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HPQ HP

Participants
Orit Keinan-Nahon Head of Investor Relations
Enrique Lores President and Chief Executive Officer
Marie Myers Chief Financial Officer
Amit Daryanani Evercore
Ananda Baruah Loop Capital
Toni Sacconaghi Bernstein
Shannon Cross Cross Research
Katy Huberty Morgan Stanley
Angela Chan JPMorgan
Sidney Ho Deutsche Bank
David Vogt UBS
Wamsi Mohan Bank of America
Jake Arbon Wells Fargo
Call transcript
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Operator

Good day everyone. And welcome to the Fourth Quarter 2021 HP Inc., Earnings Conference Call. My name is Gary and I will be your conference moderator for today’s call. At this time all participants will be in a listen-only mode. [Operator Instructions].

conference recorded this replay reminder, a is for being purposes. As the now Relations. to like would call to Investor I of turn over Head Orit Keinan-Nahon, go Please ahead.

Orit Keinan-Nahon

afternoon, Chief HP's President Quarter Chief Executive HP's With Good Marie today and welcome Myers, and Conference HP's me Lores, Earnings Officer. Call. Fourth Enrique are Officer, and everyone, Financial XXXX to

our replay earnings handing Relations website We made call is this the you remind that be call the call Before after the our investor.hp.com. posted will webcast. shortly over slide of A for me available year. Investor webcast to on at presentation on release Enrique, let X accompanying this being webpage approximately and the

world of forward-looking we presentation are as elements on see and them always, today. our this our of and businesses based As the are best view

For see information, forward-looking that in involve materials earnings uncertainties, please statements the related and assumptions. to risks, more detailed disclaimers

risks, HP's recent assumptions, HP intend a of and and does statements. any please discussion to most our uncertainties, including not update to these such refer Form no reports, obligation forward-looking some of assumes For XX-K. SEC

the HP's that the quarter note materially available other HP's ended the this XX, differ discussed reported and information based for on also We information call reflects now ultimately amounts and XXXX, from Form could on XX-K in estimates financial October fiscal SEC filings.

year-over-year the corresponding with comparisons year-ago webcast, this are noted, otherwise unless comparisons During all specifically period.

non-GAAP reconciliations I'd for turn that basis, release presentation For the like included With today's slide expressed the GAAP a to call reconciliations. over that, we've refer accompanying financial information those to information. and Enrique. the to tables has on been comparable to now Please earnings

Enrique Lores

revenue, we At building profit, today's EPS, sustained free for all that flow last Analyst you HP, cash and to continue a thank And plans our Meeting joining delivers our one growth. call. operating shared Securities stronger Orit. Thanks, month,

momentum future. against and our reflect they our in these us great This confidence quarter plans, results continued give

to flow free X% through and more EPS XX% revenue billion through of In shareholders $X grew dividends. we talk returning details. the $XX.X Let to cash billion, $X.XX. while QX repurchases grew million me generated $XXX share to And non-GAAP than

are great year. exceptional Our finish to a QX results an

full profit we opportunities the incremental non-GAAP profit. grew $X.X growth return and Non-GAAP our a that billion for $X.X we operating to target shareholders and revenue generated XX%. year, XX% continuing For we value ahead of plan creation to operating non-GAAP business. while and of the a This billion year record EPS EPS billion in to $XX.X means invest grew full exceeded strategic across plan

performance hitting year a shows for Long-term company our foot our trends full and thing. as strong QX and play secular on Our such competitive its hybrid stride.

to our Our we and are these leadership trends enabling tailwinds. are turn markets innovation diving across agenda the us into

making profitable investments organic to drive inorganic are growth. We and

businesses our capabilities, areas These growth grow and and graphics new industrial priorities our a revenue for quarter. is more We $XX growth transformation, This business, part XX% than profit At XX% our five Instant billion double-digit portfolio. collectively 'XX. our in our that in forward. see growth accelerating our for overall a reducing as efficiencies. key expect Day, making mix grew well I over fiscal revenue key progress we XX% than as growth are structural driving digital of creating Analyst bigger this more generate building Ink includes shared becoming more portfolio. moving we costs areas are We The also while and against to our growth-oriented

And not and industry taking paying strengthening But and navigate execution to headwinds The even are a We environment are actions wide includes demand driving continue as no continued There been to we our fix. we quick quarter-by-quarter. we progress complex robust operational that is constraints. double-digit want enter are just revenue growth and been persistent I operational delivered dynamic off. confidence we growth this teams driving mitigate fact supply have that easy. the and making faced say profit of the But And XXXX. that are has we for us have year the business It to from challenges proud not gives have way am stepping the how deterred up. our our I forward. we

talk components we PS leadership double-digit to Let improved effectively systems, about in revenue our be the me A each and grew success now strategy driving operating our see pricing continues the strong In of in market. given we commercial PC disciplined execution our of And across the each and part units. and big demand. headwinds. manage to us is there profit, personnel strength allowed business costs QX. mix very our are

