Core Viewpoint - HP Inc. reported lower-than-expected earnings for Q1 fiscal 2025, leading to a 3.9% decline in shares during extended trading, and provided a profit outlook for Q2 that also fell short of expectations [1][2]. Financial Performance - HP's Q1 non-GAAP earnings were 74 cents per share, missing the consensus estimate by one cent, and down 9% from 81 cents in the same quarter last year due to higher expenses [2][3]. - Revenues increased by 2.4% year-over-year to $13.5 billion, aligning with the Zacks Consensus Estimate, driven by higher Personal Systems sales, which offset declines in the Printing business [3][4]. Segment Performance - Personal Systems (PS) revenues, accounting for 68.1% of total revenues, reached $9.2 billion, a 5% increase year-over-year (5% at constant currency) due to strong commercial unit performance and market share gains [4][5]. - Total PC units sold decreased by 1% year-over-year, with a significant 11% drop in Consumer PS shipments, partially offset by a 6% increase in Commercial PS shipments [5]. - Printing business revenues, making up 31.9% of total revenues, fell by 2% year-over-year to $4.45 billion, impacted by weaknesses in Commercial Printing and Supplies [6]. Regional Performance - Growth was observed across all regions, with the Americas up 3%, EMEA growing 2%, and Asia Pacific and Japan increasing by 5% year-over-year [7]. Operating Margins - The non-GAAP operating margin for PS contracted by 60 basis points to 5.5%, while the Printing division's margin decreased by 90 basis points to 19%. Overall, HP's non-GAAP operating margin from continuing operations fell by 80 basis points to 9.6% due to higher commodity costs and increased strategic investments [8]. Balance Sheet and Cash Flow - At the end of Q1, HP had cash and cash equivalents of $2.89 billion, down from $3.25 billion in the previous quarter. The company generated $374 million in cash from operations and $70 million in free cash flow, returning $373 million to shareholders through share repurchases and dividends [9]. Guidance - For Q2 fiscal 2025, HP estimates non-GAAP EPS between 75 cents and 85 cents, with a midpoint of 80 cents, below the Zacks Consensus Estimate of 85 cents. The company raised its fiscal 2025 EPS guidance to a range of $3.45 to $3.75, up from $3.06-$3.36, with a consensus estimate of $3.57 [11].

Financial Data and Key Metrics Changes - HP Inc. reported a revenue growth of 2% year-over-year for Q1 2025, marking the third consecutive quarter of revenue growth [11][38] - Non-GAAP earnings per share (EPS) was $0.74, slightly above the midpoint of guidance, with operating profit margins for both Print and Personal Systems in line with expectations [12][42] - Gross margin decreased to 21% year-over-year due to increased commodity costs, with expectations for stronger margins in the second half of the year [40][41] Business Line Data and Key Metrics Changes - Personal Systems revenue increased by 5% year-over-year, driven by growth in the commercial segment, which represented over 70% of the PS revenue mix [24][43] - Print revenue declined by 1% in constant currency year-over-year, with strong unit growth in home and consumer subscriptions, achieving a milestone of one million instant paper subscribers [29][46] - Workforce solutions continued to show momentum with year-over-year revenue growth, including new managed print wins [30] Market Data and Key Metrics Changes - Revenue growth was observed across all regions, with APJ growing by 5%, Americas by 3%, and EMEA by 2% in constant currency [40] - The AI PC market experienced a sequential growth rate of 25% in the last calendar quarter, contributing to HP's commercial growth [26] Company Strategy and Development Direction - HP is focusing on leading the future of work by investing in AI and software capabilities, including the acquisition of strategic assets from Humane to enhance its technology ecosystem [14][15] - The company is realigning its key growth areas to prioritize hybrid systems, advanced compute solutions, and AI PCs, while managing gaming as part of its core portfolio [16] - HP aims to deliver $1.9 billion in gross annual run rate structural savings by the end of fiscal year 2025 to mitigate macro and geopolitical uncertainties [35][50] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the full-year outlook, anticipating stronger EPS in the second half of the year driven by seasonal strength in personal systems and the Windows 11 refresh [56][62] - The company is proactively managing geopolitical developments and has built a globally diverse supply chain to ensure manufacturing resiliency [32][34] - Management noted that the current tariff environment has been accounted for in their guidance, with plans to leverage their global supply chain to mitigate impacts [66][68] Other Important Information - HP's cash flow from operations was approximately $375 million, with free cash flow at $70 million, reflecting normal seasonality [51] - The company returned close to $400 million to shareholders through share repurchases and dividends [53] Q&A Session Summary Question: Impact of China tariff on guidance - Management included known impacts of current tariffs in their guidance, primarily affecting the personal systems business, with less than 10% of revenue expected to come from China by the end of FY 2025 [66][67] Question: Drivers of personal systems growth - Key drivers include aging install base, Windows 11 refresh, and penetration of AI PCs, with a focus on profitable premium categories [74][75] Question: Windows end of life and device specifications - Businesses are becoming more competent in refreshing devices, with an acceleration in the Windows 11 refresh observed [78] Question: Customer adoption of AI PCs - Current expectations for AI PC penetration by year-end are around 25%, with projections for 40% to 50% in two years [81] Question: Competitive environment for print in China - The competitive environment remains stable, with HP growing share in the print space, particularly in consumer hardware [121] Question: Inventory growth implications - Increased inventory was a strategic response to tariffs, impacting cash conversion cycles but not the full-year outlook [126][127]

Financial Performance - For the quarter ended January 2025, HP reported revenue of $13.5 billion, reflecting a 2.4% increase year-over-year [1] - EPS for the quarter was $0.74, down from $0.81 in the same quarter last year [1] - The reported revenue matched the Zacks Consensus Estimate of $13.5 billion, resulting in a surprise of -0.01% [1] - The company experienced an EPS surprise of -1.33%, with the consensus EPS estimate being $0.75 [1] Key Metrics - Days in accounts payable increased to 139 days, compared to the average estimate of 125 days [4] - Days of sales outstanding in accounts receivable remained stable at 28 days, aligning with the average estimate of 28.5 days [4] - Days of supply in inventory rose to 72 days, exceeding the average estimate of 62 days [4] Segment Performance - Net revenue for Personal Systems - Commercial PS was $6.65 billion, matching the average estimate and showing a 9.9% increase year-over-year [4] - Net revenue for Personal Systems - Consumer PS was $2.58 billion, consistent with estimates but down 6.7% from the previous year [4] - Total net revenue for Personal Systems was $9.22 billion, slightly below the average estimate of $9.23 billion, representing a 4.7% year-over-year increase [4] - Net revenue from Printing - Supplies was $2.83 billion, slightly above the average estimate, but down 1.3% year-over-year [4] - Net revenue from Printing - Commercial Printing was $1.14 billion, below the average estimate and down 6.8% year-over-year [4] - Net revenue from Printing - Consumer Printing was $299 million, exceeding estimates and up 4.9% year-over-year [4] - Total net revenue from Printing was $4.27 billion, matching estimates but down 2.4% year-over-year [4] Operational Earnings - Earnings from operations in Printing were $810 million, surpassing the average estimate of $796.53 million [4] - Earnings from operations in Personal Systems were $507 million, below the average estimate of $528.38 million [4] Stock Performance - HP shares returned +3.7% over the past month, outperforming the Zacks S&P 500 composite, which declined by -2.2% [3] - The stock currently holds a Zacks Rank 2 (Buy), indicating potential for outperformance in the near term [3]

