HPQ Leans into AI for Growth Amidst Fierce Competition

TL;DR

**HPQ is betting big on AI to stay relevant, but the market is crowded and execution will be everything.**

AI Summary

HP Inc. (HPQ) filed its 10-K for the fiscal year ended October 31, 2025, highlighting its position as a global technology leader in personal computing, printing, and 3D printing. The company emphasizes the critical role of Artificial Intelligence (AI) in its strategy, integrating AI PCs and workstations, and intelligent print features into its product portfolio. HPQ's security capabilities are designed to protect users through enhanced PCs and printers, hardware-enforced endpoint security software, and services utilizing AI deep-learning. The company operates through three reportable segments: Personal Systems, Printing, and Corporate Investments. HPQ faces strong competition from major corporations like Dell, Lenovo, Canon, and Epson, and is actively managing its Fiscal 2023 and Fiscal 2026 Plans to drive growth, improve product mix, and achieve structural cost savings through operational efficiency and digital transformation. The aggregate market value of HPQ's common stock held by non-affiliates was $24,121,817,659 as of April 30, 2025, with 917,984,523 shares outstanding as of December 1, 2025.

Why It Matters

HPQ's strategic pivot towards AI-powered devices and solutions is crucial for its long-term competitiveness against rivals like Dell and Lenovo in Personal Systems, and Canon and Epson in Printing. For investors, this focus on innovation could drive future revenue growth and market share, but also entails significant R&D investment and execution risk. Employees will see shifts in skill demands towards AI development and integration. Customers stand to benefit from more secure, faster, and cost-effective computing and printing solutions, potentially enhancing productivity in hybrid work environments. The broader market will observe how a legacy tech giant adapts to the rapidly evolving AI landscape, setting a precedent for industry transformation.

Risk Assessment

Risk Level: medium — HPQ faces significant competitive pressures in all business areas, with short product life cycles and intense price competition, as detailed in Item 1. The company also highlights risks related to its ability to execute strategic plans, including the Fiscal 2023 and Fiscal 2026 Plans, and the successful development and transition of new AI-enabled products, as mentioned in the 'Forward-Looking Statements' section. These factors, combined with reliance on third-party suppliers and macroeconomic volatility, indicate a medium risk profile.

Analyst Insight

Investors should closely monitor HPQ's progress on its AI initiatives and the execution of its Fiscal 2026 Plan, specifically looking for tangible revenue growth from AI PCs and printing solutions. Evaluate the company's ability to maintain margins amidst intense price competition and assess the impact of structural cost savings on profitability.

Financial Highlights

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Revenue Breakdown

Key Numbers

• $24.12B — Aggregate market value of common stock held by non-affiliates (As of April 30, 2025, indicating significant market capitalization.)
• 917.98M — Shares of common stock outstanding (As of December 1, 2025, providing insight into share count.)
• 170 — Number of countries HP operates in (Highlights HP's extensive global reach.)

Key Players & Entities

• HP Inc. (company) — Registrant
• Dell Inc. (company) — Primary competitor in Personal Systems
• Lenovo Group Limited (company) — Primary competitor in Personal Systems
• Canon Inc. (company) — Primary competitor in Printing
• Seiko Epson Corporation (company) — Primary competitor in Printing
• Microsoft Windows (company) — Primary operating system used by Personal Systems
• Google Chrome (company) — Primary operating system used by Personal Systems
• Intel (company) — Processor supplier for Personal Systems
• AMD (company) — Processor supplier for Personal Systems
• NVIDIA (company) — GPU supplier for Personal Systems

FAQ

Risk Factors

• Intense Competition [high — market]: HP faces significant competition from major technology companies such as Dell, Lenovo, Canon, and Epson across its Personal Systems and Printing segments. This competitive landscape can impact pricing, market share, and profitability.
• Supply Chain Disruptions [medium — operational]: The company's global operations are subject to potential disruptions in its supply chain, which could affect the availability of components and the timely delivery of products. This is a persistent risk in the technology hardware sector.
• Data Privacy and Security Regulations [medium — regulatory]: As HP collects and processes user data through its devices and services, it is subject to evolving data privacy regulations globally (e.g., GDPR, CCPA). Non-compliance can lead to significant fines and reputational damage.
• Technological Obsolescence and Innovation Pace [high — operational]: The rapid pace of technological change requires continuous innovation. Failure to adapt to new technologies, such as AI integration, or to keep products current can lead to obsolescence and loss of competitive advantage.
• Global Economic Conditions [medium — financial]: HP's performance is sensitive to global economic conditions, including inflation, interest rates, and consumer/business spending. Downturns can reduce demand for its products and services.

