HPE - Earnings call transcript Q4 2021 | Hewlett Packard Enterprise Company

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Operator

Good afternoon, and welcome to the Fourth Quarter Fiscal 2021 Hewlett Packard Enterprise Earnings Conference Call. My name is Gary, and I'll be your conference moderator for today’s call. [Operator Instructions] As a reminder, this conference is being recorded for replay purposes. I would now like to turn the presentation over to your host for today’s call, Mr. Andrew Simanek, Vice President of Investor Relations. ahead. go Please

Jeff Kvaal

with actually Vice in I'm you of Relations. Tarek conference Investor our Chief President Good Officer; and Executive Andy Jeff Chief today. filling and call earnings quarter for XXXX HPE’s welcome Neri, I'd I'm HPE’s fiscal and Executive afternoon. Robbiati, fourth Kvaal Antonio President like to Officer. to Financial

be call Antonio, made is call one call presentation the and on remind page me Investor release handing the the let webcast shortly our the earnings over of available Relations to web will webcast. investors.hpe.com. after for being year. at that, the Before A We slide replay this press HPE today’s you approximately accompanying posted release

are As our always, based world of as best businesses elements today. and the view of our this and see forward-looking on them we presentation are

disclaimers information, earnings that risks, uncertainties, the For and forward-looking more relating see statements on detailed to involve the assumptions. please materials

refer and of For Forms some discussion intend please assumes most Form its SEC, XX-K such a filings no risks, and recent does any statements. XX-Q. forward-looking of uncertainties, with to and not including HPE the assumptions, to obligation these update HPE's

release presented year-over-year the slide unless to impact revenue exclude conference details. to Please otherwise information information on for We presentation reconciliations call, the time, for the are Also, a non-GAAP quarter the this to rates, been that, on XX-Q all financial today's estimates GAAP report basis reported XXXX. website. Form earnings in based basis, noted, ultimately has ended Throughout refer our website have adjusted XX, on financial on tables for the information a amounts currency. fiscal also could expressed reflects are comparable differ information note call this on at of this from January available provided on and discussed and and that our materially growth accompanying on HPE's the we quarterly

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Antonio Neri

for evidenced growth executed in year we fiscal the XX% very a in XXXX fiscal by order In opportunity our year up and of And edge-to-cloud driving our which shareholder orders attended the our Security Well, of of commitments second the We month, to exceed demand X% record us of how who financial backlog. afternoon, thank value you us our call value those discuss year position HPE responding edge-to-cloud Analyst for our as with year-over-year. Jeff, good capture outlook, $XX.X with year and appreciate billion for accelerated are everyone. fiscal ended in XXXX, Revenue the creation. market to solutions. strong to line momentum. today. XXXX grew year-over-year. expanded you proposition an well, Meeting even our strategy virtual XXXX year, joining Demand our substantial with thanks, Customers all enabled across fiscal to last Thank accelerate long-term metrics, you. half opportunity

ability to orders XXX%. translates up constraints, strong non-GAAP as earnings like. which and flow Revenue free Annualized to up year a would our Our quickly fiscal XXXX of year $X.XX, XXXX it growth XX% to was year-over-year, per billion of convert delivered performance, our year-over-year. operating very margins, supply the as of share and improved We $XXX Run diluted generated as-a-Service Rate we year-over-year. the of year XX% We which we year-over-year. was cash was million significantly our challenge This backdrop ARR particularly impressive to fiscal $X $X.X continue billion, And fiscal up gross XXXX non-GAAP XX% profit net of or increased against revenue by which industry-wide operating

diverse of operations long-standing have with closely global a to a team world-class continues suppliers. that work network We

take robust We proactive this to to to inventory continue measures deliver better position demand. customer us against

momentum year quarter strengthened drove win. in XXXX. large strength an as have the in results including as-a-Service of with enter year-over-year, the in as-a-Service demand fiscal orders, we Increased we orders year-over-year, XXX% XX% QX impressive which network our grew Our particular growth a

flow we full of through QX. little QX XX% detail, I margins, you levels per end provided And Intelligence line Tarek Intelligent by including we the like We in growth increasing Computing million, businesses. the our year-over-year. We of of billion to a fiscal generated Artificial We take seasonality. in cash in also areas, was saw but share diluted key X% results delivered non-GAAP QX a at quarterly normal sequential up putting sequentially more our & you. expanded High QX earnings with will net gross and for and Performance total record operating orders revenue, Edge, in which would $XX $X.X spend context time above in outlook our free year

traction and XXXX to Our results to of our relevance of fiscal year become SX proved the transformation the our strategy the customers cloud company.

for profitable is our these at trends and to positions the need us strategy extract to data Analyst is cloud Meeting Securities month, last center HPE capitalize of differentiated value of experience the at markets. several uniquely growing HPE everywhere, edge, insights. the megatrends; edge-to-cloud at the from discussed we data a and capture to explosion the generate mandate compelling As on

to the and maximize them value and and multi-generation challenges workloads of solutions enable customers services help and of everywhere. all their Our IT the access, control overcome data

strategy. against our speed and We are executing with vision and deliver focus to

