HP Inc.
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ITEM 1. Business.
Overview
HP is a global technology leader and creator of solutions that enable people to bring their ideas to life and connect to the things that matter most. Operating in more than 170 countries, HP delivers innovative and sustainable devices, services and subscriptions for personal computing, printing, 3D printing, hybrid work, gaming and other related technologies.
We believe artificial intelligence (“AI”) is playing a critical role in the transformation of how people live and work, and customers are beginning to recognize the benefits in security, speed and cost. Our high-performing product portfolio includes HP’s new line of AI PCs and workstations built with the computing power to enable local AI processing for enhanced performance and features as well as intelligent print features incorporated into our home, office and graphics solutions.
Our broad range of security capabilities are designed to protect an increasingly distributed user base through security enhanced PCs and printers, hardware-enforced endpoint security software (for both HP and non-HP PCs), and endpoint security services. Our security solutions provide layered resiliency using enhanced features such as containment and isolation technology as well as the use of AI deep-learning to identify and remove malware threats.
We have three reportable segments: Personal Systems, Printing and Corporate Investments.
Personal Systems
Personal Systems offers desktops, notebooks, and workstations (including HP’s portfolio of AI PCs and workstations), thin clients, retail point-of-sale (“POS”) systems, displays, hybrid systems, software, solutions including endpoint security and services. We provide lifecycle services including support and deployment, configurations, and extended warranty services. We support a multi-operating system and multi-architecture strategy, primarily using Microsoft Windows and Google Chrome operating systems. Our platforms incorporate processors from Intel, and AMD, including integrated AI acceleration, as well as NVIDIA GPUs for advanced graphics and compute workloads.
Personal Systems groups its global business capabilities into the following business units when reporting business performance:
•Commercial PS consists of endpoint computing devices and hybrid systems, for use by enterprise, public sector (which includes education), and small- and medium-sized business (“SMB”) customers. These devices include our Pro and Elite commercial PC portfolio, our Z line of workstations, thin clients, retail POS systems, and HP’s Dragonfly and Chromebook PCs. HP offers a range of secure services and solutions to commercial customers to help them manage the lifecycle of their PCs and mobility installed base.
• Consumer PS consists of devices, accessories and services which are designed for consumer usage, focusing on gaming, learning and working remotely, consuming multi-media for entertainment, managing personal life activities, sharing information and staying connected, informed, and secure. These devices include our new Omni consumer PC portfolio, the Omen and Victus gaming lines, and HP’s Spectre, Envy, Pavilion and Chromebook PCs.
Printing
Printing provides consumer and commercial printer hardware, supplies, services and solutions. Printing is also focused on Graphics and 3D Printing and Personalization in the commercial and industrial markets. Our global business capabilities within Printing are described below:
•Office Printing Solutions delivers HP’s security enhanced office printers, supplies, services, and solutions to SMBs, public sector and large enterprises. It also includes Original Equipment Manufacturer (“OEM”) hardware and solutions.
•Home Printing Solutions delivers innovative and security enhanced printing products, supplies, services and solutions for the home, home business and micro business customers.
•Graphics Solutions delivers large-format, commercial and industrial solutions and supplies to print service providers and packaging converters through a wide portfolio of printers and presses.
•3D Printing & Personalization offers a portfolio of additive manufacturing solutions and supplies to help customers succeed in their additive and digital manufacturing journey. HP offers complete solutions in collaboration with an ecosystem of partners.
Printing groups its global business capabilities into the following business units when reporting business performance:
•Commercial Printing consists of office printing solutions, graphics solutions and 3D printing and personalization, excluding supplies;
•Consumer Printing consists of home printing solutions, excluding supplies; and
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•Supplies comprises a set of highly innovative consumable products, ranging from ink and laser cartridges to media, industrial graphics supplies and 3D printing and personalization supplies, for recurring use in consumer and commercial hardware.
Corporate Investments
Corporate Investments includes certain business incubation projects and investments in digital enablement.
Competition
We encounter strong competition in all areas of our business activity. We compete on the basis of technology, innovation, performance, price, quality, reliability, brand, reputation, distribution, range of products and services, ease of use of our products, account relationships, customer training, service, support and solutions including subscription-based offerings and financing, security, availability of application software, and our sustainable impact.
The markets for each of our key business segments are characterized by strong competition among major corporations with long-established positions and a large number of new and rapidly growing firms. Most product life cycles are short, and to remain competitive we must develop new products and services, periodically enhance our existing products and services and compete effectively based on the factors listed above. In addition, we compete with many of our current and potential partners, including OEMs that design, manufacture and often market their products under their own brand names. Our successful management of these competitive partner relationships will be critical to our future success. Moreover, we anticipate that we will have to continue to adjust prices on many of our products and services to stay competitive.