As more where we shift and saw commercial profitability. toward our offices products reopen, demand strongest Windows based their we highest lead

We to elevated see order continue backlog. a significantly

As positive month, in results. The of half 'XX. we least generating call I particularly shortages, we component into shared to in outlined persist last QX our expect first the are ICs at actions operational

two engagement tier suppliers. tier to continue direct and our three increase We with

We capacity. we mix. agility have our XX continue also creating computing experiences secure important And and This transformation devices remains expect are and work that daily digital home. our improve. We're innovation a hybrid. things to to that a lineup includes for new greater all agreements initiatives enabling to for long-term enable work optimize of visibility we trajectory our design Windows expanded to premium This speed, real-time priority and

Presence, expanding that are a software, their as digital experience peripheral hardware, so work already teams is hybrid capabilities our and grow they also of create into valuable This improve system. world's same employees. more the video to worlds are distributed HP adjacencies. advanced if Last are will that physical that truly in quarter, large companies a can converge. out technologies even feel to conferencing our and not. we immersive imaging are We Presence the investing combined most continue opportunity Seven introduced for room XX HP experience in they

space. collaboration the hybrid us will continuing growing expand and presence see our You to innovate in

revenue help new commercial complexity device subscription to learned services lineup the new another simplify And Teradici a following by hybrid We launch offers and Omniverse to environments. HP, of our high Z IT performance of we Teradici customers quarter close growth. service acquisition, of of delivered remote collaboration. included of also Nvidia digital as enable the the a double-digit This

that Turning primarily to services disciplined which constrained subscriptions, disruptions revenue supply. others driven driven by grew a print, by the well environment This this and in in to in in and we in quarter. the operate expected more driven and our strategy, our to declines our volume we year broader we print impact Like growth month, supply said the was COVID-related as us continue pricing logistics we by limited X% this as quarter. strategic could continued hardware prints industry, supplies expect offset stopping is, growth hardware The strong. advancing we last not issues. fulfill And 'XX. orders backdrop, priorities. is for fact from demand remained fiscal our we But Against this in had

We continue working, our grow new to and memories globally, that from home. including creating to plus designed portfolio our for a HP families rollout series learning Envy is XXXX

Importantly, XX% in and built sustainability content. it with over is mind made recycled from plastic

And subscription QX, printing. grow environment. launch Workforce enable Flex, also double-digit new and is Print high-risk growth office HP drove we this A of total in work momentum. example support they first will Solutions In great a plan revenue our Managed our of MPS services cloud quarter's digital contract to hybrid value. MPS for We

to new opportunities. integrating needs new unlock increasingly personal offerings our are across print and meet customer and systems We growth

recently Service hybrid great are of we our a to from win example HP the Work Our diverse launched Home office. how is portfolio leveraging in

and XD graphics earlier, growth. I continues presence. the and quarter also trends printing are we backlog revenue industrial This graphics, industrial healthy mentioned recovery driving As of built the double-digit have positive quarters. a prior we drove growth in from industrial In

for industrial with packaging. shift significant And focus growth see also more end-to-end entirely new businesses. XD, growth application on towards is a high We in in and presence continue the productive paving value our to mix labels way

products are fiber, molded track. on and Our initiatives footwear

Our our continue stewards priorities against also cash be disciplined of to And progress is capital. flow. we driving strong strategic

our we aspect applying allocation. robust return-based to approach are a have that every We of capital

while to at to $X in invest we capital shares undervalued repurchase will continue our are of where growth fiscal aggressive our We return to least shareholders. opportunities remains continuing billion we and areas ‘XX. to year committed believe levels We see in

M&A expect play to important an continue role. also will We

profitable ESG agenda. is partnership agenda. plan accelerate that strategies deals Specifically, we pursue Wildlife impact are creation our example World with long-term an our driver we to ambitious expanded drive And is making sustainable of to growth. and a Fund. value continue we against The latest stakeholders. our pursue progress And all ongoing for

portfolio We are working supports page sum restore, up, acres million every improve resilient. of focus is nearly making forest of and X the on To printed our protect positive. This and innovative landscapes. forest our management to

free and EPS, revenues, Our strategy growth. profits, driving is sustained flow operating cash

fiscal We shared confident highly we are year that 'XX shareholders. at we guidance Day. levels attractive to the returning, And are our capital of Analyst in

Year the of New to position are We forward from I And share progress. continuing our entering to look great a strength.

the Let me through now the to who take will over details and our Marie, outlook. fiscal to QX over quarter the call you of you. turn Marie,

Marie Myers

to hello, to said Analyst you I a And something with following moment so building start of together. good It's was your many And want it Enrique. underscores the everyone. and Thanks, on strong our back Day. And great Enrique of connect be to by ago. finish goals in long-term financial outlook. QX track a builds FY exceeding proven 'XX year. It or a set. our strong very record was it our to confidence meeting we on

