HPQ

Image source: The Motley Fool. Wednesday, Aug. 26, 2026 at 5:30 p.m. ET Global Treasurer and Head of Investor Relations - Alok Juyal Interim Chief Executive Officer - Bruce Broussard Chief Financial Officer - Karen Parkhill Head of Personal Systems - Ketan Patel Operator: Good day, everyone, and welcome to the Third Quarter 2026 HP Inc. Earnings Conference Call. My name is Lisa, and I'll be your conference moderator for today's call. [Operator Instructions] As a reminder, this conference is being recorded for replay purposes. I would now like to turn the call over to Mr. Alok Juyal, Global Treasurer and Head of Investor Relations. Please go ahead. Alok Juyal: Good afternoon, everyone, and welcome to HP's Third Quarter 2026 Earnings Conference Call. With me today are Bruce Broussard, HP's Interim Chief Executive Officer; and Karen Parkhill, HP's Chief Financial Officer. Before handing the call over to Bruce, 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 1 year. We posted the earnings release and accompanying slide presentation on our Investor Relations web page 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 business 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. 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 SEC filings. During this webcast, unless otherwise specifically noted, all comparisons are year-over-year comparisons with the corresponding year ago period. References to HP's channel inventory refer to Tier 1 channel inventory and market share references are based on calendar quarter information. In addition, unless otherwise specified, all financial measures discussed today are non-GAAP and EPS refers to non-GAAP diluted net earnings per share. Please refer to the tables in today's earnings release and the accompanying slide presentation on our website for reconciliations of these non-GAAP measures to the most directly comparable GAAP measures. With that, I will now turn the call over to Bruce. Bruce Broussard: Thank you, Alok, and thanks, everyone, for joining us today. I'm pleased to share that we delivered record third quarter revenue and continue to exceed expectations on EPS. We're also laying a strong foundation for the AI era and are building momentum. Our strategic execution, robust commodity mitigation plan and relentless commitment to innovation are helping us advance our business and enable our customers to successfully navigate this most significant technology shift. Today, I'll share our third quarter highlights, discuss the innovations we are bringing to market and touch on how we are managing the current environment. Before I do, I know some of you are interested in an update on the CEO search. I'm sure you can appreciate that I am unable to share details or a time line, but the search is proceeding well, and we continue to make good progress on finding the right next leader for HP. In the meantime, having spent the past several months leading the company day-to-day, I developed deeper perspective on HP. Four observations stand out. First, we need to continue advancing our operating infrastructure to become better connected, AI-enabled and data-driven, improving productivity while delivering better experiences for our customers, partners and employees. Second, we will continue advancing our devices to be AI leading by bringing more computing to the edge where context is created. This will enable more intelligent devices that anticipate needs and proactively solve problems. Third, we need to accelerate our evolution toward integrated solutions across our broad portfolio of devices, creating differentiated offerings that deliver greater value to our customers while expanding recurring revenue opportunities. And lastly, we provide greater strategic clarity around where we choose to play and allocate capital, resources and capabilities against those priorities with focus and discipline. HP has tremendous assets: one of the most iconic brands in technology, a strong global footprint, sophisticated supply chain, deep commercial relationships and a talented team. And there are meaningful opportunities to make HP stronger, more cohesive and more effective. We are taking action now to strengthen the foundation, sharpen our priorities and improve execution, so that when our next CEO steps in, they can build on that momentum and lead HP into its next chapter of growth and value creation. Let me get to our results. This quarter, we delivered $15.7 billion in revenue, a record Q3 for HP. This represents an increase of 13% and our ninth consecutive quarter of top-line growth, driven by another strong quarter in Personal Systems, while Print results were in line with our expectations. We executed on our commitments and accelerated our key growth areas, which collectively grew 46% year-over-year and faster than our core. We continue to take share in high-value segments while managing commodity headwinds with our mitigation playbook, enabling us to deliver EPS above our expectations even when excluding a tariff refund benefit while also delivering strong free cash flow. In short, we did what we said we would do. In Personal Systems, we achieved our 10th consecutive quarter of revenue growth, up 18% year-over-year, driven by solid growth across both commercial and consumer segments. We are particularly pleased with the continued strength of our AI PC portfolio, which continued to grow and is still expected to be 50% of our shipment mix by the end of this fiscal year. At the same time, consistent with our strategy, we delivered double-digit revenue expansion in our key growth areas, including advanced compute solutions and Workforce Solutions. We also continue to capture share in high-value categories, including premium PC, returning us to share leadership in the Americas. Overall, these results show customers continue to invest in the hardware and solutions they need to run AI where work habits. Turning to Print. Revenue was down 2% year-over-year in what continues to be a competitive market. We remain focused on pricing discipline and placement of profitable units. We said we would double down on big tank market, and we did, gaining another 4 points of share this quarter. Industrial Printing delivered its 12th straight quarter of revenue growth as customers continue to leverage our award-winning hardware portfolio to drive their digital workflows and grow their businesses. Across both segments, we are balancing near-term execution with long-term investment and shifting our portfolio towards high-value and more profitable categories. Turning to innovation. This quarter, we unveiled advancements designed to help our customers thrive in the AI era. We believe the future of AI is hybrid. That means AI will operate both in the cloud and increasingly at the edge. For customers already seeing the cost of cloud-based AI add up, the economics alone makes Edge AI compelling. It can also improve security, latency and strengthen data governance. To make edge AI a reality, we are working with customers and ecosystem partners to build platforms that extend data center class AI capabilities to the edge. By enabling GPU sharing through HP Z Boost and integrating it with our WXP software layer, security and device features, we are making traditional cloud AI capabilities available locally. Building advanced AI locally has too often meant specialized infrastructure, large budgets and complex setups. We are changing that. With our HP ZGX Fury, we bring data center class AI to the desk side so teams can build and run frontier scale models and always on agents locally. The response since we first showed this direction at Computex has been clear. Customers want local AI they can own. Over the next month, we will extend this momentum into more of the form factors people already carry with the memory and power those on-device models actually need. A leading automotive company is using HP solutions to bring visual AI and inferencing directly to its manufacturing line, helping improve quality inspections, performance and economics. We see the same potential in many other sectors that require on-site compute performance, strong security and the most cost-effective ways to manage increasingly complex AI models. This creates significant opportunities in areas like retail, public sector and health care. We are also advancing what PCs can do as edge devices. In the agentic era, PCs are becoming partners that understand your needs and help meet them. So we are reimagining what a personal computer can do with our new OmniBook Ultra 6 team powered by NVIDIA RTX Spark. It brings the compute needed to build and run sophisticated AI models and personal agents to a thin mainstream mobile PC. And our OmniDesk Mini desktop combines full-sized performance with a compact design and built-in AI capabilities. In Print, we're already delivering tangible customer value with AI. In June, we expanded our flagship AI-powered Print experience, Precise Print, to more than 150 countries. By intelligently removing unnecessary web content before printing, Precise Print helps customers reduce paper usage by up to 38% and ink consumption up to 47%. Our HP Nio AI companion brings agentic AI to industrial Print operations and is gaining momentum. Nio was awarded the 2026 European Digital Press Association Award for Best Software Agent in the Print industry AI category. This underscores our commitment to intelligent data-driven production ecosystems with built-in remote remediation capabilities and importantly, solving uptime problems for our printer service customers. In Q3, we also signed a 3-year $100 million strategic agreement with RRD, one of the world's leading Print service providers. This reflects our shared vision to accelerate AI and industrial automation and Print production. Succeeding at the edge also requires intelligent ways to manage the technology portfolio. Work moves across PCs, meeting rooms, collaboration tools, printers and other endpoints. Our WXP platform helps CIOs track and manage fleets of connected devices and applications. This quarter, we integrated HP Poly Lens and collaboration capabilities into WXP, giving IT teams greater visibility across PCs, printers and collaboration devices. By bringing together insights that were previously isolated across different environments, organizations and channel partners can turn data into actionable intelligence, improve workforce experiences, lower costs and establish a governance