Q1 FY26 Earnings Announcement February 24, 2026 Forward-looking Statements This presentation contains forward-looking statements based on current expectations and assumptions that involve risks and uncertainties. If the risks or uncertainties ever materialize or the assumptions prove incorrect, they could affect the business and results of operations of HP Inc. and its consolidated subsidiaries ("HP") which may differ materially from those expressed or implied by such forward-looking statements and assumpti ...

Core Insights - HP Inc. reported a strong first quarter for fiscal 2026, with net revenue of $14.4 billion, reflecting a year-over-year increase of 6.9% [3][10] - The company experienced growth in its Personal Systems segment, particularly in AI PCs, despite facing industry-wide challenges [4][10] - Non-GAAP diluted net earnings per share (EPS) increased by 9% to $0.81, while GAAP diluted EPS decreased by 2% to $0.58 [10][12] Financial Performance - GAAP net revenue for Q1 FY26 was $14.4 billion, up from $13.5 billion in Q1 FY25, marking a 6.9% increase [1][3] - GAAP operating margin decreased to 5.3%, down from 6.3% year-over-year [1][10] - Non-GAAP net earnings rose to $0.8 billion, a 7% increase from $0.7 billion in the prior year [1][10] Segment Results - Personal Systems net revenue reached $10.3 billion, an 11% increase year-over-year, with a 5.0% operating margin [11][10] - Printing segment net revenue was $4.2 billion, down 2% year-over-year, with an 18.3% operating margin [11][10] - Consumer Printing revenue decreased by 8%, while Commercial Printing revenue fell by 3% [11][10] Cash Flow and Shareholder Returns - Net cash provided by operating activities was $0.4 billion, with free cash flow of $0.2 billion, a significant increase of 150% from the previous year [1][10] - The company returned $0.6 billion to shareholders through dividends and share repurchases [10][8] - HP's dividend payment was $0.30 per share, resulting in cash usage of $277 million [8][10] Outlook - For Q2 FY26, HP estimates GAAP diluted EPS to be in the range of $0.52 to $0.58 and non-GAAP diluted EPS to be between $0.70 and $0.76 [12][13] - The company maintains its annual guidance for FY26, projecting GAAP diluted EPS between $2.47 and $2.77 and non-GAAP diluted EPS between $2.90 and $3.20 [13][12] - HP anticipates generating free cash flow in the range of $2.8 to $3.0 billion for FY26, but expects to be at the lower end of this range due to a challenging operating environment [13][12]

Core Viewpoint - Wall Street anticipates a year-over-year increase in HP's earnings and revenues for the quarter ending January 2026, with actual results being crucial for stock price movement [1][2]. Earnings Expectations - HP is expected to report quarterly earnings of $0.77 per share, reflecting a year-over-year increase of 4.1%, with revenues projected at $14.06 billion, also up 4.1% from the previous year [3]. Estimate Revisions - The consensus EPS estimate has been revised down by 0.9% over the last 30 days, indicating a reassessment by analysts regarding HP's earnings prospects [4]. Earnings Surprise Prediction - The Zacks Earnings ESP model indicates that the Most Accurate Estimate for HP is lower than the consensus estimate, resulting in an Earnings ESP of -0.65%, suggesting a bearish outlook [12]. Historical Performance - In the last reported quarter, HP exceeded earnings expectations with a surprise of +2.20%, but has only beaten consensus EPS estimates once in the last four quarters [13][14]. Investment Considerations - Despite the potential for an earnings beat, other factors may influence stock movement, and HP does not currently appear to be a strong candidate for an earnings surprise [15][17].

