Slide 1: Earnings Announcement Q2 FY23
Data courtesy of Print my Leg Earnings Announcement MAY 30, 2023 | Q2 FY23
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, they could affect the business and results of operat
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: Q2 FY23 Highlights
Q2 FY23 Highlights • Net revenue of $12.9 billion, down 21.7% from the prior-year period and down 18.0% in constant currency1 • Non-GAAP diluted net earnings per share2 of $0.80, within the previously provided outlook of $0.73 to $0.83 per share • GAAP diluted net earnings per share of $1.07, above
Slide 5: Q2 FY23 Results Overview
Q2 FY23 Results Overview Non-GAAP $ in Net Growth Growth CC1 Non-GAAP Non-GAAP Non-GAAP OP % of rev millions revenue y/y% y/y % OP $3 OP % of rev3 OP $ y/y3 y/y3 Printing $4,736 (4.6)% (2.4)% $899 19.0% $(50) (0.1) pts Personal $8,176 (29.1)% (24.8)% $445 5.4% $(349) (1.5) pts Systems Corporate Inve
Slide 6: Q2 FY23 Mix by Segment and Region
Q2 FY23 Mix by Segment and Region Net revenue Non-GAAP operating profit2 Net revenue By key segment and business unit1 By key segment3 By region Personal Systems Printing Commercial5 Supplies 46% 23% AMERICAS EMEA APJ $1.3 billion 42% 34% 24% Printing Commercial Printing 19.0% US: 34% $12.9 9% 67% o
Slide 7: Revenue & Non-GAAP Diluted Net EPS Performance
Revenue & Non-GAAP Diluted Net EPS Performance Revenue (Billions) y/y growth (%) Non-GAAP diluted net EPS y/y growth (%) 40% $1.20 140% $18 $17.0 $16.7 $16.5 $1.10 $1.08 $15.9 $1.04 120% $16 27.3% $15.3 30% $1.00 $14.7 $14.8 $1.00 $0.93 $0.94 $13.8 100% $14 25.4% $12.9 104.1% $0.85 20% $0.80 80% $12
Slide 8: Regional Revenue Trends
Regional Revenue Trends Billions % growth Billions % growth Americas $7 35% United $7 35% (including U.S.) 25% States 25% $6 $6 15% 15% $5 5% $5 5% (5)% (5)% $4 $4 (15)% (15)% $3 (25)% $3 (25)% 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 Billions % growt
Slide 9: Personal Systems Q2 FY23
Personal Systems Q2 FY23 Revenue declined y/y driven by lower volumes in consumer and commercial, currency and promotional pricing. Revenue Operating profit Gained profitable share overall both y/y and q/q in CQ1. HP now holds #1 position in 29% y/y $8.2 $445 Commercial, with share up 2.5pts y/y.
Slide 10: Printing Q2 FY23
Printing Q2 FY23 Revenue decline y/y driven by lower Consumer hardware, lower Supplies and currency, offset in part by Commercial. Revenue Operating profit Strong operating profit performance driven by solid strategic execution, including 5% y/y rigorous cost management. $4.7 $899 19.0% of revenue
Slide 11: Key Growth Areas
Key Growth Areas Continued to invest for the long-term; mixed performance due to macro headwinds HYBRID SYSTEMS Y/Y revenue growth driven by Poly. Announced Poly Video OS 4.0, which uses AI-driven speaker tracking and auto framing to enable better remote collaboration. GAMING Revenue declined y/y, c
Slide 12: Sustainable Impact
Sustainable Impact Climate Action Human Rights Digital Equity HP’s sustainable revenue1 represented more As of 2Q23 we have reached nearly 400K Ranked 9th on World Benchmarking Alliance than 60% of total revenue in FY22, reported in workers through empowerment programs Digital Inclusion Benchmark, m
Slide 13: Select Cash & Debt Balances
