HPQ 10-K & 10-Q changes, risk factors and insider trading

The following discussion of risk factors contains forward-looking statements. These risk factors may be important for understanding any statement in this Form 10-K or elsewhere. The following information should be particularly read in conjunction with Part I, Item I, “Business” and Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the Consolidated Financial Statements and related notes in Part II, Item 8, “Financial Statements and Supplementary Data” of this Form 10-K. Some of the factors, events and contingencies discussed below may have occurred in the past, but the disclosures below are not representations as to whether or not the factors, events or contingencies have occurred in the past and instead reflect our beliefs and opinions as to the factors, events or contingencies that could materially and adversely affect us in the future.

To execute our strategy, we must, among other things, optimize our cost structure, make long-term investments, develop or acquire and appropriately protect intellectual property, commit significant research and development and other resources, evolve our go-to-market strategy and business model to meet changing market dynamics, forces and demand. In addition, we need to innovate, develop and execute on evolutionary strategies in a rapidly changing and increasingly hybrid environment, seize on disruptive opportunities and effectively respond to secular trends and shifts in customer preferences. Our financial performance will depend in part on our ability to remain competitive in offerings geared towards new or emerging market trends, such as artificial intelligenceintelligence, hybrid consumption and hybriddigital consumption.employee experience. For example, in fiscal year 20242025 we experienced continuedchallenges demandfrom softnesschanging incustomer printing products and solutionsbehaviors and we believe we and others in our industry face continuing secular challenges related to, among other things, decreased demand for printing products and solutions as a result of increased digitization anddigitization, hybrid work, and increasing competition from generic alternatives.alternatives and customer preferences shifting from traditional disposable ink cartridge printers to refillable big tank printers. We also needseek to ensure our existing offerings in this space, such as managed services and print software, remain sufficiently differentiated.differentiated and profitable. Our efforts to mitigate the impact of these challenges, such as by seeking to increase our margin and market shareshare, particularly in big tank printers, and drive demand in software and subscription services andor other recurring-revenue based business models, offering higher profitability, may not be successful,successful. andWhile our big tank printers typically have a higher initial margin than our traditional in cartridge printers, they do not result in follow-on sales of high margin traditional ink cartridges and, as a result, may have lower overall device lifetime profitability. Also, shifting to recurring-revenue based business may require us to forego upfront revenue.revenue and invest in platforms and systems that enable subscription sales. In addition, we may be unable to successfully execute our strategy, sufficiently invest in, prioritize research and development, market and scale, or accurately project the financial performance of our key growth areas, other strategic growth initiatives and existing offerings, accurately predict technological or business trends or control costs. Moreover, the process of developing new high-technology products, services and solutions and enhancing existing products, services and solutions, including through the introduction of AI capabilities, is complex, costly and uncertain, and we may be unable to anticipate or respond to customers’ changing needs, accurately identify emerging technological trends or accurately project the demand, pricing, or other market dynamics of such trends. Our ability to successfully offer our products, services and solutions in this rapidly evolving market requires an effective planning, forecasting, and management process to enable us to effectively calibrate and adjust our business and business models in response to fluctuating market opportunities and conditions. This effort includes execution of effective go-to-market plans, which may require us to evolve our talent and capabilities, incentive plans (especially for evolution to recurring revenue business), and coverage models. In addition, we may be unable to appropriately prioritize and balance our initiatives or effectively manage change throughout our organization.

Our industry is subject to rapid and substantial innovation, technological change and customer preferences. Even if we successfully develop new products, solutions and technologies, future products, solutions and technologies, including those created by our competitors, may eventually supplant ours if we are unable to keep pace with technological advances and end-user requirements and preferences and timely enhancement of our existing products and technologies or develop new ones. As a result, we could lose market share and certain of our products, solutions and technologies may be rendered uneconomical or obsolete.

After we develop a product, we must be able to quickly manufacture appropriate volumes while also managing costs and preserving or improving margins. To accomplish this, we must accurately forecast volumes, mixes of products and configurations that meet customer and legal requirements, and we may not succeed in doing so within a given product’s lifecycle or at all. Any delay in the development, production or marketing of a new product, service or solution could result in us not being among the first to market, which could further harm our competitive position. Moreover, new products and services may replace or supersede existing offerings and may not be profitable,profitable. and evenEven if they are profitable, the operating margins may not be as high as the historical or anticipated margins.

We believe the proliferation of AI, especially as it relates to our product and solutions offerings, will continue to have a significant impact on customer preferences and market dynamics in our industry, and our ability to effectively compete in this space will be critical to our financial performance. We also believe that the effective use of AI in our internal operations is important to our long-term success. We are working to incorporate AI capabilities into our consumer and commercial products and solutions, as well as across the company in our own internal operations, and our research into and continued development of such technologies remain ongoing. As with many innovations, AI presents risks, challenges, and unintended consequences that could affect its rate and success of adoption, and therefore our business, and there is no guarantee that our use of AI or incorporation of AI capabilities into our products and solutions will benefit our business operations or result in products and solutions that are preferred by our customers. We have invested, and expect to continue to invest, significant resources to build and support our AI products. If our AI products fail to operate as anticipated or as well as competing products or otherwise do not meet customer needs or if we are unable to bring AI-enabled products and solutions to market as effectively, or with the same speed or in the same volumes, as our competitors, we may fail to recoup our investments in AI or improve our financial performance, our competitive position may be harmed, and our business and reputation may be adversely impacted. For example, the accelerated rate of innovation of components from our suppliers may result in higher defects or failure of our offerings to perform, which could cause us to incur increased warranty costs, inventory provisions or impairments and could impact future sales. Moreover, our actions to drive demand to AI products may result in cannibalization of demand for our traditional, non-AI products.products, which may result in lower net revenues and/or profit margins.

In addition, AI algorithms may be flawed. Datasets may be insufficient or contain biased information. AI models deployed by us or our partners may lead to unexpected or unintended outcomes that could erode trust in our AI products and solutions and potentially cause harm to individuals or society. These deficiencies and other failures of AI systemssystems, or the use of AI systems, could subject us to competitive harm, regulatory action, legal liability, including under new proposed legislation regulating AI in jurisdictions such as the U.S. and European Union, new applications of existing data protection, privacy, intellectual property, and other laws, and brand or reputational harm. Additionally, our obligations to comply with the evolving legal and regulatory landscape could entail significant costs or limit our ability to incorporate certain AI capabilities into our products and solutions. Proliferating export controls, including controls on certain rare earth elements, designed to limit the diffusion of advanced technology, can impact speed on AI innovation and capabilities by controlling hardware capable of supporting advanced AI technology. Some AI capabilities also present ethical issues, and we may be unsuccessful in identifying or resolving issues before they arise. If we enable or offer AI products or solutions or implement AI capabilities in our internal operations that are controversial because of their impact on human rights, the environment, competition, privacy, employment, or other social, economic, or political issues, we may experience brand or reputational harm or greater employee attrition.

We have at times operated in a supply-constrained environment and have faced, and may face in the future, component shortages, logistics challenges and manufacturing disruptions that impact our revenues, profitability and cash flows. We are heavily dependent on third-party suppliers and their ability to deliver sufficient key components, products and services at reasonable prices and in time for us to meet schedules for the delivery of our products and services. In addition, our operations depend on our ability to anticipate and our suppliers’ ability to fulfill, our needs for sufficient key components, products and services (including sourcing matched sets). Given the wide variety of products and services we offer, the large and diverse distribution of our suppliers and contract manufacturers, and the long lead times required to manufacture, assemble and deliver certain components and products, problems have and could continue to arise in production, planning and inventory management. Third-party suppliers may have limited financial resources to withstand challenging business conditions, particularly as a result of increased interest rates orrates, emerging market volatility,volatility or changes in global trade policies, or global pandemics or other public health crises, and our business could be negatively impacted if key suppliers are forced to cease or limit their operations. Changes or additions to our supply chain require considerable time and resources and involve significant risks and uncertainties.

