HPQ - Earnings call 4 2023

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good day, everyone, and welcome to the Fourth Quarter 2023 HP Inc. Earnings Conference Call. My name is Krista, and I'll be your conference moderator for today. [Operator Instructions] As a reminder, this conference is being recorded for replay purposes. I would now like to turn the call over to Orit Keinan-Nahon, Head of Investor Relations. ahead. go Please

Orit Keinan-Nahon

Chief And Conference everyone. HP's HP's Quarter Myers, Fourth and Good With welcome me Earnings HP's Marie and Call. Executive Lores, Officer. today XXXX Chief afternoon, Officer; to Financial are President Enrique

presentation We let and after Before that our remind investor.hp.com. approximately the on and replay call this to on accompanying available year. webcast, you will a for me be web handing posted is our Relations over release page the a call slide the Enrique, earnings call website Investor X shortly at

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

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

of uncertainties For to most some please refer including risks, SEC XX-K. recent Form of assumptions, these HP's and reports, our a discussion

obligation no assumes any to intend statements. HP forward-looking does such and update not

that based ultimately note HP's also the the amounts filings. this reported discussed available on differ from could information We and SEC on reflects materially information estimates in financial call now

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

unless X HP to to In channel noted, channel refer inventory. inventory otherwise addition, references Tier

for call we've turn has reconciliations. on to been release For Enrique. information. financial information With that to like a included non-GAAP that, to now the the refer the those expressed accompanying tables earnings presentation today's basis, to reconciliations I'd Please GAAP comparable over and slide

Enrique Lores

Securities last everyone, XXXX. It was many Thank for of host for our of Analyst month. and call great you, joining Meeting Orit, thank our final you, to earnings you

priorities, we significant ahead. attractive at progress see said the have I time, against our made strategic and As opportunities we

plan control, the relentless fiscal Ready combined in progress enable our year Plan, against we can Our our focus 'XX. to make steady us Future on with things

and would year knew pleased in be down XX% our much the year-over-year. start executed results, than the in We it results. market began. We that XX%. our the constrained and from year. revenue demand the external A we finished billion, challenging non-GAAP are very the is we profit QX a EPS was environment operating down full and this Net We a industry, position tough growing profit have with reflected stronger dynamics, year. year these of non-GAAP And face operating $X.X was well sequentially non-GAAP $XX.X throughout in across billion,

half stronger the second our first. results And were significantly than

which of company We approximately good areas, grew also drove key total made in digits our progress year. the for XX% our and growth mid-single revenue

least to billion. savings achieve to businesses cost billion us 'XX. designed in at is gross our the well on of $X.X X-year putting end plan, revenue these over-delivered target grow $XX to our of And structural by plan annualized year Our we on increased track recently fiscal

in in the you our you thank phase with reinforce the entire Our outlook of confidence And provide results we our our paving my thoughts to for I and reiterate say way market in next financial toward summarize I into October. to XXXX. insight want growth. am time the to our of to team I last each of shared the today performance, some big our going a about segments month shared use QX HP

down reflecting last quarter. X% revenue our discussed grew with we That expected Let me start to sequentially, $XX.X was QX. progress. billion. the dynamics Net was due market Revenue year-over-year X%

the meet media XX% sequentially strength billion. imaging or I'm gathered showcase areas. at from cash our and us This billion, event our last XX% $X.XX, where more with non-GAAP services. our mention pleased full delivered products they XX and of faster around particularly innovation. the Collectively, enabling flow month, new year HP display I was we year-over-year. We at than to sequentially target our was company X% globe Xx total and grew industry $X EPS up growth strong free And key want $X.X our of analysts to of approximately than to on growth.

This innovation its desktop. from tablet as red transforming most seen. a It Seamlessly of in HP's has received design. widespread at expected recently that laptop one of innovative factors to included the culture best. of reflects award, fall owners it the highest recognition And form design industry one industrial has the to device a the

to We in momentum AI. also build continue

enterprise broadly, the create the company advancing dedicated to our we're with work category. software. first are AI a IPC more We solutions workstation offer NVIDIA's to And

work I core strong silicon refresh. We next by Intel we next generation new the client the on our and Intel's a alter, of a co-engineer have to the partners. built widest range And us which commercialize IPC as products all XXXX AI cycle and foundation based of underway on giving will architectures and The market am very emergence start of processors, encouraged in with of expansion new of software year. build

double believe overall the rate category can shared I we years. the month, over PC X last As growth next this

easier modular we AX smaller, have and entire our Print, more devices In manage secure. AX and to making portfolio, refreshed and

