Computed from published fixed rules, not a model's judgement — though one input, the count of high-severity risks, comes from the AI analysis below.
Not investment advice and not a price target: it scores the quarter's fundamentals, not the stock. Full methodology →
AI Takeaway
HP's Q3 FY2026 was defined by an unusual divergence: revenue grew at a double-digit rate, while net income and EPS declined year over year. Management attributed the revenue increase primarily to pricing actions in Personal Systems and favorable currency impacts, as average selling prices rose sharply even as PC unit volume fell. Higher commodity costs and an unfavorable mix toward lower-margin Personal Systems compressed gross margin, partially offset by IEEPA tariff refunds. Operating income improved, but the bottom line declined because the prior-year period included a net tax benefit while the current quarter recorded a tax expense. The result depends on whether pricing actions and cost management can continue to offset memory and storage cost inflation.
Revenue
$15.68B
+12.53% YoY
EPS (Diluted)
$0.71
-11.25% YoY
Gross Margin
18.8%
-1.7 pts YoY
Operating Income
$892M
+24.58% YoY
Source: SEC XBRL
Hp (HPQ) reported Q3 FY2026 revenue of $15.68B, up 12.5% year over year. Operating margin was 5.7%, up 0.6 points from 5.1% a year earlier. HPQ's fiscal Q3 FY2026 corresponds to calendar Q3 2026.
Last 4 quarters: 3 beats
| Quarter | Actual EPS (USD) | Consensus (USD) | Result |
|---|---|---|---|
| Sep 2026 | 0.83 | 0.66 | Beat +25.0% |
| Jun 2026 | 0.86 | 0.72 | Beat +19.8% |
| Mar 2026 | 0.81 | 0.77 | Beat +4.9% |
| Dec 2025 | 0.93 | 0.93 | Miss -0.2% |
2 reported segments · SEC XBRL
Segment revenue totals $15.68B; with -$2M of reconciling items (corporate, unallocated and eliminations) it ties to the $15.68B of consolidated revenue on the income statement.
Profit above is reported as operating income, the measure HPQ itself discloses in this filing. Each company chooses its own measure here, so these margins are not comparable with another company's.
Compiled by AI from 10-Q Item 2 of this filing
HP has applied for recovery of about $0.3 billion of previously paid IEEPA tariffs and received $127 million in refunds during the three and nine months ended July 31, 2026, with another $91 million received after the reporting period; refunds are recognized as a reduction of product cost of net revenue.
Source: 10-Q Item 2 MD&A
Total net revenue increased 12.5% (10.9% on a constant currency basis), driven by pricing actions to mitigate higher commodity costs in Personal Systems and favorable currency impacts, partially offset by demand softness in Printing; international revenue rose 16.8% and U.S. revenue rose 5.1%.
Source: 10-Q Item 2 MD&A
Gross margin decreased 1.7 percentage points as higher commodity costs and an unfavorable mix shift toward Personal Systems outweighed pricing actions, favorable currency, and IEEPA tariff refunds; services gross margin improved due to favorable mix shifts.
Source: 10-Q Item 2 MD&A
Personal Systems net revenue rose 18.5% despite a 15.8% decline in PC unit volume, because average selling prices increased 40.8% driven by pricing actions, favorable currency, and mix shifts toward premium products; commercial and consumer units both declined.
Source: 10-Q Item 2 MD&A
Operating cash flow increased $1.0 billion year to date due to favorable working capital changes, partially offset by receivables from contract manufacturers; DSO rose to 41 days, DIO to 73 days, and DPO improved to 151 days, leaving the cash conversion cycle unchanged at negative 37 days.
Source: 10-Q Item 2 MD&A
Compiled by AI from this SEC filing · 2 high, 3 medium, 0 low
Cost of revenue rose 14.9% year over year versus a 12.5% revenue increase, compressing gross margin by about 1.7 percentage points to 18.8%. Higher memory and storage costs and an unfavorable mix toward lower-margin Personal Systems could continue to pressure profitability if pricing actions do not fully offset input costs.
Source: 10-Q Income Statement (XBRL)
Net income fell 13.4% to $661 million and diluted EPS fell 11.3% to $0.71 even as revenue and operating income grew. The decline reflects a prior-year tax benefit reversal and rising operating costs, signaling that top-line growth may not translate into bottom-line gains.
Source: 10-Q Income Statement (XBRL)
Stockholders' equity was negative $92 million, producing a return on equity of -718.5%. Negative equity limits the usefulness of debt-to-equity analysis and indicates HP relies heavily on debt and operating cash flow rather than a robust equity base.
Source: 10-Q Balance Sheet (XBRL)
Current assets were $26.746 billion against current liabilities of $33.963 billion, for a current ratio of 0.79. HP must manage short-term obligations and working capital carefully, though operating cash flow improved 46.8% year to date.
Source: 10-Q Balance Sheet (XBRL)
Personal Systems represented about 75% of segment revenue but earned only a 4.6% operating margin, compared with 18.1% for Printing. The segment's growth relied on higher average selling prices amid a declining unit volume, which may be vulnerable to demand or pricing shocks.
Source: 10-Q Segment Information (XBRL)
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Revenue $B | 15.68 $B | 13.93 $B | +12.53% |
Cost of Revenue $B | 12.73 $B | 11.08 $B | +14.90% |
Gross Profit $B | 2.95 $B | 2.85 $B | +3.30% |
Operating Income $M | 892.00 $M | 716.00 $M | +24.58% |
Net Income $M | 661.00 $M | 763.00 $M | -13.37% |
EPS (Basic) $ | 0.72 $ | 0.81 $ | -11.11% |
EPS (Diluted) $ | 0.71 $ | 0.80 $ | -11.25% |
R&D Expense $M | 389.00 $M | 406.00 $M | -4.19% |
SG&A Expense $B | 1.54 $B | 1.45 $B | +5.85% |
Answers draw on this SEC filing and the data on this page
HPQ delivered Q2 FY2026 revenue of $14.4B (+9.0% YoY) and net income of $450M (+10.8% YoY), but operating income declined 6.4% as higher SG&A and R&D costs compressed operating margin to 4.2%.
HPQ delivered Q1 FY2026 revenue of $14.4B (+6.9% YoY), but margin compression drove operating income down 10.2% and net income down 3.5%, reflecting rising costs outpacing top-line growth.
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