Core Viewpoint - HP reported quarterly earnings of $0.74 per share, missing the Zacks Consensus Estimate of $0.75 per share, and down from $0.81 per share a year ago, indicating a -1.33% earnings surprise [1] - The company posted revenues of $13.5 billion for the quarter, slightly missing the Zacks Consensus Estimate by 0.01%, but up from $13.19 billion year-over-year [2] Financial Performance - Over the last four quarters, HP has surpassed consensus EPS estimates only once [2] - The company has topped consensus revenue estimates two times over the last four quarters [2] - The current consensus EPS estimate for the upcoming quarter is $0.85 on revenues of $13.08 billion, and for the current fiscal year, it is $3.57 on revenues of $55.09 billion [7] Market Performance - HP shares have increased approximately 3.7% since the beginning of the year, outperforming the S&P 500's gain of 1.3% [3] - The stock currently holds a Zacks Rank 2 (Buy), indicating expectations of outperforming the market in the near future [6] Industry Outlook - The Computer - Micro Computers industry is currently in the top 17% of over 250 Zacks industries, suggesting a favorable outlook for stocks within this sector [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact HP's stock performance [5]

Financial Position - As of January 31, 2025, HP's cash and cash equivalents were $2.88 billion, a decrease from $3.24 billion on October 31, 2024[205]. - Total debt as of January 31, 2025, was $9.69 billion, slightly up from $9.67 billion on October 31, 2024[205]. - As of January 31, 2025, the company has approximately $1.1 billion in recorded liabilities related to uncertain tax positions[225]. - The weighted-average interest rate on HP's debt remained stable at 4.5% as of January 31, 2025[218]. Cash Flow and Operating Activities - Net cash provided by operating activities for the three months ended January 31, 2025, was $374 million, an increase of $253 million compared to $121 million in the same period of fiscal year 2024[206]. - The cash conversion cycle improved to (39) days as of January 31, 2025, from (42) days on October 31, 2024, reflecting a favorable cash conversion cycle[208]. - Net cash used in investing activities increased to $300 million for the three months ended January 31, 2025, compared to $228 million in the same period of fiscal year 2024[213]. Shareholder Returns - During the three months ended January 31, 2025, HP returned $400 million to shareholders, including $300 million in cash dividends and $100 million in share repurchases[216]. - HP had approximately $9.2 billion remaining under share repurchase authorizations as of January 31, 2025[216]. Future Financial Commitments - HP anticipates making contributions of approximately $28 million to non-U.S. pension plans and $23 million to U.S. non-qualified pension plan participants for the remainder of fiscal year 2025[223]. - The company expects to make future cash payments of approximately $400 million in fiscal year 2025 as part of its approved restructuring plans[224]. Risk Management and Partnerships - The company has not engaged in transactions that create material relationships with unconsolidated entities or financial partnerships for off-balance sheet arrangements[226]. - The company utilizes third-party arrangements for cash and liquidity management, providing liquidity to partners for working capital needs[227]. - There has been no material change in the company's exposure to market risk since October 31, 2024[229].

Financial Data and Key Metrics Changes - Overall revenue growth of 2% year over year, marking the third consecutive quarter of growth [8][26] - Non-GAAP earnings per share of $0.74, slightly above the midpoint of guidance [9][28] - Gross margin decreased to 21% year over year due to increased commodity costs [27][28] Business Line Data and Key Metrics Changes - Personal Systems revenue increased by 5% year over year, driven by commercial growth [17][29] - Print revenue declined by 1% in constant currency year over year, in line with expectations [20][31] - Consumer subscriptions revenue grew with a milestone of 1,000,000 instant paper subscribers [20][100] Market Data and Key Metrics Changes - APJ region grew by 5%, Americas by 3%, and EMEA by 2% in constant currency [27] - Worldwide PC commercial revenue grew by 10% year over year, fueled by AI PC adoption and Windows 11 refresh [18][29] - Competitive pricing market in