01—Abstract
Summary
Summary of the 10-K filed December 10, 2021. Cited figures are marked; the original filing is the authoritative source.
Hewlett Packard Enterprise Company (HPE) reported its fiscal year 2021 results, highlighting a strategic shift towards an "edge-to-cloud" platform delivered as-a-service.
The company saw revenue growth across most segments, driven by increased demand for its Intelligent Edge solutions and a strong order backlog, though partially offset by industry-wide supply chain constraints. HPE's financial performance was bolstered by significant gross profit margin improvement, attributed to pricing discipline and cost-saving transformation programs.
The company also benefited from a substantial litigation judgment. Looking ahead, HPE continues to invest in key growth areas like HPC & AI and Intelligent Edge, while strengthening its core Compute and Storage businesses, aiming to solidify its position as the leading edge-to-cloud platform-as-a-service provider.
02—Key points
Key Highlights
- Revenue increased by 3.0% year-over-year to $27.8 billion, with international revenue showing a 6.3% increase.
- Gross profit margin improved by 2.3 percentage points to 33.7%, driven by pricing discipline and transformation program cost savings.
- The company received a $2.35 billion litigation judgment, significantly boosting net earnings for the fiscal year.
- Annualized Revenue Run-rate (ARR) grew by 36% to $796 million, indicating strong momentum in HPE's as-a-service offerings.
- Intelligent Edge segment revenue saw a substantial 15.1% increase, driven by product and services growth and the Silver Peak acquisition.
- Despite a challenging supply chain environment, HPE managed to increase its order backlog, indicating strong future demand.
- HPE continues to invest in R&D, with expenditures totaling $2.0 billion, focusing on innovation in cloud, AI, and edge computing.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-KFY2021filed December 10, 2021Financial Statements
FY2021 against FY2020
| Line item | FY2021FY2020 | Change |
|---|---|---|
| Revenue | $27.78B$26.98B | +3.0% |
| R&D Expenses | $1.98B$1.87B | +5.6% |
| SG&A Expenses | $4.93B$4.62B | +6.6% |
| Operating Expenses | $26.65B$27.31B | −2.4% |
| Operating Income | $1.13B-$329.00M | +444.1% |
| Interest Expense | $501.00M$603.00M | −16.9% |
| Net Income | $3.43B-$322.00M | +1164.3% |
| EPS (Basic) | $2.62$-0.25 | +1148.0% |
| EPS (Diluted) | $2.58$-0.25 | +1132.0% |
| Shares Outstanding (Basic) | 1.31B1.29B | +1.2% |
| Shares Outstanding (Diluted) | 1.33B1.29B | +2.8% |
05—Questions
Frequently Asked Questions
What is HPE's primary strategic focus?
HPE's primary strategic focus is to be the leading edge-to-cloud platform-as-a-service company. This involves transforming its entire portfolio to be delivered as-a-service, emphasizing consumption-based IT solutions and leveraging its HPE GreenLake platform.
How did the COVID-19 pandemic impact HPE's business?
The COVID-19 pandemic presented both challenges and opportunities. While it led to supply chain constraints and impacted operations, it also accelerated trends like increased data at the edge and the need for cloud experiences everywhere, aligning with HPE's as-a-service strategy. The company adopted policies like remote work and vaccination requirements for employees.
What is HPE GreenLake?
HPE GreenLake is HPE's edge-to-cloud platform that offers a unified cloud services experience. It allows customers to access, control, and maximize the value of their data and workloads from the edge to the cloud, delivered on a consumption basis, meaning customers pay only for the IT they use.
How is HPE addressing supply chain challenges?
HPE is proactively managing supply chain challenges by implementing inventory buffering measures, leveraging strong partnerships with suppliers, and entering into longer-term agreements to improve component availability and pricing. The company acknowledges that these challenges persist and impact hardware segments.
06—Continue