layer. WXP was named a leader in the 2026 Gartner Magic Quadrant for digital employee experience management tools. We believe the future of computing will be increasingly intelligent and integrated with devices anticipating user needs, executing tasks seamlessly and connecting traditionally separate cloud and desktop environments. By bringing AI capabilities closer to users, these devices can provide the context required for more effective reasoning and inference. AI at the edge offers meaningful benefits for our customers while creating significant incremental growth opportunities for HP and the broader industry. We believe HP is uniquely positioned to lead this evolution through our broad portfolio of products and services, trusted brand, presence in more than 180 countries and robust innovation pipeline. Together, these strengths create substantial opportunities for growth. At HP, we consider ourselves customer 0, using our own business as a proven ground for the products and solutions we develop. Like our customers, HP is benefiting today from localized AI capabilities using edge inferencing across our business. For example, in our Singapore production facility, teams are using our ZBook workstations running an Opus model to enhance quality assurance and detection capabilities on the manufacturing line. This past quarter, we scaled our work with OpenAI. OpenAI Frontier, we are integrating AI across the customer and partner experiences, the HP Store, digital support, WXP telemetry, employee productivity and software development. Early deployments are already helping teams accelerate engineering workflows, enhance security analysis and automate routine tasks while maintaining HP's high standards for data, governance and security. We are just getting started with OpenAI and expect to share more as we turn our pilots into scaled capabilities that create business value. Let me now focus on the external supply and cost environment, which remains complex. We continue to effectively execute our mitigation plan. We remain confident in our memory and storage supply availability for this fiscal year and our focus on our needs into next year and beyond. The enhanced operating model we are building is designed to compound over time, creating a more connected, process-led enterprise that can serve customers with greater consistency, speed and predictability. What we are building is not a short-term efficiency program or a situational response, but a fundamental stronger operating model that better connects planning, decision-making and execution across the enterprise. We already see early signs of this working in areas such as order delivery predictability, improved accuracy rates leading to better conversion on incoming orders. With solid mitigation efforts already in place and additional steps planned, we remain confident about HP's upside potential, both in near term and long term and the constraints the industry face begins to lift. Looking ahead, we remain focused on being the trusted resource for customers in navigating a dynamic environment. In Personal Systems, we see opportunity for increasing commercial workloads, AI PCs, advanced compute and the broader shift towards hybrid AI and growing need for context-aware use cases at the edge. In Print, we will continue to place profitable hardware units, grow big tank and subscription businesses and invest in industrial applications. Our teams will continue to manage memory storage and geopolitical pressures through pricing, sourcing, supply chain actions, productivity and portfolio choices. The opportunity ahead is significant. AI is moving from isolated experimentation into day-to-day workflows, devices and environments. HP is well positioned to be the customers' trusted edge AI platform, helping them make the most of that transition. In closing, I'm proud of how the HP team performed this quarter. We delivered strong Personal Systems growth, managed through a challenging Print market and continue to drive innovation that will shape how work is done. Thank you to our employees for their commitment and to our customers, partners and investors for the trust you continue to place in HP. With that, I'll turn it over to Karen. Karen Parkhill: Thank you, Bruce, and good afternoon, everyone. We are pleased with our third quarter results, which reflect solid execution and continued progress against the priorities we outlined at the start of the year. For the third consecutive quarter, we delivered better-than-expected top line growth and EPS at the top or above our guidance range, underscoring the discipline of our teams in a dynamic operating environment. We drove yet another quarter of robust revenue growth with continued momentum in Personal Systems and key growth areas. Double-digit sequential growth in Personal Systems also supported strong free cash flow in the quarter. And at the same time, as Bruce mentioned, we are continuing to drive our 4-pillar plan to mitigate rising input costs. These ongoing efforts to secure supply, shape demand, implement targeted cost reduction and take disciplined pricing action all continue to ramp and have enabled us to deliver OP rates in line with our guidance even after excluding the favorable impact of tariff refunds received in the quarter. Now let me walk you through more details on our third quarter performance. We delivered 13% revenue growth or 11% in constant currency, with growth across all regions. By geography, strong Personal Systems performance drove constant currency revenue up 22% in APJ, 10% in EMEA and 5% in the Americas as customers continue to upgrade their devices to manage more demanding workloads. Our gross margin at 18.8% was down year-over-year as expected, driven by higher commodity costs and increased mix from Personal Systems. Pricing, strong growth from our key growth areas and tariff refunds partially offset these headwinds. Strong revenue growth, along with our focus on disciplined cost management, helped to drive operating expenses down as a percent of revenue while still enabling important investments in innovation, product promotion and our people. All in, our operating margin was 6.5%. And when excluding the benefit of tariff refunds, this was in line with our expectations. Below operating profit, higher cash balances contributed to lower financing costs in the quarter and led to better-than-expected other income and expenses. Our net earnings per share at $0.83 grew 11% and include $0.11 related to tariff refunds. Importantly, without the tariff benefit, we still delivered EPS above the top end of our guidance range. Now let's turn to segment performance. In Personal Systems, we delivered record third-quarter revenue of $11.8 billion, up 18% in a stronger than expected market. While volume was down as expected, our continued prioritization of higher-value unit placements, repricing for higher commodity costs and services expansion more than offset the volume headwind. And consistent with our strategy, we gained share in the premium PC categories and delivered strong performance from our key growth areas, with double-digit revenue growth in AI PCs, advanced compute solutions, hybrid systems and Workforce Solutions. From a segment perspective, we also delivered double-digit revenue growth in both Commercial, up 22%, and consumer up 10%, driven by disciplined pricing actions and favorable mix. Aligned with our focus on higher-value segments, Commercial represented over 70% of our Personal Systems revenue in the quarter. PS operating margin of 4.6% was below our long-term range as expected and down year-over-year from higher commodity costs and variable compensation, which we worked to partially offset with repricing actions and other cost reductions. Turning to Print. As expected, revenue was down 2% or 4% in constant currency on lower supplies and hardware volumes in what remained a competitive pricing environment. These headwinds were offset in part by key growth area contributions, including continued momentum in industrial Print, fueled by increased usage, double-digit growth in 3D and a continued ramp of subscribers to our all-in plan. By customer segment, consumer revenue declined 2% with lower traditional printer volume, offset in part by higher ASPs. Aligned with our strategy, we continue to increase our penetration of the tank printer market, delivering 42% unit growth in this important profit upfront category and gaining share both year-over-year and sequentially. In Commercial, revenue was down 1%, driven by lower volume and unfavorable mix. We saw particular softness in the office market in North America and China, and our results reflect our focus on placing profitable units in an aggressive pricing environment. And in line with expectations, supplies revenue was down 4% in constant currency, impacted in part by headwinds in the Middle East. All in, Print operating margin was 18.1%, up roughly 1 point year-over-year, reflecting the favorable impact of tariff refunds and pricing actions. Excluding the benefit of tariff refunds, Print operating margin was in line with our guidance at the low end of our long-term range. Now let me move to cash flow and capital allocation. We generated over $1.7 billion in cash from operations and roughly $1.6 billion in free cash flow in Q3 on the strength of Personal Systems performance. And as planned, we paid down slightly more than $500 million in debt maturities due in the quarter. Through disciplined working capital management and robust Personal Systems growth, we have driven year-to-date free cash flow of more than $2.5 billion, well ahead of our typical seasonality. Through both dividends and share repurchase, we returned nearly $600 million to shareholders in the quarter and over $1.5 billion year-to-date, and we ended the quarter within our target leverage range. As always, we remain committed to returning approximately 100% of our free cash flow to shareholders over time as long as our gross leverage remains under 2x and there aren't better return opportunities. Looking ahead to the remainder of our fiscal year, we continue to expect input costs to rise, putting near-term pressure on our operating margins, particularly in Personal Systems. We are factoring that into our Q4 outlook, along with the traction we are making on our cost mitigation plans. By segment, in Personal Systems, we remain aligned with industry experts projecting the PC unit TAM to decline high