I are fiscal proud previously, made continue my priority, one our shift deliberate strategic number as to to have of and and this And business. said We we progress I'm is year steps have transformation XXXX. making the taking investments in

the ways fiscal time strong for to exceeding look us digital with for kept Our orders of demand fiscal shortages billion. and there. first as year-over-year full the industry-wide backlog. XXXX converting new data year-over-year edge order component more enter at year levels create XX% our double revenue Customer and QX, in business to the was record Intelligent revenue capitalize on generated grew momentum customers experiences Edge for $X year But with the we up XXXX digits

Quadrant Our market remained - only a companies the was leaders as very of leader is years Gartner is strong. in row. X be provides infrastructure the notable Leader positioned the positioned Edge in Quadrant wireless Magic the network in leadership one which in to because the HPE the HP edge at one X of for access

created QX, to in this partnership brings security data and solution legacy software-defined innovation appliances We process. with In switch QX, strong and which distributed this right in business. eliminates services Developed continue closed Pensando, whole introduced employee the and as-a-Service throughout the hybrid cloud the services network where the software demand drive customer HP demanded is enhance largest industry-first in the stores. experience we we to needed in deal its to history - applications retailer help and organizations. build In a to US IT modern large by

Eni soccer important standardized digits addition, excluding just Edge the its This X franchise, & introduced power points XX,XXX of Powered closest as-a-Service mainstream experiences. company supercomputers Performance the positioned our the the HPE this can Stadium of of HPE of a through day upgrade XX Computing which calendar double counterless AI US Berkeley than FC $X.X Energy is generated capabilities our level HPE year-over-year. as supercomputer. by TQL sources High most platform Orders the were supercomputers HPE accelerate HPE competitor. digital research Cincinnati XX% In by existing above an platform. QX, to stadium Research sustainable with top HPE the the record to demand accepted In more most US utilization is up bring as for an Aruba market in QX Through discover ago, than scientists win data, new energy and we end HP than weeks strong selected at contracts the event National to supercomputing NERSC network of of to the AI, EX Bermuda announced HPE. seats book uniquely offerings enterprises and GreenLake, energy advanced modeling analytics Agency. world HPC the market with deep Compute the supercomputer. special Aruba and position has more of of XX also at were consumption of promoter number company. game awarded within experiences. deployed learning well phase list cashless, HPE's as Center, by Services any the This billion, Security to next-generation discovery global solution. QX, billion National capabilities League first GreenLake order Eni, of at now the a an according system, simulations, fund its deliver supercomputers to energy Cray Scientific on and of The expanded GreenLake event Science. end-to-end the at the $X of more Lab Major more franchise Department one performing Office Energy XXX the data new with released that is XXX more new in share to generation the And X,XXX - become of built At monitor - powerful top and accurate

XX.X%, and than up we fiscal year and strengthen and XX% In we Compute, where year to in Compute orders our XXXX. continue XXX basis strong operating fiscal more points margins profitability increased delivered businesses We 'XX of Storage saw orders year-over-year. in

with the XXXX, transform see the of fiscal fiscal in digits In We Pointnext, momentum to business, fiscal enable generated year-over-year. mid-single ratio are cloud-native expansion, to XXXX a in services strong single-digit resulted moves for an to revenues, to bold which basis gross our increase high highlighting in up year future and growth data attach Storage margin our potential XXX a revenue performance making year XXXX 'XX. into beyond. we as-a-Service year Pointnext rate, HPE continue points contributed This growth high to ended book-to-bill transformation helping of fiscal which company. X.XX of services in a year And HP and a orders business we order overall

orders company year-over-year. with Our as-a-Service HPE increased year-over-year, orders GreenLake XX% XX% increasing

run annualized $XXX high as-a-Service growth quality up noteworthy is or ARR particularly recurring ARR, The stream revenue high was revenue and is of margin. our because, million XX% Our of year-over-year. rate, this

portion software Meeting three grow of more And Security we believe than shared Tarek quarters years. three our During to last that than month, our next more in that is will services. Analyst ARR mix and the XX%

average And the Our content margins software drive well above ARR today. are margins high-value of will even higher. our gross margins corporate addition gross

company Our strong GreenLake. to financing HPE HPE growth Services, X% as-a-Service year-over-year, within an pivot is XXXX year which volume Financial increased fiscal by driven enabled by

and attacks GreenLake in across recovery. to September, marks offering. cloud protection, of which data for our our deliver GreenLake market. of protection services new edge-to-cloud the data In continue HP protect rapid leadership We overcome entry data set solutions our brands introduced advance war as-a-Service data are to HP we growing into designed This

our Our market-leading acquisition add data to us cyber take of ransomware attacks enabled enterprises to Zerto head portfolio help cloud services threats on. protection and to

hybrid for strategically This We platform. Lake modernization GreenLake market also for which launched analytics important solution growing helps in industry-first, data initiatives includes all analytics the HP data customers Unifi and Data the and HPE accelerate edge-to-cloud. unified analytics, modern positions across

response our incredible XXX We see GreenLake our customer more added XXXX, GreenLake X,XXX. to to new continue year more fiscal than count customers offering. to bringing HP than during We

in meet offerings largest, total than year, We costs. represent billion of more new GreenLake the than family the logos which and one from shipping - second wines The family-owned one than PKA reducing capacity in HPE powers includes sell increasing and XX solution customers. channel last of estates, XXX approximately its IT partners to different of quarter contract the automated the approximately the Examples GreenLake prepare where of our demand ecosystems types to HPE $X.X as-a-Service winery GreenLake added this technologies scale, add Auto logos the more overall selling Today, orders to one over GreenLake that orders while total the bringing share Automations. value produce billion. industry. for N&F $X.X new in the package partner more of GreenLake warehouse, mobile GreenLake, increasing world an GreenLake HPE with of of coming of through largest partner New adopted QX flexibility

to in We implementations one GreenLake the ONGC, with largest also SAP and largest in and platform Natural the a Company, more which manageable flexible. world used India's Oil won is HP the deal make of Gas

