HP Reports Strong Q3 Results Driven by AI PC Adoption and Windows 11 Upgrades

HP beats third-quarter revenue estimates on AI PC adoption, Windows 11 upgrade

Aug 27 (Reuters) - HP Inc (HPQ.N), opens new tab beat Wall Street estimates for third-quarter revenue on Wednesday, driven by growing demand for artificial intelligence-powered personal computers and Windows 11 upgrade cycle. Shares of the company rose 4.6% in extended trading. A strong PC refresh cycle is expected after Microsoft (MSFT.O), opens new tab ends support for Windows 10 in October, as users and organizations seek to maintain security and access to the latest features. "We remain confident in the strength of the PC market opportunity, and expect continued momentum from Windows 11 refresh and AI PC adoption," CFO Karen Parkhill said in a statement. The company's third-quarter revenue rose about 3% to $13.93 billion, handily beating analysts' average estimate of $13.70 billion, according to data compiled by LSEG. HP forecast fourth-quarter adjusted profit per share between 87 cents and 97 cents, roughly in line with analysts' estimates of 92 cents. The company said its expectations for fourth-quarter adjusted profit exclude about 12 cents per share for restructuring, deal-related costs, intangible amortization and tax items. The company's adjusted profit per share of 75 cents for the quarter ended July 31 aligned with estimates. In the third quarter, revenue for the personal systems unit, which houses both consumer and commercial PCs, grew 6% to $9.93 billion. Revenue for its printing segment, which includes office-oriented printers and service offerings, fell 4% to $4 billion. Reporting by Jaspreet Singh in Bengaluru; Editing by Mohammed Safi Shamsi Our Standards: The Thomson Reuters Trust Principles., opens new tab

HP cites strong demand for AI PCs as it beats expectations on revenue, but investors aren't impressed - SiliconANGLE

HP cites strong demand for AI PCs as it beats expectations on revenue, but investors aren't impressed HP Inc.'s stock was trading lower in extended trading, after initially rising in the wake of its third quarter financial results. The company surpassed analyst's expectations on earnings and revenue and said it's seeing solid demand for its new generation of artificial intelligence-capable personal computers, but its guidance for the current quarter failed to reflect that optimism. The PC and printer manufacturer reported earnings before certain costs such as stock compensation of 75 cents per share, matching Wall Street's forecast. It also delivered total sales of $13.9 billion, up 3% from a year earlier and ahead of the $13.69 billion consensus estimate. The slight bump in revenue helped HP to boost its bottom line, and it reported net earnings of $763 million in the quarter, up from $640 million in the same period one year ago. HP President and Chief Executive Enrique Lores (pictured) hailed the company's fifth consecutive quarter of revenue growth, saying this was the result of strong momentum in key growth areas. "These results demonstrate our agility and focused execution in the quarter, reinforce the strength of our strategy, and our commitment to be a leader in the future of work," he added. HP's stock quickly rose around 2% on the report, but the initial momentum faded and those gains were soon pared back, and it was trading almost 3% lower at the time of writing. A lot of attention was paid to Lores' comments on a conference call with analysts, who were eager to find out how U.S. trade tariffs are impacting the company. While some technology hardware is exempted from the heaviest tariffs imposed by U.S. President Donald Trump due to ongoing investigations, HP is not totally immune to the country's shifting trade policies. Lores insisted that the company is "executing with discipline" in a dynamic environment. He explained that the company managed to avoid some of the heaviest China tariffs by moving manufacturing away from that country to other nations, where there are currently no tariffs for PCs. However, he admitted that the company's printer business didn't come through completely unscathed. "We have been impacted by the trade changes across the board by the reciprocal tariffs, and what we have been doing is rebalancing manufacturing into the countries that were more favorable, driving more accelerated cost reductions, and also in some cases, selectively taking prices up to compensate for that," Lores explained. HP's stock has declined 17% in the year to date, not only due to the ongoing concerns about the impact of tariffs, but also fears of weakness in the PC market. But Lores said the company was seeing stronger than expected demand for PCs, especially in the consumer segment. The CEO said sales of PCs were boosted due to the growing interest in its so-called "AI PCs", which are fitted with powerful chipsets to process AI workloads on the device. According to him, AI PC sales rose by double-digits on a sequential basis, and he believes this is a trend that will accelerate next year. "If you are buying a new PC now, you don't want to buy a PC that will not be able to take advantage of all these improvements that will continue to come to market in the coming months and years, so you better upgrade to an AI PC," Lores said. The PC business is also getting an annual boost due to the "back-to-school" season, which Lores said has "started strong" so far. In addition, HP also stands to benefit from the imminent end of support for Microsoft Corp.'s Windows 10 operating system. That company is planning to stop providing software updates and technical support for Windows 10 users at the end of October, unless customers pay an additional fee. Lores said that just over half of the Windows install base has made the transition to Windows 11 so far, which suggests that many more are likely to upgrade their PCs soon. Despite Lores' apparent optimism, HP's forecast for the third quarter was a tad conservative. The company said it's expecting third-quarter earnings of between 87 cents and 97 cents per share, with the midpoint in-line with Wall Street's forecast of 92 cents per share.