We also have experienced, and may experience in the future, gross margin declines in certain businesses, reflecting the effect of competitive pricing pressures and increases in component and manufacturing costscosts, resulting from market dynamics, especially increasing memory and storage costs and potential supply chain constraints in our Personal Systems business, and higher labor and material costs borne by our manufacturers and suppliers that we are unable to pass on to our customers. Our business may be disrupted if we are unable to obtain equipment, parts or components from our suppliers—and our suppliers from their suppliers—due to the insolvency of key suppliers or the inability of key suppliers to obtain credit, or if any of our distributors lack sufficient financial resources to withstand economic weakness. In addition, our ongoing efforts to optimize the efficiency of our supply chain for cost or redundancy could cause supply disruptions and be more expensive, time-consuming and resource-intensive than expected. Furthermore, certain of our suppliers and OMs may decide to discontinue business with us or limit the allocation of products to us, which could result in our inability to fill our supply needs, jeopardizing our ability to fulfill our contractual obligations, which could in turn, result in a decrease in sales, profitability and cash flows, contract penalties or terminations, and damage to customer relationships.

•Component shortages. We have at times experienced and may in the future experience a shortage of, or a delay in receiving, certain components as a result of strong demand, capacity constraints, supplier financial weaknesses, disputes with suppliers (some of whom are also our customers), disruptions in the operations of component suppliers, supplier ability to demonstrate regulatory compliance, regulatory or other trade restrictions on specific components in certain markets, other problems experienced by suppliers or problems we face during the transition to new suppliers. For example, a market shortage of integrated circuits and panels and other component supply has at times affected, and may affect in the future, lead times, the cost of that supply, and our ability to meet customer demand for our products. Additionally, our Personal Systems business relies heavily upon OMs to manufacture our products and we are therefore dependent upon the continuing operations of those OMs. We represent a substantial portion of the business for certain OMs, and changes to the nature or volume of our business transactions with a particular OM could adversely affect the OM and lead to shortages or delays in receiving component products from that OM. Increased demand for particular components due to industry trends, including components required for the operation of AI, may lead to shortages, delays, and price increases. Our anticipation of these and other supply chain dynamics may result in us purchasing components in greater volumes and on earlier schedules in order to secure an adequate supply, which could adversely affect our working capital and cash flow. If shortages or delays in component products occur, the price of certain components may increase, we may be exposed to quality issues, we may be required to change suppliers or the components may not be available at all. We may not be able to secure enough components at reasonable prices or of acceptable quality to build products or provide services in a timely manner in the quantities needed or according to our specifications. Accordingly, we may lose time-sensitive sales, incur additional freight costs or be unable to pass on price increases to our customers due to such component shortages or delays. If we cannot adequately address a component supply issue, we may have to re-engineer some product or service offerings, which could result in further costs and delays.

•Contingent workers. We also rely on third-party suppliers for the provision of contingent workers, and our failure to effectively manage this workforce could adversely affect our financial results. Our ability to manage the costs associated with engaging a contingent workforce may be impacted by evolving local labor rights laws.

•Working conditions, human rights and materials sourcing. Our brand perception, customer loyalty and legal compliance could be adversely impacted by a supplier’s improper practices or failure to comply with our requirements for environmentally, socially or legally responsible practices and sourcing, including sub-tier sourcing.

•Single-source suppliers. We obtain a significant number of components from a single source due to technology, availability, price, quality or other considerations. For example, we rely on Canon for certain laser printer engines and laser toner cartridges and certain key suppliers for application specific integrated circuits (“ASICs”). We also rely on Intel, AMDAMD, and NVIDIANVIDIA, or other suppliers to provide us with a sufficient supply of processors for the majority of our PCs and workstations. Some of those processors may be customized for our products. New products that we introduce may utilize custom components obtained initially from only one source until we have determined whether there is a need for additional suppliers. Replacing a single-source supplier could delay production of some products as replacement suppliers may be subject to capacity constraints or other output limitations. For some components, alternative sources may not exist or may be unable to produce the quantities of those components necessary to satisfy our production requirements. In certain circumstances, we purchase components from single-source suppliers under short-term agreements that contain favorable pricing and other terms, but that may be unilaterally modified or terminated by the supplier with limited notice and with little or no penalty. The performance of single-source suppliers under those agreements (and the renewal or extension of those agreements upon similar terms) may affect the quality, quantity and price of our components. The loss of, deterioration of our relationship with, or limits in allocation by, a single-source supplier, or any unilateral modification to the contractual terms under which we are supplied components by a single-source supplier could adversely affect our business and financial performance. An adverse litigation outcome, including an injunction in an IP litigation, against a single-source supplier, could also significantly impact our ability to make and sell products utilizing that supplier’s components.

The success of our services business (such as our managed print and device services, lifecycle services, digital services, consumer subscriptions and other workforce services inand solutions for both Printing and Personal Systems) depends to a significant degree on attracting, retaining, and maintaining or increasing the level of revenues from our customers. Our standard services agreements are generally renewable at a customer’s option and/or subject to early termination rights. We may not be able to retain or renew services contracts with our customers, or our customers may reduce the scope of the services for which they contract. Factors that may influence contract termination, non-renewal or reduction include business downturns, dissatisfaction with our services or products, our retirement or lack of support for our services, our customers selecting alternative technologies, the cost of our services as compared to our competitors, general market conditions, a lower than investment grade credit rating or other reasons. We may not be able to replace the revenue and earnings from lost customers or reductions in services. While our services agreements may include penalties for early termination, these penalties may not fully cover our investments in these businesses. Our customers could also delay or terminate implementations or use of our services or choose not to invest in additional services from us in the future. In addition, the pricing and other terms of certain services agreements require us to make estimates and assumptions at the time we enter into these contracts that could differ from actual results. 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 makein the future make, these agreements less profitable or unprofitable. Certain service-oriented business models, such as the “device as a service” model under which customers rentare provided with a hardware device for a periodic fee within a managed solution that provides professional services, software, support, monitoring and other services, may not generate net new sales for customers who previously purchased our hardware transactionally. The device as a service model also requires the participation of a third-party financing provider, and we may face challenges in finding such providers who are willing to provide financing on acceptable terms or at all. In addition, from time to time we offer new services for which customer demand and adoption rates are difficult to predict, and we may not be able to scale these services as we expect. As a result, we may not generate the revenues, profits or cash flows we may have anticipated from our services business within the expected timelines, if at all.

In the course of conducting our business, we must address quality and security issues associated with our products and services, including potential flaws in our engineering, design and manufacturing processes, unsatisfactory performance under service contracts, and unsatisfactory performance or malicious acts by third-parties. Many of our products and services, including those which incorporate AI capabilities, are dependent on third-party software, including from Microsoft and Google, to function as intended, and product issues also sometimes result from the interaction between our products and software and third-party products and software. Our business is also exposed to the risk of defects in third-party components or materials included in our products, including security vulnerabilities. The products and services that we offer are complex, and our regular testing and quality control efforts may not be completely effective in controlling or detecting all quality and security issues or errors, particularly with respect to undiscovered defects or security vulnerabilities in components manufactured by third parties.

We are subject to third party claims that we or customers indemnified by us are infringing upon such parties’ IP rights. We have seen an increasing trend of patent assertion entities and operating companies with licensing businesses engaging in claims of infringement and assertion of patents to extract settlements to avoid significant business disruption, including the assertion of patents related to standardized technologies, such as Wi-Fi or video. The patent litigation environment has also become more challenging due to the emergenceincreasing use of venues adoptingwith procedural and substantive rules and practices that make them more favorable for patent asserters, including the availability of preliminary and permanent injunctions for non-competitors. If we cannot or do not license allegedly infringed IP at all or on reasonable terms, or if we are required to substitute technology from another source,source or disable allegedly IP protected functionality, our operations could be adversely affected. Even if we believe that IP claims are without merit, they can be time-consuming and costly to defend against and may divert management’s attention and resources away from our business. Claims of IP infringement have and may require us to redesign affected products, enter into costly settlements or license agreements, pay damage awards, or face a temporary or permanent injunction prohibiting us from importing, marketing or selling certain products. Additionally, claims of IP infringement may adversely impact our brand and reputation and imperil new and existing customer relationships.

