The News: HPE revenue rose to $7.87 billion in the fourth quarter of fiscal year 2022, up seven percent from $7.35 billion one year ago, as the company reported its latest earnings on November 29. The Q4 revenue figure, which is the second-highest quarterly revenue figure in its history, beat consensus estimates of $7.43 billion for the quarter from analysts with Yahoo Finance. HPE also reported its earnings for the full year of fiscal 2022, with revenue of $28.49 billion, up 2.56 percent from $27.78 billion one year ago. Read the full earnings Press Release on the HPE website.
HPE Revenue Hits $7.87B in Q4, Beating Analyst Estimates
Analyst Take: HPE’s revenue of $7.87 billion for Q4 is impressive, giving the global technology vendor its second-highest quarterly revenue total in its history. HPE’s highest revenue total came in Q4 of 2018 when the company reached $7.94 billion for that quarter. For HPE, the $7.87 billion earned in the latest quarter is particularly encouraging because it arrives as many other tech vendors are continuing to struggle with their own flat or lower revenue totals.
A major reason for HPE’s positive revenue news is that the company has low exposure to consumer markets which are experiencing broader economic turmoil due to global inflation, lower demand, lingering supply chain and other factors.
Here are HPE’s fiscal Q4 and full year 2022 (FY2022) earnings results by the numbers:
- Q4 revenue of $7.87 billion, up seven percent from $7.35 billion for the same quarter one year ago, beating analyst’s consensus estimates of $7.43 billion for the quarter.
- Q4 non-GAAP net earnings of $755 million, up 9.7 percent from $688 million one year ago.
- Q4 non-GAAP basic net earnings per share (EPS) of $0.58, which is up from $0.52 EPS one year ago. The EPS beat consensus estimates of $0.56 EPS expected by analysts at Yahoo Finance.
- Q4 non-GAAP gross profit of $2.6 billion, which is up 7.1 percent from $2.42 billion in the same quarter one year ago.
- Q4 non-GAAP gross profit margin of 33.1 percent, which is up slightly from 33 percent one year ago.
- Q4 cash flow from operations of $3 billion, which is flat from one year ago.
- Q4 Annualized Revenue Run-rate (ARR) of $936 million, up 17 percent from one year ago.
- For full fiscal FY2022, HPE’s revenue totaled $28.49 billion, up 2.56 percent from $27.78 billion one year ago.
- For full fiscal FY2022 non-GAAP net earnings of $2.66 billion, up 2.38 percent from $2.60 billion one year ago.
- For full fiscal FY2022 non-GAAP basic net EPS of $2.04, up from $1.99 per share one year ago.
- For full fiscal FY2022 non-GAAP gross profit of $9.6 billion, up 2.57 percent from $9.4 billion in the same quarter one year ago.
- For full fiscal FY2022 non-GAAP gross profit margin of 33.9 percent, unchanged from one year ago.
- For full fiscal FY2022 cash flow from operations of $4.6 billion, which is down 22 percent from $5.9 billion one year ago.
With these numbers, HPE is making it clear that the company under President and CEO Antonio Neri is making big strides and that its smart strategies with HPE GreenLake and other innovative technologies are taking shape.
For Q4, HPE had a laudable quarter, beating estimates for revenue and EPS, while also unveiling higher guidance for the future. For HPE, we see this as an earnings trifecta that is coming at a good time for weary investors and the marketplace.
HPE Earnings Outlook for Q1 and Full Fiscal Year 2023
HPE revenue and earnings guidance were also provided by the edge-to-cloud vendor for Q1 of 2023 and for the full fiscal year of 2023 as part of its Q4 FY2022 financial report.
For the first quarter of fiscal 2023, HPE said it expects revenue between $7.2 billion to $7.6 billion, with non-GAAP diluted net EPS to be between $0.50 to $0.58 per share.
For the full fiscal year of 2023, HPE said it expects non-GAAP diluted net EPS of between $1.96 and $2.04.
The company also reiterated that it expects its free cash flow will be between $1.9 billion to $2.1 billion for FY2023.
