01—Abstract
Summary
Summary of the 8-K filed February 27, 2025. Cited figures are marked; the original filing is the authoritative source.
HP Inc. (NYSE: HPQ) reported fiscal 2025 first quarter results for the quarter ended January 31, 2025, with net revenue of $13.5 billiona, up 2.4% from the prior-year period.
GAAP diluted net EPS was $0.59b, down from $0.62 a year earlier, and non-GAAP diluted net EPS was $0.74, down from $0.81. Net cash provided by operating activities was $0.4 billion and free cash flow was $0.1 billion (the filing states $70 million of free cash flow). The company returned $0.4 billion to shareholders through share repurchases and dividends during the quarter.
HP approved an amendment to its current restructuring plan that is expected to be implemented through the end of fiscal 2025. The amendment is expected to generate additional annualized gross run rate savings of approximately $0.3 billionc in fiscal 2025, bringing the total to approximately $1.9 billion over fiscal 2023 through fiscal 2025. HP anticipates about $150 million in additional restructuring and other charges, for a total of approximately $1.2 billion over the same period, and expects incremental gross workforce reductions of approximately 1,000 to 2,000 employees.
For fiscal 2025 HP maintained its outlook, estimating non-GAAP diluted net EPS of $3.45 to $3.75d and free cash flow of $3.2 to $3.6 billion. The outlook reflects added costs from current U.S. tariff increases on China, and HP expects more than 90 percent of HP products sold in North America to be built outside of China by the end of fiscal 2025. For the fiscal 2025 second quarter, HP estimates non-GAAP diluted net EPS of $0.75 to $0.85.
02—Key points
Key Highlights
- Q1 FY25 net revenue of $13.5 billion, up 2.4% year over year (up 3.3% in constant currency); Personal Systems revenue rose 5% while Printing fell 2%
- GAAP diluted net EPS of $0.59 vs. $0.62 a year earlier; non-GAAP diluted net EPS of $0.74 vs. $0.81, both within previously provided outlook ranges
- Restructuring plan amended: additional annualized gross run rate savings of about $0.3 billion, raising the total to about $1.9 billion for fiscal 2023 through 2025
- Additional restructuring and other charges of about $150 million, bringing the total to about $1.2 billion for fiscal 2023 through 2025
- Expected incremental gross workforce reductions of approximately 1,000 to 2,000 employees
- Fiscal 2025 outlook held: non-GAAP diluted net EPS of $3.45 to $3.75 and free cash flow of $3.2 to $3.6 billion
- Outlook reflects added costs from U.S. tariff increases on China; more than 90 percent of HP products sold in North America expected to be built outside China by end of fiscal 2025
03—Questions
Frequently Asked Questions
Why is HP amending its restructuring plan?
The filing states HP approved the amendment to its restructuring plan to generate additional annualized gross run rate savings of approximately $0.3 billion in fiscal 2025, for a total of approximately $1.9 billion over fiscal 2023 through 2025. The filing does not elaborate on the underlying business rationale beyond the cost savings and workforce changes.
How much will the amended plan cost HP?
HP anticipates incurring approximately $150 million in additional restructuring and other charges, due primarily to cash labor costs, for a total of approximately $1.2 billion in restructuring and other charges over fiscal 2023 through 2025.
Did HP change its fiscal 2025 earnings outlook?
No. The press release states HP is holding its outlook for the year, with GAAP diluted net EPS of $2.86 to $3.16, non-GAAP diluted net EPS of $3.45 to $3.75, and free cash flow of $3.2 to $3.6 billion.
How is HP's first-quarter performance by segment?
Personal Systems net revenue was $9.2 billion, up 5% year over year, with a 5.5% operating margin; Commercial PS revenue rose 10% while Consumer PS fell 7%. Printing net revenue was $4.3 billion, down 2%, with a 19.0% operating margin.
04—Continue