HP INC

Previous wording

Our business and financial performance depend significantly on worldwide economic conditions. We face global macroeconomic challenges such as ongoing geopolitical tensions, uncertainty in the markets, volatility in exchange rates, inflationary trends and evolving dynamics in the global trade environment. We also experience seasonality in the sale of our products and services which may be affected by general economic conditions.

Current wording

Our business and financial performance depend significantly on worldwide economic conditions. We face global macroeconomic challenges such as ongoing geopolitical conflicts, uncertainty in the markets, volatility in exchange rates, inflationary trends and evolving dynamics in the global trade environment. We also experience seasonality in the sale of our products and services which may be affected by general economic conditions.

Previous wording

During fiscal year 2025 and through the first quarter of fiscal year 2026, we experienced higher commodity and trade related costs, which were not fully mitigated by pricing and other actions enacted during the period. Additionally, during the first quarter of fiscal year 2026, we experienced higher inflationary pressure in memory and storage costs and potential supply constraints in our Personal Systems business, which we anticipate will continue. We continue to evaluate and implement further mitigating actions, including potential supply chain resiliency movements and cost and pricing measures, as the trade and supply environments evolve.

Current wording

During fiscal year 2025 and the first half of fiscal year 2026, we experienced higher commodity and trade related costs and implemented pricing and other mitigation actions during the period. Additionally, during the first half of fiscal year 2026, we experienced higher inflationary pressure in memory and storage costs and supply constraints in our Personal Systems business, which we anticipate will continue. We continue to evaluate and implement further mitigating actions, including potential supply chain resiliency movements and cost and pricing measures, as the trade and supply environments evolve.

Previous wording

We are also exposed to fluctuations in foreign currency exchange rates. We have a large global presence, with more than 65% of our net revenue from outside the United States. As a result, our financial results can be, and particularly in recent periods have been, negatively impacted by fluctuations in foreign currency exchange rates. For a further discussion of trends, uncertainties and other factors that could impact our operating results, see the section entitled “Risk Factors” in Item 1A of Part I in our Annual Report on Form 10-K for the fiscal year ended October 31, 2025.

Current wording

We are also exposed to fluctuations in foreign currency exchange rates. We have a large global presence, with more than 65% of our net revenue from outside the United States. As a result, our financial results can be impacted by fluctuations in foreign currency exchange rates. For a further discussion of trends, uncertainties and other factors that could impact our operating results, see the section entitled “Risk Factors” in Item 1A of Part I in our Annual Report on Form 10-K for the fiscal year ended October 31, 2025.

Previous wording

On November 25, 2025, we announced our Fiscal 2026 Plan intended to drive customer satisfaction, product innovation, and productivity primarily through artificial intelligence adoption and enablement that HP expects will be implemented through fiscal 2028. We are on-track to achieve our expected gross reductions in cost by the end of fiscal year 2028. During the first quarter of fiscal 2026, we took actions to integrate AI into our channel partner experience and scale additional AI agents in our supply chain operations and expect to continue to accelerate and scale these initiatives.

Current wording

On November 25, 2025, we announced our Fiscal 2026 Plan intended to drive customer satisfaction, product innovation, and productivity primarily through artificial intelligence adoption and enablement that HP expects will be implemented through fiscal 2028. We are on-track to achieve our expected gross reductions in cost by the end of fiscal year 2028. During the first half of fiscal 2026, we took actions to integrate AI into our channel partner experience and scale additional AI agents in our supply chain operations and expect to continue to accelerate and scale these initiatives. We additionally took actions to reduce headcount through the EER program of which a significant portion of which will get executed during fiscal year 2026.

Previous wording

MD&A is based on our Condensed Consolidated Financial Statements, which have been prepared in accordance with U.S. GAAP. The preparation of these financial statements requires management to make estimates, judgments and assumptions that affect the reported amounts of assets, liabilities, net revenue and expenses, and the disclosure of contingent liabilities. Management believes that there have been no significant changes during the three months ended January 31, 2026 to the items that we disclosed as our critical accounting estimates in MD&A in our Annual Report on Form 10-K for the fiscal year ended October 31, 2025.

