Q4 2023 HP Inc Earnings Call
Speaker 1: Good day everyone and welcome to the fourth quarter 2023 HP Incorporated Earnings Conference call. My name is Krista and I'll be your conference moderator for today. At this time all participants will be in a listen-only mode. We will be facilitating a question and answer session towards the end of the conference.
Good day, everyone and welcome to the fourth quarter 2023 H P incorporated earnings conference call.
My name is Krista and I'll be your conference moderator for today.
At this time, all participants will be in a listen only mode.
We will be facilitating a question and answer session towards the end of the conference should you need assistance during the call. Please signal a conference specialist by pressing the star key followed by zero.
Speaker 1: Should you need assistance during the call, please signal a conference specialist by pressing the star key followed by zero. As a reminder, this conference is being recorded for replay purposes. I would now like to turn the call over to Orit Hinan Nahon, Head of Investor Relations. Please go ahead.
As a reminder, this conference is being recorded for replay purposes, I would now like to turn the call over to our REIT Keenan <unk> hone head of Investor Relations. Please go ahead.
Speaker 2: Good afternoon, everyone, and welcome to HPE's fourth quarter 2023 earnings conference.
Good afternoon, everyone and welcome to Hps fourth quarter 2023 earnings Conference call.
Speaker 2: With me today are Enrique Lloris, HB's President and Chief Executive Officer, and Marie Meyers, HB's Chief Financial Officer.
With me today are Enrique <unk>, Hp's, President and Chief Executive Officer, and Marie Myers, Hps, Chief Financial Officer.
Speaker 2: Before handing the call over to Enrique, let me remind you that this call is a webcast and a replay will be available on our website shortly after the call for approximately one year.
Before handing the call over to Enrique Let me remind you that this call is a webcast and a replay will be available on our website. Shortly after the call for approximately one year.
Speaker 2: We posted the earnings release and accompanying slide presentation on our investor relations webpage at investor.hp.com. As always, elements of this presentation are forward-looking and are based on our best view of the world and our businesses as we see them today.
We posted the earnings release and accompanying slide presentation on our Investor Relations webpage at Investor, though the H B Dot com.
As always elements of this presentation are forward looking and are based on our best view of the world and our businesses as we see them today.
Speaker 2: For more detailed information, please see disclaimers in the earnings materials relating to forward-looking statements that involve risks, uncertainties, and assumptions.
For more detailed information please see disclaimers in the earnings materials relating to forward looking statements that involve risks uncertainties and assumptions.
Speaker 2: For a discussion of some of these risks, uncertainties, and assumptions, please refer to HP's SEC reports, including our most recent Form 10-K .
For a discussion of some of these risks uncertainties and assumptions. Please refer to Hp's SEC reports, including our most recent Form 10-K.
Speaker 2: HB assumes no obligation and does not intend to update any such forward-looking statements.
H B assumes no obligation.
And does not intend to update any such forward looking statements.
Speaker 2: We also note that the financial information discussed on this call reflects estimates based on information available now and could differ materially from the amounts ultimately reported in HP's SEC filing.
We also note that the financial information discussed on this call reflects estimates based on information available now and could differ materially from the amounts ultimately reported in Hp's SEC filings.
Speaker 2: During this webcast, unless otherwise specifically noted, all comparisons are year-over-year comparisons with the corresponding year-ago period.
During this webcast unless otherwise specifically noted all comparisons are year over year comparisons with the corresponding year ago period in.
Speaker 2: In addition, unless otherwise noted, references to HP Channel Inventory refer to Tier 1 Channel Inventory. For financial information that has been expressed on a non-GAAP basis, we've included reconciliations to the comparable GAAP information.
In addition, unless otherwise noted references to H B channel inventory refer to tier one channel inventory.
For financial information that has been expressed on a non-GAAP basis. We've included reconciliations to the comparable GAAP information.
Speaker 2: Please refer to the tables and slide presentation, accompanying today's earnings release for those reconciliations with that, and I'd like to turn.
Please refer to the tables and slide presentation accompanying today's earnings release for those reconciliations.
With that I'd now like to turn the call over to Enrique.
Speaker 3: Thank you, Orit, and thank you everyone for joining our final earnings call of 2023.
Thank you Lori and thank you everyone for joining our final earnings call of 2023.
Speaker 3: It was great to host many of you for our Securities Analyst Meeting last month.
It was great to host many of you poured our securities analyst meeting last month.
Speaker 3: As I said at the time, we have made significant progress against our strategic priority.
As I said at the time, we have made significant progress against our strategic priorities and we see attractive opportunities.
Speaker 3: and we see attractive opportunities ahead.
Speaker 3: Our future-ready plan combined with our relentless focus on the things we can control enable us to make steady progress against our plan in fiscal year 23. We are very pleased.
Our future ready plan combined with our relentless focus on the things we can control.
They want us to make steady progress against our plan in fiscal year 'twenty three.
We are very pleased with our Q4 results.
Speaker 3: And we have finished the year in a much stronger position than we began.
We have finished the year in a much stronger position than we began.
Speaker 3: We knew from the start that it would be a tough year.
We knew from their star Cardi B.
Off here.
Speaker 3: The challenging external environment constrains demand across the industry, and this is reflected in our full year result.
The challenging external environment constrained demand across the industry on this.
As reflected in our full year results.
Speaker 3: Net revenue was $53.7 billion, down 15% year-over-year. And non-GAAP operating profit was $4.6 billion, down 14%.
<unk> revenue was $53 $7 billion down 15% year over year.
non-GAAP operating profit was $4.6 billion down 14%.
Speaker 3: We executed well in the face of this market dynamic.
We executed well in the face of these market dynamics growing non-GAAP operating profit a non-GAAP EPS sequentially throughout the year.
Speaker 3: growing non-GAAP operating profit and non-GAAP EPS sequentially throughout the year.
Speaker 3: and our second half results were significantly stronger than the first.
On our second half results.
Significantly stronger from the first.
Speaker 3: We also made good progress in our key growth areas, which grew mid-single digits and drove approximately 20% of our total company revenue for the year.
We also made good progress in our key growth areas.
Which grew mid single digits and drove approximately 20% of our total company revenue for the year.
Speaker 3: Our plan is designed to grow these businesses to at least $15 billion in revenue by the end of fiscal year 2022.
Our plan is designed to grow these businesses to at least $15 billion in revenue by the end of fiscal year 'twenty six.
Speaker 3: And we over-delivered on our gross annualized structural cost savings plan, putting us well on track to achieve our recently increased three-year target of $1.6 billion.
And we over delivered on our gross unrealized structural cost savings plan, putting us well on track towards our recently increased three year target of one $6 billion.
Speaker 3: Our results reinforce our confidence in the financial outlook we share with you in October .
Power results reinforce our confidence in the financial outlook, we shared with you in October.
Speaker 3: And I want to say a big thank you to our entire HP team for paving the way toward our next phase of growth.
And I want to say a big thank you to our entire HPE team for paving the way toward our next phase of growth.
Speaker 3: I am going to use my time today to summarize our Q4 performance, provide insight into each of our segments and reiterate some of the thoughts I shared last month about the market in 2024.
I am going to use my time today to summarize our Q4 performance provides insight into each of our segments I'll reiterate some of the thoughts I shared last month about the market in 2024.
Let me start with Q4.
Speaker 3: Net revenue was $13.8 billion.
Net revenue was $13 $8 billion.
Speaker 3: That was down 6% year over year due to the expected market dynamics we discussed last quarter. Revenue grew 5% sequentially, reflecting our progress.
That was down 6% year over year due to the expected market dynamics, we discussed last quarter.
Revenue grew 5% sequentially.
<unk> our progress.
I want to mention our key growth areas.
Speaker 3: Collectively, they grew 10% sequentially, or two times faster than our total company.
Collectively they grew 10% sequentially or two times faster than our total company growth.
Speaker 3: We delivered non-GAAP EPS of $0.90, up 5% sequentially and 10% year over year.
We delivered non-GAAP EPS of <unk> 90.
Up 5% sequentially and 10% year over year.
Speaker 3: And free cash flow was strong at $1.9 billion, enabling us to meet our full year target of approximately $3 billion.
And free cash flow was strong at $149 billion.
Maybe willingness to meet our full year target of approximately $3 billion.
Speaker 3: I'm particularly pleased with the strength of our innovation.
So I'm, particularly pleased with the strength of our innovation.
Speaker 3: This was on display at our HP Imagine event last month, where we gathered media and industry analysts from around the world to showcase more than 20 new products and services.
It was on display at our HB imagine event last month.
Other media and industry analysts from around the world to showcase more than 20, new products and services.
Speaker 3: This included the Spectre Fold, a device that reflects HP's culture of innovation at its best.
This included the expected fold.
That reflects hp's culture of innovation car T space.
Speaker 3: seamlessly transforming from laptop to tablet to desktop. It has widespread recognition as one of the most innovative form factors the industry has.
Seamlessly transforming from laptop to tablet to desktop because widespread recognition as one of the most innovative form factors the industry has seen.
Speaker 3: And it recently received a Red Dot Design Award, one of the highest honors in industrial design.
And it recently received a Red Dot design award one of the highest corners in industrial design.
Speaker 3: We also continue to build momentum in AI. We are the first company to offer dedicated workstation solutions with NVIDIA's AI enterprise software.
We also continue to build momentum.
We are the first company to offer dedicated workstation solutions within VTS.
Enterprise software.
Speaker 3: And more broadly, we're advancing our work to create the AI-PC category.
And more broadly.
Once in our work to create the IPC category.
Speaker 3: We have built the widest range of client products based on Intel's next generation of processors.
