HP beats Q2 estimates as AI PC demand drives 9% revenue growth

HP Inc. reported fiscal second-quarter revenue of $14.41 billion, topping the $13.99 billion consensus estimate, as demand for AI-powered personal computers and the Windows 11 refresh cycle boosted sales.

"During the second quarter, we continued executing our future of work strategy through intelligent devices, edge AI, and connected experiences while navigating rising commodity costs," Interim Chief Executive Officer Bruce Broussard said. The company introduced innovations across AI PCs, Z workstations, AI-powered print, and HP IQ, he added.

Adjusted earnings per share came in at 86 cents, beating the 71-cent average analyst estimate compiled by LSEG and up from 71 cents a year earlier. GAAP diluted EPS was 49 cents, below the company's prior outlook of 52 to 58 cents, weighed by $365 million in restructuring charges. Revenue rose 9% from $13.22 billion a year ago, or 6.3% in constant currency.

Personal Systems revenue climbed 13% to $10.21 billion, with commercial PC sales up 14% to $7.74 billion and consumer PC sales rising 10% to $2.47 billion. Printing revenue was flat at $4.20 billion, as commercial printing held steady while consumer printing declined 10%. Segment operating margin for Personal Systems improved to 5.2% from 4.5% a year earlier, while Printing margin slipped to 18.3% from 19.2%.

HP generated $800 million in free cash flow during the quarter, compared with negative $100 million a year earlier. The company returned $374 million to shareholders through $274 million in dividends and $100 million in share repurchases. Gross cash stood at $3.7 billion at quarter-end.

For the fiscal third quarter, HP guided adjusted EPS of 61 to 71 cents, the midpoint of which is slightly above the 64-cent consensus. The company narrowed its full-year adjusted EPS forecast to $2.90 to $3.10 from a prior range of $2.90 to $3.20, and maintained its free cash flow outlook at $2.8 billion to $3.0 billion.

The results underscore HP's ability to capitalize on the PC upgrade cycle triggered by Microsoft's end of support for Windows 10 in October 2025, which is pushing enterprises toward higher-margin AI-capable devices. PC makers including HP, Dell Technologies and Lenovo Group are also navigating a memory chip shortage as data center buildout absorbs supply and drives up component costs. HP shares rose 4.3% to $25.49 on Wednesday following the release. Investors will watch the Q3 earnings call for updates on segment margins and the trajectory of AI PC adoption.

This article is for informational purposes only and does not constitute investment advice.