Financial Data and Key Metrics Changes - HP reported revenue of $14.4 billion for Q1 2026, representing a 7% year-over-year increase, driven by strong performance in Personal Systems and the impact of the Windows 11 refresh cycle [11][24] - Non-GAAP EPS was $0.81, reflecting a 9% growth compared to the prior year and was at the top of the guidance range [11][26] - Gross margin was 19.6%, influenced by a higher mix from Personal Systems and increased commodity costs, partially offset by pricing and cost reduction actions [25][26] Business Line Data and Key Metrics Changes - Personal Systems revenue increased by 11% with a 12% unit growth, benefiting from the Windows 11 refresh and AI PC adoption [26] - In the Print segment, revenue declined by 2% due to lower supplies volumes and market-driven hardware declines, with consumer revenue down 8% and commercial revenue down 3% [28] - AI PCs accounted for over 35% of total PC shipments, up from 30% in the previous quarter [12][58] Market Data and Key Metrics Changes - Revenue growth was observed across all regions, with APJ revenue up 13% in constant currency, EMEA up 5%, and Americas up 1% [24][25] - The overall PC unit Total Addressable Market (TAM) is projected to decline by double digits in calendar year 2026, reflecting industry-wide pricing actions [32][44] Company Strategy and Development Direction - HP is focusing on integrating AI into its products and services, with initiatives like AI at the Edge and the HP Digital Passport to enhance customer experiences [12][13] - The company is committed to a disciplined execution of its fiscal 2026 plan while navigating near-term challenges, emphasizing the importance of customer relationships and operational consistency [10][21] - HP is expanding its partnerships, including with Microsoft, to enhance its product offerings and customer engagement [14][15] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges posed by rising memory costs, which are expected to remain volatile throughout fiscal 2026 and likely into fiscal 2027 [17][21] - The company is implementing various mitigation measures to address these challenges, including securing long-term agreements with suppliers and adjusting product configurations [18][19] - Management remains confident in HP's ability to navigate the current environment while focusing on long-term commitments and value creation [21][22] Other Important Information - HP plans to reschedule its Investor Day due to the ongoing CEO transition [22] - The company is committed to returning approximately 100% of its free cash flow to shareholders over time, with over $600 million returned in Q1 through dividends and share repurchases [31][55] Q&A Session Summary Question: Impact of memory costs in Q1 and guidance for the fiscal year - Management indicated that memory costs increased roughly 100% sequentially and are expected to further increase, impacting overall margins [40][41] Question: PC unit TAM decline specifics - Management expects a double-digit decline in PC unit TAM, aligning with industry forecasts, but sees opportunities for revenue growth through pricing actions and share gains [44][47] Question: Capital returns strategy amidst leverage concerns - Management remains committed to returning free cash flow to shareholders while managing leverage, with plans to repay debt as it comes due [55][56] Question: Nature of long-term agreements with suppliers - Management confirmed strong relationships with suppliers and ongoing negotiations to secure supply and pricing, with new suppliers being qualified to enhance supply chain resilience [71][75]

Financial Data and Key Metrics Changes - HP reported revenue of $14.4 billion for Q1 2026, representing a 7% year-over-year increase, driven by strong performance in Personal Systems and the impact of the Windows 11 refresh cycle [11][24] - Non-GAAP EPS was $0.81, reflecting a 9% growth compared to the prior year and was at the top of the guidance range [11][26] - Gross margin was 19.6%, influenced by a higher mix from Personal Systems and increased commodity costs, partially offset by pricing and cost reduction actions [25] Business Line Data and Key Metrics Changes - Personal Systems revenue grew by 11% with a 12% increase in units, benefiting from the Windows 11 refresh and AI PC adoption [26] - Print revenue declined by 2%, with consumer revenue down 8% and commercial revenue down 3%, although higher average selling prices (ASPs) helped offset lower volumes [28] - AI PCs accounted for over 35% of total PC shipments, up from 30% in the previous quarter [12][58] Market Data and Key Metrics Changes - Revenue growth was observed across all regions, with APJ revenue up 13% in constant currency, EMEA up 5%, and Americas up 1% [24] - The company anticipates a double-digit decline in the PC unit total addressable market (TAM) for calendar year 2026, reflecting industry-wide pricing actions [32] Company Strategy and Development Direction - HP is focusing on integrating AI into its products and services, with initiatives aimed at enhancing customer experiences and operational efficiency [12][13] - The company is committed to a "future of work" strategy, which includes expanding market share and ensuring pricing reflects the value delivered [10][12] - HP is actively managing supply chain challenges and implementing cost mitigation strategies in response