Hewlett Packard Enterprise reported its fiscal third-quarter earnings, beating Wall Street expectations on revenue. The company raised its guidance on free cash flow and earnings per share for the year, the fourth increase of its kind since last October.
The company cited the strength of its as-a-service and networking businesses, as well as its edge-to-cloud management strategy.
Quarterly revenue went up 3% from the previous quarter and 1% from a year ago to reach $6.9 billion. However, analysts had expected slightly higher sales ($6.93 billion). Earnings per share of 47 cents easily exceeded the analysts’ estimates of 42 cents.
Subscription based servers
HPE executives said the company’s core compute and storage businesses are on solid ground and even gaining market share in the storage market. At the same time, growth businesses like its intelligent Edge and GreenLake composable infrastructure offering, which promises to deliver on-premises equipment as a subscription service, showed significant traction.
HPE added 200 GreenLake customers in the quarter to reach a total of more than 1000. Intelligent revenues reached $867 million, up 23% from 2020, on a currency-adjusted basis, with significant improvements to its profit margins.
The company also reported that as-a-service orders went up 46% but did not offer specific figures.
A huge GreenLake contract
The earnings announcement arrives a day after HPE announced it had won a $2 billion, 10-year contract with the National Security Agency for high-performance computing as a service through the GreenLake platform.
The deal is significant because it involves more than selling infrastructure. The CEO, Antonio Neri, called it a true as-a-service model and management where HPE operates the whole environment. He noted that it was different from the past.
Meanwhile, Higher-Performance & Mission-Critical Systems revenue grew an adjusted 9% to hit $740 million. Compute revenue fell an adjusted 12% to $3.1 billion but grew 4% over the past quarter. Find out more here.