We have built the widest range of client products based on Intel's next generation of processors Intel core alter.
Speaker 3: Intel Core Ultra, giving us a strong foundation on which to build as we co-engineer and commercialize new AI architectures next year.
Giving us a strong foundation on which to build but we co engineer and commercialize new.
Okay Pictures next year.
Speaker 3: And I am very encouraged by the work underway with all of our silicon and software partners.
And I am very encouraged by the work underway with all of our Silicon and software partner.
Speaker 3: The emergence of the AIPC in 2024 will start a new cycle of market expansion and refresh.
The emergence of the APC in 2024, we'll start a new cycle of market expansion and refurbish.
Speaker 3: As I shared last month, we believe this can double the overall PC category growth rate over the next three years.
But as I shared last month, we believe this can double the overall PC category growth rate over the next three years.
Speaker 3: In print, we have refreshed our entire A3 and A4 portfolio, making devices smaller, more modular, and easier to manage and secure.
In print, we have refreshed our entire a fee on a full portfolio, making devices smaller more modular and easier to manage and secure.
Speaker 3: We also continue to leverage our IP to create new categories.
We also continue to leverage our IP to create new categories.
Speaker 3: This includes our site print construction solution, which has already laid out more than 1 million square feet at construction sites in North America and the UK and is launching in new geography.
This includes fore sight clean construction solution, which has already laid out more than 1 million square feet at construction sites in North America, and the UK and is launching in new geographies.
Speaker 3: We expanded our POLY solutions for large conference rooms and small hidden spaces.
We expanded our poly solutions for large conference rooms, and small harden spaces.
Speaker 3: We also launched a new conference room as a service subscription to help customers optimize usage and create better employee experience.
Also launched a new conference room, as a service subscription to help customers optimize usage and create better employee experiences.
Speaker 3: And we launched HP Workforce Central, which integrates data from more than 60 service tools across PCs, printers, and poly devices into a single platform.
And we launched HP workforce, central which integrates data for more than 60 service tools across Pcs printers, and poly devices into a single platform.
Speaker 3: This will drive simplicity, productivity, and security for IT departments.
This will drive simplicity productivity and security for it.
Departments.
Speaker 3: We're in beta with over 2,000 customers and we'll be rolling it out to all managed solutions.
We're in beta with over 2000 customers.
Rolling it out to all manage solution accounts.
Speaker 3: As we innovate across our portfolio, we remain equally focused on our sustainable impact priorities.
As we innovate across our portfolio, we remain equally focused on our sustainable impact priorities.
Speaker 3: A great example is our recently announced HP Premium solution.
A great example is our recently announced HP pre new solutions.
Speaker 3: By enhancing our refurbishing capabilities, we are now able to extend the life of devices and drive peculiarity of scale.
But you're enhancing our refurbished and capabilities. We are now able to extend the life of devices and drive peculiarity upscale.
Speaker 3: In addition to supporting our sustainability goals, this reduces total cost of ownership and creates an accretive business.
In addition to supporting our sustainability goals. These reduces total cost of ownership and create an accretive business.
Speaker 3: We have launched in India and will be expanding to other markets during fiscal year 24.
We have launched in India, and we will be expanding to other markets during fiscal year 'twenty four.
Speaker 3: We're also playing an active role to support our community.
We're also playing an active role to support our communities.
Speaker 3: Right now, we are particularly focused on the needs of those suffering in Israel and Gaza.
Now, we're particularly focused on the needs of those suffering newsroom in Gaza.
Speaker 3: Since the attacks of October 7th, our number one priority has been the safety and well-being of our employees in the region.
The attacks of October seven our number one priority has been the safety and wellbeing of our employees in the region.
Speaker 3: I want to take a moment to recognize the incredible work our team is doing to keep our business in Israel fully operational in the face of an extremely difficult situation.
I want to take a moment to recognize the incredible work our team is doing to keep our business in Iran fully operational in the phase for an extremely difficult situation.
Speaker 3: The HP Foundation has committed $1 million to humanitarian relief partners in the region.
BHP Foundation has committed $1 million to humanitarian relief partners in the region.
Speaker 3: We will continue doing everything we can to support our local.
We will continue doing everything we can to support our local teams.
Speaker 3: Let me now turn to our business unit performance.
Let me now turn to our business unit performance.
Speaker 3: The external environment remains consistent with what we discussed at our securities analyst meeting. Our baseline scenario of market stabilization across fiscal year 24 has not changed.
The external environment remains consistent with what we discussed at our securities Analyst meeting.
Our baseline scenario of market stabilization across fiscal year 'twenty for crossroad change.
Speaker 3: and our markets largely behave as we expected in Q4. Consumers showed a more typical
And our markets largely behave as we expected in Q4.
Consumer showed a more typical seasonal uptick.
Speaker 3: Commercial customers remain cautious, but we saw some signs of stabilization, especially in personal sales.
Commercial customers remain cautious, but we saw some signs of stabilization, especially in personal systems.
Speaker 3: and we continue to see demand weakness in China due to challenging economic conditions.
And we continue to see demand weakness in China due to challenging economic conditions.
Speaker 3: Personal systems net revenue was $9.4 billion in the quarter. That's down 8% year-over-year or 7% in constant current.
Personal systems net revenue was $9 4 billion in the quarter, that's down 8% year over year or 7% in constant currency.
Speaker 3: But what's most important is we continue to drive significant sequential improvement in the business with peers revenue up 5% quarter over quarter.
But what's most important is we continued to drive significant sequential improvement in the business with peers revenue up 5% quarter over quarter.
Speaker 3: Our discipline execution delivers strong peers operating margin of 6.7%.
Our disciplined execution deliver strong peers operating margin of six 7%.
Speaker 3: we once again gain share in commercial and consumer year over year.
We once again gained share in commercial and consumer year over year.
Speaker 3: We saw a continued recovery in consumer and gaming, both of which grew double-digit sequentially.
We saw a continued recovery in consumer and gaming both of which grew double digits sequentially.
Speaker 3: And through our stepped-up focus on workforce solutions, we grew our peers' services TCV global digits, including new wins with several large global customers spanning multiple.
And through our stepped up focus on workforce solutions, we grew our peers services PCV double digits, including new wins with several of our large global customers spanning multiple industries.
Speaker 3: Hybrid systems grew sequentially, largely driven by seasonality in consumer peripherals.
Hybrid systems grew sequentially, largely driven by seasonality in consumer pretty flat.
Speaker 3: This market is currently impacted by enterprise spending, but we remain bullish on the long-term growth opportunity.
These market is currently impacted by enterprise spending, but we remain bullish on the long term growth opportunity.
Speaker 3: And the breadth of our offering across hardware, peripherals, and services is a huge advantage.
And the breadth of our offering across hardware pretty fit us on services is a huge advantage.
Speaker 3: Turning to print, net revenue was $4.4 billion. That's down 3% year-over-year or 2% in constant currency.
Turning to print revenue was $4 4 billion, that's down 3% year over year four 2% in constant currency.
Speaker 3: Clean revenue grew 4% sequentially, while units were flat.
<unk> revenue grew 4% sequentially while units were flat.
Speaker 3: Supplied revenue was up in constant currency in Q4 on an easier compare and finished the year down 1% in constant currency in line with our long-term outlook.
Supplies revenue was up in constant currency in Q4 on an easier compare and finished the year down 1% in constant currency in line with our long term outlook.
Speaker 3: We drove strong print operating margins of 18.9%, reflecting discipline execution and cost management.
We drove strong print operating margins of 18, 9%, reflecting disciplined execution and cost management.
Speaker 3: HV plus enabled and big tank printers, once again, comprise approximately 60% of our ship.
HP plus enabled and big tank printers, once again comprised approximately 60% of our shipments.
Speaker 3: Instant Ink delivered another quarter of revenue and subscriber growth year over year.
Instant ink delivered another quarter of revenue and subscriber growth year over year.
Speaker 3: And we drove strong momentum in workforce solutions with over-digit TCV growth and significant new NPS win.
And we drove strong momentum in workforce solutions, we double digit CV growth and significant new NPS wins.
Speaker 3: We remain focused on regaining profitable print share and improving our performance in office.
We remain focused on regaining profitable premium share and improving our performance in office.
Speaker 3: And we are starting to see the impact of our efforts, with solid share recovery in America, parts of Europe , and China, quarter over quarter, as well as strong share gains in Asia.
And we are starting to see the impact of our efforts with solid share recovery in Americas parts of Europe, and China quarter over quarter as well as strong share gains in AC.
Speaker 3: Our industrial graphics business returned to growth year over year and was up double digits sequentially, including continued recovery in labels and packaging.
Our industrial graphics business returned to growth year over year and was up double digit sequentially, including continued recovery in labels and packaging.
And whilst <unk> is impacted by the current environment, we continue to build momentum in the market.
Speaker 3: At Formnext earlier this month, we showcased our work with partners and customers like BMW, Decathlon, and Siemens to scale our 3D solution.
At <unk> earlier this month, we showcase our work with partners and customers like BMW their Kaplan and Siemens to scale, our <unk> solution.
Speaker 3: Overall, Q4 was a solid quarter. We are showing the resilience, agility, and operational rigor needed to win in the market while advancing our long-term growth priority.
Overall Q4 was a solid quarter.
We are showing the resilience agility and operational rigor needed to win in the market, while advancing our long term growth priorities.
Speaker 3: And we feel good about the outlook we share with you in October .
And we feel good about the outlook, we shared with you in October.
Speaker 3: We also remain committed to returning at least 100% of free cash flow over time unless opportunities with a higher return on investment arise, and as long as our gross leverage ratio remains under two times EBITDA.