teens year-over-year for the second half of the calendar year. Given the impact of commodity-driven price increases, we expect below seasonal revenue performance in Q4. That said, we do expect year-over-year revenue growth in the quarter, driven by pricing actions, share gains in premium categories, attach of higher-margin offerings and increased penetration of AI PCs as more AI workloads move to edge devices. We continue to expect memory and storage costs to increase further as a percentage of the bill of materials. And as we signaled last quarter, we expect our Q4 margin to be below Q3 levels and then to sequentially improve as we look ahead into FY '27. In Print, our outlook is aligned with industry expectations for a mid-single digit decline in the hardware market in the second half of the calendar year. We will continue building on our share gain progress in tank printers through portfolio extensions and targeted promotions while completing the rollout of our latest AI-enabled laser portfolio in office by the end of the fiscal year. For Q4, we expect Print revenue to be in line with historical seasonality. And excluding the impact of any tariff refunds in the quarter, we expect operating margins in the lower half of our long-term range, reflecting our focus on incremental hardware unit placement and near-term input cost pressures, which we are actively working to mitigate. Beyond the segments, we expect Q4 OI&E and corporate to be similar to Q3 levels. All in, based on our strong performance in the quarter, we are increasing our outlook for the fiscal year. We now expect diluted net earnings per share to be in the range of $3.19 to $3.29, up from our previous range of $2.90 to $3.10 and including a $0.19 favorable impact from estimated tariff refunds. For Q4 specifically, we expect diluted net earnings per share to be in the range of $0.69 to $0.79, including an $0.08 favorable impact from estimated tariff refunds. And given our improved earnings performance and strong free cash flow in Q3, we are also increasing our outlook for free cash flow to be in the range of $3 billion to $3.2 billion for the fiscal year. Looking beyond this fiscal year, as Bruce said, we see meaningful opportunity as workloads continue shifting to the edge, and we are well positioned to lead this transition through our trusted devices, software and services. In Personal Systems, we plan to continue to invest in innovation across AI PCs, workstations and high-value solutions with a disciplined focus on gaining share in premium categories. We expect input costs to continue to rise but at a slower rate than we have experienced in fiscal '26. And of course, we remain focused on mitigating the impact of this dynamic commodities environment and expect to bring our PSOP rate back into our long-term range as quickly as possible in FY '27. In Print, we will remain focused on protecting operating profit through share gains in profit upfront tank printers, expansion in consumer subscriptions, strengthening our position in office through AI-enabled innovation, sustaining momentum in industrial graphics and maintaining cost discipline. I will share more on our fiscal '27 outlook in our Q4 earnings call. In closing, we are pleased with the performance in the quarter and the progress we are making against our strategic and financial priorities. We have a strong track record of execution and remain confident in our ability to drive continued growth and value ahead. Turning to Q&A. Given the continued dynamic PC environment, we have invited Ketan Patel, Head of Personal Systems, to join us. So with that, I would like to hand it back to the operator and open the call for your questions. Operator: [Operator Instructions] And our first questioner today will be Amit Daryanani from Evercore ISI. Amit Daryanani: I guess I have a question and a follow-up, but maybe just to start with, Karen, could you just spend a little bit of time on the Personal Systems assumptions for Q4? I think you're sort of implying PS revenues will be subseasonal, but you should still see year-over-year growth in the model. I think that's a fair way to think about it. But I'd love to understand, do you see that fiscal Q4 trend line of units being down high teens, but revenue still growing by a few points, persisting through fiscal '27? Or is that more in Q4? Karen Parkhill: Yes. Thanks for the question, Amit. On Q4, our outlook reflects the industry's view that PC units will decline high teens in the second half as pricing actions pressure demand. As we said, though, we do still expect to drive year-over-year revenue growth. We expect it to be down quarter-over-quarter, but growing year-over-year with a richer mix of higher-value categories, including premium and commercial and consumer PCs, AI PCs, workstations and attach offerings, along with pricing and all of that to more than offset the lower units. I would also note that we're maintaining our discipline to prioritizing profitable growth and edge AI-driven demand rather than chasing low-margin share. Our comments on revenue growth relate to Q4. It's too early for us to be giving FY '27 guidance. We'll be doing that on our Q4 call. Amit Daryanani: Fair enough. I figure I can try, nonetheless. On memory, in your prepared -- in the press release, you folks talked about meaningful improvements in memory supply, higher fulfillment rates. Can you just talk about -- is that just you getting better allocations or there's more spot availability? Just what do those things mean for HP Inc.? And from your perspective, where do you think PS margins would trough as you go forward? Karen Parkhill: Yes. Thanks for the question. On supply, we are getting the supply that we need to fill our customer demand. So that has not been an issue. And as we look ahead in Q4 at our margins, I would say that -- we said that we expected Q4 margins to be a low point last quarterly call. We continue to believe that. But we have high confidence that it will improve from there. As we work through this volatile environment, I would say we've not only been transparent, but we've also shown that we can deliver what we say we will do. And we signaled at the beginning of the year that margins would be increasingly impacted as we move through the fiscal year. Costs have continued to rise, and we are working through the benefit of the lower cost of inventory on our balance sheets that we had more in the first half. And now you're seeing inventory that is carrying higher costs working through our P&L in the back half. But at the same time, we've been successfully implementing our mitigation plan. We've secured supply. We've qualified new suppliers. We've reshaped demand and configuration, and we've taken targeted cost actions and reprice with discipline. And as we said before, some of those actions move quickly, while others like product redesign and platform optimization on the cost reduction side and long-term contract revisions on the pricing side take some lead time. We also expect margin benefit from the areas where we're prioritizing growth in the premium categories, in AI PCs and higher value attach and edge AI workloads, and all of that contributes to improved overall margins. So on input costs, we said we still expect them to rise in FY '27 and in Q4, but at a slower rate than we've seen to date. So our focus, as I said, is just going to be to recover PS margins back to the long-term range as quickly as possible while also continuing to drive profitable growth. Operator: The next question comes from Mark Newman, Bernstein. Mark Newman: Following up on the PS margin. On the timing of memory cost increases, is the inventory -- the lower-cost memory inventory benefit done? Or in the Q3 that you just printed, is there still some cost benefit? I'm just trying to figure out on the cost line, are there more headwinds for you to normalize to the market price of memory? Or is the upcoming cost increase just based on the market increases of memory? And related to that, on pricing for PCs, obviously, these results are implying quite considerable price increases, which is leading to the strong revenue growth. But I'm trying to understand, is there -- because some of your revenue is coming from channel relationships and those channel relationships may be a bit of a lag in terms of how quickly you can increase prices. So -- are you caught up to where you want to be for pricing or some of those relationships with some of your channel partners still need catching up due to whatever terms? So in other words, I'm trying to figure out is there some more upside to pricing? Or should we expect you to be pricing in line with the market going forward? Karen Parkhill: Sure, Mark. I'll start answering that long question, and I'll ask Ketan to chime in if he's got anything to add. I would say, first, on the PS margin, yes, we were benefiting earlier in the year from that lower cost of inventory that was on our balance sheet and flowing through to the P&L. While we still have a mix of lower cost of inventory, I would say that benefit is largely behind us. And we now have higher cost of inventory that's working through our P&L, as I said. But on the cost side, we have other things that we are doing to help drive costs down. Things like product redesign and platform optimization, those things take some time, and we'll begin to start seeing the benefit of some of those things going forward. And that is one of the levers that will be helping us improve our margin as we move forward. On pricing, we have been increasing pricing. We expect to continue to increase pricing as input costs rise. We use that as a last lever after we have focused on demand shaping and product reconfiguration and taking costs out everywhere where that we can. We use pricing as the last lever. So I'll let Ketan add anything. Ketan Patel: Thank you, Karen. You covered it very well on a few of the pricing questions. I'll just add one thing that we have several go-to-market options, including we do business with online channels. We do business with our regular channel partners, enterprise customers, and we also have contractual end-user deals. And all of them have different durations for reflecting updated pricing. So the lag can range from immediately to a few months before price changes will be fully reflected for all the customers. And this is all post mitigations which Karen already spoke about. So definitely, we'll have continued