Industry Context

HP operates in the highly competitive technology hardware and services industry, facing significant rivals in personal computing (Dell, Lenovo) and printing (Canon, Epson). Key industry trends include the integration of Artificial Intelligence into devices (AI PCs), the ongoing shift towards hybrid work models, and an increasing focus on robust security solutions for endpoints.

Regulatory Implications

HP must navigate a complex web of global regulations, particularly concerning data privacy (e.g., GDPR, CCPA) due to its extensive device and service offerings. Compliance with environmental regulations and trade policies also presents ongoing challenges and potential costs.

What Investors Should Do

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Key Dates

• 2025-04-30: Aggregate market value of common stock held by non-affiliates reported — Indicates a market capitalization of $24.12 billion, reflecting investor valuation of the company.
• 2025-12-01: Shares of common stock outstanding reported — 917.98 million shares outstanding provide a basis for per-share calculations and understanding equity structure.

Glossary

AI PCs

Personal computers equipped with specialized hardware and software designed to perform artificial intelligence tasks locally, enhancing performance and features. (HP is heavily integrating AI PCs into its Personal Systems segment strategy to drive innovation and performance for users.)

Endpoint Security

Security measures designed to protect devices (endpoints) such as computers, laptops, and mobile devices from threats and unauthorized access. (HP offers hardware-enforced endpoint security software and services, leveraging AI, to protect its distributed user base.)

Hybrid Work

A work model that combines remote and in-office work, requiring flexible technology solutions for seamless collaboration and productivity. (HP provides devices and services tailored for hybrid work environments, a key market trend.)

POS Systems

Point-of-Sale systems used in retail environments for processing transactions, managing inventory, and customer interactions. (These systems are part of HP's Personal Systems segment, serving the commercial market.)

AI Deep-Learning

A subset of machine learning that uses artificial neural networks with multiple layers to learn and identify complex patterns, often used for threat detection. (HP utilizes AI deep-learning in its security solutions to identify and remove malware threats.)

Year-Over-Year Comparison

This 10-K filing highlights HP's strategic pivot towards AI integration across its product lines, a significant evolution from previous filings. While specific year-over-year financial comparisons are not detailed in the provided text, the emphasis on AI PCs and intelligent print features suggests a proactive response to market trends. New risks related to AI implementation and evolving cybersecurity threats are likely more prominent, alongside the persistent challenges of intense market competition and supply chain management.

Key Financial Figures

• $0.01 — ich registered Common stock, par value $0.01 per share HPQ New York Stock Exchange

Filing Documents

• hpq-20251031.htm (10-K) — 3448KB
• hpq-fy25parsuagreement.htm (EX-10.(A)(A)(A)) — 117KB
• a10bbb2021employeestockpur.htm (EX-10.(B)(B)(B)) — 62KB
• a10zzfy25hpstandardrsuagre.htm (EX-10.(Z)(Z)) — 88KB
• hp10-31x25ex21subsidiaries.htm (EX-21) — 128KB
• exhibit23-consent2025.htm (EX-23) — 10KB
• hp-103125xexhibit311q425.htm (EX-31.1) — 9KB
• hp-103125xexhibit312q425.htm (EX-31.2) — 9KB
• hp-103125xexhibit32q425.htm (EX-32) — 10KB
• hpq-20251031_g1.jpg (GRAPHIC) — 101KB
• 0000047217-25-000071.txt ( ) — 20366KB
• hpq-20251031.xsd (EX-101.SCH) — 116KB
• hpq-20251031_cal.xml (EX-101.CAL) — 187KB
• hpq-20251031_def.xml (EX-101.DEF) — 568KB
• hpq-20251031_lab.xml (EX-101.LAB) — 1302KB
• hpq-20251031_pre.xml (EX-101.PRE) — 1001KB
• hpq-20251031_htm.xml (XML) — 4163KB

