Slide 1: Q3 FY21 Earnings announcement
HP INC. Q3 FY21 Earnings announcement August 26, 2021 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 GAAP basis. Definitions of these non-GAAP financial measures and reconciliations of these non-GAAP financial measures to the most
Slide 4: Q3 FY21 highlights
Q3 FY21 highlights • Net revenue of $15.3 billion, up 7.0% from the prior-year period and up 4.1% in constant currency1 • Non-GAAP diluted net earnings per share2 of $1.003, above the previously provided outlook of $0.81 to $0.85 per share • GAAP diluted net earnings per share of $0.923, above the p
Slide 5: Q3 FY21 results overview
Q3 FY21 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 rev 3 $ y/y 3 % of rev y/y 3 Printing $4,882 24.1% 22.2% $857 17.6% $377 5.4 pts Personal Systems $10,406 0.4% (2.8)% $869 8.4% $299 2.9 pts Corporate Investments /
Slide 6: Q3 FY21 mix by segment and region
Q3 FY21 mix by segment and region Net revenue Non-GAAP operating profit 2 By key segment and business unit1 By key segment3 Net revenue by region Workstations and Other Personal Printing – $ 1.7 billion Sy stems Supplies 5% 20% Desktops 15% 17.6% $15.3 Printing – 4 Printing Commercial OP margin 50%
Slide 7: 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 $16 $1.20 $14 $1.00 $0.93 $1.00 $0.92 $12 $0.80 $10 $0.65 $0.62 $0.58 $0.60 $8 $0.60 $0.51 $0.49 $6 $0.40 $4 $0.20 $2 $14.6 $15.4 $14.6 $12.5 $14.3 $15.3 $15.6 $15.9 $15.3 $0 $0.00 3Q19 4Q19 1Q20 2Q20 3Q
Slide 8: Revenue growth
Revenue growth y/y growth (%) 30% 27.3% 25% 20% 25.4% 15% 10% 6.6% 7.0% 5% 1.8% 7.0% 2.1% 0.5% (0.2%) 0.1% 4.1% 0% 0.1% 0.3% (0.6%) (1.0%) (5%) (10.1%) (2.1%) (10%) (11.2%) (15%) 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 Revenue growth in constant currency 1 Revenue growth as reported 1. Adjusted
Slide 9: Regional revenue trends
Regional revenue trends y/y revenue growth % y/y revenue growth in constant currency %1 $7 35% $7 35% Americas (including U.S.) 30% 30% United 25% 20% 25% States $6 $6 20% 15% 15% 10% 10% 5% $5 $5 5% 0% (5%) 0% (10%) (5%) $4 (15%) $4 (10%) billions 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 % grow
Slide 10: Personal Systems
Personal Systems Q3 FY21 • PC is essential – Leader in Commercial PCs benefitting from Revenue Operating profit strength across multiple product categories $10.4 $869 • Strong double-digit growth in high value categories including billion million Key gaming, services, consumer accessories, and mobil
Slide 11: Printing
Printing Q3 FY21 Revenue Operating profit • Office continued gradual recovery including double-digit revenue growth in Managed Print Services $4.9 billion 1 $857 million Key messages • Instant Ink revenue and total subscribers grew more than 30% y/y • Innovation: Launched Arize, HP’s new 3D print di
Slide 12: Non-GAAP financial information
Non-GAAP financial information 1 $ in millions, except Q3 FY21 Q2 FY21 Q3 FY20 per share amounts Revenue $15,289 $15,877 $14,294 Cost of revenue 11,901 77.8% 12,437 78.3% 11,901 83.3% Total OpEx 1,885 12.4% 1,997 12.6% 1,515 10.6% Operating profit $1,503 9.8% $1,443 9.1% $878 6.1% Interest and other
Slide 13: 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 14: Select cash and debt balances
Select cash and debt balances Net cash (debt) 1 $ Billions $8.0 $6.0 $4.0 $ Billions 3Q20 4Q20 1Q21 2Q21 3Q21 $2.0 2 4.9 5.1 4.2 3.4 3.4 $0.0 Gross cash ($2.0) Gross debt 6.3 6.3 6.2 6.2 7.2 ($4.0) 1,3 Net cash (debt) (1.4) (1.1) (2.1) (2.8) (3.7) ($6.0) ($8.0) 3Q20 4Q20 1Q21 2Q21 3Q21 2 Gross cash
Slide 15: Cash flow
Cash flow $ Millions $5,000 $4,316 $4,000 $3,891 $3,561 $3,229 $3,000 $2,000 $1,667 $1,577 $1,093 $975 $1,000 $0 FY20 YTD FY21 Q320 Q321 1 Net cash provided by operations Free cash flow 1. Free cash flow = Net cash provided by operations adjusted for net investment in leases and net investment in pr
Slide 16: Shareholder return
Shareholder return $ Millions $6,000 $5.2 billion $5,000 $4.1 billion $4,000 $3,000 4,495 3,107 $2,000 $1.7 billion $1.2 billion $1,000 1,507 953 997 719 $0 251 230 FY20 YTD FY21 Q320 Q321 Shares repurchased 166.5 million 163.3 million 56.0 million 49.6 million Dividend per share $0.7048 $0.5814 $0.
