HP Inc. (HPQ) Q4 and Fiscal Year 2024 Earnings Report: Key Achievements and Outlook

HP Inc. (HPQ) Q4 and Fiscal Year 2024 Earnings Report: Key Achievements and Outlook

Release Date: November 26, 2024

Performance Highlights

Fiscal Year 2024 Results

* GAAP Diluted EPS: $2.81, exceeding the prior outlook of $2.62–$2.72 per share.

* Non-GAAP Diluted EPS: $3.38, within the guided range of $3.35–$3.45 per share.

* Net Revenue: $53.6 billion, a slight decline of 0.3% year-over-year.

* Cash Flow:

    * Net cash from operating activities: $3.7 billion.

    * Free cash flow: $3.3 billion.

* Shareholder Returns: $3.2 billion returned via dividends and share repurchases.

Q4 2024 Results

* GAAP Diluted EPS: $0.93, above the outlook range of $0.74–$0.84.

* Non-GAAP Diluted EPS: $0.93, in line with guidance of $0.89–$0.99.

* Net Revenue: $14.1 billion, a 1.7% increase year-over-year.

* Free Cash Flow: $1.5 billion for the quarter.

Segment Result

Personal Systems

* Net Revenue: $9.6 billion, a 2% increase year-over-year (up 3% in constant currency).

* Consumer Personal Systems: Revenue declined 4%, while Commercial Personal Systems grew by 5%.

* Total Units: Increased by 1%, with a 3% decline in consumer units offset by a 4% rise in commercial units.

* Operating Margin: 5.7%.

Printing Segment

* Net Revenue: $4.5 billion, up 1% year-over-year (up 2% in constant currency).

* Consumer Printing: Revenue increased by 3%, while Commercial Printing revenue declined by 1%.

* Supplies Revenue: Grew by 2% (up 3% in constant currency).

* Total Hardware Units: Increased 9.5%, driven by 10% growth in consumer units and 9% in commercial units.

* Operating Margin: A strong 19.6%.

Market Position and Achievements

* Market Share: Gained share in key categories, including commercial and premium consumer PCs, and maintained leadership in AI-powered PCs.

* AI Integration: Over 15% of PC shipments in Q4 included AI capabilities.

* Innovation: Successful product launches, such as the EliteBook X and OmniBook Ultra Flip, highlight HP’s continued focus on advanced technology.

Challenges and Concerns

* Cost Pressures: Rising commodity costs continue to weigh on margins.

* Competitive Environment: Pricing challenges in the print segment, especially from competitors benefiting from favorable currency conditions.

* Declining Market Segments: Anticipated low single-digit decline in the overall print market for FY2025.

* Q1 2025 Outlook: Lower-than-usual seasonality expected for EPS due to stock compensation expenses and reduced seasonal volumes.

Outlook for Fiscal 2025

* Q1 EPS Guidance:

    * GAAP EPS: $0.57–$0.63.

    * Non-GAAP EPS: $0.70–$0.76.

* Full-Year Focus: Sustained growth through strategic cost optimization and innovation in core segments.

Summary

HP Inc. delivered solid results in Q4 and FY2024, exceeding EPS expectations while navigating cost challenges and market headwinds. Strong performances in commercial segments, coupled with market share gains and innovations in AI-powered solutions, underscore the company’s resilience and forward-looking strategy. Despite headwinds, HP remains committed to shareholder value and advancing technological leadership.