Our net revenue, gross margin, profit and cash flow generation vary among our portfolio of products and services, customer groups and geographic markets and therefore will likely vary in future periods. Overall gross margins and profitability in any given period are dependent on the product, service, customer and geographic mix reflected in that period’s net revenue, which in turn depends on the overall demand for our products and services. We have experienced and may in the future experience delays or reductions in spending by our customers or potential customers, which could have a material adverse effect on demand for our products and services and could result in a significant decline in net revenue. For example, we observed continueda marketcompetitive uncertainty,pricing cautiousenvironment, commercialvariability spendingin oncommodity informationcosts, technologydemand hardware,softness lowerin discretionaryPrint consumerand spending,demand softness in certain geographic regions in Personal Systems, secular declines in demand for certain products or solutions, including printing products and solutions, inflationary pressures, the imposition of new or increased tariffs and other trade restrictions, and foreign currency fluctuations. We have also observed significant inflationary trends in memory and storage costs. In addition, net revenue declines in some of our businesses may affect net revenue in our other businesses, as we may lose cross-selling opportunities. Our gross margins are also subject to volatility and downward pressure due to a variety of factors, including: continued industry-wide global product pricing pressures and product pricing actions that we may take in response to such pressures; increased competition; our ability to effectively stimulate demand for certain of our products and services; compressed product life cycles; supply shortages; potential increases in the cost of components; our ability to manage product quality and warranty costs effectively; fluctuations in foreign exchange rates; inflation and other macroeconomic pressures; the imposition of new or increased tariffs and other trade restrictions; and the introduction of new products or services, including new products or services with lower profit margins. Moreover, newer geographic markets can be relatively less profitable due to our investments associated with entering those markets and local pricing pressures, as well as difficulty establishing and maintaining the operating infrastructure necessary to support the high growth rate associated with some of those markets. Our efforts to address the challenges facing our business could increase the level of variability in our financial results because the rate at which we are able to realize the benefits from those efforts may vary from period to period. These factors could also make it difficult to accurately forecast revenues and operating results and could negatively affect our ability to provide accurate forecasts to suppliers and manufacturers, manage our relationships and other expenses and to make decisions about future investments.

Conflicts might arise between our various distribution channels, we may experience the loss or deterioration of an alliance or distribution arrangement or a reduced assortment of our products, we may not be able to limit the potential misuse of pricing programs by our channel partners and we may fail to optimize the use of our pricing programs. Moreover, some of our channel partners and distributors may have insufficient financial resources and may not be able to withstand changes in business conditions, including economic weakness, industry consolidation and market trends. They may also have difficulty selling our products under new business models. Many of our significant distributors operate on narrow margins and have been negatively affected by business and trade pressures in the past. Additionally, in certain regions, we rely on a limited number of distributors, which could exacerbate these risks. Trade receivables that are not covered by collateral or credit insurance are outstanding with our distribution and retail channel partners. Net revenue from indirect sales could suffer, and we could experience disruptions in distribution, if our distributors’ financial conditions, abilities to borrow funds or operations weaken or if our distributors cannot successfully compete in the online or omnichannel marketplace.

We may not achieve some or all of the expected benefits of our restructuring and other plans and oursuch restructuringplans may adversely affect our business.

We have undertaken and may undertake in the future restructuring and other plans in order to realign our cost structurestructure, drive customer satisfaction, product innovation and toproductivity through artificial intelligence, and achieve operating efficiencies that we expect to reduce costs, including the planFiscal announced2023 inPlan Novemberand 2022.our Fiscal 2026 Plan. Implementation of any restructuringsuch planplans may be costly and disruptive to our business, and we may not be able to obtain the anticipated cost savings, operational improvements and estimated workforce reductions within the projected timing or at all. Additionally, as a result of restructuringthese initiatives,plans, we may experience a loss of continuity, loss of accumulated knowledge and/or inefficiency, loss of key employees and/or other retention issues during transitional periods. Restructuring and other plans can require a significant amount of time and focus, which may divert attention from operating and growing our business. Moreover, projections of any cost savings or other benefits associated with our restructuring plans are based on current business operations and market dynamics, and could be significantly impacted by various factors, including but not limited to our evolving business models, future investment decisions, market environment and technology landscape. For more information about our restructuring and other plans, see Note 3, “Restructuring and Other Charges” to our Consolidated Financial Statements in Item 8.

•WeIn certain instances we have not, and we may not in the future, fully realize the anticipated benefits of any particular transaction,transactions in the timeframe we expected or at all, such transactiontransactions may be less profitable than anticipated or unprofitable, we may not identify all factors to estimate accurately our costs, timing or other matters, and realizing the benefits of a particular transaction may depend upon competition, market trends, additional costs or investments and the actions of advisors, suppliers or other third parties.

Our aspirations and disclosures related to environmental, socialenvironmental and governance (“ESG”)societal matters expose us to risks that could adversely affect our reputation and performance.

We face increasing attention from the investment community, special interest groups, customers, enforcement authorities and other stakeholders, who may have conflicting views, related to our positions, performance, and disclosures relating to environmental and societal related matters and we are subject to legal and regulatory requirements relating to such positions, performance, and disclosures, which continue to broaden and may be conflicting, both in terms of scope and geography. We have establishedenvironmental and publicly announced ESGsocietal goals, including our commitments to address climate change, human rights, and digital equity. These statementswhich reflect our current plans and aspirations and are not guarantees that we will be able to achieve them. Our failure to adequately update, accomplish or accurately track and report on these goals on a timely basis, or at all, or a decision to amend, retire, or stop reporting on certain goals, or positions we take or do not take on social issues could adversely affect our reputation, financial performance and growth, and expose us to increased scrutiny from the investment community, special interest groups, customers and enforcement authorities. InAdditionally, addition,a therefailure existsto certainadequately “anti-ESG”meet sentimentregulatory amongexpectations somemay individualsresult in the loss of business and governmentreputational institutions,impacts, and we mayperiodically alsoare, faceand scrutiny,in reputationalthe risk,future lawsuitscould become the target of litigation, investigations or marketother accessproceedings restrictionsinitiated fromby thesegovernment partiesauthorities regardingor private actors alleging that our ESGactivities initiatives.related to environmental and societal matters are anti-competitive, discriminatory or otherwise unlawful. Moreover, efforts to meet evolving and increasingly divergent stakeholder expectations on environmental and societal and related matters may place a strain on our employees and systems.

Our ability to achieve any ESGenvironmental objectiveand societal objectives is subject to numerous risks, some of which are outside of our control. Examples of such risks include the availability and cost of low- or non-carbon-based energy sources, the evolving regulatory requirements affecting product circularity, ESGenvironmental or societal standards or disclosures, the evolving consumer protection laws applicable to ESG matters,laws, the availability of materials and suppliers that can meet our sustainability,environmental, diversitysocietal and other ESGrelated goals and the availability of funds to invest in ESGenvironmental and societal initiatives in times where we are seeking to reduce costs.

