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What changed in HP Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of HP Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+253 added−260 removedSource: 10-K (2025-12-10) vs 10-K (2024-12-13)

Top changes in HP Inc.'s 2025 10-K

253 paragraphs added · 260 removed · 209 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeEmployee Engagement We regularly collect feedback from employees to better understand and improve their workplace experiences and to identify ways to strengthen our culture. In fiscal year 2024, 90% of employees participated in our annual survey, and we continued to see strong overall engagement, exceeding top quartile benchmarks for most of the external comparisons we track.
Biggest changeTo deliver on these priorities, HP senior leaders are accountable for meeting management objectives for employee engagement and leadership development. Employee Engagement We regularly collect feedback from employees to better understand and improve their workplace experiences and to identify ways to strengthen our culture.
Manufacturing and Materials We utilize outsourced manufacturers (“OMs”) around the world to manufacture HP-designed products to generate cost efficiencies, reduce time to market, and maintain flexibility in our supply chain and manufacturing processes. We also manufacture finished products from components and sub-assemblies that we acquire from a wide range of vendors.
Manufacturing and Materials We utilize outsourced manufacturers around the world to manufacture HP-designed products to generate cost efficiencies, reduce time to market, and maintain flexibility in our supply chain and manufacturing processes. We also manufacture finished products from components and sub-assemblies that we acquire from a wide range of vendors.
HP offers a range of secure services and solutions to commercial customers to help them manage the lifecycle of their PCs and mobility installed base. • Consumer PS consists of devices, accessories and services which are optimized for consumer usage, focusing on gaming, learning and working remotely, consuming multi-media for entertainment, managing personal life activities, sharing information and staying connected, informed, and secure.
HP offers a range of secure services and solutions to commercial customers to help them manage the lifecycle of their PCs and mobility installed base. • Consumer PS consists of devices, accessories and services which are designed for consumer usage, focusing on gaming, learning and working remotely, consuming multi-media for entertainment, managing personal life activities, sharing information and staying connected, informed, and secure.
Printing . The markets for printer hardware and associated supplies are highly competitive. Printing’s key customer segments each face competitive market pressures in pricing and the introduction of new products. Our primary competitors include Brother Industries, Ltd., Canon Inc., Lexmark International, Inc., Pantum, Seiko Epson Corporation, The Ricoh Company Ltd., and Xerox Corporation Ltd.
Printing . The markets for printer hardware and associated supplies are highly competitive. Printing’s key customer segments each face competitive market pressures in pricing and the introduction of new products. Our primary competitors include Brother Industries, Ltd., Canon Inc., Pantum International Limited, Seiko Epson Corporation, The Ricoh Company Ltd., and Xerox Corporation Ltd.
McQuarrie served in various sales leadership positions at global personal computer and technology companies Lenovo (2008 to 2016) and Dell (1998 to 2007). Anneliese Olson; age 53; President of Imaging, Printing & Solutions Ms. Olson has served as President of Imaging, Printing and Solutions since November 2024 and has over 28 years of experience at the Company.
McQuarrie served in various sales leadership positions at global personal computer and technology companies Lenovo (2008 to 2016) and Dell (1998 to 2007). Anneliese Olson; age 54; President, Imaging, Printing & Solutions Ms. Olson has served as President of Imaging, Printing and Solutions since November 2024 and has over 28 years of experience at the Company.
Julie Jacobs; age 58; Chief Legal Officer and General Counsel Ms. Jacobs has served as Chief Legal Officer and General Counsel since October 2022. Previously, Ms. Jacobs served as Senior Executive Vice President, General Counsel and Corporate Secretary of Yahoo, a leading internet, media, and technology company, from September 2021 to October 2022. Prior to Yahoo, Ms.
Julie Jacobs; age 59; Chief Legal Officer and General Counsel Ms. Jacobs has served as Chief Legal Officer and General Counsel since October 2022. Previously, Ms. Jacobs served as Senior Executive Vice President, General Counsel and Corporate Secretary of Yahoo, a leading internet, media, and technology company, from September 2021 to October 2022. Prior to Yahoo, Ms.
Google™ and Google Chrome™ are trademarks of Google LLC. NVIDIA is a trademark of NVIDIA Corporation in the United States and/or other countries. All other trademarks are the property of their respective owners. 11 Table of Contents
Google™ and Google Chrome™ are trademarks of Google LLC. NVIDIA is a trademark of NVIDIA Corporation in the United States and/or other countries. All other trademarks are the property of their respective owners. 10 Table of Contents
Intellectual Property We seek patent protection for inventions likely to be incorporated into our products and services or where obtaining such proprietary rights will maintain or improve our competitive position. As of October 31, 2024, our worldwide patent portfolio included over 22,000 patents which expire at various dates, generally 20 years from their original filing dates.