We also remain committed to returning at least 100% of free cash flow over time unless opportunities with a higher return on investment of rice and as long as our gross leverage ratio remained under two times EBITDA.
Speaker 3: We expect to resume share repurchases in Q1.
We expect to resume share repurchases in Q1.
Speaker 3: Let me close by reiterating something I said at our Securities Analyst Meeting. HP is a company
Let me close by reiterating something I said at our Securities Analyst meeting.
HP is a compelling investment.
Speaker 3: We have market-leading portfolios in the PC and print categories, and we are well-positioned to drive profitable growth in our core markets going forward.
<unk> market, leading portfolios in the PC and pain categories, and we are well positioned to drive profitable growth in our core markets going forward.
Speaker 3: We have significant opportunities to accelerate in our key growth areas.
We have significant opportunities to accelerate in our key growth areas.
Speaker 3: We have world-class operational capabilities to deliver on our targets and reduce our structural costs.
We have world class operational capabilities to deliver on our targets and reduce our structural costs.
Speaker 3: and we have a shareholder-friendly capital return strategy.
And we have a shareholder friendly capital return strategy.
These are of course things of HP.
Speaker 3: Our Q4 and fiscal year 23 results reflect the consistent progress we're making.
Our Q4 and fiscal year 'twenty three results reflect the consistent progress we are making.
Speaker 3: And we are confident in our plan to deliver sustained revenue, non-gap operating profit, non-gap EPS, and free cash flow growth.
And we are confident in our plan to deliver sustained revenue non-GAAP operating profit non-GAAP, EPS and free cash flow growth.
Speaker 3: Let me now turn the call over to Marie for a deeper dive into the numbers.
Let me now turn the call over to Murray for a deeper dive into the numbers.
Speaker 4: Thanks Enrique and good afternoon everyone. It's a pleasure to be here with you all today.
Thanks, Enrique and good afternoon, everyone. It's a pleasure to be here with you all today we.
Speaker 4: We delivered another strong quarter financially due to outstanding operational execution and good progress in our future ready transfer.
We delivered another strong quarter financially due to outstanding operational execution and good progress in our future ready transformation.
Speaker 4: We generated solid results across revenue, non-GAAP operating margin, non-GAAP EPS and free cash flow, building on our proven track record of meeting or exceeding our goals.
We generated solid results across revenue non-GAAP operating margin non-GAAP, EPS and free cash flow building on our proven track record of meeting or exceeding our goals.
Speaker 4: Our team is executing well despite the challenging macro environment.
Our team is executing well despite the challenging macro environment, delivering Q4 sequential growth in revenue and non-GAAP operating profit dollars in both personal systems and print.
Speaker 4: Delivering Q4 sequential growth in revenue and non-GAAP operating profit dollars in both personal systems and...
Speaker 4: Margins were at or above the high end of our ranges, resulting in a return to year-over-year growth in non-GAAP EPS, while free cash flow more than doubled sequentially, consistent with our
Margins were at or above the high end of our ranges, resulting in a return to year over year growth in non-GAAP EPS, while free cash flow more than doubled sequentially consistent with that outlook.
Speaker 4: We exceeded our future ready transformation cost savings target for fiscal 23 and are on track in 24 to continue reducing our structural costs while investing in our key growth areas.
We exceeded our future ready transformation cost savings target for fiscal 'twenty, three and are on track in 'twenty forward to continue reducing our structural costs, while investing in our key growth areas.
Speaker 4: While we continue to monitor economic indicators and geopolitical risks, we're pleased with the momentum and health of our nation.
While we continue to monitor economic indicators and geopolitical risks, we're pleased with the momentum and health of that business.
Speaker 4: We will continue our efforts to drive fundamental improvements to our cost structure longer term while prudently and aggressively managing near-term expenses.
We will continue our efforts to drive fundamental improvements to our cost structure longer term, while prudently and aggressively managing near term expenses.
Speaker 4: With the savings we generate, we'll continue to focus on prioritizing our investments so that we are well-positioned to deliver on the longer-term financial outlook we outlined at our Securities Analysts Meeting last year.
With the savings we generate we'll continue to focus on prioritizing our investments. So that we are well positioned to deliver on the longer term financial outlook, we outlined at our securities analyst meeting last month.
Speaker 4: Now, let me begin by providing some additional color on our results.
Now, let me begin by providing some additional color on our results.
Speaker 4: Starting with the full year, we stayed focused on what we could control.
Starting with the full year, we stayed focused on what we could control.
Disciplined execution and cost management and.
Speaker 4: and we delivered solid performance despite the macroeconomic and competitive dynamics.
And we delivered solid performance, despite the macroeconomic and competitive dynamics we faced.
Speaker 4: Revenue was $53.7 billion, down 15% nominally, and down 12% in constant currency.
Revenue was $53 $7 billion down, 15% nominally and down 12% in constant currency revenue in our key growth areas grew mid single digits constituting approximately 20% of total revenues non.
Speaker 4: Revenue in our key growth areas grew mid-single digits, constituting approximately 20% of total revenue.
Speaker 4: Nongap operating profit was $4.6 billion, down 14% or 8.5% of total revenue flat year-over-year.
non-GAAP operating profit was $4 $6 billion down, 14% or eight 5% of total revenue flat year over year.
Speaker 4: non-GAAP net earnings per share was down 18% to $3.28.
non-GAAP net earnings per share was down 18% to $3.28.
Speaker 4: We generated $3.1 billion of free cash flow consistent with our full year guide.
We generated $3 $1 billion of free cash flow consistent with our full year guidance.
Speaker 4: and we returned $1.1 billion to shareholders and raised our dividend by $5,000.
And we returned $1 1 billion to shareholders and raised our dividend by 5%.
Speaker 4: Now, let's take a closer look at the details of Q4.
Now, let's take a closer look at the details of Q4.
Speaker 4: Net revenue was $13.8 billion in the quarter, down 6% nominally and 5% in constant currency.
Net revenue was $13 $8 billion in the quarter down 6% nominally at 5% in constant currency year over year declines improved sequentially across each of our regions in constant currency Americas declined, 6% EMEA declined 2% and a P. J declined 8% as.
Speaker 4: year-over-year declines improved sequentially across each of our regions. In constant currency, Americas declined 6%, EMEA declined 2%, and APJ declined 8%. As demand...
As demand remained soft in China.
Speaker 4: Gross margin was 21.6% in the quarter, up 3.4 points year-on-year, primarily due to lower component and logistics costs, and a favorable mix, partially offset by currency and competitive prices.
Gross margin was 21, 6% in the quarter up three four points year on year, primarily due to lower component and logistics costs and a favorable mix, partially offset by currency and competitive pricing in personal systems.
Speaker 4: non-GAAP operating expenses were $1.7 billion.
non-GAAP operating expenses were $1 $7 billion.
Speaker 4: The year-over-year increase in operating expenses was driven primarily by reinvestment of some future-ready savings in growth initiatives, investment in people, and one extra month of poly offset in part by structural and other cost reductions.
The year over year increase in operating expenses was driven primarily by reinvestment of some future ready savings and growth initiatives investment in people and one extra month of poly offset in part by structural and other cost reductions.
Speaker 4: Nongap operating profit was $1.2 billion, up 11.5%.
non-GAAP operating profit was $1 $2 billion up 11, 5%.
Speaker 4: Long DAP net OI&E expense was $173 million up sequentially due largely to higher currency losses and up year-on-year due to higher currency losses and factors.
non-GAAP net <unk> expense was $173 million up.
<unk> due largely to higher currency losses, and up year on year due to higher currency losses and factor in costs.
Speaker 4: non-gap diluted net earnings per share increased $0.08 or 10% to $0.90 with a diluted share count of approximately 1 billion shares.
non-GAAP diluted net earnings per share increased eight.
Or 10% to 90 with a diluted share count of approximately one <unk>.
Sure.
Speaker 4: non-GAAP diluted net earnings per share excludes a net benefit totaling $72 million, primarily related to tax adjustment-related credits and pension and post-retirement benefit, partially offset by restructuring and other charges, amortization of intangibles, and acquisition and divestiture-related charges.
non-GAAP diluted net earnings per share excludes a net benefit totaling $72 million, primarily related to tax adjustment related credits and pension and postretirement benefit partially offset by restructuring and other charges amortization of intangibles and acquisition Divesture.
<unk> related charges.
Speaker 4: As a result, Q4 GAAP diluted net earnings per share with 97 cents.
As a result, Q4 GAAP diluted net earnings per share with 97 cents.
Now, let's turn to segment performance.
Speaker 4: In Q4, personal systems revenue was $9.4 billion, down 8% or 7% in constant currency, but up 5% sequentially, reflecting seasonal strength ahead of the holidays.
In Q4 personal systems revenue was $9 $4 billion down, 8% or 7% in constant currency, but up.
5% sequentially, reflecting seasonal strength ahead of the holiday season.
Speaker 4: Total units were flat on a net basis with commercial down 6% and consumer up 9%.
Total units were flat on a net basis with commercial down 6% consumer up 9%.
Speaker 4: Nevertheless, we improved our overall market share in calendar Q3 on a year-over-year basis for the third consecutive quarter. And year-over-year commercial revenue declines stabilize sequentially, even as commercial customers remain cautious.
Nevertheless, we improved our overall market share in calendar Q3 on a year over year basis for the third consecutive quarter.
And year over year commercial revenue declines stabilized sequentially, even as commercial customers remain cautious.
Speaker 4: Drilling into the details, consumer revenue was down 1% and commercial was down 11%.
Going into the details consumer revenue was down 1% and commercial was down 11% driven by lower Tam increased competitive pricing and unfavorable mix offset in part by market share gains in both consumer and commercial.
