HP Inc. Reports Fiscal 2025 First Quarter Results

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Investor RelationsInvestorRelations@hp.com HP INC. AND SUBSIDIARIESCONSOLIDATED CONDENSED STATEMENTS OF EARNINGS(Unaudited)(In millions, except per share amounts)  Three months ended January 31, 2025 October 31, 2024 January 31, 2024Net revenue:     Products$12,695  $13,241  $12,419 Services 809   814   766 Total net revenue 13,504   14,055   13,185 Cost of net revenue:     Products 10,194   10,593   9,871 Services 470   461   426 Total cost of net revenue 10,664   11,054   10,297 Gross profit 2,840   3,001   2,888 Research and development 397   392   399 Selling, general and administrative 1,459   1,409   1,383 Restructuring and other charges 70   121   63 Acquisition and divestiture charges 6   12   27 Amortization of intangible assets 63   76   81 Total operating expenses 1,995   2,010   1,953 Earnings from operations 845   991   935 Interest and other, net (141)  (129)  (142)Earnings before taxes 704   862   793 (Provision for) benefit from taxes (139)  44   (171)Net earnings$565  $906  $622       Net earnings per share:     Basic$0.60  $0.94  $0.63 Diluted$0.59  $0.93  $0.62       Cash dividends declared per share$0.58  $—  $0.55       Weighted-average shares used to compute net earnings per share:     Basic 948   959   995 Diluted 957   971   1,002  HP INC. AND SUBSIDIARIESADJUSTMENTS TO GAAP NET EARNINGS, EARNINGS FROM OPERATIONS,OPERATING MARGIN AND DILUTED NET EARNINGS PER SHARE(Unaudited)(In millions, except per share amounts)  Three months ended January 31, 2025 October 31, 2024 January 31, 2024 Amounts Dilutednetearningsper share Amounts Dilutednetearningsper share Amounts Dilutednetearningsper shareGAAP net earnings$565  $0.59  $906  $0.93  $622  $0.62Non-GAAP adjustments:           Restructuring and other charges 70   0.07   121   0.13   63   0.06Acquisition and divestiture charges 6   0.01   12   0.01   27   0.03Amortization of intangible assets 63   0.07   76   0.08   81   0.08Debt extinguishment costs —   —   3   —   —   —Non-operating retirement-related credits  (5)  (0.01)  (2)  —   (2)  —Tax adjustments(a) 5   0.01   (216)  (0.22)  17   0.02Non-GAAP net earnings$704  $0.74  $900  $0.93  $808  $0.81            GAAP earnings from operations$845    $991    $935   Non-GAAP adjustments:           Restructuring and other charges 70     121     63   Acquisition and divestiture charges 6     12     27   Amortization of intangible assets 63     76     81   Non-GAAP earnings from operations $984    $1,200    $1,106               GAAP operating margin 6.3 %    7.1 %    7.1 %  Non-GAAP adjustments 1.0 %    1.4 %    1.3 %  Non-GAAP operating margin 7.3 %    8.5 %    8.4 %   (a)     Includes tax impact on non-GAAP adjustments.HP INC. AND SUBSIDIARIESCONSOLIDATED CONDENSED BALANCE SHEETS(Unaudited)(In millions)  As of January 31, 2025 October 31, 2024ASSETS   Current assets:   Cash, cash equivalents and restricted cash$2,894  $3,253 Accounts receivable, net 4,188   5,117 Inventory 8,443   7,720 Other current assets 4,309   4,670 Total current assets 19,834   20,760 Property, plant and equipment, net 2,900   2,914 Goodwill 8,599   8,627 Other non-current assets 7,597   7,608 Total assets$38,930  $39,909     LIABILITIES AND STOCKHOLDERS' DEFICIT   Current liabilities:   Notes payable and short-term borrowings$1,418  $1,406 Accounts payable 16,483   16,903 Other current liabilities 9,533   10,378 Total current liabilities 27,434   28,687 Long-term debt 8,273   8,263 Other non-current liabilities 4,295   4,282 Stockholders' deficit (1,072)  (1,323)Total liabilities and stockholders' deficit$38,930  $39,909  HP INC. AND SUBSIDIARIESCONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS(Unaudited)(In millions)  Three months ended January 31, 2025 January 31, 2024Cash flows from operating activities:   Net earnings$565  $622 Adjustments to reconcile net earnings to net cash provided by operating activities:   Depreciation and amortization 197   205 Stock-based compensation expense 192   177 Restructuring and other charges 70   63 Deferred taxes on earnings (23)  (5)Other, net 35   (20)Changes in operating assets and liabilities, net of