new is We in geographies. site X the construction our square construction at more our which U.K. print new America This also to feet and continue launching solution, leverage has North million already in out sites than IP categories. to create laid includes and

small hidden our poly and rooms spaces. conference expanded for We solutions large

launched Service We and a We're all managed for Center, PCs, devices rolling which drive for in IT launched a to and it a beta data employee solution accounts. than out more we over poly will with will This conference printers XX and customers to And optimize integrates better single across room be create new as customers into HP tools platform. subscription help and workforce simplicity, X,XXX departments. experiences. service usage also productivity security

we we impact equally priorities. As our innovate portfolio, sustainable across remain focused our on

scale. drive A our free our are devices By at extend great example of HP capabilities, announced secularity we to is now solutions. life enhancing refurbishment new recently able the and

of this to our accretive sustainability addition ownership cost business. supporting creates In reduces an total goals, and

will other fiscal 'XX. to in launched year during markets expanding have be India We and

We're employees well-being of Israel X, the an and the needs also communities. focused want Right our is work an of our Since take been #X to our of to October are support a an to incredible the active on difficult phase fully region. particularly the has priority the of team now, in gas. playing those business moment role doing our we and I safety in keep to recognize situation. our the usual operational extremely in attacks

HP million Italian region. Foundation committed partners in $X to release human the has

everything We doing we will can support continue our local teams. to

our at to external turn performance. Analyst business Let remains what our consistent Securities Meeting. unit at me environment with now we our discussed

market uptick. has 'XX as and saw a demand we changed, continue see weakness we markets customers scenario cautious, of but stabilization across of QX. challenging to in China Personal especially typical Our to seasonal due Systems. And we our in economic year fiscal conditions. some showed signs remain more Commercial baseline expected in Consumer not behaved, largely stabilization,

Personal Systems net down significant important the X% revenue the up was revenue is what's quarter-over-quarter. in year-over-year constant X% sequential improvement that's PS in we But $X.X currency. business, most quarter, X% in continue with billion or to drive

gained margin execution disciplined share peers delivered year-over-year. operating of Our Commercial in once Consumer again We X.X%. and strong

TCV digits systems our recovery continued large double with sequentially, a sequentially. Hybrid double We we seasonality including focus through peripherals. Gaming, industries. by on grew And several stepped-up of driven spanning wins in in digits, Consumer both global which peer multiple Solutions, consumer grew saw Workforce new and customers grew service our largely

peripherals across enterprise is breadth hardware market spending, bullish of This remain impacted offering the by opportunity and the our a we advantage. is on and currently but huge long-term growth services

X% or X% billion. to Print. Turning X% sequentially. year-over-year revenue Net down currency. was revenue Print constant in That's $X.X grew

While X% compare in with finished units in QX our constant currency year outlook. down revenue Supplies constant were in currency, was in flat. an the long-term on easier and up line

tank HP we double-digit We drove execution standing and operating and of year-over-year, of print comprise subscriber printers, drove in revenue and another enabled XX% with In management. and wins. approximately strong new cost reflecting NPS momentum our Workforce growth XX.X%, once significant and shipments. margins again TCV Solutions disciplined delivered quarter growth Plus strong big of

our share improving quarter-over-quarter. and on are in profitable Americas, our focused in remain China of parts recovery performance print Europe with share to starting regaining impact efforts, of We we see and the and office, solid

as AX. in share gains strong As well

including Our returned year-over-year was double sequentially, and digits labels up growth in recovery and industrial continued to graphics business packaging.

And while momentum our build and environment, to At we by this month, current continue like XD with the earlier solution. BMW, is to our Siemens, showcased partners and scale in work market. XD FormNext impacted the we Decathlon customers

solid a was QX quarter. Overall,

we and October. our growth long-term We And operational the while market, the we about you good win agility shared advancing feel resilience, are the with rigor, in to showing priorities. in outlook needed

higher flow, as leverage investment return under least XXX% as remain also Xx Unless returning We and at opportunities remains a of over our cash time. committed with arise, long free ratio gross EBITDA. to on

repurchases to resume expect We in share QX.

