The relatively low Operating Cash Flow of **$121 million** in Q1 2024 was primarily driven by several factors. Despite an improvement over Q1 2023, the modest amount was due to a combination of **favorable net earnings improvements** and **working capital adjustments** that still had negative effects. In particular, even though there was a significant increase in net earnings and positive contributions from accounts receivable, the cash flow was constrained by a **negative impact of $(476) million** from other working capital adjustments, along with timing differences in variable compensation payments that did not entirely offset these outflows.  **[0000047217-24-000024_hpq-20240131.htm:8]** **[0000047217-24-000024_hpq-20240131.htm:50]** 

Why was Operating Cash Flow so low in Q1 2024?

The jump in **Operating Cash Flow** in Q3 2024 was driven by several factors. **Accounts payable increased by $1,082 million** (compared to $801 million in Q3 2023), providing a substantial boost, and **inventory was reduced by $275 million** (versus only a $10 million reduction in Q3 2023), which further improved cash flow. Additionally, the negative impact from **accounts receivable was less severe** in Q3 2024, and **restructuring and other charges** had a smaller adverse effect at **$60 million** compared to **$77 million** in Q3 2023. Finally, improved operational efficiency driven by cost-saving initiatives under HP’s transformation plan also contributed to the overall increase in cash flow.  **[0000047217-24-000068_hp73124exhibit991q324.htm:0]** **[0000047217-24-000068_hp73124exhibit991q324.htm:8]** **[HPQ_3400062_5]** **[HPQ_3400062_4]** 

What factors drove the jump in Operating Cash Flow in Q3 2024?

The decline in **Operating Cash Flow** in **Q4 2024** compared to **Q4 2023** was mainly driven by several working capital changes. Specifically, there was a substantial increase in **accounts receivable** of **$482 million** in Q4 2024 versus a decrease of **$98 million** in Q4 2023, indicating more outstanding payments from customers. Additionally, **accounts payable** rose by **$1,398 million** in Q4 2024 compared to a decrease of **$107 million** in Q4 2023, which, despite positive implications on manufacturing activity, impacted overall cash flow negatively. Moreover, the decline in **inventory** was less pronounced in Q4 2024 (a decrease of **$101 million**) versus a decrease of **$304 million** in Q4 2023, and there was a detrimental effect from **other assets and liabilities** with a negative impact of **$472 million** in Q4 2024 compared to a positive impact of **$646 million** in Q4 2023.  **[0000047217-24-000075_hp103124exhibit991q424.htm:9]** 

Why did Operating Cash Flow decline in Q4 2024 compared to Q4 2023?

64efc9b30ae333fbebb9e489e09e43b13405c90394859578f5e3c7311e817c97

The surge in **cash and cash equivalents** in Q3 2022 was driven by several factors. **HP Inc.** generated strong operating cash flows with **$394 million** from operations due to improved working capital dynamics, such as lower inventory levels and better collections of receivables.  **[0000047217-22-000047_hp073122exhibit991q322.htm:7]** **[0000047217-22-000054_hpq-20220731.htm:57]**  Additionally, the company raised **$2,026 million** through debt issuance, which substantially boosted cash inflows, even though this was partially offset by **$1,029 million** spent on share repurchases and **$255 million** in dividends.  **[0000047217-22-000047_hp073122exhibit991q322.htm:7]**  Furthermore, modest cash outflows of **$211 million** occurred in investing activities, and some positive timing impacts from delayed collections also contributed to the increase.  **[HPQ_748048_19]** 

What drove the surge in cash in Q3 2022?

HP Inc.'s short-term borrowings dropped significantly in Q4 2022 as the **Notes payable and short-term borrowings** fell sharply from **$1,106 million** to **$218 million**. The documents do not offer specific reasons for this reduction; however, such changes are commonly linked to factors like **debt repayment**, **changes in financing strategy**, or **shifts in working capital management**.  **[0000047217-22-000068_hpq-20221031.htm:93]** 

Why did short-term borrowings drop significantly in Q4 2022?

The marked increase in long-term debt by Q4 2022 was primarily driven by the issuance of **$4.0 billion** in unsecured senior debt and an additional **$2.0 billion** offering of senior unsecured notes in June 2022. This buildup was partially offset by the redemption of maturing notes and **$0.9 billion** in commercial paper payments, but the overall net effect was a significant increase in the long-term debt balance.  **[0000047217-22-000068_hpq-20221031.htm:76]** **[0000047217-22-000068_hpq-20221031.htm:140]** 

What contributed to the marked increase in long-term debt by Q4 2022?

