Slide 1: Q1 FY22 Earnings announcement
HP INC. Q1 FY22 Earnings announcement February 28, 2022 http://investor.hp.com
Slide 2: Forward-looking statements
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, the results of HP Inc. and its consolidated subsidia
Slide 3: Use of non-GAAP financial information
Use of non-GAAP financial information HP has included non-GAAP financial measures in this presentation to supplement HP’s consolidated financial statements presented on a generally accepted accounting principles (“GAAP”) basis. Definitions of these non-GAAP financial measures and reconciliations of
Slide 4: Q1 FY22 highlights
Q1 FY22 highlights • Net revenue of $17.0 billion, up 8.8% from the prior-year period and up 8.2% in constant currency1 • Non-GAAP diluted net earnings per share2 of $1.10, above the previously provided outlook of $0.99 to $1.05 per share • GAAP diluted net earnings per share of $0.99, above the pre
Slide 5: Key Growth Areas
Key Growth Areas Collectively grew revenue double-digit in Q1 FY22 • Peripherals 40% revenue growth across HyperX and HP branded peripherals. Leading with cutting edge innovation, including the HyperX Cloud Alpha Wireless headset with up to 300 hours of battery life • Gaming 20% revenue growth in Pe
Slide 6: Q1 FY22 results overview
Q1 FY22 results overview Growth CC 1 Non-GAAP OP Non-GAAP OP Non-GAAP OP Non-GAAP OP $ in millions Net revenue Growth y/y% y/y% $3 % of rev3 $ y/y3 % of rev y/y3 Printing $4,831 (4.2)% (4.6)% $879 18.2% $(119) (1.6) pts Personal Systems $12,196 15.0% 14.3% $957 7.8% $199 0.7 pts Corporate Inv estmen
Slide 7: Q1 FY22 mix by segment and region
Q1 FY22 mix by segment and region Net revenue Non-GAAP operating profit 2 By key segment and business unit 1 By key segment3 Net revenue by region Workstations and Other Personal Sy stems Printing – $ 1.8 billion 5% Supplies 18% Desktops 17% Printing – 18.2% $17.0 Commercial 4 Printing 6% 48% of tot
Slide 8: Revenue and non-GAAP diluted net EPS performance
1 Revenue and non-GAAP diluted net EPS performance 1 Revenue (Billions) Non-GAAP diluted net EPS $18 $1.20 $16 $0.92 $1.10 $1.00 $0.93 $14 $1.00 $0.94 $12 $0.80 $0.65 $10 $0.62 $0.60 $0.51 $0.49 $8 $6 $0.40 $4 $0.20 $2 $14.6 $12.5 $14.3 $15.3 $15.6 $15.9 $15.3 $16.7 $17.0 $0 $0.00 1Q20 2Q20 3Q20 4Q2
Slide 9: Revenue growth
Revenue growth y/y growth (%) 30% 25.4% 25% 20% 27.3% 15% 9.3% 8.8% 10% 6.6% 7.0% 8.2% 5% (0.2%) 0.1% 7.0% 6.9% 0.5% 0% 4.1% (0.6%) (10.1%) (1.0%) (5%) (2.1%) (10%) (11.2%) (15%) 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 Revenue growth in constant currency 1 Revenue growth as reported 1. Adjusted
Slide 10: Regional revenue trends
Regional revenue trends y/y revenue growth % y/y revenue growth in constant currency %1 $7 35% $6 35% Americas (including U.S.) 30% 30% United 25% 20% 25% States $6 $5 20% 15% 15% 10% 10% 5% $5 $4 5% 0% (5%) 0% (10%) (5%) $4 (15%) $3 (10%) billions 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 % grow
Slide 11: Personal Systems
Personal Systems Q1 FY22 • Record revenue and operating profit since separation • Commercial revenue up 26% with strong double-digit ASPs and Revenue Operating profit Windows units growth $12.2 billion $957 million Key • Double-digit revenue growth in high value categories, including gaming, premium
Slide 12: Printing
Printing Q1 FY22 • Consumer: Strong customer demand with Home Hardware ASPs Revenue Operating profit up 10% y/y and backlog increasing q/q $4.8 billion $879 million • Commercial: Ongoing recovery in Office print with q/q increases in share and backlog Key 1 messages • Innovation: HP+ continues to dr
