Q3 2026 HP Inc Earnings Call Transcript
Key Points
- Record third quarter revenue of $15.7 billion, up 13% year-over-year, with ninth consecutive quarter of top-line growth.
- Personal Systems revenue grew 18% year-over-year, with strong performance in commercial (up 22%) and consumer (up 10%) segments.
- AI PC portfolio continues to grow, expected to reach 50% of shipment mix by end of fiscal year, with double-digit revenue growth in key growth areas like advanced compute and workforce solutions.
- Print segment gained 4 points of share in the tank printer market, with 42% unit growth in this profitable category.
- Industrial Printing delivered its 12th consecutive quarter of revenue growth, and the company signed a three-year $100 million strategic agreement with RRD.
- Free cash flow of $1.6 billion in Q3, with year-to-date free cash flow of $2.5 billion, leading to an increased full-year free cash flow guidance of $3.0-$3.2 billion.
- EPS of $0.83 exceeded expectations, even excluding the $0.11 tariff refund benefit, and full-year EPS guidance was raised to $3.19-$3.29.
- Strong innovation momentum with AI at the edge, including HP Z Boost, CGX Fury, and OmniBook Ultra, positioning HP as a leader in edge AI.
- WXP platform recognized as a leader in Gartner Magic Quadrant for digital employee experience management tools.
- Effective commodity mitigation plan, including securing supply, qualifying new suppliers, and disciplined pricing, is helping manage input cost headwinds.
- Print revenue declined 2% year-over-year, impacted by lower supplies and hardware volumes in a competitive market.
- Personal Systems operating margin of 4.6% was below the long-term range, pressured by higher commodity costs and variable compensation.
- Expect PC unit TAM to decline high teens in the second half of calendar year, with Q4 Personal Systems revenue expected to be below seasonal performance.
- Memory and storage costs are expected to continue rising, putting further pressure on operating margins, particularly in Personal Systems.
- Q4 operating margins are expected to be below Q3 levels, with a trough anticipated before improvement in FY27.
- Supplies revenue declined 4% in constant currency, impacted by headwinds in the Middle East and ongoing market softness.
- Print operating margin, excluding tariff refunds, was at the low end of the long-term range, reflecting competitive pricing and input cost pressures.
- The company faces ongoing geopolitical and supply chain pressures, including memory and storage constraints, which require continued mitigation efforts.
- CEO search is ongoing, with no timeline provided, creating uncertainty about future leadership direction.
- Consumer and commercial print revenue declined, with particular softness in the office market in North America and China.
Good day, everyone, and welcome to the third quarter 2026 HP Inc earnings conference call. My name is Lisa, and I'll be your conference moderator for today's call. (Operator Instructions) As a reminder, this conference is being recorded for replay purposes.
I would now like to turn the call over to Mr. Alok Juyal, Global Treasurer and Head of Investor Relations. Please go ahead.
Good afternoon, everyone, and welcome to HP's third quarter 2026 earnings conference call. With me today are Bruce Broussard, HP's Interim Chief Executive Officer; and Karen Parkhill, HP's Financial Officer. Before handing the call over to Bruce, let me remind you that this call is a webcast, and replay will be available on our website shortly after the call for approximately one year. We posted the earnings release and accompanying slide presentation on our Investor Relations web page at investor.hp.com.
As always, elements of this presentation are forward-looking and are based on our best view of
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