The decline in **total current assets** in Q4 2022 was primarily driven by several factors. **Cash and Cash Equivalents** decreased significantly from **$4,299 million** to **$3,145 million**, largely due to cash outflows for business acquisitions (e.g., the Poly acquisition) and share repurchases.  **[0000047217-22-000068_hpq-20221031.htm:93]** **[0000047217-22-000061_hp103122exhibit991q422.htm:9]** **[HPQ_1505821_6]**  In addition, **Accounts Receivable** dropped from **$5,511 million** to **$4,546 million**, reflecting lower revenue and adjustments in operating assets.  **[0000047217-22-000068_hpq-20221031.htm:93]** **[0000047217-22-000061_hp103122exhibit991q422.htm:9]**  A decrease in **Inventory** from **$7,930 million** to **$7,595 million**, attributed to improved supply chain management and backlog clearance, also contributed to the overall decline, despite a marginal increase in **Other Current Assets** from **$4,430 million** to **$4,515 million** which provided only a minimal offset.  **[0000047217-22-000068_hpq-20221031.htm:93]** **[0000047217-22-000061_hp103122exhibit991q422.htm:9]** **[HPQ_1505821_5]** 

What factors led to the decline in total current assets in Q4 2022?

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HP Inc.’s fiscal year 2023 decline in net revenue was driven by **multiple factors**. These include **demand softness** in both the Personal Systems and Printing segments—where reduced unit volumes and competitive pricing led to lower revenues—as well as **foreign currency fluctuations** (impacting about **65%** of revenue) that adversely affected overall results. Additionally, **lower average selling prices (ASPs)**, unfavorable mix shifts, and **macroeconomic challenges** such as inflation, geopolitical conflicts, and market uncertainty collectively contributed to the decline.  **[0000047217-23-000100_hpq-20231031.htm:67]** **[0000047217-23-000100_hpq-20231031.htm:64]** **[0000047217-23-000100_hpq-20231031.htm:58]** **[0000047217-23-000100_hpq-20231031.htm:22]** 

What factors contributed to the sharp decline in FY 2023 Net Revenue?

The low **Net Earnings** in Q1 2023 were primarily due to a mix of significant revenue declines and increased expenses. **Net revenue** fell by **18.8%** year-over-year—from **$17.0 billion** in Q1 2022 to **$13.8 billion** in Q1 2023—due to soft demand, macroeconomic challenges, and tighter corporate budgets.  **[HPQ_3230478_3]** **[0000047217-23-000015_hp13123exhibit991q123.htm:0]**  At the same time, HP Inc. saw substantial increases in costs such as **restructuring and other charges** (rising from **$68 million** to **$141 million**), **acquisition and divestiture charges** (from **$20 million** to **$84 million**), and **amortization of intangible assets** (from **$52 million** to **$85 million**). In addition, **net interest and other expenses** surged from **$32 million** to **$181 million**, which further contributed to the lower net earnings despite a lower tax provision.  **[0000047217-23-000015_hp13123exhibit991q123.htm:5]** 

Why were Net Earnings so low in Q1 2023?

HP Inc.'s dramatic turnaround in Q4 2023 was driven by a combination of **improved revenue and cost management**, enhanced **gross margins**, higher **operating profit**, and rigorous **cost savings initiatives**. Despite net revenue declining by 6% to **$13.8 billion**, the company improved its gross margin by **3.4 percentage points** thanks to lower component and logistics costs, which helped flip the GAAP net earnings to approximately **$1.0 billion** compared to a loss in the previous period. Additionally, non‐GAAP operating profit grew by **11.5%** to **$1.2 billion**, and the significant EPS improvement—from a loss of **$(0.02)** to **$0.97**—reflected operational efficiencies and robust cost reduction measures, as well as the exceeding of targeted cost savings by reducing structural expenses and investing in key growth areas.  **[HPQ_3367866_4]** **[0000047217-23-000091_hp103123exhibit991q423.htm:1]** **[0000047217-23-000091_hp103123exhibit991q423.htm:0]** 

What drove the dramatic turnaround in Q4 2023 Net Earnings?

The tax benefit in Q2 2023 was unusually high **primarily due to the tax effects of HP’s internal reorganization**. In that quarter, HP recorded significant net income tax benefits, including **$691 million** related to internal reorganization, along with additional benefits from restructuring charges and acquisition and divestiture charges, which together far outweighed the tax charges during that period.  **[0000047217-23-000038_hpq-20230430.htm:17]** **[0000047217-23-000038_hpq-20230430.htm:6]** **[0000047217-23-000038_hpq-20230430.htm:50]** 

Why was the tax benefit unusually high in Q2 2023?

The significant increase in **Interest and Other, Net expenses** in Q1 2023 was driven by multiple factors. **Higher interest expense on borrowings** was the primary contributor, with expenses rising to **$143 million** compared to **$61 million** in Q1 2022, due to both an increase in the amount of debt outstanding and higher interest rates. Additionally, there was a **$8 million loss on the extinguishment of debt** in Q1 2023, whereas no such loss occurred in the prior year. The increase was further impacted by a reduction in **non-operating retirement-related credits** (down to **$11 million** from **$36 million**) and an increase in **other net losses** (rising to **$41 million** from **$7 million**), all of which together contributed to the overall rise in expenses.  **[0000047217-23-000019_hpq-20230131.htm:17]** **[0000047217-23-000019_hpq-20230131.htm:24]** **[0000047217-23-000019_hpq-20230131.htm:45]** 

What led to the significant increase in Interest and Other, Net expenses in Q1 2023?