I'm Our proud impressive QX had rounded an And out accomplished. HPE. we've for year all of

in time, for We placing transforming we in the a become have World Sustainability executing truly our have a for the XXXX strong XXXX, leader, edge-to-cloud Tarek, Index, to position it help relevant details exceeded year you. At competitive quarter. on initiatives, Jones strategy enter same execution. customers We the our ways we shareholders. with highly share fiscal made Tarek and that, focus earned the profitable to in XX is ESG With on turn our as and a more growth before our than ever to Dow percentile. on incredible progress and about sustainable momentum commitments to to which customers to a over fiscal strategy advanced position year additional in ourselves I differentiated us QX will sharp in over our

Tarek Robbiati

revenue our X, start with financial I'll year summary to the see our year up supply across our and chain since we and unprecedented revenues so results starting growth, sequential Slide And as billion, despite prior also the pleased delivered fourth presentation XXXX, worth with to above billion $X.X from highlighting increased pandemic. year a Thank highlights the through businesses slides discussed the continue Antonio XXXX. demand seasonality X% last referencing X. $X.X XX% at this our last key represents you year-over-year. on I to very quarter usual, with X performance, Building Slides quarter well QX SAM earnings It's QX QX foreshadowed for of Antonio. report up we strength let that challenges of on robust fiscal you that of of quarter, the normal performance level fiscal from much, I'll all highest guide in of am discuss very before that the now the we be order from the the our fiscal me XXXX quarter. month.

software-rich was our was the driven and margin And basis higher-margin actions XX%, pricing discipline points gross cost offerings, shift by XXX towards to deliberate strong from which year. takeout. this non-GAAP up Our prior was

extended to pressured higher were prior underpinning and resulted quarter backlogged margins that costs commodity gross from levels lead indicated, components increasing have previously shortages in As certain industry-wide due an of orders. times

minimize We measures to display and recent continue to the proactive take impact discipline of inventory price healthy disruptions.

situation We year XXXX. expect last chain into supply well this dynamic calendar to

X.X%, high points go-to-market to increase our XX% made Even overall to our these HPC gains venture we portfolio. profit. and Within to investments, XXX benefited XX% non-GAAP continue in non-GAAP also expense, investments increased invest of from up and to an prior range of end outstanding further strong our our which the an in translates as-a-Service margin-rich execution margin of performance ended up the gross address We've with shift portfolio, prior our We later. and in for accelerate model. related at our valuations Pathfinder QX. in year-over-year basis other we from in income quarter business, outlook year $X.XX, the operating detail EPS in areas high the a growth was operating year, to I strong across the will with operational that from more our With

from operations flow received proceeds and satisfaction million, Itanium in after-tax the flow cash of was Oracle cash judgment free $XXX million. litigation, QX from was billion $XX $X.X Excluding of the

XXXX, year prior flow this to cash flow in from billion, to up billion billion increase year primarily year, fiscal $X.X $X.X an from operations total billion, by $X our For cash our from free earnings. up driven prior the the and brings $X.X

ahead us respect targets. and of flow delivering execution cost strong previous has to free our cash optimization schedule program year effectively allocation put and one resource Our with

are our per flow quarter QX Finally, dividend $XXX payable in declaring to the today We current us strength has of of in capital $X.XX our the of share January. substantial million dividends a return cash positioned shareholders. paid to and

cash Slide metrics in repurchase buying shares, in program our that reflecting share view our as-a-Service our million confidence key $XXX is generation and highlights future in stock business. our the X reinstated also undervalued. flow QX We accelerating of

current of adding We GreenLake over significant progress new over to customers today over over increasing billion made have lifetime billion. the by our our and X,XXX by TCV year last $X.X enterprise $X.X XXX over to TCV

QX, ARR up strong represents momentum the XX% provided the are the was significant mix up business. demonstrating total XX% ARR disclosure which acceleration in important reported QX in this as-a-Service which we up XXX% were million, our experiencing For year-over-year make and It's services as specifically, our year-over-year, an from we $XXX XXXX, orders software more of to than today. SAM and at also remember incremental of offerings that highlighting was proportion the together

based We expect how driving strong capabilities to expand gross year fiscal business to fiscal XX% mix gives our targets progressing, add XX% Overall, more we from XXXX. margin XXXX increase ARR to percentage this this which to improvement. than as I'm year, software points X XXXX year to with XX% this a more by by happy momentum fiscal on us to further very confidence growth is year CAGR

highlights now to Let's our on Slide X. turn segment

up represent which now In nearly company QX revenue the XX% fiscal continued revenue, businesses, for was QX X% record orders, our total business. generated Demand growth of with in unabated in up in but Our pronounced our order we over double-digits. grew more growth year-over-year, shortages XX%. of levels were SAM XXXX at and component Aruba the year-over-year foreshadowed Intelligent Edge, XX% up strong year

