HP Inc. Reports $13.5 Billion Revenue in Q1 Fiscal 2025, Net Earnings Decline

HP Inc. reported its financial results for the first quarter of fiscal year 2025, revealing a total net revenue of $13.5 billion, a 2.4% increase from $13.2 billion in the same period last year. The growth was primarily driven by a 4.7% increase in the Personal Systems segment, which generated $9.2 billion in revenue, while the Printing segment saw a decline of 2.4%, contributing $4.3 billion. The company's net earnings for the quarter were $565 million, or $0.60 per share, down from $622 million, or $0.63 per share, in the prior year.

Compared to the previous fiscal period, HP's gross profit decreased slightly to $2.84 billion, resulting in a gross margin of 21.0%, down from 21.9%. The decline in gross margin was attributed to higher commodity costs and unfavorable currency impacts, although disciplined cost management efforts, including savings from the Future Ready transformation plan, helped mitigate some of the losses. Operating expenses rose to $2.0 billion, primarily due to increased investments in personnel and restructuring charges related to the ongoing transformation initiatives.

In terms of strategic developments, HP continues to implement its Future Ready Plan, which aims to enhance digital capabilities, optimize its portfolio, and improve operational efficiency. The company has announced an increase in expected workforce reductions under this plan, now estimating a total of 8,000 job cuts. This restructuring is expected to incur additional charges of approximately $150 million. HP is also focusing on expanding its AI PC and hybrid systems offerings, as well as enhancing its subscription-based services in both the Personal Systems and Printing segments.

Operationally, HP's cash flow from operating activities improved significantly, reaching $374 million compared to $121 million in the same quarter last year. The company reported a decrease in cash, cash equivalents, and restricted cash to $2.9 billion from $3.2 billion at the end of the previous fiscal year. Additionally, HP's total debt increased slightly to $9.7 billion, with a weighted average interest rate of 4.5%. The company maintains a $5 billion sustainability-linked revolving credit facility, which is available until August 2029.

Looking ahead, HP anticipates continued challenges from macroeconomic conditions, including geopolitical tensions and inflationary pressures, which may impact demand for its products. The company remains focused on innovation and adapting its business models to meet evolving market demands. HP's management expressed confidence in its ability to navigate these challenges while pursuing growth opportunities in key areas such as AI, digital printing, and subscription services.