HP (HPQ) Financials

HPQ’s latest results show improving revenue and cash generation, but profitability and balance-sheet quality remain mixed. In Q3 fiscal 2026, revenue rose to $15.7 billion, up approximately 12.5% from the restated $13.9 billion reported in Q3 fiscal 2025. Operating income increased 24.6% year over year to $892 million, helped by lower restructuring charges and higher sales. However, net income declined 13.4% to $661 million, while diluted EPS fell from $0.80 to $0.71.

Cash flow has become a significant strength. Q3 operating cash flow reached $1.7 billion, compared with $1.66 billion a year earlier. For the first three quarters of fiscal 2026, operating cash flow totaled approximately $3.0 billion, versus $2.1 billion during the comparable period of fiscal 2025. HPQ also ended Q3 with $4.2 billion in cash, up from $2.9 billion at the end of Q3 fiscal 2025.

The balance sheet has improved in some areas, although working-capital requirements have expanded. Total debt declined to approximately $9.2 billion from $9.6 billion year over year, and negative shareholders’ equity narrowed substantially to $92 million from $901 million. Nevertheless, inventories increased to $10.3 billion and accounts receivable rose to $7.2 billion, while current liabilities reached $34.0 billion. This leaves current assets below current liabilities, highlighting continued liquidity risk despite the larger cash balance.

• Revenue momentum improved: Q3 fiscal 2026 revenue of $15.7 billion was the highest among the provided quarterly periods and increased approximately 12.5% year over year.
• Operating performance strengthened year over year: Operating income rose to $892 million from $716 million in Q3 fiscal 2025, and the operating margin improved to roughly 5.7% from 5.1%.
• Operating cash flow remains robust: Q3 operating cash flow was $1.735 billion, and fiscal 2026 year-to-date operating cash flow was approximately $3.0 billion, well above the comparable fiscal 2025 period.
• Cash reserves increased: Cash and equivalents rose to $4.169 billion by July 31, 2026, up approximately 45% from Q3 fiscal 2025.
• Debt declined modestly: Short-term and long-term debt totaled about $9.16 billion in Q3 fiscal 2026, below the approximately $9.60 billion reported a year earlier.
• Shareholder returns continue: HPQ repurchased $300 million of common stock and paid $274 million in dividends during Q3, supported by strong operating cash generation.
• Capital spending remains controlled: Q3 capital expenditures were $187 million, below quarterly operating cash flow, although continued investment will be necessary to support product development and competitiveness.
• Restructuring activity is still recurring: Restructuring charges fell to $52 million in Q3 from $369 million in Q2, but the repeated charges across recent quarters indicate that restructuring benefits and costs may continue to affect reported earnings.
• Net income and EPS weakened: Q3 net income fell to $661 million from $763 million year over year, while diluted EPS declined to $0.71 from $0.80.
• Margins remain under pressure: Q3 gross margin was approximately 18.8%, below 20.5% in the restated year-ago quarter. Higher revenue has not yet translated into consistent bottom-line growth.
• Working-capital and liquidity risks remain elevated: Inventory and receivables have increased sharply, while current liabilities of $34.0 billion exceeded current assets of $26.7 billion. Shareholders’ equity also remained slightly negative at quarter-end.