HP Inc. Reports Q2 2026 Earnings: PC Demand Stabilizes as Printing Segment Holds Ground
HP Inc. on Thursday released its fiscal second-quarter 2026 results, posting revenue that edged past Wall Street estimates as corporate PC refresh cycles and a nascent AI PC upgrade wave provided a modest tailwind. The company's earnings call, led by CEO Enrique Lores and CFO Marie Myers, underscored a cautiously optimistic tone amid ongoing macroeconomic headwinds in Europe and China.
Personal Systems revenue came in at $9.5 billion, down 1% year-over-year but slightly above consensus, as enterprise demand for AI-capable notebooks began to trickle into the mix. Consumer sales remained soft, though HP noted that back-to-school orders were pacing ahead of last year's levels. Commercial segment revenue fell 2%, better than the 4% decline that some analysts had modeled. Management pointed to recent government and education contracts in North America as bright spots.
The printing division continued to face structural pressure, with total hardware units down 5% and supplies revenue declining 3%. However, margin improvement from cost-cutting initiatives kept segment operating profit flat sequentially. HP reiterated its plan to exit certain low-margin consumer printer markets by the end of fiscal 2026, redirecting resources toward industrial and 3D printing applications.
On the call, Lores fielded multiple questions about the pace of the AI PC transition. He stressed that while the “inference-on-device” narrative is gaining traction among IT decision makers, enterprise adoption remains at a very early stage and will likely ramp meaningfully only in the second half of 2026. He also noted that HP has secured partnerships with two major AI chip suppliers to embed dedicated neural processing units in its next-generation EliteBook line.
Free cash flow came in at $1.1 billion, while the company returned $600 million to shareholders via dividends and buybacks. HP guided Q3 2026 non-GAAP EPS in a range of $0.85 to $0.92, slightly below the Street consensus of $0.94, sending shares down about 2% in after-hours trading.
Overall, the quarter painted a picture of a company navigating a slowly recovering PC market while actively restructuring its legacy printing business. With AI PC momentum still embryonic, HP's near-term outlook remains grounded in disciplined cost management and cash generation.