Good day, everyone, and welcome to the third quarter 2022 HP Inc. earnings conference call. My name is Josh, and I'll be your conference moderator for today's call. At this time, all participants will be in listen-only mode. We will be facilitating a question and answer session toward the end of the conference. Should you need assistance during the call, please signal a conference specialist by pressing the star key followed by zero. As a reminder, this conference is being recorded for replay purposes. I would now like to turn the call over to Orit Keinan-Nahon, Head of Investor Relations. Please go ahead. Good afternoon, everyone, and welcome to HP's third quarter 2022 earnings conference call. With me today are Enrique Lores, 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 a webcast, and a replay will be available on our website shortly after the call for approximately one year. We posted the earnings release and 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 relating 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 and Form 10-Q. 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, 2022 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 GAAP information. Please refer to the tables and slide presentation accompanying today's earnings release for those reconciliations. With that, I would like to turn the call over to Enrique. Thank you, Orit, and thanks to everyone who is joining the call today. As part of our earnings today, we will cover three important themes. First, we will talk about the unexpected and very abrupt shift in the macroeconomic environment and how this is challenging our overall business in the short term. Second, we will enumerate the decisive actions we are taking in response to this macroeconomic challenge, including continued progress in our structural cost reduction programs while we continue prioritizing our investments in growth areas. Third, we will convey that our confidence in the medium and longer term prospects of our markets and growth drivers remains intact. We are firmly committed to our strategy for sustainable, profitable growth over the long term and disciplined capital return to shareholders. First, regarding the macroeconomic environment, like many companies, we are managing through some challenging market conditions with a focus on what we can control. Inflation increased in many parts of the world, and this led to lower consumer spending for our product categories. Demand in Europe worsened against the backdrop of the Russia-Ukraine war. Although we highlighted pockets of consumer softness during our Q2 call, the environment deteriorated more rapidly late in the third quarter. The strength of our commercial business, particularly in the enterprise, helps us to partially offset declines in consumer demand. Still, the fact that we remain supply constrained did not allow us to fully rebalance. As a result, our net revenue was $14.7 billion in the quarter. That's down 4% nominally and 2% in constant currency year-over-year. Despite this, we were still able to deliver non-GAAP EPS of $1.04, in line with our previously provided outlook. This reflects our very disciplined cost management and pricing strategy, as well as our continued ability to shift more of our portfolio to higher growth, higher value segments. While we cannot control how the economic situation evolves in the coming months, there are some very clear actions we can take to mitigate the impact of near-term headwinds and drive continued progress against our long-term growth strategy. We are taking a very measured approach with a focus on five clear priorities. First, we are optimizing our performance by staying disciplined in our pricing and increasing our focus on pockets of profitable growth, such as premium, peripherals, services, and solutions. Second, given volatility is becoming the norm, we are focused on continuously improving the way we respond to it. We are taking decisive actions to address issues that have surfaced due to the abrupt changes we have seen in the industry. We view this as an opportunity to further improve our ability to adapt to quick transitions in the market in the future. Third, we are doubling down on our growth portfolio while protecting our core business. Collectively, our key growth businesses once again grew double digits in Q3, and we remain on track to exceed our $10 billion revenue target for the full year. We expect our key growth businesses will continue to be a critical part of our growth strategy. Fourth, we are taking actions to reduce our variable spend and further reduce our structural cost by accelerating our digital transformation. We have already met or exceeded many of our objectives in our current transformation plan, and we're in the process of finalizing the foundation for a new multi-year transformation program that we plan to share with you during our Q4 call. Finally, we are maintaining our capital allocation strategy. In Q3, we returned $1.3 billion to shareholders, and we expect to exceed our commitment to return $16 billion to shareholders as part of our value creation plan. These are the right areas of focus regardless of the macro environment. In times like this, they become even more important, and the actions we are taking will enable us to continue building a stronger HP. Let me now spend a few minutes discussing our Q3 business unit performance. In Personal Systems, revenue declined 3%, primarily driven by softening consumer demand for our categories and more price competition. In constant currency, PS revenue was flat in the quarter. We delivered operating profit margin of 6.9%. This is at the high end of our target range, driven by disciplined pricing and our mix shift to high-value segments and robust cost management. Within Commercial, our Windows-based revenue grew approximately 18%, with commercial premium and workstations up double digits. Commercial was more than two-thirds of our PS revenue mix in Q3. We are taking actions to optimize consumer performance, and we are focusing on pockets of growth across our portfolio, such as premium and peripherals, which grew double digits this quarter. We saw overall higher channel inventory levels in the quarter, and we expect pricing will become more aggressive in Q4 to address this. While this environment creates some near-term market uncertainty, our long-term view of the PC market and its adjacencies has not changed, and we have confidence in the trajectory of Personal Systems over time. One source of our confidence is our acquisition of Poly, which