high to financial Aruba were ARR. Additionally, customer, profile short-term XXX year-over-year, offerings our which our trip basis for single grow in revenue digits. but will in to US to more QX our help points We continued digits also up represented headwind delivered multimillion-dollar NaaS, business. a in Edge-as-a-Service contributing large triple deal Network-as-a-Service the Aruba significantly a Services than in the QX, long-term up strongly,

flat which AI, XX% another was We and orders demand In will for of contracts through contracts expect difficult chain level XXXX. have of HPC with NSA, year some to year finished year-over-year billion further awarded acceptances for even over fiscal in And & fiscal with record now Revenue grew of $X.X but XXXX we have customer momentum year orders. some next strengthened we out beyond. take confidence time strong give us $X will the billion pushed giving large sequentially Looking fiscal the it awarded into billion compare. challenges by in did and contract to get year forward, a ease, XXXX. we $X supply with addition us

was grew ongoing towards digits profitable year Revenue X% With our year-over-year, we by our first software-rich to strong XXX for margin digits. mid-single year We volume up the QX in the platforms, up was normalizing Revenue structure In and for growth HPE double-digit seasonality and dHCI continue year-over-year. of fiscal year back time get several in of flat prior Nimble and again, services, software-defined strong year-over-year. grew up up XXXX accelerated above in FY basis led with investments margins accelerated year-over-year operating and XXXX. were the term operational long order Services, with year quarter-over-quarter, of growth as sequentially including fiscal years. us and cloud sequential momentum, year-over-year points more year-over-year. X% rightsizing data X% in due and reflecting driven Pointnext shift strong double to strong reflecting single orders driven grew fiscal strong Most CAGR in revenue from order this momentum up year-over-year, Primera, double to up very increased strong Storage, as ahead services. in double X% including profit OpEx within Financial important, growing quarter-over-quarter expect seasonality, grew original digits XX% mix outlook. All-flash fiscal sequential Nimble XXXX normal the up to high XXXX X% were range digits arrays most year pricing our services, segment. up growth QX of double to normal double Within product Storage respect robust digits. by and XX.X%, in Revenue X% X% for driving was also cost the year-over-year, Within reported business. backlog. digits disciplined GreenLake. offerings. XX% Operating growth was grew growth importantly, XXXX, This enter overall is, Compute, was X.X% by when digits revenue

from we costs, Our our values benefiting profitability higher is and borrowing securitize lower residual ABS the also market. realization continue to via U.S. as portfolio

year X XX.X%, strong where prior momentum our clearly set above was our points SAM at XXX Our equity see year XXXX. year, rebound basis and on and operating the the XX.X% performance, return highlights can from margin EPS well target sustained XX% XXXX. at revenue the from up you fiscal is last plus and Slide throughout

highest shift EPS our As demand XXXX. mentioned program, QX of year-over-year. delivered business the our strong up we've XX% and $X.X to QX is allocation execution optimization environment, revenue of strategic QX and With cost previously, since increased mix non-GAAP $X.XX, our a billion level we resource

Turning QX delivered in to gross Slide X. XX%. non-GAAP We margins of

of expected the sequentially year. from chain strong the While by we profit. discipline we rates In total, pricing points shift discussed, This from software-rich margins XXXX, incremental were impacted businesses. and mix gross XXX million expanded was delivered supply $XXX challenges gross in as prior high-margin basis positive up previously nearly towards fiscal driven year a

Moving will near challenges but chain gross and will continuous towards of supply structural or term, forward, Lake longer IP margins as-a-Service face lingering offerings. edge shift all storage from intelligent improve the the Green mix our term, in we

X. Slide Moving to

growth while incremental profit we gross profit of targeted You the operating utilized investments margins. can simultaneously to make have some see non-GAAP expanding

our our basis from X, On in year. tremendous our to through X.X%, unique China that in our and engine shareholders. drive up to investments in continues increased Even HPC long-term of our operating highlight investment setup still has with and as-a-Service we value we to margins points long-term to our fuel growth QX levels shift and have pivot. to for higher We innovation to selling costs want these Slide accelerate investment delivered growth, R&D XXX generate prior in the our

a route-to-market IT the commercial in fastest-growing in second the gives and investment market largest, agreement Our us world.

in of year a year. and from business our operational equity our fiscal of HPC delivered interest of $XXX to expense. multinational able on performance as we consolidate that to was prior revenue 'XX, equity through throughout replicate. XX% outstanding other million contributor share HPC's interest makes operating and income our earnings part know, and which line our no year HPC, large has other the not up one has the very you This As generated P&L, XX% in profit P&L been China do from statement the recognize but

Itanium We to flow, 'XX year free XX. cash billion billion cash of obviously, the was fiscal litigation. of $X.X start and of Oracle billion of midpoint by excluding, Slide the from $X generating $X.X Free finished Turning up cash million year operations flow of received primarily satisfaction and outlook billion than earnings. more this cash increased at fiscal year-over-year from our flow 'XX, the and $XXX the is driven of $X.X after-tax,

predictable flow and business as-a-Service cash is more becoming our our recognize diminish, restructuring services. as beginning profitability aligned and revenues deferred to more we Our profile costs software and from to grow

on Moving XX. Slide to

We our have and flow balance progress payment further with Oracle. enhancing made sheet from a free strength cash strong

this a will Itanium years. cash litigation, billion redeemed Following in early, meaningful net NPV interest the next coupon the outstanding in [indiscernible] expense notes our $X we and a and the X.XX% the The expense QX, savings debt-neutral. over premium is from positive we was paid realize XXXX of GAAP-only receipt three that transaction