Select Cash & Debt Balances $ Billions Net cash (debt)1 $6.0 $3.0 $ Billions 2Q22 3Q22 4Q22 1Q23 2Q23 $0.0 Gross cash2 4.5 5.4 3.2 1.8 1.9 ($3.0) Gross debt3 9.1 11.1 11.2 10.9 10.7 ($6.0) Net cash (debt)1,4 (4.7) (5.8) (8.0) (9.1) (8.8) ($9.0) ($12.0) 2Q22 3Q22 4Q22 1Q23 2Q23 Gross cash2 Gross debt
Slide 14: Cash Flow & Shareholder Return
Cash Flow & Shareholder Return $ Millions Cash Flow $ Millions Shareholder Return $5,000 $6,000 Share repurchase $5,334 $4,463 Dividend payment $5,000 $4,000 $3,853 $4,000 $3,000 $4,297 $3,000 $2,000 $2,000 $1,272 $1,000 $620 $1,000 $508 $636 $541 $349 $351 $618 $1,010 $1,037 $100 $259 $518 $0 $0 $2
Slide 15: Outlook
Outlook Q3 FY23 net EPS guidance GAAP diluted net EPS $0.61 – $0.71 Non-GAAP diluted net EPS1 $0.81 – $0.91 FY23 net EPS guidance GAAP diluted net EPS $2.91 – $3.11 Non-GAAP diluted net EPS2 $3.30 – $3.50 FY23 Free Cash Flow Guidance Free Cash Flow3 $3.0 to $3.5 billion 1. Third quarter of fiscal 20
Slide 16: Non-GAAP Financial Information
Non-GAAP1 Financial Information $ in millions, except per share amounts Q2 FY23 Q1 FY23 Q2 FY22 % of Revenue % of Revenue % of Revenue Revenue $12,913 $13,828 $16,490 Cost of revenue 9,984 77.3% 11,019 79.7% 13,157 79.8% Total OpEx 1,808 14.0% 1,734 12.5% 1,889 11.4% Operating profit $1,121 8.7% $1,
Slide 17: Q2 FY23 GAAP to Non-GAAP Bridge
Q2 FY23 GAAP to Non-GAAP Bridge $ in millions, except Acquisition and Non-operating Amortization of Restructuring and Tax tax rate and per GAAP divestiture retirement related Non-GAAP intangible assets other charges adjustments share amounts charges (credits) / charges Revenue $12,913 $12,913 Cost o
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Slide 19: Supplemental Slides
Supplemental Slides @
Slide 20: Inventory & Accounts Receivable
Inventory & Accounts Receivable INVENTORY ACCOUNTS RECEIVABLE In Billions Percentage of Revenue1 In Billions Percentage of Revenue1 $10 18% $6 16% $9.0 $8.9 $5.5 $5.4 $9 $5.2 $8.2 16% $4.9 14% $8.2 $5 $7.9 $8 $7.6 $4.4 $4.5 $7.3 $7.2 14% $4.3 12% 13.9% 13.7% $4.1 $7 13.2% 12.8% 12% $4 12.5% 12.6% 12
Slide 21: PP&E & Accounts Payable
PP&E & Accounts Payable PP&E ACCOUNTS PAYABLE In Billions Percentage of Revenue1 In Billions $3 8% $20 $2.8 $2.8 $2.8 $18.1 $2.6 $2.6 $2.6 $17.0 $2.5 $2.5 7% $15.9 $16.1 $16 $15.5 $15.3 6% $13.5 $13.3 $2 5% $12 4.9% 4.4% 4.6% 4% 4.0% 4.0% 4.0% 4.0% 4.0% $8 3% $1 2% $4 1% $0 0% $0 Jul21 Oct21 Jan22 A
Slide 22: Working Capital Metrics
Working Capital Metrics 140 120 100 80 60 40 20 0 (20) (40) Jul21 Oct21 Jan22 Apr22 Jul22 Oct22 Jan23 Apr23 Days receivables 29 30 27 29 27 28 28 29 Days inventory 62 53 59 61 63 57 60 65 Days payable 120 108 119 116 119 114 110 120 Cash conversion cycle1 (29) (25) (33) (26) (29) (29) (22) (26) 1. C
Slide 23: Free Cash Flow Reconciliation
Free Cash Flow Reconciliation $ in millions 1Q22 2Q22 3Q22 4Q22 FY22 1Q23 2Q23 YTD23 Net cash provided by (used in) operating $1,657 $508 $394 $1,904 $4,463 $(16) $636 $620 activities Net investment in property, plant and (273) (178) (170) (144) (765) (192) (130) (322) equipment Net investment in le
Slide 24: Q1 FY23 GAAP to Non-GAAP Bridge