Intellectual Property We seek patent protection for inventions likely to be incorporated into our products and services or where obtaining such proprietary rights will maintain or improve our competitive position. As of October 31, 2025, our worldwide patent portfolio included over 16,000 patents which expire at various dates, generally 20 years from their original filing dates.
Our customers are organized by consumer and commercial groups, and purchases of HP products, solutions and services may be fulfilled directly by HP or indirectly through a variety of partners, utilizing their own physical or internet stores or an omnichannel combination of the two, including: • retailers that sell our products to the public focusing on consumers and SMBs; • resellers that sell our products and services, frequently with their own value-added products or services, to targeted customer groups; • distribution partners that supply our products and solutions to resellers and retailers in certain geographies; and • system integrators and other business intermediaries that provide various levels of services, including systems integration work and as-a-service solutions, and typically partner with us on client solutions that require our products and services. 6 Table of Contents The mix of our business conducted by direct sales or channel sales differs by business and geographic market.
Our customers are organized by consumer and commercial groups, and sales of HP products, solutions and services may be fulfilled directly by HP or indirectly through a variety of partners, utilizing their own physical or internet stores or an omnichannel combination of the two, including: • retailers that sell our products to the public focusing on consumers and SMBs; • resellers that sell our products and services, frequently with their own value-added products or services, to targeted customer groups; • distribution partners that supply our products and solutions to resellers and retailers in certain geographies; and • system integrators and other business intermediaries that provide various levels of services, including systems integration work and as-a-service solutions, and typically partner with us on client solutions that require our products and services. 6 Table of Contents The majority of our overall revenue is made through channel resellers, however, the mix of our revenue generation conducted by direct sales or channel sales differs by business and geographic market.
It also includes Original Equipment Manufacturer (“OEM”) hardware and solutions. • Home Printing Solution s delivers innovative and security enhanced printing products, supplies, services and solutions for the home, home business and micro business customers utilizing both HP’s Ink and Laser technologies. • Graphics Solutions delivers large-format, commercial and industrial solutions and supplies to print service providers and packaging converters through a wide portfolio of printers and presses. • 3D Printing & Personalization offers a portfolio of additive manufacturing solutions and supplies to help customers succeed in their additive and digital manufacturing journey.
It also includes Original Equipment Manufacturer (“OEM”) hardware and solutions. • Home Printing Solution s delivers innovative and security enhanced printing products, supplies, services and solutions for the home, home business and micro business customers. • Graphics Solutions delivers large-format, commercial and industrial solutions and supplies to print service providers and packaging converters through a wide portfolio of printers and presses. • 3D Printing & Personalization offers a portfolio of additive manufacturing solutions and supplies to help customers succeed in their additive and digital manufacturing journey.
For other customers and for consumers, we typically manage both direct online sales as well as channel relationships with retailers mainly targeting consumers and SMBs and commercial resellers mainly targeting SMBs, mid-market accounts, public sector and large enterprises.
For other customers and for consumers, we typically manage both direct online sales as well as channel relationships, whereby retailers mainly target consumers and SMBs and commercial resellers mainly target SMBs, mid-market accounts, public sector and large enterprises.
Corporate Investments Corporate Investments includes certain business incubation and investment projects. Competition We encounter strong competition in all areas of our business activity.
Corporate Investments Corporate Investments includes certain business incubation projects and investments in digital enablement. Competition We encounter strong competition in all areas of our business activity.
McQuarrie has served as Chief Commercial Officer since November 2022. Previously, Mr. McQuarrie served as Senior Vice President & General Manager, Personal Systems Category, from November 2021 to November 2022, Global Head of Customer Support from November 2019 to November 2021, and Global Head of Print Business Management from January 2017 to October 2019. Prior to joining HP, Mr.
McQuarrie served as Senior Vice President & General Manager, Personal Systems Category, from November 2021 to November 2022, Global Head of Customer Support from November 2019 to November 2021, and Global Head of Print Business Management from January 2017 to October 2019. Prior to joining HP, Mr.
Talent Development We have a multi-faceted talent, learning, and skill-development strategy. First, we emphasize diversity of backgrounds, experience, and perspectives in our senior talent pipeline, and invest in targeted approaches such as leadership assessments, external education opportunities, coaching, job rotations, and immersive, experiential learning to ensure our executives are equipped to lead HP, both now and in the future.
