AI interpretation based on checked source excerpts. Issuer assertions and evidence limitations remain explicit.
Policy quality-scores-2: six equally weighted categories. The overall score requires full coverage. Missing inputs are not zero. Qualitative grades are sourced interpretations, not probabilities. 6/6 · 18/10/2026
Moat25
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
structural advantage · 1/4 · Patents and cartridge compatibility restrictions provide localized protection, but actual price reductions and lower-priced supplies competition demonstrate weak economic exclusion. No comparative cost or network advantage is established.
durability · 1/4 · Finite patent lives and contested compatibility restrictions limit durability. The Dutch appellate outcome is favorable evidence, but the pending appeal and interoperability requests prevent treating protection as secure.
customer dependency · 1/4 · Compatibility friction and continuing supplies sales indicate some dependency indirectly. Lower-priced alternatives and customer-controlled service renewals or early termination rights limit the strength of that dependency; no retention rate is inferred.
erosion resilience · 1/4 · Pricing actions and continuing supplies demand offer partial resilience, but historical competitive discounting, incomplete cost recovery and actual intangible impairments demonstrate vulnerability. Litigation relief remains a possibility, not a realized loss.
Pricing power31
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
realized pricing · 2/4 · Observed outcomes are mixed: fiscal 2024 PC ASPs fell under competitive pricing, fiscal 2025 ASPs and units rose, and the later quarter showed 40.8% ASP growth with a 15.8% unit decline. Pricing contributed, but currency and mix prevent attributing the ASP increase entirely to pricing power; Consumer Printing still faced competitive pricing.
retention · 1/4 · Assessed indirectly from substantial continuing supplies sales and cartridge compatibility friction. Supplies revenue declined in the disclosed quarterly and nine-month comparisons, and service customers retain exit options. These facts support fragile repeat demand rather than demonstrated strong retention; they do not prove customer churn.
margin resilience · 1/4 · Pricing partly offset costs, but fiscal 2025 costs were not fully mitigated and nine-month 2026 gross margin declined 0.9 percentage points. Quarterly Personal Systems gross margin also weakened despite pricing, currency benefits and tariff refunds. Printing's comparatively steady operating performance provides a partial offset.
contractual freedom · 1/4 · Actual product repricing demonstrates some ability to change prices. However, fixed-price service contracts, customer termination rights and disclosed past profitability losses from unexpected contract costs establish constrained protection against cost increases. The passages do not establish broad unilateral repricing rights.
Predictability80
Five consecutive annual periods. Equal weights: nondeclining revenue frequency; revenue-growth volatility (5–40pp); positive FCF frequency; FCF-margin volatility (3–20pp). Stability indicator, not a growth forecast.
- Nondeclining revenue years (%)
- 25.00
- Revenue growth volatility (pp)
- 6.86
- Positive FCF years (%)
- 100.00
- FCF margin volatility (pp)
- 1.47
Financial strength47
Equal-weight grades: debt/FCF (1–8x), net debt/earnings before interest and tax (0–5x), interest service (1–12x), current ratio (0.75–2x). Earnings use reported operating income, or reported pretax profit plus reported interest expense when operating income is unavailable. Interest service uses earnings/interest expense; if unavailable, it uses reported operating cash flow/cash interest paid, without relabeling cash paid as accrued expense. Nonpositive cash flow/earnings score 0 for their service component; reported zero interest with a positive numerator scores 100. Net cash scores 100 for net leverage. Missing disclosures remain unavailable. General nonfinancial-company rubric, not a credit rating; exceptional and nonoperating gains are not normalized out. IFRS finance-cost and cash-flow classifications retain their reported scope.