$X.X non-GAAP me results, to on growing profit XX%. every with was even $XX.X grew year. EPS of starting separation. billion, trend the EPS billion, continues non-GAAP Non-GAAP additional faster, since providing our full our by year Let XX%. up This up We up XX% begin was $X.XX. color some operating Revenue

year record free was balanced That’s flow. proceeds note performance for to is. well billion returned a and XXX% billion is adjusting how our we cash Oracle What’s consistent $X.X especially litigation cash guidance our of with free $X.X important of a full Our and the to net flow shareholders.

bottom-line. and are our top We growing

We capital business. shareholders are in returning the and to investing

EMEA Net was increased by the a short towards HP. and constant This efficiencies. creation revenue We $XX.X XX%. new for businesses company nominally both new quarter, APJ of declined enter our and and period are as reflects supported QX X%, long-term X% value in X% in and in XX% billion growth increased the accelerating up geared driving is currency: Regionally, constant Americas growth This numbers. we currency.

approximately in increased $X.XX earnings increased $X.X operating primarily net $X.XX, in and currency, in investments was quarter. retirement supply was related strong increase mentioned, litigation The chain go-to-market remain up to diluted non-operating billion margin up benefit work $X.X tax operating That of continue XX% our XX.X% earnings print of share partially the this shares. by up to favorable $XX net expense amortization offset driven increase billion by innovation. driven credits, expenses was higher diluted of was other operating XX% continued with expenses costs. restructuring acquisition-related partially for by the X revenue. billion, year-on-year. quarter, were Non-GAAP The non-GAAP revenue X.X pricing quarter. million creates XX.X% points and share OI&E profit hardware impact net including results and constraints adjustments. Non-GAAP Non-GAAP plan said, and charges, particularly or gains, primarily Gross impactful Print charges, both defined to excludes gains, count Systems intangibles, as share Enrique hybrid by tailwinds. other Personal Oracle As was diluted settlement and sustained per a Non-GAAP demand per was offset this

was $X.XX. a As QX share diluted result, per GAAP earnings net

of Personal XX% double given the still let’s to the fact chain units reflected performance. revenue revenue up digits chrome down and challenges and commercial. environment was this up X% were for was mainstream notebooks, big impact commercial up was XX% lower desktops demand supply By Now, consumer category, we grew QX, In The down for XX% product Total expected turn premium revenue $XX.X the in and workstations. segment year-on-year. mix. our into Systems billion, shift and of Drilling strength was positive for and X% XX%. revenue details, XX% towards

delivered double-digit with also Systems $XXX of in services. margins peripherals growth and to across operating Personal We drive profit X.X%. billion operating continue

and declined in up by Total growth to total due and by costs in commodity of and continued the offset Print, cost a X%, $X.X margin portfolio to results strength pricing, pricing including supply units currency, product consumer hardware decline focus continued in XX% improved mix by our reflected navigated higher Our component our the and and go-to-market. favorable as was favorable year primarily billion, last print points, execution X.X partially offset in and QX on QX chain environment. we In innovation in driven investments services, due partially supplies. increased and manufacturing hardware constraints. revenue replenishment

We expect consumer with these demand grew revenue down was segment, down at By Commercial first units down with solid. XX%, print units XXXX. half hardware revenue constraints least into XX%. X%, the extend Consumer customer to remained XX%. of

home was in and and should Industrial progress revenue both recovery triple-digit increases by constrained with However, office further hardware The environment. double-digit across a printing with supply the commercial hardware. current revenue factory growth

continued declining by channel We Supplies commercial primarily X% a expect into see billion, FY in gradual recovery and year to ’XX. $X.X prior revenue inventory was driven extending replenishment. year-on-year, uneven

saw We normalization toner offset pricing. our steady We favorable also ink continued contractual momentum mix, by of saw and partially business. in

Day, this of subscriber double-digit a our in both strategy. is As increases in part we discussed Instant cumulative broader at ink key our Analyst revenue. growth services delivered

million grew new $XXX TCV print to services performance million] and Print total growth in commodity at were and with higher [ph] in innovation favorable including contract investments XD, profit operating costs Operating unfavorable and points, and and both [$XXX offset operating primarily strength XX%. driven value revenue graphics also increased renewals go-to-market. by margins improved margin bookings. pricing We cost in industrial managed partially X.X drove by mix in including and

transformation to efforts. turn me let our Now

to leveraging not run is our As savings and transformation. savings Pro subscription new of with software growth and highlight and annual to service more delivered a our basis. only additional this gross way to business continue but of new cost about their now services our we savings us deliver and we an long-term our are drivers enables program, are Wolf have like our cost example. operate rate look opportunities. Security, digitally customers. completed is than offerings. creation. capability, solutions our to on platforms, $X.X invest strategic enhancing to value see XX% One opportunities this digital savings, I’d creating in drive that cost plan we to types new the the we at many transforming Transformation and solutions reduction year of new enablement we capabilities capabilities structural structural cost more cost manage through recently new second customers ongoing By With to we digital subscription efforts we about also our The billion enabling transformation these like software launched

was billion for the litigation now move me was capital was cash after higher XX free $X.X as cash decrease This to sales $X.X days The additional inventory. in allocation. days quarter. flow billion minus cash of by Let cash operations and X and of offset deteriorated the Oracle partially $X.X proceeds in cycle conversion QX flow adjustment days flow was from the days billion. lower sequentially payable the days and only net outstanding outstanding

