Carol (Interviewer) (3:40)

I mean, you actually said you're not done raising prices. You talk about discipline in what is a very dynamic environment. Antonio, talk to us about how you're weathering the supply chain issue. In particular the cost, the memory costs at the moment. How do you navigate that?

Antonio Neri (3:56)

Yeah, I mean, obviously the demand and supply has a huge mismatch and you actually need to go back all the 22, 23 time frame to understand how we got here accelerated by the hypercycle we see in the space. But fundamentally in our guidance, the new guidance, the new outlook that we raised for 2026, we included our ability to see the supply that we need to convert that into revenue and profit. But the reality is that we do not have enough supply against the order intake and the backlog because otherwise we'll have even a higher outlook. So what we're doing, we have taken three very unique steps. Number one is securing as much supply as we can. But again, we don't have all the supply that we would like to have. Number two is taking a very agile posture when it comes down to pricing. And as I said yesterday, we are not done raising pricing. I think that that cycle will continue well into 2027, although we will hope that we will reach some sort of elevated pricing step stability in 2026. And number three, you know, my experience have taught me that ultimately you need to have direct, transparent conversation both with customers and our partners. Last week I was in Europe. I met more than 20 customers at the Mobile Congress in London. And they appreciate that level of transparency, understanding the environment we're in.

Carol (Interviewer) (5:25)

I mean, you're actually foregoing supplying some equipment to mobile service providers. So you're being choosy with who you work with at this time of geopolitical angst. And when we question how much the Middle EAS east is going to be able to build out the data center capacity as we'd once thought. Has the Iran conflict impacted your view on the world or indeed the supply of the world and chips not on

Antonio Neri (5:48)

the supply side, Carol. And obviously our first priority because we have businesses in that region, whether you Qatar, Bahrain, Saudi Arabia, Israel. Right. Is the well being, the safety of our employees. We have approximately 1,000 employees in that region and the good news, all are doing well at this point in time. But from a supply perspective, no. But obviously as the the conflict may get elongated, may have all the implications particular on the logistics side of the equation. You know, look, air freight routes are a little bit more complicated. We don't use boats or ships for transporting our equipment. But over time we have to assess if there is a revenue impact. What I can tell you right now, there is even more, more demand than we saw particularly three or four months ago. So we have to navigate that together and we have to be smart about it.

Ed (Interviewer) (6:44)

Antonio, you have never let me tear apart an HP server and that's okay. But if I got my hands in the compute tray, you'd have the high bandwidth memory around the GPU wherever it comes from. You'd have the DDRs around the CPU and somewhere you'd have the SSDs NAND flash memory. Be very, very specific. Of those three, what's the biggest impact to you right now in constraining your sales and your outlook Very simply is

Antonio Neri (7:11)

DDR and NAND or the SSDs HB's less constrained. But obviously a lot of the allocation on the capacity has moved there. And as you know there is also transition from the prior generation of HBM to the new generation of HBM because you need more memory channels but is really the DDR4 and which now nobody almost use it but DDR5 and the NAND part, which is the SSD you said just earlier.

Carol (Interviewer) (7:40)

Look you. One of your three key steps you took was to get as much supply as you could and to ensure that that was locked in. You wish you could have more. Who is it that you need to push more? Who is it that you need to have more security for? How can you perhaps get hands on further supply going forward?

Antonio Neri (7:57)

Look, we have a long standing relationship with the three core suppliers that provide DDR memory and HBMs. And there is a little bit larger ecosystem for the NAND space. But we have in weekly engagements with them. We are looking to swap components driving different configurations, but the reality all of them are significantly constrained.

Ed (Interviewer) (8:22)

Caroline Antonio, just 20 seconds. What's the dollar figure dollar terms of what was left on the table, how much better the outlook could have been?

Antonio Neri (8:33)

Yeah, it's pretty sizable, I will say. You know, we guided five pennies on the midpoint of the range and then we raise our outlook for free cash flow by almost 200 million at the midpoint. But the backlog is very, very large at this point in time. If you think about the AI system backlog is over 5 billion. We raise again the network in for networks for AI goal for the year. So it's a very sizable backlog. So we hope we make progress as we go along, but we categorize we level this as a prudent guidance at this point in time.

Carol (Interviewer) (9:11)

Antonio Neri, CEO of HP thanks for the candid conversation. We appreciate it.

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