A maker of personal computers and printers, HP Inc. sells PCs, workstations, and printing gear to homes, offices, and graphics and 3D printing customers worldwide. The company traces back to 1939, when friends Bill Hewlett and Dave Packard started Hewlett-Packard in a Palo Alto garage—and flipped a coin to decide whose name came first. Its first product, an audio oscillator, was bought by Walt Disney for Fantasia, and in 2015 the company split, with HP Inc. keeping the PC and printer businesses.
HP revenue rose 12.5% to $15.7B in Q3 FY2026, but gross margin fell 1.7 points to 18.8% on higher commodity costs.
HP's growth accelerated, but profitability moved the other way. Revenue rose 12.5% to $15.7 billion on a 40.8% increase in average selling prices that more than offset a 15.8% drop in PC unit volume, while fell 1.7 points to 18.8% as higher memory and storage costs hit the . The company is trading unit volume for pricing power, and the margin pressure shows the cost of that trade.
Key takeaways
net rose 18.5% to $11.8 billion as average selling prices increased 40.8%, more than offsetting a 15.8% decline in PC unit volume.
fell 1.7 percentage points to 18.8%, driven by higher commodity costs and unfavorable mix toward , partially offset by pricing, favorable currency, and IEEPA tariff refunds.
net declined 2.2% to $3.9 billion on demand softness, particularly in China, and competitive pressures, with printer units down 6.8%.
Section summaries
Management's Discussion and Analysis
Q3 FY2026 net revenue rose 12.5% to $15.7B on Personal Systems pricing, while gross margin fell 1.7 pts on commodity costs.
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Total net increased 12.5% to $15.7 billion in Q3 FY2026, driven by product pricing actions to offset higher memory and storage costs in , with international revenue up 16.8% and U.S. revenue up 5.1%.
rose 24.6% to $892 million, and widened 0.6 points to 5.7%.
rose $1.0 billion to $3.0 billion for the nine months, driven by favorable .
increased $237 million for the nine months, primarily from the EER program under the , while HP has applied to recover about $0.3 billion of previously paid IEEPA tariffs.
What changed
The Q2 FY2026 watch item on Supplies is answered: Printing net fell 2.2% in Q3, after being flat in Q2, as the installed base continues to shrink.
The Q2 FY2026 watch item on is answered: gross margin fell 2.1 points sequentially to 18.8%, the lowest in the reported quarterly series, as commodity costs outweighed pricing actions.
The Q2 FY2026 watch item on is answered: operating cash flow rose to $1.735 billion from $926 million in Q2, confirming the cash conversion cycle improvement persisted.
The Q2 FY2026 watch item on is answered: charges increased $237 million for the nine months, primarily from the EER program under the .
unit volume turned negative, falling 15.8% in Q3 after a 7% decline in Q2, while average selling prices rose 40.8% — a reversal from the 0.2% ASP decline in Q1.
What to watch
unit volume in Q4 FY2026 to see if the 15.8% Q3 decline deepens or stabilizes as pricing actions continue.
in Q4 FY2026 to see if commodity costs ease or the 18.8% level holds against tariff pressure.
Supplies in Q4 FY2026 to see if the 2.2% Q3 decline reverses or deepens further.
The status of HP's application to recover about $0.3 billion of previously paid IEEPA tariffs.
net rose 18.5% to $11.8 billion as increased 40.8%, more than offsetting a 15.8% decline in PC unit volume; fell 0.8 points to 4.6% on higher commodity costs.
net declined 2.2% to $3.9 billion on demand softness, particularly in China, and competitive pressures; printer units fell 6.8% while improved 1.1 points to 18.1% on tariff refunds and pricing.
decreased 1.7 percentage points to 18.8% in Q3, driven by higher commodity costs and unfavorable mix toward , partially offset by pricing, favorable currency, and tariff refunds.
rose $1.0 billion to $3.0 billion for the nine months, driven by favorable ; HP returned $1.5 billion to shareholders via $0.8 billion in dividends and $0.7 billion in share repurchases.
Restructuring charges increased $237 million for the nine months, primarily from the EER program under the , while HP has applied to recover about $0.3 billion of previously paid tariffs.
Quantitative and Qualitative Disclosures About Market Risk
For quantitative and qualitative disclosures about market risk affecting HP, see “Quantitative and Qualitative Disclosures About Market Risk” in Item 7A of Part II of our Annual Report on Form 10-K for the fiscal year ended October 31, 2025. Our exposure to market risk has not c…
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For quantitative and qualitative disclosures about market risk affecting HP, see “Quantitative and Qualitative Disclosures About Market Risk” in Item 7A of Part II of our Annual Report on Form 10-K for the fiscal year ended October 31, 2025. Our exposure to market risk has not changed materially since October 31, 2025.
Information with respect to this item may be found in Note 11, “Litigation and Contingencies” to the Condensed Consolidated Financial Statements in Item 1 of Part I of this report, which is incorporated herein by reference.
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Information with respect to this item may be found in Note 11, “Litigation and Contingencies” to the Condensed Consolidated Financial Statements in Item 1 of Part I of this report, which is incorporated herein by reference.
Our operations and financial results are subject to various risks and uncertainties, including those described in Part I, Item 1A, “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended October 31, 2025, which could adversely affect our business, financial co…
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Our operations and financial results are subject to various risks and uncertainties, including those described in Part I, Item 1A, “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended October 31, 2025, which could adversely affect our business, financial condition, results of operations, cash flows, and the trading price of our common and capital stock. There have been no material changes in our risk factors since our Annual Report on Form 10-K for the fiscal year ended October 31, 2025.
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