01—Abstract
Summary
Summary of the 10-K filed December 13, 2024. Cited figures are marked; the original filing is the authoritative source.
HP Inc. (HPQ) reported fiscal year 2024 (ended October 31, 2024) net revenue of $53.56 billiona, down slightly from $53.72 billion in fiscal 2023, while net earnings fell to $2.78 billion from $3.26 billion.
Gross margin improved to 22.1% of net revenue from 21.4%, driven mainly by lower supply chain costs and Future Ready transformation savings, but operating expenses rose, with SG&A up to $5.66 billionb from $5.36 billion, largely on litigation costs and go-to-market initiatives. Earnings from operations were $3.82 billion, versus $3.46 billion a year earlier. Personal Systems revenue grew to $36.20 billion, while Printing revenue declined to $17.34 billion, with printer unit volume down 7.2%.
The filing discloses a material weakness in internal control over financial reporting, tied to IT general controls over user access, change management and job schedule monitoring. Management concluded that disclosure controls were not effective as of October 31, 2024, and Ernst & Young issued an adverse opinion on internal control. The auditor did not identify any resulting material misstatement of the financial statements.
Cash flow from operations was $3.75 billionc, and the company returned $3.2 billion to shareholders through $2.1 billion of repurchases and $1.1 billion of dividends. Total debt stood at $9.67 billion, with short-term debt rising to $1.41 billion as Global Notes due June 2025 were reclassified to current liabilities.
Stockholders' deficit widened to $1.32 billiond. Investors should weigh the declining printing franchise, the unremediated control weakness, and the company's continued reliance on buybacks and dividends against modest margin gains and growth in Personal Systems.
02—Key points
Key Highlights
- Net revenue of $53.56 billion, down slightly from $53.72 billion in fiscal 2023; products revenue was $50.45 billion and services revenue was $3.11 billion.
- Net earnings of $2.78 billion, or $2.81 diluted EPS, compared with $3.26 billion ($3.26 diluted EPS) in fiscal 2023.
- Gross margin rose to 22.1% of net revenue from 21.4%, primarily from lower supply chain costs and Future Ready transformation savings.
- Personal Systems net revenue increased to $36.20 billion, while Printing net revenue declined to $17.34 billion; printer unit volume decreased 7.2%.
- Material weakness in internal control over financial reporting remained unremediated as of October 31, 2024, related to IT general controls; Ernst & Young issued an adverse opinion on internal control.
- Cash from operations was $3.75 billion; $3.2 billion returned to shareholders via $2.1 billion of share repurchases and $1.1 billion of dividends.
- Total debt of $9.67 billion, with short-term debt of $1.41 billion following reclassification of Global Notes due June 2025; stockholders' deficit of $1.32 billion.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2024, HP kept $0.05.
- Revenue$53.56B100.0%
- Cost of revenue−$41.74B77.9%
- Gross profit$11.82B22.1%
- Operating costs−$8.00B14.9%
- Operating income$3.82B7.1%
- Interest, other & tax−$1.04B1.9%
- Net income$2.77B5.2%
Where FY2024 revenue went
$53.56B- Cost of revenue: $41.74B, 78% of revenue
- Net income: $2.77B, 5.2% of revenue
- R&D: $1.64B, 3.1% of revenue
- SG&A: $5.66B, 11% of revenue
- Other operating costs: $702.0M, 1.3% of revenue
- Interest, other & tax: $1.04B, 1.9% of revenue
Kept 5.2% as net incomeNet income $2.77B · 5.2%Other operating costs $702.0M · 1.3%Interest, other & tax $1.04B · 1.9%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2024filed December 13, 2024Financial Statements
FY2024 against FY2023
| Line item | FY2024FY2023 | Change |
|---|---|---|
| Revenue | $53.56B$53.72B | −0.3% |
| Cost of Revenue | $41.74B$42.21B | −1.1% |
| Gross Profit | $11.82B$11.51B | +2.7% |
| R&D Expenses | $1.64B$1.58B | +3.9% |
| SG&A Expenses | $5.66B$5.36B | +5.6% |
| Operating Expenses | $8.00B$8.05B | −0.6% |
| Operating Income | $3.82B$3.46B | +10.5% |
| Interest Expense | $452.00M$548.00M | −17.5% |
| Net Income | $2.77B$3.26B | −15.0% |
| EPS (Basic) | $2.83$3.29 | −14.0% |
| EPS (Diluted) | $2.81$3.26 | −13.8% |
| Shares Outstanding (Basic) | 979.00M992.00M | −1.3% |
| Shares Outstanding (Diluted) | 989.00M1.00B | −1.1% |
05—Questions
Frequently Asked Questions
How did HP's revenue and profitability change in fiscal 2024?
Total net revenue decreased 0.3% to $53.56 billion. Earnings from operations rose to $3.82 billion from $3.46 billion, helped by a higher gross margin, but net earnings declined to $2.78 billion from $3.26 billion because of a higher tax provision and higher interest and other expense.
What is the material weakness, and has it been fixed?
The weakness stems from undue reliance on information from certain software solutions without effectively designed IT general controls over user access, change management and job schedule monitoring. HP concluded it was not remediated as of October 31, 2024, and disclosure controls were not effective. The filing states it did not result in any material misstatement of the financial statements.
Which segments drove results?
Personal Systems grew net revenue to $36.20 billion from $35.68 billion, led by Commercial PS. Printing fell to $17.34 billion from $18.03 billion, with Commercial Printing, Consumer Printing and Supplies all declining, and printer hardware ASPs down 3.2%.
How is HP returning capital and managing its debt?
HP returned $3.2 billion to shareholders in fiscal 2024, including $2.1 billion of share repurchases and $1.1 billion of cash dividends. As of October 31, 2024, about $9.3 billion remained under repurchase authorizations. Total debt was $9.67 billion, and HP maintains a $5.0 billion revolving credit facility maturing August 1, 2029.
06—Continue