to work on some of those actions. On top of it, I would say that while pricing is one of the levers, some of the actions which we have taken, let me quote a couple of examples which are helping us navigate the situation. This robust supply informed demand planning and demand shaping muscle, which we are leveraging through our WXP, Workforce Experience Platform insights to identify key configurations for specific customer workloads is helping customers with the best value with the right cost. And the second example I would quote is we have aggressive design for cost initiative, which has led to highly optimized costs for specific products for specific countries, which gives us structural capability to serve customer needs again at the right value and cost. Operator: The next question is from Krish Sankar, TD Cowen. Kinney Chin: This is Steven calling on behalf of Krish. The first one that I had is actually for Bruce. Bruce, like previously during your prepared remarks, you talked about a 50% AI PC mix target by year-end. I'm just kind of curious like in terms of the configurations of those AI PCs, does that include a lot of AI workstations? And what's sort of the attach rate of discrete AI accelerators within that AI PC mix? Bruce Broussard: Well, thank you for the question. And really is oriented to the AI PCs and in totality, not the workstation. So just to provide that context relative to the attach rate, the attach rate on the AI PCs are very similar to the attach rate that we see in other parts of the PC business, and that's traditionally around 1/3 of 30% margin kind of opportunity for us. On top of that, we also see an opportunity to continue to add solutions to our AI PCs. And where that is oriented to is really things like the HP IQ, which will be coming out later this year. Device security is another area where we look at. And even in our areas of Print where we have AI-enabled Print, which complement our AI PCs. And so I would say, as you look at the AI PCs, they are -- as Ketan and Karen have talked about, they are at premium pricing and are at significant value to our customers that are complemented by the attach rate that we normally have. And then on top of that, we have a number of solutions that we're able to add to the AI PCs that offer it to be more valuable to the customer and frankly, more valuable to us. Ketan Patel: I'd just add on top of what Bruce mentioned, AI PCs were a strong performance also for us this quarter. It contributed 46% of our mix, in line with our 40% to 50% forecast for FY '26. And we are expecting it to get up to 60% to 70% in 2027 and more than 70% in 2028. Also the work which we have accelerated with ISV partners, the software companies with more than 150 of them to leverage the capabilities of these PCs and as Bruce mentioned in his comments, with a growing AI workload being pushed to the edge, driven by cost, latency and privacy considerations, the role of these PCs and customer fleets will continue to expand. So this will be margin accretive to us, and that's what we'll continue to focus in terms of AI PC mix as well as workstations, which are critical categories for growth. Kinney Chin: Got you. And for my follow-up, I had a question on the strong double-digit growth that you guys are seeing in both the EMEA and APJ markets. If I recall correctly, the Windows 11 refresh was a big driver of that in near term. Kind of curious like in the current quarter and maybe the quarter after as well, is Windows 11 refresh still a big driver there? Or is that going to play out in the near term? And any other thoughts on demand drivers there would be helpful. Karen Parkhill: Yes. Thanks for the question, Steven. We now see roughly 70% of the Win 11 refresh complete. That's been a good catalyst for the last couple of years, and we are seeing it still drives small and medium business demand. I would say that said, the Win 11 catalyst is really being increasingly augmented by a rising demand for AI PCs, edge AI and agentic workloads requiring more capable PCs. So we honestly see these tailwinds to shape the market in the coming years, and we're proud to have an increased penetration of AI PCs today as part of our shipments, as Ketan just mentioned, and a growing part as we look ahead. Operator: Your next question today comes from Wamsi Mohan, Bank of America. Wamsi Mohan: I was wondering if you could talk about channel inventory levels in both PC and Print and how they're shaking out maybe relative to where you would ideally like them? And I have a follow-up. Karen Parkhill: Thanks, Wamsi. I would say that we are definitely disciplined in how we manage inventory across our channels. And in an inflationary cost environment, we would expect inventory to be higher than normal, and that's exactly what we see in PS right now. But that said, the inventory levels in the channel remain well controlled. They're within our demand outlook, and they continue to support the supply continuity that we really want in a constrained memory environment. And in Print, our channel inventory remains at healthy levels and within the range that we would consider normal. Wamsi Mohan: Okay. And as a follow-up, we heard a lot about AI and AI PCs as part of the mix. And I'm just wondering, are you seeing these customers already quantifying ROI from local inference deployments? And what kind of use cases are driving that? Or is it more so that customers are selecting AI PCs because that's becoming the default specification in refresh cycles? Just how much utility is being provided today towards ROI from AI PCs versus future proofing, I guess? Ketan Patel: I'll take that. So Wamsi, thank you for the question. Clearly, this is -- the AI PCs are now providing more value than what it was last year. Clearly, as the workloads are coming from cloud to the device, it's adding to significant value for our customers, especially on token economics, which is a big topic right now as you start deploying workloads in a customer environment. So that's a significant value which customers are seeing. On top of it, they also see advantages of keeping sensitive data closer to where it is generated, reduce dependency on network connectivity, improve response times and manage AI costs, as I said earlier, more effectively. So this, we see as adoption developing in stages. It right now is helping us on higher-value use cases where the return on investment to the customer is clear, such as employee productivity, engineering and design workflows or customer service, predictive maintenance kind of use cases. As customers gain confidence in some of these use cases, these capabilities will expand across fleet of devices and also to broader enterprise workflows. So that's how we see the current trend. Operator: Up next, you have a question from Asiya Merchant from Citi. Michael Cadiz: It's Mike Cadiz for Asiya Merchant with Citi. Let me just go ahead and ask both my questions at once. So the first would be, could you give please more color on the upside to the free cash flow guide? Could it be more than just tariff refund related? Or are there more levers in that? So that's question one. And the second one would be on additional color, please, on the proportion of enterprise customers deploying AI PC in various pilot versus at-scale kind of deployments. Karen Parkhill: Thanks, Mike, for the question. I'll answer the free cash flow, and then I'll ask Ketan to take the second one. In terms of free cash flow, we are pleased with our performance year-to-date. It is above seasonal performance and enabled us to increase our guide for the full year. That performance is really driven by strong Personal Systems growth, along with continued focus on working capital. Our cash conversion cycle is negative 37 days, and we continue to have a strong focus on that. So it was driven by, yes, more than the tariffs. Tariffs helped a little bit but clearly driven by underlying performance. Ketan, do you want to take the second question? Ketan Patel: Yes. On top of the comments which I had on the AI PC and the workloads, I would say that there are clearly unique needs, which we are addressing right now through our PCs, printers, peripheral services and meeting room solutions for modern work. Simultaneously, our solutions like WXP are allowing great control for IT and admins to monitor and support the end user, which is becoming a big need in the world where you will have humans and agents operating together. And currently, our AI PCs are most capable for running AI models locally. And as Bruce mentioned, we have debuted all of this in the first local -- first AI model through HP IQ. And also Wolf Security solution, which HP implementing is unique and in protecting at a BIOS level intrusion. So some of these are coming together as customers are deploying, as I said earlier, on high-value use cases and expanding this at a broader level. But one thing which we are seeing as a trend for HP, which is a great advantage for our positioning is our ability uniquely to connect the endpoint, the user experiences, enterprise manageability, security, and the broader IT environment is something which is becoming a good value equation, which we are able to deliver. Bruce Broussard: Ketan, maybe I'll just add a little bit there. I would say that we are seeing good ROI in a number of different areas. And I think a large one we're seeing, as Ketan mentioned, was developer customer service, but we're also seeing it in manufacturing, where our workstations are able to be incorporated in the manufacturing line where our quality control, they can use it for quality control and other AI-related manufacturing. And so we do see it there. We also see it in the retail area. And in addition, we're beginning to start to see it in the health care area. We're seeing a significant amount of both interest and demand as a result of some very powerful use cases, both in the subsectors that we're focused on, but in addition in the broader areas like Ketan has talked about. Operator: Your next question comes from Erik Woodring from Morgan Stanley. Erik Woodring: I apologize; I hopped on late. But Karen, you sound very optimistic about fiscal '27 Personal Systems operating margins and even the October quarter being the trough. But if we think about unit declines accelerating, component inflation is continuing, you're working through higher cost inventory, and it's fair to probably imagine demand elasticity likely