Q2 2024 Hewlett Packard Enterprise Co Earnings Call Transcript
Key Points
- Hewlett Packard Enterprise Co (HPE) exceeded revenue and non-GAAP diluted net earnings per share expectations for Q2 2024.
- AI systems revenue more than doubled sequentially to over $900 million, driven by strong demand and improved GPU availability.
- HPE raised its full-year revenue and non-GAAP earnings per share guidance, reflecting confidence in the second half of fiscal year 2024.
- HPE GreenLake saw a 9% sequential increase in customer organizations, with annualized revenue run rate growing 39% year-over-year.
- HPE's leadership in AI at scale and across the entire AI lifecycle continues to attract new customers, including partnerships with major players like Microsoft and NVIDIA.
- Non-GAAP gross margin declined by 310 basis points sequentially and year-over-year, driven by a mix shift from higher-margin Intelligent Edge revenue to server revenue.
- Intelligent Edge revenues were down 9% sequentially and 19% year-over-year, with backlog consumption creating difficult comparisons.
- Operating margin for the hybrid cloud segment was only 0.8%, down 300 basis points sequentially and 110 basis points year-over-year.
- The market for traditional storage remains challenging, with a year-over-year decline in revenue.
- Despite strong AI system revenue growth, the overall mix shift to AI systems is a gross margin headwind.
Good afternoon, and welcome to the second quarter fiscal 2024, Hewlett Packard Enterprise earnings conference call. My name is Gary and I'll be your conference moderator for today's call. (Operator Instructions) This conference is being recorded for replay purposes. I would now like to turn the presentation over to your host for today's call, Jeff Kvaal, Head of Investor Relations. Please proceed.
Good afternoon. Welcome to our second quarter of fiscal 2024 earnings conference call with Antonio Neri, HPE's President and CEO; and Marie Myers, HPE's CFO.
Let me remind you that this call is being webcast and a replay of the webcast will be available shortly after the call concludes. We have posted the press release and slide presentation accompanying the release on our investor relations web page. Elements of the financial information referenced on this call are forward-looking and are based on our best view of the world and our businesses as we see them today.
HPE assumes no
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