we closed yesterday. We are thrilled to welcome the Poly team to HP. Poly accelerates our expansion and scale in two key growth businesses, peripherals and workforce solutions. Poly devices and software, combined with HP's leadership across compute, device management, and security, creates a comprehensive portfolio of hybrid work solutions. We continue to receive very positive feedback from resellers, partners, and commercial customers about the opportunity ahead. We expect the transaction will be accretive to non-GAAP EPS in fiscal year 2023. With the Poly deal completed, I am pleased to share that Dave Shull, Poly's former CEO, will be joining HP to lead a newly created Workforce Services and Solutions organization. This is a big step forward for our business that will allow us to drive a more integrated and expansive commercial services growth agenda across Personal Systems and Print. Dave is a terrific executive with extensive global experience, and he will be a great addition to our leadership team. Let me now turn to our Print business. Like PS, consumer softness and supply constraints weighed on our results. Specifically, Print revenue declined 6% or 5% in constant currency, with supplies revenue declining 9%. We delivered operating profit margin of 19.9%, which is well above our target range and reflects our disciplined pricing and cost management in a tough market, as well as commercial hardware supply constraints. We also made progress against our plans to rebalance system profitability and accelerate in key growth areas. HP+ and Smart Tank printers continue to become a larger portion of our portfolio mix, representing more than 50% of printer shipments in the quarter. Our strong focus on Smart Tanks in emerging markets allowed us to gain share. We delivered another quarter of double-digit revenue and cumulative subscriber growth in our consumer subscription business. This model is proving to be resilient, and its value proposition is even more attractive to consumers in this environment. Industrial graphics impressions also grew year-over-year, and we built a strong funnel with recovery in all segments. We delivered double-digit revenue growth in 3D as customers increase their deployment of our thermoplastic solutions. Across both Personal Systems and Print, we continue to drive an aggressive innovation agenda. Last week, we kicked off a global roadshow with our top channel partners, and I will tell you what I told them. We have built our strongest portfolio ever. We have introduced more than 100 new products and solutions over the past 18 months. Much of this innovation is being driven by the rise of the hybrid office. Our devices are what's enabling people to connect, create, and collaborate across multiple locations and do it securely. Last week, we introduced our HP Instant Ink for small business and our new LaserJet Pro with HP+. This is an intuitive printing system that's tailor-made to meet the unique needs of small businesses by enabling greater productivity, effortless device management, and advanced security. In Personal Systems, we just unveiled our next-gen Dragonfly Folio, a beautiful PC that has been thoughtfully crafted for hybrid work. Enhanced by our HP Presence video conferencing solution, the Dragonfly's advanced camera capabilities, automatic voice leveling, and background noise filtering technologies, and digital pen create a superb remote work experience. The Dragonfly is also made using ocean-bound plastic and other recycled materials, which supports our overall commitment to sustainable impact. We continue to advance our efforts in this area. We announced last week a significant expansion of our HP Amplify Impact program, which mobilizes and rewards our channel partners as they make progress on their own sustainability and diversity goals. This work is differentiating our brand, motivating our people, and strengthening our communities. Looking ahead, the macroeconomic environment remains challenging. Consumer softness is likely to continue in the near term. We also see some companies taking a more measured approach to their spending and new orders, showing signs of softening demand in commercial categories. Although we have made significant progress on supply chain, some shortages remain. Given that we do not currently foresee an economic rebound in the short term, we believe the prudent thing to do is to adjust our Q4 outlook, which Marie will discuss in her remarks. Like all economic downturns, we also believe that the current situation is temporary. Just as market conditions deteriorated quickly, they could also rebound quickly. We have consistently proven our ability to manage the company through up and down markets. We are prepared for multiple scenarios and ready to act as needed. Most importantly, the fundamentals on which our long-term strategy is built have not changed. Hybrid work is here to stay. Gaming will continue to grow in popularity. The rise of digital services and subscriptions is unlocking new business models. Industrial markets are being disrupted by new technologies. These are long-term secular trends. Each of them plays to HP's strength, and we are confident in our long-term growth targets even as we take the actions necessary to mitigate near-term headwinds. To give you additional insight into our performance and outlook, I'm going to pass it over to Marie. Thank you and good afternoon, everyone. As Enrique mentioned, our Q3 results were impacted by macroeconomic challenges, including a significant slowdown in consumer demand in our categories, inflation, currency, and geopolitical challenges. We took swift actions across the levers within our control to help address these headwinds, focusing on rigorous financial management in both our costs and our investments across our businesses. In addition, we are executing on our strategy and returning significant amounts of capital to shareholders. Disciplined financial management, particularly OpEx and cost management, is core to our DNA at HP, and we are confident in our ability to navigate adeptly in up and down market conditions. Furthermore, we continue to realize structural cost savings from our transformation program and see additional opportunities to drive significant cost reductions ahead of us. Despite these recent challenges, we remain confident in both our end markets and strategy to drive the long-term value creation opportunities we see ahead of us. With that, let's take a closer look at the details of the quarter. Net revenue was $14.7 billion in the quarter, down 