HP Inc.

Good afternoon, and welcome to the HP, Inc. Third Quarter 2021 Earnings Conference Call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on your telephone keypad. To withdraw your question, please press star, then two. Please note, this event is being recorded. I would now like to turn the conference over to Beth Howell, Head of Investor Relations. Please go ahead.

Good afternoon, everyone, and welcome to HP's third quarter 2021 earnings conference call. With me today are Enrique Torres, HP's President and Chief Executive Officer, and Marie Myers, HP's Chief Financial Officer. Before handing the call over to Enrique, let me remind you that this call is being webcast. A replay of this webcast was made available on our website shortly after the call for approximately one year. We posted the earnings release and the accompanying slide presentation on our Investor Relations webpage at investor.hp.com. As always, elements of this presentation are forward-looking and are based on our best view of the world and our businesses as we see them today. For more detailed information, please see disclaimers in the earnings materials related to forward-looking statements that involve risks, uncertainties, and assumptions. For a discussion of some of these risks, uncertainties, and assumptions, please refer to HP's SEC reports, including our most recent Form 10-K. HP assumes no obligation and does not intend to update any such forward-looking statements. We also note that the financial information discussed on this call reflects estimates based on information available now and could differ materially from the amounts ultimately reported in HP's Form 10-Q for the fiscal quarter ended July 31, 2021, and HP's other SEC filings. During this webcast, unless otherwise specifically noted, all comparisons are year-over-year comparisons with the corresponding year-ago period. For financial information that has been expressed on a non-GAAP basis, we've included reconciliations to the comparable gap information. Please refer to the tables and slide presentation accompanying today's earnings release for those reconciliations. With that, I'd like to turn the call over to Enrique.