acquisitions:   Accounts receivables 966   446 Inventory (751)  (47)Accounts payable (397)  (744)Net investment in lease related to integrated financing 2   (62)Taxes on earnings 12   49 Restructuring and other (74)  (87)Other assets and liabilities (420)  (476)Net cash provided by operating activities 374   121 Cash flows from investing activities:   Investment in property, plant, equipment and purchased intangible (302)  (158)Purchases of available-for-sale securities and other investments (3)  — Maturities and sales of available-for-sale securities and other investments 5   — Collateral posted for derivative instruments —   (70)Net cash used in investing activities (300)  (228)Cash flows from financing activities:   Proceeds from short-term borrowings with original maturities less than 90 days, net —   100 Proceeds from debt 82   92 Payment of debt and associated costs (50)  (49)Stock-based award activities and others (92)  (76)Repurchase of common stock (100)  (500)Cash dividends paid (273)  (275)Net cash used in financing activities (433)  (708)Decrease in cash, cash equivalents and restricted cash (359)  (815)Cash, cash equivalents and restricted cash at beginning of period 3,253   3,232 Cash, cash equivalents and restricted cash at end of period$2,894  $2,417     HP INC. AND SUBSIDIARIESSEGMENT/BUSINESS UNIT INFORMATION(Unaudited)(In millions)  Three months ended Change (%) January 31, 2025 October 31, 2024 January 31, 2024 Q/Q Y/YNet revenue:         Commercial PS$6,645  $6,522  $6,045  2 %  10 %Consumer PS 2,579   3,069   2,764  (16)%  (7)%Personal Systems 9,224   9,591   8,809  (4)%  5 %Supplies 2,826   2,865   2,863  (1)%  (1)%Commercial Printing 1,144   1,262   1,227  (9)%  (7)%Consumer Printing 299   325   285  (8)%  5 %Printing 4,269   4,452   4,375  (4)%  (2)%Corporate Investments(a) 11   11   2  NM  NMTotal segment net revenue 13,504   14,054   13,186  (4)%  2 %Other(a) —   1   (1) NM  NM     Total net revenue$13,504  $14,055  $13,185  (4)%  2 %          Earnings before taxes:         Personal Systems$507  $550  $537     Printing 810   874   872     Corporate Investments (27)  (37)  (37)    Total segment earnings from operations 1,290   1,387   1,372     Corporate and unallocated cost and other (114)  (102)  (89)    Stock-based compensation expense (192)  (85)  (177)    Restructuring and other charges (70)  (121)  (63)    Acquisition and divestiture charges (6)  (12)  (27)    Amortization of intangible assets (63)  (76)  (81)    Interest and other, net (141)  (129)  (142)         Total earnings before taxes$704  $862  $793      (a)     "NM" represents not meaningful.HP INC. AND SUBSIDIARIESSEGMENT OPERATING MARGIN SUMMARY(Unaudited)  Three months ended Change (pts) January 31, 2025 October 31, 2024 January 31, 2024 Q/Q Y/YSegment operating margin:         Personal Systems 5.5 %  5.7 %  6.1 %  (0.2)pts (0.6)ptsPrinting 19.0%  19.6 %  19.9 %  (0.6)pts (0.9)ptsCorporate Investments(a)NM  NM  NM  NM NMTotal segment 9.6 %  9.9 %  10.4 %  (0.3)pts (0.8)pts              (a)     "NM" represents not meaningful.HP INC. AND SUBSIDIARIESCALCULATION OF DILUTED NET EARNINGS PER SHARE(Unaudited)(In millions, except per share amounts)  Three months ended January 31, 2025 October 31, 2024 January 31, 2024Numerator:     GAAP net earnings$565 $906 $622Non-GAAP net earnings$704 $900 $808      Denominator:     Weighted-average shares used to compute basic net earnings per share 948  959  995Dilutive effect of employee stock plans(a) 9  12  7Weighted-average shares used to compute diluted net earnings per share 957  971  1,002      GAAP diluted net earnings per share$0.59 $0.93 $0.62Non-GAAP diluted net earnings per share$0.74 $0.93 $0.81 (a)     Includes any dilutive effect of restricted stock units, stock options and performance-based awards.  Use of non-GAAP financial measures To supplement HP’s consolidated condensed financial statements presented on a GAAP basis, HP provides net revenue on a constant currency basis, non-GAAP total operating expense, non-GAAP operating profit, non-GAAP operating margin, non-GAAP other income and expenses, non-GAAP tax rate, non-GAAP net earnings, non-GAAP diluted net EPS, free cash flow, gross cash and net cash (debt).