Current wording

MD&A is based on our Condensed Consolidated Financial Statements, which have been prepared in accordance with U.S. GAAP. The preparation of these financial statements requires management to make estimates, judgments and assumptions that affect the reported amounts of assets, liabilities, net revenue and expenses, and the disclosure of contingent liabilities. Management believes that there have been no significant changes during the six months ended April 30, 2026 to the items that we disclosed as our critical accounting estimates in MD&A in our Annual Report on Form 10-K for the fiscal year ended October 31, 2025.

Previous wording

For the three months ended January 31, 2026, net revenue increased 6.9% (increased 5.2% on a constant currency basis) as compared to the prior-year period. U.S. net revenue increased 0.3% to $4.4 billion, and net revenue from international operations increased 10.2% to $10.0 billion. The increase in net revenue was driven by products net revenue due to increased units in Personal Systems, partially offset by demand softness in Printing. Services net revenue increased due to support services on hardware devices.

Current wording

For the six months ended April 30, 2026, total net revenue increased 7.9% (increased 5.7% on a constant currency basis) as compared to the prior-year period. Net revenue from international operations increased 12.2% to $19.7 billion primarily driven by the Windows-based PC operating system refresh, while U.S. net revenue decreased 0.3% to $9.1 billion. The increase in net revenue was primarily driven by products net revenue due to pricing actions to mitigate higher commodity costs in Personal Systems as well as an increase in services net revenue due to support services on hardware devices, partially offset by demand softness and competitive pressures in Printing.

Previous wording

For the three months ended January 31, 2026, gross margin decreased by 1.4 percentage points primarily driven by products gross margin due to higher commodity and trade related costs as well as unfavorable mix shifts, partially offset by disciplined pricing actions and cost management. Services gross margin increased due to cost savings and favorable mix shifts.

Current wording

For the six months ended April 30, 2026, gross margin decreased 0.6 percentage points primarily driven by products gross margin due to higher commodity and supply chain costs and unfavorable mix shifts towards Personal Systems, partially offset by pricing actions, including favorable foreign currency impacts. Services gross margin increased due to favorable mix shifts.

Previous wording

Restructuring and other charges for the three months ended January 31, 2026 primarily relate to the Fiscal 2026 Plan. For more information, see Note 3, “Restructuring and other charges”, to the Condensed Consolidated Financial Statements in Item 1 of Part I of this report, which is incorporated herein by reference.

Current wording

Restructuring and other charges increased $243 million and $299 million for the three and six months ended April 30, 2026, respectively, primarily driven by the EER program under the Fiscal 2026 Plan. For more information, see Note 3, “Restructuring and other charges”, to the Condensed Consolidated Financial Statements in Item 1 of Part I of this report, which is incorporated herein by reference.

Previous wording

Acquisition and divestiture charges for the three months ended January 31, 2026 decreased by $8 million primarily due to lower acquisition and integration activities.

Current wording

Acquisition and divestiture charges for the three and six months ended April 30, 2026 decreased by $13 million and $21 million, respectively, primarily due to lower acquisition and integration activities.

Previous wording

Interest and other, net expense decreased $53 million for the three months ended January 31, 2026 primarily due to lower factoring costs and foreign currency impacts.

Current wording

Interest and other, net expense decreased $29 million and $82 million for the three and six months ended April 30, 2026, respectively, primarily due to a lower interest expense on debt and factoring costs.

Previous wording

Our effective tax rate was 18.8% for the three months ended January 31, 2026. The difference between the U.S. federal statutory tax rate of 21% and our effective tax rate for the three months ended January 31, 2026 was primarily due to favorable tax rates associated with certain earnings from HP’s operations in lower-tax jurisdictions throughout the world.

Current wording

Our effective tax rate was 8.7% for the three months ended April 30, 2026 and 14.5% for the six months ended April 30, 2026. The difference between the U.S. federal statutory tax rate of 21% and our effective tax rate for the three and six months ended April 30, 2026 was primarily due to audit settlements in various jurisdictions.

Previous wording

Personal Systems net revenue increased 11.1% (increased 9.1% on a constant currency basis) for the three months ended January 31, 2026. The net revenue increase was primarily due to a 12.1% increase in PCs unit volume driven by the Windows-based PC operating system refresh as well as accelerated demand resulting from anticipated memory cost increases primarily in Consumer, partially offset by a 0.2% decrease in average selling price (“ASPs”). The decrease in ASPs is primarily due to unfavorable mix shifts, partially offset by disciplined pricing actions and favorable currency impacts.