$X.XX of returned repurchases represented a flow. shareholders, dividends. which XXX% the we For total quarter, cash free included share million This billion and $X cash of in in $XXX billion to

a ’XX, record shareholders or FY XXX% to For of we returned billion cash $X.X free flow. a

levels billion. of shares Looking elevated at ahead aggressively to least we at to continue ’XX, back expect buying FY $X

$X exceed target program, share, on our value our plan. annual return track recently billion our set us repurchase with a has share dividend of of increased to in per capital combined $XX Our creation

Looking and we in and XXXX forward to QX outlook. keep supply dynamics to pace financial the continue QX mind economic constraints, ’XX, recovery. navigate the availability, to pricing overall following our logistics In of and the related fiscal particular, FY

demand pricing. commercial, particularly strong see Systems, we in to for For well as as continue favorable Personal our PCs,

solid with PS to including growth expect and into premium fiscal We continue commercial, revenue categories, peripherals. ’XX shift higher the to growth

solid and normalization as a disciplined gradually range. cost our X% mix in improves the toward to through in expect continued X% We we PS long-term In Print, high-end to XXXX expect management. be consumer, commercial demand margins of

long-term We end, be towards margins about XX% XX% high the Print to expect range. to

challenges, to regard we Personal as component in the For acute disruptions world. continue particularly manufacturing due to more the the constrain shortages, Systems, and expect component disruptions ongoing expect Print, will as and shortages. transit pandemic parts with of many factory well we but port In to similar, revenue

across we Print revenue by and seasonality ’XX XXXX. challenges and apply sequential more the through by these our doesn’t to FY expect Furthermore, quarter, at expect PS to first driven be particularly half performance persist normal linear for PS. We of least

expect of earnings diluted expect per from quarter $X.XX share we are non-GAAP $X.XX $X.XX. first range diluted and considerations quarter following million quarter account, in net $XX to in a per of the into other. net share addition, corporate In to outlook; approximately growth Taking earnings Investments year-on-year, be these we slight providing and range be headwind the the to $X.XX GAAP per to we

GAAP to and of per range be net share $X.XX the full expect to earnings diluted FY net We the in to range in of be ’XX $X.XX non-GAAP $X.XX. per share earnings to $X.XX diluted year

flow FY deliver growth performance and least our we your and ’XX, our look For sustainable confident to to feel questions. about $X.X we consistent be expect outlook. good billion. free I Overall, am taking at very our cash in forward to I long-term ability

So let hand it to operator. the me back

Operator

we The Evercore. question-and-answer Thank is Instructions] first with now will [Operator you. Amit the question begin Daryanani session. And from

Amit Daryanani

Thanks to a by right, first my growth on reversal math the ASP's. maybe nice It side, driven versus a guess XX%. lot. congrats heavily impressive, Good looks like last ASPs really If my on is quarter. it's is profile on quarter afternoon think, I ago. question personal are the a and up I close very systems

is you uplift, price should of you So increase into as just how love because I'd next year? And the look durability I about perhaps at mix how then ASP that versus fiscal understand, much had when forward to apples-to-apples the think that go Chromebooks we of just ASP less increases? the

Enrique Lores

Hi, Amit, thank you question. for the

detail. more then me Let and provide start will Marie

demand pleased performance really in PC across both It the consumer, have consequence all, managing business quarter. is a strong see, were saying. way are you especially and of as we the continue commercial and but with of very the pricing of both said, to the this mix been we that as first you So we

both, very for the component saw. been managing the the side. high now general company, end will have categories effectively has pricing. driving And categories where performance the which in really this driving toward highest that have the and the on We the value that Marie you comment been we saw we the consumer And commercial of

Marie Myers

afternoon, Amit. Good Sure.

combination that they're all, what's currency, of first around XX% higher you So, some some well really there's said both you premium context mix is ASP's, a as XX% to favorable a to that year-on-year commercial driving into pricing inside Q-on-Q favorable up just including and even but commercial, give and actually as of mix mainstream. shift and as

So that favorable and we've consumer. got less shift mix low-end within

consumers mix that of and to as year predominantly And and Meeting, I see and think earlier which we've both commercial Security a do some up to as year-on-year, pricing XX%, favorable following expect in our combination mix the well. terms In by of said of up XX.X%, driven is is we continue into pricing. Analyst shift

