HP Enterprise saw a strong performance from its IoT and edge computing unit lift what was an otherwise flat quarter.
For the quarter, HPE's third for its 2023 fiscal year, revenues of $7.0bn were up 1 percent on the year-ago quarter. Net income was $464m, up from $409m in Q3 of 2022 and earnings per share were $0.36, up from $0.31.
By far the big winner for HPE on the quarter was Intelligent Edge, the branch of the company that includes IoT, OT devices, and edge computing hardware. Intelligent Edge brought in revenues of $1.4, up 50 percent from the year ago quarter and good for around 20 percent of HPE's total revenues on the quarter.
"Intelligent Edge is now the largest source of HPEs operating profit," CEO Antonio Neri told analysts on the company's quarterly earnings call.
"Our strategic shift towards edge, hybrid cloud, and AI is working."
However, the units that comprised the rest of HPE's revenues did not bring in the same level of growth. Compute revenue was $2.6bn, down 13 percent on the prior year, and storage revenue of $1.1bn was down 5 percent.
HPC and AI revenues held steady at $836, up 1 percent from the year-ago. Financial services revenue of $873m was up 7 percent.
HPE CFO Jeremy Cox said that the company is optimistic both compute and storage will turn things around as the economy continues to recover and customers resume purchases.
"We are starting to see indicators that our largest customers are returning to the market," Cox told analysts.
"Cycle times remain elongated and digestion of prior orders will continue to have some near-term impact."
That is indeed a start turnaround from a year ago when HPE execs said that their backlog was at historically high levels.
Speaking with industry pundits on the numbers, Neri said that cloud services were an area where HPE was particularly optimistic about its prospects for generating sales from cloud and AI customers.
"The reason they come to us is because we have a unique amount of intellectual property, think about it as an open ecosystem," Neri explained.
"The other is because we have a unique experience in AI. We have been doing AI for decades, but we have been doing it for unique, discreet customers."