increases due to these factors. It's not totally clear to me what the factors are that allow Personal Systems operating margins to improve. Even NVIDIA tonight is guiding to margin pressure next year from memory costs. So can you maybe just help me please better understand the offsets to some of these pressures that we're thinking about? And then I have a quick follow-up. Karen Parkhill: Yes. Sure, Erik. Happy to help. So obviously, we talked about the fact that we expect costs to continue to increase, but at a slower rate. So I'll start there. And at the same time, the mitigation actions that we've been taking are really starting to kick in. So things like long-term contract revisions on the pricing side, which take some lead time and other cost actions that we've been working through like product redesign and platform optimization that can also take some time starting to kick in. And I would say, importantly, we're also going to continue to focus on what we've been driving so far, which is an increased mix of premium products with AI PCs and workstations and also a greater mix of attach offerings where we've got plenty of opportunity to drive even more. And that's inclusive of peripherals and services, things like our WXP platform, et cetera. So it's all of these things combined that give us high confidence that we can drive improvement from here. Erik Woodring: Okay. All right. I appreciate that. And as a quick follow-up, I know, obviously, myself included, there's been a focus on PS margins on this call. What about Print operating margins just as you think about them into next year? How do you expect them to trend? And what are some of the puts and takes to consider? Karen Parkhill: Yes. I would say on the Print margins in FY '27, I'll start by just confirming that we remain comfortable with our long-term operating profit range of 16% to 19% for Print, and that still holds for our fiscal '27. Where we land in that range can really vary quarter-to-quarter and is influenced by seasonality, along with the magnitude of long-term profitable units that we're able to place in a competitive environment. But as we look more broadly to FY '27, we will remain focused on protecting operating profit through share gains and profit upfront tank printers through expansion in consumer subscriptions and by strengthening our position in office through some AI-enabled innovation that we've been bringing to market, along with sustaining momentum in industrial graphics and of course, always maintaining cost discipline. So hopefully, that helps. Operator: Our next question today comes from Katherine Murphy, Goldman Sachs. Katherine Murphy: It was impressive to see the 18% revenue growth in the Personal Systems segment, though units were down 16%. And I was wondering if you could help quantify or otherwise rank how like-for-like price increases, portfolio mix shift benefits and then the increased attach of related services benefited that implied ASP increase in the quarter? And if 1/3 of gross profit in this segment coming from those attached businesses is still the right way to think about the mix? And then I have a quick follow-up. Karen Parkhill: Thanks, Katherine. I'll take that question, and Ketan, feel free to add if you want. I would say all of the things that we are doing really drove our revenue growth, and we're not going to quantify how much was related to each. But clearly, mix played a role as we drive more premium shares, more AI PCs, more hybrid, more workforce experience platform, all of those things played a role along with pricing. We've been continuing to increase pricing given our higher input costs, and that also played a role, too. Ketan, anything you would add? Ketan Patel: Yes. Just to give some color to the mix thing that how our mix is helping us in the overall margin performance is our sequential gains on premium categories has been pretty strong. We grew 2.6 points of share on premium and 1.8 points of share on workstations. Those are categories which are growing and something which we are pleased that we continue to take share. And to your other comment around the non-hardware business contribution, yes, the attached businesses, which is a combination of our peripherals, collaboration solutions, services such as WXP and others have contributed 1/3 of the overall PS gross profit, and that's in line with what we have been forecasting that those are the businesses which will continue to focus. Katherine Murphy: Great. And then I'll attempt to ask if there's any preliminary thoughts on industry PC volumes as we think about fiscal 2027. Karen Parkhill: Yes. I would say on FY '27, obviously, we're still in our planning period. It's premature to give you specifics on our outlook for the fiscal year. And on unit volumes, that continues to move around. So premature for us to talk about that at this point. Ketan Patel: I would just only add that there are 2 demand vectors as you look at 2027. As Karen mentioned previously, the growth catalyst being the shift towards AI workloads and hence, some of those categories around AI PCs and premium PCs and workstations. So that's going to be a tailwind. At the same time, there has been demand delay or as some of the customers deferred product refresh given the price increases this year. And as costs start stabilizing over the next period, you will start seeing some of those refreshes coming over a period of time. So that's how we look at 2 different demand signals coming through. Operator: Your next question comes from David Vogt from UBS. David Vogt: So Karen, I just want to maybe ask a clarifying question about '27 profitability and margins. Can you help us walk through your comments in greater detail about protecting print margins? Does that exclude the benefit of the tariff contract count in '26? Is that how we should be thinking about your comment in '27? Or is that inclusive of the benefit that you're seeing this year from the tariff refund? And if you could help us understand, I jumped on late and I apologize, was the tariff refund largely in Print? I would imagine there's a big chunk in PC also, but I didn't quite hear that in the prepared remarks. Karen Parkhill: Yes. So just on your question on Print margins for next year, when we talk about our long-term 16% to 19% range, that is without or excluding any one-time benefit that we might get from tariff refunds. We did have some benefit from tariff refunds this quarter and have signaled more next quarter. It does largely benefit Print. There is a smaller portion that benefited PS, but it is largely benefiting Print. And so you saw our Print margins in Q3 be higher than expectations, driven by that benefit. But once you exclude those benefits, they were largely in line with expectations. David Vogt: Perfect. That's what we thought. And then maybe just as a quick follow-up. In terms of mix, I think we were -- well, we were worried about mix to hardware in the quarter, obviously, supplies are sub -- hardware is seasonally stronger relative to supplies. How do we think about the input cost on the hardware side relative to the business? Because I know we've talked about in the past the impact of currencies, the impact of commodities like oil. How are you thinking about that in context of when we're thinking about fiscal '27? I know you don't want to give a guide, but like when I think about those moving parts that are a little bit out of your control, how should we think about those contributions to the outlook? Karen Parkhill: Yes. I would just say, in general, in Print, we are going to continue to focus on momentum in our key growth areas and introducing new products in our more traditional Print business. That includes expanding our tank portfolio and driving further traction from our recent rollout of our AI-enabled laser portfolio in office. And then in terms of just supplies, we have said for a long term that we expect supplies revenue to decline low to mid-single digits in constant currency. This year, in particular, in FY '26, we see it declining low single digit in constant currency, but our long-term view of supplies hasn't changed. Operator: And the next question is Ananda Baruah, Loop Capital. Ananda Baruah: I guess going back to what sort of the revenue texture can look like as we go through '27. Do you think it's a situation where corporate is refreshing to higher spec PCs now as a trend such that it's not -- you guys are raising -- you guys are seeing higher ASPs not only because of memory prices, but because it's actually what customers are increasingly wanting. And I guess what I'm trying to get like an anecdotal sense of is, is there increasingly a much more -- is there more appetite, natural appetite for higher pricing -- that's the thing for memories, memory pricing increases as we go through '27 into '28. Ketan Patel: Yes, I'll take that question. Thank you for that. Yes, we definitely see the effect of how customers are choosing those higher configuration products, largely because of the need to conduct AI at the edge to support increasing AI workloads. Customers in their environment are now as they're implementing AI in their workflows, they are seeing this becoming more prevalent than before. Also increasing use of agents, increasing concern about token costs, cybersecurity, privacy and a lot of applications which require a different kind of latency needs leading to a PC refresh with more capable PCs having these capabilities. And that's why, to your point, yes, we see demand shifting to those higher-end devices, too, as part of the natural mix. Ananda Baruah: And this is a tricky one here. Just a quick follow-up. But are you guys -- do you guys yet have visibility to enterprise users adopting AI PCs or talking about AI PCs. You sort of quick touched on it as a way to get -- basically get the model off the internet, right? So they don't have to absorb token costs so they can actually run the native and just avoid the token cost. Is that a meaningful part of conversations yet? Ketan Patel: Yes, there are 2 meaningful conversations, which are going on right now as customers bring these workloads. One, this increasing cost of token and how bringing models locally on the edge can help them optimize cost as well as take care of customer -- take care of employee needs of requirements to use different AI models for their work. So that's definitely one of the conversations. And the second big one is as they deploy agents more in their environment, how to govern those agents more securely and drive the right level of enterprise manageability. I think those are the top 2 use cases, which we believe are happening as we speak, apart from the industry vertical workflows which Bruce talked about earlier. Operator: And everyone, that does conclude our question-and-answer session. I would like to hand the conference back to Mr. Bruce Broussard for any additional or closing remarks. Bruce Broussard: Thank you, and thank you all for the thoughtful questions and joining us today. As we -- you can tell from our voices, we are excited about the future and AI at the edge creates incredible opportunities, and HP is well positioned to lead in this area. As we've talked about with our strong portfolio, our network reach, trusted brand, we are all equipped to help our customers thrive in the AI era. And thank you, as always, to our customers, partners and investors for the continued confidence you place in HP, and we look forward to keeping you updated on our progress and have a good afternoon. Thank you. Operator: Once again, ladies and gentlemen, this does conclude today's conference. We would like to thank you all for your participation today. You may now disconnect. Before you buy stock in HP, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and HP wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $440,710!