HP Inc. Reports Fiscal 2025 Third Quarter Results
PALO ALTO, Calif., Aug. 27, 2025 (GLOBE NEWSWIRE) -- HP (NYSE:HPQ)
Third quarter GAAP diluted net earnings per share ("EPS") of $0.80, up 23.1% from the prior year period
Third quarter non-GAAP diluted net EPS of $0.75, down 10.7% from the prior year period
Third quarter net revenue of $13.9 billion, up 3.1% from the prior-year period
Third quarter net cash provided by operating activities of $1.7 billion, free cash flow of $1.5 billion
Third quarter returned $0.4 billion to shareholders in the form of dividend and share repurchases
HP Inc.'s fiscal 2025 third quarter financial performance
Q3 FY25
Q3 FY24
Y/Y
GAAP net revenue ($B)
$
13.9
$
13.5
3.1 %
GAAP operating margin
5.1
%
7.0
%
(1.9) pts
GAAP net earnings ($B)
$
0.8
$
0.6
19 %
GAAP diluted net EPS
$
0.80
$
0.65
23 %
Non-GAAP operating margin
7.1
%
8.2
%
(1.1) pts
Non-GAAP net earnings ($B)
$
0.7
$
0.8
(15)%
Non-GAAP diluted net EPS
$
0.75
$
0.84
(11)%
Net cash provided by operating activities ($B)
$
1.7
$
1.4
17 %
Free cash flow ($B)
$
1.5
$
1.3
13 %
Notes to tableInformation about HP Inc.'s use of non-GAAP financial information is provided under "Use of non-GAAP financial information" below.
Net revenue and EPS resultsHP Inc. and its subsidiaries ("HP") announced fiscal 2025 third quarter net revenue of $13.9 billion, up 3.1% (up 3.3% in constant currency) from the prior-year period.
"In Q3 we delivered a fifth consecutive quarter of revenue growth, driven by strength in Personal Systems and strong momentum in our key growth areas," said Enrique Lores, President and CEO of HP Inc. "These results demonstrate our agility and focused execution in the quarter, reinforce the strength of our strategy, and our commitment to be a leader in the future of work."
"Looking forward, we remain confident in the strength of the PC market opportunity, and expect continued momentum from Windows 11 refresh and AI PC adoption," said Karen Parkhill, CFO, HP Inc. "We believe that the actions we are taking are the right ones to enable us to respond swiftly to near term market dynamics, while continuing to invest for long-term profitable growth."
Third quarter GAAP diluted net EPS was $0.80, up from $0.65 in the prior-year period and above the previously provided outlook of $0.57 to $0.69. Third quarter non-GAAP diluted net EPS was $0.75, down from $0.84 in the prior-year period and within the previously provided outlook of $0.68 to $0.80. Third quarter non-GAAP net earnings and non-GAAP diluted net EPS excludes after-tax adjustments of $(50) million, or $(0.05) per diluted share, related to restructuring and other charges, acquisition and divestiture charges, amortization of intangible assets, certain litigation (benefits) charges, net, non-operating retirement-related credits, tax adjustments, and the related tax impact on these items.
Asset managementHP's net cash provided by operating activities in the third quarter of fiscal 2025 was $1.7 billion. Accounts receivable ended the quarter at $5.1 billion, up 3 days quarter over quarter to 33 days. Inventory ended the quarter at $8.4 billion, down 2 days quarter over quarter to 68 days. Accounts payable ended the quarter at $17.0 billion, up 8 days quarter over quarter to 138 days.
HP generated $1.5 billion of free cash flow in the third quarter. Free cash flow includes net cash provided by operating activities of $1.7 billion adjusted for net investments in leases from integrated financing of $23 million and net investments in property, plant, equipment and purchased intangible of $215 million.
HP's dividend payment of $0.2894 per share in the third quarter resulted in cash usage of $272 million. HP also utilized $150 million of cash during the quarter to repurchase approximately 5.5 million shares of common stock in the open market. HP exited the quarter with $2.9 billion in gross cash, which includes cash and cash equivalents of $2.9 billion, restricted cash of $3 million and short-term investments of $3 million included in other current assets. Restricted cash is related to amounts collected and held on behalf of a third party for trade receivables previously sold.
