HP Inc. (HPQ) Earnings

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Oct 2026upcoming

Next quarter

Consensus is $0.75 EPS for Oct 2026 across 5 estimates, ranging $0.74 to $0.77.

HPQ Jul 2026

Reported Aug 26, 2026

: 10.67%
: -2.92%

: $0.75
: $0.83
: —
: $15.68B

Reported results

: $15.68B; from $13.93B
: 18.79%; from 20.46%
: $892.00M; from $716.00M
: 5.69%; from 5.14%
: $661.00M; from $763.00M
: $0.71; from $0.80

Highlights

Earnings beat: Non-GAAP diluted EPS was $0.83, above the $0.75 consensus and up 10.7% year over year; the result included a $0.11 benefit from tariff refunds.
Record revenue: Fiscal Q3 revenue was $15.68 billion, up 12.5% year over year and 8.8% from Q2, or up 10.9% year over year on a constant-currency basis.
Personal Systems drove growth: Revenue increased 18% to $11.8 billion, led by 22% growth in Commercial PS and 10% growth in Consumer PS, while total units fell 16% as average selling prices rose.
Printing remained pressured: Revenue declined 2% to $3.9 billion, with supplies revenue down 3% and hardware units down 7%; operating margin nevertheless expanded to 18.1% from 17.0%.
Margins reflected cost pressure: GAAP operating margin improved to 5.7% from 5.1% a year ago, but non-GAAP operating margin declined to 6.5% from 7.1% as memory and storage costs rose.
Cash generation was strong: Operating cash flow was $1.74 billion and free cash flow was $1.57 billion, up from $1.66 billion and $1.47 billion, respectively, in the year-ago quarter.
Outlook raised: HP raised fiscal 2026 non-GAAP EPS guidance to $3.19-$3.29 from its prior outlook and free cash flow guidance to $3.0-$3.2 billion; both EPS ranges include $0.19 of expected tariff refunds.
Capital return continued: HP returned $0.6 billion in Q3 through $274 million of dividends and $300 million of repurchases, buying back 12.2 million shares.

Analysis

HP's fiscal third quarter was a revenue-led beat, with pricing and mix in Personal Systems offsetting lower unit volumes and continued weakness in Printing. Revenue reached a record $15.68 billion, up 12.5% from $13.93 billion a year ago and 8.8% from $14.41 billion in Q2. Non-GAAP EPS was $0.83 versus the $0.75 consensus and $0.75 a year ago, although $0.11 of the quarter's EPS benefited from tariff refunds. GAAP EPS was $0.71, below $0.80 a year ago but above $0.49 in Q2; the year-ago GAAP result included favorable tax and litigation items.

The main operating story was the divergence between the two segments. Personal Systems revenue rose 18% to $11.8 billion, but units fell 16% and segment margin contracted to 4.6% from 5.4% as component costs increased. Printing revenue fell 2% to $3.9 billion, while its margin improved to 18.1% on pricing and tariff refunds. HP generated $1.6 billion of free cash flow and raised its full-year EPS and cash-flow outlook, suggesting confidence in its ability to manage near-term cost pressures. However, the outlook includes tariff benefits, and HP continues to execute a restructuring plan expected to reduce headcount by 4,000-6,000 employees through fiscal 2028.

Raised fiscal outlook

HP raised its fiscal 2026 outlook after EPS exceeded the top end of its prior range. The updated guidance incorporates tariff refunds but also reflects continued cost and supply-chain pressure.

Fiscal 2026 EPS: GAAP diluted EPS guidance increased to $2.52-$2.62, while non-GAAP diluted EPS guidance increased to $3.19-$3.29; both ranges include an estimated $0.19 tariff benefit.
Cash flow: Free cash flow guidance increased to $3.0-$3.2 billion.
Fourth quarter: HP expects GAAP EPS of $0.74-$0.84 and non-GAAP EPS of $0.69-$0.79, with each range including an estimated $0.08 tariff refund benefit.

Personal Systems growth

Personal Systems supplied the quarter's growth, with revenue benefiting from substantial price increases and a richer product mix. The trade-off was materially lower unit volume and weaker segment profitability as memory and storage costs rose.

Commercial PS: Revenue increased 22% to $8.58 billion, with average selling prices up 41% and units down 14%.
Consumer PS: Revenue increased 10% to $3.19 billion, with average selling prices up 37% and units down 19%.
Profitability: Personal Systems operating margin fell to 4.6% from 5.4%, while earnings from operations were $537 million versus $541 million a year ago.
Product focus: HP cited premium products, workstations and AI PCs, alongside improved memory availability and higher fulfillment rates.

Printing resilience

Printing remained a declining business on revenue, reflecting lower installed-base usage, softer demand and competitive pressure. Pricing, mix and tariff refunds supported profitability despite the top-line decline.

Revenue: Printing revenue declined 2% to $3.91 billion, including a 3% decline in Supplies, a 1% decline in Commercial Printing and a 2% decline in Consumer Printing.
Volumes: Total printer hardware units declined 7%; Consumer Printing units fell 9% and Commercial Printing units fell 2%.
Margins: Operating margin expanded to 18.1% from 17.0%, and earnings from operations rose 4% to $709 million.
Demand factors: HP pointed to a declining installed base and usage in Supplies, demand softness particularly in China, and competitive pressure in printer hardware.

Tariffs and restructuring

The quarter's earnings benefited from tariff refunds, while the underlying cost environment remained difficult. HP is also incurring substantial restructuring costs as it pursues an AI-enabled productivity program.

Tariff refunds: HP received $127 million during the quarter, equivalent to a favorable $0.11 per share impact; it received another $91 million after quarter-end and had applied to recover approximately $0.3 billion of previously paid IEEPA tariffs.
Cost pressure: Gross margin declined to 18.8% from 20.5%, primarily because of higher commodity costs and an unfavorable mix shift toward Personal Systems.
Non-GAAP margin: Non-GAAP operating margin fell to 6.5% from 7.1%, despite revenue growth and lower quarterly restructuring charges.
Fiscal 2026 plan: HP expects to reduce global headcount by approximately 4,000-6,000 employees through fiscal 2028 and expects total plan charges of approximately $650 million; it had incurred $0.5 billion under the plan through July 31.

Cash and capital return

Working capital and operating performance produced strong cash generation, allowing HP to continue shareholder distributions while reducing debt from the start of the fiscal year.

Cash generation: Operating cash flow was $1.74 billion and free cash flow was $1.57 billion, compared with $1.66 billion and $1.47 billion, respectively, in Q3 FY2025.
Working capital: Accounts receivable ended at $7.2 billion, inventory at $10.3 billion and accounts payable at $21.4 billion; the cash conversion cycle remained negative 37 days.
Shareholder returns: Q3 dividends were $274 million and repurchases were $300 million; fiscal-year-to-date returns totaled $1.5 billion.
Balance sheet: HP ended the quarter with $4.2 billion of cash and $9.2 billion of debt, versus $3.7 billion and $9.7 billion, respectively, at October 31, 2025.

HP Inc.

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