- Revenue Growth & Profit Margins: HP Inc. reported 3% YoY top-line growth driven by personal systems, with operating profit margins in line with guidance and Non-GAAP EPS up 6% sequentially to $0.87–$0.97 range in Q4.
- Personal Systems Performance: Revenue grew 6% YoY, outperforming expectations, fueled by AITC, commercial premium, and services, alongside Windows 11 refresh and AIPC adoption (25% mix ahead of target).
- Print Market Strategy: Print revenue declined 3% YoY in constant currency, but the company maintained market share in office and disciplined pricing in home, with Q4 print margins expected to reach the top of the 16–19% range.
- AIPC Momentum: AIPCs showed 5–10% ASP and margin uplift, with 25% mix exceeding original targets, driven by ecosystem adoption in industries like Adobe, Zoom, and security firms.
- Q4 Guidance & Cost Mitigation: Q4 revenue aligned with prior year seasonality, with $0.87–$0.97 Non-GAAP EPS guidance and $0.75–$0.85 GAAP EPS, supported by trade cost mitigation and 100% free cash flow shareholder returns.
Segment Performance
In personal systems, revenue growth was above expectations, driven by commercial performance supported by the Windows 11 refresh and increased AIPC adoption, as well as a strong back-to-school season in consumer. In print, revenue declined 3% in constant currency as expected, with the company maintaining its share position in the office and focusing on profitable unit placements. Supplies revenue performed as expected.
Innovation and Sustainability Efforts
The company introduced several innovations, including AI-powered solutions that help businesses drive growth and employees achieve professional fulfillment. It also made progress on its sustainability efforts, with 99% of HP home and office printers, desktops, notebooks, displays, and workstations incorporating recycled content. As the company mentioned, "We're investing significantly in R&D across the full portfolio, with refreshes expected in PCs, printing, and other areas."
Outlook and Guidance
HP Inc. expects the PC market to grow mid-single digits in the second half of 2025, with continued strong momentum from Windows 11 refresh and AITC adoption. It expects the print market to decline low single digits in 2025 and at a similar level in 2026. For Q4, the company expects revenue to be in line with prior year seasonality, driven by the typical holiday uptick in consumer, continued Windows 11 refresh, and AIPC adoption, with non-GAAP diluted EPS to be in the range of $0.87 to $0.97.
Valuation Metrics
With a P/E Ratio of 10.14, P/B Ratio of 8.34, and an EV/EBITDA of 8.68, the market seems to have priced in a reasonable growth expectation. The company's ROIC of 24.51% indicates a strong ability to generate returns on invested capital. Analysts estimate next year's revenue growth at 1.4%, which may be a conservative estimate given the company's current momentum.