4% nominally and 2% in constant currency. Approximately two points or half of the decline was due to the change in estimated sales and marketing incentives benefit in our prior year results. Gross margin was 19.8% in the quarter, down 2.4 points year-on-year, driven by the change in estimated incentives benefit in the prior year and currency. Non-GAAP operating expenses were $1.5 billion or 10.3% of revenue, down 20% year-on-year. In Q3, we installed further rigor in our cost management. We reduced our OpEx spend by over $370 million year-on-year and quarter-on-quarter by prioritizing our variable spend in R&D and marketing aligned with our growth categories. Lower variable compensation, given the more challenging business environment, was also a key driver. At the same time, we are making prudent and targeted investments where we anticipate significant opportunity to drive growth, including our key growth areas, which I will touch upon in a few moments. Non-GAAP operating profit was $1.4 billion, down 8%, and non-GAAP net OINE expense was $104 million for the quarter. non-GAAP diluted net earnings per share increased 4% to $1.04, with a diluted share count of approximately 1 billion shares. non-GAAP diluted net earnings per share excludes a net benefit totaling $40 million, primarily related to non-operating retirement-related credits and other tax adjustments, partially offset by restructuring and other charges, amortization of intangibles, acquisition-related charges, and Russia exit charges. As a result, Q3 GAAP diluted net earnings per share was $1.08. Now let's turn to segment performance. In Q3, Personal Systems revenue was $10.1 billion, down 3% and flat in constant currency. Total units were down 25% as a result of a decline in ChromeOS demand, as well as the rapid deterioration of demand late in the quarter, particularly in our consumer business. In addition, we continued to see ongoing supply chain constraints as expected in some pockets of PS. In spite of those challenges, there were several bright spots in the quarter. We saw solid demand in our higher value categories across commercial and consumer, consistent with our strategy. Commercial revenue constituted over two-thirds of our Personal Systems revenue in Q3, and our commercial Windows-based revenue grew approximately 18%, with units up 6%. Mobile workstation revenue was up approximately 60%. Consumer premium revenue was up 10%. The long-term secular tailwinds we continue to see in Personal Systems, including hybrid work, give us confidence in our long-term outlook. Regarding hybrid work, an area of focus, I want to give a warm welcome to our Poly team. We anticipate significant opportunity ahead from both a strategic and financial perspective, with clear opportunities to capitalize on both secular tailwinds and synergies to help drive long-term revenue and non-GAAP operating profit and EPS growth. I will cover the financial impact of Poly shortly. Let's drill into the details. Commercial revenue was up 7% year-on-year and up 11% in constant currency. Consumer revenue was down 20% year-on-year and down 18% in constant currency. FX was clearly a key factor in our results this quarter. As an example, currency was an approximate 5-point headwind to our Personal Systems business in EMEA this quarter. By product category, revenue was down 10% for notebooks, up 13% for desktops, and up 38% for workstations. We also continued to perform well in many of our key growth areas, including peripherals and DaaS, which was up strong double digits. Personal Systems delivered $695 million of operating profit with operating margins of 6.9%, flat sequentially as we continue to execute despite the headwinds I mentioned earlier. Operating margin declined 1.5 points year-on-year, primarily due to currency and higher costs, particularly in consumer, partially offset by lower OpEx, including lower R&D and variable compensation and improved commercial product mix. In Print, our results reflected our focus on execution and the breadth of our portfolio as we navigate the current environment. In Q3, total Print revenue was $4.6 billion, down 6% nominally and down 5% in constant currency, driven by lower supplies revenue and lower Print hardware units. This was partially offset by higher home and office hardware ASPs and growth in industrial graphics and Instant Ink services. Total hardware units declined 3%, driven largely by lower than expected IC component availability and logistics constraints. While we have qualified additional suppliers and our board redesigns are on track for product inclusion later this year, we still expect Print hardware constraints to extend into FY 2023. By customer segment, commercial revenue declined 3% and down 1% in constant currency on unit declines of 15%. Consumer revenue was up 1% and 3% in constant currency with units down 1%. However, we saw some softening in home hardware demand sequentially, particularly on low-end units impacting ASPs, driven by the headwinds I described earlier. In Q3, commercial recovery continued to be impacted by the slow return to the office. In contrast, we did see solid growth in industrial graphics and 3D. In graphics, our flexible packaging business had another solid quarter, and impressions have more than doubled versus pre-pandemic levels. Overall, we continue to expect a gradual and uneven recovery in commercial, with the overall office market returning to approximately 80% of its pre-pandemic TAM over time based on our current outlook. Supplies revenue of $2.8 billion declined 9% in constant currency. The decline was driven primarily by significant reduction in consumer demand, driven by the challenging environment and continued normalization in home printing, partially offset by the gradual recovery in industrial print. The estimated impact of our decision to stop and permanently wind down our Russia business was approximately 1% headwind to our supplies revenue year-on-year. Instant Ink services delivered another quarter of double-digit increases in both cumulative subscriber growth and revenue, continuing to highlight the success of this business model even in a tougher macro. Print operating profit was $911 million, up 6%, yielding an operating margin of 19.9%. Operating margin increased 2.3 points, driven by rate improvement in hardware and OpEx management, particularly lower variable compensation, partially offset by unfavorable mix. Now let's move to our transformation efforts, where we had another strong quarter of progress and are on track to exceed our $1.2 billion in gross run rate structural cost reductions by fiscal year-end. During Q3, we delivered on numerous fronts, driving cost reductions to help drive long-term value creation. In Q3, we took several actions to drive structural cost reductions across both our manufacturing and real estate footprint. We executed two significant actions intended to optimize our print factory footprint, driving both efficiency and increased global resiliency across our ink and laser hardware and supplies manufacturing. In addition, we continued to optimize our real estate footprint with site exits or reductions. Year to date, we have now executed 23 site optimizations, including eight site exits, and our overall plan has now reached 90 site optimizations since the start of our transformation. Our current efforts have established a strong foundation that we fully intend to build upon going forward. As Enrique mentioned, we are currently finalizing our next phase of digital transformation focused on further cost and efficiency opportunities and plan to provide an update during our Q4 earnings call. Now let's move to cash flow and capital allocation. Q3 cash flow from operations and free cash flow was $0.4 billion and $0.3 billion respectively. The cash conversion cycle was minus 29 days in the quarter, a sequential improvement of three days. Free cash flow and the sequential improvement in the cash conversion days came in below our expectations, driven primarily by the larger than expected sequential decrease in Personal Systems volume, delays in supply availability, and unfavorable manufacturing linearity. While we saw a meaningful improvement in our days of inventory in Personal Systems, driven primarily by a decrease in commodities, these benefits were more than offset by higher days of print inventory, largely from assurance of supply and increased lead times. Looking ahead to Q4, we expect to see further improvement to our cash conversion cycle. Driving our outlook are our expectations for additional operational improvements, including further reductions to inventory levels, and we also expect some improvement in Personal Systems volumes sequentially in Q4. Strong capital returns continue to be a key part of our capital allocation strategy. In Q3, we returned approximately $1.3 billion to shareholders. This included approximately $1 billion in share repurchases and $255 million in cash dividends. Since the start of our value plan, we have returned over $15.6 billion to shareholders and remain on track to exceed our $16 billion return of capital target by fiscal year-end, while also maintaining a strong balance sheet and investment-grade rating. In Q4, we expect to continue to be active in our shares. Looking forward to Q4 at our fiscal year-end, we continue to navigate the challenging macro and demand environment, including inflation, logistics constraints, and pricing dynamics. In particular, keep the following in mind related to our Q4 and overall financial outlook. Given the changing demand environment driven by the headwinds I've described, we are modeling several scenarios based on a range of assumptions. For FY 2022, we now see a wider range of outcomes, and as a result, we are lowering our overall outlook for FY 2022. We expect to rigorously manage our overall cost structure and OpEx spend while continuing to prioritize investments where we see opportunities for growth. We expect currency to be approximately three percentage points year-over-year headwind in Q4 and about 1.5 percentage points for FY 2022, reflecting the continued strengthening of the US dollar. For Personal Systems, we expect many of the trends we saw in Q3 to continue, including softer demand in both consumer and commercial. We anticipate these factors will put some sequential pressure on overall pricing. We expect Personal Systems unit mix to continue to shift towards higher value categories, including commercial premium and peripherals. With regard to our Personal Systems supply chain, we expect availability in most of our key components to improve, with pockets of semiconductors to remain constrained into FY 2023. We expect Personal Systems margins to be in the lower end of our 5%-7% target range in Q4. Regarding Q4 Personal Systems revenue, we expect to be up slightly sequentially. Regarding Poly and our results, they will only reflect the last two months of the quarter, and we expect Poly to be accretive to non-GAAP EPS in FY 2023. In Print, we expect further softening in demand in consumer, similar to what we saw in the latter part of Q3. Favorable pricing in higher end consumer and commercial units and further normalization in mix as we expect commercial to gradually improve over time. With regard to Print supply chain, we expect similar to Q3, component shortages and logistics delays to constrain hardware revenue in some areas. We expect these conditions to continue into FY 2023, but with some incremental improvement in Q4. We now expect Print margins for Q4 specifically to once again be above the high end of our range, given continued hardware constraints and disciplined cost management. Finally, regarding Supplies revenue, we are holding to our long-term outlook of a low- to mid-single-digit annual decline in constant currency. In the near term, over the next few quarters, we expect to see a decline of roughly low double digits given the challenging environment. As a result, we expect to be above our long-term range for FY 2022. With regard to the impact of Poly on our financials in the fourth quarter and for FY 2022, we expect for non-GAAP diluted net earnings per share an approximately $0.05 headwind from Poly, including debt-related expenses and other deal-related costs. For our GAAP diluted net earnings per share, we expect an incremental approximately $0.27 GAAP-only charge related to the Poly acquisition charges. Regarding free cash flow, we expect an approximately $300 million cash flow headwind related to Poly acquisition and integration costs. Taking these considerations into account, we are providing the following outlook. We expect fourth quarter non-GAAP diluted net earnings per share for HP without Poly to be in the range of $0.84-$0.94. For HP with Poly, we expect fourth quarter non-GAAP diluted net earnings per share to be in the range of $0.79-$0.89. Fourth quarter GAAP diluted net earnings per share for HP without Poly to be in the range of $0.76-$0.86. For HP with Poly, we expect fourth quarter GAAP diluted net earnings per share to be in the range of $0.44-$0.54. We expect FY 2022 