Core Viewpoint - Lenovo has reported its "historical best" performance despite rising storage prices, with AI revenue surpassing 30% for the first time, and CEO Yang Yuanqing has indicated a commitment to sustainable double-digit growth [2][6]. Financial Performance - For the third quarter of the fiscal year ending December 31, 2025, Lenovo achieved revenue of 157.5 billion yuan, a year-on-year increase of over 18%, exceeding market expectations [2]. - Adjusted net profit grew by 36%, with profit growth outpacing revenue growth [2]. AI Revenue Growth - AI-related revenue increased by 72% year-on-year, accounting for 32% of total revenue, marking a significant shift in Lenovo's business model [2][3]. - AI PC and AI server segments experienced high double-digit growth, while AI mobile and AI services saw triple-digit growth [3]. Supply Chain and Cost Management - Yang Yuanqing confirmed that Lenovo was not adversely affected by the shortage and price increases of memory supplies, maintaining higher profitability and faster growth than the market [2][5]. - The company anticipates that the global PC market may remain flat or slightly decline in terms of shipment volume, but revenue will continue to grow due to rising average prices [5]. Strategic Initiatives - Lenovo's mixed AI strategy has led to double-digit growth across all three major business groups: IDG (Intelligent Devices Group), ISG (Infrastructure Solutions Group), and SSG (Solutions and Services Group) [4]. - The ISG segment underwent a strategic restructuring, with a focus on AI-driven solutions, and is expected to achieve profitability soon [7]. Partnerships and Collaborations - Lenovo's collaboration with NVIDIA has quadrupled in scale over the past three to four years, with future goals to achieve similar growth [8][9]. - Partnerships with AMD and Intel focus on specific AI applications, contributing to significant business volumes [9]. AI Market Perspective - Yang Yuanqing addressed concerns about an AI investment bubble, asserting that while some areas may be overheated, AI as a whole represents an unstoppable trend [9][10].

Core Insights - The semiconductor industry is undergoing significant changes, with a price surge starting from storage chips and spreading to non-storage sectors like power chips and MCUs [1][3] - Major PC manufacturers, including Lenovo, HP, Dell, Asus, and Acer, have initiated price adjustments due to rising upstream costs, leading to price increases of up to 20% for laptops and smartphones [1][3] - The price of components such as solid-state drives has seen dramatic increases, with prices for 1TB SSDs rising from 600-900 CNY to 950-1100 CNY within a short period [1][3] Price Surge in the Semiconductor Market - The price increase in the semiconductor market began in Q3 2025, with DRAM and NAND flash prices rising over 300% [3] - Predictions indicate that NAND flash prices will increase by 33%-38% and DRAM prices by 55%-60% in Q1 2026, driven by the explosive demand from AI servers [3][4] - The shift in production capacity towards higher-margin storage products is squeezing the supply of traditional products like analog chips and MCUs, leading to price increases in these areas [3][5] Impact on Consumer Electronics - The price adjustments have made it increasingly difficult for consumers to purchase computers within their budgets, with some configurations exceeding initial estimates by 1000 CNY [2][5] - The rising costs have led to a perception among consumers that computers are becoming luxury items, affecting purchasing enthusiasm [5][6] - Market analysts have downgraded the shipment forecasts for laptops and smartphones for 2026 due to the significant price increases and reduced consumer demand [6] Industry Response - Several non-storage chip manufacturers have announced price hikes in response to rising raw material costs and production constraints, with increases ranging from 15% to 80% [4][5] - The overall cost increase across the supply chain, including raw materials and manufacturing processes, is significantly impacting profitability for companies in the semiconductor sector [5] - Some consumers are opting to sell high-value components in the second-hand market to mitigate the impact of rising prices, a strategy referred to as "downward replacement" [6]

Core Insights - The State Street Technology Select Sector SPDR ETF (XLK) is designed to provide broad exposure to the Technology - Broad segment of the equity market and has been passively managed since its launch on December 16, 1998 [1] Fund Overview - XLK has amassed assets over $90.51 billion, making it the largest ETF in the Technology - Broad segment [3] - The ETF seeks to match the performance of the Technology Select Sector Index before fees and expenses [3] - The fund has an annual operating expense ratio of 0.08%, making it one of the least expensive options in the market [5] Sector and Holdings - The Technology Select Sector Index includes various industries such as computers & peripherals, software, telecommunications, and semiconductors [4] - The ETF has a 100% allocation in the Information Technology sector [6] - Nvidia Corp (NVDA) accounts for approximately 14.79% of total assets, with Apple Inc (AAPL) and Microsoft Corp (MSFT) also being significant holdings; the top 10 holdings represent about 61.36% of total assets [7] Performance Metrics - As of February 11, 2026, the ETF has lost about 0.99% year-to-date but is up approximately 21.36% over the past year [8] - The ETF has traded between $89.865 and $152.065 in the past 52 weeks [8] - It has a beta of 1.23 and a standard deviation of 22.74% over the trailing three-year period, indicating medium risk [8] Investment Ranking - XLK holds a Zacks ETF Rank of 1 (Strong Buy), based on expected asset class return, expense ratio, and momentum [10] - Other alternatives in the space include iShares U.S. Technology ETF (IYW) and Vanguard Information Technology ETF (VGT), with respective assets of $20.36 billion and $112.72 billion [11]

