HP Q1 2026 earnings: revenue beats, but HP flags cost headwinds
HP Inc has reported fiscal Q1 2026 results that beat consensus on both revenue and adjusted earnings, while cautioning that rising component costs and trade-related expenses are likely to weigh on profitability through the year. The company posted net revenue of $14.4 billion, up 6.9% year on year, and non-GAAP diluted EPS of $0.81. GAAP diluted EPS was $0.58. In its quarterly update, HP said it expects to land towards the lower end of its full-year earnings and free-cash-flow ranges given a “fluid operating environment” and the added cost driven by current US trade-related regulations and mitigations.
HP Q1 2026 earnings: PCs drive growth
The headline improvement came from Personal Systems, where net revenue rose 11% year on year to $10.3 billion on 12% unit growth. Segment operating margin was 5.0%, down year on year. HP split the momentum across both sides of the market: consumer Personal Systems revenue rose 16%, while commercial was up 9%.
Printing remained profitable but softer on demand. Printing net revenue was $4.2 billion, down 2% year on year, with an 18.3% operating margin. Supplies revenue slipped 1%, and total hardware units were down 6%.
HP Q1 2026 earnings: outlook and cash returns
For fiscal Q2 2026, HP guided to GAAP diluted EPS of $0.52 to $0.58 and non-GAAP diluted EPS of $0.70 to $0.76. For the full fiscal year, HP maintained its ranges of GAAP diluted EPS of $2.47 to $2.77 and non-GAAP diluted EPS of $2.90 to $3.20, while signalling performance is likely to track the low end. HP also maintained its free cash flow outlook of $2.8 billion to $3.0 billion.
Cash generation in the quarter was modest: operating cash flow was $383 million and free cash flow was $175 million. HP paid a quarterly dividend of $0.30 per share and repurchased about 13.3 million shares for $325 million. In the earnings call transcript published by Seeking Alpha, management highlighted ongoing efforts to offset higher memory-related costs and other input pressures while pushing new PC products, including AI-capable systems, into the market.
As previously reported by eeNews Europe in its coverage of AI developments, silicon and system-level cost shifts are increasingly shaped by AI-driven demand, and HP’s commentary underscores how that dynamic is now reaching mainstream PC and printing product economics.
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