Slide 17: Outlook
Outlook Q4 FY21 net EPS guidance GAAP diluted net EPS $0.82 – $0.88 Non-GAAP diluted net EPS1 $0.84 – $0.90 FY21 net EPS guidance GAAP diluted net EPS $3.56 – $3.62 Non-GAAP diluted net EPS2 $3.69 – $3.75 FY21 Free Cash Flow Guidance Free Cash Flow3 At least $4.0 Billion 1. Fourth quarter non-GAAP d
Slide 18: Supplemental slides
Supplemental slides @
Slide 19: Inventory and accounts receivable
Inventory and accounts receivable Inventory Accounts receivable In Billions In Billions $9.0 16.0% $7.0 16.0% $8.2 $8.0 $7.5 14.0% $6.0 $6.0 14.0% $7.0 $6.7 $5.3 $5.4 $5.3 $6.4 13.2% 12.0% $5.1 $5.0 $4.9 12.0% % of revenue1 $6.0 $4.9 % of revenue1 $5.7 $5.9 12.3% $5.0 $6.0 11.6% $4.9 11.1% 10.5% 10.
Slide 20: PP&E and accounts payable
PP&E and accounts payable PP&E Accounts payable In Billions In Billions $3.0 $2.8 6.0% $2.8 $2.7 $15.9 $2.7 $2.6 $2.5 $2.5 $2.5 $16.0 $14.8 $14.7 $15.0 $15.2 $14.2 $14.3 5.0% $2.4 $14.0 $12.8 4.8% 4.7% 4.8% 4.7% 4.6% $12.0 % of revenue1 4.4% 4.2% 4.0% $1.8 4.0% $10.0 3.0% $8.0 $1.2 2.0% $6.0 $0.6 $4
Slide 21: Working capital metrics
Working capital metrics 140 120 100 80 60 40 20 0 -20 -40 Oct19 Jan20 Apr20 Jul20 Oct20 Jan21 Apr21 Jul21 Days receivables 35 30 37 33 32 30 28 29 Days inventory 41 38 57 45 43 49 54 62 Days payable 107 98 128 108 105 109 110 120 Cash conversion cycle1 1 -31 -30 -34 -30 -30 -30 -28 -29 1. Cash conve
Slide 22: 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 23: 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 24: 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 25: 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 26: Q3 FY20 GAAP to non-GAAP bridge
Q3 FY20 GAAP to non-GAAP bridge Non-operating Amortization $ in millions, except Restructuring Debt retirement of Acquisition- Tax tax rate and per GAAP and other extinguishment related Non-GAAP intangible related charges adjustments share amounts charges costs (credits) / assets charges Revenue $14
Slide 27: 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 28: 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 29: FY19 GAAP to non-GAAP bridge
FY19 GAAP to non-GAAP bridge Non-operating $ in millions, except Amortization retirement Restructuring and Acquisition- tax rate and per GAAP of other charges related charges Tax adjustments related (credits) Non-GAAP share amounts intangible assets / charges Revenue $58,756 $58,756 Cost of revenue
Slide 30: Q4 FY19 GAAP to non-GAAP bridge
Q4 FY19 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 $15,407 $15,407 Cost of revenu
Slide 31: Q3 FY19 GAAP to non-GAAP bridge
Q3 FY19 GAAP to non-GAAP bridge Non-operating Amortization $ in millions, except Restructuring Acquisition- Defined benefit retirement of Tax tax rate and per GAAP and other related credits plan settlement related Non-GAAP intangible adjustments share amounts charges (charges) charges (credits) / as
Slide 32: Thank you
Thank you