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A Look at HPE’s Intelligent Edge and Financial Services Revenue

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Mar. 1 2018, Updated 1:20 p.m. ET

Intelligent Edge revenue rose 9% YoY in fiscal 1Q18

Intelligent Edge, Hewlett Packard Enterprise’s (HPE) smallest segment, accounted for over 8% of HPE’s total revenue in fiscal 1Q18. This segment accounts for revenue from the campus and branch switching, wireless LAN (local area network), Aruba Services, and Edge compute businesses. HPE’s Intelligent Edge segment’s revenue rose 9% YoY (year-over-year) in fiscal 1Q18 to $620 million with an operating profit of $18 million, or 2.9%.

HPE’s focus on Intelligent Edge services has meant significant research and development and go-to-market investments, resulting in a leadership position for the company.

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Aruba

HPE’s Aruba product saw revenue growth of 9% in fiscal 1Q18, primarily in campus switching as well as from “pull-through with the Aruba Acquisition,” according to HPE’s chief financial officer, Tim Stonesifer. HPE stated that its WLAN (wireless LAN) sales were lower than expected due to rising competition from Cisco (CSCO), Brocade-Ruckus (RKUS), Ubiquiti, and China’s (FXI) Huawei.

According to Stonesifer, “Aruba services was up 6% as we continue to improve services attached with the goal of driving rates closer to those in Pointnext.”

At the end of 3Q17, HPE-Aruba accounted for 13.7% of the global WLAN market. Cisco, Brocade-Ruckus, Ubiquiti, and Huawei accounted for 44.7%, 5.9%, 5.3%, and 5% of this market, respectively.

Financial Services

HPE’s Financial Services segment’s revenue rose 8% YoY (year-over-year) in fiscal 1Q18 to $888 million with an operating profit of $72 million, or 8.1%. Strong residual sales drove the segment’s revenue growth. Its operating profit fell 110 basis points YoY due to an unfavorable bad debt release in the prior year’s period.

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