01—Abstract
Summary
Summary of the 10-Q filed February 25, 2026. Cited figures are marked; the original filing is the authoritative source.
HP Inc. reported net revenue of $14.44 billiona for the three months ended January 31, 2026, up from $13.50 billion a year earlier, driven by products revenue from increased Personal Systems units, partially offset by demand softness in Printing.
Gross margin declined, with gross profit of $2.84 billionb roughly flat year over year. Earnings from operations fell to $759 million from $845 million, and net earnings were $545 million, or $0.58 diluted EPS, compared with $565 million, or $0.59, in the prior-year period. The filing attributes the margin pressure mainly to higher commodity and trade-related costs and unfavorable mix shifts, partially offset by pricing actions and cost management.
Cash flow from operations was $383 millionc, roughly flat versus $374 million. HP returned $0.6 billion to shareholders in the quarter through $325 million of share repurchases and $277 million of cash dividends. Cash, cash equivalents and restricted cash fell to $3.15 billion, and total debt was $9.70 billion.
Stockholders' deficit widened to $766 milliond, and accumulated other comprehensive loss increased to $654 million, largely reflecting cash flow hedge losses. The company is executing its Fiscal 2026 Plan, approved November 25, 2025, which targets a reduction of approximately 4,000 to 6,000 employees and pre-tax charges of about $650 million, with implementation through fiscal 2028. Restructuring and other charges were $126 million in the quarter.
The filing notes that the U.S. Supreme Court held on February 20, 2026 that IEEPA tariffs were not authorized, and HP is assessing the potential recovery of tariffs previously paid. Management also flagged higher memory and storage costs and potential supply constraints in Personal Systems.
02—Key points
Key Highlights
- Net revenue rose to $14.44 billion from $13.50 billion, with Personal Systems up 11.1% and Printing down 2.2%.
- Net earnings were $545 million (diluted EPS $0.58) versus $565 million (diluted EPS $0.59) a year earlier; earnings from operations fell to $759 million from $845 million.
- Gross margin decreased 1.4 percentage points to 19.6%, driven by higher commodity and trade-related costs and unfavorable mix.
- Operating cash flow was $383 million, flat versus $374 million; HP returned $0.6 billion to shareholders via $325 million of buybacks and $277 million of dividends.
- The Fiscal 2026 Plan targets 4,000 to 6,000 headcount reductions and about $650 million in pre-tax charges, with $126 million of restructuring and other charges recorded this quarter.
- Total debt was $9.70 billion, and the stockholders' deficit widened to $766 million from $346 million.
- The U.S. Supreme Court ruled on February 20, 2026 that IEEPA tariffs were not authorized; HP is assessing potential recovery of tariffs previously paid.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q1 FY2026, HP kept $0.04.
- Revenue$14.44B100.0%
- Cost of revenue−$11.60B80.4%
- Gross profit$2.83B19.6%
- Operating costs−$2.08B14.4%
- Operating income$759.0M5.3%
- Interest, other & tax−$214.0M1.5%
- Net income$545.0M3.8%
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2026filed February 25, 2026Financial Statements
Q1 FY2026 against Q1 FY2025
| Line item | Q1 FY2026Q1 FY2025 | Change |
|---|---|---|
| Revenue | $14.44B$13.50B | +6.9% |
| Cost of Revenue | $11.60B$10.66B | +8.8% |
| Gross Profit | $2.83B$2.84B | −0.2% |
| R&D Expenses | $392.00M$397.00M | −1.3% |
| SG&A Expenses | $1.50B$1.46B | +3.1% |
| Operating Expenses | $2.08B$2.00B | +4.1% |
| Operating Income | $759.00M$845.00M | −10.2% |
| Interest Expense | $99.00M$104.00M | −4.8% |
| Net Income | $545.00M$565.00M | −3.5% |
| EPS (Basic) | $0.59$0.60 | −1.7% |
| EPS (Diluted) | $0.58$0.59 | −1.7% |
| Shares Outstanding (Basic) | 926.00M948.00M | −2.3% |
| Shares Outstanding (Diluted) | 932.00M957.00M | −2.6% |
05—Questions
Frequently Asked Questions
What drove HP's revenue growth this quarter?
Products net revenue rose on increased units in Personal Systems, where PC unit volume increased 12.1% amid the Windows-based PC operating system refresh and accelerated demand tied to anticipated memory cost increases. Printing net revenue declined 2.2% on demand softness and competitive pressures.
Why did profitability decline?
Gross margin fell 1.4 percentage points to 19.6%, primarily due to higher commodity and trade-related costs and unfavorable mix shifts, partially offset by disciplined pricing actions and cost management. Earnings from operations decreased to $759 million from $845 million, and restructuring and other charges rose to $126 million from $70 million.
What is the Fiscal 2026 Plan?
Approved on November 25, 2025, the plan aims to drive customer satisfaction, product innovation and productivity primarily through AI adoption and enablement, to be implemented through fiscal 2028. HP expects to reduce global headcount by approximately 4,000 to 6,000 employees and to incur pre-tax charges of about $650 million, including roughly $400 million in labor costs.
How much did HP return to shareholders and how is its balance sheet positioned?
HP returned $0.6 billion in the quarter, including $325 million of share repurchases and $277 million of cash dividends. About $8.1 billion remained under the repurchase authorization. Cash, cash equivalents and restricted cash was $3.15 billion, total debt was $9.70 billion, and total stockholders' deficit was $766 million. HP also maintains a $5.0 billion revolving credit facility available until August 1, 2029.
What risks does the filing highlight for the coming periods?
Management highlighted higher memory and storage costs, potential supply constraints in Personal Systems, and continued trade and tariff uncertainty. The company is evaluating further mitigating actions, including supply chain resiliency moves and cost and pricing measures. Pending legal matters include a securities-related settlement that received final court approval on February 13, 2026, and a pending India customs duty case in which HP India faces demands of about $370 million plus penalties and interest in the original 2010 notices.
06—Continue