Summary of Dell Technologies Conference Call Company Overview - **Company**: Dell Technologies (NYSE: DELL) - **Event**: UBS Tech Conference - **Date**: December 02, 2025 Key Financial Highlights - **Revenue**: $27 billion, up 11% year-over-year [5] - **Earnings Per Share (EPS)**: $2.59, up 17% [5] - **Shareholder Returns**: $1.6 billion returned to shareholders [5] - **Infrastructure Solutions Group (ISG)**: Grew 24% [5] - **Service and Networking**: Grew 37% [5] - **Operating Margins**: Improved by 360 basis points from 8.8% to 12.4% [5] - **AI Orders**: Record orders of $12.3 billion, totaling $30 billion year-to-date [5] - **Backlog**: Increased by almost $7 billion to $18.4 billion [5] - **Annual Revenue Guidance**: Increased to over $111 billion [5] - **AI Shipments Guidance**: Increased to $25 billion [5] Demand and Market Conditions - **Demand Trends**: Strengthening demand observed across various business segments, particularly in commercial PCs and storage servers [6] - **Quarterly Performance**: Month three of the quarter showed better demand than month one, with double-digit growth in international server demand [6] - **AI Market**: Significant momentum in AI server orders, with a growing pipeline across NeoCloud, Sovereign, and enterprise customers [17] Competitive Advantages - **Engineering Differentiation**: Dell's competitive edge lies in its engineering capabilities, particularly through forward-deployed engineers who work closely with large-scale users [10][11] - **Value Proposition**: Dell positions itself as a value leader rather than a price leader, focusing on comprehensive solutions that include hardware, software, and services [12][13] - **Operational Efficiency**: Dell's systems can be operational within 24 to 36 hours, with a high uptime of 99% or better [11] Supply Chain Management - **Supply Chain Strategy**: Dell emphasizes a strategy of never running out of parts, leveraging long-term agreements and strong relationships with suppliers [20][21] - **Cost Management**: Dell is prepared to pass on increased costs to customers while maintaining mid-single-digit margins [28] AI and Infrastructure Development - **AI Demand**: The company sees exponential growth in token demand generation for AI, indicating a long-term positive outlook for AI-related infrastructure [18] - **Infrastructure Evolution**: Dell is adapting to a bifurcation in traditional infrastructure and accelerated computing, with a focus on integrating various types of accelerators [36] Storage Market Dynamics - **Storage Performance**: Dell's storage business faced challenges due to declines in third-party IP but showed growth in its proprietary storage portfolio, particularly PowerStore and all-flash arrays [49][50] - **Future Outlook**: Expectations for storage growth align with market trends, with a focus on growing at or above market rates [53] PC Market Insights - **Windows 11 Transition**: The transition from Windows 10 to Windows 11 is taking longer than expected, with a significant installed base still needing upgrades [57] - **Market Strategy**: Dell aims to expand its market coverage and capitalize on the ecosystem of complementary products to drive growth [59] Investor Sentiment and Communication - **Investor Concerns**: There are concerns regarding the ability to maintain margins and secure parts amidst rising costs [61] - **Communication Gaps**: The company acknowledges the need to better communicate the performance of its ISG business and the underlying growth in its Dell IP portfolio [60] Conclusion - Dell Technologies is experiencing robust growth driven by strong demand in AI and infrastructure solutions, while also navigating challenges in supply chain management and market transitions. The company remains optimistic about its competitive advantages and future growth prospects in both the AI and traditional server markets.

This story was originally published on CFO Dive. To receive daily news and insights, subscribe to our free daily CFO Dive newsletter. Dive Brief: HP expects to reduce its global headcount by 4,000 to 6,000 employees by the end of fiscal year 2028, the technology company said Tuesday. The planned layoff is part of a company-wide initiative “to drive customer satisfaction, product innovation, and productivity through artificial intelligence adoption and enablement,” the Palo Alto, California-based supplie ...

