HPE Q4 Earnings

By Patrick Moorhead - December 5, 2023

The Six Five team discusses HPE Q4 Earnings.

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Transcript:

Patrick Moorhead: So revenue is down, but as we’ve seen from the shift to GreenLake, ARR was good. We also saw a freaking edge that was up 41% that was crazy. They beat on profits and the AI and supercomputing kicked in and I need to drill down to see if that’s the supercomputing deals that are finally being realized or it’s real AI. Forecast was down and that’s why HPE took the hit. The fundamentals are solid though. There’s nothing that I saw in their performance that was unexpected and I think it’s just a tough market for general compute and aside from Lenovo and Pure, storage is tough as well, but again, I want to put the exclamation point. Edge up 41%. By the way, was below expectations, but 41%. That’s the last time I’ll say this.

Daniel Newman: Yeah. So I continue to watch ARR GreenLake. There’s a pretty significant pivot that’s taking place between the cell of large compute. You saw the HPC numbers, AI numbers, edge numbers continue to grow. The edge to cloud strategy clearly is working well, but that core kind of compute storage business has been slow and I think some of that has to do with the pivot to GreenLake and some of that has to do with just the overall market conditions. When we talked about Dell Lenovo, not a lot of year-on-year growth here in those particular areas. When there are such a big part of the number, those slower growth total dollar numbers that come from ARR just aren’t going to add up quickly enough. Solid quarter. Some work to be done there. I want to see the ARR for GreenLake continue to stay high ’cause that’s really where all the energy is so that’s where the numbers need to show up.

Patrick Moorhead
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Patrick founded the firm based on his real-world world technology experiences with the understanding of what he wasn’t getting from analysts and consultants. Ten years later, Patrick is ranked #1 among technology industry analysts in terms of “power” (ARInsights)  in “press citations” (Apollo Research). Moorhead is a contributor at Forbes and frequently appears on CNBC. He is a broad-based analyst covering a wide variety of topics including the cloud, enterprise SaaS, collaboration, client computing, and semiconductors. He has 30 years of experience including 15 years of executive experience at high tech companies (NCR, AT&T, Compaq, now HP, and AMD) leading strategy, product management, product marketing, and corporate marketing, including three industry board appointments.