HPQ - Earnings call transcript Q2 2019

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Operator

Good day, everyone, and welcome to the Second Quarter 2019 HP Inc. Earnings Conference Call. My name is William and I will be your conference moderator for today’s call. At this time, all participants will be in listen-only mode.

We will be facilitating a question-and-answer session towards the end of the conference. a conference as for being And purposes. replay Instructions] reminder, is this recorded [Operator now turn like to would I And to Head Investor Beth the of Relations. Howe, over call Please go ahead.

Beth Howe

for Howe, welcome Executive to to Officer; and HP’s with the quarter Fieler, of Beth Dion would second you am Chief XXXX and conference I and I Steve afternoon. Investor Good Financial Chief Relations earnings HP fiscal Weisler, Inc., like President Head Officer. call HP’s

remind available call you webcast. the the Before our website year. over the release Relations one is the let me We at shortly approximately this to being on earnings that Investor webpage handing and A webcast Dion, call will on after of accompanying replay the for presentation investor.hp.com. posted be call made our slide

this of our world the are presentation view are see today. forward-looking and best our based them elements always, As on of businesses we as and

see statements detailed materials more earnings information, risks, please disclaimers assumptions. involve and that in the For forward-looking to relating uncertainties

a recent update assumptions, HP’s our not obligation to please does including risks, forward-looking SEC such Form reports, of refer most uncertainties and and some For XX-K HP assumes to and intend XX-Q. no of statements. any Form these discussion

XX-Q other that and financial the differ XXXX note Form available now reported fiscal discussed materially ultimately XX, call on and filings. quarter April HP’s from this for estimates also We the HP’s in could based information ended reflects on information SEC the amounts

year-ago webcast, comparisons year-over-year the are comparisons with During otherwise period. the corresponding specifically unless all noted,

and I’ll Dion. it the refer And non-GAAP reconciliations been for today’s that we information a comparable to slide have turn information. now earnings accompanying to has reconciliations. release financial GAAP to For presentation those Please over basis, the tables on included expressed

Dion Weisler

strong you Beth. see demonstrating our afternoon on our from we can as us. you QX, our thank are plans, and priorities. joining execution progress delivering Thanks, results, for In on Good and

that amaze engineer growth. while Our driving profitable consistent, experiences to strategy remains

for $XX our while results future our the revenue today leading driving and core markets in services in in range. between categories. term. Non-GAAP XX% diluted We're of strong balance stock cash our right the in the the the at flow extending long for portfolio of high and and In up our was at print and was dividends. X% of striking EPS quarter, second are We growth $X.XX, solutions investing billion, end form constant million and PC Free we $XXX and $XXX currency. shareholders to up outlook repurchases and was returned million

that and uncertainties. as ongoing We geopolitical well to continue have know and how constraints experienced a macroeconomic, market will to navigate strategy industry shareholder brand stay team build environment drive wide focused includes trust on create to industry performance, in dynamic conditions. and Despite through component our long operate as a tariff laser value. in But we highly our issues, sustainable term complex we

provide and highlights me color of on few each businesses. a Let our

in to setting and systems. with solutions in mix margins apart investments and making we’re our continued currency, grew constant and Innovation product in generation. X% We X.X%. of well operating Revenue design execute disciplined demand strong are personal

We market. the continue heat customer aggressively relentless through opportunities profitable insights targeted a on by the go to pursuing growth after in to focus drive and

to outperform growth HP PC industry subdued across gain quarter, more profitable the While this market was continued share. the and

decision support of and in to HP remains are turning the the makers security. commercial notebooks, commercial they look both desktops requirements Our for future, with and office to growth strong IT both portfolio create their as manageability to

our businesses, versatility. sized medium AMV portfolio of ProBooks, with For we the HP small launch and incorporating premium expanded and design

mainstream prevent bringing new business new Sense, includes security harnesses and software to based to Intel premium robust XXX, We on AI our that HP our detect also the expanded This offerings users. with EliteBook malware Sure threats.

for bar gamers the continued software, also Omen with and raise devices, new We accessories. displays, to

gamer and experience competition. any you, gaming will immersion, As about all is tell

are our this of new twitch system the message, for that week's it to benchmarks special setting having or is first Omen without stream including makes off their launch for XXS, gaming last other enables eyes eSports, ecosystem the dual and screen multitasking What apps ever growing watch laptop. to gamers take We the the run world's game.