Amit Daryanani

follow used of revenues what you're think say decline now, what margins seeing if And thinking kind think print And important to Enrique, certainly, will in XX% up hold to right sort up, would you're to guiding Perfect. XX% supply supply I fiscal everyone pressure. 'XX go under range. start as I of more that could just in if I be even margins should down, for is

big expand to vectors more are should kind think the as down that two little perspective, about print I'd three get even bit margins get revenues your or year? investors might supplies be So enabling that things, what love of is to next a --

Enrique Lores

started that from we we profitability very strategy what as really -- you. And have more the this years when execute of hardware. is driving during good consistent into Meeting, we driving supplies we ago, Analyst making progress shared And strategy. the been to are to Thank that two we change

we have what increased products mix customers supplies includes that We when call up products. the profit of from buy them,

we toward businesses. from We is And have also profitability subscription a also increased service-oriented very call also positively a contributing the we been That systems, HP+. transition and percentage of what end-to-end have perspective. driving now

what we So said two what years we going is to happening drive. you were see ago

for makes Analyst and guidance for this and progress Day guide fiscal good us the we making been have in our year that have in we confident 'XX today the about provided provided We QX.

Marie Myers

just that I'm sure mind Also some know this lapping compares. to we're keep tough you that in

to more what it's So OP dollars business Enrique OP really model. on driving we're the and incremental focused shifting and outside over time driving dollars exactly really supply of is what said

Operator

Ananda is Capital. Loop The next from question with Baruah

Ananda Baruah

seeing, the positive I Enrique, any Congrats Yes, you Analyst over that the if follow-up. could. a regards as to guys results. helpful? weeks conversations, weeks super on the then five weeks would on two have conversion, five anecdotal you strong any anything demand be continue did the But five clearly picked you're like context customer ago net I you And what with just at new last as Day. up to over new last sound quick

Enrique Lores

Analyst seen what is, sorry consistent you we discussed have to disappoint very we is What to Day. our I'm in

to getting and We and -- strong we in to and offices, experiences demand, their PCs are desktops. reopening improve see continue they office especially companies they're customers from share investing notebooks invest in improve and to commercial investing work, therefore employees as their back

are the seeing demand season holiday consumer also strong We comes. as

plan, we We what demand as discussed behaving from deviations weeks are so ago. few seeing a no per

Marie Myers

quarter too. We great had a with backlog

remains still backlog elevated. our So

Ananda Baruah

medium is the has make business distinction to small on that. two Yes. I been small side, good the your between while. follow-up And enterprises medium guess what any chunk Thanks business, commercial then, Marie a for of a for seeing business you're

those two? Thanks. between And center so of any the to between demand distinction there make

Enrique Lores

any make large board, SMBs. big see wouldn't both We and growth across for enterprises the I distinction. for

in segments, We both in we no have so deviations business customer major a and areas two Thank that. from very you. see the demand strong

Operator

from The next question Bernstein. with is Sacconaghi Toni

Toni Sacconaghi

wondering just if on backlog. more a little detail could your was provide for question. Yes, you the thank you taking I maybe

was Can on about last that hardware you backlog was think that? update constrained. said probably most quarter you an XX provide And that your the you I PCs print, in supply weeks. mentioned

have then in a dimension the the how it backlog may can And perhaps have follow-up, I you So, quarter? changed and if please. much

Enrique Lores

of level, quarter very PC Toni, a a we elevated were it terms backlog, similar where at to ago. remains very in So

correct, So, quite no a business terms created continues major this And are you changes. despite to quarter. saw because then, we largely factory seen is major during strong many to last shared the be a the where lockdowns of which have week. we print hardware Asia what limitations, It we of Southeast in similar supply countries, what print, you the that have is in chain

no And also this is we part PCs. than news have So here. elevated of lower but what on

Toni Sacconaghi

And backlog and should and down. the should same we seasonality remain down because kind but normal know ultimately up be going think operating Okay. that then all costs, follow-up, of any in the And year. demand getting pricing. see then, strength in there your growth sequentially to supply were I margins progress in you're were seasonality continuing if think leverage, drawing XX% about to of to traditional from sort chain a profit talked strong, basically somewhat price Prices ignore if to some I make the of backlog you leverage? that seasonality were incremental you're just actually but of draw you're related throughout kind PCs flattish did you operating is said lowest in your why year, your but rate, they at you greater above PCs, that, demand yet the actually were not able tailwind

you. So some of both set those straight? maybe just Thank provide and things, help color potential you on me inconsistencies could

Marie Myers

afternoon. good and Toni, worries, No Yes.

first I'd continue PS that in seen that and first in we've and seasonality say the out strength that we when talk quarter to I that 'XX. do So into about expect

expect few more as we've So we linearity so, linear quarters Toni, than revenue result, in the a what years. to seen the and across in be year do that's last the more

is had more then, therefore respect in think we be rate was And seasonality. slightly quarter-to-quarter. margins that just So San The the as due I estimate back just the don't we saw PS normal reiterate actually might was quarter-on-quarter in really consistent down to recall QX. that to had. to and in business I operating with it the expect And did the sequential in also like of that I'll And we material the change revenue you 'XX quarter. strength just that growth the going at actually you Meeting

did that going take in one-time expect we we to probably to are repeat some So in they investments the don't 'XX. make that opportunity

Operator

next The question Cross from with Research. is Shannon Cross

Shannon Cross

should points, you done talk your try much. to about proof and that could to XXXX? in business for and initiative, contribute Thank fiscal in that we a -- peripherals terms it Enrique, look improve then what of you've very internally Thank you. can how I've follow-up. what you bit a so And

Enrique Lores

Thank Shannon. you, Sure.