Core Insights - HP plans to cut between 4,000 and 6,000 jobs globally by the end of October 2028, as it increasingly adopts AI to enhance product development, which has led to a lower-than-expected profit outlook for the coming year [1][2] - The job cuts are expected to result in annualized savings of $1 billion by 2028, although the restructuring will incur costs of approximately $650 million [2] Company Strategy - The CEO of HP, Enrique Lores, emphasized the significant opportunity to integrate AI into the company to accelerate product innovation, improve customer satisfaction, and enhance productivity [2] - Affected teams will include those involved in product development, internal operations, and customer support [2] Industry Context - The announcement of job cuts at HP aligns with a broader trend where companies are citing AI as a reason for workforce reductions, with other firms like Clifford Chance and PwC also adjusting their staffing in response to technological advancements [4][5] - A report from the National Foundation for Educational Research indicated that up to 3 million low-skilled jobs in the UK could be at risk due to automation and AI by 2035, particularly in trades, machine operations, and administrative roles [3] Financial Performance - HP reported better-than-expected revenues of $14.6 billion for its fourth quarter, with demand for AI-enabled PCs making up over 30% of its shipments during that period [8] - However, rising memory costs, which currently account for 15% to 18% of the cost of a typical PC, could impact profits for HP and its competitors [7][8]

Core Insights - HP reported $14.64 billion in revenue for the quarter ended October 2025, a year-over-year increase of 4.2% [1] - The EPS for the same period was $0.93, unchanged from a year ago, with a surprise of +2.2% compared to the consensus estimate of $0.91 [1] - The reported revenue fell short of the Zacks Consensus Estimate of $14.97 billion, resulting in a surprise of -2.23% [1] Financial Performance Metrics - HP's shares have returned -12.7% over the past month, underperforming the Zacks S&P 500 composite's -1.2% change [3] - The company currently holds a Zacks Rank 4 (Sell), indicating potential underperformance in the near term [3] Key Operational Metrics - Days in accounts payable: 139 days, slightly above the estimated 137 days [4] - Days of sales outstanding in accounts receivable: 35 days, exceeding the estimated 31.5 days [4] - Days of supply in inventory: 66 days, close to the estimated 67 days [4] Revenue Breakdown - Personal Systems - Commercial PS: $6.97 billion, below the estimated $7.34 billion, with a year-over-year change of +6.9% [4] - Personal Systems - Consumer PS: $3.38 billion, matching the estimated $3.38 billion, with a year-over-year change of +10.2% [4] - Total Personal Systems revenue: $10.35 billion, below the estimated $10.72 billion, with a year-over-year change of +7.9% [4] - Printing - Supplies: $2.76 billion, below the estimated $2.81 billion, with a year-over-year change of -3.6% [4] - Printing - Commercial Printing: $1.21 billion, slightly above the estimated $1.18 billion, with a year-over-year change of -4.2% [4] - Printing - Consumer Printing: $296 million, below the estimated $302.61 million, with a year-over-year change of -8.9% [4] - Total Printing revenue: $4.27 billion, slightly below the estimated $4.29 billion, with a year-over-year change of -4.2% [4] Earnings from Operations - Earnings from operations in Personal Systems: $597 million, below the estimated $632.41 million [4] - Earnings from operations in Corporate Investments: -$34 million, significantly better than the estimated -$156.27 million [4]