office and weak demand in China impacted overall performance [19][31] Company Strategy and Development Direction - Focus on leading the future of work with investments in AI and software capabilities [10][11] - Realignment of key growth areas to include AI PCs and advanced compute solutions, while gaming will be managed as part of the core portfolio [11][12] - Plans to deliver $1,900,000,000 in gross annual run rate structural savings by the end of fiscal year 2025 [24][33] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the full year outlook despite geopolitical uncertainties and tariff impacts [24][36] - Anticipated stronger EPS in the second half of the year due to seasonal strength and ongoing cost management efforts [37][40] - Continued focus on profitable growth and strategic investments to navigate macroeconomic challenges [40][41] Other Important Information - Acquisition of strategic assets from Humane to enhance AI capabilities and build an intelligent ecosystem [10][82] - Commitment to return approximately 100% of free cash flow to shareholders over time [39] Q&A Session Summary Question: Impact of China tariffs on guidance - Management included known impacts of current tariffs in guidance, primarily affecting the Personal Systems business [44][45] Question: Drivers of Personal Systems growth - Key drivers include aging installed base, Windows 11 refresh, and penetration of AI PCs [51][52] Question: Windows end of life and device refresh confidence - There is an acceleration in Windows 11 refresh, with customers more aware and ready to drive the refresh [55][56] Question: Customer adoption of AI PCs - Expected penetration of AI PCs to be around 25% by year-end, with continued projections for future growth [58] Question: Competitive environment for print in China - Competitive environment remains stable, with no radical changes in supplies competitive perspective [92] Question: Inventory growth implications - Increased finished goods inventories in the U.S. to mitigate tariff impacts, but not necessarily implying further growth in inventory [94][95]

Group 1 - HP reported fiscal first-quarter sales of $13.5 billion, a 2.4% year-over-year increase, exceeding analyst estimates [1] - Adjusted earnings per share (EPS) decreased to 74 cents from 81 cents a year ago, aligning with expectations [1] - For the second quarter, HP projected adjusted EPS between 75 cents and 85 cents, with analysts anticipating 84 cents at the higher end of the range [1] Group 2 - The company's outlook reflects expectations of higher costs due to U.S. tariff increases on China and associated mitigations [2] - HP aims to diversify its supply chain, expecting over 90% of products sold in the U.S. to be manufactured outside of China by the end of 2025 [2] Group 3 - HP recently reached a $116 million deal to acquire AI technology and personnel from Humane, which will contribute to a new AI innovation lab called HP IQ [3] - Following the earnings report, HP shares fell nearly 4% in extended trading, although they have increased approximately 17% over the past year [3]

[HP Inc. Fiscal 2025 First Quarter Financial Highlights](index=1&type=section&id=HP%20Inc.%20Reports%20Fiscal%202025%20First%20Quarter%20Results) [Overall Financial Performance](index=1&type=section&id=Overall%20Financial%20Performance) In the first quarter of fiscal 2025, HP Inc. reported a 2.4% year-over-year increase in GAAP net revenue to $13.5 billion, marking the third consecutive quarter of revenue growth, while profitability declined with GAAP diluted net EPS falling 5% to $0.59 and non-GAAP diluted net EPS decreasing 9% to $0.74 Q1 FY25 Financial Performance Summary | | Q1 FY25 | Q1 FY24 | Y/Y Change | | :--- | :--- | :--- | :--- | | **GAAP net revenue ($B)** | $13.5 | $13.2 | 2.4% | | **GAAP operating margin** | 6.3% | 7.1% | (0.8) pts | | **GAAP diluted net EPS** | $0.59 | $0.62 | (5)% | | **Non-GAAP operating margin** | 7.3% | 8.4% | (1.1) pts | | **Non-GAAP diluted net EPS** | $0.74 | $0.81 | (9)% | | **Net cash provided by operating activities ($B)** | $0.4 | $0.1 | 209% | | **Free cash flow ($B)** | $0.1 | $0.0 | 180% | - Both GAAP and non-GAAP diluted EPS for Q1 FY25 were within the company's previously provided outlook[3](index=3&type=chunk) - The company increased its annualized