Current wording

Personal Systems net revenue increased 12.1% (increased 9.5% on a constant currency basis) for the six months ended April 30, 2026. The net revenue increase was primarily due to a 10.1% increase in ASPs and a 2.4% increase in PC unit volume driven by the Windows-based PC operating system refresh as well as accelerated demand resulting from anticipated commodity cost increases, partially offset by a focus on higher value units in a dynamic commodity environment. The increase in ASPs is primarily due to pricing actions and favorable currency impacts.

Previous wording

Personal Systems earnings from operations as a percentage of net revenue decreased by 0.5 percentage points driven by a decrease in gross margin, partially offset by a decrease in operating expenses as a percentage of revenue. Gross margin decreased primarily due to higher commodity costs, partially offset by favorable currency impacts and disciplined pricing actions in Consumer PS. Operating expenses as a percentage of revenue decreased primarily due to cost savings initiatives, partially offset by higher variable compensation.

Current wording

Personal Systems earnings from operations as a percentage of net revenue increased by 0.1 percentage points driven by a decrease in operating expenses as a percentage of revenue, partially offset by a decrease in gross margin. Operating expenses as a percentage of revenue decreased due to disciplined cost management, partially offset by higher variable compensation. Gross margin decreased primarily due to higher commodity and supply chain costs, partially offset by disciplined pricing actions, including favorable foreign currency impacts.

Previous wording

Printing net revenue decreased 2.2% (decreased 3.2% on a constant currency basis) for the three months ended January 31, 2026. The decrease in net revenue was driven by Supplies, Commercial Printing, and Consumer Printing. Net revenue for Supplies decreased 1.1%, primarily due to decline in the installed base and usage, partially offset by disciplined pricing actions. Printer units decreased by 6.5% primarily due to demand softness and competitive pressures, while ASPs increased by 0.9%.

Current wording

Printing net revenue decreased 1.1% (decreased 2.5% on a constant currency basis) for the six months ended April 30, 2026. The decrease in net revenue was driven by Commercial, Consumer Printing and Supplies, partially offset by favorable currency impacts. Net revenue for Supplies remained flat, primarily due to decline in the installed base and usage, offset by favorable currency impacts. Printer unit volume decreased 6.5% driven by demand softness and competitive pressures, while hardware ASPs increased 3.0%.

Previous wording

Net revenue for Commercial Printing decreased 3.4%, primarily due to a 6.5% decrease in printer unit volume, partially offset by a 0.5% increase in ASPs. The increase in ASPs was primarily driven by favorable currency impacts, partially offset by unfavorable mix shifts.

Current wording

Net revenue for Commercial Printing decreased by 1.6%, primarily due to a 5.3% decrease in printer unit volume and a 1.7% increase in ASPs. The increase in ASPs was primarily driven by favorable foreign currency impacts, partially offset by unfavorable mix shifts.

Previous wording

Net revenue for Consumer Printing decreased 7.8%, primarily due to a 6.4% decrease in printer unit volume, partially offset by a 2.0% increase in ASPs. The increase in ASPs was primarily driven by favorable mix shifts and currency impacts, partially offset by competitive pricing.

Current wording

Net revenue for Consumer Printing decreased 8.7%, primarily due to a 7.2% decrease in printer unit volume, partially offset by a 3.6% increase in ASPs. The increase in ASPs was primarily driven by favorable mix shifts towards Big Tank and foreign currency impacts, partially offset by competitive pricing.

Previous wording

Printing earnings from operations as a percentage of net revenue decreased by 0.4 percentage points for the period. The decrease was driven by an increase in operating expenses as a percentage of revenue, partially offset by an increase in gross margin. Operating expenses as a percentage of revenue increased primarily due to higher variable compensation, partially offset by the receipt of a government grant. Gross margin increased primarily due to mix shift towards Supplies, partially offset by higher net trade related costs.