Fiscal 2025 third quarter segment results
Personal Systems net revenue was $9.9 billion, up 6% year over year (up 6% in constant currency) with a 5.4% operating margin. Consumer PS net revenue was up 8% and Commercial PS net revenue was up 5%. Total units were up 5% with Consumer PS units up 8% and Commercial PS units up 3%.
Printing net revenue was $4.0 billion, down 4% year over year (down 3% in constant currency) with a 17.3% operating margin. Consumer Printing net revenue was down 8% and Commercial Printing net revenue was down 3%. Supplies net revenue was down 4% (down 3% in constant currency). Total hardware units were down 9%, with Consumer Printing units down 8% and Commercial Printing units down 12%.
OutlookFor the fiscal 2025 fourth quarter, HP estimates GAAP diluted net EPS to be in the range of $0.75 to $0.85 and non-GAAP diluted net EPS to be in the range of $0.87 to $0.97. Fiscal 2025 fourth quarter non-GAAP diluted net EPS estimates exclude $0.12 per diluted share, primarily related to restructuring and other charges, acquisition and divestiture charges, amortization of intangible assets, non-operating retirement-related credits, tax adjustments, and the related tax impact on these items.
For fiscal 2025, HP anticipates generating free cash flow in the range of $2.6 to $3.0 billion. HP's outlook reflects the added cost driven by the current U.S. trade-related regulations in place, and associated mitigations.
More information on HP's earnings, including additional financial analysis and an earnings overview presentation, is available on HP's Investor Relations website at investor.hp.com.
HP's FY25 Q3 earnings conference call is accessible via audio webcast at www.hp.com/investor/2025Q3Webcast.
About HP Inc.HP Inc. (NYSE:HPQ) is a global technology leader and creator of solutions that enable people to bring their ideas to life and connect to the things that matter most. Operating in more than 170 countries, HP delivers a wide range of innovative and sustainable devices, services and subscriptions for personal computing, printing, 3D printing, hybrid work, gaming, and more. For more information, please visit http://www.hp.com.
Use of non-GAAP financial informationTo supplement HP's consolidated condensed financial statements presented on a generally accepted accounting principles ("GAAP") basis, HP provides net revenue on a constant currency basis, non-GAAP total operating expense, non-GAAP operating profit, non-GAAP operating margin, non-GAAP other income and expenses, non-GAAP tax rate, non-GAAP net earnings, non-GAAP diluted net EPS, free cash flow, gross cash and net cash (debt) financial measures. HP also provides forecasts of non-GAAP diluted net EPS and free cash flow. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures are included in the tables below or elsewhere in the materials accompanying this news release. In addition, an explanation of the ways in which HP's management uses these non-GAAP measures to evaluate its business, the substance behind HP's decision to use these non-GAAP measures, the material limitations associated with the use of these non-GAAP measures, the manner in which HP's management compensates for those limitations, and the substantive reasons why HP's management believes that these non-GAAP measures provide useful information to investors is included under "Use of non-GAAP financial measures" after the tables below. This additional non-GAAP financial information is not meant to be considered in isolation or as a substitute for net revenue, operating expense, operating profit, operating margin, other income and expenses, tax rate, net earnings, diluted net EPS, cash provided by operating activities or cash, cash equivalents, and restricted cash prepared in accordance with GAAP.
Forward-looking statementsThis document contains forward-looking statements based on current expectations and assumptions that involve risks and uncertainties. If the risks or uncertainties ever materialize or the assumptions prove incorrect, they could affect the business and results of operations of HP Inc. and its consolidated subsidiaries which may differ materially from those expressed or implied by such forward-looking statements and assumptions.
All statements other than statements of historical fact are statements that could be deemed forward-looking statements, including, but not limited to, projections of net revenue, margins, expenses, effective tax rates, net earnings, net earnings per share, cash flows, benefit plan funding, deferred taxes, share repurchases, foreign currency exchange rates or other financial items; any projections of the amount, timing or impact of cost savings or restructuring and other charges, planned structural cost reductions and productivity initiatives; any statements of the plans, strategies and objectives of management for future operations, including, but not limited to, our business model and transformation, our sustainability goals, our go-to-market strategy, the execution of restructuring plans and any resulting cost savings (including the fiscal 2023 plan), net revenue or profitability improvements or other financial impacts; any statements concerning the expected development, demand, performance, market share or competitive performance relating to products or services; any statements concerning potential supply constraints, component shortages, manufacturing disruptions or logistics challenges; any statements regarding current or future macroeconomic trends or events, including global trade policies, and the impact of those trends and events on HP and its financial performance; any statements regarding pending investigations, claims, disputes or other litigation matters; any statements of expectation or belief as to the timing and expected benefits of acquisitions and other business combination and investment transactions; and any statements of assumptions underlying any of the foregoing. Forward-looking statements can also generally be identified by words such as "future," "anticipates," "believes," "estimates," "expects," "intends," "plans," "predicts," "projects," "will," "would," "could," "can," "may," and similar terms.