gross run rate structural cost savings target for the Future Ready plan from **$1.6 billion to $1.9 billion** by the end of fiscal year 2025[3](index=3&type=chunk)[5](index=5&type=chunk) [Management Commentary](index=2&type=section&id=Management%20Commentary) Management expressed satisfaction with the Q1 performance, highlighting the third consecutive quarter of revenue growth, attributing progress to a strong commercial business in Personal Systems and momentum in key growth areas like AI PCs - CEO Enrique Lores stated that progress was fueled by a strong commercial business in Personal Systems and momentum in key growth areas, including AI PCs[5](index=5&type=chunk) - CFO Karen Parkhill announced an increase in the Future Ready savings target to **$1.9 billion** by the end of fiscal 2025 and confirmed that the full-year outlook remains unchanged[5](index=5&type=chunk) [Asset Management and Capital Return](index=2&type=section&id=Asset%20Management%20and%20Capital%20Return) In Q1, HP generated $0.4 billion in net cash from operating activities and $70 million in free cash flow, while returning $0.4 billion to shareholders through dividends and share repurchases Key Balance Sheet and Cash Flow Metrics (Q1 FY25) | Metric | Value | Change (QoQ) | | :--- | :--- | :--- | | **Accounts Receivable ($B)** | $4.2 | -5 days | | **Inventory ($B)** | $8.4 | +9 days | | **Accounts Payable ($B)** | $16.5 | +1 day | | **Net Cash from Operations ($B)** | $0.4 | N/A | | **Free Cash Flow ($M)** | $70 | N/A | - HP returned a total of **$0.4 billion** to shareholders in Q1, consisting of **$0.3 billion** in dividend payments and **$100 million** used to repurchase approximately **2.7 million** shares[3](index=3&type=chunk)[8](index=8&type=chunk) [Segment Performance](index=2&type=section&id=Fiscal%202025%20first%20quarter%20segment%20results) [Personal Systems](index=2&type=section&id=Personal%20Systems) The Personal Systems segment reported a 5% year-over-year revenue increase to $9.2 billion, driven by a 10% rise in Commercial PS revenue which offset a 7% decline in Consumer PS revenue, with total units decreasing by 1% and an operating margin of 5.5% Personal Systems Performance (Q1 FY25 vs Q1 FY24) | Metric | Q1 FY25 | YoY Change | | :--- | :--- | :--- | | **Net Revenue ($B)** | $9.2 | +5% | | Commercial Revenue ($B) | $6.6 | +10% | | Consumer Revenue ($B) | $2.6 | -7% | | **Total Units** | N/A | -1% | | Commercial Units | N/A | +6% | | Consumer Units | N/A | -11% | | **Operating Margin** | 5.5% | -0.6 pts | [Printing](index=2&type=section&id=Printing) The Printing segment's net revenue decreased by 2% year-over-year to $4.3 billion, with a 1% decline in Supplies revenue, as a 5% increase in Consumer Printing revenue was not enough to offset a 7% decline in Commercial Printing, while maintaining a strong operating margin of 19.0% Printing Performance (Q1 FY25 vs Q1 FY24) | Metric | Q1 FY25 | YoY Change | | :--- | :--- | :--- | | **Net Revenue ($B)** | $4.3 | -2% | | Supplies Revenue ($B) | $2.8 | -1% | | Commercial Revenue ($B) | $1.1 | -7% | | Consumer Revenue ($B) | $0.3 | +5% | | **Total Hardware Units** | N/A | +5% | | Commercial Units | N/A | 0% | | Consumer Units | N/A | +7% | | **Operating Margin** | 19.0% | -0.9 pts | [Business Outlook](index=3&type=section&id=Outlook) [Q2 FY25 Outlook](index=3&type=section&id=Q2%20FY25%20Outlook) For the second quarter of fiscal 2025, HP projects GAAP diluted net EPS to be in the range of $0.62 to $0.72, with non-GAAP diluted net EPS estimated between $0.75 and $0.85 Q2 FY25 EPS Guidance | Metric | Range ($) | | :--- | :--- | | **GAAP Diluted Net EPS** | $0.62 to $0.72 | | **Non-GAAP Diluted Net EPS** | $0.75 to $0.85 | [Full Year FY25 Outlook](index=3&type=section&id=Full%20Year%20FY25%20Outlook) HP maintains its full-year fiscal 2025 outlook, estimating GAAP diluted net EPS between $2.86 and $3.16, and non-GAAP diluted net EPS between $3.45 and $3.75, while anticipating free cash flow in the range of $3.2 to $3.6 billion Full Year FY25 Guidance | Metric | Range ($) | | :--- | :--- | | **GAAP Diluted Net EPS** | $2.86 to $3.16 | | **Non-GAAP Diluted Net EPS** | $3.45 to $3.75 | | **Free Cash Flow ($B)** | $3.2 to $3.6 | - HP expects that by the end of fiscal year 2025, over **90%** of its products sold in North