So the as of company, contributing of is we we Systems. Personal to one sustained to five that to see in areas be our peripherals the said Day, the Analyst we that expect growth in and going is think really growth

when you have our you you done calling were it better. focus, and have don't to the call don't have organizational of business we lot We remember, a business attach, a you put a requires engineer, internally investment changes manage that. the past, if attach, and best don't the the you business We put all -- we that in changed and

We peripherals. a organization to dedicated have

the to company drive of leaders in We the that initiative. have put strongest some

internal We increasing are investment.

double-digit category opportunity peripherals the we some this invested in of the moving our and in and category. just organic in going to have to engineers regular doing acquisitions did growth will that forward in area, What great is us And are case grow to providing We the to the for as to Group, We that a HyperX think future forward. like we continue specific going reinforce continue best with also close, to of in in invest in updates see see we quarter you acquisition be of have to our gaming. we some the will HyperX we position have progress we this in space. this in are going to

really pleased peripherals. with we in So are growth the

Shannon Cross

out I update strong that's not how but And the of give printing, you. know seeing? specific Okay. going seeing you coming us you. Thank you're on that's to what you're an if a was contribution then demand? -- I give you're of going could where and wondering numbers, Thank where pandemic XD kind

Enrique Lores

you. Thank

cover angles. me printing let from So two XD

pandemic, and First pickup is are selling in on But we services Investor Day and selling fiber packaging strong the printing selling are orthotics in molded cases, footwear, in us seeing also, we supplies growth areas the the we are seen selling parts can call traditional and a grow would we of after the to really around to billion were the our have in printer, drive XD because very some strong to printing, help strong I end-users. demand. we we growth very have our basically we to really And that of businesses to we where a transform we billion, sustainable designing what because call the or think and industries. disruption those is going the where the XD parts, $X on on shared three $XX printers, in applications working consumers opportunity just during the capturing and and have we to also complemented that specific of businesses we investment we that not the value, the think with Day three Investor are of or we where more part we business end-to-end, shared those, selling it really

continue going. And this will track, where updates on business weeks are this we we during discussed on few is we to a ago. provide progress, great what see So we XXXX,

Operator

The next Huberty question is with Katy Stanley. from Morgan

Katy Huberty

EMEA are this just afternoon. out passing wide different growth dispersion, in you. prices positive Thank in follow-up. through dispersion have across X% dispersion in pretty I Asia-Pacific. around context of year-on-year Good is that nearly Yes. there geographic growth? the a Americas revenue with but it? distribution and not differences and comps, how the some it growth then channels across pretty quarter wide coming And in of of regions? rebuilding What that's the There down explains double-digit downturn, the all regions Is in rates inventory any the a Are is

Enrique Lores

Yes, I growth. we've the have prioritizing is been what by think really we -- dispersion driven and where seen how

This we implications America. shared, mostly and is business about higher our North that commercial, categories growth premium saw If And towards year as in driving the you very think Katy. business what strong therefore, this on really a in on we delta, comparison. more are have the has driving is consumer we ago, year-on-year now

Katy Huberty

cash follow-up Marie, the move Should Okay. inventory of as balance your sheet for in gradually a assume past did it through fiscal And year, a quarter. inventory then the you that down use was come 'XX? we over fourth normalizes as maybe

Marie Myers

our inventory environment. remain while we we're this supply constrained through expect levels basically no, elevated chain somewhat to for Yes,

However, we expect levels the But do elevated. depending expect that those the to we of moderate on 'XX, first the and our components. we see we certainly forward into somewhat components around look still to as the supply half see demand

Enrique Lores

-- expect look those at if what What of you if the with availability we continue to correcting -- was where we we is half, and saw inventory least be has Katy maintain need levels. components to -- But we environment seeing there in levels will Marie stay are first the improved through saying, at at since we're like, therefore inventory we to supply that. as a constrained high

Operator

question is Chatterjee next The from Samik JPMorgan. with

Angela Chan

on Hi. Samik Angela for This Chatterjee. is Chan

the into dig wanted in to here. margin question, little Just a had one

and fiscal to situation that XX% just may I at guidance? you be you PCs, year about for into seems stabilizing should to had for see have or think least margin bit, beyond quarter mentioned to price easing and someone starts first elevated the a level that your increase even moving we expect a earlier remain to, at in be favorable pricing that 'XX supply forward assuming thinking so

