Aug 26, 2026 earnings call — Edge AI focus and AI PC growth
HP reported record third quarter revenue of $15.7 billion, a 13% year-over-year increase.
Revenue $15.7B (est $14.4B) · EPS $0.83 (est $0.66)
Key quotes
"To make edge AI a reality, we are working with customers and ecosystem partners to build platforms that extend data center class AI capabilities to the edge."
"In Personal Systems, we achieved our 10th consecutive quarter of revenue growth, up 18% year-over-year, driven by solid growth across both commercial and consumer segments."
"We said we would double down on big tank market, and we did, gaining another 4 points of share this quarter."
Analyst Q&A 10
Q4 Personal Systems outlook
Q (Amit Daryanani · Evercore): Asked about Personal Systems (PS) assumptions for Q4 and whether the Q4 trend of lower units but year-over-year revenue growth will persist into fiscal 2027. Also asked about memory supply improvements and where PS margins might trough.
A: They expect PC units to decline high teens in the second half, but Q4 revenue to grow year-over-year driven by a richer mix of higher-value categories; comments on revenue growth relate to Q4 and fiscal '27 guidance is premature.
"On Q4, our outlook reflects the industry's view that PC units will decline high teens in the second half as pricing actions pressure demand." — Karen Parkhill (CFO)
Memory cost and pricing timing
Q (Mark Newman · Bernstein): Asked whether the lower-cost memory inventory benefit is done, whether more headwinds remain from memory cost increases, and whether pricing versus channel lags are caught up.
A: They said the benefit from lower-cost inventory is largely behind them and higher-cost inventory is now flowing through the P&L. They are using product redesign, platform optimization and disciplined pricing as levers to improve margins over time.
"While we still have a mix of lower cost of inventory, I would say that benefit is largely behind us." — Karen Parkhill (CFO)
Pricing lag across channels
Q (Ketan Patel): Asked how pricing changes show up across different go-to-market channels and how long lags can be.
A: They said different channels and contracts reflect updated pricing over different time frames, from immediate to a few months. They also highlighted demand shaping, design-for-cost and WXP insights as tools to deliver value while managing costs.
AI PC mix and attach rates
Q (Kinney Chin · TD Cowen): Asked if the 50% AI PC mix target includes workstations and what the attach rate of discrete AI accelerators is within AI PCs. Also asked whether Windows 11 refresh still drives regional growth.
A: Management clarified the AI PC target is about AI PCs overall, not workstations, and attach rates on AI PCs are similar to the rest of the PC business (around one-third). They said Win 11 refresh is about 70% complete and AI demand is increasingly augmenting that tailwind.
"On top of that, we also see an opportunity to continue to add solutions to our AI PCs." — Bruce Broussard (CEO)
Channel inventory and AI PC ROI
Q (Wamsi Mohan · BofA): Asked about channel inventory levels in PC and Print and whether customers are already seeing measurable ROI from local inference on AI PCs or just using them as default specs.
A: They said channel inventory is well controlled and within demand outlook; Print channel inventory is at healthy, normal levels. On ROI, they said AI PCs are delivering significant customer value today on token economics, latency, privacy and high-value use cases like productivity, engineering and predictive maintenance.
"So that's a significant value which customers are seeing." — Ketan Patel
Free cash flow and AI PC deployments
Q (Michael Cadiz · Citi): Asked what drove upside to the free cash flow guide beyond tariff refunds and how many enterprise customers are piloting versus scaling AI PCs.
A: They said free cash flow performance is driven mainly by strong Personal Systems growth and working capital focus (tariffs helped a little). On deployments, they described customers adopting AI PCs for high-value workloads, with solutions like WXP, HP IQ and Wolf Security supporting manageability and security.
"That performance is really driven by strong Personal Systems growth, along with continued focus on working capital." — Karen Parkhill (CFO)
Print margins outlook
Q (Erik Woodring · Morgan Stanley): Asked how Print operating margins should trend into next year and what factors matter.
A: They said they remain comfortable with Print's long-term operating profit range of 16% to 19% for fiscal '27, but quarter-to-quarter results can vary with seasonality and unit placement; they will protect profit via product expansion, AI-enabled office offerings and cost discipline.
"We remain comfortable with our long-term operating profit range of 16% to 19% for Print." — Karen Parkhill (CFO)
Drivers of PS ASP and attached business
Q (Katherine Murphy · Goldman Sachs): Asked to rank contributions to the higher implied ASP: price increases, portfolio mix shift, and attach services, and whether attached businesses still supply 1/3 of PS gross profit.
A: They would not quantify each contribution but said mix, premium AI PCs, hybrid offerings, WXP and pricing all played roles. They confirmed attached businesses (peripherals, services, collaboration) contributed 1/3 of overall PS gross profit and they are taking share in premium and workstation categories.
"We grew 2.6 points of share on premium and 1.8 points of share on workstations." — Ketan Patel
Tariff refund and Print margins
Q (David Vogt · UBS): Asked whether Print margin comments for '27 exclude tariff refund benefits and whether tariff refunds were largely in Print this year.
A: They said the long-term 16%–19% Print range excludes any one-time tariff refund benefits. They confirmed some tariff refund benefit hit this quarter and more next quarter, largely benefiting Print with a smaller portion to Personal Systems.
"So just on your question on Print margins for next year, when we talk about our long-term 16% to 19% range, that is without or excluding any one-time benefit that we might get from tariff refunds." — Karen Parkhill (CFO)
Shift to higher-spec AI PCs
Q (Ananda Baruah · Loop Capital): Asked whether corporate customers are refreshing to higher-spec AI-capable PCs for genuine AI needs versus just higher memory prices, and whether enterprises discuss adopting AI PCs to lower token costs and run models locally.
A: They said customers are choosing higher-config devices to run AI at the edge for workloads that need lower latency, privacy and lower token costs, so demand is shifting to higher-end devices. They also said two meaningful enterprise conversations are about token cost optimization by local models and secure governance of deployed agents.
"Yes, we definitely see the effect of how customers are choosing those higher configuration products, largely because of the need to conduct AI at the edge to support increasing AI workloads." — Ketan Patel