HP Prints Solid Q3, Analysts Expect It To Ride AI PCs Into 2026 - HP (NYSE:HPQ)

HP HPQ eased market worries over PCs and printing with solid Q3 results, prompting JPMorgan's Samik Chatterjee to reaffirm an Overweight rating and lift his price target to $30 on AI PC momentum, a Windows 11 refresh, and supply chain gains. Also Read: HP Stock Drops 10% Post-Earnings Miss, Outlook Disappoints Chatterjee reaffirmed confidence in HP, raising the December 2026 price forecast, citing reduced downside risks to fiscal 2025 estimates. He said HP's fiscal third-quarter results eased investor concerns about a potential PC market slowdown and margin pressure in printing, as the company delivered substantial revenue and kept its full-year outlook intact despite headwinds. Chatterjee noted that AI PC adoption already makes up 25% of HP's mix across consumer and enterprise segments, helping to drive refresh momentum alongside the Windows 11 upgrade cycle. He added that HP expanded Personal Systems (PS) margins sequentially through pricing and supply chain diversification away from China, with further margin gains expected in fiscal fourth-quarter. HP also maintained Print margins at 17.3%, within its long-term target range, and guided for margins at the upper end of that range next quarter, despite ongoing competitive and tariff pressures. For third-quarter, revenue totaled $13.9 billion, in line with JPMorgan's estimate and above consensus, with PS revenue of $9.9 billion and Print revenue of $4.0 billion. EPS came in at $0.75, matching expectations. HP guided fourth-quarter EPS between $0.87 and $0.97, with JPMorgan's forecast at $0.91. The company also reiterated free cash flow guidance of $2.6-$3.0 billion for fiscal 2025. Looking ahead, Chatterjee expects mid-single-digit PC market growth in the second half of fiscal 2025 and continued AI PC momentum into 2026. He projected a structural low-single-digit decline in the print market through 2026. HP's strategic execution, cost optimization, and diversified supply chain are mitigating factors, he says. Price Action: HPQ stock is up 2.64% at $27.83 at last check on Thursday. Read Next: Victoria's Secret Lifts 2025 Sales Outlook After Q2 Earnings Exceed Estimates, Leaders Optimistic For Year Ahead Image: Shutterstock HPQHP Inc$27.792.49%Stock Score Locked: Want to See it? Benzinga Rankings give you vital metrics on any stock - anytime. Reveal Full ScoreEdge RankingsMomentum15.37Growth34.41QualityN/AValue46.05Price TrendShortMediumLongOverviewMarket News and Data brought to you by Benzinga APIs

