01—Abstract
Summary
Summary of the 10-Q filed August 28, 2025. Cited figures are marked; the original filing is the authoritative source.
HP Inc. reported net revenue of $13.93 billiona for the three months ended July 31, 2025, up from $13.52 billion a year earlier, and net earnings of $763 million, or $0.80 per diluted share, compared with $640 million, or $0.65 per diluted share, in the prior-year quarter.
For the nine months, net revenue was $40.66 billionb and net earnings were $1.73 billion, or $1.82 per diluted share, down from $1.87 billion in the prior-year period. Gross margin declined to 20.5% in the quarter from 21.5% a year earlier, which the company attributes mainly to higher tariff costs, mix shifts toward Personal Systems and unfavorable currency impacts. Earnings from operations fell to $716 million from $940 million.
The filing discloses a material weakness in internal control over financial reporting that was not remediated as of July 31, 2025, tied to IT general controls over certain software solutions. As a result, management concluded that disclosure controls and procedures were not effective. Balance sheet metrics show total stockholders' deficit of $901 millionc, cash, cash equivalents and restricted cash of $2.87 billion, and total debt of $9.60 billion.
During the nine months, HP returned $1.2 billiond to shareholders through $0.8 billion in dividends and $0.4 billion in share repurchases. Legal matters include a pending Autonomy-related damages ruling in which the court found the Lynch estate owed approximately 740 million pounds, with any recovery to be shared equally with Hewlett Packard Enterprise, and a securities class action for which the parties executed a binding term sheet for a proposed settlement on July 28, 2025. HP also faces new Wi-Fi 6 patent suits in the Eastern District of Texas and in Germany, and the Fiscal 2023 Plan was amended to add an expected $150 million in restructuring and other charges.
02—Key points
Key Highlights
- Net revenue rose 3.1% to $13.93 billion in the third quarter, with Personal Systems net revenue up 6.0% to $9.93 billion and Printing net revenue down 3.8% to $3.99 billion.
- Diluted EPS was $0.80 in the quarter versus $0.65 a year earlier, while nine-month diluted EPS fell to $1.82 from $1.88.
- Gross margin contracted 1.0 percentage point in the quarter to 20.5%, driven mainly by higher tariff costs, mix shifts and unfavorable currency impacts.
- Management concluded that a previously identified material weakness in IT general controls was not remediated as of July 31, 2025, leaving disclosure controls not effective.
- Impairment charges of $65 million on Print segment intangible assets and $27 million on Corporate Investments technology and patents increased amortization of intangible assets to $159 million in the quarter.
- The Fiscal 2023 Plan amendment adds an expected $150 million in restructuring and other charges, and the company says it is on track for overall program savings and its headcount reduction goal.
- Total debt was $9.60 billion, and HP issued $1.0 billion of senior notes in April 2025 to fund general corporate purposes, including repaying notes due June 2025.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q3 FY2025, HP kept $0.05.
- Revenue$13.93B100.0%
- Cost of revenue−$11.08B79.5%
- Gross profit$2.85B20.5%
- Operating costs−$2.13B15.3%
- Operating income$716.0M5.1%
- Interest, other & tax$47.0M0.3%
- Net income$763.0M5.5%
04—Financials
Financial Highlights
Figures from 10-QQ3 FY2025filed August 28, 2025Financial Statements
Q3 FY2025 against Q3 FY2024
| Line item | Q3 FY2025Q3 FY2024 | Change |
|---|---|---|
| Revenue | $13.93B$13.52B | +3.1% |
| Cost of Revenue | $11.08B$10.61B | +4.4% |
| Gross Profit | $2.85B$2.91B | −1.9% |
| R&D Expenses | $406.00M$413.00M | −1.7% |
| SG&A Expenses | $1.45B$1.40B | +3.4% |
| Operating Expenses | $2.13B$1.97B | +8.6% |
| Operating Income | $716.00M$940.00M | −23.8% |
| Interest Expense | $111.00M$111.00M | 0.0% |
| Net Income | $763.00M$640.00M | +19.2% |
| EPS (Basic) | $0.81$0.65 | +24.6% |
| EPS (Diluted) | $0.80$0.65 | +23.1% |
| Shares Outstanding (Basic) | 947.00M979.00M | −3.3% |
| Shares Outstanding (Diluted) | 954.00M990.00M | −3.6% |
05—Questions
Frequently Asked Questions
How did HP perform in the third quarter of fiscal 2025?
Net revenue increased 3.1% to $13.93 billion, and net earnings rose to $763 million from $640 million, or $0.80 per diluted share versus $0.65. Earnings from operations declined to $716 million from $940 million, and gross margin fell to 20.5% from 21.5%.
What is the material weakness HP disclosed?
The material weakness stems from undue reliance on information generated by certain software solutions, along with IT general controls that were not effectively designed around user access, change management and job schedule monitoring. The company said it had not remediated the weakness as of July 31, 2025, and that it is designing appropriate IT general controls under Audit Committee oversight.
What drove the decline in gross margin?
For the quarter, the company attributed the 1.0 percentage point decline in gross margin primarily to higher tariff costs, mix shifts toward Personal Systems and unfavorable currency impacts, partially offset by disciplined pricing actions. Services gross margin decreased due to unfavorable mix shifts.
How much did HP return to shareholders and what remains under its repurchase authorization?
During the nine months ended July 31, 2025, HP returned $1.2 billion to shareholders, consisting of $0.8 billion in cash dividends and $0.4 billion in share repurchases. As of July 31, 2025, approximately $8.9 billion remained under the share repurchase authorization.
What legal developments could affect HP's financial results?
In the Autonomy-related proceedings, the court ruled on July 22, 2025 that the Lynch estate owed approximately 740 million pounds, with a hearing set for the week of November 17, 2025; any recovery would be shared equally with Hewlett Packard Enterprise and has not been recorded. HP also faces Wi-Fi 6 patent suits in the Eastern District of Texas and in Germany, and a securities class action in which the parties executed a binding term sheet for a proposed settlement on July 28, 2025.
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