Thanks, Beth. Good afternoon, everyone, and thank you for joining the call. I hope that you and your families are safe and well. It's an important time for us to connect. The hybrid world taking shape is expanding our addressable markets and creating new opportunities to drive profitable growth. We have already started to capitalize on this and have a long runway ahead. This is evident in our Q3 performance. We delivered another quarter of top and bottom line growth, with EPS growing substantially faster than revenue. This reflects continued progress against our strategic priorities, and strong and sustained demand for our products and services. In Q3, we delivered revenue of $15.3 billion, an increase of 7%. Our non-GAAP net earnings increased 71% to $1.2 billion. Non-GAAP EPS increased to $1 compared to 49 cents in Q3 last year. And we generated $1 billion of free cash flow, returning $1.7 billion to shareholders. Before I take you through the highlights, I want to first share three key points of context as you think about our performance and outlook. First, as I mentioned, we continue to see strong demand for our products and services. The hybrid world is accelerating trends in our segments, and our leadership across commercial and consumer categories positions as well, even as demand continues to outpace supply. The second point is that we continue to ship as much product as we can while navigating a complex operational environment. We are managing through component shortages, COVID-related factory lockdowns in Southeast Asia and congested ports and transportation disruptions. Even under these conditions, we delivered solid financial results. And third, we are performing while transforming our business models and service offerings to capitalize on emerging growth opportunities. We have continued to make progress reducing our fixed cost structure, evolving our business models, and creating new growth businesses. And we are expanding our time in key segments to drive additional top and bottom line growth. In personal systems, this will be driven by our focus on peripherals and new compute models. In printing, we are expanding our services and subscription offerings. I will talk about all of this in more detail by looking at the progress we are making across our portfolio. In personal systems, demand for our products continues to be strong, with our backlog increasing again quarter on quarter. PC penetration rates are growing across our markets as devices become increasingly essential in today's hybrid world. While we delivered strong operating profits, PF revenue was less than we expected, primarily because of our supply chain constraints. We expect industry-wide supply shortages, particularly in ICs, to continue into 2022. Given this, we have identified the necessary improvements we need to make and are accelerating their execution to drive stronger top-line performance. We expect that it will take more than one quarter to show results. As we ramp supply, our PS portfolio is extremely well positioned for the hybrid world and we see significant opportunities for market expansion. And our leading share in commercial PCs positions as well as more businesses reopen. In the commercial market, we launched a new all-in-one and expanded our ZBook portfolio of high-performance PCs for creative professionals. This includes the ZBook Studio G8, the world's most powerful mobile workstation of its size. And our new ZBook Power brings ZBook performance to students, SMBs, and the public sector. In Q3, we also launched a new pavilion lineup that brings premium computing experiences into the mainstream. We rolled out a series of new displays that are purpose-built for home office and entertainment setups. And we continued to drive momentum outside of our core hardware businesses. This quarter, we completed our acquisition of HyperX, giving us a leading position in gaming peripherals and a platform from which to accelerate our peripheral leadership more broadly. We also continue to advance our device as a service business, which grew 32% in the quarter. And we are investing to meet emerging customer needs in the commercial space. This is highlighted by our recent agreement to acquire Teradici Corporation. Paradigi software is widely used by leading organizations around the world to deliver superior remote computing solutions. We expect this deal will accelerate new compute models and services tailored for hybrid work environments. In printing, revenue was up 24% driven by recovery in commercial and strength in consumer. As in personal systems, The rise of all things hybrid plays to our strengths and is creating new opportunities for print innovation and growth. Specifically, we are expanding our services and subscription offerings, each of which deliver double-digit growth this quarter. We continue to scale HP Plus and Instant Ink across North America and Europe, including the addition of HP Plus on the Envy and DeskJet product families. We have seen positive response to HP Plus to date, and HP's InstaNIC hit a major milestone by surpassing 10 million subscribers. Our subscription services are providing a simple and seamless experience for today's hybrid workers, paving the way for new offerings in the future. We also continue to evolve our hardware portfolio with success in our award-winning HP LaserJet 400 and 500 series. HP continues to be recognized as a best managed print vendor, helping SMB solution providers thrive in a competitive market where quality and security are essential. The strength of our position in the commercial market is significant as more people return to the office. In our industrial businesses, we drove very strong hardware revenue growth in the quarter. Importantly, our number of pages printed is at or above 2019 levels. We once again saw double-digit growth in print impressions and square meters. as well as strengths in key categories like labels and packaging. And in 3D, we remain focused on driving high-value end-to-end applications in strategic vertical markets. This quarter, we launched the new Arise Orthotic solution. It leverages HP3D printing and cloud-based software to help the millions of patients who suffer from foot pain. It is a great example of the opportunity we see to disrupt industries with highly personalized solutions. Our combination of innovation and execution enables us to continue making progress across our business and portfolio. And we remain committed to generating strong cash flow and to value-creating capital allocation. This includes our robust share repurchase and dividend programs, and discipline organic and inorganic investments. In Q3, we returned $1.7 billion to shareholders and have returned $6.8 billion over the past 12 months. We believe our shares remain undervalued and are committed to aggressive repurchase levels of at least $1.5 billion in Q4. As part of our value creation strategy, We also remain focused on M&A that can accelerate our growth in strategic areas. HyperX and Teradici are two great examples. We will continue using our rigorous returns-based framework to evaluate and pursue deals that complement our strategy and accelerate new sources of value creation. As we drive our portfolio strategy and transformation agenda, we continue to prioritize making a sustainable impact. This quarter, we released our 20th Annual Sustainable Impact Report that highlights the work we are doing in climate action, human rights and digital equity and outlines new 2030 goals. Not only is this the right thing to do, it's also driving business success. In 2020, our Sustainable Impact Initiative help us win more than $1 billion in new sales for the second consecutive year. Aligned with this, we recently issued $1 billion in sustainability bonds. We are allocating these proceeds to ESG-related initiatives consistent with our strategy and values. Looking ahead to Q4, our backlog remains significantly elevated. We expect robust demand to continue and we are taking decisive steps to address operational headwinds. Our portfolio is strong and resilient, and we remain on track to significantly exceed the full-year EPS targets we set in February. And today, we are raising our queue for outlook. And more importantly, we plan to build on this performance and expect to grow full-year EPS in fiscal year 2022. Longer term, the hybrid world plays to our strengths and creates attractive opportunities across our categories. We are well positioned to drive sustained performance as we innovate, improve, and continue to reinvent for our customers, partners, and shareholders. I look forward to our upcoming October analyst meeting to discuss our strategy and our plans to drive continued business success. Let me now turn the call over to Marie, who will take you through the details of the quarter and our fiscal year outlook. Marie, over to you.