HP Inc.

HP reported third-quarter revenue of $15.7 billion, up 13% year over year, and 11% in constant currency. Non-GAAP EPS was $0.83, up 11%, including a $0.11 benefit from tariff refunds; excluding that benefit, EPS was still above the top end of guidance. Gross margin was 18.8% and operating margin was 6.5%; Karen Parkhill said operating margin was in line with expectations excluding tariff refunds. Personal Systems revenue was $11.8 billion, up 18%, while Print revenue was down 2% year over year, or down 4% in constant currency. HP generated over $1.7 billion in cash from operations and roughly $1.6 billion in free cash flow in Q3, and year-to-date free cash flow was more than $2.5 billion. HP raised full-year non-GAAP EPS guidance to $3.19 to $3.29 from $2.90 to $3.10, with $0.19 of tariff-refund benefit embedded, and raised full-year free cash flow guidance to $3.0 billion to $3.2 billion. For Q4, HP expects EPS of $0.69 to $0.79, including an $0.08 tariff-refund benefit.

Bruce Broussard framed the quarter as evidence that HP is executing well while building for the “AI era.” He emphasized record revenue, momentum in key growth areas, and a strategy centered on edge AI, integrated solutions, and a more disciplined operating model. His tone was upbeat but also transitional, as he discussed strengthening the company’s foundation and sharpening priorities ahead of the next CEO.

Karen Parkhill said HP delivered better-than-expected top-line growth and EPS for the third straight quarter, and that operating expenses fell as a percent of revenue even while the company kept investing. She highlighted gross margin of 18.8%, operating margin of 6.5%, and strong cash generation, including over $1.7 billion in operating cash flow, roughly $1.6 billion in free cash flow, and nearly $600 million returned to shareholders in the quarter. She also said HP paid down slightly more than $500 million of debt maturities, ended within its target leverage range, and expects more margin pressure in Q4 from rising memory and storage costs before improvement into FY27.

Analysts focused on whether Personal Systems revenue can keep growing if unit volumes remain weak, and management said Q4 should still show year-over-year revenue growth thanks to richer mix, pricing, and higher-value categories, though revenue should be down sequentially. Questions also centered on memory costs and pricing lag; management said the benefit from lower-cost inventory is largely behind them, but mitigation actions, supplier qualification, redesign work, and pricing should help margins trough in Q4 and improve afterward. The other major theme was AI-PC adoption: management said customers are increasingly valuing local inference for cost, privacy, latency, and governance, with use cases already visible in productivity, engineering, manufacturing, retail, and health care.