We emphasize different backgrounds, experience, and perspectives in our senior talent pipeline and invest in targeted approaches such as leadership assessments, external education opportunities, coaching, job rotations, and immersive, experiential learning to ensure our executives are equipped to lead HP, both now and in the future.
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.
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 benchmark and set pay ranges based on relevant market data and consider factors such as an employee’s role, experience, skills, and performance. We also regularly review our compensation practices, both in terms of our overall workforce and individual employees, to make sure our pay is fair and equitable.
We benchmark and set pay ranges based on market data and consider factors such as an employee’s role and experience, the location of their job, and 8 Table of Contents performance. We also regularly review our compensation practices, both in terms of our overall workforce and individual employees, to help ensure our pay is fair and equitable.
Morgan Chase & Co., a financial services company, in various capacities from 1992 to 2011, including serving as Chief Financial Officer of the Commercial Banking business from 2007 to 2011. 10 Table of Contents Available Information Our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to reports filed or furnished pursuant to Sections 13(a) and 15(d) of the Securities Exchange Act of 1934, as amended, are available free of charge on our website at http://investor.hp.com, as soon as reasonably practicable after HP electronically files such reports with, or furnishes those reports to, the Securities and Exchange Commission.
Available Information Our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to reports filed or furnished pursuant to Sections 13(a) and 15(d) of the Securities Exchange Act of 1934, as amended, are available free of charge on our website at http://investor.hp.com, as soon as reasonably practicable after HP electronically files such reports with, or furnishes those reports to, the Securities and Exchange Commission.
Since 2016, we have reviewed employees’ compensation with the support of independent third-party experts to ensure consistent pay practices. In fiscal year 2024, we continued to expand our annual pay equity assessment to include additional countries representing a majority of our global workforce.
Since 2016, we also have reviewed employees’ compensation with independent third-party experts to support equitable pay practices. We have expanded our annual pay equity assessment to include additional countries representing a majority of our global workforce.
Previously, she served as Senior Vice President & Managing Director, North America Market, and prior to that as Senior Vice President & Chief Operating Officer, Worldwide Print. Karen L. Parkhill; age 59; Chief Financial Officer Ms. Parkhill has served as Chief Financial Officer since August 2024.
Previously, she served as Senior Vice President & Managing Director, North America Market since September 2023, and prior to that as Senior Vice President & Chief Operating Officer, Worldwide Print from November 2019 to April 2022. 9 Table of Contents Karen L. Parkhill; age 60; Chief Financial Officer Ms. Parkhill has served as Chief Financial Officer since August 2024.
Jacobs spent over 16 years in various senior legal roles at AOL, a global internet, media and technology company, including serving as AOL’s Executive Vice President, General Counsel, and Corporate Secretary from May 2010 to June 2017. Stephanie Liebman; age 55; Global Controller Ms.
Jacobs spent over 16 years in various senior legal roles at AOL, a global internet, media and technology company, including serving as AOL’s Executive Vice President, General Counsel, and Corporate Secretary from May 2010 to June 2017. Enrique Lores; age 60; President and Chief Executive Officer Mr. Lores has served as President and Chief Executive Officer since November 2019.
We are focused on developing products, services and solutions that anticipate customers’ changing needs and desires, and emerging technological trends, including accelerating the delivery of AI throughout our product portfolio.
Research and Development Innovation across products, services, business models and processes is a key element of our culture and success. We are focused on developing products, services and solutions that anticipate customers’ changing needs and desires, and emerging technological trends, including accelerating the delivery of AI throughout our product portfolio.
We also support talent through an extensive portfolio of internal and external development programs designed to accelerate their career growth. Additionally, we prepare new people managers with development experiences designed, among other things, to build coaching skills and champion inclusion. We are committed to the continuous growth of employees.
We also support employees through an extensive portfolio of internal and external development programs designed to accelerate career growth and enhance technical and digital capabilities. Additionally, we prepare new people managers with development experiences designed, among other things, to build coaching skills and foster trust and belonging.
Demand during the spring and early summer months also may be adversely impacted by market anticipation of seasonal trends. Historical seasonal patterns may be impacted by supply constraints, shifts in customer behavior and the evolving impacts of macroeconomic challenges.
Demand during the spring and early summer months also may be adversely impacted by market anticipation of seasonal trends. Historical seasonal patterns may be impacted by supply constraints, shifts in customer behavior and the evolving impacts of macroeconomic challenges. Sustainable Impact Activities At HP, we believe how we do things is just as important as what we do.
Before his Business Personal Systems role, Mr. Lores was Senior Vice President of Customer Support and Services. Kristen Ludgate; age 62; Chief People Officer Ms. Ludgate has served as Chief People Officer since July 2021. Previously, Ms.
