HPQ · Q4 2025 Earnings
CautiousHP Inc.
Reported November 25, 2025
30-second summary
Q4 revenue grew 4.2% YoY to $14.6B and non-GAAP EPS of $0.93 landed in the upper half of the $0.87–$0.97 guide, pulling FY25 non-GAAP EPS to $3.12 (down 9.0% YoY). The forward setup is the story: FY26 non-GAAP EPS guided to $2.90–$3.20 brackets FY25's $3.12 with a midpoint of $3.05, implying roughly -2% at the midpoint and a -7% downside case, even as management leans into AI PC momentum and a Windows 11 refresh tailwind. HP issued no FY26 revenue guide, which on its own tells you management isn't ready to underwrite the topline.
Headline numbers
EPS
Q4 FY2025
$0.93
Revenue
Q4 FY2025
$14.60B
+4.2% YoY
Gross margin
Q4 FY2025
20.2%
Free cash flow
Q4 FY2025
$1.50B
Operating margin
Q4 FY2025
6.6%
Key financials
Q4 FY2025| Metric | Q4 FY2025 | YoY | Q3 FY2025 | QoQ |
|---|---|---|---|---|
| Revenue | $14.60B | +4.2% | $13.90B | +5.0% |
| EPS | $0.93 | — | $0.75 | +24.0% |
| Gross margin | 20.2% | — | 20.5% | -30bps |
| Operating margin | 6.6% | — | 5.1% | +150bps |
| Free cash flow | $1.50B | — | $1.50B | +0.0% |
Guidance
Q4 FY2025 beat non-GAAP EPS guidance; FY2026 guidance implies slight decline or flat EPS growth vs. FY2025, signaling caution despite PC market optimism.
Guidance is issued for both next quarter and the full year. Both may appear below.
Actuals vs prior guidance
| Metric | Period | Prior guide | Actual | Δ | Result |
|---|---|---|---|---|---|
| Non-GAAP Diluted EPS | Q4 FY2025 | $0.87 to $0.97 | $0.93 | +0.01–0.06 above guide | Beat |
| GAAP Diluted EPS | Q4 FY2025 | $0.75 to $0.85 | $0.84 | -0.01 below guide high; in-line upper range | Beat |
New guidance
| Metric | Period | Guide | YoY |
|---|---|---|---|
| Non-GAAP Diluted EPS | FY2025 | $3.12 | — |
| Non-GAAP Diluted EPS | FY2026 | $2.90 to $3.20 | -7.0% to +2.6% YoY |
| GAAP Diluted EPS | FY2026 | $2.47 to $2.77 | — |
| Free Cash Flow | FY2026 | $2.8 to $3.0 billion | — |
| Non-GAAP Diluted EPS | Q1 FY2026 | $0.73 to $0.81 | — |
| GAAP Diluted EPS | Q1 FY2026 | $0.58 to $0.66 | — |
Product revenue
Q4 FY2025| Segment | Q4 FY2025 | YoY |
|---|---|---|
| Personal Systems | $10.353B | +8.0% |
| Commercial PS | $6.971B | +7.0% |
| Consumer PS | $3.382B | +10.0% |
| Printing | $4.266B | -4.0% |
| Commercial Printing | $1.209B | -4.0% |
| Consumer Printing | $0.296B | -9.0% |
| Supplies | $2.761B | -4.0% |
Management tone
The Q4 release is built around two CEO/CFO themes: "disciplined execution" for FY26 and "decisive actions to mitigate recent cost headwinds." CEO Enrique Lores framed FY26 as a year where "our focus is on disciplined execution. We are committed to driving measurable results - ensuring that our plans translate into long-term value for our shareholders" — language notably narrower than the growth-and-momentum framing from earlier in the year. CFO Karen Parkhill added that HP is "taking decisive actions to mitigate recent cost headwinds and are investing in AI-enabled initiatives" — a tone shift acknowledging that cost headwinds are recent and ongoing, not resolved.
The most concrete tone signal is the new fiscal 2026 plan announced alongside results: a fresh restructuring program targeting ~$1B in gross run-rate savings by end of FY28, with ~$650M in charges (~$250M in FY26) and 4,000–6,000 headcount reductions. Layering a new multi-year cost program on top of Future Ready, in the same release that brackets an EPS decline, is itself the tone shift — management is telling investors FY26 needs structural cost action, not just cyclical recovery, to defend earnings.
The press release also explicitly attributes the FY26 outlook softness to trade costs: "HP's outlook reflects the added cost driven by the current U.S. trade-related regulations in place, and associated mitigations." This is the first time trade cost is named as an explicit drag on a forward annual frame rather than a quarter to be absorbed.
The omission of FY26 revenue guidance is itself the tone shift on topline. HP issued EPS and FCF frames but no revenue number, and provided no FY26 segment margin frames. Combined with a print market that continues to decline and PC cycle dynamics still finding their level, this reads as management not wanting to underwrite a topline through FY26.
Recurring themes management leaned on this quarter:
Risks management surfaced:
Q&A highlights
Wamsi Mohan · Bank of America
Print margins dropped 200+ basis points sequentially and are expected to bounce back next quarter. Asked whether management is shifting to a higher long-term margin range given cost actions and recent performance at the higher end of guidance.