Marie Myers

good sure, no, Yes, and afternoon.

are which very gave much our Analyst of towards track our we So the high long-term SAM we PS. Day end range at on for

in Q-on-Q strong range. PCs, for last think were for that favorable that really to change we demand QX. I see driven to to guide material was that expect well, to that's of particularly the our how commercial and mentioned our just But think continue as would slightly margins and I end that by forward, see we be our expect about add, had in we I our we we pricing continue PS So high estimate Toni the quarter. to down at we going absolutely and long-term

Enrique Lores

we our range a weeks increased reminder, brief long-term few And ago. just a

ranges are So that at end to the what we new stay are of provided. saying we the just we is going high

Angela Chan

you. Great. Thank

Operator

with from The is next Deutsche question Sidney Ho Bank.

Sidney Ho

question. Hi, questions. for thanks taking got two I my

decline at are dynamics, about orders can another serving First that backlog sure one staying make of level, monitor you that and how have And see to sharp or -- a sharp in increase how rate real, that quarter follow-up. your supply mentioned confident you is don't backlog? this decline once this you ease in are have a constraints in you you now you start talk I elevated cancellation to is

Enrique Lores

Yes, thank you.

orders -- the before, happening. we that all and to, So, a percentage orders pay attention is cancellations as as what small. in quality we get, of of this cancellations of and the very the very slow that the monitor constantly we And shared very, past, really the we shared have something have lot very, are is is we

the we we means Usually, is So rest Also of in now But cases, we many given commercial competition of see any an don't stronger the with coming cancellations. this at customers, see there double the an demand. have assured, that the this end as so of is continue our is backlog, user the cancellations we backlog it probabilities where even end-user from the we not is any something associated cancellations. majority look is it to we or lower. and monitor backlog, or constantly seen booking

that we backlog our the to backlog of amount of reduce the normalized is -- of we expect next Now, be reducing time during we that over quarter, goal that, have. will because to and we supply that the have get amount course, will

Sidney Ho

different, could in fiscal the we factors quarter, go related Thanks. year, is free And for fiscal of the billion, in question may going more we free be go through and typically $X.X second be of about quarter Maybe look through should lowest on of this amount we the cash follow-up the how we you third that, share see but year? flow the Great. the kind my profile to but thinking That's should as how think fiscal flow other like as any year 'XX of helpful. about? buyback than cash that to change highest that

Marie Myers

I'll and maybe flow up so buyback. cash hit Yes, then we'll go to the

all, guide to mentioned $X.X things bear And we're annual we on at cash SAM, mind, obviously A in an confident as flow of in least first guide couple of So, billion. we our of basis. cash profit flows secondly, capital in to we think I we did then those driven potentially as inventory second we and operating see working to expect and by growth, moderate did favorable comment revenue the see start levels that some half. at

that share. shares, we about, built billion $X least at committed Analyst meeting saw our expecting as to of that's So buybacks, we're terms to of our thinking Analyst pay how reports, in X basically we're of probably a at recently all to cash you per flow. repurchase dividend we've free and well, our remain With respect into guide our out as

I to So to there shareholders. meaningful starting a think with plan our return capital buybacks respect our to of really

Operator

David from is question next UBS. The with Vogt

David Vogt

important buyback how because to longer you you're grows with what if in out of appreciates, profit laid dividend Great. profit I want up the and just And just financial laid have value parameters let's buyback, even maybe of to pull ratchet would use, financial trying and for one question, Thank single-digit be operating taking my you've sort value, the question. face say seems at you a maybe out less EPS quote-unquote I that earnings, the imagine or much of back at your stock your on you you down underpins expansion that at terms SAM, the about of philosophical longer-term and more that sort SAM. question. the to the it's to the are your of or think undervalued and/or framework no that you growth high long-term of as sort as might the EPS growth using multiple along a think part that framework and through take grows pretty I that

it bit how Thanks. an So understanding a to you're about longer-term? over thinking get just the want of

Marie Myers

maybe Yes, is combination of of firstly FYXX out guidance results the flow-through that buyback. just both I'll and commenting operational a by start our share

of just your is ingredients, shareholders. we're question absolutely our I specifically has we've SAM, a your the about return that buybacks, committed sitting, to capital how addressing of allocation part question and Now nothing big changed and strategy philosophical outlined would around at about that look we're to capital that those the thinking there say

So at of least of back we're on to value least track elevated at we billion. $XX fact, we to plan said X buy to think continue going levels surpass our what I And we're in at shares at billion. do back

really it, that's our So changed. how commitment and we're thinking hasn't about

Enrique Lores

our long-term, is we we and will what and also to saying. the talking that we will two time. increase And complement maybe to other unless XXX% free doing be committed have opportunities be flow leverage committed little a was arise, better this cash of Marie What over returning, ratio and I'm have to about we points,

to better using will both if we if be cash -- we that to of So will or to bring sources return be shareholders M&A potentially capital returns. M&A, would