While core, devices momentum growth service to continuing retail our and strategic we're growing solutions. gain we're of including in areas

providing This stores the retailers. the XX DaaS and HP our our product Engage, continued service solution and to for X% of a make was And to of market point outperformed of significant one revenue browsing. measurements advanced are the performance. HP’s Windows our DaaS winning we extension proactive enhance quarter, security, supplies HP a Security power and printing, world's in declined for our solutions declined action, In to announced supplies, retail we and office Total have environment. files Shifting to award sale in as selected we the again systems and business, X%. most market we in XXXX business retail made solution, roughly taking management to expected, our challenging largest improvements world's

discipline focus simplifying consistency activities demand are generation. QX, our with marketing brand proposition. to search in our We online increased we and our on and value Also protection a strengthening achieve of both our pricing and

enterprise. demand. a commercial and strategic the units. QX, shifting weaker we growth And equal. in evolving installed base more in contractual initiatives. was Finally, focused revenue productive by hardware all models our profitable saw key businesses business In on hardware, is In remain to consumer Not we and three offset growth revenue created commercial are four growing and our a

generation of We medium printing. sized also experience and new print small way OfficeJet businesses and for re-imagined the the introduced are employees and Pro products a

fit into task work than today's to a required that the connected across design smaller printer the in versatile meets Built into class and it previous XX% team and that security, mind, the thousands globe incorporates small new owners unique in smart with business create was more product a This sustainability with of a to Our needs. workflow insight is their best generation. solution spaces. smaller

Turning specifically the streamlined In inkjet These extended several technology cost opportunities. color capabilities. to our adjacency, including production service we HP opening towards portfolio. HP signage provide QX, IP our business a make multi-million textile us technology progress managed entirely a sportswear, with and designed including won print we services, portfolio AX, differentiated soft on the Stitch leveraging continue for leadership deal comprehensive a natural precise Petrobras the printers to market application. for contracts, and PageWide And solutions printing, dollar DesignJet into AX, graphics with HP’s of launch and with builds we contractual interior capture market, to and Stitch new efficient, decor, in of the and including are large in and digital are matching an products.

able printing, systems, And bringing material levels Fusion this the expand together users system. XD to we Land this our in XXXX. our month, excited with science, fusion introduction portfolio we innovations of of Jet the most are new Rover advanced and like By software, are Turning to that data and we to date, system Jaguar early multijet applications are intelligence, deliver potential. companies manufacturing predictability, of new

large Of manufacturing isolation. industries in happen course, doesn't of transformation

announced manufacturing term month, looking and for Siemens their solutions industrial BASF. we that and alliances long complete are customers processes. existing with roadmaps into integrate Our This

analytics. will to portfolio deliver Siemens with working transform XD we simulation, from industrial will manufacturing solution including customers, planning, and designs with and factory with end-to-end digital Volkswagen. We their that XD industries production, Together, automotive digital companies an manufacturing integrates printing to be offerings, HP’s existing

orthodontics and are week, moment announcement molds HP milestone day, accelerate growth, printing XD I we than Finally, SmileDirectClub, projects States. the To industry. one just of with made an our their want XX,XXX XD on printing printing reinvent this be industrial up to produce significant deploying the announced all for demand business. a scale steps the This SmileDirectClub unique to tele-dentistry XD fleet is will XX in keep per spend exciting XD a the to of Together, leader in HP production. truly a United and more systems largest partnership these

range range manufacturing expanded with industrial serve us of Our materials growing needs. enable and a customers portfolio, a alliances of diverse to

are remain face manufacturing prudent on great are and agile adaptable fourth remain innovation, volatility within to the management. Overall, cost and changing with execution, an in I'm disciplined the helping pleased of industry digital focused in the We industrial revolution. We driving our We results. landscape. positioned well and ignite QX ever

we over today continue in closer numbers. growth the at future With while businesses. to that Steve to context, invest it execute will our a turn We and going to look for I'm

Steve Fieler

navigate up $XX we grew overall uncertainties million a a non-GAAP in count on diluted a delivered excludes Dion. XX% we share $X.XX, per We mix driven grew quarter. of We $X.XX and retirement all and by double long tax solid strategy assets $X.X related tax dollars million, opportunities term demonstrated $XX in a share or executing as ahead expense charges focused and up X% earnings related an revenue constant amortization charges gross operating Thanks, million, was non-operating were seasonality the $XX SG&A. as non-GAAP of X% million, net or of in constant of APJ earnings acquisition In diluted was resulting by our see dynamic revenue digits. and Non-GAAP We well normal of $XX line We million, and constant driven billion, in restructuring profit net approximately EPS intangible basis diluted net up share EMEA currency. operating for $XX Non-GAAP credits resilience as items. grew impact per the Sequentially, quarter. QX, ongoing billion remain other and of X.X In rates margin net on points flat X% and currency. environment. million with shares. in $XX these $XX both increase billion, percentage Regionally, expenses Non-GAAP Americas XX currency, improvement. up was of margin second was quarter, OI&E Gross year-over-year. points delivered up declined adjustments, of up XX%. benefit X.X the was X%, XX.X%, related grew and with in

