Revenue of $6.7 billion was up 9% year over year, with better-than-normal sequential seasonality.
I'm particularly pleased with the double-digit revenue growth in both our HPC and Intelligent Edge businesses that together now represents two -- 22% of our HPE total revenue.
Our as-a-Service annual recurring revenue growth was an impressive 30% year over year, which underscores our momentum in enabling consumption-based IT.
Our non-GAAP gross margin of 34.3% is at record level and up 210 basis points year over year.
Our non-GAAP operating profit of 10.2% is up 300 basis points year over year.
And our non-GAAP earnings per share of $0.46 is up 70% year over year and above the high end of our outlook range.
These results contribute to Q2 free cash flow of $368 million, which is up $770 million year over year, bringing our first half fiscal year '21 free cash flow to a record $931 million.
Revenue of $799 million grew 17% year over year, and operating profit expanded 320 basis points year over year.
Today, our Aruba Edge Services platform already supports well over 100,000 customers with 150 new customers added every day, connecting over 1 billion active devices.
Aruba and Keerti has been instrumental in accelerating this business to the $3 billion business it is today.
He joined HPE in 2019 and most recently assumed the role as the General Manager of our Communications Technology Group, leading a team of more than 5,000 team members who drive $500 million in CPG-specific revenue and $3.5 billion in total revenue for HPE.
In our high-performance compute and mission critical solutions business, revenue of $685 million was up 11% year over year.
We continue to execute on over $2 billion in awarded contract, and we are pursuing a robust pipeline of another $5 billion in market opportunity over the next three years.
As we have noted on previous calls, this is an inherently lumpy business due to the lead times between ordinary revenue recognition, but we remain on track to deliver our target of 8% to 12% annual growth in this business this year.
In Compute, revenue of $3 billion was up 10% year over year.
We drove strong operational performance, expanding operating margins by 550 basis points.
In storage, revenue of $1.1 billion was up 3% year over year with a strong operating profit of 16.8%, up 110 basis points year over year.
Our HPE's All-Flash Array portfolio grew 20%.
Our annualized revenue run rate of $678 million was up 30% year over year.
We saw strong total as-a-Service order growth of 41%.
Over 900 go-to-market partners are now actively selling HPE GreenLake as a part of their own marketplace.
And we average a 95% renewal rate with billings from those customers at 124% usage of the regional contract commitments.
Our industry-leading HPE GreenLake Cloud Services experience enables us to gain more than 90 new customers during the quarter.
Cash collections continue to improve, and HPE FS delivered a return on equity of 18.3%, well above prepandemic levels.
At HPE, we accelerated our strategy to be the edge-to-cloud Platform-as-a-Service company to support our customers' rapidly changing needs, who have defined our 60,000 team members' demonstrated amazing agility and perseverance.
We delivered Q2 revenues of $6.7 billion, up 9% from the prior-year period, a level better than our normal sequential seasonality.
I am particularly proud of the fact that our non-GAAP gross margin is at the record level of 34.3%, up 210 basis points from the prior-year period and up 60 basis points sequentially.
Even with our investments, our non-GAAP operating margin was 10.2%.
That is up 300 basis points from our prior year, which translates to a 59% year-over-year increase in operating profit.
As a result, we now expect other income and expense for the full year in fiscal year '21 to be an expense of approximately $50 million.
With strong execution across the business, we ended the quarter with non-GAAP earnings per share of $0.46, up 70% from the prior year and meaningfully above the higher end of our outlook range for Q2.
Q2 cash flow from operations was $822 million and free cash flow was $368 million, up $770 million from the prior year, driven by better profitability and strong operational discipline, as well as working capital benefits.
This puts us at a record level of free cash flow for the first half at $931 million.
Finally, we paid $156 million of dividends in the quarter and are declaring a Q3 dividend today of $0.12 per share payable in July.
In Intelligent Edge, we accelerated our momentum with rich software capabilities to meet robust customer demand, delivering 17% year-over-year revenue growth across the portfolio.
Switching was up 17% year over year, and wireless LAN was up 16%.
We also continue to see strong operating margins at 15.5% in Q2, up 320 basis points year over year, which is the sixth consecutive quarter of year-over-year operating margin expansion.
In HPC-MCS, revenue grew 11% year over year as we continue to achieve more customer acceptance milestones and deliver on our more than $2 billion of awarded contracts.
