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HPE returns to profit for the year thanks to services and a legal win

HPE returns to profit for the year thanks to services and a legal win

HPE has reported a 3% increase in sales for the year to $27.8 billion, as it swung back to profitability, helped by a big litigation win against Oracle in the fourth quarter.

The Oracle court loss, around the two firms' argument over Itanium products, brought in $2.35 billion.

HPE said its edge-to-cloud strategy was driving “strong momentum” across all businesses entering FY22.

“HPE ended fiscal year 2021 with record demand for its edge-to-cloud portfolio, and is well positioned to capitalise on the significant opportunity in front of it,” said Antonio Neri, president and CEO of Hewlett Packard Enterprise. “In 2021, we accelerated our pivot to as-a-service, strengthened our core capabilities, and invested in bold innovation in high-growth segments. As our customers continue to demand greater connectivity, access to solutions that allow them to extract value from their data no matter where it lives, and a cloud-everywhere experience, HPE is poised to accelerate its market leadership and provide strong shareholder returns.”

For the fourth quarter ended October 31, 2021, revenue was $7.4 billion, up 2% from the prior-year period or flat when adjusted for currency.

In the quarter, the annualised revenue run-rate (ARR) was $796 million, up 36% from the prior-year period and total as-a-service orders were up 114% from the same period last time.

Quarterly Intelligent Edge revenue was $815 million, up 4% from the prior-year period or 2% when adjusted for currency, with a 10.7% operating profit margin - compared to 12.3% from the prior-year period.

High Performance Computing & Artificial Intelligence (HPC & AI) revenue was $1 billion, up 1% from last year, or flat when adjusted for currency, with a 14.3% operating profit margin, compared to 13% last year.

Compute revenue was $3.2 billion, up 1% compared to last year, or down 1% when adjusted for currency. The 9.4% operating profit margin was higher than the 6.6% previously.

Fourth quarter Storage revenue came in at $1.3 billion, a rise of 3%, but with a lower 13.8% operating profit margin when compared to 18.2% last year.

For the year, thanks to that court win, HPE posted a big net profit increase to $3.43 billion, compared with a loss of $322 million last year.