Marie Myers
Chief Financial Officer at HP
Thanks, Enrique, and hello everyone. It's good to be back together and it was great to connect with so many of you following our Analyst Day. I want to start by building on something Enrique said a moment ago. Q4 was a strong finish to a very strong year. It builds on our proven track record of meeting or exceeding the goals we set and it underscores our confidence in our FY '22 and long-term financial outlook.
Let me begin by providing some additional color on our results, starting with the full year. Revenue was $63.5 billion, up 12%. Non-GAAP operating profit was $5.8 billion, up 42%. We grew non-GAAP EPS even faster, up 66% to $3.79. This continues our trend of growing non-GAAP EPS every year since separation. Our $4.2 billion of free cash flow was consistent with our full year guidance and adjusting for the net Oracle litigation proceeds and we returned a record $7.2 billion to shareholders. That's a 172% of free cash flow.
What's especially important to note is how well balanced our performance is. We are growing our top and bottom line. We are returning capital to shareholders and investing in the business. We are accelerating new growth businesses and driving efficiencies. This reflects the company geared towards both short and long-term value creation as we enter a new period of growth for HP. This is supported by our Q4 numbers. Net revenue was $16.7 billion in the quarter, up 9% nominally and 7% in constant currency. Regionally, in constant currency: Americas declined 4%, EMEA increased 15% and APJ increased 18%.
As Enrique mentioned, supply chain constraints continue to impact both Print and Personal Systems revenue and this was particularly impactful to our print hardware results this quarter. That said, demand remain strong as hybrid work creates sustained tailwinds. Gross margin was 19.6% in the quarter, up 2 points year-on-year. The increase was primarily driven by continued favorable pricing including currency, partially offset by higher costs. Non-GAAP operating expenses were $1.9 billion or 11.5% of revenue. The increase in operating expenses was primarily driven by increased investments in go-to-market and innovation.
Non-GAAP operating profit was $1.3 billion, up 28% and non-GAAP net OI&E expense was $64 million for the quarter. Non-GAAP diluted net earnings per share increased $0.32, up 52% to $0.94 with a diluted share count of approximately 1.1 billion shares. Non-GAAP diluted net earnings per share excludes Oracle litigation gains, defined benefit plan settlement gains, non-operating retirement related credits, partially offset by restructuring and other charges, amortization of intangibles, acquisition-related charges, other tax adjustments. As a result, Q4 GAAP diluted net earnings per share was $2.71.
Now, let's turn to segment performance. In Q4, Personal Systems revenue was $11.8 billion, up 13% year-on-year. Total units were down 9% given the expected supply chain challenges and lower chrome mix. The fact we still grew revenue double digits in this environment reflected the strength of demand and positive impact of our big shift towards mainstream and premium commercial. Drilling into the details, Consumer revenue was down 3% and commercial was up 25%. By product category, revenue was up 13% for notebooks, 11% for desktops and 39% for workstations. We also continue to drive double-digit growth across peripherals and services.
Personal Systems delivered $764 billion in operating profit with operating margins of 6.5%. Our margin improved 1.4 points, primarily due to continued favorable pricing, product mix and currency, partially offset by higher cost including commodity costs and investments in innovation and go-to-market. In Print, our results reflected continued focus on execution and the strength of our portfolio as we navigated the supply chain environment. Q4 total print revenue with $4.9 billion, up 1%, driven by favorable pricing in hardware and growth in services, partially offset by a decline in supplies.
Total hardware units declined 26% due to consumer replenishment last year in Q4 and increased manufacturing and component constraints. We expect these Print hardware constraints to extend at least into the first half of 2022. By customer segment, consumer revenue was down 6%, with units down 28%. Commercial revenue grew 19%, with units down 12%. Consumer demand remain solid. However, revenue across both home and office was constrained by the current supply and factory environment.
The commercial recovery should further progress with a double-digit hardware revenue growth with triple-digit increases in Industrial printing hardware. We expect to see a continued gradual and uneven recovery in commercial extending into FY '22. Supplies revenue was $3.1 billion, declining 2% year-on-year, driven primarily by prior year channel inventory replenishment. We also saw steady normalization of ink and toner mix, partially offset by favorable pricing. We saw continued momentum in our contractual business. As we discussed at our Analyst Day, this is a key part of our broader services strategy.