I HP Securities said our Let Analyst investment. compelling me close at reiterating by Meeting. is a something

We have and drive profitable are the we growth well market-leading positioned and core in to print portfolios going in categories, markets forward. our PC

our accelerate We in opportunities key to areas. significant growth have

and operational HP. world-class strategy. deliver a strengths our we have on These We structural of capabilities, core to reduce And have targets shareholder-friendly are our return costs. capital

the non-GAAP Our results cash deliver growth. in sustained confident 'XX EPS year are non-GAAP free are operating progress plan reflect and fiscal And our profit, consistent we QX revenue, we to and flow making.

dive into for the the turn now Marie numbers. me Let call deeper over to a

Marie Myers

pleasure to another with in Thanks, operational be and and delivered afternoon, We progress quarter good Enrique, future a you execution here due strong everyone. It's today. financially, ready to transformation. outstanding good all our

results proven and of exceeding record margin, our solid across building meeting our generated track cash revenue, EPS non-GAAP operating flow, goals. We on non-GAAP free or

sequential Our both challenging QX Personal team in macro and and the profit well Systems revenue executing Print. delivering non-GAAP in dollars is operating environment, despite growth

or end EPS. in above to growth return at non-GAAP a our Margins of were high in ranges, year-over-year the resulting

our free structural in with exceeded and sequentially, transformation We 'XX than While are key track areas. cost on flow to target continue more costs, our our fiscal while reducing growth our future-ready for cash 'XX, doubled outlook. in consistent investing savings

indicators continue of with momentum and we monitor the business. health economic risks, and geopolitical we're pleased While to our

longer efforts improvements managing our cost to continue and expenses. near-term fundamental our structure will prudently We while aggressively drive term, to

With prioritizing at Meeting longer-term generate, the on our investments, so Securities outlined our financial savings Analyst we on to are to deliver we outlook, the month. focus continue we last we'll well positioned that

the nominally and faced. total constant with by performance grew and approximately execution digits, on cost Starting what currency. XX% in our constituting billion, key our revenue. competitive and full XX% of let additional we was on control, delivered year, despite down XX% $XX.X providing in areas me begin results. disciplined we we Revenue could focused growth mid-single macroeconomic Now management, the down stayed we color dynamics and solid some Revenue

We $X.XX. of X%. down year-over-year. $X.X $X.X with free profit down raised to our billion, full consistent was flat shareholders or billion net was of Non-GAAP earnings billion guidance. XX% flow to operating share Non-GAAP by $X.X returned dividend our And X.X% generated cash total per year XX% and revenue, we

take let's regions normally Americas X%, QX. year-on-year, look Personal and declines points X.X pricing constant Gross the Systems. XX.X% to by APJ the across details revenue margin of improved in Net and in was and declined up currency. component declined closer X%, our in competitive each demand offset was of remained X%, a X% costs and favorable EMEA soft mix, $XX.X lower China. primarily constant and a X% partially sequentially in due as logistics the down at currency quarter, declined billion quarter, Year-over-year Now, currency, in in

reinvestment operating growth expenses by part Non-GAAP in Poly, savings operating expenses in month people and cost driven was billion, X of were extra increase investment some and in other by primarily $X.X in offset year-over-year structural initiatives, of reductions. the future-ready

or $X.XX, million, $X.X and up shares. Non-GAAP up largely approximately diluted Non-GAAP was costs. XX.X%. per share and with diluted year-on-year profit a was count to to losses sequentially billion, up $XXX to net increased net currency share, $X.XX OI&E losses operating due earnings higher Non-GAAP due higher billion currency of factor expense X XX%

intangibles post-retirement and a credits restructuring diluted per charges, offset net earnings charges. related other benefit, to related by pension and excludes Non-GAAP acquisition adjustment and amortization and benefit totaling primarily divestiture-related net and partially share tax of $XX million,

was As earnings a diluted result, per GAAP $X.XX. share QX net

reflecting segment on Consumer net to up Systems ahead Personal sequentially, turn with units Commercial season. a X% In performance. and strength were let's down constant holiday down seasonal but X% or Total Now flat X% the X%. X% revenue basis was $X.X QX, a of in billion, currency, up

third improved year-over-year share consecutive sequentially on we market And Commercial as stabilized overall revenue in calendar QX, year-over-year for our even the a customers Nevertheless, declines basis remain Commercial cautious. quarter.

by pricing by by details, increased margin competitive both market unfavorable and and profitable down both our emphasis in share the Consumer on results Commercial into segments Consumer down customer Drilling Commercial. management. mix, X% in offset revenue were was cost gains and driven growth and part profit XX%, was lower TAM, driven effective and Strong in

resulting to Competitive with quarter, ASPs, in eased in pricing this pressures revenue improvement contributing in increased Systems QX, somewhat the our Personal consistent sequential outlook.

is inventory to back normalized levels. channel Our

margins Personal Systems profit with delivered of operating $XXX X.X%. operating million of