The competitive environment in which each key segment operates is described below:
Personal Systems. The markets in which Personal Systems operates are highly competitive and are characterized by price competition and introduction of new products and solutions. Our primary competitors are Acer Inc., Apple Inc., ASUSTeK Computer Inc., Dell Inc., Huawei Technologies Co., Ltd., Lenovo Group Limited, Logitech International S.A., Microsoft Corporation, Samsung Electronics Co., Ltd., and Toshiba Corporation. In certain geographies, we also experience competition from local companies and from generically-branded or “white box” manufacturers. Our competitive advantages include our broad product portfolio, our innovation, and research and development capabilities including security features, our innovative design work, our brand and procurement leverage, our ability to cross-sell our portfolio of offerings, our extensive service and support offerings, the accessibility of our products and the execution of our broad-based distribution strategy from retail and commercial channels to direct sales.
Printing. The markets for printer hardware and associated supplies are highly competitive. Printing’s key customer segments each face competitive market pressures in pricing and the introduction of new products. Our primary competitors include Brother Industries, Ltd., Canon Inc., Pantum International Limited, Seiko Epson Corporation, The Ricoh Company Ltd., and Xerox Corporation Ltd. In addition, independent suppliers offer non-original supplies (including imitation, refill and remanufactured alternatives), which are often available for lower prices, but which can also offer lower print quality and reliability compared to HP original inkjet and toner supplies. These and other competing products are often sold alongside our products through online or omnichannel resellers, retailers or distributors, or such resellers, retailers and distributors may highlight the availability of lower cost non-original supplies. Our competitive advantages include our comprehensive high-quality solutions for the home, office and publishing environments, our innovation, and research and development capabilities including security features, sustainability, our brand, and the accessibility of our products through a broad-based distribution strategy from retail and commercial channels to direct sales.
Sales, Marketing and Distribution
We manage our business and report our financial results based on the business segments described above. Our customers are organized by consumer and commercial groups, and sales of HP products, solutions and services may be fulfilled directly by HP or indirectly through a variety of partners, utilizing their own physical or internet stores or an omnichannel combination of the two, including:
•retailers that sell our products to the public focusing on consumers and SMBs;
•resellers that sell our products and services, frequently with their own value-added products or services, to targeted customer groups;
•distribution partners that supply our products and solutions to resellers and retailers in certain geographies; and
•system integrators and other business intermediaries that provide various levels of services, including systems integration work and as-a-service solutions, and typically partner with us on client solutions that require our products and services.
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The majority of our overall revenue is made through channel resellers, however, the mix of our revenue generation conducted by direct sales or channel sales differs by business and geographic market. We believe that customer buying patterns and different geographic market conditions require us to tailor our sales, marketing and distribution efforts to the geographic market and sub-geographic specificities for each of our businesses. We are focused on driving the depth and breadth of our market coverage while identifying efficiencies and productivity gains in both our direct and indirect routes to market. Our businesses collaborate to accomplish strategic and process alignment where appropriate. For example, we typically assign an account manager to manage relationships across our business with large enterprise customers. The account manager is supported by a team of specialists with product and services expertise and drives both direct and indirect sales to their assigned customers. For other customers and for consumers, we typically manage both direct online sales as well as channel relationships, whereby retailers mainly target consumers and SMBs and commercial resellers mainly target SMBs, mid-market accounts, public sector and large enterprises.
Manufacturing and Materials
We utilize outsourced manufacturers around the world to manufacture HP-designed products to generate cost efficiencies, reduce time to market, and maintain flexibility in our supply chain and manufacturing processes. We also manufacture finished products from components and sub-assemblies that we acquire from a wide range of vendors.
We utilize two primary methods of fulfilling demand for products: building products to order and configuring products to order. Building products to order maximizes manufacturing and logistics efficiencies by producing high volumes of basic product configurations. Alternatively, configuring products to order enables products to match a customer’s hardware and software customization requirements. Additionally, while most of our products have existing or readily available alternative sources of supply, in some cases, where multiple sources of supply are not available, our components are obtained from a single source or limited number of sources if we believe it is advantageous to do so based on technology, availability, price, quality or other considerations.
Research and Development
Innovation across products, services, business models and processes is a key element of our culture and success. We are focused on developing products, services and solutions that anticipate customers’ changing needs and desires, and emerging technological trends, including accelerating the delivery of AI throughout our product portfolio. We continue to invest in innovation in both the areas where we believe we can make a unique contribution and where strategic partnerships will leverage our cost structure and maximize our customers’ experiences.
