HP (HPQ) Q2 2026 earnings summary

Executive summary

• Net revenue for Q2 FY26 reached $14.4 billion, up 9% year-over-year (6.3% in constant currency), marking the eighth consecutive quarter of top-line growth, driven by strong Personal Systems performance and international sales, while U.S. revenue declined slightly.

• Non-GAAP diluted net EPS was $0.86, up 21.1% year-over-year and exceeding guidance; GAAP diluted net EPS was $0.49, up 16.7% year-over-year but slightly below guidance.

• Free cash flow for the quarter was $0.8 billion, with $0.9 billion net cash from operating activities.

• $374 million was returned to shareholders via dividends and share repurchases.

• The company is executing its Fiscal 2026 Plan, focusing on AI-driven innovation, cost reductions, and workforce realignment.

Financial highlights

• Q2 revenue up 9% year-over-year (6% in constant currency); APJ up 18%, EMEA up 6%, Americas flat.

• Gross margin at 20.9%, up year-over-year; operating margin at 7.5% (non-GAAP), up 0.2 pts; GAAP operating margin at 4.2%, down 0.7 pts.

• Net earnings per share (non-GAAP diluted) at $0.86, up over 20% year-over-year; GAAP net earnings for the quarter were $450 million, up 11% year-over-year.

• Free cash flow for the quarter was $800 million; year-to-date free cash flow was $955 million.

• Gross cash stood at $3.7 billion, with gross debt at $9.7 billion, resulting in net debt of $6.0 billion.

Outlook and guidance

• FY26 non-GAAP diluted net EPS guidance is $2.90–$3.10; GAAP diluted net EPS guidance is $2.15–$2.45.

• Q3 FY26 non-GAAP diluted net EPS guidance is $0.61–$0.71; GAAP diluted net EPS guidance is $0.47–$0.63.

• FY26 free cash flow projected at $2.8–$3.0 billion.

• Anticipates rising input costs (memory, storage, oil) to pressure margins in the second half; expects Q4 to be a low point for Personal Systems margins, with sequential improvement into FY27.

• Management anticipates continued challenges from macroeconomic uncertainty, competitive pressures, and evolving distribution models.