HP’s third quarter results drew a negative market reaction as investors focused on soft profitability despite revenue coming in slightly ahead of Wall Street expectations. Management attributed revenue growth to strength in Personal Systems, particularly commercial PCs and high-value devices, while Print continued to struggle with declining demand. CEO Enrique Lores noted, “We have driven sequential profit improvement the last two quarters,” but acknowledged that higher memory costs and a weak print hardware market weighed on overall margins. The company also referenced ongoing supply chain investments to mitigate these headwinds and highlighted recent leadership transitions as part of its evolving strategy.

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While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.

Our Top 5 Analyst Questions From HP’s Q3 Earnings Call

• Wamsi Mohan (BofA) asked about the ability to maintain free cash flow despite margin pressures. CFO Karen Parkhill explained that working capital improvements and slightly lower restructuring costs would offset weaker earnings, and confirmed restructuring charges are included in the cash flow guide.
• Brian Luke (UBS) pressed on whether price increases would be broad or selective given memory cost inflation. CEO Enrique Lores said increases would be applied case by case, varying by country and product category, but the impact would be felt across the portfolio.
• Irvin Liu (Evercore ISI) inquired if the new cost-saving initiative was a direct response to memory costs. Lores clarified the program was planned prior to the memory surge, driven by AI’s potential to improve productivity and accelerate product development.
• Michael Ng (Goldman Sachs) sought detail on the growth of recurring revenue streams. Lores and Parkhill highlighted progress in consumer print subscriptions and workforce solutions, and stressed the goal of making HP’s revenue more stable and higher margin over time.
• Mark Newman (Bernstein) questioned if the 30¢ EPS impact from memory inflation was conservative. Parkhill described the guide as prudent, while Lores emphasized actions to mitigate the impact and focus on higher-margin products during the cycle.

Catalysts in Upcoming Quarters

Looking ahead, the StockStory team will be watching (1) the trajectory of memory prices and HP’s ability to pass costs through to customers, (2) progress in expanding subscription and recurring revenue streams in both Personal Systems and Print, and (3) the effectiveness of new cost-saving initiatives, including AI-driven operational changes and leadership transitions. Execution on these fronts will be critical in navigating margin headwinds and stabilizing profitability.

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