to position ensure outlook liquidity now our available of growth with consistent of are shareholders. balance long-term cash cash billion. company net capital our have and improved $X.X cash in We return free ample flow Bottom operating we an to position line, investments

fiscal Slide encourage discussion 'XX, for a reiterate presentation month, few our drill let components. like down that last outlook and turning year our review me for my the Meeting on Now, we Securities provided Analyst XX. more outlook. to our Having outlook I to At key that, of said into you detailed a to would

in of X% currency fiscal X%. growth to expect We 'XX year constant revenue

discussed, the expect few As with last we and increased very expedite impacting fees near-term dynamic, to commodity and and revenue quarters chain next shipping the in gross fiscal nutshell, environment remains for to supply costs, supply component in have we discussed that of our more loaded year the expect we chain year risk 'XX 'XX margins. a guidance. reflected with fiscal year back-end In a shortages

be We EPS cash to non-GAAP $X.XX to $X free $X.X expect to to and be $X.XX billion. billion flow

to a line historical where stronger is We generator cash with cash flow seasonality expect of second half. more free in than first half the be the

QX we and revenue levels. Now fiscal digits are from consensus strong specific down to be comfortable chain with seasonality XXXX balanced line to of the supply backlog normal expect current QX sequential of by given with very revenue, year constraints, in mid-single

pressured given We gross supply margins short-term expect to the also be in chain.

As for QX expect $X.XX $X.XX and a result, net we EPS to net XXXX, diluted diluted non-GAAP $X.XX GAAP of to EPS $X.XX. of

So overall, strong very of XXXX. throughout year our fiscal progress our I'm proud

year and in fiscal our XXXX exceeded acceleration that As across margin. all strong we XXXX, the momentum. entering of key well with that incredibly a has year said, by Antonio targets second are environment our with half strong financial fiscal been year demand XXXX; we often in fiscal significant edge-to-cloud working The business demonstrating our strategy is

well-positioned us our deliver against of now in to opportunity fiscal capitalize year are We outlook. the front and on XXXX

for let's that, it up open with questions. Now

Operator

[Operator Research. go Instructions] Shannon Please Cross Cross with from Our first question is ahead.

Shannon Cross

the - that's contract large dig extremely one-time, quarter. into signed, to Thank the orders maybe How from at model service of bit the look the during was a driving we should year growth you think very much. that as-a-Service, next about one-time not that from the I bit wanted strong it we don't business performance. are or how Obviously, much the you know as-a-Service there on little composition the really two? if time? point And in any to can you. one the through product, is this a of how give or but potential, longer-term Thank more flows I more the as little

Antonio Neri

particularly and part cloud the contract is already our $X.X products in fiscal billion said, also early Aruba been services, And is not part of have Aruba as show Edge revenue is storage durable excited driving GreenLake. one XX, added just three we in we to truly that to of the than So we to to in we year XXXX. again, Tarek rapidly. or and the obviously premises at number platform. growing adding when the XX% capabilities we from new of some, I in that. and was services, differentiated subscription And about the which with think from is growth already to delivering proud come which also a like would is XX, year Edge market we're Well, in total as-a-Service, as-a-Service believe We the and you Shannon, what XX thank data that's drove the itself. QX, ways. QX the key or we everything is the Storage model we about order ability like in obviously, the And call one in in transformation I in are which model it's are integrated I'm a the of of as-a-Service okay? HPE the super believe next accelerated is now, and more XXXX, why very to it, many you because will and software you, Shannon. value growth part that it's colo logos, see about in have And we to fact what cloud the call market. network hardware with procure I Infrastructure of platform, momentum this, start, to And in XXX%. in they two-thirds on I portfolio. what new private be from customers it What which can we margin by on of component comment as was consume in the of will But Listen, XXX%, anything XXX more the high that years,

home believe we years been I overall, this has We a of will advantage. say run. So have

disclosing anything as direct now sides, XXX our their versus of competitors soon drive, with And as will you platform are our are numbers, way have as we some co-selling, indirect. we both sharing really partners the can fully what because all you see. selling not from our I'm and see is push that's and We here offers in see, far I that pleased us,

want do Tarek, to the modeling? So you about talk

Tarek Robbiati

a So few yes, said Sharon, mean, quite I things. Antonio already

look this - but that, ARR contract time. notwithstanding network not recognized the you QX million to grew QX million the first ARR, contribute is $XXX because precise QX. We will foremost $XXX and revenue as-a-Service really $XXX largest first XXXX, the to first in over progression of in if did be million contributed and So orders our substantially, that QX the outstanding. after be ARR one in ARR, in to quarter approaching $XXX - But QX, million it's to $XXX did in year in million, now at fiscal and

these contributing. this the an extremely is strategy now, We're Aruba a business are of Right is edge, The of and the pillars. unit So organization momentum and another integrated main executing is that Storage business particular unit fit is that parts the cloud the there three strong, that is about in them. one. business isn't various contributors data. one

we be will opportunity as-a-service also future it. We that continue to tremendous how tell a And firmly offerings and in for But our in see the opportunity us. because HPC there. will expand AI believe we big will us

Operator

Wamsi Mohan from is question Merrill ahead. Please with America go Lynch. of next Bank The