Instant ink delivered double-digit increases in both cumulative subscriber growth in revenue. We also drove growth in managed print services revenue and total contract value with strength in both renewals and new TCV bookings. Print operating profit increased $117 million to $830 million and operating margins were 17%. Operating margin grew 2.2 points, driven primarily by favorable pricing and improved performance in industrial including graphics 3D, partially offset by unfavorable mix at higher cost including commodity costs and investments in innovation and go-to-market.
Now let me turn to our transformation efforts. As we completed the second year of our cost savings program, we have now delivered more than 80% of our $1.2 billion gross run rate structural cost reduction plan and we continue to look at new cost savings opportunities. Transformation is not only about cost savings, but about also creating new capabilities and long-term value creation. One example. I'd like to highlight is our ongoing digital transformation. By leveraging our new digital platforms, we are enhancing our capabilities and transforming the way we operate to deliver new solutions to our customers.
With this capability, we recently launched Wolf Pro Security, a new subscription service that enables customers to digitally manage their software on an annual subscription basis. The structural cost savings with our transformation efforts are enabling us to invest in these types of strategic growth drivers and we see many more opportunities like this to drive business enablement through additional software services and solutions offerings.
Let me now move to cash flow and capital allocation. Q4 cash flow from operations was $2.8 billion and free cash flow was $0.9 billion after the additional adjustment for the net Oracle litigation proceeds of $1.8 billion. The cash conversion cycle was minus 25 days in the quarter. This deteriorated 4 days sequentially as lower days payable outstanding and higher days sales outstanding was only partially offset by the decrease in days of inventory. For the quarter, we returned a total of $2 billion to shareholders, which represented 210% of free cash flow. This included $1.75 billion in share repurchases and $219 million in cash dividends. For FY '21, we returned a record $7.2 billion to shareholders or a 170% of free cash flow.
Looking ahead to FY '22, we expect to continue aggressively buying back shares at elevated levels of at least $4 billion. Our share repurchase program, combined with our recently increased annual dividend of a $1 per share, has us on track to exceed our $16 billion return of capital target set in our value creation plan. Looking forward to Q1 and FY '22, we continue to navigate supply availability, logistics constraints, pricing dynamics and the pace of the economic recovery. In particular, keep the following in mind related to our Q1 and overall fiscal 2022 financial outlook.
For Personal Systems, we continue to see strong demand for our PCs, particularly in commercial, as well as favorable pricing. We expect solid PS revenue growth to continue into fiscal '22 with the shift to higher growth categories, including commercial, premium and peripherals. We expect PS margins to be toward the high-end of our 5% to 7% long-term range. In Print, we expect solid demand in consumer, a continued normalization in mix as commercial gradually improves through 2022 and disciplined cost management. We expect Print margins to be towards the high end, about 16% to 18% long-term range.
For Personal Systems, we expect the component shortages, as well as manufacturing port and transit disruptions will continue to constrain revenue due to the ongoing pandemic in many parts of the world. In Print, we expect similar, but more acute challenges, particularly with regard to factory disruptions and component shortages. We expect these challenges across PS and Print to persist at least through the first half of 2022. Furthermore, normal sequential seasonality doesn't apply for FY '22 and we expect our revenue performance to be more linear by quarter, particularly driven by PS.
In addition, we expect a slight headwind year-on-year, approximately $20 million per quarter from corporate Investments and other. Taking these considerations into account, we are providing the following outlook: we expect growth quarter non-GAAP diluted net earnings per share to be in the range of $0.99 to $1.05 and first quarter GAAP diluted net earnings per share to be in the range of $0.92 to $0.98. We expect full year non-GAAP diluted net earnings per share to be in the range of $4.07 to $4.27 and FY '22 GAAP diluted net earnings per share to be in the range of $3.86 to $4.06. For FY '22, we expect free cash flow to be at least $4.5 billion.
Overall, I feel very good about our performance and our outlook. I am confident in our ability to deliver consistent long-term sustainable growth and we look forward to taking your questions. So let me hand it back to the operator.
