HP Inc. (NYSE:HPQ) Q1 2023 Earnings Call Transcript

Enrique Lores: Let me add that we are pleased both with the strategic progress we have made and executing the strategies that we defined three years ago but also taking advantage and getting the benefit from all the work on cost that we did during the last three years and that we are continuing to do now.

Operator: We’ll take our next question from Ananda Baruah with Loop Capital.

Ananda Baruah: Hey, thanks guys for taking the questions. Really appreciate it. I may have missed it Enrique and Marie, but did you mention of the growth business category what percentage of revenue those are now? And what’s the growth profile was for the quarter? And then I have a follow-up as well. Thanks.

Enrique Lores: Sure. Let me €“ thank you for the question because this is something that we wanted to clarify. We mentioned briefly on the script, but we wanted to provide more details. So during this quarter, we have made some changes in the definition of the growth categories because we wanted to align better how we talk about them externally to some of the internal changes we have made. By growth categories, we really are referring to the six businesses that we think are going to be growing faster than the core business and that we’re going to have accretive margins compared to core. Something common, they have a common strategic intent, which is really to create more value for our customers by focusing on the long-term relationship with those customers.

And this is behind the expansion into services, subscriptions and many of these businesses. During the last quarter, we made two internal changes, one is we created a focused organization to work, go after workforce solutions and services. And we defined the goal of that team to drive and to grow service driven opportunities. We also have just created a consumer subscriptions team that will be driving that opportunity across the company starting from the work that we have done on Instant Ink and expanding now and during the next quarter to the rest of the HP portfolio. And we also decided to align the HyperX business with our Gaming PC team. So we have one group that is really responsible for the full experience for gamers. As we went through all these changes, we realign also how we externally will be reporting those especially in the Workforce Solutions & Services, since we are really focused now on service-enabled businesses.

Ananda Baruah: And Enrique, so two, I know, I’ll keep it here Enrique. Is that to say that you’ll no longer be providing us a sense of kind of the old grouping and what the percentage of revenue is and what the growth rates of that old grouping was? And then I have just a quick clarification after that, too. Thanks.

Enrique Lores: No, we will continue to do that. I will just highlighting the changes because, for example, as we have done that, the overall size of Workforce Solutions is going to be smaller than what it was because we have redesigned, redefined the business. This is what I was highlighting. Every quarter, we will provide visibility as we have done over the last quarter of the growth of the different businesses, you see that on the deck. And every year, we will be reporting the total size as we have done in the past, Ananda.

Marie Myers: And they did grow double-digit collectively in the quarter as well Ananda, just to answer part of your question.