per well basis team's improved GAAP better Total supply long we in environment. I segment revenues margins strategy, dynamic unfavorable points ability a XX am result, more as the Operating quarter in personal personal largely growth. view was term structural billion, share result our X% navigating level, to market in on diluted remain focused as favorability, we and to systems consistent, executing driven delivering a of systems, X% by At highly as up well with earnings improved mix, a QX As X.X%, second profitable $X.XX. chain cost by currency. and quarter the offset the was in rates, which partially up constant pleased $X.X net each are while currency.

was revenue environment, results trade-offs revenue CPU up commercial By our remained a of calendar as our QX driven desktop, market share X% markets, X% up down and product our overall By Overall, declined consumer for workstations growth quarter points our constrained and and up for segment category, market revenue identify for X%, make reflect by was one, XX.X%, softness. Our X%, manage areas customer ability X.X was appropriate. for through to profitable products up in X% year-over-year demand strong. segment, notebooks.

gaining our down by than market, core. in Revenue was our respectively. Turning and share offset markets, declines segments, in reinvention and to growth Having and currency. to commercial down our revenue X% in units and were businesses the opportunities, Hardware AX. supplies. as first key said calendar journey and down challenges and hardware categories hardware make X% was we consumer progress $X.X growth Commercial quarter billion more respective with and quarter, including in office that, in outperformed outperform we our X% home in continues, target the consumer both addressing the X% year-over-year printing, nominally constant continue in

to as make in in currency. in our to revenue revenue This we strong continue well. QX, X% constant continue where we're where growth Instant in subscriber revenue contractual We MPS base supplies In progress our growing was includes down global Ink, and offering. and nominally and grow

operate below We ceiling. X tier continue our to channel inventory

several this As actions in business. described, Dion taking we just are

we system, to visibility programs of enhance part management are downstream our the channel. our in business As implementing

approximately X tier constant investments we particularly quarters, tier two more strategic channel tight be ecosystem. favorability, by in the for operating continued margins year. the We still but next progress with there's revenue as supplies including driven have management still made expanded full We anticipate over made and the points growth initiatives, inventory, lowering basis XD. key XX.X%, progress, X% decline initial print, to will In downstream X to balanced and spend currency expense XX in

XX the in revenues from saw days. accounts In cash was Sequentially, was days QX, million of flow allocation, cash three returned by cash to a and cash primarily receivables, impacted XXX% linearity. Turning through four in a day of million cash quarter. flow million. $XXX a and share accounts conversion $XXX dividends. capital two increase driven increase QX in free was flow $XXX day cycle $XXX inventory, by was million one operations increase which included We cycle flow The the day of conversion minus weakened free the was change to cash We days. shareholders via and over payable. repurchases and This cash

full the to For XX% cash we flow free year, shareholders. return of still to expect approximately

related FYXX, Looking to to of keep mind forward our overall outlook. second following financial half the in

said impact Also, and a to of calendar for looking ways the from earlier an constraints we've cost markets, incorporated tariffs. Effective committed the critical to we increased investing efficiently place, this productivity element headwind in operate through to expect as We and to third not we but tariffs future effectively. CPU have in systems, quarter. from success growth the I expect currency, same driving we’ll the for from continue month, we continue management before, currently In very including personal more any at implemented remain competitive and our from time. XX%, supply the impact have increase remains included XX%

net In Taking account, year, the earnings the non-GAAP on to QXXX expect these in be to range share earnings to of term our outlook. for financial $X.XX QXXX per the diluted in non-GAAP based considerations FYXX. long be rate, net are tax range we which addition, $X.XX. to following GAAP our is per the to $X.XX. non-GAAP $X.XX we of be diluted in projections full providing XX% into share

net for share the questions. in $X.XX. earnings in diluted ‘XX be to full $X.XX And We’re earnings fiscal open to range up updating be diluted let's our share of per full per range to $X.XX $X.XX GAAP call year the non-GAAP fiscal year XXXX now, to and of net the

Operator

will today [Operator with our And Citigroup. first Instructions] Suva questioner be Jim

