The News: HPE revenue reached $7 billion in the third quarter of fiscal year 2023, up 1% from $6.95 billion one year ago, as Hewlett Packard Enterprise reported its latest earnings for the period ending on July 31. The $7 billion revenue figure beat estimates of $6.99 billion for the quarter from analysts at Investing.com. HPE reported its Q3 earnings on August 29, 2023. Read the full Q3 earnings press release on the HPE investor website.
HPE Revenue Hits $7 Billion in Q3 2023, Beating Analyst Estimates
Analyst Take: HPE’s revenue for Q3 held steady, with a modest 1% rise, as sales for many tech and consumer companies continue to experience challenging macroeconomic conditions around the world. In the big picture, it was a solid quarter for HPE, with continuing healthy growth in its intelligent edge market and its HPE GreenLake intelligent edge to cloud platform.
Here are HPE’s fiscal Q3 2023 earnings results by the numbers:
- Q3 FY2023 revenue of $7 billion, up 1% from $6.95 billion year-over-year (YoY). The Q3 revenue figure beat analyst consensus estimates of $6.99 billion from Investing.com.
- Q3 FY2023 non-GAAP net earnings of $639 million, up 2% from $629 million YoY.
- Q3 FY2023 non-GAAP diluted net earnings per share (EPS) of $0.49, which is up from $0.48 per share YoY. The EPS beat analyst consensus estimates of $0.46 per share from Investing.com. The Q3 EPS is above HPE’s previous guidance of $0.44 to $0.48 per share for the quarter.
- Q3 FY2023 non-GAAP gross profit of $2.52 billion, which is up 4% from $2.4 billion YoY.
- Q3 2023 non-GAAP gross profit margin of 35.9%, which is up from 34.7% YoY.
- Q3 FY2023 annual recurring revenue (ARR) of $1.3 billion, which is up 48% YoY.
We had a chance to talk with HPE CEO Antonio Neri about the company’s latest strong quarterly results after the earnings were announced, and he told us that he is positive about the numbers, based on strong demand and overall performance in what is still a challenging global market.
Among the highlights mentioned by Neri are HPE’s healthy margin expansion on service and pricing power around AI-centric compute and edge, as well as 48% growth in the company’s GreenLake offerings with total contract value (TCV) rising above $12 billion. Neri said he was also positive based on the more than 40% growth HPE is seeing in its Intelligent Edge business. This has been a long-term focus for HPE and is proving to be a good bet and a future strength as AI proliferates beyond the data center.
These are solid numbers for HPE and we believe they are good indicators that the company is continuing to make its way through the challenging post-Covid-19 global marketplace and its ensuing adjustments.
HPE’s Revenue Sales Market Breakdowns for Q3
HPE’s revenue again saw mixed results across its five main product line market segments in Q3. Here are the complete breakdowns:
- For Q3, HPE’s Compute unit saw its revenue hit $2.6 billion, which is down 13% from $3.03 billion YoY.
- High Performance Computing (HPC) and AI revenue totaled $836 million in Q3, up 1% from $830 million YoY.
- HPE’s Storage unit revenue for Q3 came in at $1.07 billion, down 5% from $1.13 billion YoY.
- HPE revenue in the Intelligent Edge unit totaled $1.4 billion, up 50% from $941 million YoY.
- And in HPE’s Financial Services unit, Q3 revenue totaled $873 million, up 7% from $817 million YoY.
These are strong overall numbers, especially because they come as global markets remain challenging.
HPE Revenue and Earnings Outlook for Fiscal Q4 of 2023
HPE earnings guidance was also provided for Q4 of 2023 as part of its Q3 FY2023 financial report.
For the fourth quarter of fiscal 2023, HPE said it expects revenue between $7.2 billion to $7.5 billion, with non-GAAP diluted net EPS between $0.48 to $0.52 per share.
For the full fiscal year of 2023, HPE estimates that FY2023 revenue growth will be between 4% to 6% in constant currency and targets non-GAAP operating profit growth to be in the 6% to 7% range. HPE has also raised its guidance on its non-GAAP diluted net EPS to $2.11 to $2.15 per share.
The company said it still expects its full year FY2023 free cash flow (FCF) to be between $1.9 billion to $2.1 billion.
HPE Revenue Overview
As we have said before, despite the macroeconomic challenges that continue to linger around the globe, HPE is still prevailing and showing good results while providing excellent technologies to its customers. We believe that HPE’s generally positive results are a testament to its effective leadership team led by Neri, along with its core product and service offerings and its broad innovations across the tech industry.
Several years ago, HPE successfully began presenting a differentiated edge-to-cloud portfolio of products to the market, and we continue to see HPE delivering on those plans while also working to reduce costs and grow its orders in the marketplace. We believe that HPE’s ARR growth shows that the company is seeing well-earned success with that strategy, which is bringing real benefits of HPE technologies to customers around the world.
HPE is well-positioned in a vibrant market of technology change and advancement and is answering the call with innovations and higher performance for its customers. From its innovative edge to cloud, AI, GreenLake, software, XaaS and other offerings for the world’s enterprises, HPE is in the thick of it all.
Daniel Newman and his co-host of The Six Five Webcast, Patrick Moorhead of Moor Insights and Strategy discussed HPE’s earnings in their latest episode. Check it out here and be sure to subscribe to The Six Five Webcast so you never miss an episode.
Disclosure: The Futurum Group 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 The Futurum Group 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.