Standards for tracking and reporting ESGenvironmental and societal matters continue to evolve. Our selection of voluntary disclosure frameworks and standards, and the interpretation or application of those frameworks and standards, may change from time to time or differ from those of others. Methodologies for reporting ESGenvironmental and societal data may be updated and previously reported ESG data may be adjusted to reflect improvement in availability and quality of third-party data, changing assumptions, changes in the nature and scope of our operations and other changes in circumstances. Our processes and controls for reporting ESGenvironmental and societal matters across our operations and supply chain are evolving along with multiple disparate standards for identifying, measuring, and reporting ESGenvironmental and societal metrics, including ESG-relatedsustainability-related disclosures that are or may become required by the SEC, European and other regulators (including, but not limited to, the EU Corporate Sustainability Reporting Directive, the EU Corporate Sustainability Due Diligence Directive,Directive and the state of California’s new climate change disclosure requirements, and climate-change disclosure requirements from the SEC), and such standards may change over time, which could result in significant revisions to our current goals, reported progress in achieving such goals, or ability to achieve such goals in the future. If our ESG practices do not meet evolving government, investor or other stakeholder expectations and standards, then our reputation or our attractiveness as an investment, business partner, acquiror, product or service provider or employer could be negatively impacted and we could be subject to litigation or regulatory proceedings.

Our business and financial performance depend on worldwide economic conditions and the demand for our products and services. Ongoing economic weakness, including an economic slowdown or recession, uncertainty in markets throughout the world and other adverse economic conditions, including inflation, changes in monetary policy, changes in levels of government spending, increased interest rates, tariffs,tariffs and other trade restrictions, exchange rates and an evolving global trade environment, have resulted in, and may continue to result in, decreased demand for our products and services and challenges in managing inventory levels and accurately forecasting revenue, gross margin, cash flows and expenses. For example, during fiscal year 20242025 we observed continued market uncertainty, cautious commercial spending on information technology hardware, including in China, lower discretionary consumer spending, increasing commodity costs, inflationary pressures, the implementation of tariffs and other trade restrictions, and foreign currency fluctuations. Changes in government spending limits may continue to reduce demand for our products and services from governments or organizations that receive government funding. Moreover, U.S. government contracts are subject to congressional funding, which at times has been and may in the future be unavailable or delayed, which could impact our business.

Our worldwide operations could be disrupted by natural disasters, telecommunications failures, cybersecurity incidents or other disruptions impacting information technology systems, manufacturing equipment failures, power or water shortages, fires, extreme weather conditions, and other disasters or catastrophic events, for which we are predominantly self-insured. Terrorist acts or armed conflicts, for which we are predominantly uninsured, may also disrupt our operations. Global pandemics, such as COVID-19,pandemics or other public health crises may adversely affect, among other things, our supply chain and associated costs; demand for our products and services; our operations and sales, marketing and distribution efforts; our research and development capabilities; our engineering, design, and manufacturing processes; and other important business activities. These events could result in significant losses, adversely affect our competitive position, increase our costs, require substantial expenditures and recovery time, make it difficult or impossible to provide services or deliver products to our customers or to receive components from our suppliers, create delays and inefficiencies in our supply chain and result in the need to impose employee travel restrictions. Our operations and those of our suppliers and distributors could be adversely affected if manufacturing, logistics, or other operations in key locations, are disrupted for any reason, such as those described above or other economic, business, labor, environmental, public health, regulatory or political reasons. In addition, even if our operations are unaffected or recover quickly, if our customers cannot timely resume their own operations, they may reduce or cancel their orders, or these events could otherwise result in a decrease in demand for our products.

There are climate-related risks wherever our business is conducted. Global climate change is resulting, and is projected to continue to result, in natural disasters and adverse weather, such as drought, wildfires, storms, sea-level rise, flooding, heat waves, and cold waves, occurring more frequently or with greater intensity. Such extreme climate related events are driving changes in market dynamics, stakeholder expectations, and local, national and international climate change policies and regulations, which could result in disruptions to us, our suppliers, vendors, customers and logistics hubs and impact employees’ abilities to live in certain areas, commute or to work from home effectively. These disruptions could make it more difficult and costly for us to deliver our products and services, obtain components or other supplies through our supply chain, maintain or resume operations or perform other critical corporate functions, and could reduce customer demand for our products and services. Furthermore, climate change has reduced the availability and increased the cost of insurance for these negative impacts of natural disasters and adverse weather conditions by contributing to an increase in the incidence and severity of such natural disasters.

The increasing concern over climate change has resulted, and we expect will continue to result, in transition risks such as shifting customer preferences and regulations, including with regard to our products and their environmental impact. These demands have, and we expect will continue to, cause us to incur additional costs and make other changes to our operations. If we fail to manage transition risks effectively, customer demand for our products and services could diminish, and our profitability and cash flow could suffer. Additionally, concerns over climate change have resulted in, and are expected to continue to result in, the adoption of regulatory requirements designed to address climate change, such as imposing a price on carbon emissions, requirements of increased circularity in products, product efficiency and environmental certification requirements and climate-related disclosures. As a result, we have experienced and expect to continue to experience, increased compliance burdens and costs, increased indirect costs resulting from our suppliers passing on compliance costs to us, and certain of our products may be rendered obsolete, financially unviable or face market access issues. Further, anti-ESGconflicting governmentregulations initiativesand a lack of harmonization of legal and regulatory environments across the jurisdictions in which we operate may conflictcreate withenhanced othercompliance regulatoryrisks requirementsand or our stakeholders’ expectations.costs. The impacts of climate change, whether involving physical risks or transition risks, are expected to be widespread and may materially adversely affect our business and financial results.

We are subject to variousvarious, and sometimes conflicting, federal, state, local and foreign laws and regulations. There can be no assurance that such laws and regulations will not be interpreted and changed in ways that will require us to modify our business models and objectives or affect our returns on investments by restricting existing activities and products, subjecting them to escalating costs or increased restrictions or prohibiting them outright. In particular, we face increasing complexity in our product design and procurement operations as we adjust to new and future requirements relating to the composition of our products, their safe use, the energy consumption associated with those products, climate change laws and regulations, and product repairability, reuse, recyclability and take-back legislation. In addition, there is existing and proposed legislation related to human rights, environmental and social responsibility (including tracing requirements related to forced labor prohibitions) for our operations, supply chain partners, and our products and services. Moreover, we are becoming increasingly subject to laws, regulations and international treaties relating to climate change, such as carbon pricing or product energy efficiency requirements or more prescriptive reporting requirements. Additionally, the rapid evolution and increased adoption of AI technologies and our obligations to comply with emerging laws and regulations may require us to develop additional AI-specific governance programs, which could entail significant costs or limit our ability to incorporate certain AI capabilities into our products and solutions.

As these new laws, regulations, treatiestreaties, executive orders, directives, enforcement priorities and similar initiatives and programs are adopted and implemented, we will beare required to comply or potentially face market access limitations or restrictions on our products entering certain jurisdictions or our ability to provide services within certain jurisdictions, sanctions or other penalties, including fines. Such burdens or costs have in the past resulted in, and may in the future result inin, an adverse effect on our financial condition, results of operations and cash flows. We could also face significant compliance and operational burdens and incur significant costs in our efforts to comply with or rectify non-compliance with these laws or regulations. Our potential exposure also includes third-party property damage, personal injury claims and clean-up costs. Further, liability under some environmental laws relating to contaminated sites can be imposed retroactively, on a joint and several basis, and without any finding of noncompliance or fault.

We face legal claims or regulatory matters involving stockholder, consumer, competition, commercial, IP, employment, and other issues on a global basis. There is an increasingly active litigation and regulatory environment, including but not limited to employment and patent-monetization claims in the United States, Germany and Brazil, and litigation and regulatory matters focused on consumer protection, privacy, and competition regulation globally. Patent monetization campaigns have become increasingly aggressive, including those by patent holders for standardized technology, such as WiFiWi-Fi and video and other standardized technology in PCs, who have sued in venues that allow injunctions despite commitments to license patents on fair and reasonable terms. If we are unsuccessful in defending against such claims, we may be exposed to exorbitant licensing demands in order to avoid potential disruptions to our business. As described in Note 14, “Litigation and Contingencies” to the Consolidated Financial Statements in Item 8, we are engaged in a number of litigation and regulatory matters that may have a material adverse impact on our business, financial condition, cash flows or results of operations, if decided adversely to or settled by us. Litigation and regulatory proceedings are inherently uncertain, and adverse rulings and settlements have occurred and may occur, including awards of monetary damages, imposition of fines, issuance of injunctions or cease-and-desist orders directing us to cease engaging in certain business practices, cease manufacturing or selling certain products, requiring the compulsory licensing of patents, or requiring other remedies. In addition, regardless of the outcome, litigation and regulatory proceedings can be costly, time-consuming, disruptive to our operations, and distracting to management.management, and adversely impact our reputation.