non-GAAP diluted net earnings per share for HP without Poly to be in the range of $4.07-$4.17. For HP with Poly, we expect FY 2022 non-GAAP diluted net earnings per share to be in the range of $4.02-$4.12. FY 2022 GAAP diluted net earnings per share for HP without Poly to be in the range of $3.78-$3.88. For HP with Poly, we expect FY 2022 GAAP diluted net earnings per share to be in the range of $3.46-$3.56. For FY 2022, we now expect free cash flow for HP without Poly to be in the range of $3.5 billion-$4 billion. For HP with Poly, we now expect free cash flow to be in the range of $3.2 billion-$3.7 billion. We continue to make progress against our priorities as we navigate through a very volatile fiscal 2022, and we are taking decisive actions with the levers within our control. Looking forward, we plan to provide guidance for FY 2023 as part of our Q4 earnings call. Typically, we would provide guidance as part of our annual Analyst Day or Securities Analyst Meeting event. Moving forward, we plan to have these Analyst Day events biannually or as we have key updates to our strategy. We continue to be confident in our ability to deliver long-term value creation, and we look forward to sharing our progress with you. I'll stop here so we can take your questions. Thank you. We'll now begin the question and answer session. To ask a question, you may press star then one on your touch-tone phone. If you're using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, again, press star then one. We also ask that you please limit yourself to one question and a single follow-up. Our first question today will be from Erik Woodring with Morgan Stanley, your line is open. Awesome. Thank you guys for taking my question. I guess maybe one for you, Enrique, and then one for you, Marie. Just on the pricing side, Enrique, maybe can you give us a little more detail on the pricing actions you're taking, and really in respect to kind of balancing or the challenge of balancing kind of softening demand with U.S. dollar strength, you know, and what that means for international sales. If you could just specify again across Personal Systems and Printing, that would be super, and then I will follow up. Thank you. Sure. Thank you, Erik. I think that overall this quarter and similar to what we have done in the previous quarter, the team has done a very nice job managing pricing. If we look at year-on-year compares, we continue to see benefit of pricing, which is really driven by this. What we're starting to see is some erosion quarter-over-quarter, driven by both the increase in competitiveness that we see, but also by the fact that especially in PCs, we see a high channel inventory. We expect that the pricing situation is going to become more aggressive, especially as we enter in Q4. From a currency perspective, traditionally, we have been very effective managing currency and pricing it. Again, depends also on what the competitive situation is and what the channel inventory is. We may not be able to fully price it, but traditionally this has been one of the key things that we have done over time. Super. Thanks for that detail. Maybe Marie, you know, just a quick clarification question regarding Poly. Is the you know the low single digit sequential increase in fiscal 4Q revenue that you're talking about, is that overall revenue and does that include you know the 2 months of Poly and you know do we think about including that in Personal Systems for now? Or are you thinking about re-segmenting? Just any color that you could provide there would be super helpful. Thank you. Sure. Erik, good afternoon. Maybe I'll just start out by clarifying Poly. For now, Poly will be in our Personal Systems external reporting going forward. In terms of Poly, just a point of clarification, the guide actually just comprehends the last two months of Poly. You know, going forward, we do expect Poly to be accretive to our non-GAAP EPS. In terms of the $0.05 headwind, there's a combination of both macro headwinds in there and plus debt related expenses and integration costs. Net-net, Erik's, it's roughly in line with our expectations. Just a point to follow up on Enrique's comments on currency. We do actually see a 3-point headwind in Q4 as well. Let me share kind of the excitement that we have about the announcement we made yesterday. We think that the acquisition of Poly positions us very strongly as a leader in hybrid work. We see a tremendous opportunity to add value, to innovate, and to differentiate ourselves. We are really eager to start working with the Poly/HP team to start bringing new solutions to market and really expand that business. Your next question comes from Toni Sacconaghi with Bernstein. Your line is open. Yes, thank you. I'm wondering if you can just comment on the state of your backlog in the Personal Systems group. I think going into the quarter, you had anticipated not being able to reduce backlog because it was elevated, and I'm wondering whether backlog changed over the course of the quarter, and whether you expect backlog to be at normal levels by the end of the fiscal year. I have a follow-up, please. Sure. Thank you, Tony. I'll take that one. Backlog reduced during the quarter, but we had talked before, majority of the backlog was on the commercial side. Given the supply chain improvements that we had that we were expecting, we were able to clear some of it. We are entering Q4 still with more elevated backlogs than normal, but it's lower than what we had at the beginning of the quarter. Do you expect to be at normal levels at the end of the fourth quarter? Maybe I'll ask my second question with that at this point as well. Supplies was down 9%. That feels extremely abrupt change from, you know, kind of the -3% level that you were at before. Was there any meaningful level of supplies channel inventory change? I think you said you anticipated supplies being down double digits for the next few quarters. How do we know that there's not something structural akin to what we saw a couple of years ago happening with supplies? Why shouldn't we be worried about a pronounced negative mix shift given supplies are higher margin than hardware? That once hardware goes back to kinda normalized pricing levels, printing margins could actually be below your trend. Thank you. Sure. Let me answer first the question on backlog. Our current plan is that we should be able to clear that during Q4. Of course, depends on both how demand and supply evolves, but this is the plan that we have at this stage. Really thank you about the