Persistent demand drives orders and sustained margins
Q2 2022 Financial Highlights:
• Orders: Strong customer demand drives order growth up 20% from the prior-year period, the fourth
a consecutive quarter of 20% or better order growth
• As-a-Service orders(1) increased 107% from the prior-year period, the 3rd consecutive quarter of doubling
• Revenue: $6.7 billion, up 0.2% and 1.5% adjusted for currency from the prior-year period and in line with the Q2 outlook
• Gross margins remain strong despite ongoing supply chain constraints and an inflationary environment
• GAAP of 32.4%, down 170 basis points from the prior-year period primarily due to $105 million of Russia-related charges
• Non-GAAP of 34.2%, down 10 basis points from the prior-year period
• Diluted net earnings per share (“EPS”):
• GAAP of $0.19, flat from the prior-year period primarily due to $126 million of Russia-related charges
• Non-GAAP of $0.44, down 4% from the prior-year period due to impact from Russia-related operations
• Cash flow from operations of $379 million and free cash flow of ($211) million, in line with normal seasonality
• Returned $214 million to shareholders in the form of dividends and share repurchases
• Declared a regular cash dividend of $0.12 per share, payable on July 8, 2022
• Reiterates fiscal 2022 revenue growth of 3%-4% adjusted for currency
• Third quarter fiscal 2022: Estimates GAAP diluted net EPS to be in the range of $0.22 to $0.32 and non
GAAP diluted net EPS to be in the range of $0.44 to $0.54
• Fiscal 2022: Updates GAAP diluted net EPS to be in the range of $1.17 to $1.31 and non-GAAP diluted
net EPS back to the original outlook of $1.96 to $2.10 provided at the HPE October 2021 Securities
Analyst Meeting reflecting unfavorable currency movements and Russia’s exit
• Fiscal 2022 free cash flow(3): Reiterates free cash flow guidance to be in the range of $1.8 to $2.0
HOUSTON, Texas – June 1, 2022 – Hewlett Packard Enterprise (NYSE: HPE) today announced financial
results for the second quarter, which ended April 30, 2022. “Persistent demand led to another quarter of
significant order growth and higher revenue for HPE, underscoring the accelerating interest customers
have in our unique edge-to-cloud portfolio and our HPE GreenLake platform,” said Antonio Neri,
president, and CEO of Hewlett Packard Enterprise. “I am optimistic that demand will continue to be
strong, given our customers’ needs to accelerate their business resilience and competitiveness. We
remain focused on innovating for our customers and on executing with discipline so that we translate
that demand into profitable growth for HPE.”
“We are particularly pleased with the resiliency of our gross margins despite the inflationary environment
and ongoing supply chain disruptions,” said Tarek Robbiati, EVP and CFO of Hewlett Packard Enterprise.
“With record levels of high-quality backlog, we are well-positioned for growth in FY22 and beyond, and
confident in realizing the financial commitments we set at our Securities Analyst Meeting last October.”
Second Quarter Fiscal Year 2022 Results
Net revenue of $6.7 billion, up 0.2% and 1.5% adjusted for currency(2) from the prior-year period and in
line with outlook.
Annualized revenue run-rate (“ARR”) (4) of $829 million, up 25%(2) from the prior-year period, and total
as-a-Service orders(1) were up 107% from the prior-year period, marking the third consecutive quarter of
orders doubling. We remain confident in delivering our 2021 Securities Analyst Meeting ARR guidance of
35%-45% Compounded Annual Growth Rate from the fiscal year 2021 to the fiscal year 2024.
GAAP gross margin of 32.4%, down 170 basis points from the prior-year period, primarily due to $105
million of Russia-related charges, and non-GAAP gross margin of 34.2%, down 10 basis points from the
prior-year period, driven by disciplined execution and pricing actions.
GAAP diluted net EPS was $0.19, flat from the prior-year period and in line with our previously provided
outlook of $0.18 to $0.26 per share.
HPE announced in February that we stopped all shipments to and sales in Russia and Belarus. During
the second quarter of 2022, we recorded total charges of $126 million related to the Russia conflict’s
impact on our business. Based on further assessment of business risks and needs, we have determined
that it is no longer tenable to maintain operations in Russia and Belarus and are proceeding with an
orderly, managed exit of our remaining business in these countries. We expect to record additional
charges in the third quarter of fiscal 2022 related to our decision to exit Russia and Belarus, but do not
expect these charges to be material.
Non-GAAP diluted net EPS was $0.44, compared to $0.46 in the prior-year period and near the midpoint
of our outlook range of $0.41 to $0.49 per share. Second-quarter non-GAAP net earnings and non-GAAP
diluted net EPS excludes after-tax adjustments of $333 million and $0.25 per diluted share, respectively,
primarily for Russia-related disaster charges, stock-based compensation expenses, transformation costs,
and the amortization of intangible assets.
Cash flow from operations of $379 million, down $443 million from the prior-year period.