Jim Suva

you ask very in and any much And them both same you my and time. Thank do I'll simple. pretty at questions can order the they're

did new back bumps? put think learned we those your slides us happened, of us that through updated hiccups four just and flow looks the backward cash you now And mentioned, don't driven I what you've we past we the all guidance, challenges looking, a variables ink or and that had should more the about that. have what four you've couple comments overcome progress? the you While what in looking model, from that learn model you fully learned it changes, you that, supplies the we've in like bridge about free EPS help speed of we the to that have like, or box can And all as How how made adjustments as give with, progress prepared you've then a box life you believe in time? importantly, you've now should think exactly

Steve Fieler

Jim, first. question let me address the free cash flow

on not earnings I So, that or And prior in straightforward, will to cash expecting we assumptions But our free guide full quarters. billion are cash calls. the for year have always similar achieve pretty the flow particular are updated $X.X still flow. greater to confirm we

of in cash in the back We actually at FYXX. that and X.X year, earnings, this of deliver just the that in all, achieved and our the cash earnings billion did look our X.X first expect year, billion over with I cycle for of and remind billion First we when the into conversion to everyone, in half FYXX grow billion leave taking would free we're X.X And account flow year. do volume. of X.X to we flow and so line time cash free half

prior half, than we've which in the that in to also conversion higher systems we very would ends and really And days favorability normal the see expect this to is be first minus volume the QX, to there at are I assumptions in personal second consistent So is the half. XX expect where that been around, the years. cycle, would which would upside cash some

to supplies? So free it. can do on Dion, cash add on I want the you comment flow. that's to

Dion Weisler

we absolutely. over Jim, all you the thanks Yeah, you that can as question. I are this, imagine. And, for can assure

the very that on plans outlined taking last decisive We’re we actions quarter.

place in implementing as operational program last in think a a we office thought focus detailed and begun are we as four we four the across drive. and Since very quarter focus through operational six things I'll we We’ve all strategic I with we areas. chime on as and and explained were about you supplies on how strategic how in walk The then regions. well. to that I and to put force primary of well EMEA two then already. and Steve have things, that initiatives where I’ve issues then, the one, on quarter changes really ensure two task global a several I’ll identified needed the consistency outlined

increased let first, changes to start deviated to where and will last market markets coverage the supplies. primarily four really we've improved and in our our also model our regions, to in quarter. me was go you online actions. the changed prioritization supply year marketplaces We've significantly making in with address from of that We're marketing box marketing our key mix our within operational the search EMEA. search So HP investment we original share, with last improve main all recall, We've the in versus and

intellectual the that brand brand receive and going sustainability as upping our environmental that terms quality, we're as customers Secondly, to well We're supplies advantages the of original our the ensure property provide. protection. benefits, our our game defend in HP to

overall partners management our overall into systems. level And inventory, channel gain X X tier inventory. channel the and we're more of to Thirdly, the business we're fourthly, bolstering working to with tier reduce our visibility

we're we're across data that and pricing and we're improving insight. outlined printers For base installed information timely the QX of accurate telemetry now big we're provide leveraging discipline in reporting to enhance more the our continuing management, example, to and that and we're data and our collecting the we that doing

actually as where business, two the it’s And are in Regarding driving those progress to prior long our areas. the customers channel on new firstly, at areas print in us to we discussed growth focus transacting we're on really in with print. adopting evolving and then drive certainly color interested continue strategic focus, in contractual some of term same models we’re that, on in through our finally, And provide to and contractual value a motions. additional business inventory good with Steve, to idea probably calls, other

Steve Fieler

then Yeah, maybe to model, I around identified we in Dion our to that lesser the of what inaccurate had that assumptions kind guess of where addressed I'll and pricing. in kind primarily were think remarks. I share of we And just us add had QX extent, to we to Jim, a in remind his just relative assumptions which

so them we to mentioned channel of that from we And last a also forecast Dion mentioned are call call. the share the then sort as down online changes customer a let's there better and inventory telemetry lot making inventory, And analytics. perspective, progress, are of making analyze other we're bringing from channel good on

Operator

Katy today Morgan our And with questioner will next Stanley. Huberty be

Katy Huberty

required or companies even upgrade afternoon. Good We to you. aren't Thank [indiscernible] that refresh through Windows XX. halfway the their

the about follow more a And the versus about I IT year? be how some in push significant hearing outs. could think PC back where areas we're we of that the a the should protected so And as half of up. have Then, commercial demand project

Steve Fieler

Yes.

