HP Inc. (NYSE: HPQ), a leading global technology company specializing in personal computing and printing solutions, reported its fiscal second quarter 2025 results on May 28, 2025. The company recorded a net revenue of $13.2 billion, a 3.3% increase from the prior year’s $12.8 billion, marking the fourth consecutive quarter of revenue growth.

Despite the revenue rise, HP’s financial performance revealed significant operational challenges. The company noted a decline in both its GAAP and non-GAAP diluted net earnings per share (EPS). GAAP diluted EPS dropped 31% to $0.42 from $0.61 a year earlier. Non-GAAP diluted EPS decreased by 13% to $0.71 compared to the same period the previous year.

HP’s operating margin also faced pressures, with a GAAP operating margin of 4.9%, down from 7.4% year-over-year. Non-GAAP operating margin was reported at 7.3%, down from 8.8% in the prior year. The changes in margins were attributed to increased tariff costs that affected the company’s profitability outcomes.

In terms of segment performance, the Personal Systems business unit contributed a net revenue of $9.0 billion, reflecting a 7% increase from the previous year (8% in constant currency). This revenue growth was driven by strong commercial performance, particularly in the high-value categories and AI PCs, which saw robust demand. However, operating margin for Personal Systems was below expectations at 4.5%, impacted notably by tariffs.

Conversely, HP’s Printing segment reported a decline in net revenue of 4% year-over-year, totaling $4.2 billion. The decline was attributed to sluggish demand in North America and continued softness in the Chinese market. The Printing segment’s operating margin improved to 19.5%, reflecting effective cost management despite overall revenue declines.

Looking ahead, HP provided adjusted guidance for the third quarter of fiscal 2025, estimating non-GAAP diluted EPS in the range of $0.68 to $0.80 and GAAP diluted net EPS between $0.57 and $0.69. For the full fiscal year, HP expects non-GAAP diluted EPS to fall within $3.00 to $3.30 and GAAP diluted EPS in the $2.32 to $2.62 range.

The company’s cash flow from operations for the second quarter was reported at $38 million, while free cash flow was slightly negative at $(95) million. HP returned approximately $400 million to shareholders during the quarter through dividends and share repurchases.

HP’s business performance amid a turbulent regulatory environment reflects challenges in adapting to ongoing macroeconomic and geopolitical uncertainties, particularly trade-related costs. The company’s proactive response included accelerating its manufacturing shift to mitigate tariff impacts, although it noted that full mitigation may take until the fourth quarter. HP aims to achieve cumulative gross annual run rate structural savings of at least $2 billion from its Future Ready program by the end of fiscal year 2025 to better support long-term growth and overcome current market pressures.