Intellectual Property
We seek patent protection for inventions likely to be incorporated into our products and services or where obtaining such proprietary rights will maintain or improve our competitive position. As of October 31, 2025, our worldwide patent portfolio included over 16,000 patents which expire at various dates, generally 20 years from their original filing dates.
We believe that our patents and patent applications are important for maintaining the competitive differentiation of our products and services, enhancing our freedom of action to sell our products and services in markets in which we choose to participate, and maximizing our return on research and development investments. No single patent is essential to HP as a whole or to any of HP’s business segments.
In addition to developing our patent portfolio, we license intellectual property (“IP”) from third parties. We have also granted and continue to grant to others licenses, and other rights, under our patents when we consider these arrangements to be in our interest. These license arrangements include a number of cross-licenses with third parties.
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Seasonality
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Financial statements
data from SEC XBRL filings. Values are as-reported; restatements supersede originals. Values reported in .
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ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
HP INC.
Management’s Discussion and Analysis of
Financial Condition and Results of Operations
The discussion of financial condition and results of our operations that follows provides information that will assist the reader in understanding our Condensed Consolidated Financial Statements, the changes in certain key items in those financial statements from year to year, and the primary factors that accounted for those changes, as well as how certain accounting principles, policies and estimates affect our Condensed Consolidated Financial Statements. This discussion should be read in conjunction with our Condensed Consolidated Financial Statements and the related notes that appear elsewhere in this document.
OVERVIEW
HP delivers innovative and AI-powered devices, software, services, and subscriptions that drive business growth and professional fulfillment. We have three reportable segments: Personal Systems, Printing, and Corporate Investments. The Personal Systems segment offers commercial and consumer desktops, notebooks and workstations (including HP’s portfolio of AI PCs and workstations), thin clients, retail POS systems, displays, hybrid systems, software, solutions including endpoint security, and services. The Printing segment provides consumer and commercial printer hardware, supplies, solutions and services. Corporate Investments include certain business incubation and investment projects.
•In Personal Systems, our long-term strategic focus is on:
◦profitable growth through innovation, market segmentation and simplification of our portfolio;
◦enhanced innovation in multi-operating systems, multi-architecture, customer segments and other key attributes;
◦investing in endpoint services and solutions. We are focused on services, including Device-as-a-Service, as the market shifts to subscription-based solutions, and accelerating in attractive adjacencies such as hybrid systems; and
◦driving innovation to enable productivity and collaboration, with AI PCs and workstations playing a critical role in the transformation of how people live and work.
•In Printing, our long-term strategic focus is on:
◦offering innovative, intelligent printing experiences and subscription-based solutions designed to securely serve consumer and SMB customers through our Instant Ink Services and HP All-In Plan, as well as large enterprises through our Managed Print Services solutions;
◦providing digital printing solutions for industrial graphics segments and applications including commercial publishing, labels, packaging, and textiles; and
◦expanding our footprint in 3D printing across digital manufacturing and strategic applications.
We are focused on driving further growth, recurring revenue and investment in strategic areas and believe we are well positioned to lead the future of work with our competitive product lineup and enhanced portfolio of hybrid systems, remote-computing solutions, and intelligent print solutions. We are driving innovation by accelerating the delivery of AI across our product portfolio and focusing on growth opportunities in commercial, solutions, and premium consumer and gaming markets. We have consolidated all our software resources under the Technology and Innovation Organization to evolve from a transactional hardware company to a more experience-led organization, further strengthening our ability to capture these opportunities.
We continue to experience challenges that are representative of the trends and uncertainties that may affect our industry, generally, and our business and financial results, specifically, and we expect these challenges to continue in the short-term. One set of challenges relates to the current macroeconomic environment and the adverse impact on demand for certain of our products. A second set of challenges relates to changes in the competitive landscape. Our primary competitors are exerting competitive pressure in targeted areas and are entering new markets, our emerging competitors are introducing new
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technologies and business models, and our alliance partners in some businesses are increasingly becoming our competitors in others. A third set of challenges relates to business model changes and our go-to-market execution in an evolving distribution and reseller landscape, with increasing online and omnichannel presence. Specific challenges we face at the segment level are set forth below.
•In Personal Systems, we face challenges with a competitive pricing environment, increasing commodity costs, particularly in memory and storage costs, and the uncertainty of the market’s ability to absorb price increases.
•In Printing, we face challenges from changing customer behaviors as well as competitors with a favorable foreign currency environment and non-original supplies (which includes imitation, refill, or remanufactured alternatives). We also obtain many Printing components from single source suppliers due to technology, availability, price, quality, or other considerations.
