HP 2025 Q3 Earnings Beats Expectations, Net Income Up 19.2%

HP (HPQ) reported its fiscal 2025 Q3 earnings on August 27, 2025. The company delivered results that exceeded revenue expectations and demonstrated strong earnings growth, with net income rising 19.2% year-over-year. The guidance for Q4 reflects continued confidence in the company’s strategic direction and market positioning.

Revenue
HP reported total revenue of $13.93 billion in Q3 2025, a 3.1% increase from $13.52 billion in the same period the prior year. The company's Personal Systems segment led the way with net revenue of $9.93 billion, driven by a 6% year-over-year growth in the segment. Within Personal Systems, Commercial PS revenue reached $7.04 billion with 5% growth, while Consumer PS rose to $2.90 billion with an 8% increase. Printing segment revenue totaled $3.99 billion, with a 4% year-over-year decline, primarily due to softer demand in the office segment and competitive pricing pressures. Supplies revenue stood at $2.60 billion, down 4%, while Commercial Printing revenue amounted to $1.11 billion with a 3% decline and Consumer Printing at $269 million with an 8% drop. Corporate Investments reported $16 million in revenue, and the Other category contributed a negative $1 million. Together, these segments reflect HP’s strategic shift toward higher-margin and growth-focused areas such as AI-powered PCs and subscriptions in the printing division.

Earnings/Net Income
HP’s earnings per share (EPS) for Q3 2025 rose to $0.81, a 24.6% increase from $0.65 in the same period the prior year. Net income for the quarter reached $763 million, up 19.2% from $640 million in Q3 2024. The company’s ability to sustain profitability for over 20 years in the same quarter highlights its operational resilience and effective cost management strategies. The strong earnings performance underscores HP’s progress in navigating supply chain and pricing challenges while maintaining profitability.

Price Action
HPQ shares edged up 0.15% during the latest trading day and gained 2.42% over the most recent full trading week. Month-to-date, the stock has advanced 4.87%, showing positive momentum in the post-earnings period.

Post-Earnings Price Action Review
Despite the strong earnings results, the performance of a strategy to buy HPQ shares 30 days after the earnings release has been underwhelming. Over the past three years, following quarters with revenue growth, the strategy returned -11.80%, significantly underperforming the 61.70% benchmark return, which led to an excess return of -73.50% and an annualized return of -4.25%. The maximum drawdown was 0%, and the Sharpe ratio was -0.13, highlighting the high risk and poor performance of the strategy relative to the benchmark.

CEO Commentary
Enrique J. Lores, HP’s CEO, praised the company’s Q3 performance, noting 3% revenue growth driven by strong demand for AI-powered PCs and the Windows 11 refresh cycle. He highlighted the company’s progress in reducing trade costs through diversification and pricing adjustments, with nearly all North American products now manufactured outside of China. Lores emphasized that the Personal Systems segment achieved 6% growth, with operating margins returning to target ranges. The Printing segment saw a 3% decline, but Lores pointed to resilience in subscription services and industrial graphics. Looking ahead, he expressed confidence in HP’s ability to navigate global trade uncertainties and capitalize on AI-driven market opportunities.

Guidance
For Q4 2025, HP expects Personal Systems revenue to follow prior-year seasonality, with operating margins in the 5% to 7% range. Printing revenue is expected to follow a similar seasonal pattern, with operating margins near the top of the 16% to 19% range. The company is guiding for non-GAAP diluted EPS in the range of $0.87 to $0.97 and GAAP diluted EPS of $0.75 to $0.85. HP also expects fiscal year 2025 free cash flow between $2.6 billion and $3 billion, including $400 million in restructuring-related cash outflows. The company remains optimistic about PC market growth, citing momentum from the Windows 11 refresh and AI adoption.

Additional News
Following the Q3 earnings release, HP Inc. (HPQ) reported quarterly earnings of $0.75 per share, in line with the consensus estimate, and revenue of $13.93 billion, surpassing the $13.69 billion analyst expectation. In the Personal Systems segment, net revenue reached $9.9 billion, growing 6% year-over-year with a 5.4% operating margin. Commercial PS and Consumer PS segments grew by 5% and 8%, respectively. The Printing segment reported $4 billion in revenue, down 4% year-over-year, with a 17.3% operating margin. Supplies revenue declined by 4%, and total hardware units fell 9%, with Consumer and Commercial Printing units down by 8% and 12%, respectively. CEO Enrique Lores highlighted the company’s agility and focused execution, reinforcing HP’s strategic direction and commitment to leading in the future of work. Looking ahead, the company expects non-GAAP diluted EPS for Q4 to range from $0.87 to $0.97. In extended trading, HPQ shares rose 1.18% to $27.43, reflecting investor confidence in the results.