Speaker 4: driven by lower TAM, increased competitive pricing and unfavorable mix, offset in part by market share gains in both consumer and commercial.
Speaker 4: Strong profit and margin results in both customer segments were driven by our emphasis on profitable growth and effective cost management.
Strong profit and margin results in both customer segments were driven by our emphasis on profitable growth.
The effective cost management.
Speaker 4: Competitive pricing pressures eased somewhat in Q4, resulting in increased ASPs contributing to the sequential improvement in personal systems revenue this quarter, consistent with our outlook. Our channel inventory is
Competitive pricing pressures eased somewhat in Q4, resulting in increased asp's.
<unk> to the sequential improvement in personal systems revenue this quarter consistent with our outlook.
Our channel imagery is back to normalized levels.
Speaker 4: Percival Systems delivered $631 million of operating profit with operating margins of $6.7 billion.
Personal systems delivered $631 billion of operating profit with operating margins of six 7%.
Speaker 4: Our margin increased 2.5 points year over year primarily due to lower commodity and logistics costs and structural cost savings.
Our margin increased two five points year over year, primarily due to lower commodity and logistics costs and structural cost savings.
Speaker 4: This was partially offset by mixed currency and investment.
This was partially offset by mix currency and investment in people.
Speaker 4: Sequentially, our operating margin held firm towards the high end of our target range driven by strong profitability in both our consumer and commercial business.
Sequentially, our operating margin held firm towards the high end of our target range driven by strong profitability in both our consumer and commercial business segments.
Speaker 4: In print, our results reflect our continued focus on execution and discipline cost management as we navigate a weak and competitive print market.
In print our results reflect our continued focus on execution and disciplined cost management as we navigate a week and competitive market in.
Speaker 4: In Q4, total print revenue was $4.4 billion, down 3% nominally or 2% in constant currency.
In Q4 total print revenue was $4 $4 billion down, 3% nominally or 2% in constant currency. The decline was driven by soft demand in both consumer and commercial market share loss and currency.
Speaker 4: The decline was driven by soft demand in both consumer and commercial, market share loss and currency.
Partially by supplies revenue growth.
Speaker 4: Hardware revenue was down $188 million, driven by lower volumes, attributable largely to continued soft demand in greater Asia and China, and share loss as our Japanese competitors continue to price.
Hardware revenue was down $188 million driven by lower volumes attributable largely to continued soft demand in greater Asia, and China and share loss as a Japanese competitors continue to price aggressively.
Speaker 4: Total hardware units decreased 19% year over year.
Total hardware units decreased 19%.
Speaker 4: Industrial Graphics finished the year positively with revenue returning to growth in Q4, driven by hardware and services, with performance improvements across all major geographical regions.
The year indeed.
Industrial graphics finished the year positively with revenue returning to growth in Q4, driven by hardware and services with performance improvements across all major geographical regions.
Speaker 4: By customer segment, commercial revenue decreased 4% on a reported basis and in constant currency with units down 24%.
By customer segment commercial revenue decreased 4% on a reported basis and in constant currency with units down 24%.
Speaker 4: consumer revenue decreased 21% or down 19% in constant currency, with units down 8%.
Consumer revenue decreased 21% or down 19% in constant currency with units down 18%.
Speaker 4: Demand for traditional home ink printers remained soft, but was offset partially by increased demand for big.
Demand for traditional home ink printers remained soft.
Was offset partially by increased demand for big tank printers.
Speaker 4: In office hardware, ASPs were up double digits year over year as favorable mix offset competitive pricing and currency headwinds driven by improved contractual A3 demand.
In office hardware Asp's were up double digit year over year as favorable mix offset competitive pricing and currency headwinds driven by improved contractual HII demand across multiple markets.
Speaker 4: Supplier's revenue was $2.8 billion, increasing 3% nominally and 4% increasingly.
Supplies revenue was $2 $8 billion, increasing 3% nominally and 4% in constant currency.
Speaker 4: For FY23, supplies revenue declined 1% on a constant currency basis in line with our long-term outlook of down low to mid-single digits.
For FY2023 supplies revenue declined 1% on a constant currency basis in line with our long term outlook of down low to mid single digits.
Speaker 4: Print operating profit was approximately $836 million, down 6% year-over-year, and operating margin was $18.9%.
Print operating profit was approximately $836 million down 6% year over year and operating margin was 18, 9% operating margin decreased <unk> eight points driven by investments in people competitive pricing and unfavorable currency, partially offset by favorable mix and cost reductions.
Speaker 4: Operating margin decreased 0.8 points driven by investments in people, competitive pricing, and unfavorable currency, partially upset by favorable mix and cost reduction.
Speaker 4: Turning to our Future Ready Transformation Plan, we successfully completed the first year of our three-year program and delivered better than expected performance against our goals for fiscal year 23.
Turning to our future ready transformation plan, we successfully completed the first year of our three year program and delivered better than expected performance against our goals for fiscal year 'twenty three.
Speaker 4: Given the strong progress we made during the year and confidence we have to drive additional structural cost savings, we recently raised our cumulative program target to $1.6 billion.
Given the strong progress we made during the year and confidence we have to drive additional structural cost savings. We recently raised our cumulative program target to $1 6 billion.
Speaker 4: In FY23, we generated gross annual run rate structural cost savings across COGS and OPICS, exceeding our revised target.
FY2023 we generated gross annual run rate structural cost savings across Cogs, and opex exceeding our revised target.
Speaker 4: Let me briefly recap some key accomplishments across each of the three core pillars of our program that we achieved during fiscal.
Let me briefly recap some key accomplishments across each of the three core pillars of that program that we achieved during fiscal 'twenty three.
Speaker 4: Under our Operational Excellence Pillar, we continue to optimize and reduce structural costs across our businesses, particularly...
Under our operational excellence pillar, we continued to optimize and reduce structural costs across our businesses, particularly in corporate.
Speaker 4: We embraced hybrid work, enabling us to rationalize our real estate portfolio, executing 13 site consolidations or exits during the year. We also simplified our go-to-market organization, including streamlining our management structure.
We embraced hybrid work, enabling us to rationalize our real estate portfolio executing 13 site consolidations or exits during the year.
We also simplified our go to market organization, including streamlining our management structure.
Speaker 4: We made solid progress on our digital transformation efforts by driving additional automation and digital transformation. Thank you.
We made solid progress on our digital transformation efforts by driving additional automation and process improvements.
Speaker 4: We modernized our data infrastructure to leverage AI machine learning to deliver richer data-driven insights.
We modernized our data infrastructure to leverage AI machine learning to deliver richer data driven insights for business decisions.
Speaker 4: Looking ahead, we are accelerating our generative AI capabilities including rolling out AI tools like GitHub Copilot to approximately half of our developers as well as implementing HP-specific large language models to improve efficiencies through a chatbot for our sales and services.
Looking ahead, we are accelerating at generative AI capabilities, including rolling out AI tools like Github copilot to approximately half of that developers as well as implementing THP specific large language models to improve efficiencies through a chatbot for our sales and service representatives.
Speaker 4: Further, there are significant opportunities ahead across many additional.
Further there are significant opportunities ahead across many additional use cases.
Speaker 4: Our third pillar is focused on simplifying our product portfolio, significantly reducing the number of platforms we support to drive agility and operating
Our third pillar is focused on simplifying our product portfolio significantly reducing the number of platforms, we support to drive agility and operating leverage in FY2023 the actions we took in personal systems continued to impact our overall performance.
Speaker 4: In FY23, the actions we took in personal assistance continue to impact our overall performance.
At the end of FY 'twenty, three we were approximately half way to our U N FY 'twenty full goal of reducing our total number of personal systems platforms by approximately one third in.
Speaker 4: We were approximately halfway to our UN FY 24 goal of reducing our total number of personal systems platforms by approximately one third.
Speaker 4: In addition, we make great progress reducing our commodity complexity by decreasing the number of client SKUs in our personal systems portfolio.
In addition, we made great progress, reducing our commodity complexity by decreasing the number of client skus and our personal systems portfolio.
Speaker 4: We expect these initiatives will optimize our overall supply of...
We expect these initiatives will optimize our overall supply ecosystem increase our supply chain efficiency and drive better forecast capabilities.
Speaker 4: increase our supply chain efficiency and drive better forecasts.
Speaker 4: and in print. By rationalizing our investments, we plan to simplify our print portfolio to drive a 40% reduction in ink hardware platforms shipped by FY25.
And in print by rationalizing our investments we plan to simplify our print portfolio to drive a 40% reduction ink hardware platform and shipped by FY 'twenty five.
Speaker 4: As we discussed at our Securities Analyst Meeting, we see significant opportunities ahead of us to focus on our future ready plan and position the company to optimize our cost structure and enhance our margin performance.
As we discussed at our Securities Analyst meeting, we see significant opportunities ahead of us to focus on our future ready plan.
Positioning the company to optimize our cost structure.
Hence our margin performance.
Shifting to cash flow and capital allocation.
Speaker 4: Q4 cash flow from operations was strong at $2 billion and free cash flow was $1.9 billion on the strength of the sequential growth.
Q4 cash flow from operations was strong at $2 billion of free cash flow was $1 $9 billion on the strength of the sequential growth in personal systems pre.
Speaker 4: Pre-cash flow for fiscal year 23 was approximately $3.1 billion.
Free cash flow for fiscal year, 'twenty, three was approximately $3 $1 billion consistent with that outlook.
Speaker 4: The cash conversion cycle was minus 32 days in the.
The cash conversion cycle was minus 32 days in the quarter. This improved three days year over year, driven exclusively by an increase in days payable.