To address these challenges, we continue to pursue innovation with a view towards developing new products and services aligned with generating market demand and meeting the needs of our customers and partners. In addition, we continue to work on improving our operations and adapting our business models, with a particular focus on enhancing our end-to-end processes, analytics, efficiencies and simplification of our product portfolio. We also continue to work on optimizing our sales coverage models, aligning our sales incentives with our strategic goals, improving channel execution and inventory, production and backlog management, strengthening our capabilities in our areas of strategic focus, effective cost management, strengthening our pricing strategy, and developing and capitalizing on market opportunities.
Macroeconomic Environment
Our business and financial performance depend significantly on worldwide economic conditions. We face global macroeconomic challenges such as ongoing geopolitical conflicts, uncertainty in the markets, volatility in exchange rates, inflationary trends and evolving dynamics in the global trade environment. We also experience seasonality in the sale of our products and services which may be affected by general economic conditions.
Since April 2025, new, substantial tariffs have been imposed on imports to the United States. On February 20, 2026, the U.S. Supreme Court held that tariffs imposed under the IEEPA were not authorized by statute which removed the obligation for and collection of related tariffs. As of July 31, 2026, we have applied for the recovery of approximately $0.3 billion of previously paid IEEPA tariffs. We have received $127 million of refunds during the three and nine months ended July 31, 2026, and $91 million subsequent to the reporting period. Refunds are recognized as a reduction of Products cost of net revenue when received. We are continuing to assess the recoverability of additional IEEPA tariffs previously paid, as well as the effects of any additional tariffs or trade actions that may be imposed.
During the nine months ended July 31, 2026, we experienced higher inflationary pressure in memory and storage costs and supply constraints in our Personal Systems business, which we anticipate will continue. We continue to evaluate and implement mitigating actions, including potential supply chain resiliency movements and cost and pricing measures, as the trade and supply environments evolve.
New or sustained changes to tariffs and commodity costs could result in increased supply chain challenges, cost volatility, and consumer and economic uncertainty which may have a significant adverse impact to our results of operations and cash flows to the extent our efforts do not fully mitigate these effects.
We are also exposed to fluctuations in foreign currency exchange rates. We have a large global presence, with more than 65% of our net revenue from outside the United States. As a result, our financial results can be impacted by fluctuations in foreign currency exchange rates. For a further discussion of trends, uncertainties and other factors that could impact our operating results, see the section entitled “Risk Factors” in Item 1A of Part I in our Annual Report on Form 10-K for the fiscal year ended October 31, 2025.
Transformation Update
On November 25, 2025, we announced our Fiscal 2026 Plan intended to drive customer satisfaction, product innovation, and productivity primarily through artificial intelligence adoption and enablement that HP expects will be implemented through fiscal 2028. During the nine months ended July 31, 2026, we took actions to integrate AI into our channel partner experience and scale additional AI agents in our supply chain operations and expect to continue to accelerate and scale these initiatives. We additionally took actions to reduce headcount through the EER program of which a significant portion will get executed during fiscal year 2026.
See “Risk Factors—Strategic and Operational Risks—We may not achieve some or all of the expected benefits of our restructuring and other plans and such plans may adversely affect our business” in Item 1A of Part I in our Annual Report on
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Form 10-K for the fiscal year ended October 31, 2025. For more information on our Fiscal 2026 Plan, see Note 3, “Restructuring and Other Charges,” to the Condensed Consolidated Financial Statements in Item 1 of Part I of this report, which is incorporated herein by reference.
ACCOUNTING PRONOUNCEMENTS
For a summary of recent accounting pronouncements applicable to our Condensed Consolidated Financial Statements see Note 1, “Basis of Presentation”, to the Condensed Consolidated Financial Statements in Item 1 of Part I of this report, which is incorporated herein by reference.
CRITICAL ACCOUNTING ESTIMATES
MD&A is based on our Condensed Consolidated Financial Statements, which have been prepared in accordance with U.S. GAAP. The preparation of these financial statements requires management to make estimates, judgments and assumptions that affect the reported amounts of assets, liabilities, net revenue and expenses, and the disclosure of contingent liabilities. Management believes that there have been no significant changes during the nine months ended July 31, 2026 to the items that we disclosed as our critical accounting estimates in MD&A in our Annual Report on Form 10-K for the fiscal year ended October 31, 2025.