question on supplies because this is really something that I wanted to clarify. The situation that we see today is radically different from what we saw in 2019. The slowdown that we have seen is driven by a reduction in demand, especially in consumer, which is driven by the macroeconomic situation, very similar to what we are seeing in consumer PCs. If I look at the business fundamentals like share, they are behaving as expected. Even if channel inventory is slightly high, again, driven by the slowdown we have seen in demand, overall channel inventory dollars are down year-over-year. Therefore, we see this as temporary. It's similar to other economic slowdowns that we have seen in the past, and the speed of decline has been similar. Long-term, we continue to project that supplies will decline in low- to mid-single digits. Based on how we have designed the strategy of the company, we don't need supplies to grow to meet our profit goals. Maybe one silver lining that I would like to share is something that we have seen through this quarter and that has confirmed the importance of the strategy: subscription models are significantly more resilient than the traditional model, which really reinforces the need to continue to shift the business towards that model. Your next question comes from Shannon Cross with Credit Suisse, your line is open. Thank you very much. I was wondering, sort of a follow-up to that. Can you talk a bit about the subscription business in maybe more detail? I'm just wondering, you know, percent of revenue or, you know, growth you've seen. Also, anything you can talk about with HP+ in terms of regaining share from the aftermarket. I have a follow-up. Thank you. Sure. Shannon, it's great to hear your voice again. Thank you. Talking about Instant Ink, it continues to grow double digits, both revenue and net new subscribers. All this is doing really well. Really this is driven by the fact that the value proposition to consumers is better than the traditional model. Cost of printing is lower, it is more convenient because they get consumables at home, and on top of that, it's more sustainable, which is really becoming every time more important. We continue to see growth in that space, and we're gonna continue to shift the business in that direction. As we have discussed in the past, we continue to see this as a platform to sell additional subscription programs. As we shared a few months ago, we have learned, for example, the pilot of paper subscription in the U.S, and we are seeing good traction and good progress. Very good progress there. In terms of HP+, penetration continues to grow. We announced a new system on the laser side this quarter that had very strong reception. As we have shared in the script, when we look at the combination of HP+ plus big ink and big toner, the combination of both is more than 50% of our hardware shipments this quarter. This talks about the progress that we continue to make in that space, and this is really important, as we have said before, to rebalance profitability between hardware and supplies. Okay. Thank you. Then you're basically at about $16 billion for your cash return to shareholders, you know. I'm curious as to how you're thinking about it, given the potential pressure on free cash flow, given the PC business slowdown, what we should think about in terms of your commitment to share repurchase and, I mean, obviously dividend growth, over, you know, the coming year or two. Thank you. Sure. For the rest of the year, we have shared that we are gonna be exceeding the plan that we explained about three years ago to returning $16 billion of capital, so we will be above that plan. In terms of going forward, we don't foresee any changes in our capital allocation strategy. We are gonna continue to execute the model that we have been sharing, or the framework that we have been sharing during the last years. First of all, we think that for us it's important to stay investment grade credit rating. For us to be there, we need to be in a leverage ratio between 1.5 and two, which is where we are now. Once we are in that range, our plan is to continue to return 100% of free cash flow to investors, either in dividends or in share buybacks, unless an M&A opportunity with a better return shows up. This is what we have been doing during the last quarters, and this continues to be the plan going forward. Your next question comes from Sidney Ho with Deutsche Bank, your line is open. Great. Thanks for taking my question. Last quarter, you had expected strength in the commercial PC for the rest of fiscal 2022. Obviously things have changed. It seems like third quarter commercial revenue did decline, but better than consumer. When did you start seeing signs of demand weakness, and any color on how the quarter progressed would be great. Do you have a view when you will start seeing some stabilization in that market? I have a follow-up. Thanks. Sure. Thank you. Let me explain what we have seen on the commercial side, which is a little bit more complex than on the consumer side. I think the influencing factors are the same, and it's really how the macro situation has evolved and the implications of, especially of inflation and the, and companies in general becoming more cautious as they manage their investments. What we are seeing is that from one side, companies continue to open significant deals because they see the need to improve the experience of their employees as they come to the office. Feedback that we get constantly from our customers is that employees have now better systems to work from home than to work in the office, so they need to invest in the equipment in the office to convince them to come back to the office. This is really creating a lot of opportunities, and the funnel of opportunities that we see is very significant, significantly above what we need to make our sales targets. At the same time, what we are seeing is once we win those deals, the conversion of those deals into orders has slowed down, which really reflects the fact that enterprises are being more cautious in how they manage their budgets, how many new employees they hire. This is having an impact. This had an impact in Q3 of orders in the commercial space. Additionally to this, we also saw at the end of the quarter, a reduction in the sell-out, especially in the more transactional commercial categories, those that are closer to the consumer business. This is what we are projecting is going to continue into Q4, and this was one of the elements that Marie commented that