- debtFcfGrade
- 64.97
- netDebtEbitGrade
- 62.34
- interestCoverageGrade
- 58.01
- currentRatioGrade
- 1.39
- Debt / FCF (x)
- 3.45
- Net debt / operating income (x)
- 1.88
- Interest coverage (x)
- 7.38
- Current ratio (x)
- 0.77
Capital allocation100
Three-year equal-weight indicators: pretax return on average invested capital (0–25%; equity + debt − cash, each year and its prior year), share-count growth (0–5%, lower better), share-based cost/revenue (2–20%, lower better), consolidated FCF/net income (0–1x). Return uses reported operating income or, if unavailable, EBIT calculated from reported pretax profit plus reported interest expense; exceptional/nonoperating gains are not normalized out. Share-based cost uses the reported cash-flow add-back or, if absent, separately reported recognized compensation expense; the latter never becomes an FCF adjustment. Nonpositive net income scores 0 for cash conversion; absent income/FCF stays unavailable. Nonpositive invested capital has no defined return and remains unavailable. Does not establish acquisition quality or buyback timing.
- 3-year pre-tax operating return (%)
- 66.60
- 3-year average dilution (%)
- -3.04
- 3-year average SBC / revenue (%)
- 0.87
- cashConversionGrade
- 100.00
Management50
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
capital discipline · 2/4 · Nine-month operating cash flow of $3.044 billion supported $590 million of capital investment, $725 million of repurchases and $825 million of dividends, alongside net debt repayment. However, cash generation benefited from a $3.323 billion accounts-payable increase while receivables and inventory absorbed cash. Purchase commitments, restructuring costs and intangible impairments temper the evidence of disciplined outcomes; repurchases alone do not prove value creation.
incentive alignment · 2/4 · Existing three-year performance equity links rewards to EPS, relative shareholder returns and growth goals, with hedging and pledging restrictions. Adjustment discretion weakens the mechanical link to reported outcomes, although the committee actually reduced financial incentive funding. Actual ownership balances and full payout outcomes are absent.
execution · 2/4 · The Fiscal 2023 restructuring plan was substantially completed and operating expense efficiency improved. Revenue and segment operating results show continuing execution, but cost recovery remained incomplete, substantial restructuring costs were incurred and acquired intangibles were impaired. Operational evidence is indirect evidence of management effectiveness, not proof that planned AI initiatives will succeed.
governance · 2/4 · An independent compensation committee held seven meetings with executive sessions, and management reported effective disclosure controls. These are concrete governance processes, but do not establish exceptional oversight effectiveness. The disclosed exception allowing service on four audit committees adds a monitoring concern without proving governance failure.
Evidence
The core allegations in these proceedings claim misleading or inadequate consumer notifications and permissions pertaining to the use of Dynamic Security, the installation of firmware updates, or the potential inability of cartridges with clone chips or circuitry to work in HP printers with Dynamic Security.
Legal proceedings: Dynamic Security cartridge compatibility allegations · Filed 27/08/2026
On November 19, 2024, the court of appeal issued a decision rejecting competition claims against HP and providing that use of Dynamic Security by HP is not unlawful.