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,335,252!* Now, it’s worth noting Stock Advisor’s total average return is 978% — a market-crushing outperformance compared to 213% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors. See the 10 stocks » *Stock Advisor returns as of August 31, 2026. This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has positions in and recommends HP. The Motley Fool has a disclosure policy. HP (HPQ) Q3 2026 Earnings Call Transcript was originally published by The Motley Fool

HP (HPQ) could be a solid addition to your portfolio given a notable revision in the company's earnings estimates. While the stock has been gaining lately, the trend might continue since its earnings outlook is still improving. The upward trend in estimate revisions for this personal computer and printer maker reflects growing optimism of analysts on its earnings prospects, which should get reflected in its stock price. After all, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements. Our stock rating tool -- the Zacks Rank -- is principally built on this insight. The five-grade Zacks Rank system, which ranges from a Zacks Rank #1 (Strong Buy) to a Zacks Rank #5 (Strong Sell), has an impressive externally-audited track record of outperformance, with Zacks #1 Ranked stocks generating an average annual return of +25% since 2008. For HP, strong agreement among the covering analysts in revising earnings estimates upward has resulted in meaningful improvement in consensus estimates for the next quarter and full year. The chart below shows the evolution of forward 12-month Zacks Consensus EPS estimate: The company is expected to earn $0.74 per share for the current quarter, which represents a year-over-year change of -20.4%. Over the last 30 days, the Zacks Consensus Estimate for HP has increased 11.11% because three estimates have moved higher compared to no negative revisions. The company is expected to earn $3.15 per share for the full year, which represents a change of +1.0% from the prior-year number. There has been an encouraging trend in estimate revisions for the current year as well. Over the past month, five estimates have moved up for HP versus no negative revisions. This has pushed the consensus estimate 9.04% higher. Thanks to promising estimate revisions, HP currently carries a Zacks Rank #2 (Buy). The Zacks Rank is a tried-and-tested rating tool that helps investors effectively harness the power of earnings estimate revisions and make the right investment decision.You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. Our research shows that stocks with Zacks Rank #1 (Strong Buy) and 2 (Buy) significantly outperform the S&P 500. HP shares have added 11.9% over the past four weeks, suggesting that investors are betting on its impressive estimate revisions. So, you may consider adding it to your portfolio right away to benefit from its earnings growth prospects. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report HP Inc. (HPQ) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

HP, Inc. (HPQ) delivered strong fiscal Q3 earnings, revenue, free cash flow (FCF), and higher FCF margins. That augurs well for HPQ stock, although unit sales were down, management warned that memory costs could rise, and growth may depend on price hikes. Nevertheless, put yields are still high, giving short-sellers a good play. HPQ fell just 2.92% today to $29.63, despite heavy put option trading in the past several weeks. Why Options Traders Are Betting That Marvell Technology Stock Could Soon Hit $300 Why Corning Stock Can Make a Comeback Here Unusual Options Activity: NFLX, HONA, and MSFT Lead the Way With These 3 Options Strategies Get exclusive insights with the FREE Barchart Brief newsletter. Subscribe now for quick, incisive midday market analysis you won't find anywhere else. I discussed this yesterday in a Barchart article, “HP, Inc. Results Today - Huge, Unusual Options Activity in Long-Dated HPQ Puts, ” and also in an Aug. 11 Barchart piece, “HP Inc. Has Unusual Put Option Activity - A 7.4% Short-Put Yield - But Is It a Trap?” As a result, short-sellers of out-of-the-money (OTM) HPQ puts can now earn high cash-secured short-sale yields. This article will discuss this play. Not only were fiscal Q3 revenue and earnings significantly higher than management's guidance and analysts' forecasts, but HP, Inc. also raised its free cash flow (FCF) guidance for FY 2026 (i.e., ending Oct. 31). It said that net revenue was up 12.5% Y/Y and earnings per share (EPS) were up 10.7% to 71 cents, although this included one-time tariff refund income of 11 cents. Moreover, free cash flow (FCF) was up 7% to $1.548 billion. Stock Analysis reported that the FCF margin was down slightly from last year (9.87% vs. 10.38%, although up from 5.25% in fiscal Q2). However, the bad news, or more concerning news, is that HP's personal systems (i.e., PCs for both consumers and companies) had a 16% drop in unit volume Y/Y. This is seen on page 2 of the press release Moreover, Personal Systems account for 75% of total sales, as shown on page 13 of the release. (Personal units dropped 19%, accounting for 20% of sales). The point is that revenue gains were due to higher unit prices, not higher volume. Companies can't count on that continuing without dampening demand further. Moreover, management said that they expect that memory costs, as a percent of the total unit "bill of materials, will increase further. Whether the company can keep passing this on to consumers through higher prices is yet to be seen. It could lead to further drops in unit volume. Will that lead to revenue declines? So far, analysts don't think so. For example, the average analyst revenue forecast for Oct. 31, 2027 is $59.34 billion vs. $59.74 billion this year ending Oct. 31, 2026. That is essentially flat. But the market always wants to see growth. It could be why the stock has fallen today, despite higher FCF margins and higher FCF. Nevertheless, much of this bad news is already “baked” into HPQ stock. For example, analysts now have an average price target of $27.32, according to Yahoo! Finance. That's up significantly from 2 weeks ago, when I showed that the average PT was $22.98. In fact, yesterday, Yahoo! Finance had an average survey PT of $23.41, as seen in my Aug. 26 Barchart article. As a result, put options are probably too high, especially for strike prices at $27.00 or lower. For example, the Oct. 2, 2026, expiry put option chain, a little over one month from now, shows that the $27.00 strike price put has a midpoint premium of 66 cents. That represents a 2.44% one-month yield for cash-secured put short sellers (i.e., $66/$2,700 in collateral secured). Moreover, even though the strike price is 8.88% below Thursday's closing price of $29.63, it allows an investor to have a potential breakeven even lower: $27.00 - $0.66 = $26.34 breakeven point (BP) That's 11% lower than the $29.63 close. Moreover, for just a slightly higher strike price, the investor can earn a higher yield. The $27.50 put has a $1.02 midpoint premium. That means a short-seller can make $102 after posting $2,750 as cash-secured collateral to buy 100 shares. This works out to a one-month yield of 3.709%. That is very attractive to value investors over the long run. For example, the expected return (ER), assuming it can be repeated each month, for six months is 22.25%. The bottom line is that investors can earn significant yields shorting HPQ. However, some investors may want to wait to see if HPQ falls closer to $27.00, where analysts' price targets are now. That could reduce the potential yield opportunity, but would make the play safer from a long-term standpoint. On the date of publication, Mark R. Hake, CFA did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Barchart.com