Slide 13: Accelerating our ESG impact
Accelerating our ESG impact Our ambition is to become the world’s most sustainable and just technology company by 2030 Climate Action Human Rights Digital Equity • Achieved goal to reduce HP product use GHG • Overall economic impact from HP’s supplier • 50+ million students and adult learners have e
Slide 14: Non-GAAP financial information
Non-GAAP1 financial information $ in millions, except 2 Q1 FY22 Q4 FY21 Q1 FY21 per share amounts Rev enue $17,028 $16,675 $15,646 Cost of rev enue 13,643 80.1% 13,410 80.4% 12,322 78.8% Total OpEx 1,886 11.1% 1,919 11.5% 1,847 11.8% Operating profit $1,499 8.8% $1,346 8.1% $1,477 9.4% Interest and
Slide 15: Q1 FY22 GAAP to non-GAAP bridge
Q1 FY22 GAAP to non-GAAP bridge Non-operating $ in millions, except Amortization of Restructuring and Acquisition-related GAAP Tax adjustments retirement related Non-GAAP tax rate and per share amounts intangible assets other charges charges (credits) / charges Revenue $17,028 $17,028 Cost of revenu
Slide 16: Select cash and debt balances
Select cash and debt balances Net cash (debt) 1 $ Billions $6.0 $ Billions $4.0 Gross cash2 $2.0 $ Billions 1Q21 2Q21 3Q21 4Q21 1Q22 Gross debt $0.0 Gross cash2 4.2 3.4 3.4 4.3 3.4 Net cash (de ($2.0) Gross debt 6.2 6.2 7.2 7.6 7.1 ($4.0) Net cash (debt)1,3 (2.1) (2.8) (3.7) (3.3) (3.7) ($6.0) ($8.0
Slide 17: Cash flow
Cash flow $ Millions $7,000 $6,409 $6,000 $5,000 $4,167 $4,000 $3,000 $2,000 $1,657 $1,657 $1,404 $1,404 $1,022 $908 $1,000 $0 FY21 FY22 Q121 Q122 1 Net cash provided by operations Free cash flow 1. Free cash flow includes net cash provided by operating activities adjusted for net investments in lea
Slide 18: Shareholder return
Shareholder return $ Millions $8,000 $7.2 billion $7,000 $6,000 $5,000 $4,000 6,249 $3,000 $2,000 $1.8 billion $1.6 billion $1.8 billion $1,000 1,508 1,378 1,508 938 $0 271 250 271 FY21 FY22 Q121 Q122 Shares repurchased 224.3 million 42.6 million 60.2 million 42.6 million Dividend per share $0.7752
Slide 19: Outlook
Outlook Q2 FY22 net EPS guidance GAAP diluted net EPS $0.95 – $1.01 Non-GAAP diluted net EPS1 $1.02 – $1.08 FY22 net EPS guidance GAAP diluted net EPS $3.87 – $4.07 Non-GAAP diluted net EPS1 $4.18 – $4.38 FY22 Free Cash Flow Guidance Free Cash Flow2 At least $4.5 Billion 1. Second quarter and fiscal
Slide 20: Accelerating our ESG impact (Footnotes for Slide 13)
Accelerating our ESG impact (Footnotes for Slide 13) 1 Product use GHG emissions intensity describes the performance of our portfolio, taking into account 7 In 2021, we tracked over $3.5 billion in new sales (total contract value) in which sustainability changes to product mix and business growth. H
Slide 21: Supplemental slides
" Supplemental Slides
Slide 22: Inventory and accounts receivable
Inventory and accounts receivable Inventory Accounts receivable In Billions In Billions $10.0 18.0% $6.0 16.0% $9.0 $5.4 $5.5 $9.0 16.0% $5.1 $5.3 $5.3 $5.2 $8.2 $7.9 $5.0 $4.9 14.0% $8.0 $7.5 $5.0 14.0% 12.0% % of revenue1 $6.7 % of revenue1 $7.0 13.9% $6.4 13.2% 12.0% % of Rev $5.9 $6.0 12.5% $4.0
Slide 23: PP&E and accounts payable
PP&E and accounts payable PP&E Accounts payable In Billions In Billions $3.0 6.0% $20.0 $2.7 $2.7 $18.1 $2.6 $2.5 $2.5 $2.6 $2.5 $2.5 $18.0 5.0% $15.9 $16.1 $2.4 $16.0 $15.0 $15.2 4.8% $14.2 $14.3 $14.7 4.7% 4.6% PP&E $14.0 % of revenue1 4.4% 4.2% 4.0% $1.8 4.0% 4.0% 4.0% $12.0 3.0% $10.0 $1.2 $8.0
Slide 24: Working capital metrics