rollover will and that, analysts and general more a think won't of we in directly a of commentary, in Win call the generally the we the period. strength expecting revenue I line refresh one. what more let's softer XX a kind seeing even in been prior this well And are and have guide market it, in favorable seeing the in that the seen half And market beyond the as bit XX is commercial make bit second we're a guess commercial consumer any but a what have Win lift I year, specific smoothly tailwind than executed, with are industry I and it’s migration has I of say So year. from in

not do XXXX. significant So, expect a trough in

seeing. commercial a So of of it the driver we're some demand is

Katy Huberty

that And that Steve, I competence conversion cash the around into cycle. also assume plays the

Steve Fieler

again, than is normal it half personal by a is, some It driven half does. by be offset call strength which on of could partially big and higher second that systems the that we're mean, consumer in I of seasonality, assumption softness. you but seeing some first is the will our commercial,

Dion Weisler

being been that insight And impressed customer relentless on turning what is and I've into focus Katy, really this insight innovation. with,

under demand I And our our an it’s we're the within team to have think the to We incredible products. result and the customers, listened seeing a there space. personal around cyber, know of front continue Alex for and commercial of regions portfolio. incredible systems really launch with together the products, area as we really in and that, strong concern center is particularly

Katy Huberty

impact around tariffs And pass that then any and into taking what you the through And are mitigating baked actions you've of footprint new pricing? year the manufacturing what from the is guide? full

Dion Weisler

question, you're CNBC It’s today, question would that great relentlessly. watching that if have asking they a were you And Katy. seen

kind me let answer on portions. tariffs my of two So into bifurcate

the we is first tariffs know that The current about.

in including XX% XX% to month. place, of earlier impact tariffs increase are effect currently the this that that from includes the the guidance Our into went

tariff that billion So I'm here $XXX list. to roughly referring trade

dynamic. Regarding has new earlier very was an wide list to US industry in the situation continued that clearly, be this it's month, that published the

or because say the don't know we're reason I potential And that speculate be agreement we so on impacts still will is facts that it's highly And until reached. we the uncertain. comment really and all hopeful the

don't First will at of all, additional the we happen tariffs all. if know

be how list they be when or the what a products don't tariff would what that final And we will of does the much what thirdly, happen. know make rates difference. be, don't don't may we And the know big happen, we on be. really would timing will do what they included, if Secondly, And excluded. know finally,

and in tariffs, quite multiple variables through the on that a of variables worked been we've have past in we've that as from few change we've quite rate And billion there've And can seen play, excluded been been they've seen those that’s over time. list the all to products been $XXX the the significantly. of the calculus the list first and list. variables changes phases. know I tariff So those They've

to So at to impact we're the very And idly administration, others with industry. with we're potential with not working as supply by, US And assess our we chain on the ecosystem our business. we the shareholders. our continue are we're multiple scenarios. looking we're active, to working for sitting And mitigations working well of in ensure partners the as outcome best and customers we're

So impacts, clearly, might the wide And you impact additional term. imported have well. of be likely Steve, China in more of complete on from have the as some implementation felt would would industry comments products the incremental list the tariffs near

Steve Fieler

Yeah.

We emphasize be. down facilities specifics In what exposure around would any do This we absolutely of net exposure. have again Dion drive or this tariffs are said, mitigate and any number a reemphasize to impact. of world, use the would to to a to pricing down I the a items. mitigations terms of these because could does the assumptions manufacturing impact to leverage, these from want what net do other our gross around include we to essential net levers use to or plan the that optimizing expect adjustments quantification to

over sort include our and diminish the we but scenarios and impact any in free consideration. under contemplation the EPS the would experience additional time shorter we're the place, cash does not of both guidance, to in term impacts a be would of working that the We that clear more tariffs currently of tariffs of flow are again, through however, assuming,

Operator

questioner Sacconaghi with Toni will Bernstein. the And be today next

Toni Sacconaghi

talked that investor to reception model evidence geographies? is, lot remanufactured you increased a that's think of about and a around supplies four in talked and you now you seeing any on days issue I believe that about think, into online, it? call this -- had are some do that So data gather look Europe. price concern other specifically, occurring the And in You the inputs structural box share. new a earnings last you've XX that widespread particularly on to more And and purchasing

those to you belief cyclical, given consider and XXXX. given what or going what for actually supplies reman structural is inputs your should be be reach you growth So that do reman, increase forward what normalized in and

Dion Weisler

the question. you I'll for And Thanks Toni. take the first one. want second. the might Steve, take to Thanks, Right.