Core Viewpoint - HP Inc. (HPQ) stock has experienced significant pressure, declining approximately 40% from its peak due to weak PC demand, fears of ongoing printer market decline, and general multiple compression linked to rising interest rates [1] Company Performance - The stock has been under pressure for the past year, reflecting a combination of market concerns regarding demand and valuation [1] Market Conditions - The decline in HPQ's stock price is attributed to broader market trends, including weak demand for personal computers and fears surrounding the printer market's long-term viability [1]

Core Viewpoint - HP Inc. is expected to announce its fiscal first-quarter earnings for 2026, with analysts projecting a profit increase compared to the previous year [1][2]. Financial Performance - Analysts anticipate HPQ to report a diluted EPS of $0.76 for the upcoming quarter, reflecting a 2.7% increase from $0.74 in the same quarter last year [2]. - For the full fiscal year, HPQ is expected to report an EPS of $3, which is a decline of 3.9% from $3.12 in fiscal 2025, but is projected to rise to $3.13 in fiscal 2027, marking a 4.3% year-over-year increase [3]. Stock Performance - Over the past 52 weeks, HPQ shares have decreased by 40.7%, significantly underperforming the S&P 500 Index, which gained 13.7%, and the Technology Select Sector SPDR Fund, which rose by 21.8% [4]. - Following the Q4 results announcement on November 25, 2025, HPQ shares closed down slightly despite an adjusted EPS of $0.93, which exceeded Wall Street expectations of $0.91, and a revenue of $14.6 billion, up 4.2% year over year [5]. Analyst Ratings - The consensus opinion on HPQ stock is cautious, with a "Hold" rating overall; among 15 analysts, one recommends a "Strong Buy," nine suggest a "Hold," and five advise a "Strong Sell" [6]. - The average analyst price target for HPQ is $25.43, indicating a potential upside of 30.2% from current levels [6].

Core Insights - AMD's CEO Lisa Su and her executive team visited Lenovo's global headquarters in Beijing, showcasing Lenovo's latest products and technologies, including humanoid robots [1] - This visit is part of an ongoing relationship between AMD and Lenovo, which began with a collaboration announcement in the AI PC sector and further cooperation in AI server solutions [3] - Lenovo is also strengthening its relationship with NVIDIA, having recently visited NVIDIA's headquarters to discuss AI infrastructure and enterprise-level computing solutions [3] - Lenovo will host a technology innovation conference on January 6, 2026, in Las Vegas, where it will unveil its latest AI products and hybrid AI strategy, with notable attendees including NVIDIA's CEO Jensen Huang and AMD's Lisa Su [3] Group 1 - AMD's CEO Lisa Su visited Lenovo's headquarters, indicating a strong partnership [1] - The collaboration between AMD and Lenovo focuses on AI PC and server solutions [3] - Lenovo is also engaging with NVIDIA for AI infrastructure discussions [3] Group 2 - Lenovo's upcoming technology innovation conference will highlight its AI advancements [3] - Key industry leaders, including AMD and NVIDIA executives, will participate in the conference [3]

Core Insights - The AI industry is rapidly evolving, with a consensus forming that by 2026, the performance iteration of large models will stabilize, allowing companies to focus on productization of large models [1] - Lenovo has launched the "AI Factory" solution and new high-end AI servers, aiming to inject strong momentum into China's AI industry for high-quality development [3][10] Industry Developments - Lenovo's "AI Factory" solution aims to transform traditional data centers into efficient AI factories, utilizing customer data as raw materials to produce intelligent models and services [10][11] - The launch of Lenovo's "万全异构智算平台4.0" addresses the diverse computing power needs in China, enabling efficient collaboration among different brands of CPUs and GPUs [6][12] Technological Innovations - The new platform has achieved significant performance improvements, including a 35% reduction in pre-training time and a 50% reduction in post-training time, along with a 60% increase in bandwidth utilization for inference scenarios [6] - Lenovo's WA8080a G5 server features a 10U chassis design to support GPUs with power consumption exceeding 1000 watts, addressing the rapid evolution of GPU technology [9] Strategic Positioning - Lenovo's approach emphasizes a complete ecosystem, integrating hardware and software to overcome the challenges of heterogeneous computing power in China [12] - The company aims to provide a comprehensive service system that addresses various client needs, from data governance to AI production management [11]