Speaker 4: This improves three days year over year, driven exclusively by an increase in days payable.
Speaker 4: In Q4, we returned approximately $216 million to shareholders via...
In Q4, we returned approximately $260 million to shareholders via cash dividends.
Speaker 4: We did not repurchase any shares in the quarter, given that we were in possession of material non-public.
We did not repurchase any shares in the quarter given that we were in possession of material non public information, but we expect to resume repurchases in Q1 and be active throughout FY 'twenty four.
Speaker 4: but we expect to resume repurchases in Q1 and be active throughout FY24.
Speaker 4: For fiscal year 23, we returned greater than $1.1 billion to shareholders and retired $1.6 billion.
For fiscal year 'twenty, three we returned greater than $1 $1 billion to shareholders and retired $1 $6 billion of debt.
Speaker 4: Regarding FY24, we are reiterating our outlook provided at our security analyst meeting last
Regarding FY 'twenty four we are reiterating the outlook provided at our security analyst meeting last month.
Speaker 4: We intend to return approximately 100% of our free cash flow to shareholders next year, as long as our debt to EBITDA ratio remains under two times, and unless higher ROI opportunities arise, such as strategic...
We intend to retire approximately 100% of our free cash flow to shareholders next year as long as our debt to EBITDA ratio remains under two times and unless higher ROI opportunities arise such as strategic acquisitions.
Speaker 4: Looking forward to FY24, consistent with what we said at our October Securities Analyst Meeting, we assume the market will stabilize in our base case scenario.
Looking forward to FY 'twenty four consistent with what we said at our October Securities Analyst meeting, we assume the market will stabilize in a base case scenario.
Speaker 4: Underlying that outlook for personal systems is for revenues to grow in line with the personal systems market and for print revenue to be in line with the print market.
Underlying that outlook for personal systems is for revenues to grow in line with the personal systems market.
<unk> revenue to be in line with the print market.
Speaker 4: We expect operating margins for both personal systems and print to be solidly within their respective target ranges as we continue to manage costs and pricing in this dynamic and uncertain world.
We expect operating margins for both personal systems and print to be solidly within their respective target ranges as we continue to manage costs and pricing in this dynamic and uncertain environment.
Speaker 4: Regarding our non-GAP FY24 EPS outlook, consistent with historical seasonality, we expect second half performance will be greater than the first.
Regarding our non-GAAP FY 'twenty four EPS outlook consistent with historical seasonality, we expect second half performance will be greater than the first half.
Speaker 4: As we said at our security analyst meeting, we expect corporate other expense for Fiscal 24 to be relatively flat year over year at approximately $1 billion.
As we said at our security Analyst meeting, we expect corporate other expense for fiscal 'twenty four to be relatively flat year over year at approximately $1 billion.
Speaker 4: Keep in mind that due to the timing of stock compensation expense, we expect approximately one-third of FY24's corporate other expense.
Keep in mind that due to the timing of stock compensation expense, we expect approximately one third of FY 'twenty foods corporate other expense in Q1.
Speaker 4: And in Q1, we expect the economic and demand environment to remain challenging, but...
And in Q1, we expect the economic and demand environment to remain challenging but stable.
Speaker 4: As we continue to manage costs aggressively to help offset some of these pressures, we expect our operating profit margins for both personal assistance and print to be toward the high end of their respective target ranges.
As we continue to manage cost aggressively to help offset some of these pressures we expect our operating profit margins for both personal systems and print to be toward the high end of their respective target ranges for the quarter.
Speaker 4: Taking these considerations into account, we are providing the following outlook for Q1 and fiscal year 2024.
Taking these considerations into account we are providing the following outlook for Q1 and fiscal year 2024.
Speaker 4: We expect first quarter down-gap diluted net earnings per share to be in the range of 76 cents to 80 cents.
We expect first quarter non-GAAP diluted net earnings per share to be in the range of 76 to.
86 cents and first quarter GAAP diluted net earnings per share to be in the range of 60 to 70.
Speaker 4: and first quarter GAAP diluted net earnings per share to be in the range of 60 cents to 70.
Speaker 4: We expect FY24 non-gap diluted net earnings per share to be in the range of $3.25 to $3.65.
We expect FY 'twenty four non-GAAP diluted net earnings per share to be in the range of $3 and 25 to $3 65.
Speaker 4: And FY24, GAAP diluted net earnings per share to be in the range of $2.68 to $3.80.
And FY 'twenty for GAAP diluted net earnings per share to be in the range of $2 68 to $3.08.
Speaker 4: In summary, we are pleased with our Q4 results as we delivered on our commitments, even in light of the continued challenging macro environment. Our longer-term financial framework that we outlined at our security analyst meeting last month remains unchanged, and we have good momentum to execute on our near-term FY24 agreement.
In summary, we are pleased with our Q4 results as we delivered on our commitments even in light of the continued challenging macro environment.
Longer term financial framework that we outlined at our security analyst meeting last month remains unchanged and we have good momentum to execute on our near term FY 'twenty four objectives.
Speaker 4: Our focus remains on profitable growth in the higher value segments of the market and structural cost savings across our P&L while returning 100% of our free cash flow to our shareholders.
Our focus remains on profitable growth in the higher value segments of the market and structural cost savings across our P&L, while returning 100% of our free cash flow to our shareholders and.
Speaker 4: And now I would like to hand it back to the operator and open the call for your
And now I would like to hand, it back to the operator and open the call for your questions.
Speaker 1: Thank you and we will now begin the question and answer session. To ask a question you may press star then the number one on your touch shown phone. If you're using a speakerphone please pick up your handset before pressing the keys.
Thank you and we will now begin the question and answer session to ask a question you May Press Star then the number one on your Touchtone phone.
Using a speakerphone please pick up your handset before pressing the keys to withdraw your question. Please press star. One we also ask that you. Please limit yourself to one question and our first questioner today is Wassa Army Mohan from Bank of America. Please go ahead.
Speaker 1: To withdraw your question, please press star 1.
Speaker 1: We also ask that you please limit yourself to one question.
Speaker 1: And our first questioner today is Wasami Mohan from Bank of America. Please go ahead.
Good.
Speaker 5: Uh, yes, thank you so much. Um, I was wondering, maybe you could help us think through the seasonality. Obviously, it's, it's been, uh, for the 1st, half versus 2nd, half, uh, what's implied in in your guidance. If we go back a few years, uh, you know, in the low 50% of EPS was recognized in the 2nd, half versus 1st, half.
Hi, yes. Thank you so much.
I was wondering maybe you could help us think through the seasonality obviously its been part of the first half versus second half.
What's implied in your guidance if we go back a few years.
The low 50% of EPS was recognized in the second half versus first half. So I'm wondering if you could maybe either characterize it that way our second half versus first half.
Speaker 5: So I'm wondering if you could maybe either characterize it that way or second half versus first half on a growth basis on on earnings and and maybe within that context, you can just give us some sense.
On a growth basis on earnings and and maybe within that context, you can just give us some sense.
Speaker 5: The commercial PC market continues to be quite weak. I know, Marie, you said that the guidance for fiscal 24 bakes in, in line with market performance. But can you be somewhat explicit about what that performance is in commercial PCs in your fiscal year guide?
The commercial PC market continues to be quite weak, Idaho Murray, you said that the guidance for fiscal 'twenty or bakes in in line with market performance, but can you be somewhat explicit about what that performance is in commercial Pcs in your fiscal year guide. Thank you so much.
Speaker 3: Yeah, so once you hide this, Enrique, let me provide them a view on macro, and then Marie will be more specific about seasonality on EPS, because I think it will help to understand it better. So from a macro perspective, what we saw in Q4 is an increase in seasonality, especially for PCs between Q3 and Q4.
<unk>, let me provide then our view on macro and then Marie will be more specific about seasonality on EPS.
He will help to fund this.
Any better.
From a macro perspective, what we saw in Q4, 8% increase in seasonality, especially for Pcs.
Three in Q4.
Speaker 3: And also, on the commercial side, we saw stability of sales. Market continued to remain soft, but especially when we look at real end-user demand, we saw demand being stable.
And also on the commercial side, we saw stability of sales market continued to remain soft, but especially when we look at end user demand we saw demand being stable.
Speaker 3: And somehow, this helps us in the projection that we have for next year. As we discussed before, we expect the PC market to be slightly growing from 2024 to 2023, and the pre-market to be about slightly declining between 2024 and 2023. And we expect both segments to improve gradually through the year. So having said that context, Marie will address the EPS question.
How this helps us in the projection that we have for next year as we discussed before we expect the market to be slightly growing from 2024 to 2023 and the pre market to be about flattish slightly decline between 'twenty four 'twenty five 2020 three and we expect both.
To improve.
It is through the year.
Having said that context.
The <unk> question.
Speaker 4: Yeah, no, good afternoon. So let me walk you through how to think about seasonality. If you take the midpoint of our guide, which is what we gave at SAM, which is the 345, if you take the midpoint, basically, you can assume the macro is stabilizing. And also, we expect the revenue to improve over the course of the year. So I would just say we're not
Yes. Good afternoon. So let me walk you through how to think about seasonality. If you take the midpoint of that guide, which is what we gave at sandwiches. The $3 45, if you take the midpoint basically consume the macros stabilizing and also we expect the revenue to improve over the course of the year. So I would just say we are.
Speaker 4: back yet quite to normal seasonal patterns, but we're definitely expecting the back half to improve over the first half, so think about a gradual recovery over the year. But I just add, as we think about the Q1 guide, particularly for personal systems, you know, I would say at this point we don't expect that normal seasonality yet due to the pace of the market recovery, so we're going to see that quarter-on-quarter differential relative to the Q4 period that we've just come out of. So same guide unchanged, but definitely still not quite back to normal seasonality.
