Hewlett Packard Enterprise Co (NYSE:HPE) reported a strong quarter with revenue of $7.9 billion, up 17% year over year, exceeding guidance. The company’s non-GAAP diluted net earnings per share was within the guided range of $0.47 to $0.52.
Server revenue reached $4.3 billion, up 30% year over year, while Intelligent Edge revenue increased by 2% quarter over quarter. Hybrid Cloud revenue also rose 11% year over year, and Annual Recurring Revenue (ARR) grew 46% year over year to $2.1 billion.
HPE’s GreenLake Cloud platform surpassed $2 billion in annual recurring revenue, highlighting strong demand for hybrid cloud and AI workloads. The company achieved significant growth in its AI systems business, with $1.6 billion in new AI system orders and a 29% quarter-over-quarter increase in AI systems backlog.
However, HPE faced challenges in its Server segment, with operating margins falling below expectations due to pricing competition and inventory valuation issues. The company is also experiencing pressure from tariffs on imports, which are expected to impact the Server business and overall profitability.
As part of cost-cutting measures, HPE plans to reduce its workforce by 5% over the next 12 to 18 months, affecting approximately 2,500 positions. The proposed acquisition of Juniper Networks is also facing legal challenges from the Department of Justice, potentially delaying the expected synergies from the deal.
Despite these challenges, HPE remains confident in its revenue and operating margin improvements expected in the second half of the year, driven by timing of AI systems deals, server execution improvements, tariff mitigation, and cost efficiency programs.
Source: https://finance.yahoo.com/news/hewlett-packard-enterprise-co-hpe-071804095.html