HP Inc’s Earnings Call Highlights Growth Amid Challenges

HP Inc ((HPQ)) has held its Q4 earnings call. Read on for the main highlights of the call.

HP Inc’s recent earnings call painted a picture of robust growth and strategic advancements, particularly in the Personal Systems and AI innovation sectors. While the company faces challenges such as declining print revenue, rising memory costs, and a flat commercial market in North America, the overall sentiment remains positive. The outlook for fiscal year 2026 is optimistic, driven by continued innovation and strategic focus.

Record Revenue Growth in Personal Systems

HP Inc. celebrated its sixth consecutive quarter of revenue growth, with an impressive 8% year-over-year increase in Personal Systems. This growth was fueled by significant gains in both the commercial and consumer sectors, showcasing the company’s strength in these markets.

AI-Powered Innovation

The company introduced groundbreaking AI-powered devices, including an AI station powered by NVIDIA and the industry’s first 49-inch ultra-wide monitor with integrated AI noise reduction. These innovations highlight HP’s commitment to leading in technology advancements.

Successful Cost Savings Initiative

HP exceeded its original cost savings target, achieving $2.2 billion in cumulative gross annualized savings. This success underscores the company’s effective cost management strategies and operational efficiency.

Strong Performance in Key Growth Areas

HP reported double-digit growth in key areas such as data science workstations and consumer subscriptions, which are nearing $1 billion in annual revenue. The company also continues to gain momentum in Industrial Graphics.

Positive Outlook for Fiscal Year 2026

Looking ahead, HP expects to outpace market growth with a strong focus on AI integration and maintaining leadership in key segments. The company remains confident in its strategic direction and innovation capabilities.

Decline in Print Revenue

Despite maintaining a number one market share, HP experienced a 4% decline in print revenue due to market softness and delayed purchasing decisions. This remains a challenge for the company moving forward.

Impact of Rising Memory Costs

Rising memory costs, which constitute 15% to 18% of a typical PC’s cost, have impacted Personal Systems margins. HP is implementing mitigation strategies to address these cost pressures.

Challenges in the Commercial Market

The company’s revenue in the Americas was flat in constant currency, reflecting demand softness in North America, particularly in the commercial sectors. This poses a challenge to HP’s growth in the region.

Operating Profit Decline

HP reported a decline in operating profits due to trade-related costs, with a notable decrease in print operating income on a dollar basis. This highlights the financial pressures the company is navigating.

Forward-Looking Guidance

In its Fourth Quarter 2025 Earnings Conference Call, HP reported a 4% year-over-year revenue growth, driven by gains in personal systems. Despite a decline in print revenue, the company observed double-digit growth in consumer subscriptions and industrial graphics. HP’s strategic focus on AI-powered solutions and supply chain resilience is expected to drive future growth. The company anticipates a fiscal 2026 non-GAAP EPS range of $2.9 to $3.2 and announced a $0.30 per share dividend, reflecting confidence in its long-term outlook. HP is also embedding AI across operations, expecting significant savings and workforce reductions.

In summary, HP Inc’s earnings call reflects a positive sentiment with robust growth in personal systems and AI innovation. Despite challenges like declining print revenue and rising memory costs, the company remains optimistic about its future, driven by strategic focus and innovation. Key takeaways include strong revenue growth, successful cost savings, and a positive outlook for fiscal year 2026.