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RESULTS OF OPERATIONS
Revenue from our international operations has historically represented, and we expect will continue to represent, a majority of our overall net revenue. As a result, our net revenue growth has been impacted, and we expect it will continue to be impacted, by fluctuations in foreign currency exchange rates. In order to provide a framework for assessing performance excluding the impact of foreign currency fluctuations, we supplement the year-over-year percentage change in net revenue with the year-over-year percentage change in net revenue on a constant currency basis, which excludes the effect of foreign currency exchange fluctuations calculated by translating current period revenues using monthly exchange rates from the comparative period and excluding any hedging impact recognized in the current period, and without adjusting for any repricing or demand impacts from changes in foreign currency exchange rates. This information is provided so that net revenue can be viewed with and without the effect of fluctuations in foreign currency exchange rates, which is consistent with how management evaluates our net revenue results and trends, as management does not believe that the excluded items are reflective of ongoing operating results. The constant currency measures are provided in addition to, and not as a substitute for, the year-over-year percentage change in net revenue on a GAAP basis. Other companies may calculate and define similarly labeled items differently, which may limit the usefulness of this measure for comparative purposes.
Results of operations in dollars and as a percentage of net revenue were as follows:
| Three months ended July 31 | Nine months ended July 31 | ||||||||||||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||||||||||||||||||||||||
| Dollars | % of Net Revenue | Dollars | % of Net Revenue | Dollars | % of Net Revenue | Dollars | % of Net Revenue | ||||||||||||||||||||||||||||||||||||||||
| Dollars in millions | |||||||||||||||||||||||||||||||||||||||||||||||
| Net revenue: | |||||||||||||||||||||||||||||||||||||||||||||||
| Products | $ | 14,825 | 94.6 | % | $ | 13,114 | 94.1 | % | $ | 41,986 | 94.3 | % | $ | 38,232 | 94.0 | % | |||||||||||||||||||||||||||||||
| Services | 852 | 5.4 | % | 818 | 5.9 | % | 2,537 | 5.7 | % | 2,424 | 6.0 | % | |||||||||||||||||||||||||||||||||||
| Total net revenue | 15,677 | 100.0 | % | 13,932 | 100.0 | % | 44,523 | 100.0 | % | 40,656 | 100.0 | % | |||||||||||||||||||||||||||||||||||
| Cost of net revenue: | |||||||||||||||||||||||||||||||||||||||||||||||
Products(1) | 12,256 | 82.7 | % | 10,599 | 80.8 | % | 34,312 | 81.7 | % | 30,800 | 80.6 | % | |||||||||||||||||||||||||||||||||||
Services(2) | 476 | 55.9 | % | 482 | 58.9 | % | 1,415 | 55.8 | % | 1,426 | 58.8 | % | |||||||||||||||||||||||||||||||||||
| Total cost of net revenue | 12,732 | 81.2 | % | 11,081 | 79.5 | % | 35,727 | 80.2 | % | 32,226 | 79.3 | % | |||||||||||||||||||||||||||||||||||
| Gross Margin | 2,945 | 18.8 | % | 2,851 | 20.5 | % | 8,796 | 19.8 | % | 8,430 | 20.7 | % | |||||||||||||||||||||||||||||||||||
| Research and development | 389 | 2.5 | % | 406 | 2.9 | % | 1,213 | 2.7 | % | 1,204 | 3.0 | % | |||||||||||||||||||||||||||||||||||
| Selling, general and administrative | 1,537 | 9.8 | % | 1,452 | 10.4 | % | 4,555 | 10.2 | % | 4,391 | 10.8 | % | |||||||||||||||||||||||||||||||||||
| Restructuring and other charges | 48 | 0.3 | % | 110 | 0.9 | % | 539 | 1.3 | % | 302 | 0.7 | % | |||||||||||||||||||||||||||||||||||
| Acquisition and divestiture charges | 4 | — | % | 8 | 0.1 | % | 6 | — | % | 31 | 0.1 | % | |||||||||||||||||||||||||||||||||||
| Amortization of intangible assets | 75 | 0.5 | % | 159 | 1.1 | % | 220 | 0.5 | % | 287 | 0.7 | % | |||||||||||||||||||||||||||||||||||
| Total operating expenses | 2,053 | 13.1 | % | 2,135 | 15.4 | % | 6,533 | 14.7 | % | 6,215 | 15.3 | % | |||||||||||||||||||||||||||||||||||
| Earnings from operations | 892 | 5.7 | % | 716 | 5.1 | % | 2,263 | 5.1 | % | 2,215 | 5.4 | % | |||||||||||||||||||||||||||||||||||
| Interest and other, net | (94) | (0.6) | % | (92) | (0.6) | % | (301) | (0.7) | % | (381) | (0.9) | % | |||||||||||||||||||||||||||||||||||
| Earnings before taxes | 798 | 5.1 | % | 624 | 4.5 | % | 1,962 | 4.4 | % | 1,834 | 4.5 | % | |||||||||||||||||||||||||||||||||||
| (Provision for) benefit from taxes | (137) | (0.9) | % | 139 | 1.0 | % | (306) | (0.7) | % | (100) | (0.2) | % | |||||||||||||||||||||||||||||||||||
| Net earnings | $ | 661 | 4.2 | % | $ | 763 | 5.5 | % | $ | 1,656 | 3.7 | % | $ | 1,734 | 4.3 | % | |||||||||||||||||||||||||||||||
(1) Products cost of net revenue as a percentage of net revenue is calculated as a percentage of product net revenue.
