HPE: Fiscal 4Q16 Financial Results

Hewlett Packard Enterprise Development LP (HPE) announced financial results for its fiscal 2016 fourth quarter and fiscal year, ended October 31, 2016.

Storage revenue reached $779 million for the quarter, back to Q/Q growth (8%) but down 5% Y/Y.

This business is included into enterprise group with quarterly sales of $6.7 billion, down yearly 9% with a 13.2% operating margin. Servers revenue was down 7%.

4FQ16 Enterprise Group Revenue

Meg Whitman, president and CEO, commented: “We saw growth this year in key areas of the portfolio, including high performance compute, Cloudline servers, all-flash storage, converged systems, mission critical systems, and networking with Aruba Sure.“

“We introduced a new MSA offering to address the entry market that I think should benefit us going forward. So I think, you’ll see storage continued to be a strong point for us, where we’ve got that old, you’ve got traditional storage declining and the new stuff growing, but feeling pretty good about the 2017 outlook, given the strength of the portfolio and the momentum we have in all-flash,” added CFO Tim Stonesifer.

Traditional storage this quarter declined 11% and that was particularly challenged in entry storage.

HPE saw growth in 3par as usual (3par plus XP plus EVA was up 2%). Overall it was up 5% and all-flash was up 100% Y/Y now at $750 million annualized run rate excluding services. This means the could be number 3 in the sector behind EMC Dell and NetApp and surpassing Pure Storage.

All-flash now makes up 50% of 3par portfolio and still only comprises 10% of the data center. So the company sees more running room in its 3par all-flash business now finally with de-dupe that was missing.

Higher-margin converged storage portfolio was up 1% and it’s now 56% of the total storage mix.

I the rumored acquisition of SimpliVity between $3.8 billion to $3.9 billion is confirmed, it could largely expand HPE’s hyper-converged portfolio currently including Hyper Converged 380 appliance competing with Nutanix and SimpliVity.

Quarterly revenue for HP storage only
(without services, in $ million)

Note: For  4Q15, HPE announced previously $905 million for storage and now $819 million.

To read the earnings call transcript