HP Inc. (NYSE: HPQ) has unveiled its financial results for the first quarter of fiscal 2026, revealing robust growth across its business segments despite facing industry-wide challenges. The company reported net revenue of $14.4 billion, marking a significant increase of 6.9% from the same period last year, driven largely by strong performance in its Personal Systems division.

1. Key Financial Highlights

GAAP Diluted Net Earnings Per Share (EPS): $0.58, a slight decrease of 1.7% from $0.59 year-over-year.

Non-GAAP Diluted Net EPS: $0.81, reflecting a 9.5% increase from $0.74 in the prior year.

Net Revenue: $14.4 billion, compared to $13.5 billion in Q1 FY25.

Operating Margin: GAAP operating margin dipped to 5.3% from 6.3% year-over-year, while non-GAAP operating margin was reported at 6.9%.

Net Cash Provided by Operating Activities: $383 million, with free cash flow amounting to $175 million.

Shareholder Returns: Approximately $600 million returned to shareholders via share repurchases and dividends.

2. Segment Performance

Personal Systems

HP's Personal Systems segment achieved net revenue of $10.3 billion, up 11% year-over-year. This growth was fueled by a 16% increase in consumer unit sales and a 9% rise in commercial units. The segment also reported an operating margin of 5.0%.

Interim CEO Bruce Broussard noted, “We are pleased to report a strong first quarter, highlighted by robust growth in Personal Systems, including the continued momentum in AI PCs. Our performance reflects the strength of our portfolio and our disciplined execution of our Future of Work strategy.”

Printing

In contrast, the Printing segment generated net revenue of $4.2 billion, a decline of 2% compared to the previous year. This segment experienced an 18.3% operating margin, but both consumer and commercial printing revenues faced challenges, reflecting a decrease of 8% and 3%, respectively.

3. Management Commentary

CFO Karen Parkhill expressed satisfaction with the quarter's execution, surpassing revenue growth expectations and achieving non-GAAP EPS above consensus. She emphasized that while the company is maintaining its annual guidance, it anticipates results to be closer to the lower end of its forecast due to rising memory costs and ongoing market dynamics.

4. Cash Flow and Shareholder Returns

HP’s cash flow from operations was healthy at $383 million, contributing to a free cash flow of $175 million. The company utilized $325 million for share buybacks, repurchasing approximately 13.3 million shares, and distributed $277 million in dividends, reinforcing its commitment to returning value to shareholders.

5. Outlook for Fiscal 2026

For the second quarter of fiscal 2026, HP expects GAAP diluted net EPS to range between $0.52 and $0.58 and non-GAAP diluted net EPS between $0.70 and $0.76. For the full fiscal year, HP maintains its guidance for GAAP diluted net EPS in the range of $2.47 to $2.77 and non-GAAP diluted net EPS between $2.90 and $3.20.

Broussard concluded, “We remain confident in our strategy and focused on delivering sustainable, long-term value for our customers and shareholders,” indicating a commitment to navigating the current market landscape effectively.

6. Conclusion

HP Inc.'s first quarter results showcase the company's resilience amidst challenges in the printing industry and highlight strong growth in the personal computing segment. With a solid strategy in place and a focus on shareholder returns, HP is well-positioned for the remainder of fiscal 2026. Investors and stakeholders will be keenly watching how the company adapts and grows in a dynamic environment.

Original press release