Legal proceedings: Dutch appellate decision on Dynamic Security · Filed 27/08/2026
12 Table of Contents HP INC. Notes to Condensed Consolidated Financial Statements (Continued) (Unaudited) Significant Segment Expenses and Operating Results Three months ended July 31 Nine months ended July 31 2026 2025 2026 2025 In millions Net revenue Commercial PS $ 8,579 $ 7,036 $ 23,575 $ 20,467 Consumer PS 3,188 2,895 8,656 7,712 Personal Systems 11,767 9,931 32,231 28,179 Supplies 2,536 2,609 8,089 8,166 Commercial Printing 1,101 1,113 3,374 3,424 Consumer Printing 275 280 831 889 Printing 3,912 4,002 12,294 12,479 Corporate Investments — — — — Total segment net revenue 15,679 13,933 44,525 40,658 Other (2) (1) (2) (2) Total net revenue $ 15,677 $ 13,932 $ 44,523 $ 40,656 Cost of net revenue Personal Systems $ 10,250 $ 8,421 $ 27,785 $ 24,009 Printing 2,475 2,640 7,889 8,134 Corporate Investments — — 1 2 Total segment cost of net revenue 12,725 11,061 35,675 32,145 Operating expenses Personal Systems $ 980 $ 969 $ 2,868 $ 2,713 Printing 728 681 2,164 2,059 Corporate Investments 28 24 80 67 Total segment operating expenses 1,736 1,674 5,112 4,839 Earnings before taxes Personal Systems $ 537 $ 541 $ 1,578 $ 1,457 Printing 709 681 2,241 2,286 Corporate Investments (28) (24) (81) (69) Total segment earnings from operations 1,218 1,198 3,738 3,674 Corporate and unallocated costs and other (102) (103) (258) (302) Stock-based compensation expense (95) (100) (389) (432) Restructuring and other charges (48) (110) (539) (302) Acquisition and divestiture charges (4) (8) (6) (31) Amortization of intangible assets (75) (159) (220) (287) Certain litigation charges (2) (2) (63) (105) Interest and other, net(1) (94) (92) (301) (381) Total earnings before taxes $ 798 $ 624 $ 1,962 $ 1,834 (1) The three and nine months ended July 31, 2025 includes Certain litigation benefits from a single litigation matter that does not relate to HP's ongoing business operations.
Note 2: quarterly and nine-month segment operating results · Filed 27/08/2026
Furthermore, non-original supplies (including imitation, refill or remanufactured alternatives), which are often available at lower prices, compete with our Printing Supplies business.
Risk factors: lower-priced non-original printing supplies · Filed 10/12/2025
Among other relief, Plaintiffs have sought or seek money damages and in certain cases have or may seek injunctive relief against the use or operation of Dynamic Security or relief requiring interoperability.
Legal proceedings: requested injunctions and interoperability relief · Filed 27/08/2026
Our standard services agreements are generally renewable at a customer’s option and/or subject to early termination rights.
Risk factors: service agreement renewal and early termination rights · Filed 10/12/2025
On February 18, 2025, Digital Revolution filed a cassation appeal against the decision before the Dutch Supreme Court.
Legal proceedings: pending Dutch cassation appeal · Filed 27/08/2026
As of October 31, 2025, our worldwide patent portfolio included over 16,000 patents which expire at various dates, generally 20 years from their original filing dates.
Business: patent portfolio size and expiration · Filed 10/12/2025
We believe that our patents and patent applications are important for maintaining the competitive differentiation of our products and services, enhancing our freedom of action to sell our products and services in markets in which we choose to participate, and maximizing our return on research and development investments.
Business: management assessment of patent differentiation · Filed 10/12/2025
No single patent is essential to HP as a whole or to any of HP’s business segments.
Business: absence of an individually essential patent · Filed 10/12/2025
We have faced and expect to continue to face aggressive price competition and have lowered and may in the future need to lower the prices of many of our products and services to stay competitive, while at the same time trying to maintain or improve our market share, revenue and gross margin.
Risk factors: realized aggressive price competition and price reductions · Filed 10/12/2025
(1) During the three and nine months ended July 31, 2026, the Company incurred impairment charges of $23 million and $55 million related to acquired customer contracts, customer lists and distribution agreements and technology and patents related to the Personal Systems segment.
Supplementary financial information: Personal Systems intangible asset impairments · Filed 27/08/2026
The net revenue increase was primarily due to a 3.3% increase in PC unit volume driven by Commercial PS, partially offset by a 1.4% decrease in average selling price (“ASPs”).
MD&A: fiscal 2024 Personal Systems unit and selling-price changes · Filed 13/12/2024
The decrease in ASPs is primarily due to competitive pricing, partially offset by favorable mix shifts.
MD&A: competitive pricing explanation for fiscal 2024 ASP decline · Filed 13/12/2024
The net revenue increase was primarily due to a 4.3% increase in unit volume driven by the Windows-based PC operating system refresh, and a 3.1% increase in average selling price (“ASPs”).
