HP Inc (HPQ) Q1 2026 Earnings Call Transcript
HP Inc. provides personal computing, printing, 3D printing, hybrid work, gaming, and other related technologies in the United States and internationally. The company operates through three segments: Personal Systems, Printing, and Corporate Investments. The Personal Systems segment offers commercial and consumer desktops and notebooks, workstations, thin clients, retail point-of-sale systems, displays, software, support, and services, as well as hybrid systems. The Printing segment provides consumer and commercial printer hardware, supplies, solutions, and services, as well as focuses on graphics and 3D printing and personalization solutions in the commercial and industrial markets. The Corporate Investments segment is involved in the business incubation and investment projects. It serves individual consumers, small- and medium-sized businesses, and large enterprises. The company was formerly known as Hewlett-Packard Company and changed its name to HP Inc. in October 2015. HP Inc. was founded in 1939 and is headquartered in Palo Alto, California.
HP delivered 7% revenue growth driven by Personal Systems with AI PC momentum, maintained full-year EPS guidance at the low end due to memory cost headwinds, and advanced AI/workplace solutions while managing leverage and returning cash to shareholders.
⭐ Key Highlights
✔Positive Signals
- Solid top-line growth powered by AI PC adoption and Windows 11 refresh
- Non-GAAP EPS at top of guidance and up year-over-year
- Advancement of AI at the edge and enterprise AI initiatives (OpenAI Frontier partnership)
- Strong cash generation and continued shareholder returns
- Share gains in high-value PC segments and continued print subscription growth
✖Negative Signals
- Memory cost volatility remains elevated with guidance implying costs well above prior levels
- PS margins expected to be below the long-term range for the remainder of the year
- Memory prices anticipated to rise further in the latter part of FY26
- Near-term headwinds requiring ongoing mitigations and potential demand moderation
- CEO search ongoing with event timing causing some strategic uncertainty (Investors Day rescheduled)
📊Financial Results
- Revenue $14.4B, +7% YoY, +5% CC; Personal Systems strength drives results
- Non-GAAP gross margin not explicitly stated for the quarter; Print gross margins implied to be around the top end of the long-term range
- Non-GAAP operating margin 6.9% for the quarter in line with guidance
- Free cash flow roughly $200M in Q1; cash from operations about $400M
- Share repurchases >$300M in Q1; leverage slightly above target but liquidity preserved to pay debt maturities
🔮Future Guidance
- Full-year non-GAAP diluted EPS guidance maintained at $2.90–$3.20, with the expectation to land toward the lower end due to memory headwinds
- Q2 non-GAAP EPS guidance of $0.70–$0.76; GAAP range $0.52–$0.58
- Annual free cash flow guidance remains $2.8B–$3.0B, with potential near-term pressure at the low end due to headwinds
- PS margins expected to be below long-term range for the remainder of FY26 due to higher memory costs, with improvements anticipated as mitigations take effect
- Print margins expected to be near the top end of the long-term range in Q2 and for the full year
💡Interesting Insights
- HP expects memory to normalize eventually but is accelerating supply/portfolio diversification and platform decontenting to preserve value, indicating a deliberate shift to resilience over near-term cost pass-through
Detailed Analysis
AI-generated summary of HP Inc earnings call transcript.
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