HP Reports 3 Percent Revenue Growth | The Motley Fool

HP(HPQ 0.69%) reported third-quarter 2025 results on August 27, 2025, posting 3% year-over-year revenue growth, a fifth consecutive positive quarter, and strong performance in personal systems and AI PC (AIPC) adoption. The company maintained profit margins within target ranges, accelerated supply chain diversification, and reaffirmed its full-year free cash flow and earnings guidance. The following highlights provide a detailed look at HP's operating momentum, risk management, and investment thesis updates, supported by direct management commentary. HP's personal systems segment, which includes PCs and workstations, delivered a 6% year-over-year revenue gain and reached a 5.4% operating margin, returning to the guidance target range. Sequential revenue was up 10% and units climbed 13%, driven by robust commercial activity, higher average selling prices (ASPs), and strong back-to-school demand in North America and China. "Importantly, as promised, we drove personal systems operating margin back into our guidance range at 5.4% with our planned mitigation actions." -- Karen Parkhill, Chief Financial Officer This result demonstrates HP's ability to regain operational leverage through premium product mix optimization and disciplined cost management, supporting the company's long-term earnings growth in a cyclical industry. Shipments of AI-capable PCs (AIPCs), which integrate local neural processing units (NPUs) for AI workloads, have ramped to over 25% of HP's PC mix a full quarter ahead of plan, with double-digit sequential revenue growth in the segment. Management confirmed that AIPC units command a 5%-10% ASP uplift compared to non-AIPC products, enhancing the company's premium hardware mix. "We can confirm the estimations that we had before. We are seeing an uplift in pricing of AIPCs compared to similar units that don't bring this capability. And we maintain the assumptions that we had shared before of the 5% to 10% price increase driven by AIPCs." -- Enrique Lores, President and CEO This acceleration in high-value hardware mix not only raises near-term revenue and gross margin, but also strengthens HP's competitive position as enterprises and consumers transition to AI-integrated devices. HP completed a strategic migration of manufacturing for nearly all North American products from China to facilities in Vietnam, Thailand, Mexico, and the U.S., significantly reducing tariff exposure. Management reported that the majority of tariff-related costs were mitigated during the third quarter of fiscal 2025, supporting gross margin stabilization and business agility. "This quarter, as planned, nearly all products sold in North America are now built outside of China, helping to further reduce trade-related costs. We continue to ramp up production across Vietnam, Thailand, Mexico, and the US." -- Enrique Lores, President and CEO By localizing production and diversifying its supply base, HP reduces future exposure to trade frictions, protects profitability under shifting tariff regimes, and improves resilience relative to less-nimble competitors. Management reiterated full-year free cash flow guidance of $2.6 billion to $3 billion and set a non-GAAP EPS target of $0.87 to $0.97 for the fiscal fourth quarter. Personal systems operating margin is projected within the 5%-7% target range, and print operating margin is expected near the top of the 16%-19% range in the fiscal fourth quarter. HP will outline long-term strategic targets and capital allocation plans at its Investor Day in early 2026.