to rising memory costs [17][19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating the current volatile environment, emphasizing the importance of disciplined execution of mitigation plans [21][36] - The company expects to maintain its annual non-GAAP diluted EPS guidance range of $2.90-$3.20, although it may be closer to the lower end due to ongoing challenges [35][36] - Management highlighted the importance of securing supply and shaping demand to offset rising input costs [24][41] Other Important Information - HP is evaluating the impact of recent U.S. Supreme Court rulings on tariffs but does not expect significant negative effects [20] - The company plans to reschedule its Investor Day due to the ongoing CEO transition [22] Q&A Session Summary Question: Impact of memory costs on Q1 results - Management indicated that memory costs increased significantly, with a forecast of further increases impacting margins for the remainder of the year [40][41] Question: PC unit TAM decline specifics - Management expects a double-digit decline in PC unit TAM, aligning with industry forecasts, but sees opportunities for revenue growth through pricing and share gains [44][47] Question: Free cash flow generation target - Management discussed the expectation of $2.8 billion-$3 billion in free cash flow, emphasizing the importance of PS growth and cash conversion cycles [82][83] Question: Print margins and growth levers - Management highlighted strategies for maintaining print margins at the high end of their range, focusing on profitable growth and cost structure reductions [87] Question: CEO search process - The board is looking for a CEO with a proven track record in delivering shareholder value and navigating complex environments [90]

Financial Data and Key Metrics Changes - The company reported revenue of $14.4 billion for Q1 2026, representing a 7% year-over-year increase, driven by strong performance in Personal Systems and the impact of the Windows 11 refresh cycle [9][20] - Non-GAAP EPS was $0.81, reflecting a 9% growth compared to the prior year and was at the top of the guidance range [9][23] - Gross margin was 19.6%, influenced by a higher mix from Personal Systems and increased commodity costs, partially offset by pricing and cost reduction actions [21] Business Line Data and Key Metrics Changes - Personal Systems revenue grew by 11% with a 12% increase in units, benefiting from the Windows 11 refresh and AI PC adoption [23] - Consumer revenue in Personal Systems increased by 16% on a 14% unit increase, attributed to demand pull-in to avoid rising memory prices [23][24] - Print revenue declined by 2%, with consumer revenue down 8% and commercial revenue down 3%, although higher average selling prices helped offset lower volumes [25] Market Data and Key Metrics Changes - Revenue growth was observed across all regions, with APJ revenue up 13% in constant currency, EMEA growing 5%, and Americas increasing by 1% [21] - AI PCs accounted for over 35% of total PC shipments, up from 30% in the previous quarter [10] Company Strategy and Development Direction - The company is focused on integrating AI into its products and services, with initiatives aimed at enhancing customer experiences and operational efficiency [10][12] - The strategy includes expanding market share in high-value segments and ensuring pricing reflects the value delivered [7][10] - The company is committed to navigating near-term challenges while maintaining long-term growth strategies, including partnerships with technology leaders like Microsoft and OpenAI [12][13] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges posed by rising memory costs and indicated that these costs are expected to remain volatile throughout fiscal 2026 [14][18] - The company is implementing various mitigation measures to manage these costs, including securing long-term agreements with suppliers and adjusting product configurations [15][16] - The outlook for fiscal 2026 includes expectations for revenue growth driven by pricing actions and share gains, although margins are anticipated to be below long-term ranges due to cost pressures [29][31] Other Important Information - The company plans to reschedule its Investor Day due to the ongoing CEO transition [19] - The search for a new CEO is underway, with a focus on finding a leader with experience in managing large, multi-segment businesses [5][6] Q&A Session Summary Question: Impact of memory costs on financials - Management indicated that memory costs increased roughly 100% sequentially and are expected to further increase, impacting overall margins [35][36] Question: PC unit TAM decline - The company expects the PC unit total addressable market to decline in double digits, with ongoing momentum from Windows 11 and AI PCs expected to drive revenue [39][41] Question: Guidance for full year amidst memory cost uncertainties - Management emphasized a prudent approach to guidance, factoring in stronger first-half revenue and anticipated memory cost increases [45][46] Question: Capital returns strategy - The company remains committed to returning 100% of free cash flow to shareholders, balancing this with debt repayment obligations [49] Question: Nature of long-term agreements with suppliers - Management confirmed strong relationships with suppliers and ongoing negotiations to secure both volume and pricing [67][68]