Wamsi Mohan

Yes. about. full it to guide. major you have in Thank maintaining comments Antonio, strong near here shortages in year term, were component you. the to a guys you're for been guide that, consistent Relative and backlog, reason - your the for very reconcile trying sounds what which like but around quarter I'm happened the your

out to it confidence is pan just you the the what resolve you these now? will is gives understand going gives as loaded like And confidence year to that you're what back-end seeing that itself? this this So trying

Antonio Neri

little front me more in bookings front been end book the the is amazing and about availability. the Sure. right, - driven there one more I the fact last to because we business approach think, It's Despite by itself. have the I supply grew the challenges always X%, back XX% one pleased, weeks counterintuitive quarters more navigating through orders of year-over-year, talk job think our orders is couple the in actually. the that's the look and way bring can more allows right, the a we end revenue quarter particularly end that there right? and Obviously, between XX more quarters, continue, divergence bit the our is if fact having back the orders in that the convert And I Well, company so on, which say early velocity, linearity you is than time XX% more a - I'm we a dollars great And big you will. X%. us, I end, really area orders. are and actual challenge. if it. customers in do on supply but that what in the results, was despite now at up mean, if Total once The about I chain have you

zero, challenge. are week remarks, So is Tarek whatsoever. and day, And backlog orders as tell can cancellation? asked the I is that right durable. the very to seen People me in in you no taking This industry-wide actions said that listen, my very we every on, the the matter is is an going confident have ourselves. of you cancellations And early navigate. we're fact now, we're strong. every But continue I said, coming incredibly with short-term,

have navigate on have quarter suppliers, the you built acceptances the as also, engineering our chain chunk capabilities two. based in recognize on backlog adjust components know, better. accepted. which supply with is to base our remember, HPC, is cannot and we with big able we second based then our already fully the to the be shipped. half think, and related until to a work operations remember, or And on and also be bond. the the So, we of And then But revenue will capabilities, we customer the world-class then And next have I done both understanding to

large order we think half we the the us the about remember, a deals we quarter, going of very had back customer, one exo-scale is in in them a for of HPC. year. large This and XXXX, But recognized important have which to be as

confident X% And remind we guidance, ourselves why transition of long-term great, to So, because to the X% durable the which towards very X right, let's X% service, a I is as X% is and that's in have guidance. growth. Tarek headwind that in are is to X.X of points

X.X%, the for a then you if And X% to add currency, is And to have which top you so like constant in the on more will. you that, currency. headwind to normalize that, obviously X% of the that is sense X% it's

So, the QX if the more like you all billion, back that, growth. than all are chain quarter we remember of the that way largest a in going are supply despite was the to X% X% XXXX. And to $X.X

Operator

ahead. Leopold from Please Simon James. is Raymond with question next go The

Simon Leopold

this taking it. there some XX% if aspect because aspect maybe you an an question. On placing of wondering for get price is, growth, Thanks earlier that of factors of I'm order extended I'm the could here of or to trying in orders ahead of customers And to what the unpack contributed thinking is lead-times. increases about customers

us to If contributing you could what just you. see understand Thank you that massive help number?

Antonio Neri

it than call you a glad with strong agree stronger year. and and Well, of It's clearly half the in QX the because momentum we you. massive was QX first

a I Simon. think it's combination,

recovery the driven by that think there is economy. there out the in demand obviously, I a market

the true somebody been competitor. points and enterprise, scale And deals business, HPC, just faster are against number anybody at I and drives to amazing solution, offerings is the I number supercomputers we're of quarters we'll of power in all differentiated about experience can not same driving take now of the can one from XX% edge it's market Perhaps and advantage that think time, cloud-native also deploying are our with XXXX. extra a number question on have space, portfolio going I a and top worry it's and And to the the the also in second question this but This supercomputer, And deliver a happened the now mobile-first supply. match it, of me. the cloud. usage. And making a differentiated. unique that's believe the supply now the else. again, on, customers has the and not impact the earlier momentum XX% We in the true the in better us. is don't leader XX you years, think underestimate And think Aruba we space. And GreenLake is that the and in to I remember, double-bookings? there's it's by despite for has - of you pipeline this short, about is then hybrid the are share XXX just edge. the the back getting swap that for should deploying GreenLake, which, a of short-term on we approach, we challenge not because clear got unique which But the not value mid-term. that commodity something closing better

it's in the a growth so and commented XXX new logos. current I And installed which base combination of logos, new

the edge-to-cloud XXXX. in So we that's but rest our market, be in believe accelerate believe the is in which may space, there because some the commodity is offering, resonating of going to we and

Operator

is Jefferies. from go Please ahead. The Kyle with next question McNealy

Kyle McNealy

your question. wondering bit are I certainly get some bit that that down there. Compute areas the consensus, for in there's could was higher in we than drill Thanks you were and I expected driving if the a segment a more results? the FX They

for stronger a sense Compute? maybe And are the But that a much market of how And give that. increases? you mix quantified unit memory can product split you can there versus price you been You growth comes for segments for versus contextualize? that us have ASP general of Thanks. from growth

Antonio Neri

back I the end, Go ahead, the then on Tarek, and comment will on end.

