TLDR
- HPQ jumps as AI PC demand helps drive 9% revenue growth
- HP reports stronger Q2 earnings as commercial PC sales rise
- HPQ gains after revenue, EPS, and free cash flow improve
- AI PC momentum lifts HPQ as Q2 revenue reaches $14.4B
- HP raises fiscal outlook after stronger Q2 cash flow and EPS
HP Inc. (HPQ) stock gained after the company reported stronger second-quarter revenue, higher earnings, and firm cash flow. The stock closed at $25.49, up 4.34%, then rose after hours to $25.84, adding 1.37%. The move followed 9% revenue growth, driven mainly by stronger Personal Systems demand and AI PC momentum.
HP Inc. Revenue Rises as Personal Systems Leads Growth
HP reported second-quarter net revenue of $14.4 billion, up 9% from $13.2 billion a year earlier. The company also posted 6.3% revenue growth in constant currency, showing broad demand across key markets. Moreover, the results reflected stronger sales of commercial devices as companies refreshed workplace hardware.
Personal Systems revenue reached $10.2 billion, rising 13% year over year, or 10% in constant currency. Commercial Personal Systems revenue increased 14%, while consumer revenue grew 10% during the quarter. However, total units declined 7%, showing higher revenue despite lower shipment volume.
HP continued to push AI PCs, Z workstations, edge AI tools, and connected workplace products. The company linked its strategy to intelligent devices and services for modern work environments. Additionally, demand for commercial systems supported the stock’s sharp session gain.
Earnings Improve Despite Lower GAAP Margin
HP posted GAAP diluted EPS of $0.49, up 17% from $0.42 one year earlier. Non-GAAP diluted EPS reached $0.86, rising 21% from $0.71 in the prior-year period. However, GAAP EPS missed the company’s earlier outlook range of $0.52 to $0.58.
GAAP operating margin fell to 4.2% from 4.9%, reflecting pressure from costs and mix. Still, non-GAAP operating margin improved to 7.5% from 7.3% last year. HP showed stronger adjusted profitability despite a softer reported margin.
GAAP net earnings rose 11% to $450 million, compared with $410 million last year. Non-GAAP net earnings increased 17% to $790 million during the same period. Besides, management raised its fiscal-year outlook after two stronger quarters.
HP Cash Flow and Outlook Support Stock Momentum
HP generated $900 million in operating cash flow during the second quarter. Free cash flow reached $800 million, compared with negative free cash flow last year. Additionally, the company returned $374 million through dividends and share repurchases.
The company paid a quarterly dividend of $0.30 per share, using $274 million in cash. It also spent $100 million to repurchase about 5.2 million common shares. HP ended the quarter with $3.7 billion in gross cash.
For the third quarter, HP expects GAAP diluted EPS of $0.47 to $0.63. It also projects non-GAAP diluted EPS of $0.61 to $0.71 for the period. For fiscal 2026, HP now expects free cash flow between $2.8 billion and $3.0 billion.
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