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 orimplied by such forward-looking statements and assumptions. All statements other than statements of historical fact are statements ...

Core Insights - Intel Corporation (INTC) is actively pursuing initiatives to strengthen its position in the AI sector through collaborations with original equipment manufacturers like HP to develop next-generation AI PCs [1][9] - The global AI market is projected to grow from $757.6 billion in 2025 to $3.68 trillion in 2034, with a compound annual growth rate of 19.2%, positioning Intel favorably to capitalize on this trend [5] Group 1: AI Initiatives and Collaborations - Intel is collaborating with HP to identify AI applications that provide significant benefits to end users, optimizing CPU, GPU, and NPU performance for real-world applications [2] - The partnership has led to the development of AI PCs like the EliteBook series, powered by Intel Core Ultra processors, enhancing enterprise functionality [9] Group 2: Performance Enhancements - Intel's AI-optimized software packages have resulted in significant performance improvements, with Microsoft Power BI running 45% faster and Adobe Lightroom running 32% faster compared to previous systems [3] - AI applications like Canvid and Writeup, previously exclusive to Apple users, are now available on Windows PCs powered by Intel AI chips, enhancing organizational efficiency [4] Group 3: Competitive Landscape - Intel faces strong competition from Qualcomm and AMD, with Qualcomm launching the Snapdragon X chip for mid-range AI desktops and laptops, and AMD's Ryzen AI 300 Series gaining industry adoption [6][7] - The competitive landscape is intensifying as OEMs like Dell, ASUS, and Samsung expand collaborations with Qualcomm to develop AI PCs [6] Group 4: Financial Performance and Valuation - Intel's stock has declined by 31% over the past year, contrasting with the industry's growth of 11.2% [8] - The company's shares currently trade at a price/book ratio of 0.87, significantly lower than the industry's 31.65 [10] - Earnings estimates for 2025 and 2026 have seen a decline of 39.58% and 29.36%, respectively, indicating a downward trend in financial forecasts [11]

Q1 FY25 Financial Performance - Net revenue reached $13504 million, a 24% increase year-over-year, or a 33% increase in constant currency[15] - Non-GAAP diluted net earnings per share were $074, aligning with the projected range of $070 to $076 per share[14] - GAAP diluted net earnings per share stood at $059, also within the anticipated range of $057 to $063 per share[14] - Free cash flow amounted to $01 billion[14] - $400 million was returned to shareholders through dividends and share repurchases[14] Segment Performance - Printing net revenue was $4269 million, a decrease of 24% year-over-year, or a 09% decrease in constant currency, with a non-GAAP operating profit of $810 million, representing 190% of revenue[15] - Personal Systems net revenue totaled $9224 million, reflecting a 47% increase year-over-year, or a 53% increase in constant currency, with a non-GAAP operating profit of $507 million, or 55% of revenue[15] Regional Performance - Americas experienced a 39% year-over-year revenue increase, or a 53% increase in constant currency[17] - EMEA saw a 21% year-over-year revenue increase, or a 31% increase in constant currency[17] - APJ (Asia Pacific) reported a 18% year-over-year revenue increase, or a 22% increase in constant currency[17] Outlook - Q2 FY25 GAAP diluted net EPS is projected to be between $062 and $072, while non-GAAP diluted net EPS is expected to range from $075 to $085[56] - FY25 GAAP diluted net EPS is forecasted to be between $286 and $316, with non-GAAP diluted net EPS estimated at $345 to $375[56] - FY25 free cash flow is anticipated to be in the range of $32 billion to $36 billion[56]

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 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]