Our currency lower in towards costs to Sequentially, operating margin margin and year-over-year, commodity end increased people. mix, X.X and high the due was our cost Consumer held points savings. and business strong segments. and our range, target primarily structural by partially by in firm offset This Commercial investment of profitability our driven both logistics

decline nominally Print, In and revenue The management, Commercial, X% weak both navigate Consumer continued as QX, driven Offset we partially cost our competitive $X.X soft loss down in constant Print and was X% In in disciplined reflect focus total revenue was currency. currency. our demand results execution market. Print share supplies and by market on by or a growth. and billion,

to down revenue Industrial XX% all our demand continued volumes revenue Total largely finished Hardware year with and competitors hardware services QX, in returned aggressively. loss continued driven by year-over-year. soft price with performance Japanese by the in $XXX Graphics share driven across regions. growth hardware units to improvements decreased was attributable lower Asia geographical major as and positively million, China to and Greater

currency decreased By printers home decreased in demand units partially with for Customer in revenue down revenue for soft big on constant remain increased segment, Consumer reported XX%. traditional Commercial or down And basis XX%. down offset but Demand and XX% printers. was tank ink units constant XX% currency X% by a with

currency. were hardware, improved up billion, ASPs nominally markets. X% mix, by office constant as X% and and competitive contractual demand across In double-digit revenue favorable driven pricing was year-over-year multiple in currency offset AX increasing Supplies headwinds $X.X

million, driven on down by with offset pricing constant decreased profit unfavorable approximately For margin FY year-over-year, outlook was reductions. currency long-term 'XX, cost Operating mid-single favorable and X% our line was supplies declined a margin partially to $XXX in points revenue operating and XX.X%, in X% basis and by operating our Print currency, competitive investments mix low of people, digits. X.X down

our We Transformation X-year delivered our Future fiscal and to first our successfully 'XX. plan. Turning the program Ready better-than-expected completed goals against for of performance, year year

$X.X additional program cumulative and structural savings, Given confidence we the to strong raised billion. the progress, we during have we recently year made cost our drive target to

cost In generated savings annual gross OpEx, exceeding 'XX, revised we rate COGS across structural FY our run and target.

X recap briefly pillar, our structural me achieved pillars particularly we program our reduce in corporate. and accomplishments 'XX. key Under excellence across fiscal Let continue some optimize across each of businesses, operational during the costs to core of that our we

year. to work, executing hybrid portfolio, consolidations estate XX site enabling embraced exits us We our rationalize during the or real

learning AI streamlining deliver and to also additional to digital data our We automation decisions. our our organization, driving progress simplified including made management insights machine from infrastructure We We go-to-market business leverage our structure. data-driven modernized efforts process solid by on improvements. transformation richer,

rolling capabilities, well through sales to our Copal GitHub HP-specific AI improve generative tools and half of as to language developers Looking approximately we large AI representatives. are chatbot as accelerating out implementing models including a ahead, our for a efficiencies service like

there Further, significant across additional opportunities ahead, use many are cases.

to 'XX, the performance. took pillar In and number platforms actions product support portfolio. simplifying third operating to the our continued of we FY our agility impact is Systems Our in Significantly focused leverage. Personal overall on drive reducing we

by Personal our goal the FY of were reducing Systems halfway total of X/X. 'XX, At 'XX approximately of FY end we our to approximately platforms number year-end

made portfolio. our decreasing great Personal Systems SKUs reducing client number by progress our we addition, the In at complexity commodity of

efficiency our supply capabilities. chain our expect initiatives optimize forecast overall We drive better supplier ecosystem will and increase these

by our a plan shipped And investments, rationalizing our in by Print, platforms to Print hardware reduction portfolio simplify to drive ink we XX% in 'XX. FY

structure optimize at our significant see Future on discussed company Plan of to margin Meeting, the and we our As opportunities focus to us position cost we our performance. Analyst our Securities enhance Ready and ahead

allocation. sequential at the Personal $X of was was for and cycle Shifting conversion days year-over-year, outlook. flow on by in with was flow the fiscal capital cash in billion, to free year strength growth flow $X.X quarter. from operations Free days cash our in cash QX Systems. and strong the cash flow The XX an driven exclusively payable. $X.X days consistent billion, 'XX approximately minus This improved cash billion, was increase X

of quarter, In not possession QX, information, we material $XXX nonpublic and 'XX. given repurchases were shareholders in dividends. approximately million returned cash be QX shares in we via the to to active did any resume but in and repurchase throughout we expect FY We that

$X.X 'XX, billion debt. year retired greater shareholders billion For $X.X we than of to fiscal returned and