(2) Services cost of net revenue as a percentage of net revenue is calculated as a percentage of services net revenue.
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Net Revenue
Products net revenue includes revenue from the sale of hardware, supplies, subscriptions and software licenses. Services net revenue includes revenue from our service offerings and support on hardware devices.
For the three months ended July 31, 2026, net revenue increased 12.5% (increased 10.9% on a constant currency basis) as compared to the prior-year period. Net revenue from international operations increased 16.8% to $10.4 billion, while U.S. net revenue increased 5.1% to $5.3 billion. The increase in net revenue was primarily driven by products net revenue due to pricing actions to mitigate higher commodity costs in Personal Systems and favorable currency impacts, partially offset by demand softness in Printing. Services net revenue increased due to support services on hardware devices.
For the nine months ended July 31, 2026, total net revenue increased 9.5% (increased 7.5% on a constant currency basis) as compared to the prior-year period. Net revenue from international operations increased 13.7% to $30.1 billion, while U.S. net revenue increased 1.6% to $14.4 billion. The increase in net revenue was primarily driven by products net revenue due to pricing actions to mitigate higher commodity costs in Personal Systems, partially offset by demand softness and competitive pressures in Printing. Services net revenue increased due to support services on hardware devices.
A detailed discussion of the factors contributing to the changes in segment net revenue is included in “Segment Information” below.
Gross Margin
For the three months ended July 31, 2026, gross margin decreased 1.7 percentage points primarily driven by higher commodity costs and unfavorable mix shifts towards Personal Systems, partially offset by pricing actions including favorable currency impacts, and IEEPA tariff refunds. Services gross margin increased due to favorable mix shifts.
For the nine months ended July 31, 2026, gross margin decreased 0.9 percentage points primarily driven by products gross margin due to higher commodity costs and unfavorable mix shifts towards Personal Systems, partially offset by pricing actions including favorable currency impacts, and IEEPA tariff refunds. Services gross margin increased due to favorable mix shifts.
A detailed discussion of the factors contributing to the changes in segment gross margins is included under “Segment Information” below.
Operating Expenses
Research and Development (“R&D”)
R&D expense decreased 4.2% for the three months ended July 31, 2026, primarily driven by favorable net R&D partner funding, partially offset by higher variable compensation.
R&D expense increased 0.7% for the nine months ended July 31, 2026 primarily driven by higher variable compensation.
Selling, General and Administrative (“SG&A”)
SG&A expense increased 5.9% and 3.7% for the three and nine months ended July 31, 2026 primarily driven by higher variable compensation, partially offset by disciplined cost management.
Restructuring and Other Charges
Restructuring and other charges decreased $62 million for the three months ended July 31, 2026 driven by severance activity under the Fiscal 2023 Plan in the prior period.
Restructuring and other charges increased $237 million for the nine months ended July 31, 2026 primarily driven by the EER program under the Fiscal 2026 Plan.
For more information, see Note 3, “Restructuring and other charges”, to the Condensed Consolidated Financial Statements in Item 1 of Part I of this report, which is incorporated herein by reference.
Acquisition and Divestiture Charges
Acquisition and divestiture charges for the three and nine months ended July 31, 2026 decreased by $4 million and $25 million, respectively, primarily due to lower acquisition and integration activities.
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Amortization of Intangible Assets
Amortization of intangible assets decreased $84 million and $67 million for the three and nine months ended July 31, 2026, respectively, primarily driven by higher impairment charges of $69 million and $37 million, respectively, in the prior periods.
Interest and Other, Net
Interest and other, net expense remained flat for the three months ended July 31, 2026 primarily due to a gain from a single litigation matter that does not relate to HP’s ongoing business operations recorded in the prior period, offset by lower interest expense on debt and factoring costs in the current period.
Interest and other, net expense decreased $80 million for the nine months ended July 31, 2026 primarily due to lower interest expense on debt and factoring costs in the current period, partially offset by a gain from a single litigation matter that does not relate to HP’s ongoing business operations recorded in the prior period.
Provision for Taxes
Our effective tax rate was 17.2% for the three months ended July 31, 2026 and 15.6% for the nine months ended July 31, 2026. The difference between the U.S. federal statutory tax rate of 21% and our effective tax rate for the three months ended July 31, 2026 was primarily due to decreases in unrecognized tax benefits. For the nine months ended July 31, 2026, the difference was primarily due to decreases in unrecognized tax benefits and audit settlements in various jurisdictions.