1bf4117c8280dea8f7bd0c3d8de4aa7be7996c84c984b20557102136c9e166d3

Net Earnings (USD, millions)

Depreciation and Amortization (USD, millions)

Stock-Based Compensation Expense (USD, millions)

Restructuring and Other Charges (USD, millions)

Deferred Taxes on Earnings (USD, millions)

Other, Net (USD, millions)

Taxes on Earnings (USD, millions)

Restructuring and Other (Changes in Operating Assets and Liabilities) (USD, millions)

Net Cash Provided by Operating Activities (USD, millions)

Investment in Property, Plant and Equipment, Net (USD, millions)

Purchases of Available-for-Sale Securities and Other Investments (USD, millions)

Maturities and Sales of Available-for-Sale Securities and Other Investments (USD, millions)

Payments Made in Connection with Business Acquisitions, Net of Cash Acquired (USD, millions)

Net Cash Used in Investing Activities (USD, millions)

Proceeds from Debt, Net of Issuance Costs (USD, millions)

Payment of Debt and Other Associated Costs (USD, millions)

Stock-Based Award Activities and Others (USD, millions)

Repurchase of Common Stock (USD, millions)

Cash Dividends Paid (USD, millions)

Settlement of Cash Flow Hedges (USD, millions)

Net Cash Used in Financing Activities (USD, millions)

Increase (Decrease) in Cash, Cash Equivalents and Restricted Cash (USD, millions)

Net Investment in Leases from Integrated Financing (USD, millions)

Accounts Receivable (USD, millions)

Inventory (USD, millions)

Accounts Payable (USD, millions)

Other Assets and Liabilities (USD, millions)

Collateral Posted for Derivative Instruments (USD, millions)

Cash, Cash Equivalents and Restricted Cash at Beginning of Period (USD, millions)

Cash, Cash Equivalents and Restricted Cash at End of Period (USD, millions)

6ed024e5a6ad81b6b3753c160cf995cb69ea773d3c07177c119b41068a2009cc

Net Revenue (USD, millions)

Cost of Revenue (USD, millions)

Research and Development (USD, millions)

Selling, General and Administrative (USD, millions)

Acquisition and Divestiture Charges (USD, millions)

Amortization of Intangible Assets (USD, millions)

Earnings from Operations (USD, millions)

Interest and Other, Net (USD, millions)

Earnings Before Taxes (USD, millions)

Benefit from (Provision for) Taxes (USD, millions)

ff4821b71ca5617fde99e6b7bd6b86036e367bbaf4e5ca420bd3eb67727310a8

Cash and cash equivalents (USD, millions)

Accounts receivable, net (USD, millions)

Other current assets (USD, millions)

Total current assets (USD, millions)

Property, plant and equipment, net (USD, millions)

Goodwill (USD, millions)

Other non-current assets (USD, millions)

Total assets (USD, millions)

Notes payable and short-term borrowings (USD, millions)

Accounts payable (USD, millions)

Other current liabilities (USD, millions)

Total current liabilities (USD, millions)

Long-term debt (USD, millions)

Other non-current liabilities (USD, millions)

Common stock (USD, millions)

Additional paid-in capital (USD, millions)

Accumulated deficit (USD, millions)

Accumulated other comprehensive income (loss) (USD, millions)

Total stockholders’ deficit (USD, millions)

Total liabilities and stockholders’ deficit (USD, millions)

84bfdece1a17f7768b4b11f9be8d587b8a61f200c742a0ea627b843bc884e9f1

Adjustments for Non-Cash Items (USD, millions)

Stock-Based Compensation (USD, millions)

Changes in Working Capital (USD, millions)

Capital Expenditures (CapEx) (USD, millions)

Proceeds from / Repayments of Debt (USD, millions)

Share Repurchases (USD, millions)

Dividend Payments (USD, millions)

Net Change in Cash (USD, millions)

854a093c6015a69e7d3146321e45499e2ebfe355a09dcb9126db651d593e4b32

d302f33e408f0024aea226980d05b76a81e59463debfc60fd36239d9ce389c17

bb606415ad1f8a550e00ee6ac036c6df743735cfe22b0a39a46ef9a17e26fc17

af2f09f9e07933acf87d7939bfc8e348418f2c73accb9d9c8c3430f570e8dd93

b688b2eb231937bae3a4c3f776e927d4c8acd4a47f93623281d6a81dd3d0dce7

Americas

Europe, Middle East, Africa

Asia-Pacific and Japan

- United States

- Other Countries

Total Revenue

8764267d5f1fc1d571a18bfdfa2ef3fe5f7ada867a6ef53cd7687a400778cca0

HP (HPQ)

Financials