HP Inc. Reports 3.3% Revenue Growth to $13.22 Billion in Q2 Fiscal 2025

HP Inc. reported its financial results for the second quarter of fiscal 2025, revealing a total net revenue of $13.22 billion, a 3.3% increase from $12.80 billion in the same period last year. For the first half of the fiscal year, net revenue reached $26.72 billion, up 2.8% from $25.99 billion in the prior year. The growth was primarily driven by a 7.1% increase in the Personal Systems segment, which includes commercial and consumer desktops and notebooks, while the Printing segment experienced a decline of 4.3% in net revenue, reflecting challenges in the market.

The company's gross profit for the second quarter was $2.74 billion, resulting in a gross margin of 20.7%, down from 23.6% a year earlier. This decline was attributed to higher commodity and tariff costs, as well as unfavorable currency impacts. Operating expenses increased slightly to $2.09 billion, leading to earnings from operations of $654 million, a decrease from $952 million in the previous year. Net earnings for the quarter were $406 million, or $0.43 per share, compared to $607 million, or $0.62 per share, in the same quarter last year.

HP's restructuring efforts, part of its Future Ready Plan initiated in November 2022, have led to increased charges, with restructuring and other charges rising to $122 million in the second quarter. The plan aims to enhance digital capabilities, optimize the product portfolio, and improve operational efficiency. As of April 30, 2025, HP had incurred total costs of approximately $1.7 billion related to these restructuring activities, with expectations of further workforce reductions.

In terms of operational metrics, HP's cash and cash equivalents stood at $2.73 billion, down from $3.25 billion at the end of the previous fiscal year. The company reported a decrease in accounts receivable and an increase in inventory levels, indicating potential challenges in cash flow management. The total debt increased to $10.74 billion, reflecting new borrowings to support operations and investments. HP's effective tax rate for the quarter was 19.8%, with net income tax benefits recorded due to discrete items related to litigation and restructuring charges.

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 strategic investments in growth areas such as AI and digital solutions, while also managing costs and optimizing its operations to navigate the evolving market landscape.