America will be manufactured outside of China, although China will remain an important global manufacturing hub[12](index=12&type=chunk) [Consolidated Financial Statements](index=6&type=section&id=Consolidated%20Financial%20Statements) [Consolidated Condensed Statements of Earnings](index=6&type=section&id=CONSOLIDATED%20CONDENSED%20STATEMENTS%20OF%20EARNINGS) For the three months ended January 31, 2025, HP reported total net revenue of $13.50 billion, a slight increase from $13.19 billion in the prior-year period, with net earnings of $565 million, or $0.59 per diluted share, down from $622 million, or $0.62 per diluted share, in Q1 FY24 Q1 FY25 Statement of Earnings (in millions) | Metric | Q1 FY25 | Q1 FY24 | | :--- | :--- | :--- | | **Total net revenue** | $13,504 | $13,185 | | **Gross profit** | $2,840 | $2,888 | | **Earnings from operations** | $845 | $935 | | **Net earnings** | $565 | $622 | | **Diluted net EPS ($)** | $0.59 | $0.62 | [Consolidated Condensed Balance Sheets](index=8&type=section&id=CONSOLIDATED%20CONDENSED%20BALANCE%20SHEETS) As of January 31, 2025, HP's total assets were $38.93 billion, down from $39.91 billion at the end of the previous quarter, with total liabilities at $40.00 billion, resulting in a stockholders' deficit of $1.07 billion Balance Sheet Summary (as of Jan 31, 2025, in millions) | Category | Amount | | :--- | :--- | | **Total current assets** | $19,834 | | Cash, cash equivalents and restricted cash | $2,894 | | Inventory | $8,443 | | **Total assets** | $38,930 | | **Total current liabilities** | $27,434 | | Accounts payable | $16,483 | | **Total liabilities** | $40,002 | | **Stockholders' deficit** | $(1,072) | [Consolidated Condensed Statements of Cash Flows](index=9&type=section&id=CONSOLIDATED%20CONDENSED%20STATEMENTS%20OF%20CASH%20FLOWS) For the first quarter of fiscal 2025, HP generated $374 million in net cash from operating activities, a significant increase from $121 million in the same period last year, resulting in a net decrease in cash of $359 million for the quarter Q1 FY25 Cash Flow Summary (in millions) | Metric | Q1 FY25 | Q1 FY24 | | :--- | :--- | :--- | | **Net cash provided by operating activities** | $374 | $121 | | **Net cash used in investing activities** | $(300) | $(228) | | **Net cash used in financing activities** | $(433) | $(708) | | Repurchase of common stock | $(100) | $(500) | | Cash dividends paid | $(273) | $(275) | | **Decrease in cash, cash equivalents and restricted cash** | $(359) | $(815) | [Supplementary Information](index=4&type=section&id=Supplementary%20Information) [Use of Non-GAAP Financial Measures](index=4&type=section&id=Use%20of%20non-GAAP%20financial%20information) HP utilizes non-GAAP financial measures to supplement its GAAP-based financial statements, providing a better understanding of the company's ongoing operational performance by excluding items not reflective of core business results - HP provides non-GAAP metrics to offer investors greater insight into the information used by management for financial and operational decision-making[15](index=15&type=chunk)[48](index=48&type=chunk) - Key adjustments to derive non-GAAP figures include the exclusion of restructuring charges, acquisition and divestiture costs, amortization of intangible assets, and certain tax adjustments[39](index=39&type=chunk)[40](index=40&type=chunk) [Forward-Looking Statements](index=4&type=section&id=Forward-looking%20statements) This report contains forward-looking statements regarding projections of revenue, earnings, cost savings, and strategic plans, which are subject to various risks and uncertainties, including macroeconomic trends, supply chain issues, competitive pressures, and geopolitical events - Forward-looking statements include projections of financial items, cost savings, management plans, and the expected performance of products and services[17](index=17&type=chunk) - Major risks that could affect future results include the ability to execute strategic plans, macroeconomic and geopolitical trends, supply chain constraints, and competitive pressures[18](index=18&type=chunk)[19](index=19&type=chunk) [Key Growth Areas](index=15&type=section&id=Key%20Growth%20Areas) HP has identified several Key Growth Areas that management expects to grow faster than the core business with accretive margins over the long term, spanning across hybrid work solutions, advanced computing, AI-enabled PCs, managed services, consumer subscriptions, industrial printing, and 3D printing technologies - HP's designated Key Growth Areas include: - Hybrid Systems (e.g., video conferencing solutions) - Advanced Compute Solutions (e.g., workstations) - AI PC - Workforce Solutions (e.g., managed services) - Consumer Subscriptions (e.g., Instant Ink) - Industrial Graphics - 3D & Personalization[42](index=42&type=chunk)[43](index=43&type=chunk)[45](index=45&type=chunk)