Interested in HP Inc.? Here are five stocks we like better. Record revenue and raised outlook: HP’s fiscal third-quarter revenue rose 13% year over year to $15.7 billion, while non-GAAP EPS increased 11% to $0.83. The company raised its fiscal 2026 EPS outlook to $3.19–$3.29 and free-cash-flow forecast to $3.0–$3.2 billion, partly reflecting tariff refunds. Personal Systems drove performance: Personal Systems revenue climbed 18% to a record $11.8 billion, supported by commercial PCs, premium products and AI PCs. AI PCs represented 46% of shipments, with HP expecting that mix to reach 50% by the end of fiscal 2026. Cost and printing pressures remain: Print revenue fell 2%, although tank printers and industrial categories grew, while rising memory, storage and commodity costs are expected to pressure fourth-quarter Personal Systems margins. HP expects margins to improve in fiscal 2027 through pricing, product redesigns and a higher-margin product mix. MarketBeat Week in Review – 03/30 - 04/03 HP (NYSE:HPQ) reported record fiscal third-quarter revenue and raised its full-year earnings and free-cash-flow outlook, as growth in its Personal Systems business offset continued pressure in printing markets and rising component costs. Revenue for the quarter totaled $15.7 billion, up 13% year over year, marking the company’s ninth consecutive quarter of top-line growth. Non-GAAP diluted earnings per share rose 11% to $0.83, including a $0.11 benefit from tariff refunds. Chief Financial Officer Karen Parkhill said earnings excluding the tariff benefit still exceeded the top end of HP’s prior guidance range. → What Rising Delivery Forecasts Say About Rivian's Stock Prospects HP Inc. Stock Is Historically Cheap, but Can AI Change the Story? “For the third consecutive quarter, we delivered better than expected top-line growth and EPS at the top or above our guidance range,” Parkhill said. Personal Systems revenue rose 18% to a record $11.8 billion in the fiscal third quarter. Commercial revenue increased 22%, while consumer revenue grew 10%. Commercial customers accounted for more than 70% of Personal Systems revenue during the quarter. → NVIDIA Reveals $21 Billion SpaceX Stake: Signal of Confidence or Circular Financing? HP Is Positioning Itself for the AI Gold Rush's Second Act HP said its strategy of prioritizing higher-value placements, pricing actions, services expansion and premium categories more than offset lower unit volume. The company reported double-digit growth in AI PCs, advanced compute solutions, hybrid systems and workforce solutions. Personal Systems operating margin was 4.6%, below the company’s long-term range, due to higher commodity costs and variable compensation. HP said repricing and other cost-reduction measures partly offset those pressures. → Berkshire Boosts Its Bet: This AI Hyperscaler Is Now a Top-3 Holding Interim Chief Executive Officer Bruce Broussard said HP expects AI PCs to account for 50% of its shipment mix by the end of fiscal 2026. Personal Systems President Ketan Patel said AI PCs represented 46% of shipments in the third quarter and that HP expects the mix to reach 60% to 70% in fiscal 2027 and more than 70% in fiscal 2028. Patel said customers are increasingly considering more capable devices as AI workloads move closer to users and away from solely cloud-based computing. He cited considerations including token costs, security, privacy, latency and enterprise management of AI agents. HP gained 2.6 percentage points of share in premium PC categories, according to Patel. The company gained 1.8 percentage points of workstation share. Peripherals, collaboration offerings and services such as the Workforce Experience Platform contributed about one-third of Personal Systems gross profit. Print revenue declined 2% from a year earlier, or 4% in constant currency, as lower hardware and supplies volumes outweighed contributions from industrial printing, 3D printing and HP’s All-In Plan subscription offering. Consumer print revenue fell 2%, while commercial print revenue declined 1%. Parkhill cited softness in the North American and Chinese office markets, as well as HP’s focus on profitable unit placement in an aggressive pricing environment. Supplies revenue fell 4% in constant currency, partly reflecting headwinds in the Middle East. HP continued to expand in tank printers, a category it describes as profit-upfront. The company reported 42% tank-printer unit growth and said it gained share both sequentially and year over year. Broussard said HP gained another four points of share in big-tank markets during the quarter. Print operating margin was 18.1%, up about one percentage point year over year. The result included a favorable impact from tariff refunds and pricing actions. Excluding tariff refunds, Parkhill said Print margin was at the low end of HP’s long-term 16% to 19% range. Gross margin was 18.8%, down from the prior year as higher commodity costs and a greater Personal Systems mix weighed on profitability. Pricing, growth in key areas and tariff refunds partly offset those effects. Operating margin was 6.5%; excluding tariff refunds, it was in line with HP’s expectations. HP generated more than $1.7 billion in cash from operations and approximately $1.6 billion in free cash flow during the quarter. Year-to-date free cash flow exceeded $2.5 billion. The company repaid slightly more than $500 million of debt maturities and returned nearly $600 million to shareholders through dividends and share repurchases during the quarter. HP increased its fiscal 2026 non-GAAP diluted EPS outlook to $3.19 to $3.29, from a prior range of $2.90 to $3.10. The updated full-year forecast includes an estimated $0.19 favorable impact from tariff refunds. Fourth-quarter EPS is projected at $0.69 to $0.79, including an estimated $0.08 tariff-refund benefit. The company also raised its fiscal-year free-cash-flow forecast to $3 billion to $3.2 billion. HP expects Personal Systems revenue to grow year over year in the fiscal fourth quarter but decline sequentially, reflecting what Parkhill described as below-seasonal demand amid industry projections for a high-teens decline in PC unit volumes during the second half of the calendar year. The company expects memory and storage costs to continue rising as a percentage of bill of materials. Personal Systems margin is expected to be lower in the fourth quarter than in the third quarter before improving sequentially in fiscal 2027, according to Parkhill. Parkhill said the benefit from lower-cost inventory held earlier in the year is “largely behind us” as higher-cost inventory moves through HP’s profit and loss statement. The company expects cost pressures to rise at a slower rate in fiscal 2027 and cited longer-term pricing revisions, product redesigns, platform optimization, premium product mix and higher-margin attached offerings as factors that could support a margin recovery. For Print, HP expects fourth-quarter revenue in line with historical seasonality and operating margin in the lower half of its long-term range, excluding any tariff refunds. The company said it plans to continue emphasizing tank printers, subscriptions, AI-enabled office products, industrial graphics and cost discipline. Broussard also said the search for HP’s next chief executive officer is proceeding and that the company is making progress, though he did not provide a timeline. HP Inc is an American multinational information technology company that designs, manufactures and sells personal computing devices, printers and related supplies and services. Its product portfolio spans consumer and commercial notebooks and desktops, workstations, displays and accessories, as well as an extensive line of printing hardware that includes home, office and production printers. HP also provides consumables such as ink and toner, managed print services, device deployment and lifecycle support, and software for device and print management. Founded from the original Hewlett‑Packard Company, HP Inc became a separately traded public company in 2015 following a corporate split that created Hewlett Packard Enterprise to focus on enterprise hardware and services. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "HP Q3 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

HP (NYSE:HPQ), a personal computers and printing hardware provider, closed at $29.62, down 2.93%. Investors focused on weak PC shipment trends and margin pressure from higher memory and commodity costs, while watching component costs and PC demand. Trading volume reached 38.4M shares, coming in about 118% above its three-month average of 17.6M shares. S&P 500 (SNPINDEX:^GSPC) closed at 7,730, up 0.71%, and the Nasdaq Composite (NASDAQINDEX:^IXIC) closed at 26,541, up 1.57%. Among personal computers, printers, and related technology hardware names, Dell Technologies (NYSE:DELL) closed at $471.80, up 1.72%, while Apple (NASDAQ:AAPL) closed at $314.58, up 0.36%, highlighting a firmer tone for sector rivals despite HP's decline. HP reported sales and adjusted EPS growth of 13% and 11% in Q3, easily surpassing Wall Street estimates, but the stock dipped 3% today regardless. Even accounting for a tariff benefit, HP still beat expectations for the quarter. However, despite raising guidance to generate roughly $3.1 billion in free cash flow this year, HPQ stock slid as PC shipments declined 16% and margins contracted. Most of HP's sales growth came from price increases implemented to offset soaring input costs. That said, I'd argue Q3's growth shows a decent bit of pricing power, even if shipments dropped, but it's not a long-term solution. Furthermore, HP's AI PC unit posted double-digit sales growth and now accounts for 46% of its PC business. Management believes this figure will exceed 70% by 2028, providing the company with a few years of promising replacement-cycle opportunities. Trading at 10 times forward earnings and guiding to earning $3.1 billion in FCF versus an enterprise value of $33 billion, HPQ stock remains quite cheap, but operates in a brutally competitive industry. Before you buy stock in HP, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and HP wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $439,308!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,286,826!* Now, it’s worth noting Stock Advisor’s total average return is 964% — a market-crushing outperformance compared to 212% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors. See the 10 stocks » *Stock Advisor returns as of August 27, 2026. Josh Kohn-Lindquist has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple and HP. The Motley Fool has a disclosure policy. Stock Market Today, Aug. 27: HP Slips 3% on Weak PC Shipments Despite Fiscal Q3 Beat was originally published by The Motley Fool