Our contracts with our customers may include unique and specialized performance requirements. In particular, our contracts with federal, state, provincial and local governmental customers are subject to procurement regulations, contract provisionsprovisions, executive orders and other specific requirements relating to their formation, administration and performance. In addition, contracts with customers may also include a requirement to comply with customer codes of conduct, which may have terms that conflict with our code of conduct, business policies and strategic objectives. Any failure by us to comply with the specific provisions in our customer contracts or any violation of government contracting regulations or applicable law could result in loss of business or the imposition of civil and criminal penalties, which may include termination of contracts, forfeiture of profits, suspension of payments and, in the case of our government contracts, fines and suspension from future government contracting. Such failures could also cause reputational damage to our business and affect our ability to compete for new contracts. If our customer contracts are terminated, if we are suspended or disbarred from government work, or if our ability to compete for new contracts is adversely affected, our financial performance could suffer. Our partner contracts also contain terms relating to new partner business models and tools creation that could raise issues for which laws or regulations are currently changing or emerging. This could affect us in ways that are not currently fully known or measurable.

We are focused on driving further growth, recurring revenue and investment in strategic areas and believe we are well positioned to lead the future of work with our competitive product lineup and enhanced portfolio of hybrid systems, remote-computing solutions, and intelligent print solutions. We are driving innovation by accelerating the delivery of AI across our product portfolio and focusing on growth opportunities in commercial, solutions, and premium consumer and gaming markets. We arehave consolidatingconsolidated all our software resources under the Technology and Innovation Organization to evolve from a transactional hardware company to a more experience-led organization, further strengthening our ability to capture these opportunities.

•In Personal Systems, we face challenges with a competitive pricing environment, variability in commodity costs, especially increasing memory and demandstorage softnesscosts, inand certainthe geographicuncertainty regions.of the market’s ability to absorb price increases.

Our business and financial performance depend significantly on worldwide economic conditions. We face global macroeconomic challenges such as ongoing geopolitical conflicts (including the military conflicts in Ukraine and the Middle East, and tensions in the Taiwan Strait and South China Sea),tensions, uncertainty in the markets, volatility in exchange rates, inflationary trends and evolving dynamics in the global trade environment. We also experience seasonality in the sale of our products and services which may be affected by general economic conditions.

In November 2022, we announced our Future Ready Plan (the “Fiscal 2023 Plan” or “Future Ready”) to become a more digitally enabled company, focus investments on key growth opportunities and simplify our operating model. The Fiscal 2023 Plan, as amended in February 2025, ran through the end of fiscal year 2025 and exceeded our overall program savings target. Since announcing our Fiscal 2023 Plan, we have enhanced our digital capabilities in Workforce Solutions and continued to leverage AI to positively impact our products, solutions and operations. Additionally, we are reducingreduced portfolio complexity, improvingimproved continuity of supply, and increasingincreased our forecast accuracy across our business to drive reduction in our cost of sales and operating expenses. We also continued to reducereduced our structural cost through headcount reductions and are on track to achieveachieved our overall headcount reduction goal. We expect to continue to invest some of the savings into our growth areas and our people.

See “Risk Factors—Strategic and Operational Risk Factors—We may not achieve some or all of the expected benefits of our restructuring plans and our restructuring may adversely affect our business” in Item 1A, which is incorporated herein by reference. For more information on our Fiscal 2023 Plan and Fiscal 2026 Plan, see Note 3, “Restructuring and Other Charges,” to the Consolidated Financial Statements in Item 8 of Part II of this report, which is incorporated herein by reference.

We recognize revenue depicting the transfer of promised goods or services to customers in an amount that may include variable consideration. When the transaction price includes a variable amount, we estimate the amount using either the expected value or most likely amount method. At the time of revenue recognition, we reduce the transaction price by the estimated variable consideration (e.g., customer and distributor programs and incentive offerings, rebates, promotions, and other volume-based incentives and expected returns). We use estimates to determine the expected variable consideration for such programs based on historical experience, expected consumer behavior and market conditions.

In fiscal year 2024,2025, total net revenue decreasedincreased 0.3%3.2% (decreasedincreased 0.2%3.7% on a constant currency basis) as compared to the prior-year period. Net revenue from the United States decreasedincreased 0.2%2.2% andto remained at $18.8$19.2 billion, and outside of the United States decreasedincreased 0.3%3.8% to $34.8$36.1 billion. The decreaseincrease in products net revenue was primarily driven by lowerproducts hardwarenet revenue due to increased units in PrintingPersonal andSystems competitiveas pricingwell as an increase in Printerservices net revenue due to support services on hardware and Personal Systems,devices, partially offset by marketa recoverydecline in Commercial PS and higherPrinting net revenue inand keyunfavorable growthcurrency areas. Services net revenue remained flat.impacts.

In fiscal year 2024,2025, gross margin increaseddecreased by 0.71.5 percentage points,points primarily driven by products gross margin due to lowerhigher supply chain costs,commodity and costtariff savings, including Future Ready transformation savings, partially offset by competitive pricing in Printer hardware and Personal Systems, andcosts, mix shifts towards Personal Systems whileand servicesunfavorable currency impacts, partially offset by disciplined pricing actions and cost savings including Future Ready transformation savings. Services gross margin decreased.decreased due to unfavorable mix shifts.

R&D expense increaseddecreased 3.9%2.3% in fiscal year 2024,2025, primarily due to continued investments in innovation, partially offset by disciplined cost management including Future Ready transformation savings.

SG&A expense increased 5.6%2.9% in fiscal year 2024,2025, primarily due to higher litigation costs and go-to-market initiatives,costs, partially offset by disciplinedlower variable compensation and the receipt of a new government grant in the current period as well as cost managementsavings including Future Ready transformation savings.

Acquisition and divestiture charges primarily include direct third-party professional and legal fees, and integration and divestiture-related costs, as well as non-cash adjustments to the fair value of certain acquired assets such as inventory and certain compensation charges related to cash settlement of restricted stock units and performance-based restricted stock units from acquisitions.inventory. Acquisition and divestiture charges decreased by $157$38 million in the fiscal year 2024,2025, primarily due to reduced integration activities associated with the fiscal year 2022 Poly acquisition.activities.

Our effective tax rate was 15.4%5.2% in fiscal year 2024.2025. The effective tax rate differs from the U.S. federal statutory rate of 21% primarily due to impacts of changesdecreases in valuation allowances and favorableuncertain tax rates associated with certain earnings from HP’s operations in lower-tax jurisdictions throughout the world.positions.

In fiscal year 2024,2025, we recorded $214$415 million of net income tax benefits related to non-recurring items in the provision for taxes. This amount included $198$273 million related to changes in uncertain tax positions, $80 million related to restructuring charges, $44 million related to changes in valuation allowances, $60 million related to restructuring charges, $14$28 million related to the filing of tax returns in various jurisdictions, and $11$22 million related to acquisitionaudit settlements in various jurisdictions, and $16 million related to litigation charges. These benefits were partially offset by $39$69 million of uncertain tax position charges and $25 million related to changes in tax rates.

DuringA description of the firstproducts quarterand ofservices fiscalfor yeareach 2024,segment HPcan realignedbe its business unit financial reporting more closely with its customer market segmentation. Future changes to this organizational structure may resultfound in changes to the segments disclosed. For more information on our segments see Note 2, “Segment Information,” to the Consolidated Financial Statements in Item 8, which is incorporated herein by reference.