MD&A: fiscal 2025 Personal Systems unit and ASP growth · Filed 10/12/2025
The increase in ASPs is primarily due to favorable mix shift towards Commercial PS and disciplined pricing, partially offset by unfavorable currency impact.
MD&A: fiscal 2025 ASP attribution to mix, pricing and currency · Filed 10/12/2025
During fiscal year 2025, we experienced higher commodity and tariff costs, which were not fully mitigated by pricing and other actions enacted during the period.
MD&A: fiscal 2025 commodity and tariff costs incompletely mitigated · Filed 10/12/2025
The net revenue increase was primarily due to a 40.8% increase in ASPs, partially offset by a 15.8% decrease in PCs unit volume driven by a focus on higher value units in an increasing commodity cost environment.
MD&A: quarterly Personal Systems ASP growth and PC unit decline · Filed 27/08/2026
The increase in ASPs is primarily due to pricing actions to mitigate higher commodity costs, favorable currency impacts and mix shifts.
MD&A: quarterly ASP attribution to pricing, currency and mix · Filed 27/08/2026
For the nine months ended July 31, 2026, gross margin decreased 0.9 percentage points primarily driven by products gross margin due to higher commodity costs and unfavorable mix shifts towards Personal Systems, partially offset by pricing actions including favorable currency impacts, and IEEPA tariff refunds.
MD&A: nine-month gross margin decline and mitigation factors · Filed 27/08/2026
Gross margin decreased primarily due to higher commodity costs, partially offset by pricing actions, IEEPA tariff refunds and favorable currency impacts.
MD&A: quarterly Personal Systems gross margin cost and pricing drivers · Filed 27/08/2026
The increase in ASPs was primarily driven by favorable mix shifts towards Big Tank and currency impacts, partially offset by competitive pricing.
MD&A: Consumer Printing ASP drivers including competitive pricing · Filed 27/08/2026
Any increased or unexpected costs or unanticipated delays in connection with the performance of these contracts, such as increased costs resulting from new or increased tariffs or other trade restrictions, which may increase as services become more customized, have in the past made, and could in the future make, these agreements less profitable or unprofitable.
Risk factors: actual and potential service-contract profitability pressure from unexpected costs · Filed 10/12/2025
HP recognizes revenue from fixed-price support, maintenance and other service contracts over time depicting the pattern of service delivery and recognizes the costs associated with these contracts as incurred.
Revenue recognition: fixed-price support, maintenance and service contracts · Filed 10/12/2025
Condensed Consolidated Statements of Cash Flows (Unaudited) Nine months ended July 31 2026 2025 In millions Cash flows from operating activities: Net earnings $ 1,656 $ 1,734 Adjustments to reconcile net earnings to net cash provided by operating activities: Depreciation, amortization and impairment 722 708 Stock-based compensation expense 389 432 Restructuring and other charges 539 302 Deferred taxes on earnings (110) (67) Other, net 126 103 Changes in operating assets and liabilities, net of divestitures: Accounts receivable (1,531) 54 Inventory (1,902) (671) Accounts payable 3,323 94 Net investment in leases from integrated financing (69) (71) Taxes on earnings (184) (360) Restructuring and other (256) (238) Other assets and liabilities 341 53 Net cash provided by operating activities 3,044 2,073 Cash flows from investing activities: Investment in property, plant, equipment and purchased intangibles (590) (700) Purchases of available-for-sale securities and other investments (21) (23) Maturities and sales of available-for-sale securities and other investments 32 69 Collateral returned (posted) for derivative instruments 98 (343) Payments made in connection with business acquisitions, net of cash acquired (10) (116) Proceeds from business divestitures, net 26 — Net cash used in investing activities (465) (1,113) Cash flows from financing activities: Proceeds from debt, net of issuance costs 291 1,248 Payment of debt (770) (1,312) Stock-based award activities and others (94) (113) Repurchase of common stock (725) (350) Cash dividends paid (825) (818) Settlement of cash flow hedges — 6 Net cash used in financing activities (2,123) (1,339) Increase (decrease) in cash, cash equivalents and restricted cash 456 (379) Cash, cash equivalents and restricted cash at beginning of period (1) 3,713 3,253 Cash, cash equivalents and restricted cash at end of period $ 4,169 $ 2,874 (1) Includes cash held for sale of $8 million recorded within Other current assets as of October 31, 2025.
