HP Inc
Q2 2025 Earnings
Market Reaction
S&P 500 over the same 30 days: +4.68%.
Did HPQ Beat Earnings? Q2 2025 Results
HP Inc. delivered a mixed fiscal Q2 2025, with tariff headwinds cutting deeply into profits even as revenue held up. The company posted non-GAAP EPS of $0.71, missing the $0.80 consensus estimate by 11.63%, while revenue of $13.22 billion grew 3.3% year over year and edged fractionally ahead of the $13.13 billion consensus. The primary culprit was a punishing tariff environment that compressed Personal Systems operating margins to 4.5% from 6.0% a year ago and sent free cash flow to negative $95 million, compared to $462 million in the prior-year quarter. HP is aggressively accelerating its exit from China-based manufacturing for North American products, aiming to have nearly all such production relocated by June, six months ahead of schedule. The turbulence prompted the company to lower its full-year non-GAAP EPS guidance to $3.00 to $3.30 and issue a cautious Q3 non-GAAP EPS outlook of $0.68 to $0.80, though management expects to fully offset trade-related costs by Q4 assuming current conditions persist.
- Strong Commercial Personal Systems revenue growth of 9% YoY with units up 11%
- Personal Systems segment revenue up 7% YoY driven by commercial demand
- Constant currency revenue growth of 4.5%
- Tariff-related costs and dynamic regulatory environment pressured margins
“In Q2, we delivered solid revenue growth, led by strong Commercial performance in Personal Systems and continued momentum behind our future of work strategy. While results in the quarter were impacted by a dynamic regulatory environment, we responded quickly to accelerate the expansion of our manufacturing footprint and further reduce our cost structure. These decisive actions strengthen our foundation and position us to deliver long-term sustainable growth.”
HP CEO, on the earnings call
Forward Guidance & Outlook
For fiscal Q3 2025, HP estimates GAAP diluted net EPS of $0.57 to $0.69 and non-GAAP diluted net EPS of $0.68 to $0.80. For the full fiscal year 2025, HP estimates GAAP diluted net EPS of $2.32 to $2.62 and non-GAAP diluted net EPS of $3.00 to $3.30. HP anticipates generating free cash flow of $2.6 to $3.0 billion for fiscal 2025. The outlook reflects added costs driven by current U.S. tariffs and associated mitigations. The company is executing targeted mitigation strategies and expects to fully offset trade-related costs by Q4 assuming current conditions remain.
HPQ YoY Financials
HPQ Revenue by Segment
Figures from SEC filings and company reports. Not investment advice.