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Segment Information
A description of the products and services for each segment and the business unit realignment in the first quarter of fiscal year 2026 can be found in Note 2, “Segment Information” to the Condensed Consolidated Financial Statements in Item 1 of Part I of this report, which is incorporated herein by reference.
Personal Systems
| Three months ended July 31 | Nine months ended July 31 | ||||||||||||||||||||||||||||||||||
| 2026 | 2025 | % Change | 2026 | 2025 | % Change | ||||||||||||||||||||||||||||||
| Dollars in millions | |||||||||||||||||||||||||||||||||||
| Net revenue | $ | 11,767 | $ | 9,931 | 18.5 | % | $ | 32,231 | $ | 28,179 | 14.4 | % | |||||||||||||||||||||||
| Earnings from operations | $ | 537 | $ | 541 | (0.7) | % | $ | 1,578 | $ | 1,457 | 8.3 | % | |||||||||||||||||||||||
| Earnings from operations as a % of net revenue | 4.6 | % | 5.4 | % | 4.9 | % | 5.2 | % | |||||||||||||||||||||||||||
The components of net revenue and the weighted net revenue change by business unit were as follows:
| Three months ended July 31 | Nine months ended July 31 | |||||||||||||||||||||||||||||||||
| Net Revenue | Weighted Net Revenue Change(1) | Net Revenue | Weighted Net Revenue Change(1) | |||||||||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||||||||||
| Dollars in millions | Percentage Points | Dollars in millions | Percentage Points | |||||||||||||||||||||||||||||||
| Commercial PS | $ | 8,579 | $ | 7,036 | 15.5 | $ | 23,575 | $ | 20,467 | 11.0 | ||||||||||||||||||||||||
| Consumer PS | 3,188 | 2,895 | 3.0 | 8,656 | 7,712 | 3.4 | ||||||||||||||||||||||||||||
| Total Personal Systems | $ | 11,767 | $ | 9,931 | 18.5 | $ | 32,231 | $ | 28,179 | 14.4 | ||||||||||||||||||||||||
(1)Weighted Net Revenue Change Percentage Points measures contribution of each business unit towards overall segment revenue growth. It is calculated by dividing the change in revenue of each business unit from the prior-year period by total segment revenue for the prior-year period.
Three months ended July 31, 2026 compared with three months ended July 31, 2025
Personal Systems net revenue increased 18.5% (increased 16.7% on a constant currency basis) for the three months ended July 31, 2026. The net revenue increase was primarily due to a 40.8% increase in ASPs, partially offset by a 15.8% decrease in PCs unit volume driven by a focus on higher value units in an increasing commodity cost environment. The increase in ASPs is primarily due to pricing actions to mitigate higher commodity costs, favorable currency impacts and mix shifts.
Commercial PS net revenue increased 21.9% primarily due to a 41.1% increase in ASPs, partially offset by a 13.6% decrease in units. The increase in ASPs is primarily due to pricing actions, favorable currency impacts and mix shifts towards premium.
Consumer PS net revenue increased 10.1% primarily due to a 37.1% increase in ASPs, partially offset by a 19.4% decrease in units. The increase in ASPs was primarily due to pricing actions and favorable currency impacts partially offset by unfavorable mix shifts.
Personal Systems earnings from operations as a percentage of net revenue decreased by 0.8 percentage points driven by a decrease in gross margin, partially offset by a decrease in operating expenses as a percentage of revenue. Gross margin decreased primarily due to higher commodity costs, partially offset by pricing actions, IEEPA tariff refunds and favorable currency impacts. Operating expenses as a percentage of revenue decreased primarily driven by disciplined cost management and favorable net R&D partner funding, partially offset by higher variable compensation.
45
Nine months ended July 31, 2026 compared with nine months ended July 31, 2025
Personal Systems net revenue increased 14.4% (increased 12.1% on a constant currency basis) for the nine months ended July 31, 2026. The net revenue increase was primarily due to a 19.8% increase in ASPs, partially offset by a 4.2% decrease in PC unit volume. The decrease in PC unit volume was driven by an increasing commodity cost environment, partially offset by the Windows-based PC operating system refresh. The increase in ASPs is primarily due to pricing actions to mitigate higher commodity costs, as well as favorable currency impacts. Consequently, the cost environment drove an increase in ASPs and decrease in PC unit volume in both Commercial and Consumer PS.
Commercial PS net revenue increased 15.2% primarily due to a 20.2% increase in ASPs, partially offset by a 3.7% decrease in PC unit volume.