Risks, uncertainties and assumptions that could affect our business and results of operations include factors relating to HP's ability to execute on its strategic plans, including the previously announced initiatives, business model changes and transformation; the development and transition of new products and services and the enhancement of existing products and services to meet evolving customer needs and respond to emerging technological trends, including artificial intelligence; the use of artificial intelligence; the impact of macroeconomic and geopolitical trends, changes and events, including global trade policies, the ongoing military conflict in Ukraine, continued instability in the Middle East or tensions in the Taiwan Strait and South China Sea and the regional and global ramifications of these events; volatility in global capital markets and foreign currency, increases in benchmark interest rates, the effects of inflation and instability of financial institutions; risks associated with HP's international operations and the effects of business disruption events, including those resulting from climate change; the need to manage (and reliance on) third-party suppliers, including with respect to supply constraints and component shortages, and the need to manage HP's global, multi-tier distribution network and potential misuse of pricing programs by HP's channel partners, adapt to new or changing marketplaces and effectively deliver HP's services; the execution and performance of contracts by HP and its suppliers, customers, clients and partners, including logistical challenges with respect to such execution and performance; the competitive pressures faced by HP's businesses; the impact of third-party claims of IP infringement; successfully innovating, developing and executing HP's go-to-market strategy, including online, omnichannel and contractual sales, in an evolving distribution, reseller and customer landscape; successfully competing and maintaining the value proposition of HP's products, including supplies and services; challenges to HP's ability to accurately forecast inventories, demand and pricing, which may be due to HP's multi-tiered channel, sales of HP's products to unauthorized resellers or unauthorized resale of HP's products or our uneven sales cycle; the hiring and retention of key employees; the results of our restructuring plans (including the fiscal 2023 plan), including estimates and assumptions related to the cost (including any possible disruption of HP's business) and the anticipated benefits of our restructuring plans; the protection of HP's intellectual property assets, including intellectual property licensed from third parties; disruptions in operations from system security risks, data protection breaches, or cyberattacks; HP's ability to maintain its credit rating, satisfy its debt obligations and complete any contemplated share repurchases, other capital return programs or other strategic transactions; changes in estimates and assumptions HP makes in connection with the preparation of its financial statements; the impact of changes to federal, state, local and foreign laws and regulations, including environmental regulations and tax laws; integration and other risks associated with business combination and investment transactions; our aspirations related to environmental, social and governance matters; potential impacts, liabilities and costs from pending or potential investigations, claims and disputes; the effectiveness of our internal control over financial reporting; and other risks that are described in HP's Annual Report on Form 10-K for the fiscal year ended October 31, 2024 and HP's other filings with the Securities and Exchange Commission ("SEC"). HP's fiscal 2023 plan includes HP's efforts to take advantage of future growth opportunities, including but not limited to, investments to drive growth, investments in our people, improving product mix, driving structural cost savings and other productivity measures. Structural cost savings represent gross reductions in costs driven by operational efficiency, digital transformation, and portfolio optimization. These initiatives include but are not limited to workforce reductions, platform simplification, programs consolidation and productivity measures undertaken by HP, which HP expects to be sustainable in the longer-term. These structural cost savings are net of any new recurring costs resulting from these initiatives and exclude one-time investments to generate such savings. HP's expectations on the longer-term sustainability of such structural cost savings are based on its current business operations and market dynamics and could be significantly impacted by various factors, including but not limited to HP's evolving business models, future investment decisions, market environment and technology landscape.
