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Hewlett Packard Enterprise (HPE) has published its latest set of financial results, with a strong quarter driven by traditional server sales.
The results, for the financial quarter that ended on 31 October, showed the company’s revenue reaching $8.5 billion, a 15% increase on the corresponding quarter a year ago.
“Growth in the quarter was led by strong conversion of AI systems backlog, refreshes in traditional compute, better than expected performance within Hybrid Cloud, and a continued recovery in networking,” Marie Myers, the company’s CFO, told a recent earnings call.
Servers were the standout segment for HPE, with revenue rising 32% year-on-year to $4.7 billion – a record for the company’s servers unit. HPE said its revenue from traditional servers has now grown for four quarters in a row. Recent growth was driven by refreshes in its Gen11 server line, HPE said, with Gen11 contributing more than two thirds of its core compute revenue for the quarter.
HPE’s hybrid cloud also performed strongly, delivering 18% year-on-year growth to reach $1.6 billion for the quarter. HPE’s Alletra cloud storage and pay-per-use cloud environment Greenlake, which added 2,000 new customers during the quarter, were key cloud performers for the company.
HPE also noted that its first earnings from private cloud AI were booked during the quarter, with industries including financial services, education and manufacturing expressing interest in the technology.
AI systems also showed progress, with 16% year-on-year growth and $1.5 billion in revenue. HPE’s backlog of AI orders now totals $3.5 billion.
It was a less impressive story for both HPE’s financial services and Intelligent Edge divisions: the former saw revenue remain practically flat year-on-year at $893 million while the latter’s revenue fell by 20% to $1.1 billion.
Antoni Neri, HPE’s CEO, also gave an update on the progress of HPE’s acquisition of Juniper Networks, saying the purchase has already received approvals from regulators in the UK, India, Australia, South Korea and the EU, but discussions with US watchdogs are ongoing. Neri added that he expects the discussions with the Department of Justice to continue into 2025, with the deal closing in the “early part” of next year.
Next year will be something of a mixed picture, according to Myers. “Overall customer conversations indicate higher IT spending in 2025 with multiple tailwinds that should contribute to revenue growth. We expect a continued recovery in traditional computing and growing adoption of AI systems by enterprises and sovereigns, although we expect orders to remain competitive and lumpy,” she told the earnings call.
