Gross margin improved to 33.3% in Q4, up 120 basis points from prior year, driven by favorable revenue mix and efficiencies.
Healthcare division sales declined in Q4, negatively impacting consolidated growth but with plans for improvement.
Net interest expense decreased to $7.2 million due to lower debt levels and favorable convertible notes impact.
Operating expenses were well controlled with SG&A at 14.8% of sales and R&D increased to 3.7% of revenues reflecting investment in innovation.
Optoelectronics division set a new Q4 record with $113 million in revenues including intercompany sales.
Q4 revenues increased 5% year-over-year to $505 million, driven by a 28% increase in Security division service revenues and 10% growth in Optoelectronics division revenues.
Record Q4 non-GAAP adjusted EPS of $3.24, the highest quarterly adjusted EPS in company history.
Security division revenues in Q4 were $367 million, up 7% year-over-year, with a 50% growth excluding Mexico contracts and acquisitions.
Free cash flow was approximately $1.5 billion, with $1.7 billion cash from operations, and over $400 million returned to shareholders via dividends and buybacks.
Gross margin was 20.5%, down year-over-year due to higher personal systems mix, trade-related costs, and currency impacts, partially offset by pricing and cost management.
HP delivered a fifth consecutive quarter of growth with top-line revenue increasing 3% year-over-year, driven by strong personal systems performance.
Non-GAAP diluted EPS was $0.75, slightly above the midpoint of guidance, reflecting a 6% sequential improvement.
Non-GAAP operating margins for print and personal systems were within guidance, with personal systems margin returning to long-term target range at 5.4%.
Personal systems revenue grew 6% year-over-year, exceeding expectations, with 5% unit growth and increased ASPs.
Print revenue declined 3% in constant currency, reflecting a softer office segment and competitive pricing environment.
Dafinchi