Not back yet quite to normal seasonal pattern, but were definitely expecting the back half to improve over the first half so think about a gradual recovery over the year, but I'd just add as we think about the Q1 guide, particularly for personal systems.
I would say at this point, we don't expect that normal seasonality yet due to the pace of the market recovery. So we're going to see that quarter on quarter differential relative to the Q4 period that we've just come out of so Sam guide unchanged, but definitely still not quite back to normal seasonality yet throughout the year.
Okay.
Speaker 6: Thank you.
Thanks, Erica Thanks, Brian. Thank you. Thank you.
Speaker 1: Your next question comes from the line of Amit Daryani from Evercore ISI, please go ahead.
Your next question comes from the line of Amit <unk> from Evercore ISI. Please go ahead.
Speaker 7: Thanks a lot. Good afternoon, everyone. I guess my question is from the print side.
Thanks, Marc good afternoon, everyone.
My question is on the printing side in.
Speaker 7: And Lisa, I'm hoping you can just touch on, what are you seeing from a competitive perspective, given a lot of your peers are in Japan, who are probably leveraging the weakest currency, I think, on the pricing side. I'd love to understand how you're reacting to that, and then really, how do you maintain the operating margin of this run rate, given the pricing competitive hedging that you have? Maybe you can just touch on that. And then Marie, could you just maybe flush out free cash flow? Is there any seasonality we should be cognizant about in Q1 versus rest of the year? And that'll be helpful. Thank you.
<unk> I'm, hoping you can just talk about what are you seeing from a comparability perspective, given a lot of it feels like in Japan, where company leveraging the weakness on the pricing side I'd love to understand how you're reacting to that and then really how do you maintain the operating margin run rate given that pricing headwind.
<unk> had been that you have.
Maybe just touch on that.
And then.
Nearly flat free cash flow.
Is there any seasonality we should be cognizant about in Q1 versus last year that'd be helpful. Thank you.
Speaker 3: So let me start on print. So not much has changed since we met a few weeks ago. So we continue to see a competitive environment on the print side, especially driven by the current situation between yen and dollar. But I have to say between Q3 and Q4, we didn't see more aggressive pricing in anything prices sequentially improved Q3 to Q4. We have not seen an increase in competition from that perspective.
So let me start on paint so not much has changed since we met a few weeks ago. So we continue to see a competitive environment on the prime side.
Really driven by the current situation between yen and dollar.
I have to say between Q3 and Q4, we didn't see more aggressive pricing in lithium prices sequentially improved Q3 to Q4. So we have not seen any increase in competition from that perspective.
Speaker 3: When we look at 24 and the actions that we are taking to compensate for a potential more pricing increase.
When we look at 'twenty, Florida, and the actions we are taking to compensate for a potential more pricing increase.
Speaker 3: We are going to be executing the plan that we described before. We have an aggressive cost reduction plan that will help us to manage that. We continue to drive the shift toward HP Plus units and Profit Upfront units.
We're gonna be executing the plan that we described before we have an aggressive cost reduction plan that will help us to manage that well continue to drive the shift for what HP plus unit and profit upfront unit that will also help from that perspective, and we'll continue to drive.
Speaker 3: that will also help from that perspective. And we continue to drive, and we expect to grow, share in the office space, which will be a contributor of margin.
Expect to grow share in the LTE space, which will be a contributor of both margin improvement and finally as we shared in our prepared remarks, we have seen an improvement of the performance of the industrial business we have.
Speaker 3: And finally, as we shared in our prepared remarks, we have seen an improvement of the performance of the industrial business. We have seen a recovery of the market. And within the market, we have grown both hardware and consumption. And we think this is going to help us also in 2024.
In a recovery of the market and within the market, we have grown both hardware and consumption and we think this is going to help US also in 2024.
Speaker 4: Yeah, and just a couple of points on the print rate. So, as we guided and Sam was so very confident in the outlook we gave around the revised range on print.
Yeah, and just a couple of points on the print right. So as we guided and Sam we're still very confident in the outlook. We gave around the revised range on print and as a result of that we do expect in Q1 two to be at the high end of that range and then in 'twenty four we expect to be solidly in the range. So just keep that in mind as you sort of working through your model and then with respect.
Speaker 4: And as a result of that, we do expect in Q1 to still be at the high end of that range. And then in 24, we expect to be solidly in the range. So just keep that in mind as you're sort of working through your model. And then with respect to cash flow and the comments on seasonalities, you know, reiterating our guide that we had at SAM of 3.1 to 3.6, and I'd just add from a seasonality perspective, just always bear in mind that Q1, we do expect cash flow to be lower, and that's due to the fact that we always accrue for our bonus in the prior period, and we typically, you know, pay that out.
<unk> to cash flow and the comments on seasonality.
Reiterating our guide that we had at Sam of three 1% to three six and I'd just add from a seasonality perspective, just always bear in mind that Q1, we do expect cash flow to be lower and that's due to the fact that we always accrue for a bonus in the prior period and we typically pay that out in Q1 of the current year. So expect that Q1 free.
Speaker 4: Q1 of the current year. So expect that Q1 free cash flow will therefore be somewhat lower. But similarly, as I said in Sam, we expect it to be in line with net earnings and continue to see those fluctuations around working capital throughout the remaining quarters.
Cash flow will therefore be somewhat lower but similarly, as I said at Sam we expect it to be in line with net earnings and continue to see those fluctuations around working capital throughout the remaining quarters.
Alright, great. Thank you very much.
Speaker 7: Your next question comes from the line of Krish Sankar from TD Cowen. Please go ahead. Yeah, hi. Thanks for taking my question. Enrique, I had a question on the PC side. You said you're expecting modest growth next year. I'm kind of curious. Is there a way to quantify it? And how much is AI driving it? And also, when it comes to AI PCs, how much kind of an uplift in ASP do you expect versus regular PCs? Thank you.
Your next question comes from the line of question Sam car from TD Cowen. Please go ahead.
Yeah, Hi, Thanks for taking my question.
And you can ask a question on the <unk> side, you said, you're expecting modest growth next June I'm kind of curious is there any way to quantify it and how much is AI.
And also when it comes to AI.
How much kind of uplifting AFC deal.
Thank you.
Speaker 3: Sure. So let me start by saying that we are really excited about the impact that AI PCs are going to have in the overall PC category. As we have shared before, we think that they will drive, they will double the expected growth from 24 to 26. So it's really going to have significant impact.
So let me start by saying that we are really excited about the impact that <unk> are going to have in the overall PC category.
As we have shared before we think that they will drive they will double the expected growth from 24 to 26, so it's really going to have significant impact.
Speaker 3: If we talk about 24, we think the impact will be smaller, just because of first timing. The first AIPCs will be introduced in the second half.
If we talk about 'twenty four we think the impact will be smaller just because of timing. The first day of <unk> will be introduced in the second half.
Speaker 3: And second, because of penetration. When we launch a new category, we know also it takes time for the category to penetrate. Our expectation is that in three years, 40% to 60% of the PCs will be AI PCs, but it's going to be a gradual.
Second because of because of penetration when we launched a new category. We know also it takes time for the call.
I agree to penetrate our expectation is that in few years 40 to 60 per cent of MPC will be <unk>, but she's going to be a good one.
Speaker 3: penetration of the category. But again we are really excited not only because of the impact that it will have on the business but also because of the value, additional value, this is going to bring to our customers.
<unk> of the category, but again, we are really excited not only because of the impact that it will have on the business, but also because of the value additional value he's going to bring to our customers.
Any way to quantify the ASC.
Speaker 3: Oh, thank you. Yes. So what we have said before, and we haven't changed our projection, is average selling price for PCs will increase between 5% and 10% as a consequence of the penetration of AI PCs. Thank you.
Alright. Thank you, yes, so what we have said before and we haven't changed our prediction is right.
Selling price for Pcs will increase between five and 10%.
Sequentially the penetration of <unk>. Thank you.
Thank you.
Speaker 1: Your next question comes from the line of Tony Sacchione from Bernstein, please go ahead.
Your next question comes from the line of Tony Sac Sac Kiani from Bernstein. Please go ahead.
Speaker 8: Yes, thank you. I was wondering if you could comment on supplies growth in the quarter. It was up sequentially. That hasn't happened at any point in the last 10 years on an organic basis. So, what was driving the non-seasonal growth in supplies? Did you change prices and people bought in before or was there some channel fill?
Yes. Thank you I was wondering if you could comment on supplies growth in the quarter. It was up sequentially that hasnt happened.
At any point in the last 10 years on an organic basis.
So what was driving the non seasonal growth in supplies did you change prices and people bought in before or was there some channel fill.
Speaker 8: And then could you also just comment on – you talked a lot about future ready and the strength. I think you've taken out maybe run rate about $600 million worth of cost.
And then could you also just comment on you talked a lot about future ready and the strength.
I think you've taken out maybe run rate about $600 million worth of costs, but opex is essentially identical to the first quarter of this year. So when we think about future ready should we actually think about opex.
Speaker 8: But OPEX is essentially identical to the first quarter of this year. So when we think about future ready, should we actually think about OPEX?
Speaker 8: going down in fiscal 24 or we won't see the impact of Future Ready on OPEX. Thank you.
Going down in fiscal 'twenty, four or we won't see the impact of future ready on Opex. Thank you.
Speaker 4: Yeah, hi, Tony. Good afternoon. So let me just start out with the question on future ready. So first of all, obviously, really pleased with the performance. I think, as I mentioned in my prepared remarks for 23 and then going into 24, as you know, we raised our target.