We remain on track to deliver on our full-year and three-year revenue growth CAGR target of 8% to 12%.
In compute, revenue grew 10% year over year and was down just 1% sequentially, reflecting much stronger-than-normal sequential seasonality.
We ended the quarter with an operating profit margin of 11.3%, up 550 basis points from the prior-year period and toward the upper range of our long-term margin guidance for these segments provided at SAM.
Within storage, revenue grew 3% year over year, driven by strong growth in software-defined offerings.
Nimble grew 17% with ongoing strong dHCI momentum growing triple digits.
All-Flash Arrays grew 20% year over year, led by Primera, that was up triple digits and is expected to surpass 3PAR sales next quarter.
The mix shift toward our more software-rich platforms and operational execution helped drive storage operating profit margin to 16.8%, up 110 basis points year over year.
This has been driven by the increased focus of our BU segments on selling product and service bundles, improve service intensity, and our growing as-a-Service business, which I'll remind you, enrolls service attach rates of 100%.
Within HPE Financial Services, revenue was down 3% year over year as the pandemic did not materially impact this business until later in 2020.
As expected, we are seeing continued sequential improvements in our bad debt loss ratios ending this quarter at just 75 basis points, which continues to be best-in-class within the industry.
Our operating margin in this segment was 10.8%, up 160 basis points from the prior year and our return on equity at 18.3% is well above pre-pandemic levels and the 15%-plus target that we set at SAM.
Similar to the past couple of quarters, we are making great strides in our as-a-Service offering with over 90 new enterprise GreenLake customers added.
That is in Q2, bringing the total to well over 1,000.
I am pleased to report that our Q2 '21 ARR was $678 million, which was up 30% year over year as reported.
Total as-a-Service orders were up 41% year over year, driven by strong performance in North America and Central Europe.
Based on strong customer demand and recent wins, I am very happy with how this business is executing and progressing toward achieving our ARR growth targets of 30% to 40%, a CAGR from FY '20 to FY '23.
And with the operational execution of our cost optimization and resource allocation program, we have increased non-GAAP earnings per share in Q2 by 70% year over year.
We delivered a record non-GAAP gross margin rate in Q2 of 34.3% of revenues, which was up 60 basis points sequentially and up 210 basis points from the prior year.
You can also see we have expanded non-GAAP operating profit margin substantially from pandemic lows of -- to 10.2%, which is up 300 basis points from the prior-year period.
We generated a record first half levels of cash flow with $1.8 billion of cash flow from operations and $931 million of free cash flow, which is up $1.5 billion year over year.
We now expect to grow non-GAAP operating profit by 25% to 35% and deliver fiscal year '21 non-GAAP diluted net earnings per share between $1.82 and $1.94.
This is a $0.09 per share improvement at the midpoint of our prior earnings per share guidance of $1.70 to $1.88 and a $0.22 per share improvement at the midpoint since SAM.
For Q3 '21, we expect GAAP diluted net earnings per share of $0.04 to $0.10 and non-GAAP diluted net earnings per share of $0.38 to $0.44.
Additionally, given our record levels of cash flow in the first half and raised earnings outlook, I am very pleased to announce that we are also raising FY '21 free cash flow guidance to $1.2 billion to $1.5 billion.
That is a $350 million increase at the midpoint from our original SAM guidance.

Summary:
And our non-GAAP earnings per share of $0.46 is up 70% year over year and above the high end of our outlook range.
We delivered Q2 revenues of $6.7 billion, up 9% from the prior-year period, a level better than our normal sequential seasonality.
With strong execution across the business, we ended the quarter with non-GAAP earnings per share of $0.46, up 70% from the prior year and meaningfully above the higher end of our outlook range for Q2.
We now expect to grow non-GAAP operating profit by 25% to 35% and deliver fiscal year '21 non-GAAP diluted net earnings per share between $1.82 and $1.94.
For Q3 '21, we expect GAAP diluted net earnings per share of $0.04 to $0.10 and non-GAAP diluted net earnings per share of $0.38 to $0.44.
Additionally, given our record levels of cash flow in the first half and raised earnings outlook, I am very pleased to announce that we are also raising FY '21 free cash flow guidance to $1.2 billion to $1.5 billion.