HP and HPE buoyed by hardware demand and as-a-service growth

HP saw net revenue increase nine per cent to $17bn while HPE’s net revenue increased two per cent to $7bn

HP and HPE were buoyed by continued PC demand and as-a-service growth respectively as both companies saw sales rise in the first quarter.

HP posted net revenue of $17bn, up nine per cent from $15.6bn during the same period in the prior year, while HPE's net revenue increased two per cent to $7bn.

CRN breaks down both sets of results and the factors behind the revenue increases.

HP

The hardware vendor continued to see demand for its PCs, with personal systems net revenue up 15 per cent year-over-year to $12.2bn.

Much of this was down to commercial demand, with net revenue for the segment jumping 26 per cent while consumer net revenue fell by one per cent.

HP's printing division did not see the same level of performance, with net revenue falling four per cent to $4.8bn. Consumer net revenue was down 23 per cent but commercial net revenue was up by nine per cent.

Overall, HP's net earnings jumped slightly, increasing two per cent to $1.1bn.

Non-GAAP diluted net earnings per share was up 20 per cent to $1.10.

"We continue to see very strong demand, driven in large part by the secular tailwinds associated with hybrid," CEO Enrique Lores said on the company's earnings call.

"The way people work and live has fundamentally changed and we see this trend continuing across our segments long part of the pandemic. This creates incredible opportunities for innovation and growth.

"Companies are reconfiguring office space to be more collaborative and this is requiring a refresh in their IT strategies, services, and security offerings. Consumers are investing to improve their home office setups as hybrid work becomes the norm."

But Lores added that ongoing supply challenges would continue to impact the level of progress being made by the company.

"Despite steady progress against our plan to strengthen our operational processes, it will take time before the gap between supply and demand fully dissipate," he said.

"We are securing more parts for products, sourcing from alternate part suppliers and allocating available parts to optimise our product mix. This is an area of relentless focus for our team."

HPE

HPE, which continues to allocate its efforts into growing its as-a-service offering Greenlake, said it saw as-a-service orders grow by 136 per cent in the quarter compared with the previous year.

Customer demand drove total order growth up 20 per cent from the prior year period, while the company claims it had an annualised revenue run rate of $798m, up 23 per cent.

"During the quarter, we added more than 100 new HPE GreenLake customers, bringing the total count to more than now 1,350 customers who have adopted the HPE GreenLake platform because of its compelling value proposition," HPE president and CEO Antonio Neri said on the results earnings call.

"The traction we are seeing in the market for HPE GreenLake is driving us to further accelerate the transformation of HPE into an edge-to-cloud company.

"On March 22, we will unveil significant new innovations and enhancements to our HPE GreenLake platform to help customers manage their hybrid clouds more easily, protect and get more value from their data and securely connect at the edge."

HPE saw the biggest gains in its intelligent edge segment, with revenue up 11 per cent from the prior year period.

High performance computing & artificial intelligence revenue, meanwhile, was $790m which was up four per cent from the prior-year period while compute revenue grew by one per cent to $3bn.

However, both storage and financial services revenue fell by three per cent and two per cent respectively.

Non-GAAP diluted net EPS was $0.53, compared to $0.52 in the prior-year period and above the previously provided outlook of $0.42 to $0.50 per share.

Total net earnings increased from $223m in the first quarter of the previous year to $513m.