Q1 FY23 GAAP to Non-GAAP Bridge Non-operating $ in millions, except Amortization of Restructuring Acquisition and Debt Tax retirement tax rate and per GAAP intangible and other divestiture extinguishment Non-GAAP adjustments related (credits) share amounts assets charges charges costs / charges Reve
Slide 25: FY22 GAAP to Non-GAAP Bridge
FY22 GAAP to Non-GAAP Bridge Non-operating Amortization of Restructuring Acquisition and Russia exit Tax retirement $ in millions, except GAAP intangible and other divestiture Non-GAAP charges adjustments related (credits) / tax rate and per assets charges charges share amounts1 charges Revenue $62,
Slide 26: Q4 FY22 GAAP to Non-GAAP Bridge
Q4 FY22 GAAP to Non-GAAP Bridge $ in millions, except Restructuring Acquisition and Non-operating Amortization of Tax tax rate and per GAAP and other divestiture retirement related Non-GAAP intangible assets adjustments share amounts charges charges (credits) / charges Revenue $14,801 $14,801 Cost o
Slide 27: Q3 FY22 GAAP to Non-GAAP Bridge
Q3 FY22 GAAP to Non-GAAP Bridge Non-operating $ in millions, except Amortization of Restructuring Acquisition- Russia exit Tax retirement tax rate and per GAAP intangible and other related Non-GAAP charges adjustments related (credits) / share amounts assets charges charges charges Revenue $14,664 $
Slide 28: Q2 FY22 GAAP to Non-GAAP Bridge
Q2 FY22 GAAP to Non-GAAP Bridge $ in millions, except Restructuring Acquisition- Non-operating Amortization of Tax tax rate and per GAAP and other related retirement related Non-GAAP intangible assets adjustments share amounts charges charges (credits) / charges Revenue $16,490 $16,490 Cost of reven
Slide 29: Q1 FY22 GAAP to Non-GAAP Bridge
Q1 FY22 GAAP to Non-GAAP Bridge $ in millions, except Restructuring Non-operating tax rate and per Amortization of and other Acquisition- retirement related share amounts GAAP intangible assets charges related charges Tax adjustments (credits) / charges Non-GAAP Revenue $17,028 $17,028 Cost of reven
Slide 30: FY21 GAAP to Non-GAAP Bridge
FY21 GAAP to Non-GAAP Bridge Non-operating $ in millions, except Amortization Restructuring Acquisition- Debt Defined benefit Oracle retirement tax rate and per of intangible and other related Extinguishment plan settlement Tax litigation related (credits) / share amounts GAAP assets charges charges
Slide 31: Q4 FY21 GAAP to Non-GAAP Bridge
Q4 FY21 GAAP to Non-GAAP Bridge Defined Benefit Non-operating $ in millions, except Amortization Restructuring Acquisition- plan settlement Oracle retirement tax rate and per of intangible and other related (gains) / Tax litigation related (credits) share amounts GAAP assets charges charges charges
Slide 32: Q3 FY21 GAAP to Non-GAAP Bridge
Q3 FY21 GAAP to Non-GAAP Bridge Non-operating $ in millions, except Amortization Restructuring Acquisition- Debt retirement tax rate and per of intangible and other related extinguishment Tax related (credits) / share amounts GAAP assets charges charges costs adjustments charges Non-GAAP Revenue $15
Slide 33: Q2 FY21 GAAP to Non-GAAP Bridge
Q2 FY21 GAAP to Non-GAAP Bridge $ in millions, except Restructuring Non-operating tax rate and per Amortization of and other Acquisition- retirement related share amounts GAAP intangible assets charges related charges Tax adjustments (credits) / charges Non-GAAP Revenue $15,877 $15,877 Cost of reven