Regarding Meeting Xx ROI next approximately intend to our outlook our year, provided last higher reiterating to return long debt-to-EBITDA as opportunities remains and flow shareholders, of month. XXX% such our ratio are Analyst we Securities as acquisitions. cash FY strategic at 'XX, as our under free unless arise, We

to forward our market 'XX, for to assume Personal base scenario, the to in is for grow for Meeting, October with stabilize Print line Securities the FY outlook we the case Print we in and Personal be market at market. consistent Systems will revenues that said Analyst in what with Looking revenue Systems line our with underlying

margins ranges, pricing within solidly continue Print their to target Systems We be both and as Personal this respective to expect and in operating and dynamic we manage uncertain for costs environment.

historical 'XX half. non-GAAP the FY consistent half seasonality, outlook, expect we than will performance greater Regarding first with second EPS our be

for Meeting, we billion. approximately Security relatively we be at fiscal As expect flat expense our $X Analyst other corporate year-over-year said to at 'XX,

expect in QX. timing corporate but Keep expect we demand remain challenging And environment mind FY compensation that in 'XX's to economic and expense due X/X approximately stable. of we QX, expense, the to in other the of

some margins for Personal profit to operating to pressures, continue help end we both respective toward these their our be manage expect we for Print high offset to ranges cost of quarter. System and As of the aggressively target the

providing we outlook Taking account, following year and into XXXX. these the fiscal are considerations for QX

We quarter $X.XX diluted share And of $X.XX. be to diluted earnings GAAP expect range range net be first the non-GAAP the earnings share to $X.XX. net of first quarter to in per $X.XX to in per

in FY FY of share earnings $X.XX. in diluted We $X.XX range GAAP to net 'XX, earnings per net diluted the be be to $X.XX share the per expect And to to non-GAAP $X.XX. 'XX of range

our with environment. we on QX summary, the are commitments, of delivered challenging we even light results, continued macro as pleased In in our

outlined remains that momentum financial we Meeting Our near-term and Analyst to at our longer-term we FY framework Security have 'XX our last good objectives. month, execute unchanged, on

Our our on now across to market profitable questions. call free And focus cash structural of to value like remains hand the open growth your I the P&L, XXX% it back operator and segments the to and in higher while our returning would savings shareholders. cost of for our flow the

Operator

Mohan [Operator from Instructions] first questioner America. of And Bank Wamsi is our today

Wamsi Mohan

you your recognized was of versus I been Yes. us go few wondering XX% guidance? in If in it's could seasonality. in the the for maybe think low half. we half second the EPS first What's the Obviously, through was back half. versus implied help years, half a first second

So I'm way that earnings? either it characterize you half half second a versus basis. growth maybe first on On could wondering if or

just for about explicit give in fiscal market market is in the you guidance year Commercial sense And you fiscal continues be in guide? performance maybe Commercial within that performance. know can what in that be 'XX But Marie line weak. with makes us said somewhat your I the that you PC quite PCs to context, some can

Enrique Lores

Yes.

So Enrique.

seasonality will more then on will me understand the I it EPS better. view to macro about think provide be and help on Let specific because Marie it

QX. in between perspective, seasonality, what sales, Commercial on macro to is and soft. the a for market of side, also, stability we in from saw And increase remain QX QX, saw especially we PC continues So an

we But being especially demand, when we look at saw stable. real end-user demand

somehow, for helps we us And this have projection in the year. that next

decline the from expect we improve to XXXX As and slightly 'XX, to to before, gradually -- slightly PC to discussed be year. the and segments between market XXXX, 'XX premarket through the about both and we and be we slight growing flattish, -- 'XX expect

address will the Marie context, question. that said EPS having So

Marie Myers

Yes.

through about let to walk think So how me you seasonality.

we take our If is of improve the take can at the gave midpoint, million, is the stabilizing. basically, macro which you course midpoint the you year. what And if $XX guide, to which we expect of the the also SAM, you over revenue is the assume

I the but seasonal to patterns, say expecting over back not first to half quite just So we're yet the back half. would we're improve normal definitely

year. So recovery. expect as due don't think that the Personal But about guide, of point, normal add, for to at Systems, we would think yet a the gradual I this seasonality just QX about market say we particularly over recovery the pace the I'd

we've quarter-on-quarter out differential we're to QX period, just that to relative that of. So the going see come

So seasonality not throughout same yet still guide year. unchanged. the normal back But definitely quite to

Operator

the next of Daryanani Your Evercore question from from ISI. comes line Amit

Amit Daryanani

on really, guess touch out Is of And currency, -- understand on are your then cognizant And maintain you I'd think, versus to there free be you the my the on probably operating the that to just in that? side. helpful. rate, question you given touch that have. any would is cash be I'm could seasonality how what that do maybe the Japan, on weaker can about head-competitive competitive a your maybe perspective side. of peers leveraging flush reaction flow. QX just then how hoping Print given in this year, Enrique, headwind I rest I like you in just you pricing pricing a should that. run from lot seeing we Maybe margin we'll you