Current wording

Printing earnings from operations as a percentage of net revenue decreased 0.6 percentage points driven by an increase in operating expenses as a percentage of revenue, partially offset by an increase in gross margin. Operating expenses as a percentage of revenue increased primarily driven by higher variable compensation and go-to market initiatives. Gross margin increased primarily due to pricing actions and favorable mix shift towards Supplies, partially offset by trade related costs.

Previous wording

The loss from operations in Corporate Investments for the three months ended January 31, 2026 was primarily due to expenses associated with our incubation projects and investments in digital enablement.

Current wording

The loss from operations in Corporate Investments for the three and six months ended April 30, 2026 was primarily due to expenses associated with our incubation projects and investments in digital enablement.

Previous wording

Compared to the corresponding period in fiscal year 2025, net cash provided by operating activities remained flat.

Current wording

Compared to the corresponding period in fiscal year 2025, net cash provided by operating activities increased $0.9 billion for the six months ended April 30, 2026, primarily due to favorable cash conversion cycle, partially offset by changes in receivables from contract manufacturers.

Previous wording

DIO measures the average number of days from procurement to sale of our product. DIO is calculated by dividing ending inventory by a 90-day average cost of goods sold. The decrease in DIO was primarily due to inventory optimization.

Current wording

DIO measures the average number of days from procurement to sale of our product. DIO is calculated by dividing ending inventory by a 90-day average cost of goods sold. The increase in DIO was primarily due to higher commodity costs, partially offset by inventory optimization in Printing.

Previous wording

DPO measures the average number of days our accounts payable balances are outstanding. DPO is calculated by dividing ending accounts payable by a 90-day average cost of goods sold. The increase in DPO was primarily due to higher purchases.

Current wording

DPO measures the average number of days our accounts payable balances are outstanding. DPO is calculated by dividing ending accounts payable by a 90-day average cost of goods sold. The increase in DPO was primarily due to higher commodity cost, partially offset by lower advance buys.

Previous wording

Compared to the corresponding period in fiscal year 2025, net cash used in investing activities decreased by $31 million for the three months ended January 31, 2026, primarily due to lower investment in property, plant, equipment and purchased intangible of $69 million, and net proceeds from business divestiture of $26 million, partially offset by collateral posted for derivative instruments of $76 million.

Current wording

Compared to the corresponding period in fiscal year 2025, net cash used in investing activities decreased by $0.9 billion for the six months ended April 30, 2026, primarily due to a $0.6 billion favorable net decrease in collateral posted for derivative instruments, lower payments in connection with business acquisitions of $0.1 billion, and lower investment in property, plant, equipment and purchased intangible of $0.1 billion.

Previous wording

Compared to the corresponding period in fiscal year 2025, net cash used in financing activities increased by $0.2 billion for the three months ended January 31, 2026, primarily due to a $0.2 billion increase in share repurchases.

Current wording

Compared to the corresponding period in fiscal year 2025, net cash used in financing activities increased by $1.2 billion for the six months ended April 30, 2026, primarily due to a $1.0 billion decrease in net proceeds from debt and a $0.2 billion increase in share repurchases.

Previous wording

During the three months ended January 31, 2026, HP returned $0.6 billion to shareholders in the form of share repurchases of $0.3 billion and cash dividends of $0.3 billion. As of January 31, 2026, HP had approximately $8.1 billion remaining under the share repurchase authorization approved by HP’s Board of Directors.

Current wording

During the six months ended April 30, 2026, HP returned $1.0 billion to shareholders in the form of share repurchases of $0.4 billion and cash dividends of $0.6 billion. As of April 30, 2026, HP had approximately $8.0 billion remaining under the share repurchase authorization approved by HP’s Board of Directors.

Previous wording

As of January 31, 2026, we had available borrowing resources of $1.1 billion from uncommitted lines of credit in addition to funds available under the revolving credit facility.

Current wording

As of April 30, 2026, we had available borrowing resources of $1.0 billion from uncommitted lines of credit in addition to funds available under the revolving credit facility.