Personal Systems net revenue increased 1.4%6.5% (increased 1.3%6.7% on a constant currency basis) in the fiscal year 2024,2025, as compared to the prior-year period. The net revenue increase was primarily due to a 3.3%4.3% increase in PC unit volume driven by Commercialthe PS,Windows-based partiallyPC offsetoperating bysystem refresh, and a 1.4%3.1% decreaseincrease in average selling price (“ASPs”). The decreaseincrease in ASPs is primarily due to competitivefavorable mix shift towards Commercial PS and disciplined pricing, partially offset by favorableunfavorable mixcurrency shifts.impact.

Commercial PS net revenue increased 3.1%7.7% primarily drivendue byto a 5.7%6.4% increase in units due to market recovery,expansion partially offset byand a 1.6%2.7% decreaseincrease in ASPs. The decreaseincrease in ASPs was driven by unfavorablefavorable mix shifts and competitivedisciplined pricing.pricing, partially offset by unfavorable currency impacts.

Consumer PS net revenue decreasedincreased 2.4%3.6% drivenprimarily due to by a 2.5%2.3% decreaseincrease in ASPs and a 0.3%1.2% decreaseincrease in units due to demand softness, especially in China.units. The decreaseincrease in ASPs was driven by competitivedisciplined pricing and unfavorablefavorable mix shifts, partially offset by favorable foreignunfavorable currency impacts.

Personal Systems earnings from operations as a percentage of net revenue increaseddecreased by 0.10.9 percentage points driven by ana increasedecrease in gross margin, partially offset by ana increasedecrease in operating expenses as a percentage of revenue. Gross margin increaseddecreased primarily due to lowerhigher supplycommodity chainand cost,tariff favorable mix shifts as well as Future Ready transformation savings,costs, partially offset by competitivedisciplined pricing.pricing actions. Operating expenses as a percentage of revenue increaseddecreased primarily due to higherlower variable compensation and litigation costs,charges go-to-marketas initiativeswell and continued investments in innovation, partially offset by disciplinedas cost managementsavings including Future Ready transformation savings.

Printing net revenue decreased 3.8%3.7% (decreased 3.2%2.7% on a constant currency basis) for fiscal year 20242025 as compared to the prior-year period. The decline in net revenue was primarily driven by Supplies, Commercial Printing, Consumer Printing and SuppliesConsumer Printing as well as unfavorable foreign currency impacts. Net revenue for Supplies decreased 1.4%3.4% primarily due to decline in the installed base and usage as well as foreignand currency impacts, partially offset by disciplined pricing. Printer unit volume decreased 7.2%4.2% due to demand weaknesssoftness and hardware ASPs decreased 3.2%.1.5%. Printer hardware ASPs decreased primarily due to competitiveunfavorable pricing,mix particularlyshifts fromtowards ourConsumer JapanesePrinting competitorsand benefiting from a favorable foreignunfavorable currency environment, and mix shifts.impacts.

Net revenue for Commercial Printing decreased by 7.8%,4.3%, primarily due to ana 8.8%6.2% decrease in printer unit volumevolume, andpartially offset by a 1.8%0.1% decreaseincrease in ASPs. The decreaseincrease in ASPs was primarily driven by competitivefavorable pricing,mix shifts, partially offset by favorablecompetitive mix shifts.pricing.

Net revenue for Consumer Printing decreased 9.4%,4.1%, primarily due to a 6.2%3.1% decrease in printer unit volume and a 3.3%1.4% decrease in ASP’s.ASPs. The decrease in ASPs was primarily driven by competitiveunfavorable pricing,currency impacts and mix shifts, partially offset by favorabledisciplined mix shifts.pricing.

Printing earnings from operations as a percentage of net revenue increaseddecreased by 0.10.3 percentage points driven by ana increasedecrease in gross margin, partially offset by higherwhile operating expenses as a percentage of revenue.revenue Theremained increaseflat. in grossGross margin wasdecreased primarily drivendue to higher tariff costs, partially offset by favorable mix shifts astowards wellSupplies, asdisciplined pricing, cost savings including Future Ready transformation savings,savings partiallyand offsetthe byreceipt competitive pricing. Operating expenses asof a percentagenew ofgovernment revenuegrant increasedin primarilythe duecurrent to higher go-to-market initiatives, partially offset by disciplined cost management including Future Ready transformation savings.period.

The loss from operations in Corporate Investments for the fiscal year 20242025 was primarily due to expenses associated with our incubation projects and investments in digital enablement.

Net cash provided by operating activities increaseddecreased by $0.2$0.1 billion for fiscal year 20242025 primarily due to favorable working capital impacts,impacts and lower net earnings, partially offset by changes in receivables from contract manufacturers due to higher manufacturing activity and amounts collected and held on behalf of a third party for trade receivables previously sold.manufacturers.

DSO measures the average number of days our receivables are outstanding. DSO is calculated by dividing ending accounts receivable, net of allowance for credit losses, by a 90-day average of net revenue. The increase in DSO was primarily due to unfavorablelower revenue linearity.factoring.

DOS measures the average number of days from procurement to sale of our product. DOS is calculated by dividing ending inventory by a 90-day average of cost of goods sold. The increase in DOS iswas primarily due to strategic buys inhigher Personal Systems volume driven by Windows-based PC operating system refresh demand, tariff mitigation and highersupply in-transitchain shipments.resiliency actions.

DPO measures the average number of days our accounts payable balances are outstanding. DPO is calculated by dividing ending accounts payable by a 90-day average of cost of goods sold. The increase in DPO as compared to prior-year period, was primarily due to higher manufacturingpurchasing volumes in Personal Systems as well as favorable changes in payment terms.volumes.

Net cash used in investing activities increased $0.1$0.5 billion for fiscal year 20242025 as compared to the prior-year period, primarily due to paymentshigher madeinvestment in connectionproperty, withplant, acquisitions.equipment and purchased intangible of $0.3 billion, collateral posted for derivative instruments of $0.3 billion.

Net cash used in financing activities increaseddecreased by $0.2$1.0 billion in fiscal year 20242025 compared to the prior-year period, primarily due to highera $1.3 billion decrease in share repurchases of $2.0 billion,repurchases, partially offset by lowerhigher net debt repayment of $1.6 billion and collateral returned for derivative instruments of $0.2 billion in the prior-year period.billion.

In fiscal year 2024,2025, HP returned $3.2$1.9 billion to shareholders in the form of share repurchases of $2.1 billion and cash dividends of $1.1 billion.billion Onand Augustshare 27, 2024, HP’s Boardrepurchases of Directors$0.8 increased HP’s total share repurchase authorization to $10.0 billion, inclusive of the amount remaining under previously authorized share repurchases.billion. As of October 31, 2024,2025, HP had approximately $9.3$8.4 billion remaining under the share repurchase authorizations approved by HP’s Board of Directors.

Short-term debt increaseddecreased by $1.2$0.6 billion and long-term debt decreasedincreased by $1.0$0.6 billion for fiscal year 20242025 as compared to the prior-year period. These changes are due to the issuance of unsecured senior debt in April 2025, the repayment upon maturity of the Global Notes due June 2025 and the reclassification of the Global Notes due in June 20252026 to short-term.

Our credit risk is evaluated by major independent rating agencies based upon publicly available information as well as information they obtain during our ongoing discussions. While we currently do not have any rating downgrade triggers that would accelerate the maturity of a material amount of our debt, a downgrade from our current credit rating may increase the cost of borrowing under our credit facilities,facility, reduce market capacity for our commercial paper, require the posting of additional collateral under some of our derivative contracts and may have a negative impact on our liquidity and capital position and our contractual business going forward, depending on the extent of such downgrade. See “Risk Factors—Macroeconomic, Industry and Financial Risks—Failure to maintain our credit ratings could adversely affect our liquidity, capital position, borrowing costs and access to capital markets, as well as our subscription based and other offerings.” in Item 1A, which is incorporated herein by reference. We can access alternative sources of funding, including drawdowns under our credit facility, if necessary, to offset potential reductions in the market capacity for our commercial paper.