Yeah, Hi, Tony Good afternoon. So let me just start out with the question on future ready. So first of all obviously really pleased with the performance I think as I mentioned in my prepared remarks.
For 'twenty, three and then going into 'twenty four as you know we raised our target to $1 six and Sam So very much on track and I think as I as we discussed at Sam.
You ready is a combination of both opex and cost of sales. So some of those savings we're reinvesting back in growth and in people to help us manage through some of the volatility.
Speaker 4: and cost of sales. So some of those savings were reinvesting back in growth and in people to help us manage through some of the volatility. But we do also drop that through to the bottom line. And frankly, Tony, you can see that in the rates that we even delivered in this last quarter and also in terms of how we're guiding the rates going forward in terms of solidly in the range for the year and really at the high end of the range for both.
But we do also drop that through to the bottom line and frankly, Tony you can see that in the in the rates that we even delivered in this last quarter and also in terms of how we're guiding the rates going forward in terms of solidly in the range for the year and will be at the high end of the range for both businesses in Q1, now opex will be up year on year, and it's driven by exactly those factors I meant.
Speaker 4: Now, OPEX will be up year on year, and it's driven by exactly those factors I mentioned earlier, the investments in our growth, the investments in our people. And I would just sort of add as a sort of closing comment around this is if you look at the geography of the P&L, you could see in our gross margins that we're shifting out now to higher gross margins.
Generally the investments in our growth investments in our people and I would just sort of add as a closing comment around this is if you look at the geography of the P&L you can see in our gross margins that were shifting out now at a higher gross margins and that's being partially offset by.
Speaker 4: that's being partially upset by operating expenses. So hopefully that gives you a little bit more context around how to think about future ready. And I'll turn it back to Enrique on supplies. I'll just add on the supplies ecosystem. We're in good shape, Tony. From a multi-tier perspective, you know, we ended the quarter.
Operating expenses, so hopefully that gives you a little bit more context around how to think about future ready and I'll turn it back to Enrique on supplies I'll just add on the supplies ecosystem. We're in good shape Tony to it from a multi tier perspective, we ended the quarter in good shape.
Speaker 3: Yeah, so let me complement that. So I think there are multiple factors that drove the.
Let me complement that so I think there are multiple factors that drove the.
Speaker 3: good performance of supplies in Q4. As I have said many times, though, when we look at year-on-year compares, it's not the best way to look at the performance in a quarter because there are many adjustments that are done every quarter, and then comparisons can distort the overall perspective.
Good performance of supplies in Q4 as I have said many times, though when we look at year on year comparison is not a bad way to look at their performance in a quarter because there are many adjustments.
Got it and then comparisons Cuddle Candice.
Can distort the overall perspective, we are driving many positive actions and suppliers will continue to grow share overall, which is something that we have been doing already for several quarters. We have increased prices to reflect the value that we bring to the combination of all these things well past two grew suppliers.
Speaker 3: We are driving many positive actions on supplies. We continue to grow share overall, which is something that we have been doing already for several quarters. We have increased prices to reflect the value that we bring. So the combination of all these things help us to grow supplies quarter on quarter.
Quarter on quarter and again, we are pleased with our performance in the long term. We continue to expect the supplies to decline low to mid single digits. We have no change in our predictions for supplies in the future.
Speaker 3: And again, we are pleased with the performance, but in the long term, we continue to expect supplies to decline low to mid-single digit. We are not changing our projections for supplies in the future.
Thank you. Thank you.
Speaker 1: Your next question comes from the line of Asia Merchant from Citigroup. Please go ahead.
Your next question comes from the line of Asia merchant from Citigroup. Please go ahead.
Great. Thank you for the opportunity.
A little bit on inventory if you could just comment on how you look at the inventory in the channel.
Both on the PC and on the personal on the print side as well.
Typically <unk> I think there was commentary that there was some elevated one and then you spoke about it last quarter not for HP, but generally for the industry in general and then if you can.
Speaker 9: And then if you can just talk about the cadence of EPS, you know, as you progress, the second half is going to be stronger. I think, as was commented earlier, you're starting the 1st year 1st quarter up 10% and that's correct. And you're ending for the year at 5% for the year. So, if you can just kind of walk through that, that would be great. Thank you.
Just talk about the cadence of EPS.
You know as you progressed through the second half is going to be stronger I think <unk> commented earlier, you're starting to first year first quarter up 10% and that's correct and you're ending for.
For the year at 5% for the year. So if you can just kind of walk through that that would be great. Thank you.
Speaker 4: So why don't I just start out on the EPS sort of seasonality and how to think about it. So...
Good afternoon, So why don't I just start out on the EPS.
Sort of seasonality and how to think about it. So in terms of Q1, just to sort of give you some context there.
Speaker 4: Just to sort of give you some context there, you know, a third, we usually have corporate other expense that hits in from a seasonality perspective. A third of that hits in Q1, so if you look at our Q1 gun.
Third we usually have corporate other expense that hits in from a seasonality perspective, a third of that hits in Q1. So if you look at our Q1 guide just bear that in mind, because that's typically the stock comp expense period. So as a result of that you're going to see that.
Speaker 4: just bear that in mind, because that's typically the stock comp expense period. So as a result of that, you're going to see that seasonality adjustment in our Q1 EPS. And as you correctly said, we're actually up, I think, 11% on the midpoint year-on-year in our Q1. But we're, a SAM guide, I'll just reiterate, of 325 to 365 hasn't changed. And just to close, Q1's just really typical seasonality. And then if you think about channel inventory, both personal...
Seasonality adjustment in our Q1 EPS and as you correctly said, we are actually up I think 11% on the mid point year on year in Q1, but were a Sam guide I'll, just reiterate of $3 25 to $3 65, Hasnt changed and just to close Q1 is just really typical seasonality and then if you think about channel inventory.
Personal systems and print, we weren't really healthy shape and we're pleased with where we landed in terms of the progress. We made this quarter I would add on personal systems that we've seen declines sequentially and that we are really now back to much more normalized levels and in fact, you know the industry.
Speaker 4: and print were in really healthy shape and we're pleased with where we landed in terms of the progress we made this quarter. I would add on personal systems that we've seen.
Speaker 4: declines sequentially, and that we are really now back to much more normalized levels. And in fact, the industry levels themselves are also normalizing. And you can see that in terms of the quality of our pricing in the last quarter as well. So I think looking back, we've seen CI really return back to more normalized levels, particularly in personal systems.
Levels themselves are also normalizing and you can see that in terms of the quality of our pricing in the last quarter as well. So I think looking back we've seen see I really return back to more normalized levels, particularly in personal systems and print as well.
Speaker 9: Great. One more thing on component disillusionary expectations. I think there was some commentary previously on how you think about components.
Great. Thank you might if I need one more.
On components deflationary expectations I think there was some commentary previously on how you think about components.
Speaker 4: Yes, very much in line with our SAM guide in terms of forward-looking, you know, we expect both print and PS to be headwinds for the year and as we look into Q1, we do expect headwind and PS but a slight tailwind on print and in terms of just what you've seen in the quarter, you know, we've seen tailwinds and favorability on print as well, but definitely headwinds for both businesses for the year.
Yes, it's very much in line with our Sam Guide in terms of forward looking we expect both print and PFS to be headwinds for the year and as we look into Q1, we do expect a headwind in <unk>, but a slight tailwind on print and then in terms of just what you've seen in the quarter, we've seen tailwind, sorry, tailwind and favorability on print as well, but definitely headwinds.
For both businesses for the year.
Okay.
Great. Thank you.
Thank you.
Speaker 1: Your next question comes from the line of Aaron Rakers from Wells Fargo. Please go ahead.
Your next question comes from the line of Aaron Rakers from Wells Fargo. Please go ahead.
Speaker 10: Hi, this is Jake on for Aaron. Thanks for the question. I was hoping you could give some additional color on the amount of promotional pricing for PCs. You expect to see heading into the holiday season and maybe how this could compare to prior years.
Hi, This is Jake on for Aaron. Thanks for the question I was hoping you could give some additional color on the amount of promotional pricing for Pcs, you expect to see heading into the holiday season, and maybe how that could compare to prior years.
Speaker 3: We expect to see a similar level of aggressiveness that we were seeing before Channel Inventory was high. And at this point, what we know about the holiday season is that based on the billing, the shipments we have been making, the strength of our portfolio, we have very good assortment on the stores. We have just introduced significant innovation across our full portfolio, so we are optimistic about the holiday season in the coming weeks.
So we expect to see a similar level of aggressiveness that we were seeing before channel inventory was high.
Hi, I'm.
And at this point, what we know about the holiday season is that based on the <unk> shipments we have been making the things of our portfolio. We have very good assortment on the stores.
<unk> just introduced significant innovation across our full portfolio, but we are optimistic about the holiday season.
In the coming weeks.
Speaker 10: Great, thanks. And then I was also wondering if you could talk a little bit more about the growth you're seeing in poly and maybe some of the momentum you expect with the new as a service subscription offering.
Great. Thanks, and then.
Was also wondering if you could talk a little bit more about the growth youre seeing in poly and maybe some of that momentum you expect with the new as a service subscription offering.
Speaker 3: Sure, we continue to be very bullish about the opportunities that we have with the poly business. Of course, during the last weeks, it has been impact, during the last quarter, it has been impacted by macro. But the
Sure we continue to be very bullish about the opportunities that we have with a poorly business of course during the last weeks. It has been impacted during the last quarter.
Been impacted by macro but there.
Speaker 3: Feedback we get from our channel, from our customers, continues to be very positive. As you said, we just introduced both new technology in the systems and the new as-a-service model, which we think will help us to drive growth in 2021.