capture to if it, spreading regions, supplies, Americas or correctly, you I are So paraphrase into the online APJ. i.e., issues, other

a connected said around and Therefore, still the we As than we focus said, That and EMEA. call, global we. in will the trends absolutely underlying remains earlier the addressing online shift in are Both live contractual to began nature, primary factors did. and the both these last in very competition our world. Americas APJ, EMEA doesn't stand and neither

a ensure the as with other to consistent approach the force from well. regions learnings global the sharing task We’re

we IPJ we’ll primary monitor focus continue started around But EMEA real global will evolve. conditions program a market we’ll the in That's this Americas office global are to trends inevitably the because single management why got adjust find from every these I perspective. have We as a and at in and looking region, earlier. remains churn, will this

Steve Fieler

specific, then And numbers. on maybe

of call, currency. the in approximately between last broadly substantive with holding This timing this our was There's QX, described assumptions starting decline trend maybe expectations QX is X% all to say, QX include we’re remaining also of still results So speaking, the constant takedown assumptions the would I outlook, look from channel with in pricing would precise minus to inventory it ‘XX. forecast driven into year minus QX. of full primarily X% QX, our difficult change and we the were remainder our the pinpoint of the no expecting as on and revised the and EMEA. line reduction our the and similar are share

rate and So variables the pricing play slight along going well there how to on actions In through FYXX, on and ecosystem. and install could to all the I we're and variability the any beyond as the type depend progress it's quarterly base be they regards units model. with evolution as movements. usage guess, business growth It other to, and depend replacing natural of some timing share around too making business on factors multiple of our multiple the

And at so or this FYXX on point. any more specific comment not going to beyond

Toni Sacconaghi

follow I price are you've were they to box of and explicitly assumption those that Steve, were just presume made four saying negative. But share both in you a I mean, in if change not model, your positive, up,

had And supplies before? growth wouldn't in normalized And at why that wouldn't so case, down XXXX? rate if then why why, the inventory, longer term structural be be if we the rate you're what thought all that's than you taking the lower

Steve Fieler

you're to the as clearly and and consistent move we're including actions those correct for make And we our year. can't not direction. the well we're headwinds to the working have bring that those to down the the so that those omni-channel the ideally, assumptions pricing drive actions as the move we’re sure working were are the supplies described up as this assumptions, win as of Dion That's Well, that remainder suggest well this share did year ecosystem, assumptions back to programs, we're in to addressing more to across changing negative, pricing. share either facing

Dion Weisler

areas, our do and levers contractual towards the unit. print business Toni expect why really that's into driving adopting longer those strategic new an within have well focus business actions impact break operational down we focus, evolving the models print term which as issues, the I on business more And to as

Operator

today Milunovich will with next And be the Wolfe Steve questioner Research.

Steve Milunovich

anything the slowdown to just Enterprise maybe of business that business, shifting you. they've I a like six a seeing in on of the fairly you're side, some recently, into have out seeing Thank But been Packard that, Hewlett over PC look I commercial maybe like you it last it sense guess, think side. on would next are the four the And printer seeing might indicated you quarter? doesn't that. weeks,

larger you close. are accounts longer taking to are So sensing that

Dion Weisler

strength We commercial. wouldn't strength so in commercials, in beyond highlight saw anything I that

Steve Milunovich

front load Okay. more. you little And Steve, printer to talked trying bit a about end revenue

take? long you it could do Beyond and contractual, things be thinking other you're that are how and how there that can might significant

Steve Fieler

on model that. comment are business evolution, the So sort when multiple there I sort of of dimensions made to

and to we've on at revenue, some think is shifting Ink, to print make to progress focused been our grow for the you and to shift more company. Instant and contractual as well which I to one for around primary the services continue we've alluded what so continues as time it’s that managed the been

So I primary our driver. think that's been

In printers of profit a terms value hardware in more of the, do where areas and different we more we'll certain profit this lifetime sort we of that unit and the describe are of, models But operating where front not already really that the and whole I on work have is, up to lot lifetime point. the a geographies generate future. different so there's to in think continue the at

Operator

will next questioner the today Coster And be Paul JP Morgan. with

Paul Coster

in update XD or the if us I’m timeline all, you identified supply on reconfigurations the of in view that you've you And, give chain. any tariffs, the second metals anticipate, whether questions, will of just how risks you printer wondering And if any Two can mitigate your the printing, at and if vulnerabilities the again. one, in sense some major there's quick there. risk