Forward-Looking Statements

Forward-Looking Statements 3 PART I

Business

Item 1. Business 5

Risk Factors

Item 1A. Risk Factors 11

Unresolved Staff Comments

Item 1B. Unresolved Staff Comments 26 Item 1C. Cybersecurity 26

Properties

Item 2. Properties 27

Legal Proceedings

Item 3. Legal Proceedings 28

Mine Safety Disclosures

Item 4. Mine Safety Disclosures 28 PART II

Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 29

Reserved

Item 6. Reserved 31

Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations 32

Quantitative and Qualitative Disclosures about Market Risk

Item 7A. Quantitative and Qualitative Disclosures about Market Risk 45

Financial Statements and Supplementary Data

Item 8. Financial Statements and Supplementary Data 46

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 102

Controls and Procedures

Item 9A. Controls and Procedures 102

Other Information

Item 9B. Other Information 102

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 102 PART III

Directors, Executive Officers and Corporate Governance

Item 10. Directors, Executive Officers and Corporate Governance 103

Executive Compensation

Item 11. Executive Compensation 103

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 103

Certain Relationships and Related Transactions, and Director Independence

Item 13. Certain Relationships and Related Transactions, and Director Independence 103

Principal Accounting Fees and Services

Item 14. Principal Accounting Fees and Services 104 PART IV

Exhibits and Financial Statement Schedules

Item 15. Exhibits and Financial Statement Schedules 105

Form 10-K Summary

Item 16. Form 10-K Summary 111 In this report on Form 10-K, for all periods presented, "we", "us", "our", the "company", the "Company", "HP" and "HP Inc." refer to HP Inc. (formerly Hewlett-Packard Company) and its consolidated subsidiaries. 2

Forward-Looking Statements

Forward-Looking Statements This Annual Report on Form 10-K, including "Business" in Item 1 and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Item 7, contains forward-looking statements based on current expectations and assumptions that involve risks and uncertainties. If the risks or uncertainties ever materialize or the assumptions prove incorrect, they could affect the business and results of operations of HP Inc. and its consolidated subsidiaries which may differ materially from those expressed or implied by such forward-looking statements and assumptions. All statements other than statements of historical fact are statements that could be deemed forward-looking statements, including, but not limited to projections of net revenue, margins, expenses, effective tax rates, net earnings, net earnings per share, cash flows, benefit plan funding, deferred taxes, share repurchases, foreign currency exchange rates or other financial items; any projections of the amount, timing or impact of cost savings or restructuring and other charges, planned structural cost reductions and productivity initiatives; any statements of the plans, strategies and objectives of management for future operations, including, but not limited to, our business model and transformation, our sustainability goals, our go-to-market strategy, the execution of restructuring plans and any resulting cost savings (including the Fiscal 2023 Plan and the Fiscal 2026 Plan (as defined herein)), net revenue or profitability improvements or other financial impacts; any statements concerning the expected development, demand, performance, market share or competitive performance relating to products or services; any statements concerning potential supply constraints, component shortages, manufacturing disruptions or logistics challenges; any statements regarding current or future macroeconomic trends or events, including global trade policies, and the impact of those t

Business

ITEM 1. Business. Overview HP is a global technology leader and creator of solutions that enable people to bring their ideas to life and connect to the things that matter most. Operating in more than 170 countries, HP delivers innovative and sustainable devices, services and subscriptions for personal computing, printing, 3D printing, hybrid work, gaming and other related technologies. We believe artificial intelligence ("AI") is playing a critical role in the transformation of how people live and work, and customers are beginning to recognize the benefits in security, speed and cost. Our high-performing product portfolio includes HP's new line of AI PCs and workstations built with the computing power to enable local AI processing for enhanced performance and features as well as intelligent print features incorporated into our home, office and graphics solutions. Our broad range of security capabilities are designed to protect an increasingly distributed user base through security enhanced PCs and printers, hardware-enforced endpoint security software (for both HP and non-HP PCs), and endpoint security services. Our security solutions provide layered resiliency using enhanced features such as containment and isolation technology as well as the use of AI deep-learning to identify and remove malware threats. We have three reportable segments: Personal Systems, Printing and Corporate Investments. Personal Systems Personal Systems offers desktops, notebooks, and workstations (including HP's portfolio of AI PCs and workstations), thin clients, retail point-of-sale ("POS") systems, displays, hybrid systems, software, solutions including endpoint security and services. We provide lifecycle services including support and deployment, configurations, and extended warranty services. We support a multi-operating system and multi-architecture strategy, primarily using Microsoft Windows and Google Chrome operating systems. Our platforms incorporate processors from Intel, a