Condensed consolidated cash flows: nine months ended July 31, 2026 and 2025 · Filed 27/08/2026
As of July 31, 2026, the Company had outstanding purchase commitments of $2.1 billion.
Liquidity and capital resources: outstanding purchase commitments · Filed 27/08/2026
The Company's purchase obligations under variable price provisions approximate market prices at the time of purchase and are estimated using current period pricing.
Commitments: variable purchase prices approximate market prices · Filed 27/08/2026
The Fiscal 2023 Plan is substantially complete.
Restructuring: Fiscal 2023 Plan substantially complete · Filed 27/08/2026
HP incurred $865 million in severance costs and $347 million in infrastructure costs related to non-labor and other charges.
Restructuring: incurred severance and infrastructure costs · Filed 27/08/2026
Operating expenses as a percentage of revenue decreased primarily driven by disciplined cost management and favorable net R&D partner funding, partially offset by higher variable compensation.
MD&A: quarterly Personal Systems operating expense efficiency · Filed 27/08/2026
Significant portion of long-term incentives are delivered through PARSUs with 3-year cliff vesting based on performance against goals: (i) 80% based on achievement of annual EPS goals which roll into a 3-year average, adjusted by 3-year TSR versus the S&P 500, and (ii) 20% based on achievement of a revenue goal for KGAs.
Executive compensation: existing three-year performance-adjusted equity incentive structure · Filed 25/02/2026
No hedging or similar transactions by employees or Directors involving HP securities, no holding HP securities in margin accounts and no pledging stock as collateral for loans in a manner that could create compensation-related risk for the Company.
Executive compensation: restrictions on hedging, margin accounts and pledging · Filed 25/02/2026
The Committee also allows for adjustments to performance results for extraordinary factors that are hard to predict or control, such as material changes to foreign exchange rates or unexpected changes in tax rates or tariffs.
Executive compensation: permitted performance-result adjustments · Filed 25/02/2026
(3)The HRC Committee also exercised its discretion to reduce the financial performance funding to 39.8% in order to create parity with the bonus plan for the broader group of employees within the Company.
Executive compensation: actual discretionary reduction in financial performance funding · Filed 25/02/2026
The HRC Committee met seven times in fiscal 2025, and all of these meetings included an executive session.
Executive compensation governance: committee meetings and executive sessions · Filed 25/02/2026
Each HRC Committee member is an independent non-employee Director with significant experience in executive compensation matters.
Executive compensation governance: independent committee membership · Filed 25/02/2026
Based on this evaluation, our principal executive officer and principal financial officer concluded as of the Evaluation Date that our disclosure controls and procedures were effective such that the information required to be disclosed by us in our SEC reports (i) is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and (ii) is accumulated and communicated to HP’s management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.
Controls and procedures: management conclusion on disclosure-control effectiveness · Filed 27/08/2026
In addition, no member of the Audit Committee may serve on the audit committee of more than three public companies, including HP, unless the Board determines that such simultaneous service would not impair the ability of such member to effectively serve on the Audit Committee.
Corporate governance: Audit Committee outside-service limit and exception · Filed 25/02/2026
Mr. Meline currently serves on the audit committee of four public companies and the Board has determined that such simultaneous service does not impair the ability of Mr.
Corporate governance: disclosed service on four public-company audit committees · Filed 25/02/2026
