Hewlett Packard Enterprise reported quarterly net revenue of $6.9 billion, down 8% from the prior-year period and 7% from the prior-year period when adjusted for currency. m
HPE said market uncertainty, supply constraints, and North America manufacturing capacity constraints impacted revenue in Q1, particularly in Compute.
GAAP gross margin was 32.8%, up 170 basis points from the prior-year period and Non-GAAP gross margin of 33.2%, up 210 basis points from the prior-year period. Non-GAAP diluted net EPS was $0.44, compared to $0.42 in the prior-year period and in-line with the previously provided outlook of $0.42 to $0.46 per share.
Some highlights:
- Intelligent Edge returned to growth with revenue of $720 million, up 4% year over year when adjusted for currency, with 9.7% operating margin, up 630 basis points from the prior-year period. Enhancements to North America sales leadership and go-to-market segmentation are paying off with double-digit growth in North America and 13% growth when adjusted for currency in overall WLAN product.
- Compute revenue was $3.0 billion, down 15% year over year when adjusted for currency, with 9.5% operating margin, flat from the prior-year period. Revenue was pressured this quarter due to a more uneven business environment, component supply constraints and North America manufacturing capacity constraints.
- High Performance Compute & Mission Critical Systems (HPC & MCS) revenue was $823 million, up 6% year over year when adjusted for currency, with 6.0% operating margin, down 660 basis points from the prior-year period. HPC business continues to gain momentum with over $2.0 billion of awarded business expected to be delivered by FY23.
- Storage revenue was $1.3 billion, down 7% year over year when adjusted for currency, with 18.1% operating margin, down 60 basis points from the prior-year period. Hyperconverged Infrastructure showing continued momentum, up 6% year over year when adjusted for currency and Big Data, up 45% year over year when adjusted for currency.
- Advisory & Professional Services (A&PS) revenue was $243 million, flat year over year when adjusted for currency, with (0.8%) operating margin, up 12.5 points from the prior-year period. A&PS is a strategic business that pulls through significant infrastructure and operational services sales.
- Financial Services revenue was $859 million, down 6% year over year when adjusted for currency, with 8.5% operating margin, up 10 basis points from the prior-year period. Net portfolio assets were up 2% year over year when adjusted for currency, and financing volume was up 2% year over year when adjusted for currency. The business delivered return on equity of 14.8%, down 90 basis points from the prior-year period.
