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]

HP (HPQ) came out with quarterly earnings of $0.74 per share, missing the Zacks Consensus Estimate of $0.75 per share. This compares to earnings of $0.81 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of -1.33%. A quarter ago, it was expected that this personal computer and printer maker would post earnings of $0.94 per share when it actually produced earnings of $0.93, delivering a surprise of -1.06%.Over the last four quarters ...

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].

HP (HPQ) Q1 2025 Earnings Call February 27, 2025 05:30 PM ET Company Participants Orit Keinan-Nahon - Head, Investor RelationsEnrique Lores - CEO, President & DirectorKaren Parkhill - Chief Financial OfficerJoseph Cardoso - Vice President, Equity ResearchBrian Luke - Associate DirectorMichael Ng - Managing Director - Global Investment ResearchMichael Cadiz - Assistant Vice President, Equity researchAlek Valero - Equity Research Associate Conference Call Participants Wamsi Mohan - Senior Equity Research Anal ...

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]

1501 Page Mill Road Palo Alto, CA 94304 hp.com Editorial contacts HP Inc. Media Relations MediaRelations@hp.com HP Inc. Investor Relations InvestorRelations@hp.com News Release HP Inc. Reports Fiscal 2025 First Quarter Results PALO ALTO, Calif. – February. 27, 2025 (GLOBE NEWSWIRE) – HP (NYSE: HPQ) HP Inc.'s fiscal 2025 first quarter financial performance | | | Q1 FY25 | | Q1 FY24 | Y/Y | | --- | --- | --- | --- | --- | --- | | GAAP net revenue ($B) | $ | 13.5 | $ | 13.2 | 2.4 % | | GAAP operating margin | ...

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]

Core Viewpoint - HP Inc. is expected to report its first-quarter fiscal 2025 results on February 27, with anticipated non-GAAP earnings per share between 70 cents and 76 cents, reflecting a year-over-year decline of 8.6% in earnings, while revenues are projected to improve by 2.25% to $13.48 billion [1][2]. Group 1: Earnings Expectations - The Zacks Consensus Estimate for HP's earnings is set at 74 cents, indicating a decline compared to the previous year [2]. - In the last four quarters, HP's earnings surpassed the Zacks Consensus Estimate twice and missed on two occasions, with an average negative surprise of 0.83% [3]. Group 2: Performance Drivers - HP's performance in the first quarter is likely driven by strong momentum in the Personal Systems segment, although this is slightly offset by weakness in the Printing division [4]. - The introduction of AI-based computing devices is expected to have gained traction among consumers, contributing positively to top-line growth [5]. - The growing adoption of gaming experiences and the launch of new gaming products are anticipated to have bolstered HP's sales in the quarter [6]. Group 3: Challenges - Macroeconomic challenges, including high interest rates and inflation, are expected to negatively impact demand for consumer PCs, while enterprises are delaying IT spending due to economic uncertainties [7]. - The Printing division's sales are likely to be affected by reduced consumer demand in China and a competitive pricing environment, despite some growth in big tank printers [8]. Group 4: Earnings Prediction Model - The current model does not predict a definitive earnings beat for HP, as it has an Earnings ESP of 0.00% and a Zacks Rank of 2, indicating a potential for earnings to meet expectations but not exceed them [9].