Previous wording

Purchase obligations include agreements to purchase goods or services that are enforceable and legally binding on HP and that specify all significant terms, including fixed or minimum quantities to be purchased; fixed, minimum, or variable price provisions; and the approximate timing of the transaction. Unconditional purchase obligations exclude agreements that are cancellable without penalty. The Company's purchase obligations under variable price provisions approximate market prices at the time of purchase and are estimated using current period pricing. Actual future variable price purchase commitments may significantly vary depending on market prices and product mix at the time of purchase. The Company's unconditional purchase obligations are primarily related to inventory and service support. As of January 31, 2026, the Company had outstanding purchase commitments of $2.4 billion. The majority of these commitments are due within five years. For more information, see Note 13, “Commitments,” to the Condensed Consolidated Financial Statements in Item 1 of Part I of this report, which is incorporated herein by reference.

Current wording

Purchase obligations include agreements to purchase goods or services that are enforceable and legally binding on HP and that specify all significant terms, including fixed or minimum quantities to be purchased; fixed, minimum, or variable price provisions; and the approximate timing of the transaction. Unconditional purchase obligations exclude agreements that are cancellable without penalty. The Company's purchase obligations under variable price provisions approximate market prices at the time of purchase and are estimated using current period pricing. Actual future variable price purchase commitments may significantly vary depending on market prices and product mix at the time of purchase. The Company's unconditional purchase obligations are primarily related to inventory and service support. As of April 30, 2026, the Company had outstanding purchase commitments of $2.2 billion. The majority of these commitments are due within five years. For more information, see Note 13, “Commitments,” to the Condensed Consolidated Financial Statements in Item 1 of Part I of this report, which is incorporated herein by reference.

Previous wording

As of January 31, 2026, we anticipate making contributions for the remainder of fiscal year 2026 of approximately $31.0 million to our non-U.S. pension plans and $23.0 million to cover benefit payments to U.S. non-qualified pension plan participants. Our policy is to fund our pension plans so that we meet the minimum contribution required by local government, funding and taxing authorities. For more information on our retirement and post-retirement benefit plans, see Note 4, “Retirement and Post-Retirement Benefit Plans”, to the Consolidated Financial Statements in our Annual Report on Form 10-K for the fiscal year ended October 31, 2025.

Current wording

As of April 30, 2026, we anticipate making contributions for the remainder of fiscal year 2026 of approximately $8.0 million to our non-U.S. pension plans and $16.0 million to cover benefit payments to U.S. non-qualified pension plan participants. Our policy is to fund our pension plans so that we meet the minimum contribution required by local government, funding and taxing authorities. For more information on our retirement and post-retirement benefit plans, see Note 4, “Retirement and Post-Retirement Benefit Plans”, to the Consolidated Financial Statements in our Annual Report on Form 10-K for the fiscal year ended October 31, 2025.

Previous wording

As a result of our approved restructuring plans, we expect to make future cash payments of approximately $0.6 billion. For more information on our restructuring activities that are part of our cost improvements, see Note 3, “Restructuring and Other Charges”, to the Condensed Consolidated Financial Statements in Item 1 of Part I of this report, which is incorporated herein by reference.

Current wording

As a result of our approved restructuring plans, we expect to make future cash payments of approximately $0.3 billion. For more information on our restructuring activities that are part of our cost improvements, see Note 3, “Restructuring and Other Charges”, to the Condensed Consolidated Financial Statements in Item 1 of Part I of this report, which is incorporated herein by reference.

Previous wording

As of January 31, 2026, we had approximately $829 million of recorded liabilities and related interest and penalties pertaining to uncertain tax positions. We are unable to make a reasonable estimate as to when cash settlement with the tax authorities might occur due to the uncertainties related to these tax matters. Payments of these liabilities would result from settlements with taxing authorities. For more information on our uncertain tax positions, see Note 4, “Taxes on Earnings”, to the Condensed Consolidated Financial Statements in Item 1 of Part I of this report, which is incorporated herein by reference.

Current wording

As of April 30, 2026, we had approximately $733 million of recorded liabilities and related interest and penalties pertaining to uncertain tax positions. We are unable to make a reasonable estimate as to when cash settlement with the tax authorities might occur due to the uncertainties related to these tax matters. Payments of these liabilities would result from settlements with taxing authorities. For more information on our uncertain tax positions, see Note 4, “Taxes on Earnings”, to the Condensed Consolidated Financial Statements in Item 1 of Part I of this report, which is incorporated herein by reference.