Financial Data and Key Metrics Changes - HP reported a 4% year-over-year revenue growth in Q4 2025, marking the sixth consecutive quarter of revenue growth, driven primarily by gains in personal systems [6][20] - Non-GAAP EPS was reported at $0.93, representing a sequential increase of 24% and coming above the midpoint of guidance [20] - For the full year, revenue grew by 3%, returning to growth after previous declines [11] Business Line Data and Key Metrics Changes - Personal systems revenue grew 8% year-over-year, with strong performance in both commercial and consumer segments [10][20] - Print revenue declined 4% year-over-year, reflecting market softness and delayed purchasing decisions [10][23] - Key growth areas in personal systems, including AI PCs, saw double-digit revenue growth, with AI PCs now representing over 30% of shipments [10][20] Market Data and Key Metrics Changes - EMEA revenue grew 6% and APJ was up 9% in constant currency, while Americas revenue was flat, indicating regional disparities in performance [19] - The Windows 11 refresh is expected to continue driving demand, with 40% of the installed base still on Windows 10 at the end of Q4 [10][46] Company Strategy and Development Direction - The company is focusing on four pillars for fiscal year 2026: personal systems growth, print market share expansion, workforce solutions recovery, and improved cost structure [15][16][17] - HP is committed to embedding AI into its operations to drive product innovation and improve customer satisfaction, with a target of achieving approximately $1 billion in gross run rate savings over three years [17][26] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges posed by rising memory costs, which currently account for 15%-18% of the cost of a typical PC, and outlined strategies to mitigate these impacts [13][14] - The company remains confident in its ability to navigate the challenging trade environment and expects to see stronger revenue in the second half of fiscal year 2026 [25][49] Other Important Information - HP's cumulative gross annualized savings from its future-ready cost plan reached $2.2 billion, surpassing the original target [19] - The company announced a quarterly dividend increase to $0.30 per share, reflecting confidence in its long-term outlook [32] Q&A Session Summary Question: Free cash flow guidance for next year - Management expects free cash flow to be relatively flat year-over-year, offset by improvements in working capital and lower CapEx and restructuring costs [33][34] Question: Strategies to navigate memory pricing - The company plans to use its scale and supplier relationships to manage memory costs, including qualifying lower-cost suppliers and redesigning product configurations [35][36] Question: Pricing actions across the portfolio - Pricing increases will be considered on a case-by-case basis, with a focus on balancing profitability and customer demand [39] Question: Windows 11 refresh impact - The Windows 11 refresh is expected to continue as a tailwind, particularly in SMB and international markets [40][46] Question: Cost savings initiative rationale - The new cost savings initiative is driven by opportunities presented by AI, not solely in response to memory costs [42] Question: Customer reception to pricing actions - Pricing actions have been implemented in both consumer and commercial spaces, with varied impacts on market share [59][60]

Financial Highlights - Q4 FY25 - Net revenue reached $1464 billion, a 4% increase year-over-year in both nominal and constant currency[15] - Non-GAAP diluted net earnings per share were $093, aligning with the outlook of $087 to $097 per share[15] - Free cash flow amounted to $15 billion[15] - $08 billion was returned to shareholders through share repurchases and dividends[15] Financial Highlights - FY25 - Net revenue totaled $553 billion, a 3% increase from the previous year, or 4% in constant currency[16] - Non-GAAP diluted net earnings per share reached $312[16] - Free cash flow was $29 billion[16] - $19 billion was returned to shareholders through dividends and share repurchases[16] Segment Performance - Q4 FY25 - Personal Systems contributed 71% to net revenue, while Printing accounted for 29%[18] - Printing generated 57% of the total non-GAAP operating profit with an 189% operating profit margin, while Personal Systems contributed 43% with a 58% operating profit margin[19] - Printing revenue was $4266 billion, down 42% year-over-year, with an operating profit of $805 million[22] - Personal Systems revenue was $10353 billion, up 79% year-over-year, with an operating profit of $597 million[22] Segment Performance - FY25 - Personal Systems accounted for 70% of net revenue, while Printing represented 30%[20] - Printing generated 60% of the total non-GAAP operating profit with an 187% operating profit margin, while Personal Systems contributed 40% with a 53% operating profit margin[20] - Printing revenue was $16702 billion, down 37% year-over-year, with an operating profit of $3118 billion[23] - Personal Systems revenue was $38532 billion, up 65% year-over-year, with an operating profit of $2054 billion[23] Regional Performance - Q4 FY25 - Americas accounted for 42% of net revenue, EMEA for 34%, and APJ for 24%[19] - Americas net revenue decreased by 06% year-over-year (03% in constant currency), while EMEA and APJ increased by 79% year-over-year (56% and 89% in constant currency, respectively)[19] Regional Performance - FY25 - Americas accounted for 42% of net revenue, EMEA for 34%, and APJ for 24%[20] - Americas net revenue increased by 73% year-over-year (85% in constant currency), EMEA increased by 13% year-over-year (21% in constant currency), and APJ increased by 31% year-over-year (26% in constant currency)[20]

