a-service business, underpinned by the success of our HPE GreenLake platform. The relevance of HPE GreenLake with customers, combined with our disciplined execution, has propelled both annualized revenue run rate (ARR)3 and our as-a-service total contract value higher. This quarter, we unlocked an impressive $1 billion in ARR for the first time. And over the last two years, we have more than doubled our as-a-service total contract value, reaching nearly $10 billion through the end of this quarter.
Impressively, in every one of our key segments during the first quarter, we produced more revenues as well as positive operating profit.
Delivering for customers and shareholders
I am very proud of how our HPE team members have executed to achieve this quarter’s exceptional performance, especially given the uneven macro environment. We have kicked off fiscal 2023 with another set of standout results, positioning us very well to deliver a very strong business performance for the full fiscal year.
We look forward to the rest of the fiscal year, as we continue to be laser-focused on executing our winning strategy, creating unmatched innovation, and delivering significant results for our customers and shareholders.
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.