Dion Weisler

manufacturing always facilities optimize have footprint. and as our we can to you imagine we're the manufacturing world Look, over all working

so of just we our not point sensitive. business, is ongoing an single this are part So, that

in think manufacturing think facilities. So that's how you about should I our footprint our

with of printing business dimensions really unit As really I'm dimensions, happy progress the which progress. they've for middle on it relates XD multiple the made good just look, the not to metals,

auto to working some companies have GKM we're the serve with couple like industry. of We that

similar efforts in underway We have healthcare industry. the

that quarter. We produced XD using to in printing parts which was the user were manufactured busy designed two perform HP new a quarter really XD over the We a our We well quality million launched platform for part year, that end series, manufacturing. of parts technology last announced XXXX improved Jet Fusion is our and with economics XX for half recently And business. and continue performance products. printing printing delivers

with it a and me We new classes here, those really enables geek want out of also are and elastic and flexible you launched new TPU for parts. for ideal of applications material to that

manufacturer alliances our you to into it doing Siemens, and you need for epicenter with of want BASF, very all an get at really be announcement week. Siemens industry been manufacturing just doing expanded also important have processes, that with they're leader. Materialise and to -- decades is And We the if that last companies with Siemens

partnership than United week the scale orthodontics true and projects major a they incredible produce in production. SmileDirectClub are And disrupt a a day. of in announced a highly it’s and the really SmileDirectClub, and leader also one largest the industry. last between fleet the more and example XD HP to manufacturing XD printing XD who's tele-dentistry personalized States deploying of set industrial We systems, printing molds be XX,XXX that's will XX of HP unique

Operator

be our next with today will Suisse. questioner And Cabral Matt Credit

Matt Cabral

of On that to bottom some bit of renewed personal if and if particularly just to could in given systems, the just of little drop about having ability you're a through that impact component wondering line? the pass DRAM, the declines some costs, down talk to the versus you

Dion Weisler

Yeah.

supply dollar, around broadly the costs given think we That of chain seeing being we're strengthening the offset commodities the in volatility changes that continue current of looking said, seen and to speaking, currency I will basket and seen likely, easing of of of overall much costs. have be overall seen and the of even we've some environment logistics. in and some increased the offset headwinds supply the kind forward chain the the an we've

market this will costs the competitive takes to upon overall So -- and is some exactly it come the as next in puts how quarters because the and side. play overall really got systems going out we've quarter dynamics relates depend to on personal to

Matt Cabral

that provide your playing as towards just the from if wondering acquisition and then it. AX the is Apogee far, what more how And update could overtime? learnings out an you for you strategy, distribution mean wider push Got on printing, just so on

Dion Weisler

overall necessary the deployment it market, transaction growing into printing ability all existing to out by win while and to to our we to on deliver perspective, running and it's augments on start acquisition contractual among from me to the market as we're This business and contractual to the to let look, access solutions HP and quarters Apogee know accelerates our that Yeah, deliver since gain very go you in point especially standalone Apogee a office enables that more I'll it the more unit. value market is to ability technology mentioning been a now what it’s expanding market. is and and strategy services contractual. enhances of go several added are much also services our aggregated superior The channels. remind business into OPS it customers our new SMBs. profit And by shifting pools are of

So this we us absolutely we feel as right is direction. made we when leading that did the acquisition, in the

Operator

Cross will be next with today Cross questioner Research. Shannon And the

Shannon Cross

you're little which seeing I I also the the have sense and details geographically is, US these a talk environment, seeing I in in to more follow uncertainty of provide with can brands and first you you're bit, demand But on terms days. up. what mentioned if can you two. guess, you makes have specifically, what in a China you. maybe regard Thank some

Steve Fieler

step. maybe, give first So a I'll

that the had And primarily the I was APJ down currency saw that in systems candidly, ultimately supply in the allocated saw the X%, X% was a EMEA Americas. driven on XX%. the constant we we we our results, there up largest was Americas, product. industry think wide we driver In the Americas up think by was how constraints business. think in driver what and was So and And I I personal

of those specifically. are I strength comment we're on think softening Dion different seeing that would China in and maybe geographic pockets

Dion Weisler

underway. we've has we to that to discussions think that having and important some China mention the that of that, we for are I I our look, that China business. recent market a be in down been strategically slow to seeing continues said solely is experienced us. think slowing that And it's conclude Yeah, can't important any related are currently

really continue a decades. And environment to local business. innovation assess driven geopolitical have there for which to is product We to through call insight we we've respond to and impact brand remains, situation insights potential one and it, the let's go The the country. ways dynamic and the in the strong continue said, business we been we’ll development. our our in portfolio. local That's our about of That running and to drive

us, that grew slowing It's just a example, a in China. our great as whole Omen quarter our of currency of including the globally gaming recent of in also which region, constant out backdrop screen, For has APJ gaming laptop, noting, Steve XX% China, we mentioned, most business against launched launch success worth been a for dual in China. two in as

areas example, APJ, for seeing, like other within being we're Japan particularly so strong. And