Core Insights - HP Inc. reported a fiscal 2025 first quarter net revenue of $13.5 billion, representing a year-over-year increase of 2.4% (3.3% in constant currency) [4][7] - The company's GAAP diluted net earnings per share (EPS) was $0.59, down from $0.62 in the prior-year period, while non-GAAP diluted EPS was $0.74, down from $0.81 [5][7] - HP's operating margin decreased, with GAAP operating margin at 6.3% and non-GAAP operating margin at 7.3%, both lower than the previous year [7][39] Financial Performance - First quarter GAAP net earnings were $0.6 billion, unchanged from the prior year, while non-GAAP net earnings were $0.7 billion, down 13% [2][5] - The company generated $0.4 billion in net cash from operating activities, a significant increase of 209% year-over-year, and free cash flow was $0.1 billion, up 180% [2][8] - HP returned $0.4 billion to shareholders through share repurchases and dividends during the quarter [7] Segment Results - Personal Systems segment net revenue was $9.2 billion, up 5% year-over-year, with commercial PS revenue increasing by 10% while consumer PS revenue decreased by 7% [17] - Printing segment net revenue was $4.3 billion, down 2% year-over-year, with commercial printing revenue declining by 7% [17] - Total segment net revenue decreased by 4% quarter-over-quarter but increased by 2% year-over-year [36] Outlook - For the fiscal 2025 second quarter, HP estimates GAAP diluted EPS to be in the range of $0.62 to $0.72 and non-GAAP diluted EPS to be in the range of $0.75 to $0.85 [11] - For the full fiscal year 2025, HP anticipates GAAP diluted EPS between $2.86 and $3.16 and non-GAAP diluted EPS between $3.45 and $3.75 [12] - The company expects to generate free cash flow in the range of $3.2 to $3.6 billion for the fiscal year [12] Strategic Initiatives - HP is raising its Future Ready savings target from $1.6 billion to $1.9 billion by the end of fiscal year 2025 [5][7] - The company is focusing on building a globally diverse supply chain, with an expectation that over 90% of products sold in North America will be built outside of China by the end of fiscal year 2025 [13]

Core Insights - HPQ Silicon Inc. is advancing its proprietary Fumed Silica Reactor (FSR) process through successful pilot-scale testing, marking a significant step towards commercial production of fumed silica [1][2][4] - The first batch test of the FSR pilot plant has produced material with characteristics consistent with lab-scale production, indicating the process's viability [2][3][5] - The company aims to transition to semi-continuous production, significantly increasing material throughput and targeting the production of at least 200 kg of commercial-grade fumed silica [7] Company Developments - HPQ Silicon's technology provider, PyroGenesis Inc., confirmed successful material production during the first batch test of the FSR pilot plant, with further analysis planned to validate product quality [2][5] - The pilot plant represents a 20-fold scale-up from laboratory conditions, focusing on replicating validated lab-scale operations while assessing performance under real-world conditions [4][5] - The upcoming batch tests will ensure consistent production of high-surface-area fumed silica, with specifications aimed to meet or exceed lab-scale results [6] Industry Context - The fumed silica industry has traditionally relied on fossil-fuel-intensive production methods, and the FSR process aims to revolutionize this by eliminating carbon emissions while maintaining product quality [8] - The transition to semi-continuous production will enhance efficiency and set a new standard for sustainable fumed silica production, aligning with global decarbonization efforts [8]