Enrique Lores

Print. So let on me start

not has weeks we met a since much few changed So, ago.

say to QX improved QX. competitive continue QX see side, see didn't on to prices driven in pricing QX, anything a situation between Print between the more aggressive the we especially But I by environment and we current yen dollar. to and So have sequentially

plan a before. actions we seen not 'XX from to and increase, that potential to in an are are we going executing competition compensate that the we When at described for the we have more We perspective. increase be look that taking pricing

plan an to us We that. will that help manage aggressive cost have reduction

Plus in continue improvement a -- we that as prepared of performance also continue our remarks, the grow of we Industrial units will improvement. margin to the HP business. the to shared units, And which seen from profit we our shift have expect office And to upfront and we space, We of that help and perspective. drive contributor be share will to finally, in an the drive

have seen and the market, within We is we a market. recovery grown in have us hardware And think consumption, of going also help XXXX. both and to we the this

Marie Myers

Yes. a couple And just of points on the Print rate.

we very a guided of we're that gave in the solidly range. to as in range. range at be revised in expect 'XX, outlook And we So be SAM, the Print. the still to And in around confident that, expect high we the in do end on of then result QX as still we

keep X.X%, perspective, in a fact QX SAM just just X.X% had and that that flow always through that your So on a pay model. for we mind lower, be the seasonality, and I working the that's to the prior in guide to out in to mind our always bear period, cash accrue we typically of do of as with expect from current in reiterating that of respect bonus that And we and year. add seasonality our due to the QX, sort and then we you're cash flow just comments

said remaining fluctuations SAM, expect those to continue earnings in see around and line net working QX that as quarters. be expect we cash flow similarly, somewhat to it free lower. will, So capital with I in throughout be therefore, the But

Operator

next Sankar line Krish from comes Your question of from the Cowen.

Sreekrishnan Sankarnarayanan

PC I a Enrique, question the side. had on

is how is also, to it You said expect an modest way uplift AI And of do PC? year. how it? PC, kind comes I'm a versus quantify driving regular of ASP And AI it? to expecting you're next much growth much when there curious, kind you in

Enrique Lores

me we excited category. let in the start saying that impact have overall PC are that to the going So AI PCs about really by are

from As 'XX. double we growth -- will we that will the think before, expected shared drive to they they 'XX have

timing. going really to impact have 'XX, it's we impact. we If of because So smaller significant think about will talk first just be the

The know launch second, penetration. in also to we penetrate. IPC it first And we time be the second When category takes new introduced half. of the because for category, will a

Our ITC, it only will really XX% because But again, in the expectation to but also the it's the of of is have the will penetration on not to to but of business, years, of additional that X to -- a be we gradual are XX% be our is going the value, this impact that excited, because PCs bring customers. going category. value

Sreekrishnan Sankarnarayanan

quantify ASP And the uplift?

Enrique Lores

Yes. you. Thank

So had will for average -- IPC. a haven't and consequence is our changed we projection said between the we price penetration what before, PCs selling of and increase of X% XX%, as

Operator

Your Tony next question comes from from the Bernstein. of line Saone

Toni Sacconaghi

on an any basis. supplies was wondering the XX comment point on last organic growth was quarter. at I in That you years if the could -- It up sequentially. hasn't in any happened

nonseasonal So growth of and you you to $XXX was there comment costs. you've of Ready bought identical rate But essentially and taken this fill? just the -- And the is channel year. change Or on then worth people in supplies? prices driving the a lot about you could I Future was before? also in out Did what some million, about quarter maybe OpEx run first strength, think talked

So when 'XX? Future Or of in think we Ready about think we Ready, going impact down about Future OpEx the OpEx? on won't see actually we should fiscal

Marie Myers

So Future on out the let with me Ready. just question start

pleased So first obviously, of all, performance. the with really

and discussed then into 'XX, as Ready you OpEx we 'XX. $X.X cost I much my for Future to is I SAMs I prepared we've raised SAM, our both know, at a target as in And million remarks, think of mentioned as in on think, very combination of going sales. track. And

bottom those the and volatility. people do in of we're through to some growth to also that some in drop help through But of us line. savings, manage we reinvesting So the back

the the frankly, businesses forward see that Tony, rates end high in guiding solidly in of And quarter range rates both we're at QX. the terms that you year going in we this for in in last in and even the for the also the range delivered how can really of of and terms

factors up in OpEx earlier, driven be it's exactly by investments year-on-year, I the the those Now will and people. growth, our investments mentioned our in

of just And add of offset that gross geography and P&L, margins, gross as in out I this of partially operating margins that's the been our sort see shifting around closing the sort we're expenses. if could comment you now to you a higher would by look is, at