HP Inc. HPQ reported third-quarter fiscal 2026 adjusted earnings of 83 cents per share, which increased 10.7% year over year and beat the Zacks Consensus Estimate by 10.7%. HPQ reported revenues of $15.68 billion, which increased 12.5% and surpassed the consensus mark by 5.6%. Growth was led by Personal Systems as pricing and a richer premium mix offset lower unit volumes. HPQ’s total PC units fell 16% year over year, while AI PCs accounted for 46% of shipment mix, highlighting the shift toward higher-value configurations. Personal Systems revenues were $11.77 billion, up 18.5% year over year and 16.7% in constant currency. Commercial PS revenues rose 22%, while Consumer PS revenues increased 10%, reflecting continued strength across both customer groups. Commercial PC units declined 14%, and consumer units fell 19%. Even so, HP gained 2.6 points of share in premium categories and 1.8 points in workstations sequentially. Attached businesses, including peripherals, collaboration solutions and services, contributed about one-third of Personal Systems gross profit. HP Inc. price-consensus-eps-surprise-chart | HP Inc. Quote Printing revenues were $3.91 billion, down 2.2% year over year and 3.6% in constant currency. Supplies revenues declined 3%, Commercial Printing fell 1%, and Consumer Printing decreased 2% as hardware and supplies volumes remained under pressure. The company continued to shift toward higher-value print categories. Tank printer units jumped 42%, while Industrial Printing posted its 12th consecutive quarter of revenue growth. 3D Printing revenues also grew at a double-digit rate for the sixth straight quarter. HPQ's gross margin was 18.8%, pressured by higher commodity costs and a greater mix of Personal Systems revenues. Non-GAAP operating margin contracted 60 basis points year over year to 6.5%, even as pricing, growth in key areas and tariff refunds provided partial offsets. Personal Systems operating margin fell 80 basis points to 4.6%, while Printing margin improved 110 basis points to 18.1%. The quarter's adjusted earnings included an 11-cent benefit from tariff refunds. Management said the benefit from lower-cost inventory is largely behind the company as higher-cost inventory moves through results. HPQ generated $1.74 billion of operating cash flow and $1.57 billion of free cash flow in the quarter. The company ended July with $4.17 billion in cash, cash equivalents and restricted cash, while the cash conversion cycle stood at negative 37 days. During the quarter, HPQ repurchased $300 million of stock and paid $274 million in dividends. It also paid down slightly more than $500 million of debt maturities, ending the quarter with $9.20 billion of gross debt. HPQ expects AI PCs to account for 50% of shipment mix by the end of fiscal 2026, rising to 60-70% in fiscal 2027 and more than 70% in fiscal 2028. The company is also working with more than 150 software partners to expand workloads that can run locally on PCs. Beyond PCs, HPQ signed a three-year, $100 million strategic agreement with RRD to accelerate AI and industrial automation in print production. Management also highlighted continued expansion of WXP, which brings PC, printer and collaboration-device management into a single platform. HPQ raised its fiscal 2026 non-GAAP earnings outlook to $3.19-$3.29 per share from $2.90-$3.10. The new range includes a 19-cent favorable impact from estimated tariff refunds. Free cash flow guidance was also increased to $3-$3.20 billion. For the fourth quarter of fiscal 2026, HPQ expects non-GAAP earnings of 69-79 cents per share, including an 8-cent tariff-refund benefit. Personal Systems revenues are expected to be below seasonal levels but still grow year over year, while Printing revenues are projected to follow historical seasonality. HPQ currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the broader Zacks Computer and Technology sector include Dell Technologies DELL, Docusign DOCU and Hewlett Packard Enterprise HPE. While Dell Technologies sports a Zacks Rank #1 (Strong Buy), Docusign and Hewlett Packard Enterprise carry a Zacks Rank of 2 (Buy) each at present. You can see the complete list of today’s Zacks #1 Rank stocks here. DELL shares have skyrocketed 268.4% in the year-to-date period. Dell Technologies is set to report second-quarter fiscal 2027 results on Sept. 1. Shares of DOCU have plunged 13.3% year to date. Docusign is set to report the second-quarter fiscal 2027 results on Sept. 3. Shares of HPE have rallied 129.9% year to date. Hewlett Packard Enterprise is slated to report third-quarter fiscal 2026 results on Sept. 2. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report HP Inc. (HPQ) : Free Stock Analysis Report Dell Technologies Inc. (DELL) : Free Stock Analysis Report Hewlett Packard Enterprise Company (HPE) : Free Stock Analysis Report Docusign Inc. (DOCU) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

HP (HPQ) reported $15.68 billion in revenue for the quarter ended July 2026, representing a year-over-year increase of 12.5%. EPS of $0.83 for the same period compares to $0.75 a year ago. The reported revenue represents a surprise of +5.59% over the Zacks Consensus Estimate of $14.85 billion. With the consensus EPS estimate being $0.75, the EPS surprise was +10.67%. While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- and how they compare to Wall Street expectations to determine their next course of action, some key metrics always provide a better insight into a company's underlying performance. Since these metrics play a crucial role in driving the top- and bottom-line numbers, comparing them with the year-ago numbers and what analysts estimated about them helps investors better project a stock's price performance. Here is how HP performed in the just reported quarter in terms of the metrics most widely monitored and projected by Wall Street analysts: Days in accounts payable: 151.00 Days versus 141.00 Days estimated by two analysts on average. Days of sales outstanding in accounts receivable: 41.00 Days versus the two-analyst average estimate of 34.00 Days. Days of supply in inventory: 73.00 Days versus 69.50 Days estimated by two analysts on average. Net revenue- Personal Systems- Commercial PS: $8.58 billion compared to the $7.67 billion average estimate based on two analysts. The reported number represents a change of +21.9% year over year. Net revenue- Personal Systems- Consumer PS: $3.19 billion versus the two-analyst average estimate of $3.24 billion. The reported number represents a year-over-year change of +10.1%. Net revenue- Personal Systems: $11.77 billion compared to the $10.91 billion average estimate based on two analysts. The reported number represents a change of +18.5% year over year. Net revenue- Printing- Supplies: $2.54 billion versus $2.58 billion estimated by two analysts on average. Compared to the year-ago quarter, this number represents a -2.6% change. Net revenue- Printing- Commercial Printing: $1.1 billion versus the two-analyst average estimate of $1.07 billion. The reported number represents a year-over-year change of -1.1%. Net revenue- Printing- Consumer Printing: $275 million versus $248.83 million estimated by two analysts on average. Compared to the year-ago quarter, this number represents a +2.2% change. Net revenue- Printing: $3.91 billion versus the two-analyst average estimate of $3.9 billion. The reported number represents a year-over-year change of -1.9%. Earnings from operations- Personal Systems: $537 million compared to the $539.53 million average estimate based on two analysts. Earnings from operations- Corporate Investments: $-28 million versus the two-analyst average estimate of $-66.23 million. View all Key Company Metrics for HP here>>> Shares of HP have returned +4.4% over the past month versus the Zacks S&P 500 composite's +3.7% change. The stock currently has a Zacks Rank #3 (Hold), indicating that it could perform in line with the broader market in the near term. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report HP Inc. (HPQ) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Wednesday, August 26th, 2026Today’a trading session looked a bit hesitant ahead of NVIDIA’s NVDA Q2 results after the closing bell today, but it needn’t have been: earnings of $2.22 per share on revenues of $96.2 billion in the quarter left the Zacks estimates of $2.09 per share on $91.85 billion in the dust. This marks a +120% year-over-year increase on the bottom line and +106% on the top. Expectations had been for +99% earnings growth and +96.5% on revenues.NVIDIA’s Data Center business alone accounted for $89.00 billion in revenues for the July quarter, up a cool +117% from this time last year. Next quarter, the AI chip behemoth is expected to surpass $100 billion in revenues for the first time: $108 billion, +/- 2%. This assumes no gains from data center compute from China in the current quarter. What is there to say about earnings growth of this caliber? NVIDIA grew +140% in its prior quarter on the bottom line, and +85% the quarter previous to that. Shares are down slightly on the report, but that’s because CEO Jensen Huang has plenty to address in the company’s upcoming conference call. By the numbers, though? These are hard to beat by any company at any point in trading history. In what looks to be the final big earnings afternoon of this Q2 earnings season, Salesforce CRM posted a big earnings beat on its partnership with AI giant Anthropic: $5.90 per share versus expectations of $3.27 in the Zacks consensus, while revenues of $11.3 billion came in-line with forecasts. The Customer Management Relationship (CRM) leader returned $27.5 billion to shareholders in the quarter, in both share buybacks and dividends, and current-quarter guidance has been bumped higher.Cybersecurity staple CrowdStrike CRWD shares cruised +9.7% higher after reporting record annual recurring revenue (ARR) of $333 million, +51% year over year. Earnings of $0.31 per share beat the Zacks consensus by two cents, while $1.47 billion in revenues beat projections for $1.44 billion. CrowdStrike guides higher for next quarter and fiscal year revenues, and higher on year-over-year earnings.Hewlett-Packard HPQ also easily outpaced estimates this afternoon, posting earnings of +$0.83 per share above the +$0.74 analysts were looking for — the partial result of an 11-cent gain on tariff refunds — on revenues which came in at $15.7 billion, up +12.5%. Guidance was raised for both current quarter and year-over-year earnings, but investors took the opportunity to book profits after +37% gains year to date.Urban Outfitters URBN met projected earnings results of $1.72 per share this afternoon on a record-high $1.66 billion in revenues, +10.4% year over year. The parent of Anthropologie, Free People, FP Group (which led brands with +10% growth in the quarter) and more are giving up -3.3% in late trading on the mixed report, after gaining more than +10% year to date.Questions or comments about this article and/or author? Click here>> Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report HP Inc. (HPQ) : Free Stock Analysis Report Salesforce, Inc. (CRM) : Free Stock Analysis Report NVIDIA Corporation (NVDA) : Free Stock Analysis Report Urban Outfitters, Inc. (URBN) : Free Stock Analysis Report CrowdStrike (CRWD) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research