Tarek Robbiati

Sure, Kyle.

a the terms comparison of all units across respect growth, board With unit to customers, we telcos, these remains So is roughly normalized right customers. the comparison. and in SaaS quarter-on-quarter, been from demand robust see segments, and large have very very the flat enterprise customer companies, year-over-year but strong demand

over been you very have Which pleased that compute comes costs and year And grown fees have units rising orders We're an disciplines for QX normalized know. dynamics us. with generated a team able it. executed have space. still and XXXX. pretty were expedite When the X%. risen also there container there that of generate but strong Aruba and this QX with for XXXX dramatically, that hikes a sold, of fiscal you that about If good P, with and number basis, were you that in way the We our think commodities this feel for order Aruba XXXX, in in price that just XXXX up normalize result feel together strong quite from demand and in costs where QX segment. price for that QX management and to ahead the that of the units normalized We've strong that of and remember on increases coming as by XX% performance is of the about both I QX, comment AUP logistics order in particularly excellent been very we price we is storage. XXXX made and forward, year in true in fiscal the our we the at have Compute, But on we The book feel true have overall backlog you quantity. very moving is demand about very a

Antonio feel a commented moment we about year fiscal as So ago. XXXX, pretty good

Antonio Neri

Yes.

about to terms, simple Just the to this think way few add In it. a comments. is

first in all, compute up So XXXX. our of orders than were XX% more

$XXX number units COVID we two $XXX and When XXXX are million one, Our Obviously, reasons; number if $XXX structural you we cost; which for cleared the units in QX up up. remember, XXXX QX. the backlog you started, in million two, changes. when are remember, had and million for that, for normalize normalized backlog, a AUPs -

still Telco next-generation which more the are XX structural sustainable, irrespective our changes As it, changes those going Gen of - changes, to XX.X you're and more of and is HPE in And we built which Edge of platform, believe which have the Software-as-a-Service markets as providers, the from. see call Compute now the density is introduce And if obviously, is where big are then the manufacturing driving own said on obviously And of said we we to and we companies, significant market, not those of SaaS, structural delivered manageability. options to pivot a on our Edge which and this, growth. XG GreenLake and are platform, focus into with to trust in been drives growing value but XXXX being the particularly the segments all important. what SaaS, by XXXX the benefit are are platform of in and well. growing our focus all deployment market, hospitality, of Intelligent then Edge, of way, quite we then retail, enterprise while Solutions have at to cost. cloud Telco the we commodity segments listen the root super different three the want silicon with we you and

sell we the a time. is more over have GreenLake multiplier the to in growth as-a-Service, Compute, So for Compute because force more we're revenue the recurring in going

hope answers I that question. the So

Operator

is from question Katy with next The Stanley. Huberty Morgan Please go ahead.

Katy Huberty

a fiscal incredibly a these how similar you. that XX% quarter business XXXX, orders to we strong acceleration your think year, growth XXXX? every Antonio, in orders on there commentary Thank we that to X% just up point you of convert for growth X% and last do you backlog fiscal so, reconcile Yes. reported could flush? see in should growth that order And really revenue XXXX about if in the which the and strong revenue fiscal with revenue meaningful growth? Is X%

Antonio Neri

comments. Tarek few Yes, I then add let start, I'll a and will

Tarek Robbiati

Yes.

strong. I chain and say We're the quarter par you basis. And fiscal acceleration revenue do of the every year-over-year script second understood XXXX. to orders did from the trough the We itself that strongly since was before has to the very quarter prior most respect Why a is The the comment constraints full we end a would going navigate XXXX, it's year now on in continuing was and on, the important orders manifesting business we're in likely watermark And first most is that of acceleration fiscal at to up. than it with year the Katy, orders not that been growth in year where point half on QX that? is demand the are still day, year XXXX XXXX. even So chain very have of make our high linearity hit to the timing-wise, of XXXX hit those calendar with back-end that, at going and itself revenue manifested here remains hopefully, the of XXXX of is is the to it supply is be loaded. see we last this my quarter roughly. ever year. in the abate supply revenue XXXX in we constraints But edging was for year the quarter fiscal the better getting probably fiscal and It's year because second

and also comfortable levels and a you when Specifically quarter-after-quarter. trend, by at year-over-year now will look of from But of chain which do for we're we said supply I with a really digits. navigating day-after-day, that on, revenue that script, as decline expect consensus little we're be dampened current imply, month-after-month mid-single bit overall acceleration in my the seasonal QX, revenue an on constraint

Antonio Neri

about amazing Yes. Katy, turbocharge. we what anytime think Tarek, amazing to addition abating of me I don't acceleration believe the in what is focus, that in our in that's particular of a first to all, that we and actually be growth. me the particularly quarter, And And where excites I know soon. is first innovation to see knowing going I what to new see demand calendar the I is place a I see areas that continue accelerate. we offerings what -

growth including you is six in of to then it. as-a-Service continue because like for XX%. Wamsi, but hopefully, this the the seven to think that's should four, XXXX, about good with have team pretty I get move ARR customer credit But here. with operations But we're to Tarek is in the a back to the about earlier day-to-day to normalize the about the again, think pivot, a time Now in way more not quarters in lot going said driving growth we accelerate And first for to which our supply should you drive two as you And the I spend the we the accelerating we obviously, when availability XX% business. three of of year. that, I acceptances. supply at of that and the to to feel combination remember, global can the going imagine, half, - And transformation everything

Operator

The with next question is go from Evercore. ahead. Please Daryanani Amit

Amit Daryanani

deceleration, also I drop guess, could over maybe revenue want a And little just margin there. driving Intelligent seemed the the out maybe side. Edge I talk to Tarek, talk the declines what's but you fairly The margin just about material. on bit

love things you've fiscal that for your they Is will you've when being that business which kind alleviate How are at do driver I up would you, cancellations XXXX? understand is you If it, will only a talked other that I versus your a issues that looking these there confidence. of are gives happen chain big lack supply said fair? business you're would now. pretty convert? about imagine ramp therefore Antonio, cancellation confidence have so, orders right I to So I with the And see this happening to touch how you there. the then, what's through bit good fair conviction and think that orders of you want a in and about in

Antonio Neri

talk - of to the want the obviously was of Network-as-a-Service the Aruba component you Tarek, about piece a big that? which it

Tarek Robbiati

Yes, yes.