As in prior periods, the financial information set forth in this document, including any tax-related items, reflects estimates based on information available at this time. While HP believes these estimates to be reasonable, these amounts could differ materially from reported amounts in HP's Annual Report on Form 10-K for the fiscal year ending October 31, 2025 and HP's other filings with the SEC. The forward-looking statements in this document are made as of the date of this document and HP assumes no obligation and does not intend to update these forward-looking statements.
HP's Investor Relations website at investor.hp.com contains a significant amount of information about HP, including financial and other information for investors. HP encourages investors to visit its website from time to time, as information is updated, and new information is posted. The content of HP's website is not incorporated by reference into this document or in any other report or document HP files with the SEC, and any references to HP's website are intended to be inactive textual references only.
HP INC. AND SUBSIDIARIESCONSOLIDATED CONDENSED STATEMENTS OF EARNINGS(Unaudited)(In millions, except per share amounts)
Three months ended
July 31, 2025
April 30, 2025
July 31, 2024
Net revenue:
Products
$
13,114
$
12,423
$
12,750
Services
818
797
769
Total net revenue
13,932
13,220
13,519
Cost of net revenue:
Products
10,599
10,007
10,164
Services
482
474
449
Total cost of net revenue
11,081
10,481
10,613
Gross profit
2,851
2,739
2,906
Research and development
406
401
413
Selling, general and administrative
1,452
1,480
1,404
Restructuring and other charges
110
122
46
Acquisition and divestiture charges
8
17
22
Amortization of intangible assets
159
65
81
Total operating expenses
2,135
2,085
1,966
Earnings from operations
716
654
940
Interest and other, net
(92
)
(148
)
(113
)
Earnings before taxes
624
506
827
Benefit from (provision for) taxes
139
(100
)
(187
)
Net earnings
$
763
$
406
$
640
Net earnings per share:
Basic
$
0.81
$
0.43
$
0.65
Diluted
$
0.80
$
0.42
$
0.65
Cash dividends declared per share
$
0.58
$
—
$
0.55
Weighted-average shares used to compute net earnings per share:
Basic
947
950
979
Diluted
954
956
990
HP INC. AND SUBSIDIARIESCONSOLIDATED CONDENSED STATEMENTS OF EARNINGS(Unaudited)(In millions, except per share amounts)
Nine months ended
July 31, 2025
July 31, 2024
Net revenue:
Products
$
38,232
$
37,212
Services
2,424
2,292
Total net revenue
40,656
39,504
Cost of net revenue:
Products
30,800
29,359
Services
1,426
1,328
Total cost of net revenue
32,226
30,687
Gross profit
8,430
8,817
Research and development
1,204
1,248
Selling, general and administrative
4,391
4,249
Restructuring and other charges
302
180
Acquisition and divestiture charges
31
71
Amortization of intangible assets
287
242
Total operating expenses
6,215
5,990
Earnings from operations
2,215
2,827
Interest and other, net
(381
)
(410
)
Earnings before taxes
1,834
2,417
Provision for taxes
(100
)
(548
)
Net earnings
$
1,734
$
1,869
Net earnings per share:
Basic
$
1.83
$
1.90
Diluted
$
1.82
$
1.88
Cash dividends declared per share
$
1.16
$
1.10
Weighted-average shares used to compute net earnings per share:
Basic
948
986
Diluted
955
994
HP INC. AND SUBSIDIARIESADJUSTMENTS TO GAAP NET EARNINGS, EARNINGS FROM OPERATIONS,OPERATING MARGIN AND DILUTED NET EARNINGS PER SHARE(Unaudited)(In millions, except per share amounts)
Three months ended
July 31, 2025
April 30, 2025
July 31, 2024
Amounts
Dilutednet earningsper share
Amounts
Dilutednet earningsper share
Amounts
Dilutednet earningsper share
GAAP net earnings
$
763
$
0.80
$
406
$
0.42
$
640
$
0.65
Non-GAAP adjustments:
Restructuring and other charges
110
0.12
122
0.13
46
0.05
Acquisition and divestiture charges
8
—
17
0.01
22
0.02
Amortization of intangible assets
159
0.17
65
0.07
81
0.08
Certain litigation (benefits) charges, net (a)(b)
(50
)
(0.05
)
103
0.11
18
0.02
Non-operating retirement-related credits
(2
)
—
(6
)
(0.01
)
(2
)
—
Tax adjustments(c)
(275
)
(0.29
)
(29
)