Enrique So the turn bit I'll more Future gives the good to little it in a Tony. And ended about around a hopefully, ecosystem. we add to that on on think quarter how supplies We're context back From Ready. shape. in good perspective, just shape, supplies. you multi-tier I'll

Enrique Lores

Yes.

that. complement me let So

So I good of factors in there are that QX. supplies performance think drove multiple the

As not many at comparisons at done it's that best the are look then oil -- times, in quarter said there compares, adjustments I have way and the many performance are can to when because distort the look we overall the perspective. at every year-on-year though, quarter,

on positive many are We supplies. driving actions

continue is we which several to already quarters. We grow share been for overall, something doing have that

expect decline in value with grow the prices combination to low long things these increased are quarter-on-quarter. price to help the performance. mid-single And that we to have to to But we the reflect digits. all bring we We continue to to pleased the of supplies the term, us again,

in We the not supplies for projections changing are our future.

Operator

from Your comes the Aga line from Merchant next question of Citigroup.

Unknown Analyst

A little inventory. bit on

the both Personal comment the If just Print PC at channel, as on on on how and -- you in side look you the the could the inventory well.

think but I about there some ones, commentary that was you in last when it general. quarter, elevated generally not was spoke HP there for for industry the PCs, Specifically

cadence And then can of the you just talk if about EPS.

you're second at and the X% the first is As that's as ending going year XX%, commented quarter for starting the it, I the stronger, -- earlier, up you was year to you're be first think, progress year. half for correct,

So of through if just that, can you be kind walk that would great.

Marie Myers

why just seasonality start don't think So on to how the about of and I EPS, out sort it.

in give QX. to in a from some there. usually QX, perspective, of terms X/X other you in -- corporate have expense X/X of So we hits -- context hits that sort seasonality just of that

typically look bear So the our if guide, because expense stock comp at you in period. mind QX that's that just

adjustment in seasonality that EPS. see our to going you're QX that, of result a as So

just we're, year-on-year you hasn't And really said, Systems really terms Personal $XXX inventory, seasonality. is pleased you $XXX about with we're And changed. as to million where think, correctly think Print the up, in just made close our typical XX% were to guide, we're And But the on shape, we progress landed actually just in channel of midpoint million, healthy SAM both QX. then I in and QX reiterate, quarter. and if of I'll this we

quarter And in see the we've on Personal industry that normalized are levels to seen you our now that well. And the sequentially of that we much add of would in last are declines normalizing. really fact, in levels. and as also can the I themselves pricing Systems, back more terms quality

Personal Print we've think more looking I back, really in normalized as levels, So seen CI particularly Systems back to and return in well.

Unknown Analyst

more how Great. components, I think on components? about previously was expectations, And one commentary on think you deflationary there some

Marie Myers

It's Yes. very in guide of forward-looking. terms line in much SAM our with

you've seen -- as the QX, year. businesses year. for we and the to expect headwinds in both be Print the but tailwinds we've Print. seen a for tailwind do favorability a on both of in well, Print PS just And We what into in on we look quarter, PS, slight headwinds And sorry, for tailwinds as headwind definitely but then terms and expect

Operator

from comes Your of Fargo. line from next Wells question the Aaron Rakers

Unknown Analyst

maybe expect on on holiday the some give could hoping compare how could for Jake you promotional color of into Aaron. was and for see the amount to I additional to is pricing PCs. Do years? heading this season This prior you

Enrique Lores

seeing expect making shipments, have portfolio, what a at we see similar based that the the we channel on strength know level this on before that We were of the the telling good is we point, And about high. aggressiveness holiday very our inventory been season was stores. we to the of assortment have

We have portfolio. our full introduced just across innovation significant

So we in coming about season holiday the weeks. the are optimistic

Unknown Analyst

momentum about also wondering you And little you as-a-service of offering? the the with then Great. more if I growth talk and new a Poly seeing could subscription in expect maybe was the bit some you're

Enrique Lores

Sure.

Poly We be very have the that with the bullish business. continue we to opportunities about

from Of to positive. last during quarter. from feedback we it our impacted get continues week, course, by been be been has macro. during the very impacted It customers our last But channel, the has

which new in the us model, XXXX. just help said, you new, as we think we both service technology a As And growth and the really in systems drive will introduced the to a on to the are based finishing that be perspective, quarters plan and to we to From continues now the grow ago. opportunity integration innovate there. process we few IT a shared

is really We going with about have again, the progress per made. to us. bring business optimistic are And to happy as this been plan. driving we the opportunities the process I'm we have

Operator

Morgan next Woodring Your Erik from the comes line from question of Stanley.

