Today, we announced our first quarterly financial results as Hewlett Packard Enterprise – and it was a very strong debut. In Q1, we delivered our third consecutive quarter of year-over-year revenue growth in constant currency. In addition, we grew revenue in every one of our business segments in constant currency, excluding the impact of recent mergers and acquisitions. This is for the first time since 2010.
First quarter net revenue of $12.7 billion was down 3% from the prior year period and up 4% on a constant currency basis.
First quarter GAAP diluted net earnings per share (EPS) was $0.15, down from $0.30 in the prior-year period, and above its previously provided outlook of $0.09 to $0.13. First quarter non-GAAP diluted net EPS was $0.41, down from adjusted non-GAAP diluted net EPS of $0.44 in the prior-year period, and at the top end of its previously provided outlook of $0.37 to $0.41. First quarter non-GAAP net earnings and non-GAAP diluted net EPS exclude after-tax costs of $464 million and $0.26 per diluted share, respectively, related to restructuring charges, the amortization of intangible assets, separation costs, acquisition and other related charges and tax indemnification adjustments.
The strength of the quarter suggests that the separation of Hewlett-Packard has led to positive momentum and a more focused future for HPE.
Results by Business Segment
Enterprise Group (EG) had another strong quarter with revenue increasing 7% year-over-year in constant currency. In Storage, we saw record revenue for 3PAR driven by all-flash, which grew three times the market rate. Servers grew 5% year-over-year in constant currency, thanks to strong Tier 1 and core sales internationally. And the significant actions we took in Networking last year, including the acquisition of Aruba, are really paying off as revenue grew 62% year-over-year in constant currency. Even excluding Aruba, Networking saw double-digit revenue growth in constant currency.
We’re also seeing strong customer traction in Cloud following a major wave of product releases across our HPE Helion portfolio in the second half of 2015. Since the separation, HPE Helion has gained more than 200 customer wins with some of the world’s largest banks, service providers and industrials.
In Enterprise Services (ES), we grew revenue in constant currency for the first time since 2012. This was driven by several significant customer wins for large, global IT transformation projects, including Avon and Sabre. We can also credit a diversified customer base, stabilized revenue and reduced cost structure for keeping ES on track with its turnaround strategy.
In Software, we returned to growth, with year-over-year revenue up 1% in constant currency when adjusted for recent M&A activity. We continued to make progress aligning the portfolio and go-to-market with our four transformation areas, increasing efficiency and accelerating our move to SaaS. Revenue performance in Big Data was up double digits, driven by triple-digit growth in Vertica license. Security revenue performance was also strong.
HPE Financial Services also had a great quarter, increasing revenue in constant currency and growing in financing volume in constant currency year-over-year. This business is continuing to do a tremendous job of providing our customers with the financing flexibility they need to take on their biggest IT challenges while simultaneously managing the business to minimize our risk and maximize our return.
For the fiscal 2016 second quarter, Hewlett Packard Enterprise estimates non-GAAP diluted net EPS to be in the range of $0.39 to $0.43 and GAAP diluted net EPS to be in the range of $0.13 to $0.17. Fiscal 2016 second quarter non-GAAP diluted net EPS estimates exclude after-tax costs of approximately $0.26 per share, related to restructuring charges, the amortization of intangible assets, separation costs and acquisition and other related charges.
For fiscal 2016, Hewlett Packard Enterprise estimates non-GAAP diluted net EPS to be in the range of $1.85 to $1.95 and GAAP diluted net EPS to be in the range of $0.75 to $0.85. Fiscal 2016 non-GAAP diluted net EPS estimates exclude after-tax costs of approximately $1.10 per share, related to restructuring charges, the amortization of intangible assets, separation costs, acquisition and other related charges and tax indemnification adjustments.
"After returning $1.3 billion in capital to our shareholders, HPE is increasing our commitment to return at least 100% of our free cash flow outlook to shareholders in FY16," said Tim Stonesifer, chief financial officer, Hewlett Packard Enterprise. "In addition, when the Tsinghua transaction closes, we plan to use the majority of approximately $2 billion received to repurchase shares."
For the full results, read our press release.