Antonio. take me let that, you. So Thank

we growth about basis in a retailer. a the So in first Amit, large And operating for headwind XXX shared as of signed US of on Network-as-a-Service scripts, contract headwind we a our on margins substantial about this time had revenue XXX Aruba and with points. points a basis very

demand the changed. it, Aruba you growth approaching to business margins But The If chain the knowing be there XX% simply for comfortable and double-digit at supply high-teens QX you comfortable, book would is fiscal and very we're in is in be have sum that order suffered high-teens revenue realize meaning top-line to remains solid. still they're anything, remains our very is XXXX. the a particularly XX% the are bit that - overall. there it's were could constraints super was of in well, story strong. that there. the to been there QX see that a you us. QX, of we it do still And the Aruba. the of and order normalize for realize of QX has We realized very incredibly and in Nothing little high-teens if company just as growth Aruba strong, So year part feel in deferring into one more margins

about confident very we're prospects XXXX. Aruba of fiscal for So the year

Antonio Neri

net Remember I at covered everything. mean, what $XXX million this that the time. I think Yes. we pretty much

And So more makes also that with company. very pleased of a us faster. and execute to part lean is ability that, which agile the

is of One was sales compensate also big what changes this made and the force orders, on you our we we way the see.

confident now are based implementation. our We on systems

that started three ago. we this drive also in years to recall, changes forward. And think And all execution. the I excellence to completion, the we some us you If and way is close allowed here operational make are getting business we about going

because said will we market prices. leader to And so, thing working the think right the On And the at in time. us not to same the this has the team inventory ability side, we which I but done as at on it's right the inventory, convert the long-term - be continue changing power. capital and pricing but the remarkable do tend also to time, job to Security just I Analyst making Meeting, the give driving in bets right do a

that customers And continue for numbers. so we manage and to will delivering for of our inventory needed as

Operator

final ahead. question our with be Please go And Samik from JPMorgan. will Chatterjee

Samik Chatterjee

Thanks to get here. wanted I me guess HXC. for your on I in thoughts squeezing

equity we mentioned the And well? of back-end multiple plus kind today, should year. the as constraints HXC supply growth loaded into You call with How XXXX navigating what's had income. times in a conference about strong about visibility a fiscal there? chain And your through think year you've

HXC income to think about, wanted we Thank consistent should if just should So see equity that's as well? with you. how

Antonio Neri

and with felt contributes performance. important to was HXC it you share I Tarek Well, to our financial Yes. how

of in and value XX% done value they You China, they proposition significant. shows products, the we in that entity, set to which China. continue to multinational business the, they they independent our the has And HXC able operates And expect we same do. incredibly a been achieve also, to no which continue the is a as And They their is planet, the which very shareholders, day-to-day. other and a So lot And will the obviously, an is grow, are going support have customers accretive here. well to changes at extremely this and market drives job. business But that country, what grow manage unique the saw a which received. the report mean slide our They And interest business well, remarkable equity are what positioned second setup, will to if the very you to Tarek double-digits. really said, support is what I shareholders. have to unique are is continue of SMB. time, in obviously. continue it's enterprise accrete they a that largest in to telco, of for market pretty the call okay? to on that grow ICT believe well And positioned, business, which and

May we at quarters, put Now are timeframe. expire previous as the in said

Tarek Robbiati

right. That's

Antonio Neri

best that shareholders, is right what thing will And always, right will time. we is as return at we the the our for shareholders. do our what And make decision the for

Tarek Robbiati

point said we're to position is away Antonio add that, simply in And The a very, very in hopefully, all of not And data and feel interesting that the stake about we very the it slide, on would you our HXC. well. I value continues take rush. good accrete. our

Antonio Neri

time walk with I'm thank you hope clear away performing. as appreciate we you, us the XXXX. with view you, a we of we momentum I Well, today. are Thank to the have to making particularly everyone. enter how Jeff. We Okay. talk you pleased

on point. could strategy not be Our more

excited in some very solutions. we of then amazing is because even value to I'm the accelerate of the but only the terms to create of our shareholder have demand the pipeline think us differentiate further. I things And going not innovation XXXX. because And strong, down our coming and market, that's about in ability

we consensus next we so thank Be looking out well. that next the current are and very forward Thank to very to we I'm month challenge there. much. to guidance Happy and you execute speak the so, you confident I you don't short-term or on prosper And we this in in If quarter. Holidays everyone the to XXXX. to hope navigate as And exceed while of the supply, but XXXX, very much.

Operator

and gentlemen, Ladies this Thank today. concludes our call you. for

Hewlett Packard Enterprise (HPE) 1 Dec 212021 Q4 Earnings call transcript