HPE’s Sales Market Breakdowns for Q4 and FY2022
HPE’s revenue was boosted by good performances in most of the company’s market segments in Q4 and for the full fiscal year of 2022. HPE saw growth in its Compute, Storage, and Intelligent Edge divisions, while revenue was down in HPE’s HPC and AI and Financial Services units. Here are the complete breakdowns:
- For Q4, HPE’s Compute unit saw its revenue hit $3.7 billion, which is up 15.6 percent from $3.2 billion one year ago.
- HPE’s Storage unit revenue for Q4 came in at $1.3 billion, up 3.8 percent from $1.2 billion one year earlier.
- HPE revenue for Q4 in the Intelligent Edge unit totaled $965 million, up 17.9 percent from $818 million one year ago. Intelligent Edge as-a-Service ARR revenue rose 70 percent in the quarter compared to the prior year.
- High Performance Computing (HPC) and AI revenue fell in Q4 to $862 million, down 13.7 percent from $999 million one year ago.
- And in HPE’s Financial Services unit in Q4 revenue totaled $857 million, flat from one year ago.
For the full fiscal year of 2022, here are the HPE’s revenue breakdowns by division:
- HPE’s Compute unit for FY2022 saw its revenue hit $12.7 billion, up 3.7 percent from $12.2 billion one year ago.
- HPE’s Storage unit revenue for FY2022 fell by one percent to $4.71 billion from $4.76 billion one year earlier.
- HPE revenue for FY2022 in the Intelligent Edge unit totaled $3.6 billion, up 11.2 percent from $3.3 billion one year ago.
- High Performance Computing (HPC) and AI revenue for FY2022 totaled $3.19 billion, essentially unchanged from $3.18 billion one year ago.
- And in HPE’s Financial Services unit, FY2022 revenue was $3.3 billion, down 1.8 percent from $3.4 billion one year ago.
Overall, HPE’s segment performance remains healthy, especially due to the ongoing tough market conditions being faced by so many vendors across the global tech sector.
HPE Overview
HPE’s revenue and other positive financial results are perfect examples of why we remain bullish about this strong company. HPE is continuing to successfully drive forward to serve its broad market base during uncertain times, fueled by effective leadership, proven products and services, and continuing innovation that meets customer needs.
HPE’s move to present a differentiated edge-to-cloud portfolio of products continues to be successful, helping to drive the almost-record revenue that the company brought in for Q4. We expect the company to keep massaging those goals and strategies as it works to reduce costs and grow its orders in the marketplace amid a broad field of competitors. For HPE, its recent strategy of seeking higher margins by providing a wide range of technologies via as-a-service models shows measurable success in what we believe is a wise transformation of its core business practices.
HPE clearly understands that annualized recurring revenue is a friend of successful companies and that it something to be pursued, grown, and nurtured. These latest quarterly and full year results for HPE show that this approach is working well as customers enjoy the benefits of leaving their previously CapEx-heavy investments behind.
It will be exciting to watch HPE’s performance throughout 2023 as it continues to build on its edge to cloud and everything-as-a-service (XaaS) portfolios and missions.
Disclosure: Futurum Research is a research and advisory firm that engages or has engaged in research, analysis, and advisory services with many technology companies, including those mentioned in this article. The author does not hold any equity positions with any company mentioned in this article.
Analysis and opinions expressed herein are specific to the analyst individually and data and other information that might have been provided for validation, not those of Futurum Research as a whole.
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Author Information
Daniel is the CEO of The Futurum Group. Living his life at the intersection of people and technology, Daniel works with the world’s largest technology brands exploring Digital Transformation and how it is influencing the enterprise.
From the leading edge of AI to global technology policy, Daniel makes the connections between business, people and tech that are required for companies to benefit most from their technology investments. Daniel is a top 5 globally ranked industry analyst and his ideas are regularly cited or shared in television appearances by CNBC, Bloomberg, Wall Street Journal and hundreds of other sites around the world.
A 7x Best-Selling Author including his most recent book “Human/Machine.” Daniel is also a Forbes and MarketWatch (Dow Jones) contributor.
An MBA and Former Graduate Adjunct Faculty, Daniel is an Austin Texas transplant after 40 years in Chicago. His speaking takes him around the world each year as he shares his vision of the role technology will play in our future.