(4)Retirement and Post-Retirement Benefit Plan Contributions. In fiscal year 2025,2026, we expect to contribute approximately $36$43 million to our non-U.S. pension plans, $30$31 million to cover benefit payments to U.S. non-qualified pension plan participants and $4$3 million to cover benefit claims for our post-retirement benefit plans. Our policy is to fund our pension plans so that we meet the minimum contribution required by local government, funding and taxing authorities. Expected contributions and payments to our pension and post-retirement benefit plans are excluded from the contractual obligations table because they do not represent contractual cash outflows as they are dependent on numerous factors which may result in a wide range of outcomes. For more information on our retirement and post-retirement benefit plans, see Note 4, “Retirement and Post-Retirement Benefit Plans”, to the Consolidated Financial Statements in Item 8, which is incorporated herein by reference.

(5)Cost Savings Plans. As a result of our approved restructuring plans, we expect to make future cash payments of approximately $0.2 billion in the fiscal year 2025.2026. For more information on our restructuring activities that are part of our cost improvements, see Note 3, “Restructuring and Other Charges”, to the Consolidated Financial Statements in Item 8, which is incorporated herein by reference.

(6)Uncertain Tax Positions. As of October 31, 2024,2025, we had approximately $1.0$797 billionmillion of recorded liabilities including related interest and penalties pertaining to uncertain tax positions. We are unable to make a reasonable estimate as to when cash settlement with the tax authorities might occur due to the uncertainties related to these tax matters. Payments of these liabilities would result from settlements with taxing authorities. For more information on our uncertain tax positions, see Note 6, “Taxes on Earnings”, to the Consolidated Financial Statements in Item 8, which is incorporated herein by reference.

•In Personal Systems, we face challenges with a competitive pricing environment, variability inincreasing commodity costs, especiallyparticularly increasingin memory and storage costs, and the uncertainty of the market’s ability to absorb price increases.

Since April 2025, new, substantial tariffs have been imposed on imports to the United States. On February 20, 2026, the U.S. Supreme Court held that tariffs imposed under the International Emergency Economic Powers ActIEEPA were not authorized by statute which removed the obligation for and collection of related tariffs. As of July 31, 2026, we have applied for the recovery of approximately $0.3 billion of previously paid IEEPA tariffs. We have received $127 million of refunds during the three and nine months ended July 31, 2026, and $91 million subsequent to the reporting period. Refunds are recognized as a reduction of Products cost of net revenue when received. We are continuing to assess the impactrecoverability of subsequentadditional developments, including the potential recovery ofIEEPA tariffs previously paid, as well as the effects of any additional tariffs or trade actions that may be imposed.

During fiscal year 2025 and the firstnine halfmonths ofended fiscalJuly year 2026, we experienced higher commodity and trade related costs and implemented pricing and other mitigation actions during the period. Additionally, during the first half of fiscal year31, 2026, we experienced higher inflationary pressure in memory and storage costs and supply constraints in our Personal Systems business, which we anticipate will continue. We continue to evaluate and implement further mitigating actions, including potential supply chain resiliency movements and cost and pricing measures, as the trade and supply environments evolve.

On November 25, 2025, we announced our Fiscal 2026 Plan intended to drive customer satisfaction, product innovation, and productivity primarily through artificial intelligence adoption and enablement that HP expects will be implemented through fiscal 2028. We are on-track to achieve our expected gross reductions in cost by the end of fiscal year 2028. During the firstnine halfmonths ofended fiscalJuly 31, 2026, we took actions to integrate AI into our channel partner experience and scale additional AI agents in our supply chain operations and expect to continue to accelerate and scale these initiatives. We additionally took actions to reduce headcount through the EER program of which a significant portion of which will get executed during fiscal year 2026.

For the three months ended AprilJuly 30,31, 2026, net revenue increased 9.0%12.5% (increased 6.3%10.9% on a constant currency basis) as compared to the prior-year period. Net revenue from international operations increased 14.4%16.8% to $9.8$10.4 billion primarily driven by the Windows-based PC operating system refresh,billion, while U.S. net revenue decreasedincreased 0.9%5.1% to $4.7$5.3 billion. The increase in net revenue was primarily driven by products net revenue due to pricing actions to mitigate higher commodity costs in Personal Systems asand wellfavorable ascurrency animpacts, increasepartially offset by demand softness in servicesPrinting. Services net revenue increased due to support services on hardware devices.

For the sixnine months ended AprilJuly 30,31, 2026, total net revenue increased 7.9%9.5% (increased 5.7%7.5% on a constant currency basis) as compared to the prior-year period. Net revenue from international operations increased 12.2%13.7% to $19.7$30.1 billion primarily driven by the Windows-based PC operating system refresh,billion, while U.S. net revenue decreasedincreased 0.3%1.6% to $9.1$14.4 billion. The increase in net revenue was primarily driven by products net revenue due to pricing actions to mitigate higher commodity costs in Personal Systems as well as an increase in services net revenue due to support services on hardware devices,Systems, partially offset by demand softness and competitive pressures in Printing. Services net revenue increased due to support services on hardware devices.

For the sixthree months ended AprilJuly 30,31, 2026, gross margin decreased 0.61.7 percentage points primarily driven by products gross margin due to higher commodity and supply chain costs and unfavorable mix shifts towards Personal Systems, partially offset by pricing actions,actions including favorable foreign currency impacts.impacts, and IEEPA tariff refunds. Services gross margin increased due to favorable mix shifts.

R&D expense increaseddecreased 7.7% and 3.3%4.2% for the three and six months ended AprilJuly 30,31, 2026, respectively primarily driven by favorable net R&D partner funding, partially offset by higher variable compensation.

SG&A expense increased 2.3%5.9% and 2.7%3.7% for the three and sixnine months ended AprilJuly 30,31, 2026 primarily driven by higher variable compensation.compensation, partially offset by disciplined cost management.

Restructuring and other charges increased $243 million and $299$237 million for the three and sixnine months ended AprilJuly 30,31, 2026, respectively,2026 primarily driven by the EER program under the Fiscal 2026 Plan. For more information, see Note 3, “Restructuring and other charges”, to the Condensed Consolidated Financial Statements in Item 1 of Part I of this report, which is incorporated herein by reference.

Acquisition and divestiture charges for the three and sixnine months ended AprilJuly 30,31, 2026 decreased by $13$4 million and $21$25 million, respectively, primarily due to lower acquisition and integration activities.

Interest and other, net expense decreasedremained $29 million and $82 millionflat for the three and six months ended AprilJuly 30,31, 2026, respectively,2026 primarily due to a gain from a single litigation matter that does not relate to HP’s ongoing business operations recorded in the prior period, offset by lower interest expense on debt and factoring costs.costs in the current period.

Our effective tax rate was 8.7%17.2% for the three months ended AprilJuly 30,31, 2026 and 14.5%15.6% for the sixnine months ended AprilJuly 30,31, 2026. The difference between the U.S. federal statutory tax rate of 21% and our effective tax rate for the three and six months ended AprilJuly 30,31, 2026 was primarily due to decreases in unrecognized tax benefits. For the nine months ended July 31, 2026, the difference was primarily due to decreases in unrecognized tax benefits and audit settlements in various jurisdictions.

Three months ended AprilJuly 30,31, 2026 compared with three months ended AprilJuly 30,31, 2025

Personal Systems net revenue increased 13.2%18.5% (increased 10.0%16.7% on a constant currency basis) for the three months ended AprilJuly 30,31, 2026. The net revenue increase was primarily due to a 22.3%40.8% increase in ASPsASPs, withpartially offset by a 15.8% decrease in PCs unit volume driven by a focus on higher value units in aan dynamicincreasing commodity environmentcost contributing to a 7.0% decrease in PCs unit volume.environment. The increase in ASPs is primarily due to pricing actions,actions to mitigate higher commodity costs, favorable currency impacts and mix shifts.

