SaaS success drives HPE growth in its fiscal Q2

Hewlett Packard Enterprise (HPE) landed back in the black in its fiscal Q2 2021 (ended April 30), with strong revenue growth driven by the company’s as-a-service offerings helping it swing to a profit from a steep loss a year ago.

Revenue of $6.7 billion was up 11% year on year, with a profit of $259 million compared to a net loss of $821 million in its fiscal Q2 2021.

During an earnings call, HPE CEO Antonio Neri stated “as-a-service annual recurring revenue growth was an impressive 30% year over year, which underscores our momentum in enabling consumption-based IT. This is an important long-term growth driver for our company.”

By segment, Intelligent Edge revenue increased 20% to $799 million, with Neri noting its Aruba software-as-a-service (SaaS) offering was up “triple digits year over year” and is “now a meaningful contributor” to HPE’s annualized revenue run-rate. Sales from the company’s High Performance Compute and Mission Critical Systems business grew 13% to $685 million; Compute revenue increased 12% to $3 billion; Storage was up 5% to $1.1 billion; and Financial Services inched up 1% to $839 million.

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The company raised its full year fiscal 2021 diluted net EPS outlook to a range of $0.60 to $0.72 from between $0.48 and $0.66.

Executive shuffle

During the call, Neri announced the retirement of Aruba founder Keerti Melkote, though noted in a separate blog post he will remain in an advisory role at the company through October 31. Aruba was founded in 2002, and acquired by HPE in 2015.

Neri said Phil Mottram, who most recently served as SVP and GM for HPE’s newly formed Communications Technology Group, is stepping up to become president of Aruba’s Intelligent Edge business in the wake of Melkote’s departure.

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Though the CEO lamented the loss of Melkote, he hailed Mottram as “a result-driven leader with extensive experience implementing growth strategies and leading transformation initiatives” and “the perfect fit to ensure we maintain our leadership position and strong momentum in the market.”

Neri said on the call its Aruba Edge Services platform now supports “well over 100,000 customers with 150 new customers added every day” and connects over 1 billion devices.