Risks, uncertainties and assumptions that could affect our business and results of operations include factors relating to HP’s ability to execute on its strategic plans, including the previously announced initiatives, business model changes and transformation; the development and transition of new products and services and the enhancement of existing products and services to meet evolving customer needs and respond to emerging technological trends, including artificial intelligence; the use of artificial intelligence; the impact of macroeconomic and geopolitical trends, changes and events, including the ongoing military conflict in Ukraine, continued instability in the Middle East or tensions in the Taiwan Strait and South China Sea and the regional and global ramifications of these events; volatility in global capital markets and foreign currency, increases in benchmark interest rates, the effects of inflation and instability of financial institutions; risks associated with HP’s international operations and the effects of business disruption events, including those resulting from climate change; the need to manage (and reliance on) third-party suppliers, including with respect to supply constraints and component shortages, and the need to manage HP’s global, multi-tier distribution network and potential misuse of pricing programs by HP’s channel partners, adapt to new or changing marketplaces and effectively deliver HP’s services; the execution and performance of contracts by HP and its suppliers, customers, clients and partners, including logistical challenges with respect to such execution and performance; the competitive pressures faced by HP’s businesses; the impact of third-party claims of IP infringement; successfully innovating, developing and executing HP’s go-to-market strategy, including online, omnichannel and contractual sales, in an evolving distribution, reseller and customer landscape; successfully competing and maintaining the value proposition of HP’s products, including supplies and services; challenges to HP’s ability to accurately forecast inventories, demand and pricing, which may be due to HP’s multi-tiered channel, sales of HP’s products to unauthorized resellers or unauthorized resale of HP’s products or our uneven sales cycle; the hiring and retention of key employees; the results of our restructuring plans (including the fiscal 2023 plan), including estimates and assumptions related to the cost (including any possible disruption of HP’s business) and the anticipated benefits of our restructuring plans; the protection of HP’s intellectual property assets, including intellectual property licensed from third parties; disruptions in operations from system security risks, data protection breaches, or cyberattacks; HP’s ability to maintain its credit rating, satisfy its debt obligations and complete any contemplated share repurchases, other capital return programs or other strategic transactions; changes in estimates and assumptions HP makes in connection with the preparation of its financial statements; the impact of changes to federal, state, local and foreign laws and regulations, including environmental regulations and tax laws; integration and other risks associated with business combination and investment transactions; our aspirations related to environmental, social and governance matters; potential impacts, liabilities and costs from pending or potential investigations, claims and disputes; the effectiveness of our internal control over financial reporting; and other risks that are described in HP’s Annual Report on Form 10-K for the fiscal year ended October 31, 2024 and HP’s other filings with the Securities and Exchange Commission ("SEC").

All statements other than statements of historical fact are statements that could be deemed forward-looking statements, including, but not limited to, projections of net revenue, margins, expenses, effective tax rates, net earnings, net earnings per share, cash flows, benefit plan funding, deferred taxes, share repurchases, foreign currency exchange rates or other financial items; any projections of the amount, timing or impact of cost savings or restructuring and other charges, planned structural cost reductions and productivity initiatives; any statements of the plans, strategies and objectives of management for future operations, including, but not limited to, our business model and transformation, our sustainability goals, our go-to-market strategy, the execution of restructuring plans and any resulting cost savings (including the fiscal 2023 plan), net revenue or profitability improvements or other financial impacts; any statements concerning the expected development, demand, performance, market share or competitive performance relating to products or services; any statements concerning potential supply constraints, component shortages, manufacturing disruptions or logistics challenges; any statements regarding current or future macroeconomic trends or events and the impact of those trends and events on HP and its financial performance; any statements regarding pending investigations, claims, disputes or other litigation matters; any statements of expectation or belief as to the timing and expected benefits of acquisitions and other business combination and investment transactions; and any statements of assumptions underlying any of the foregoing.   Forward-looking statements can also generally be identified by words such as "future,” "anticipates,” "believes,” "estimates,” "expects,” "intends,” "plans,” "predicts,” "projects,” "will,” "would,” "could,” "can,” "may,” and similar terms.

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Author / Journalist: HP Inc.

Category: Technology

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Topics: NYSE:HPQ US40434L1052

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Published On: 2025-02-27 @ 21:15:00 (13 hours ago)

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