Commercial PS net revenue increased 14.1%21.9% primarily due to a 23.0%41.1% increase in ASPs, partially offset by a 6.7%13.6% declinedecrease in units. The increase in ASPs is primarily due to pricing actions, favorable currency impacts and mix shifts.shifts towards premium.

Consumer PS net revenue increased 10.4%10.1% primarily due to a 19.9%37.1% increase in ASPs, partially offset by a 7.8%19.4% declinedecrease in units. The increase in ASPs was primarily due to pricing actions and favorable currency impacts.impacts partially offset by unfavorable mix shifts.

Personal Systems earnings from operations as a percentage of net revenue increaseddecreased by 0.70.8 percentage points driven by ana increasedecrease in gross margin, partially offset by ana increasedecrease in operating expenses as a percentage of revenue. Gross margin increaseddecreased primarily due to pricinghigher actionscommodity including favorable foreign currency impacts,costs, partially offset by increasedpricing commodityactions, costs.IEEPA tariff refunds and favorable currency impacts. Operating expenses as a percentage of revenue increaseddecreased primarily driven by disciplined cost management and favorable net R&D partner funding, partially offset by higher variable compensation.

SixNine months ended AprilJuly 30,31, 2026 compared with sixnine months ended AprilJuly 30,31, 2025

Personal Systems net revenue increased 12.1%14.4% (increased 9.5%12.1% on a constant currency basis) for the sixnine months ended AprilJuly 30,31, 2026. The net revenue increase was primarily due to a 10.1%19.8% increase in ASPsASPs, andpartially offset by a 2.4%4.2% increasedecrease in PC unit volume. The decrease in PC unit volume was driven by an increasing commodity cost environment, partially offset by the Windows-based PC operating system refresh as well as accelerated demand resulting from anticipated commodity cost increases, partially offset by a focus on higher value units in a dynamic commodity environment.refresh. The increase in ASPs is primarily due to pricing actions andto mitigate higher commodity costs, as well as favorable currency impacts. Consequently, the cost environment drove an increase in ASPs and decrease in PC unit volume in both Commercial and Consumer PS.

ConsumerCommercial PS net revenue increased 13.5%15.2% primarily due to a 9.4%20.2% increase in ASPsASPs, andpartially offset by a 3.9%3.7% increasedecrease in PC unit volume. The increase in ASPs is primarily driven by pricing actions and favorable currency impacts.

Personal Systems earnings from operations as a percentage of net revenue increaseddecreased by 0.10.3 percentage points driven by a decrease in gross margin, partially offset by a decrease in operating expenses as a percentage of revenue,revenue. Gross margin decreased primarily due to higher commodity costs, partially offset by apricing decreaseactions inincluding grossfavorable margin.currency impacts. Operating expenses as a percentage of revenue decreased due to disciplined cost management, partially offset by higher variable compensation. Gross margin decreased primarily due to higher commodity and supply chain costs, partially offset by disciplined pricing actions, including favorable foreign currency impacts.

Three months ended AprilJuly 30,31, 2026 compared with three months ended AprilJuly 30,31, 2025

Printing net revenue decreased 1.1%2.2% (decreased 2.5%3.6% on a constant currency basis) for the sixthree months ended AprilJuly 30,31, 2026. The decrease in net revenue wasacross drivenSupplies, byCommercial Commercial,and Consumer Printing and Supplies,was partially offset by favorable currency impacts. Net revenue for Supplies remaineddecreased flat,2.8%, primarily due to a decline in the installed base and usage, partially offset by pricing actions and favorable currency impacts. Printer unit volumeunits decreased 6.5%by driven6.8% byprimarily due to demand softnesssoftness, andparticularly in China, as well as competitive pressures, while hardware ASPs increased 3.0%.by 5.8%. The increase in ASPs was primarily driven by favorable mix shifts towards Commercial, pricing actions and currency impacts.

Net revenue for Commercial Printing decreased by 1.6%, primarily1.1%, due to a 5.3%2.4% decrease in printer unit volume and a 1.7% increasedecrease in ASPs. The increasedecrease in ASPs was primarily driven by favorableunfavorable foreignmix currency impacts,shifts, partially offset by unfavorablefavorable mixpricing shifts.actions and currency impacts.

Net revenue for Consumer Printing decreased 8.7%,1.8% primarily due to a 7.2%9.1% decrease in printer unit volume, partially offset by a 3.6%16.5% increase in ASPs. The increase in ASPs was primarily driven by favorable mix shifts towards Big Tank and foreign currency impacts, partially offset by competitive pricing.impacts.

Printing earnings from operations as a percentage of net revenue decreasedincreased 0.6by 1.1 percentage points driven by an increase in operatinggross expensesmargin as a percentage of revenue, partially offset by an increase in operating expenses as a percentage of revenue. The increase in gross margin.margin is primarily due to IEEPA tariff refunds and pricing actions, partially offset by unfavorable mix shifts. Operating expenses as a percentage of revenue increased primarily drivendue byto higher variable compensation and go-to market initiatives. Gross margin increased primarily due to pricing actions and favorable mix shift towards Supplies, partially offset by trade related costs.compensation.

The loss from operations in Corporate Investments for the three and sixnine months ended AprilJuly 30,31, 2026 was primarily due to expenses associated with our incubation projects and investments in digital enablement.

Compared to the corresponding period in fiscal year 2025, net cash provided by operating activities increased $0.9$1.0 billion for the sixnine months ended AprilJuly 30,31, 2026, primarily due to favorable cashchanges conversionin cycle,working capital, partially offset by changes in receivables from contract manufacturers.

AprilJuly 30,31, 2026 as compared to AprilJuly 30,31, 2025

DSO measures the average number of days our receivables are outstanding. DSO is calculated by dividing ending accounts receivable, net of allowance for credit losses, by a 90-day average net revenue. The increase in DSO was primarily due to lower factoring.factoring, partially offset by favorable revenue linearity.

DIO measures the average number of days from procurement to sale of our product. DIO is calculated by dividing ending inventory by a 90-day average cost of goods sold. The increase in DIO was primarily due to higher commodity costs, partially offset by inventory optimization in Printing.optimization.

DPO measures the average number of days our accounts payable balances are outstanding. DPO is calculated by dividing ending accounts payable by a 90-day average cost of goods sold. The increase in DPO was primarily due to higher commodity cost,costs, partially offset by lowerworking advancecapital buys.management activities.

Compared to the corresponding period in fiscal year 2025, net cash used in investing activities decreased by $0.9$0.6 billion for the sixnine months ended AprilJuly 30,31, 2026, primarily due to a $0.6$0.4 billion favorable net decrease in collateral posted for derivative instruments, lower payments in connection with business acquisitions of $0.1 billion, and lower investment in property, plant, equipment and purchased intangible of $0.1 billion.

Compared to the corresponding period in fiscal year 2025, net cash used in financing activities increased by $1.2$0.8 billion for the sixnine months ended AprilJuly 30,31, 2026, primarily due to a $1.0$0.4 billion decreaseincrease in net proceedsdebt from debtrepayments and a $0.2$0.4 billion increase in share repurchases.

During the sixnine months ended AprilJuly 30,31, 2026, HP returned $1.0$1.5 billion to shareholders in the form of cash dividends of $0.8 billion and share repurchases of $0.4 billion and cash dividends of $0.6$0.7 billion. As of AprilJuly 30,31, 2026, HP had approximately $8.0$7.7 billion remaining under the share repurchase authorization approved by HP’s Board of Directors.

As of AprilJuly 30,31, 2026, we maintained a $5.0 billion sustainability-linked senior unsecured committed revolving credit facility which will be available until August 1, 2029. Funds borrowed under the revolving credit facility may be used for general corporate purposes.

As of AprilJuly 30,31, 2026, we had available borrowing resources of $1.0$0.9 billion from uncommitted lines of credit in addition to funds available under the revolving credit facility.