Erik Woodring

to supplies. circle Tony's I just back on question wanted to Print

supplies quarter. Print obviously You outperformed this

to quarter. -- X-box to would as XX% mentioned wanted X kind that, supplies share given make could different year-over-year, just specifically, understood go the drove of factors we gains are understand about be the in the sure helpful through think all But the you think I upside for offsets what what in sure if drivers, should Print are the I you hardware I declining the pricing. we units that to different So model? make just in And just hard 'XX.

Enrique Lores

you, And Tony, not because helped, thank I I to because that year Thank is QX also the strong one when to last compare which Perfect. of last easy for was mention quarter answering was you the a elements supply. missed Eric.

on has this year-on-year compare. model different if -- look decline. So we the drivers installed an impact the also supplies, to base continued clearly, I of has X-box the at If and

go continues Usage negative factor. factor. to negative a is is which this So down, a

factors then space, references One that this be have I the to projections pandemic is and impact quarter. we the home especially the X above, positive continues making to But have had an pricing. say, that the and before in were

and We for share. have prices increased supplies market

to have positive grow on which As supplies you. I mentioned Thank overall share has continued for the supplies, growth. a we impact before,

Operator

from line the Your comes question Sachs. next of from Ng Mike Goldman

Michael Ng

I for about in first Marie full some print to guided the the have the talk year? factors for any was about range AX? Or the and each solidly those of the wondering for to year. be normalization very then versus I a for for outlook Printing, for little And end the Enrique. Commercial X Marie, one drive PSM at the fiscal within you could quarter bit just range margins throughout talk of competitive AX of dynamics high margin one and in Can are that differences you then segments Enrique, if similar? just that the you

Marie Myers

Mike. ranges sure, the Why Yes, context you on we're don't about I thinking start how and give them. out and some

and So of on a just mentioned, QX. what's as the for mix. is driving combination at the be end PS, high we that really we'd

heard in to terms and is pricing improved of in as prepared value that his Enrique you think channel -- I inventory talked remarks, also the higher the on normalized.

year the are sort costs -- what's the rates result, headwinds Ready of we've Obviously, we we've of As the solidly being saw Future that got and influencing progresses. the the ago improvement, we as range, working less benefits a got then of against terms commodity expect, and moment really I of in more that of mentioned that a see that to about promotional also pricing. obviously, some I talked And as is seasonality sequential with the earlier, with see we that a in program Tony. the

So Systems. Personal that's sort of

the of in you model if of being about in about, think the the similar the it's the end Supplies. really profitability QX, we shift terms Print at And with that by and for range drivers high just driven -- talked

new the Also, businesses. both an frankly, on business impact of the having of models. impact Some growth is

again, to, the and mid-single the also see there Ready. Supplies, digits. Future terms we Supplies pricing once the outlook to of to of low we in no Similarly, impact is normalization And change see

all for to the it for those both turn Erique. solidly I'll high see end year, be the together of what us really factors is but businesses So in range the at the drives to QX. range

Enrique Lores

think the Print, from And AX, continued see printing production key office driven expect Customers. Commercial they X they market this office. therefore, One especially people Yes. that AX to have We need Commercial And just less products. in is to change they is -- type shift comments. your volumes that fact expecting the of in to were that question the less by and have large we we in in reduced in about the

So that has been one unchanged.

during do, countries in XXXX. the Americas, it in did work we did in to it In know to we of We terms AX in in we continue our We continue and this it AX, an to several we and to quarter Europe. grow North grow share. in both -- to we China, expect in did We that it in did started opportunity share in but America. some in we Second, AX, several AX, geographies. have to drive and see have

Operator

remarks. the have to I Lores We closing turn questions call further at this will no Enrique now for over time.

Enrique Lores

Well, you. all of all, you Thank thank first you, of joining. for

me a continue undervalued investment. And but in at least, we close Thanksgiving. -- reinforces weeks a results that increase we last that let you the of with happy signal then all With that progress good we all very are are shared U.S., of believe and the Thank a are shared for we SAM, the we QX of not plan HP you shares of that key you. few have to making and those that are we this in the the believe confidence be the the ago. you And Wishing that a call. message

Operator

now and today's may concludes your call. conference for Thank participation, disconnect. you This you

HP (HPQ) 21 Nov 232023 Q4 Earnings call transcript