Working capital metrics 140 120 100 80 60 40 20 0 -20 -40 Apr20 Jul20 Oct20 Jan21 Apr21 Jul21 Oct21 Jan22 Days receivables 37 33 32 30 28 29 30 27 Days inventory 57 45 43 49 54 62 53 59 Days payable 128 108 105 109 110 120 108 119 Cash conversion cycle 1 1 -34 -30 -30 -30 -28 -29 -25 -33 1. Cash con
Slide 25: FY21 GAAP to non-GAAP bridge
FY21 GAAP to non-GAAP bridge $ in millions, except Debt Defined benefit plan Non-operating Amortization of Restructuring and Acquisition-related Oracle litigation tax rate and per share GAAP extinguishment settlement (gains)/ Tax adjustments retirement related Non-GAAP intangible assets other charge
Slide 26: Q4 FY21 GAAP to non-GAAP bridge
Q4 FY21 GAAP to non-GAAP bridge $ in millions, except Defined benefit plan Non-operating Amortization of Restructuring and Acquisition-related Oracle litigation tax rate and per share GAAP settlement (gains)/ Tax adjustments retirement related Non-GAAP intangible assets other charges charges proceed
Slide 27: Q3 FY21 GAAP to non-GAAP bridge
Q3 FY21 GAAP to non-GAAP bridge $ in millions, except Debt Non-operating Amortization of Restructuring and Acquisition-related tax rate and per share GAAP extinguishment Tax adjustments retirement related Non-GAAP intangible assets other charges charges amounts costs (credits) / charges Revenue $15,
Slide 28: Q2 FY21 GAAP to non-GAAP bridge
Q2 FY21 GAAP to non-GAAP bridge $ in millions, except Non-operating Amortization of Restructuring and Acquisition-related tax rate and per share GAAP Tax adjustments retirement related Non-GAAP intangible assets other charges charges amounts (credits) / charges Revenue $15,877 $15,877 Cost of revenu
Slide 29: Q1 FY21 GAAP to non-GAAP bridge
Q1 FY21 GAAP to non-GAAP bridge Non-operating $ in millions, except Amortization of Restructuring and Acquisition-related GAAP Tax adjustments retirement related Non-GAAP tax rate and per share amounts intangible assets other charges charges (credits) / charges Revenue $15,646 $15,646 Cost of revenu
Slide 30: FY20 GAAP to non-GAAP bridge
FY20 GAAP to non-GAAP bridge Non-operating $ in millions, except Restructuring Debt Defined benefit Amortization of Acquisition- retirement tax rate and per share GAAP and other extinguishment plan settlement Tax adjustments Non-GAAP intangible assets related charges related (credits) amounts charge
Slide 31: Q4 FY20 GAAP to non-GAAP bridge
Q4 FY20 GAAP to non-GAAP bridge Non-operating $ in millions, except Restructuring Defined benefit Amortization of Acquisition- retirement tax rate and per share GAAP and other plan settlement Tax adjustments Non-GAAP intangible assets related charges related (credits) amounts charges charges / charg
Slide 32: Q3 FY20 GAAP to non-GAAP bridge
Q3 FY20 GAAP to non-GAAP bridge Amortization Non-operating $ in millions, except Restructuring Debt of Acquisition- Tax retirement related tax rate and per GAAP and other extinguishment Non-GAAP intangible related charges adjustments (credits) / share amounts charges costs assets charges Revenue $14
Slide 33: Q2 FY20 GAAP to non-GAAP bridge
Q2 FY20 GAAP to non-GAAP bridge Non-operating $ in millions, except Amortization Restructuring and Acquisition-related Tax retirement related tax rate and per GAAP of Non-GAAP other charges charges adjustments (credits) / share amounts intangible assets charges Revenue $12,469 $12,469 Cost of revenu
Slide 34: Q1 FY20 GAAP to non-GAAP bridge
Q1 FY20 GAAP to non-GAAP bridge Non-operating $ in millions, except Amortization Restructuring and Acquisition-related Tax retirement related tax rate and per GAAP of Non-GAAP other charges charges adjustments (credits) / share amounts intangible assets charges Revenue $14,618 $14,618 Cost of revenu
Slide 35: Thank you
Thank you