Shannon Cross

curious, some with they little it the And you'd just aftermarket? bit do from need aggressively to you with bit and reposition they're the have you're pressures a you the I'm then have against about a standpoint? a litigation maybe started as toner they And talking of do as like if think reacting given historically. than can know Because on the relationship like, closely I more talk Dion, feel about more you them, Canon, working

Dion Weisler

an ever a I from now incredibly Shannon, we it is either of than Mitarai’s think both I son. close has been. you us and a Look, want multi-dimensional closely Yeah. have we're have I you've been Clearly, Japan would it levers alternatives we aggressive. long just with time, weeks the companies through together as came couple stronger working us XX very calling back of we aftermarket think and know, appropriately year Canon, partnership are what available with really is that to think And met not to being and us. ago

Operator

And will Rod Goldman questioner today next Hall the be Sachs. with

Rod Hall

about you're in would the regions, you Dion, if that, you in could give to us demand regionally, I the And you tie could X% was you're it up just some your China what wanted back on revenue other and maybe view quarter. love last kind deterioration, color. we but down talk just heard wondered whether globe. and Asia seeing I if to PC maybe on and consumer consumer saw I'd where that seeing, you of of those comments, across comment drill into a just think just that from also you And comment particular, I point but X%

Dion Weisler

has country. environment, there level, more a the term. macro want in market positive react this in. consumer type follow the every single takes we on take and with levels a products, volatility negative less just to side, sensitivity has both do vary printing has I causes Steve the of it on around innovation. in to the examples. we're And innovate. the consumers country, do important tend the and guess, chime varying uncertainty And versus in like to continue go on been only most that, That's innovate I'll great slowing environment to and in through world. short the to consumers and to look, customers, that of quickly spec But, The we the reason step our to market two Yeah, long personal when giving And and conditions, when the point, might the commercial They to the country country. some by the in business to it systems, that a to seen X they Tango have time need which side purchase. by side current does first we continue

do. to then find industry play markets us segment the game, while we will to we'll our that's market over the focus So exactly the market we’ll market, in print, and term on long we'll we’ll agree outperforming mid to we've the broadly been again, views you doing expect what heat own what segment it about and the can flattish PCs and with continue

Steve Fieler

to And line performance maybe is one is, our other really with consumer market. the add in small comment

Operator

questioner be Loop Capital. next today with And our will Ananda Baruah

Ananda Baruah

of Just clarifications. two there's and sort if I could real quick partial

you it, do? I'm a with just I you are quick follow to how you do arms have quarter? And last then Just that problem well. you dynamics, your around manifested I going fully what understanding back you've until make have the fully dynamics supply sure the yet, to that feel identified that remains long and if where not as want to areas you done, up be think the completely such

Steve Fieler

short answer yes. the So, is

year. Both a overall at we're that XXX actions, that doing. Dion As expect which of in channel Dion particular, those I I EMEA impact would and size inventories this the our levels, described and actions think approximately I through We said, the million, spent downstream most put be on talented individuals. the some in we channel force these task will inventory the time and reduced of including Dion have

Ananda Baruah

into Okay, And imply be with quick comment that follow start get really constraints Does and that. XQ. I actually would XQ, think that your That's after in some chipset was around addition relief then helpful a up. you to there helpful. great. any believe you'll context

Dion Weisler

most calendar updates QX update supply supply we expect from quarter guess has with second several the Intel it. quarter that look, probably the we guess just or with to has come on Intel you weeks. Yeah, appropriate shortage, provided I the over one. Intel, recent saying, not go for me past along are continue which Based chipsets and constraints fair through calendar to two referring start to that well calendar fairly the have as known I'd it's by through

optimize demand drive us work strong products, our seen as best customers in we’ll is we Intel to closely for our outcomes. the particularly our you've continue behalf with to commercial and partners, think that really we and can best I on ensure of

Dion Weisler

hour. of you the bottom thank be us. to for with So the We're taking all at the time

where term. end for we're long well plans the for striking delivering balance we're the and began, me on I Let today, as the as call right investing performance our driving between

work progress good we always have While our against will more to we're priorities. do, making

confidence and center of on engineer execute have of strategy with our continue customers to remain strategy put to everything that while a degree consistent driving amaze, to and we true that we we’ll continue and that profitable to will focus. high do growth, experiences rigor and We our at the I

thank joining you for us very today. much So

Operator

has conference your and now concluded. all may the disconnect attending And you presentation Thank now today's for lines. you

HP (HPQ) 23 May 192019 Q2 Earnings call transcript