AI bears fruit: HPE completed its first quarter with record revenue of $8.5 billion and doubled profit

Hewlett Packard Enterprise (HPE) reported results for the fourth quarter of fiscal 2024, ended October 31, 2024, in which the company generated record revenue of $8.5 billion, exceeding the same quarter of the previous fiscal year by 15%, driven by increased sales of AI- Alletra servers and storage.

Net income (GAAP) for the quarter amounted to $0.99 per share, exceeding the fourth quarter of the previous fiscal year by 102% and by 161% – the previous quarter. Also, the profit was higher than the company’s own forecast in the range of $0.76 – $0.81 per share. Adjusted earnings (non-GAAP) were $0.58 per share, up $0.06 per share year-over-year and beating the FactSet analysts’ consensus estimate of $0.56 per share. ARR (annual recurring revenue) increased year-on-year by 48% to $1.9 billion.

Image source: HPE

According to Antonio Neri, HPE CEO and President, the company generated quarterly revenue of more than $8 billion for the first time in its history. He also said that for the third consecutive quarter the company had growth rates and revenues higher than the previous year, and noted record server revenue of $4.7 billion (31% year-on-year growth), marking the third consecutive quarter of double-digit growth in the segment.

Revenue from the HPE hybrid cloud segment, which includes storage systems and part of the server business, which also accounts for HPE GreenLake, increased year-on-year by 18% to $1.6 billion. The GreenLake platform now has about 39 thousand customers. The segment’s growth was driven by sales of HPE Private Cloud and Alletra Storage MP arrays, which were announced in April 2023.

«Customer adoption of our HPE Alletra Storage MP solutions continues to grow at an accelerating pace. Since launch, we have sold approximately 3,000 systems,” said Neri, adding that Alletra Storage MP is the fastest-growing storage product in the company’s history. He also said the company will continue to invest in the HPE Alletra Storage MP multi-protocol platform as it transitions storage to an AI-driven, cloud-based, disaggregated architecture.

Revenue from the Intelligent Edge segment, which is responsible, in particular, for sales of IoT products and Aruba’s network business, fell by 20% year-on-year to $1.1 billion. HPE believes that the acquisition of Juniper Networks will expand its portfolio of offerings to include networking equipment for the data center, will revive its work. At the same time, Intelligent Edge has seen order growth for the third quarter in a row. The company’s financial services revenue was $893 million, up 2% from the same period in the previous fiscal year.

As for its fiscal 2024 results, HPE reported revenue of $30.13 billion, up 3.4% from the previous fiscal year, and profit rose 26% to $2.55 billion. The company also added more than 9,000 new customers and generated a record $2.3 billion in free cash flow, exceeding its full-year forecast of $1.9 billion.

In the current quarter, HPE expects revenue growth to range from 15% to 17%, without giving specific volume figures, since the Juniper acquisition deal has not yet been completed. “We expect the Juniper transaction to close in early 2025, at which time we will provide consolidated company guidance for fiscal 2025,” CFO Marie Myers said. The forecast for adjusted net income (non-GAAP) for the first quarter of 2025 is in the range of $0.47 – $0.52.