Feedback, we get from our China from our customers continues to be very positive.
Said, we just introduced both new technology, and the systems and the new <unk>.
This model, which we think will help us to drive growth.
2024.
Speaker 3: and really the opportunity to grow and to innovate continues to be there. From a process perspective, we are now finishing the IT integration based on the plan that we shared a few quarters ago. We have been driving the process.
And really the opportunity to grow and to innovate continues to continues to be there from a process perspective, we are now finishing the integration based on the plan that we shared a few quarters ago, we have been driving the process as per plan and and again, we are happy with the progress we have made and really optimistic.
Speaker 3: As per plan, and again, we are happy with the progress we have made.
Speaker 3: I'm really optimistic about the opportunities this business is going to bring to us.
Think about the opportunities this business is going to bring to us.
Alright. Thank you. Thank you.
Speaker 1: Your next question comes from the line of Eric Woodring from Morgan Stanley . Please go ahead.
Your next question comes from the line of Erik Woodring from Morgan Stanley. Please go ahead.
Speaker 11: Great, thank you very much for for taking my question. I just wanted to circle back to Tony's question on print supplies. You obviously out outperformed print supplies this quarter. So I just wanted to make sure I understood specifically what drove the upside in the corner and given hard print hardware units are declining, you know, 20% year over year should.
Thank you very much for taking my question I just wanted to circle back to Tonys question on print supplies.
You, obviously outperformed print supplies this quarter. So I just wanted to make sure I understood specifically what drove the upside in the corner.
And given hard print hardware units are declining 20% year over year shoot.
Speaker 11: What are the offsets to that as we think about supplies in the four box model? I think you mentioned.
What are the offsets to that as we think about supplies in the four box model I think you mentioned share gains in pricing, but if you could just go through kind of all before with different factors just to make sure. We understand the different drivers that would be helpful. For 24. Thank you perfect. Thank you Eric.
Speaker 11: share gains in pricing. But if you could just go through kind of all the four different factors just to make sure we understand the different drivers.
Speaker 3: Thank you. Perfect. Thank you, Eric. And thank you, because when I was answering to Tony, I missed to mention one of the elements that also helped, which is the easy compare, because Q4 last year was not a strong quarter for supply. So this also has an impact on the year-on-year compare.
Thank you because when I would have said into Tony I Miss to mention one of the elements that also helped with the easy compare because last Q4 last year. So there is not a strong quarter for supply. So this also has an impact on the year on year compare.
Speaker 3: If I, if we look at the four box model and the different drivers of supply.
If we look at the four box model and the different drivers of supply clearly installed base has continued to decline. So this is a negative factor usage continues to go down which is a negative factor, though I have to say continues to be a both especially in the home being space. The references in the projections that we will.
Speaker 3: Clearly, install base has continued to decline, so this is a negative factor. Usage continues to go down, which is a negative factor, though I have to say it continues to be above, especially in the home ink space, the references and the projections that we were making before the pandemic.
Making before the pandemic and then two positive factors that have had an impact this quarter. One is pricing we have increased prices for supplies and.
Speaker 3: And then two positive factors that have had an impact this quarter, one is pricing. We have increased prices for supplies.
Speaker 3: and market share. As I mentioned before, we have continued to grow share for supply, which has a positive impact on the overall supply growth. Thank you.
On market share as I mentioned before we have continued to grow share for supply, which has a positive impact on the overall supply growth. Thank you.
Speaker 1: Your next question comes from the line of Mike Ng from Goldman Sachs. Please go ahead.
Your next question comes from the line of Mike <unk> from Goldman Sachs. Please go ahead.
Speaker 12: Hey, good afternoon. Thank you very much for the question. I just have one for Marie and one for Enrique.
Hey, good afternoon. Thank you very much for the question I just have one for Murray and one for Enrique.
Speaker 12: Marie, you got it to PF and print margins to be at the high end of the range for the fiscal first quarter, and then solidly in the range for the full year. Can you talk about some of the factors that drive that margin normalization for each of those 2 segments throughout the year? And then Enrique, within commercial printing, I was just wondering if you could talk a little bit about. Any differences and outlook for a 3 versus a 4, or are the competitive dynamics very similar? Thank you very much.
Murray you guided to PSN print margins to be at the high end of the range for the fiscal fourth first quarter and then solidly in the range for the full year could you talk about some of the factors that drive that margin normalization for each of those two segments throughout the year and then Enrique within commercial printing I was just wondering if you could talk a little bit about any.
Differences in outlook for 83 versus a four or are the competitive dynamics very similar thank you very much.
Speaker 4: Yeah, no, sure, Mike. Good afternoon. Why don't I start out and give you some context on the ranges and how we're thinking about them. So on PS, as we mentioned, we'd be at the high end for Q1. And really what's driving that is just a combination of the mix. I think you heard Enrique talk to that in his prepared remarks.
Yes, sure Mike Good afternoon, why don't I start out and give you some context on the ranges on how we're thinking about themselves on PFS as we mentioned we'd be at the high end for Q1 and really what's driving that is just a combination of the mix I think you heard Enrique talk to that in his prepared remarks in terms of the high value and also the improved pricing on as channel inventory.
Speaker 4: in terms of the higher value, and also the improved pricing as channel imagery is normalized. As I mentioned earlier, we saw sequential improvement, and we expect, as a result, to see less promotional pricing. And then, obviously, we've got the benefits of the Future Ready program that I talked about a moment ago with Tony. Obviously, also, working against that are the headwinds that we've got with commodity costs, and some of that is really what's influencing the seasonality of the rates that we see in terms of being more solidly in the range.
It is normalized as I mentioned earlier, we saw sequential improvement and we expect as a result to see less promotional pricing and then obviously about the benefits of the future ready program that I talked about a moment ago with Tony Obviously also working against that are the headwinds that we've got with commodity costs.
Some of that is really what's influencing the seasonality of the rates that we see in terms of being more solidly in the range as the year progresses. So that's sort of personal systems and if you think about print.
Speaker 4: as the year progresses. So that's sort of personal systems. And if you think about print, similar drivers in terms of just being at the high end of the range for Q1, and it's really driven by the profitability that we talked about, the shift in the model with supplies, some of the new business models. Also, frankly, the impact of growth is having an impact on both businesses.
Similar drivers in terms of just being at the high end of the range for Q1, and it's really driven by the profitability that we talked about the shift in the model with suppliers. Some of the new business models also frankly, the impact of growth is having an impact on both businesses. Similarly.
Speaker 4: Similarly, the impact of the future ready, and once again, we also see pricing normalization and we see supplies, there is no change to the supplies outlook too in terms of low to mid single digits. So all of those factors together is what really drives us to see both businesses be solidly in the range for the year, but at the high end of the range for Q1.
Similarly, the impact of the future ready and once again, we also see pricing normalization and we see supplies. There is no change to the supplies outlook to us in terms of low to mid single digits. So all of those factors together is what really drives us to see both businesses be solidly in the range for the year, but at the high end of the range for Q1.
Speaker 3: I'll send it to Enrique. Yeah. And I think your question about the office market in print.
I'll turn it to <unk>. In addition to your question about the <unk> market in print.
Speaker 3: And two key comments. One is we have continued to shift change from A3 to A4, especially in large commercial customers. We think this is driven by the fact that they expect to see less printed people in the office. And therefore, they have reduced the printing volumes that they were expecting, and they need a less production type of product. So that has been one change.
Two quick comments one is we have continued to shift.
A change from a C to a floor, especially in commercial and large commercial customers. We think this is driven by the fact that they expect to see less plenty of people in the office and therefore, they have reduced their printing volumes that they were expecting that they need.
This production type of products. So that has been one foreign change second in terms of both a Florida and three we continue to see an opportunity to grow share. We did this quarter in this quarter in AC and we have started to grow our share in 84 inhibitor geographies, we did it in the <unk>.
Speaker 3: Second, in terms of both A4 and A3, we continue to see an opportunity to grow share. We did it in this quarter in A3, and we have started to grow our share in A4 in several geographies. We did it in North America. In America, we did it in several countries. In Europe , we did it in China. And we know we have some work to do, but we expect to continue to drive that during 2024.
America in America, as we did in <unk>.
Several countries in Europe, we did it in China, and we know we have some work to do but we expect to continue to drive that during 2024.
Great. Thank you Enrique Thank you. Thank you.
Speaker 1: We have no further questions at this time. I will now turn the call over to Enrique Flores for closing remarks.
We have no further questions at this time I will now turn the call over to Enrique Flores for closing remarks. Thank.
Speaker 3: Thank you. So, first of all, thank you, all of you, for joining. With Q4 results, we believe are a signal of the progress that we are making and increase the confidence that we have in the plan that we shared with all of you a few weeks ago. And this reinforces the key message that we share at SAM, that we believe that HP shares are undervalued and continue to be a good investment.
Thank you. So first of all thank you all of you for joining the Q4 results. We believe are seeking them.
The progress that we're making and increases our confidence that we have in the plan that we shared with all of you a few weeks ago and these are enforced is the key message that we shared at Sam and we believe that HP shares are undervalued and continue to be a good investment.
Speaker 3: And then last but not least, for those of you in the U.S., let me close the call wishing all of you a very happy Thanksgiving. Thank you.
And then last but not least for those of you in the U S. Let me close the call. We're seeing all of you a very happy Thanksgiving. Thank you.
Speaker 1: This concludes today's conference call. Thank you for your participation and you may now disconnect.
This concludes today's conference call. Thank you for your participation and you may now disconnect.
Okay.
Speaker 13: People people people people, people people.
Okay.
Okay.
Okay.