we are using in our guide because we have seen the slowdown in the commercial categories. Okay. That's helpful. Thank you. My last follow-up question is, I want to get an update on your growth area initiatives. You kinda talk about the various businesses there, but you already had $5.6 billion of revenue in the first half of fiscal 2022, so reaching $10 billion target doesn't seem to be a stretch. But can you talk about what you expect half-over-half in the second half of the fiscal year? Especially interested in your comments on gaming, given what we've been hearing about the weakness there, but also how does the full year target change with the inclusion of Poly? Thank you very much. Let me start from the end. When we talk about being above $10 billion, we are not including the additional revenue coming from Poly. We were not planning to close the deal in Q4, and the target was without them. What we have seen for the categories is continuation of the overall categories double-digit growth. Let me refresh what these categories are: consumer subscriptions, workforce solutions, gaming, industrial print, industrial print and 3D, and peripherals. All these categories overall are growing double digits. Of course, some of them are growing slower than others. In this quarter, we saw a slower performance of gaming than what we had seen in the past, which was a combination of demand and some supply constraints that we were expecting, but we expect it to recover in Q4. Overall, very strong performance of the growth businesses. That is really critical for us because they will continue to contribute to the overall growth of the company, even in a more relevant way going forward. Your next question comes from Wamsi Mohan with Bank of America. Your line is open. Yes, thanks for taking my question. Enrique, I was wondering if you might be willing to share some thoughts on the PC industry outlook overall. For calendar 2022, I think industry analysts are forecasting roughly 300 million. We heard one of your large competitors talk about a number that's lower. Our own work is showing something even lower than that. Any early thoughts into calendar 2023, particularly as we stand here, because there's a lot of concern about things reverting to sort of pre-COVID levels, given the dynamics that happened during COVID, and I will follow up. Sure. Our current projection is similar to what you were describing. We see the market somewhere in between 290-300 billion units. This is what we're using for our plans. This is in units. We continue to see more growth on the premium categories. From a revenue perspective, the market is proportionally bigger from that perspective. This is still significantly higher than where we were pre-COVID. We think that the fundamentals of the business have not changed from the perspective that PCs are way more relevant now than they were three years ago. If you think about hybrid work, for example, which is where we think the majority of the companies are gonna be working. If you think of how majority of the companies are going to be working, if you think about telehealth, if you think about how students are using PCs today, all these are drivers of growth for PC. We see that the slowdown we are going through in consumer and potentially in commercial is driven by macro, is not driven by preferences for PCs or whether PCs are more useful or not. We continue to believe they are critical, and so we remain optimistic about the future of PCs, even if we think we are gonna go through these temporary headwinds driven by the macro situation. Thanks, Enrique. Any thoughts on 2023 there?. As a follow-up, can you talk about the state of the channel in terms of inventory? You clearly noted a more aggressive pricing environment. How worried should investors be about any potential writedowns that you might have to take? Do you expect the PC print profit mix to revert back to the 75-25% as we look over the next few years? Thank you so much. In terms of 2023, at this stage, it's since we think that the major impact is macro, it's really hard to predict what is gonna be the evolution on the macro side. This is why we highlighted that given that macro we cannot control, we are taking all the necessary actions in the company to manage it through the next quarter because we think this difficult macro situation is going to continue. In terms of guidance for fiscal year 2023, we will be providing it during our Q4 call, and then this is a plan to share kind of how do we see the different businesses performing. In terms of channel, and these were like three follow-ups in the follow-up, we see, as I mentioned, high inventory in the channel. We are gonna be managing it down through the different quarters, and we have this built into the guide that Marie shared with all of you. Wamsi, might just add, so just a point of clarification, the inventory. It's certainly on the PS side of the house, but in print hardware, actually, we're in good shape given the current supply chain position. Also just to add a comment to Enrique's comments about the PS. Profit mix and how to think about the rates, et cetera. I mean, we do expect, however, for PS to stay in those long-term ranges. If you think about the acquisition of Poly, I think that's a good example of how we see these growth businesses that have higher gross margins really playing into the mix going forward as well. Thank you, Marie. No worries. Your next question comes from Samik Chatterjee with JP Morgan, y our line is open. Great. Thanks for taking my questions. I guess, if I can start with the PS segment. You've talked today about primarily the sort of consumer weakness that you're seeing, but you still expect the mix to sort of move towards the higher end there in terms of the high-end consumer or premium consumer remaining strong. I'm just wondering, what are you seeing in terms of price elasticity from consumers? Why shouldn't we sort of be a bit more concerned that maybe the next step is for consumers to start to trade down a bit and sort of the mix to start to move down a bit? If you can share your thoughts around that, and I have a follow-up. Thank you. Yeah. Let me share our view on that. What we are seeing in consumer is a shift towards more premium categories because we think that the traditional buyer of the premium categories is less impacted by the macro situation that we see. As inflation has grown, as energy prices have increased in many parts of the world, as food prices have increased, families with lower income, families with lower