Consumer PS net revenue increased 12.2% primarily due to a 18.4% increase in ASPs, partially offset by a 5.0% decrease in PC unit volume.
Personal Systems earnings from operations as a percentage of net revenue decreased by 0.3 percentage points driven by a decrease in gross margin, partially offset by a decrease in operating expenses as a percentage of revenue. Gross margin decreased primarily due to higher commodity costs, partially offset by pricing actions including favorable currency impacts. Operating expenses as a percentage of revenue decreased due to disciplined cost management, partially offset by higher variable compensation.
46
Printing
| Three months ended July 31 | Nine months ended July 31 | ||||||||||||||||||||||||||||||||||
| 2026 | 2025 | % Change | 2026 | 2025 | % Change | ||||||||||||||||||||||||||||||
| Dollars in millions | |||||||||||||||||||||||||||||||||||
| Net revenue | $ | 3,912 | $ | 4,002 | (2.2) | % | $ | 12,294 | $ | 12,479 | (1.5) | % | |||||||||||||||||||||||
| Earnings from operations | $ | 709 | $ | 681 | 4.1 | % | $ | 2,241 | $ | 2,286 | (2.0) | % | |||||||||||||||||||||||
| Earnings from operations as a % of net revenue | 18.1 | % | 17.0 | % | 18.2 | % | 18.3 | % | |||||||||||||||||||||||||||
The components of net revenue and the weighted net revenue change by business unit were as follows:
| Three months ended July 31 | Nine months ended July 31 | |||||||||||||||||||||||||||||||||
| Net Revenue | Weighted Net Revenue Change(1) | Net Revenue | Weighted Net Revenue Change(1) | |||||||||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||||||||||
| Dollars in millions | Percentage Points | Dollars in millions | Percentage Points | |||||||||||||||||||||||||||||||
| Supplies | $ | 2,536 | $ | 2,609 | (1.8) | $ | 8,089 | $ | 8,166 | (0.6) | ||||||||||||||||||||||||
| Commercial Printing | 1,101 | 1,113 | (0.3) | 3,374 | 3,424 | (0.4) | ||||||||||||||||||||||||||||
| Consumer Printing | 275 | 280 | (0.1) | 831 | 889 | (0.5) | ||||||||||||||||||||||||||||
| Total Printing | $ | 3,912 | $ | 4,002 | (2.2) | $ | 12,294 | $ | ||||||||||||||||||||||||||
Recent insider activity
| Date | Insider | Role | Action | Shares | Price | Value |
|---|---|---|---|---|---|---|
| 2026-10-29 | Olson Anneliese | Pres Imaging Prtng & Solutions | Sell | -18,997 | $32.56 | -$618,542 |
| 2026-10-02 | McQuarrie David P. | Chief Commercial Officer | Sell | -31,572 | $32.12 | -$1,014,093 |
| 2026-08-07 | McQuarrie David P. | Chief Commercial Officer | Sell | -21,048 | $29.98 | -$631,019 |
Source: SEC Form 4 filings.
Next expected filings
- ~2026-12-09 10-K expected by 2026-12-28 (in 34 days)
- ~2027-02-24 10-Q expected by 2027-03-08 (in 111 days)
- ~2027-05-27 10-Q expected by 2027-06-08 (in 203 days)
- ~2027-08-26 10-Q expected by 2027-09-07 (in 294 days)
Predicted from historical filing cadence; not an SEC commitment.
Recent SEC filings
- 2026-11-04 8-K Officer/Director Change; Bylaws/Articles Amended; Regulation FD Disclosure; Financial Statements and Exhibits
- 2026-08-27 10-Q Quarterly Report
- 2026-08-27 S-8 Employee Benefit Plan Registration
- 2026-08-26 8-K Earnings Release; Financial Statements and Exhibits
- 2026-05-28 10-Q Quarterly Report
- 2026-05-27 8-K Earnings Release; Financial Statements and Exhibits
- 2026-04-21 8-K Officer/Director Change; Shareholder Vote Results; Financial Statements and Exhibits
- 2026-02-25 10-Q Quarterly Report
- 2026-02-24 8-K Earnings Release; Financial Statements and Exhibits
- 2026-02-03 8-K Earnings Release; Officer/Director Change; Bylaws/Articles Amended; Regulation FD Disclosure; Financial Statements and Exhibits
- 2025-12-29 8-K/A Officer/Director Change
- 2025-12-10 10-K Annual Report
- 2025-11-25 8-K Earnings Release; Costs Associated with Exit; Regulation FD Disclosure; Financial Statements and Exhibits
- 2025-10-01 8-K Officer/Director Change
- 2025-08-28 10-Q Quarterly Report