David Vogt

Enrique. Great. Maybe quick just as a follow-up,

lockstep cash the over sort does -- and of the growth flow that sort flexible of M&A -- will in longer-term? then that imply So the dividend buybacks of of and marching sort between will earnings the cash be between use a with flow effectively M&A a be

Enrique Lores

and we what delta. clearly we at do, that expect thinking this while that so situation is this while us believe, is least see shares are should the you undervalued, believe I the today, to

Operator

from is Bank America. Wamsi question of next with The Mohan

Wamsi Mohan

In just M&A would you plus was you. your cash curious, that also out thank a for generating you as given strong from important payment be M&A. warchest Oracle, that -- Yes, have Hi. the you M&A flow, I an you lever, cash commentary, mentioned sizable flow prepared the called Enrique, and free

here the recent parameters, we to and us, So that can similar expect any share you've something done looking, what should in or you sizing you're past anything with larger? what

Enrique Lores

during the what remind of kind been me have discussing we let last so weeks. Yes,

shared have M&A our plan. First important is, part of we is that an

are return undervalued. a whether grow do at capital and to said are need key a At we have we fairly opportunity the be have shares financial Second, we five the any buyback strategy, rigorous to company, us opportunities attractive believe stewards to we time, help going to that of we is take to very on high that and to scanning think would also faster have that threshold versus returns, for that growth we the ability operational the versus shares, we goals, are the given which we then, areas same course, need deliver of we have could profitably identified that that M&A that. where to way the

cash not terms space. on of we and -- on commitments don't that made of do to any that anything their got. specific deliver really to with think we different be any need going we strong because results strategies. I -- Oracle the They that are and In side, financial aligned we But -- commitment have haven't based

We have been are rigor. we going to the that with continue to with now discussing until same and capital manage the framework

Wamsi Mohan

and the few attribute the these driving improves you the in would do which over favorable of drive Thank pricing talk you mix asked could the to I people you. sustain levels how sort few sustainability, have next and maybe of and demand about If little a much it increase quarters, still ASP can the supply clearly in elevated you market, this strong is as could of Enrique. backlog thanks, anticipate about up, I a this of ASP growth? ask ASP to the 'XX. versus follow Okay, fiscal the tightness But ASP differently, if course strength potentially

Enrique Lores

guidance to really the a the the will key going additional as thing think is the will of margin reduce gross be will be and operating saying, we but favorability will or price range margin. And happen few the we as that What at we volumes to XXXX. high was what our ago as be we think profit weeks delivering increased is see increase, eventually to I Yes, end is increase, volumes continue we will the expect through business. also will Marie

So other. compensate the one will

high within stay through end the will we the range of XXXX. So

Marie Myers

environment, in addition, while are bit economics like pricing And laws you're constrained a really strong. the that, favorable demand in in still persist, just of add, we it's but supply a I'd is

this as we continue will expect do as to dynamic, together, pricing well. that So we seen terms favorable of which expect year 'XX, contributes do but really normalization the in through on some we've goes what

Operator

The Aaron Fargo. Wells with next from question Rakers is

Jake Arbon

the Aaron. quarter. on great this for on Jake is Hi, Congrats

graphics about you're market quick, really then a bit talk about in thinking the what kind that Just more wondering you and XXXX? seeing how heading was little could if business just I you're into of

Enrique Lores

Yes.

driven strong side recovery overall by -- graphics for a we of the business, label So packaging. and by are driven industrial more industrial the mostly the seeing

see in We nice we growth XXXX. and to nice growth have seen very in expect QX

a good really of contributor and really for the company So XXXX. progress growth in

Jake Arbon

on kind be just with of as a on? for it would Is to M&A something how is, a that follow-up fragmented targeting just And market focused that. you that guys you're is

Enrique Lores

combination very have is years. of have we in over a that development strong a portfolio both the category we Well, that of that internal done M&A

time, the and source we as X.X shared, over return we to will space, another done to be And to through room we that And And acquisitions repurchases to also to as of time, same have of increasing continue areas be X, several XXXX. we while printing also have as at before, both share plan, our technologies as of I growth ratio that and identified expect this in in key I one in We our and said to which in will that, we the of do five do said, shareholders dividends. is capital. company. the both software, M&A have aggressive we part capital also

Jake Arbon

you. Thank Great.

Enrique Lores

I And time to think now it's wrap up.

see provided and shows we And business. we fiscal for shows value have in about we entered to that that close the let we call saying that year that provided of So to have, feel the is we in our momentum shareholders this the ability guide a we why our that the things the it's 'XX. me quarter QX by the strong have that we really point proof strong great deliver that

call of a Thanksgiving So, the great everybody And you. wish for your you thank today. families. you with all we Thank

Operator

conference has for attending presentation. concluded. The you now Thank today's

now may disconnect. You