HP Posts 3% Revenue Gain in Fiscal Q3 | The Motley Fool

HP (HPQ 0.69%), a leading global provider of personal computers, printers, and related services, reported its fiscal third quarter results on August 27, 2025. HP posted GAAP net revenue of $13.9 billion, topping analyst consensus estimates of $13.69 billion (GAAP) and marking its fifth straight quarter of revenue growth. While GAAP revenue exceeded expectations, non-GAAP diluted earnings per share declined to $0.75, a drop of 10.7 % compared to the same period last year. GAAP diluted earnings per share increased to $0.80, up 23 % year over year, partly due to tax adjustments and a one-time litigation gain. Profit margins contracted from a year ago, with both GAAP and non-GAAP operating margins decreasing. Overall, the quarter demonstrated continued growth in sales, especially in Personal Systems, but also highlighted ongoing profit and margin challenges. HP is one of the world's largest manufacturers of personal computers (PCs), printers, and associated services. Its operations are split into three main segments: Personal Systems, Printing, and Corporate Investments. Its broad product lineup covers commercial and consumer desktops, laptops, workstations, and a wide range of inkjet and laser printers for both home and enterprise users. In recent years, HP has made strategic moves to address fast-changing technology trends and competitive pressures. The company has focused on innovation in artificial intelligence (AI), integrating AI PCs (personal computers equipped with AI-specific hardware and features) and advanced print technologies. Security is another priority, with the company emphasizing new device-level protections as cyber threats become more complex. HP also prioritizes sustainability initiatives, aiming to reduce emissions and promote responsible sourcing. The third quarter delivered top-line growth, with GAAP net revenue up 3.1% year-over-year. The company's $13.9 billion result beat consensus estimates and extended a multi-quarter growth streak, which management attributed to steady demand for its Personal Systems offerings and operational execution. According to the release, CEO Enrique Lores said, "In Q3 we delivered a fifth consecutive quarter of revenue growth, driven by strength in Personal Systems and strong momentum in our key growth areas," The Personal Systems segment, which covers consumer and commercial PCs, achieved GAAP revenue of $9.9 billion -- up 6% year over year. Both consumer and commercial sides delivered growth, with Consumer Personal Systems revenue up 8% and Commercial Personal Systems revenue was up 5% year over year. Total PC unit volumes grew 5%, including strong momentum in AI PCs, which the company has targeted as a key area for expansion. Consumer PC units rose 8% while commercial units increased 3%. Operating margin for Personal Systems was 5.4 %, down from 6.6 % in the prior year quarter, but improved sequentially. The Printing segment continued to face structural challenges. Revenue declined 4 % year over year to $4.0 billion. Both Consumer Printing and Commercial Printing businesses recorded declines, with respective year-over-year drops of 8% and 3%. Supplies revenue, which comes from sales of ink, toner, and related consumables, was down 4%. Overall hardware unit sales in Printing fell 9%, as both consumer and commercial placements decreased. The segment's operating margin held steady at 17.3%, unchanged from the same period last year. However, falling hardware placements may have future implications for the company's high-margin supplies business. Profitability remained under pressure. GAAP operating margin dropped to 5.1%, a decrease of 1.9 percentage points from a year ago while Non-GAAP operating margin slipped to 7.1% from 8.2% in Q3 FY2024. The margin contraction reflected ongoing challenges, including higher input costs. Despite these pressures, GAAP earnings per share climbed 23.1% year over year, benefiting from tax and litigation-related gains. However, underlying core profitability -- as shown by non-GAAP EPS and net income -- declined, highlighting that headline gains did not fully translate into operational improvement. Cash flow was a positive note. Operating cash flow rose 17% year over year to $1.7 billion and free cash flow (non-GAAP) improved 13% year over year to $1.5 billion and return $272 million in dividends to shareholders. HP also repurchased $150 million in its own shares. Balance sheet liquidity stayed strong, with $2.9 billion in gross cash on hand and the company completed a shift in manufacturing out of China for North American sales. This supply chain transition is intended to reduce future trade-related risks. Security remained a selling point, particularly for commercial clients, but the quarter did not provide new quantitative disclosures on its financial impact. Sustainability efforts were referenced, reiterating HP's commitment to environmental goals, although no new data was shared this quarter. AI integration is one of HP's leading focus areas. AI PCs -- computers with specialized hardware and software for AI-driven functions -- are a pillar of its innovation strategy. The company reported that the mix of AI-enabled product shipments continues to rise, and plans for these models to represent more than 25% of the PC business by the end of the year. Customer demand for smarter, secure, and connected devices is influencing product development, and HP continues to invest heavily in this area. Alongside AI, HP emphasizes advanced security capabilities, such as device-level protections and endpoint management, which play an important role for enterprise clients needing to safeguard sensitive data. HP's continued supply chain transformation stands out as a risk-management move. By wrapping up its re-shoring initiative -- moving most manufacturing out of China for North American markets -- the company has mitigated exposure to evolving trade regulations and tariffs. For Q4 FY2025, HP management issued guidance for GAAP diluted earnings per share of $0.75 to $0.85 and Non-GAAP EPS of $0.87 to $0.97. Full-year free cash flow for FY2025 is expected to reach $2.6 to $3.0 billion, in line with prior forecasts. No significant changes were made to previous financial guidance. The company stated that current U.S. trade regulations will continue to add costs, but expects cost mitigation and its supply chain changes to limit the impact going forward. Management remains confident in sequential improvement in operating performance, supported by the roll-out of Windows 11-based PCs and rising demand for AI-enabled models. Investors should watch for margin recovery in upcoming periods, as well as performance in the Printing segment, where declining hardware placements could impact high-margin supplies sales. Trends in AI PC adoption, effectiveness of security solutions, and continued success in reshoring manufacturing will also be crucial, especially as global technology demand remains unpredictable.

HP beats third-quarter revenue estimates on AI PC adoption, Windows 11 upgrade

(Reuters) -HP Inc beat Wall Street estimates for third-quarter revenue on Wednesday, driven by growing demand for artificial intelligence-powered personal computers and Windows 11 upgrade cycle. Shares of the company rose 4.6% in extended trading. A strong PC refresh cycle is expected after Microsoft ends support for Windows 10 in October, as users and organizations seek to maintain security and access to the latest features. "We remain confident in the strength of the PC market opportunity, and expect continued momentum from Windows 11 refresh and AI PC adoption," CFO Karen Parkhill said in a statement. The company's third-quarter revenue rose about 3% to $13.93 billion, handily beating analysts' average estimate of $13.70 billion, according to data compiled by LSEG. HP forecast fourth-quarter adjusted profit per share between 87 cents and 97 cents, roughly in line with analysts' estimates of 92 cents. The company said its expectations for fourth-quarter adjusted profit exclude about 12 cents per share for restructuring, deal-related costs, intangible amortization and tax items. The company's adjusted profit per share of 75 cents for the quarter ended July 31 aligned with estimates. In the third quarter, revenue for the personal systems unit, which houses both consumer and commercial PCs, grew 6% to $9.93 billion. Revenue for its printing segment, which includes office-oriented printers and service offerings, fell 4% to $4 billion. (Reporting by Jaspreet Singh in Bengaluru; Editing by Mohammed Safi Shamsi)