Free cash flow of ($211) million, down $579 million from the prior-year period reflecting normal
seasonality and strategic working capital actions due to strong customer demand.
Capital returns to shareholders of $214 million in the form of share repurchases and dividends. Segment Results
• Intelligent Edge revenue was $867 million, up 8% from the prior-year period in actual dollars and 9%
when adjusted for currency, with a 12.6% operating profit margin, compared to 15.7% in the prior-year
period. Aruba Services revenue was up double-digits from the prior-year period and Intelligent Edge as-a
Service ARR(4) was up 50%+ from the prior-year period.
• High-Performance Computing & Artificial Intelligence (“HPC & AI”) revenue was $710 million, up 4%
from the prior-year period in actual dollars and 5% when adjusted for currency, with (a 5.6%) operating
profit margin, compared to 2.6% from the prior-year period. The operating loss was driven by supply
constraints and delayed customer acceptances. We remain on track to exceed the expected 11% market
CAGR from FY21-24.
• Compute revenue was $3.0 billion, flat from the prior-year period in actual dollars and up 1% when
adjusted for currency, with a 13.9% operating profit margin, compared to 11.2% from the prior-year
period. Margin expansion was driven by strategic pricing actions more than offsetting input cost
• Storage revenue was $1.1 billion, down 3% from the prior-year period in actual dollars and 2% when
adjusted for currency, with a 12.6% operating profit margin, compared to 16.8% from the prior-year period
reflecting higher supply chain costs and unfavorable mix shifts.
• Financial Services revenue was $823 million, down 2% from the prior-year period in actual dollars and
flat when adjusted for currency, with a 12.6% operating profit margin, compared to 10.8% from the prior-
year period. Net portfolio assets of approximately $12.6 billion, down 4% from the prior-year period or up
1% when adjusted for currency. The business delivered a return on equity of 20.4%, up 2.1 points from
the prior-year period, well above pre-pandemic levels.
Board of Directors has declared a regular cash dividend of $0.12 per share on the company’s common
stock, payable on July 8, 2022, to stockholders of record as of the close of business on June 13, 2022.
Fiscal 2022 third-quarter outlook:
Hewlett Packard Enterprise estimates GAAP diluted net EPS to be in the range of $0.22 to $0.32 and
non-GAAP diluted net EPS to be in the range of $0.44 to $0.54. Fiscal 2022 third-quarter non-GAAP
diluted net EPS estimates exclude after-tax adjustments of approximately $0.22 per diluted share,
primarily related to, transformation costs, stock-based compensation expense, and the amortization of
Fiscal 2022 outlook:
Hewlett Packard Enterprise updates GAAP diluted net EPS outlook of $1.17 – $1.31 and full-year FY22
non-GAAP diluted net EPS outlook to the original outlook provided at our 2021 Securities Analyst
Meeting of $1.96 to $2.10. Fiscal 2022 non-GAAP diluted net EPS estimates exclude after-tax
adjustments of approximately $0.79 per diluted share, reflecting charges related to Russia and Belarus,
transformation costs, stock-based compensation expense, and the amortization of intangible assets.
Reiterates free cash flow(3) guidance of $1.8 to $2.0 billion.
1 As-a-Service (“AAS”) orders are an overlay across all business segments contributing to HPE’s
consumption-based services (both recurring and non-recurring), and includes hardware, as well as
GreenLake as-a-Service, Aruba SaaS, CMS SaaS, and other Software assets.
2 Adjusted to eliminate the effects of currency. A description of HPE’s use of non-GAAP financial
information is provided below under “Use of non-GAAP financial information”.
3 Hewlett Packard Enterprise provides certain guidance on a non-GAAP basis, as the Company cannot
predict some elements that are included in reported GAAP results. Refer to the discussion of non-GAAP
financial measures below for more information.
4 Annualized Revenue Run-Rate (“ARR”) is a financial metric used to assess the growth of the
Consumption Services (“CS”) offerings. ARR represents the annualized revenue of all net HPE
GreenLake services revenue, related financial services revenue (which includes rental income from
operating leases and interest income for capital leases), software-as-a-Service, software
consumption revenue, and other as-a-Service offerings recognized during a quarter and multiplied by
four. We use ARR as a performance metric. ARR should be viewed independently of net revenue and is
not intended to be combined with it.
About Hewlett Packard Enterprise
Hewlett Packard Enterprise (NYSE: HPE) is the global edge-to-cloud company that helps organizations
accelerate outcomes by unlocking value from all of their data, everywhere. Built on decades of
reimagining the future and innovating to advance the way people live and work, HPE delivers unique,
open, and intelligent technology solutions as a service. With offerings spanning Cloud Services,
Compute, High-Performance Computing & AI, Intelligent Edge, Software, and Storage, HPE provides a
consistent experience across all clouds and edges, helping customers develop new business models,
engage in new ways, and increase operational performance. For more information, visit: www.hpe.com