Core Insights - HP Inc. reported fiscal 2025 net revenue of $55.3 billion, an increase of 3.2% year-over-year, with a 3.7% increase in constant currency [4][8] - The company experienced a decline in GAAP diluted net EPS to $2.65, down 5.7% from the previous year, while non-GAAP diluted net EPS decreased to $3.12, down 9.0% [5][8] - HP generated $3.7 billion in net cash from operating activities and $2.9 billion in free cash flow for fiscal 2025, returning $1.9 billion to shareholders through dividends and share repurchases [10][8] Financial Performance - Fiscal 2025 GAAP net revenue was $55.3 billion, with a GAAP operating margin of 5.7%, down from 7.1% in the prior year [8][5] - Fourth quarter net revenue reached $14.6 billion, up 4.2% year-over-year, with a GAAP diluted net EPS of $0.84, down from $0.93 [6][7] - Non-GAAP operating margin for fiscal 2025 was 7.4%, a decrease from 8.5% in the previous year [8][5] Cash Flow and Shareholder Returns - HP's net cash provided by operating activities for fiscal 2025 was $3.7 billion, with free cash flow of $2.9 billion [10][8] - The company returned $1.9 billion to shareholders, including $1.1 billion in dividends and $850 million in share repurchases [10][8] - In the fourth quarter, HP generated $1.5 billion in free cash flow and returned $0.8 billion to shareholders [12][8] Strategic Initiatives - HP announced a company-wide initiative aimed at driving customer satisfaction and product innovation through AI, estimating gross run rate savings of approximately $1 billion by the end of fiscal 2028 [20][8] - The initiative will incur approximately $650 million in restructuring costs, with an expected reduction of 4,000-6,000 employees [20][8] - The company plans to increase its quarterly dividend to $0.30 per share, payable on January 2, 2026 [14][8] Outlook - For fiscal 2026, HP estimates GAAP diluted net EPS to be in the range of $2.47 to $2.77 and non-GAAP diluted net EPS to be in the range of $2.90 to $3.20 [18][16] - The company anticipates generating free cash flow between $2.8 billion and $3.0 billion for fiscal 2026 [18][16] - HP's outlook reflects added costs driven by current U.S. trade-related regulations [18][16]

Core Viewpoint - HP Inc. is facing challenges in meeting financial expectations, primarily due to its dependence on commodity prices and ongoing issues with quarterly performance [1][2]. Company Performance - HP Inc. has consistently missed quarterly earnings expectations, leading to skepticism about its ability to deliver future results [2]. - The company has engaged in share buybacks, repurchasing an average of 6% of its shares, but this strategy is viewed as insufficient to mask underlying performance issues [2]. Market Sentiment - Despite a recent stock price increase of nearly 6%, market sentiment remains cautious, with analysts suggesting that this does not provide a compelling reason to invest in HP [1]. - There is a belief that other sectors, particularly AI stocks, may offer better investment opportunities with higher upside potential and lower downside risk compared to HP [2].

Core Insights - HP Inc. has experienced significant stock declines, with a 15.2% drop year-to-date and a 24.3% decrease over the past 52 weeks, underperforming the S&P 500 Index which gained 16.3% in 2025 and 17.7% over the past year [1][2] Financial Performance - For fiscal 2025, analysts project a non-GAAP EPS of $3.11, indicating an 8% decline from the previous year. The company has missed profit expectations in three of the last four quarters and only met estimates in the most recent quarter [4] - The consensus rating for HP's stock is "Hold," with 15 analysts providing ratings that include one "Strong Buy," 13 "Holds," and one "Strong Sell" [4] Recent Developments - On October 13, HP shares rose by 5.9% following the announcement of a new manufacturing facility and AI R&D center in Saudi Arabia, aimed at enhancing production and regional supply chains [3] - HSBC upgraded HP's stock to "Buy" on October 14, raising the price target to $30, citing improved demand for PCs and printers, along with a projected 5.1% growth in PC shipments for fiscal 2025 [6] Market Comparison - HP has underperformed compared to the Technology Select Sector SPDR Fund, which saw gains of 29.3% in 2025 and a 31% increase over the past 52 weeks [2]

Group 1 - The analyst has over 10 years of experience researching more than 1000 companies across various sectors including commodities and technology [1] - The focus has shifted from writing a blog to creating a value investing-focused YouTube channel, covering hundreds of companies [1] - The analyst expresses a particular interest in metals and mining stocks, while also being comfortable with consumer discretionary, REITs, and utilities [1]