Analyst(s): Olivier Blanchard
Publication Date: February 26, 2026
HP delivered solid revenue growth in Q1 FY 2026, driven by Personal Systems strength and continued AI PC traction, while Printing performance tracked plan with subscription and industrial print progress. Management flagged sharply higher memory costs and trade-related impacts, guiding performance toward the low end of FY 2026 ranges as mitigation actions scale.
What is Covered in This Article:
- HP’s Q1 FY 2026 financial results
- AI PC momentum and demand shaping
- Memory cost mitigation and supply actions
- Print subscriptions and industrial print performance
- Guidance and Final Thoughts
The News: HP Inc. (NYSE: HPQ) reported Q1 FY 2026 revenue of $14.4 billion, up 6.9% year on year (YoY) and above Wall Street consensus of $13.9 billion. Personal Systems revenue was $10.3 billion, up 11% YoY, and Printing revenue was $4.2 billion, down 2% YoY. Non-GAAP operating margin was 6.9% versus 7.3% YoY. Non-GAAP net earnings were $753 million, up 7% YoY, and non-GAAP diluted EPS was $0.81, up 9% YoY.
“We are pleased with our execution in Q1, driving better than expected revenue growth and non-GAAP EPS above consensus,” said Karen Parkhill, CFO, HP Inc. “With just one quarter behind us in a dynamic environment marked by increasing memory costs, we are holding our outlook for the year, yet currently anticipate results to be closer to the low end of our range. We are well practiced at managing through headwinds and remain focused on executing our mitigation plans.”
HP Q1 FY 2026 Earnings: AI PC Momentum, Memory Costs Temper Outlook
Analyst Take: HP’s quarter underscores solid execution in Personal Systems (PS) supported by Windows 11 refresh and AI PC adoption, alongside disciplined Print profitability and subscription progress. The sharp, sequential memory cost inflation is the central headwind, with management advancing multi-pronged mitigation across supply, product configuration, pricing, and productivity. Strategic investments in edge AI, device–software–services integration, and CIO tooling continue, aimed at improving attach, lifetime value, and operational leverage. Near term, PS margins will be pressured even as revenue benefits from demand shaping and pricing; Print is positioned to offset some pressure with OP rates near the top of its range.
AI PCs, Win11 Refresh, and Demand Shaping
PS revenue grew 11% YoY on 12% unit growth, with Consumer up 16% revenue and 14% units and Commercial up 9% revenue and 11% units, reflecting Win11 refresh and AI PC traction. Management noted AI PCs exceeded 35% of PC shipments in the quarter, up from 30% in the prior quarter and 25% the quarter before, signaling early scaling of on-device AI demand. HP highlighted premium category share gains and price actions that lifted ASPs even as some large education deals tempered Commercial ASPs. The launch of the HP EliteBoard G1a and emphasis on edge AI compute for local LLMs reinforce positioning for hybrid work use cases. Demand pull-ins to get ahead of memory price increases aided Q1 Consumer performance, implying a more moderate cadence later in the year. Net, HP is leaning into premium and AI-driven refresh cycles to sustain PS revenue despite a tougher pricing backdrop.
Memory Cost Inflation and Mitigation Playbook
HP reported memory costs roughly doubled sequentially, with potential for further increases, driving below-range PS operating rates for the rest of FY 2026. The company secured long-term agreements for FY 2026 coverage, qualified new suppliers, and accelerated configuration changes to improve cost control and flexibility. Targeted pricing actions, expanded lower-cost sourcing, logistics savings, and accelerated productivity programs are being executed to offset commodity pressure. Product reconfiguration to align supply with demand and selective price moves are intended to protect mix and margins. Management referenced a strong track record navigating commodity super-cycles and trade costs, and expects normalization over time though visibility remains fluid. The takeaway: mitigation should cushion, not eliminate, memory-driven margin pressure near term.
Platform Strategy: Edge AI, WXP, and Ecosystem Integrations
HP advanced its Future of Work strategy by integrating AI across devices, print, and services to streamline workflows and improve support. The Workforce Experience Platform (WXP) now ingests data from 50 million endpoints and processes over one terabyte daily to power predictive insights and multi-vendor fleet management across PCs, print, and collaboration. HP launched Digital Passport to unify device, software, and service experiences and embedded Microsoft 365 Copilot into printers to enhance document management. The company initiated an exploratory partnership with OpenAI to pilot OpenAI Frontier for building and managing AI agents with enterprise governance. These initiatives aim to increase attach of higher-margin offerings, improve lifetime value, and reduce downtime for enterprises. Strategically, the platform approach deepens customer engagement and creates levers for future monetization beyond hardware.
Guidance and Final Thoughts
HP maintained FY 2026 non-GAAP EPS guidance of $2.90–$3.20 and free cash flow of $2.8–$3.0 billion, indicating results likely at the low end amid elevated memory and trade-related costs. Q2 FY 2026 non-GAAP EPS is guided to $0.70–$0.76 as pricing actions and above-seasonal PS revenue support the top line while PS OP rates remain below the long-term range. Management expects the PC unit TAM to decline double digits in calendar 2026 due to industry-wide pricing actions, while Print OP margins should track near the top of the long-term range. Subscriptions (double-digit growth), Big Tank share gains, and Industrial Print’s ongoing analog-to-digital shift support Print resilience. Execution on supplier diversification, pricing, and AI-enabled productivity remains central to navigating the near-term cost cycle.
See the full press release on HP’s Q1 FY 2026 financial results on the company website.
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Author Information
Olivier Blanchard is Research Director, Intelligent Devices. He covers edge semiconductors and intelligent AI-capable devices for Futurum. In addition to having co-authored several books about digital transformation and AI with Futurum Group CEO Daniel Newman, Blanchard brings considerable experience demystifying new and emerging technologies, advising clients on how best to future-proof their organizations, and helping maximize the positive impacts of technology disruption while mitigating their potentially negative effects. Follow his extended analysis on X and LinkedIn.