budgets have a bigger impact, and they usually or traditionally buy lower price PCs versus families with higher income. We think this is really one of the key drivers of the change of mix that we are seeing. Okay. A quick follow-up for Marie here. Marie, I'm just looking at the cash flow, updated cash flow guidance, and the change in the cash flow seems a bit more pronounced than the change in the earnings outlook, particularly as if I walk through sort of the PS changes, on the share count, it just looks like the cash flow is coming down a lot more. If you can just walk me through the big sort of buckets in terms of the cash flow guidance change. We expect our cash flow is largely in line with our net earnings. Obviously, there's some differences, you know, quarter to quarter on working capital. Just in terms of how to think about cash flow and the guide and what we see as some of the drivers for Q4, you know, firstly, I'd say, look, we've got plans to, you know, improve our working capital sequentially, and we're seeing that just in terms of the lower inventory levels. You would've seen that in Q3. We expect operationally take additional actions going into Q4. I'd say we also, you know, in this last quarter in Q3, we did have some timing impacts around other assets and higher accounts receivable from our contract manufacturers, which caused, you know, that AR to be collected in early Q4. You know, this was caused by component receipts and delays to us. You know, therefore those month three shipments to our CMs were late. Now, we do also continue to expect to see some sequential improvement in PS volumes. You know, as you know, PS is a negative cash conversion cycle, so that'll be a tailwind. Based on these factors, you know, I'm confident in our free cash flow outlook of $3.5-$4 for HP for the year. Your next question comes from Ananda Baruah with Loop Capital, your line is open. Hi. Thanks, guys. Hey, thanks for taking the questions. Appreciate it. Enrique, in your comments, you talked about, you know, sort of ASP declines becoming a bit stronger, as you move through the quarter, and it also sounds like the commercial order slowing or sort of protracting is just on the front end. I guess the question is, should we anticipate the fundamentals become a bit more challenging post the October quarter, if even just in the near term? I have a quick follow-up as well. We are not guiding next year, and we expect that channel inventory will be corrected or will be partially corrected at least during Q4. As we enter in Q4, we expect these more aggressive pricing dynamics. When we look at the channel inventory of the industry, so this is not an HP particular situation, channel inventories are high, and therefore we expect to see competition be more aggressive on pricing. This is. We are not gonna be the drivers of that. We will only respond if we see the need to manage our sell-out, but we expect to see pricing more aggressive as we enter in Q4. Ananda, just to add, in Q4. Understood. Oh, sorry. No, I was gonna add that our ChromeOS shipments fall off, so in terms of the comp, so that was a tailwind obviously for Q3, which won't be repeated in Q4. Helpful. Cool. Quick follow-up is, the transformation plan that you'll gonna be talking to us about in 90 days, would we be? I'm just trying to get a sense of how incremental it is, and I guess the way I'll ask the question is, would we be hearing of you guys in 90 days, would you be describing to us, you know, some actions that you'd be taking or some plan if you weren't seeing the incremental macro impact currently? That's it for me. Thanks. In any case, no matter what the macro is, we need to continue to improve the efficiency of the company, and the investments that we have done during the last years in IT and in digital systems will allow us to continue to do going forward. Absolutely. Thanks. What you will see from us is this plan that will show what are the investments that we are gonna be making, what are the returns that we expect to see over time, but a big part of it is really be driven by digital, leveraging from the work that has been done during the last years. Your next question comes from Jim Suva with Citigroup, your line is open. Thank you. Enrique and Marie, when you mentioned about pricing and margins to come down a little bit lower. I remember pre-COVID it was 3.5%-5.5% operating margins for PS, then I think you took it from 5%-7%. Are you kinda saying now we should kinda, you know, start to model in getting back to the 3.5%-5.5% range, or are you talking about kind of the lower end of the 5%-7% range? I'm just kinda wondering about have we structurally moved that higher, or is it actually with more supply gonna go back to the 3.5%-5.5% range? Thank you. Jim, hey, it's Marie, good afternoon. We absolutely remain committed to our long-term ranges for PS that we gave at our securities analyst meeting. I think the point of clarification is just what we're expecting to see in Q4, where we do expect to be at the lower end of the range based on a lot of what you've heard on the call today. Also remember that Q4 is typically our consumer holiday season, where you'll see, you know, obviously a slightly different mix from a pricing perspective. Overall, Jim, you know, we're not changing our ranges, and we're staying on track for our long-term range. Just a reminder, Jim, what we said is we expected to see within the 5%-7% range. We were already expecting margins for PCs to go down as we shared that range, but we also were expecting the new businesses, peripherals, and services to grow in relevance, to grow in mix to compensate for the decline. This was the model that we had a year ago, continues to be the plan. We just need to see how this manages now as we face this new and not expected economic headwinds. Okay. I think we are at the end of the time. Thank you all for joining us today and for spending the last hour with us. I would like to make a few comments. Clearly during the quarter, even if we face significant economic challenges, we delivered solid EPS growth of 4%, and we continue to return capital to shareholders. In this case it was $1.3 billion. We are taking clear actions to mitigate the near-term macro headwinds that we are facing while we continue to drive progress and execute on our long-term growth strategy. Because as we always say, this, as every other, is an opportunity to further strengthen the company and to continue to build a stronger HP. Thank you. This concludes today's conference call. You may now disconnect.