HP (HPQ) Q1 2026 earnings summary

Executive summary

• Net revenue rose 6.9% year-over-year to $14.4 billion, driven by strong Personal Systems and AI PC momentum, partially offset by Printing softness.

• Non-GAAP diluted EPS was $0.81, up 9–9.5% year-over-year and at the top of guidance; GAAP diluted EPS was $0.58, down 1.7%.

• Free cash flow for the quarter was $175 million, with $0.6 billion returned to shareholders via dividends and share repurchases.

• CEO transition underway, with a broad search for a leader experienced in complex, multi-segment businesses; interim CEO transition described as smooth.

• Strategic focus on AI integration, edge computing, and unified device-software-service experiences, with execution of a major AI-driven cost reduction plan.

Financial highlights

• Revenue: $14.4 billion, up 6.9–7% year-over-year (5% in constant currency), with growth across all regions.

• Non-GAAP operating margin: 6.9%; GAAP operating margin: 5.3%, down year-over-year.

• Gross margin: 19.6%, reflecting higher Personal Systems mix and offsetting commodity/trade costs.

• Cash from operations: $383–400 million; free cash flow: $175–200 million; $600 million returned to shareholders in Q1.

• Gross cash at quarter-end was $3.2 billion, with gross debt at $9.7–$9.8 billion.

Outlook and guidance

• Annual non-GAAP EPS guidance maintained at $2.90–$3.20, now expected near the lower end; GAAP EPS at $2.47–$2.77.

• Q2 non-GAAP EPS expected at $0.70–$0.76; GAAP EPS at $0.52–$0.58.

• Annual free cash flow guidance of $2.8–$3 billion, likely at the low end.

• FY26 revenue expected to grow faster than the market, with growth moderating in the second half.

• Print operating margins expected near the top end of the long-term range.