Hewlett Packard Enterprise (HPE) posted better-than-expected revenue growth during the first fiscal quarter 2018. It was Antonio Neri’s first earnings report as CEO. Neri took over from former CEO Meg Whitman in February.
The company’s first quarter net revenue of $7.7 billion, up 11 percent from the prior-year period, sent HPE’s share price up about 12 percent in after-hours trading today.
HPE also reported first quarter non-GAAP earnings per share of $0.34, above its previously provided outlook of $0.20 to $0.24 per share.
“Our strong Q1 performance is proof we have the right strategy,” Neri said on the call with investors, adding that the company saw growth in every segment of its business. “I believe our portfolio is the strongest we have had in years.”
HPE separates its business into three segments — hybrid IT, intelligent edge, and financial services — and all three reported revenue growth during the quarter.
Compute revenue grew 11 percent, driven by strong hyperconverged infrastructure (HCI) and composable infrastructure sales. HPE’s HCI product, which uses software it acquired form its $650 million SimpliVity purchase, grew at over 200 percent, year-over-year. Additionally, storage grew 24 percent year-over-year. Neri credited the Nimble Storage acquisition for the boost.
Intelligent Edge, which includes Aruba products and services, was up 9 percent, posting $620 million in revenue.
And financial services revenue grew 8 percent, reaching $888 million during the quarter.
On the earnings call, both Neri and HPE CFO Tim Stonesifer fielded questions about HPE Next, the company’s plan to net between $750 million and $800 million of cost savings over three years.
Stonesifer said HPE expects to see about $250 million in cost savings related to HPE Next this year. Neri, who developed the savings plan, said it’s working. “This is an initiative I architected,” Neri said. “It’s all about simplification, innovation, and execution.” The plan also involves layoffs, which he didn’t mention.
“In Q1 we executed well with no disruption,” Neri said. “This is an opportunity for me as the new CEO to establish a new culture and to really architect the company from the ground up, with a clean-sheet approach. The organization is actually very excited about what we are doing.”