Management attributed Q3 margin decline to seasonal mix of supplies (lower in Q3 vs Q2 and Q4), consistent with prior year patterns. Stated they are not changing long-term margin range projections and maintaining established ranges to preserve flexibility for aggressive unit placement. Outlined continuing strategy: shift to profitable units (big tank), drive subscriptions/services, grow profitable office categories, and pursue industrial growth with disciplined cost management.
Wamsi Mohan · Bank of America
Industry expectations show below-normal seasonality and projected declines in PC market in back half of year, but HP projects mid-single digit growth and continued growth into FY26. Is HP taking share, and from where?
Management stated projections are consistent with actual market observations of strong commercial and consumer demand in Q3, occurring across multiple geographies (not just US), indicating real demand pull not demand pulling forward. Emphasized strong AI PC demand and Windows 11 refresh as drivers. Noted strategy is profitable growth in premium segments, not share gain for its own sake. Expect ESPs to continue growing due to stronger premium category demand.
Michael Ng · Goldman Sachs
On print demand: what is outlook for aggressive pricing environment and softer office demand in North America/Europe into 2026? Will these conditions improve or worsen? Also requested clarification on capital allocation and whether revenue guidance was consistent with prior/typical years.
On print pricing: expecting continued aggressive price competition similar to Q3; price increases announced by competitors did not materialize in market. Attributed to smaller market driving price pressure but believed temporary based on stable page print volumes. Too early to provide detailed 2026 forecast; will provide more detail in coming quarters/months. On capital allocation: leverage improved from 2.2x in Q2 to 2.04x in Q3 via improved EBITDA and debt repayment; expect continued improvement in FY26; anticipates more repurchase activity soon and would use cash to reduce debt as bonds mature.
Eric Woodring / Maya · Morgan Stanley
Despite limited enthusiasm from CIOs/channel partners about AIPCs, management claims strong adoption. Requested unpacking of industries, regions, and use cases driving AIPC adoption, plus follow-up on SMB Windows 11 adoption patterns and extended support implications.
Management cited actuals: AI PC mix exceeds 25%, ahead of original Q4 target. Key drivers: software applications increasingly leveraging AI capabilities (Adobe, Zoom running locally for speed/cost reduction; CrowdStrike using NPUs for faster memory scanning; Microsoft improving application libraries). HP launched AI Companion, Omen AI, China-specific app with month-over-month and quarter-over-quarter improvement in utilization. Pitch to customers: if refreshing 2-4 year systems, buy AIPCs now to avoid missing future productivity gains. On Windows 11: penetration pattern consistent with prior refreshes—enterprise leads, SMB adoption slower; expect extended SMB opportunity in 2026.
Alec Valero · Loop Capital
Update on Poly business and enterprise/corporate spending trends; also asked about refresh initiatives across portfolio product lines.
Poly hybrid systems had weak quarter; companies (especially in Europe) deprioritizing projects in favor of PCs and AI. Headset space particularly deprioritized. However, gaming peripherals (HyperX) showed strong growth. Company committed to continued investment in both headset and video categories, including 3D video collaboration innovation with Google. Across full portfolio (consumer PCs, commercial PCs, workstations, printing), significant R&D investment driving upcoming refreshes next year, with innovation pipeline described as exciting.
Answers to last quarter's watch list
What to watch into next quarter
Whether Q1 FY26 non-GAAP EPS lands above the $0.77 midpoint — a print at or below the $0.73 low end would imply FY26 EPS trends toward the low end of the $2.90–$3.20 range (the -7% YoY case), and would force a re-rating of the AI PC monetization thesis.
Whether HP introduces FY26 revenue guidance during the year — the omission is conspicuous. A mid-year addition of revenue guide would signal topline confidence improving; continued silence through Q1 would confirm management's view that PC cycle dynamics and print decline make annual revenue too uncertain to anchor.
Print hardware unit declines — Q4's -12% is a meaningful deterioration. A third consecutive worse-than-prior-quarter unit print in Q1 FY26 would break the supplies-driven margin story within 2–3 quarters as the installed base erodes.
Personal Systems operating margin trajectory above 5.8% — watch whether Q1 FY26 lands at 6%+ (supporting the FY26 EPS guide via PS leverage) or stalls at 5.8% (forcing the EPS guide to depend more on print margin and cost actions).
AI PC mix and ASP disclosure — a Q1 mix print with ASP commentary would help validate or undermine the premium-pricing thesis given the Q4 release did not quantify mix.
FY26 plan execution milestones — pace of the ~$250M FY26 restructuring charge, headcount actions, and any quantification of in-year savings against the $1B FY28 target.
Tariff/trade cost language — the FY26 outlook explicitly cites trade-related cost as a drag. Watch for any new tariff exposure (Vietnam, Thailand, Mexico) that would deepen the headwind.
Sources
- HP Inc. Q4 FY2025 press release (Form 8-K Exhibit 99.1): https://www.sec.gov/Archives/edgar/data/47217/000004721725000068/hp103125exhibit991q425.htm
- HP Inc. Q3 FY2025 Tapebrief brief (prior-quarter watch list and guidance baseline).
- HP Inc. Q3 FY2025 earnings conference call transcript (prepared remarks and Q&A).
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