HP delivers fifth straight quarter of revenue growth in Q3 FY2025, driven by Personal Systems and raises confidence in AI PC opportunity

ByInvestment Club

Overview

HP Inc. reported solid third quarter fiscal 2025 results, marking its fifth consecutive quarter of revenue growth. Performance was led by strength in Personal Systems and momentum across key growth initiatives, while Printing declined year-over-year. Despite margin pressures, GAAP earnings improved, supported by disciplined cost management and cash generation. Management reaffirmed confidence in secular demand drivers such as Windows 11 refresh and adoption of AI-enabled PCs.

“In Q3 we delivered a fifth consecutive quarter of revenue growth, driven by strength in Personal Systems and strong momentum in our key growth areas. These results demonstrate our agility and focused execution in the quarter, reinforce the strength of our strategy, and our commitment to be a leader in the future of work”, said Enrique Lores, President and CEO of HP Inc.

Q3 FY2025 vs. Q3 FY2024:

  • Net revenue was $13.9bn (+3.1% YoY), reflecting sustained momentum in Personal Systems despite weakness in Printing.
    • Personal Systems (PS) revenue rose to $9.9bn (+6% YoY), with Consumer PS up 8% and Commercial PS up 5%. Total units increased 5%, led by Consumer (+8%) and Commercial (+3%), while segment operating margin was 5.4%.
    • Printing revenue fell to $4.0bn (-4% YoY), with Consumer Printing down 8%, Commercial Printing down 3%, and Supplies down 4%. Segment operating margin held flat at 17.3% despite lower hardware units (-9%).
  • GAAP diluted EPS was $0.80, up 23% YoY from $0.65 a year earlier, exceeding the outlook range. Non-GAAP diluted EPS was $0.75, down 11% YoY, pressured by higher restructuring and amortization charges.
  • GAAP net earnings were $763m (+19% YoY), while non-GAAP net earnings declined to $713m (-15% YoY).
  • GAAP operating margin contracted to 5.1% (-190 bps YoY), and non-GAAP operating margin fell to 7.1% (-110 bps YoY), reflecting mix shifts and higher operating costs.
  • Operating cash flow was $1.7bn (+17% YoY), with free cash flow of $1.5bn, underscoring strong working capital management.
  • HP returned $0.4bn to shareholders through dividends and share repurchases during the quarter, exiting with $2.9bn in gross cash.

For Q4 FY2025, HP expects GAAP EPS of $0.75-$0.85 and non-GAAP EPS of $0.87-$0.97. For the full year FY2025, free cash flow is projected at $2.6bn-$3.0bn. Management highlighted ongoing cost headwinds from U.S. trade regulations but expressed confidence in long-term growth opportunities, particularly around AI PCs, hybrid work, and subscription-led services.

Following its latest earnings release, HP shares gained about 1-2% in post-market trading, reflecting a mildly positive investor reaction. From a technical perspective, the stock continues to trade between its key moving averages, with the 50-day SMA at $25.55 acting as support and the 200-day SMA at $29.26 capping upside momentum for now. The RSI currently stands at 58.27, in neutral territory, suggesting balanced momentum without signs of overbought or oversold conditions. However, on a year-to-date basis, HP remains clearly negative, down around -16.5%, highlighting the broader weakness that has persisted throughout 2025 despite short-term rebounds.

Source: TradingView

Author: Ionuț-Adrian Lazar

Similar Posts