Before his Business Personal Systems role, Mr. Lores was Senior Vice President of Customer Support and Services. David McQuarrie; age 50; Chief Commercial Officer Mr. McQuarrie has served as Chief Commercial Officer since November 2022. Previously, Mr.
Human Capital HP employs approximately 58,000 employees in 59 countries. Together, they power HP innovation by applying their diverse skills and perspectives to create transformative solutions for our partners and customers worldwide. Our aim is to attract and retain exceptional talent by providing engaging work experiences that help our employees thrive.
Human Capital HP employs approximately 55,000 employees worldwide. Together, they power HP’s innovation and perspectives to create breakthrough technologies and transformative solutions that we believe will drive our long-term success. We strive to attract, retain and advance exceptional talent by providing engaging work experiences that help our employees thrive.
Parkhill was a member of Comerica’s Management Executive Committee and the Comerica Bank Board of Directors. Prior to joining Comerica, Ms. Parkhill worked for J.P.
Parkhill was a member of Comerica’s Management Executive Committee and the Comerica Bank Board of Directors. Prior to joining Comerica, Ms. Parkhill worked for J.P. Morgan Chase & Co., a financial services company, in various capacities from 1992 to 2011, including serving as Chief Financial Officer of the Commercial Banking business from 2007 to 2011.
Additionally, while most of our products have existing or readily available alternative sources of supply, some of our components are obtained from a single source due to technology, availability, price, quality or other considerations. Research and Development Innovation across products, services, business models and processes is a key element of our culture and success.
Additionally, while most of our products have existing or readily available alternative sources of supply, in some cases, where multiple sources of supply are not available, our components are obtained from a single source or limited number of sources if we believe it is advantageous to do so based on technology, availability, price, quality or other considerations.
For more information on our sustainability goals, programs, and performance, including our methodology for calculating progress towards our GHG and other sustainability goals, we refer you to our annual Sustainable Impact Report, available on our website (which is not incorporated by reference herein).
Our Sustainable Impact strategy focuses on empowering customers, enhancing our value chain, and advancing societal impact. For more information on our sustainability strategy and performance, see our annual Sustainable Impact Report, available on our website (which is not incorporated by reference herein).
In addition to skill development resources, HP also offers formal education assistance through our Degree Assistance Program which provides employees with the opportunity to participate in higher academic education. 8 Table of Contents Hybrid Work Strategy At HP, hybrid work balances workplace flexibility with time working together to collaborate and connect in person at our sites.
In addition to skill development resources, HP also offers formal education assistance through our Degree Assistance Program which provides employees with the opportunity to participate in higher academic education. Inclusion Innovation at HP comes from the different perspectives, backgrounds, knowledge, and experiences of our employees that make up our globally connected workforce.
Our environmental, health, and safety leadership team uses our global injury and illness reporting system to assess worldwide and regional trends as a part of quarterly reviews. We focus on reducing and effectively managing risks at HP-owned and partner-owned manufacturing facilities, and injury rates continue to be low.
Health, Safety, and Wellness HP is committed to the health and safety of our employees through robust training programs, clear communication of standards, and leadership engagement. Our environmental, health, and safety leadership team uses our global injury and illness reporting system to assess worldwide and regional trends as a part of quarterly reviews.
We sponsor a global wellness program designed to enhance wellbeing for all HP employees. Throughout the year, we encourage healthy behaviors across our five pillars of wellness—physical, financial, emotional, life balance, and social/community—through regular communications, educational sessions, voluntary progress tracking, wellness challenges, and other incentives.
Throughout the year, we encourage healthy behaviors across the five pillars of wellness through regular communications, educational sessions, voluntary progress tracking, personal challenges, and other incentives. In addition, we provide specialized programs and campaigns, all with the help of HP-provided mindfulness apps, targeted mental health support, individual assessments, and expanded financial wellbeing programs.
Personal Systems includes support and deployment, configurations and extended warranty services and maintains multi-operating system and multi-architecture strategies using Microsoft Windows and Google Chrome operating systems, and predominantly uses processors from Intel, AMD, and NVIDIA.
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, and AMD, including integrated AI acceleration, as well as NVIDIA GPUs for advanced graphics and compute workloads.
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Like other participants in the information technology (“IT”) industry, we ordinarily acquire materials and components through a combination of blanket and scheduled purchase orders to support our demand requirements for periods averaging 90 to 120 days.
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We take action to address their ideas, suggestions, and concerns collected through our employee surveys and pulse polls and continue to be certified as a Great Place to Work. Talent Development We have a multi-faceted talent, learning, and skill-development strategy.
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We also may acquire component inventory in times of growth or in anticipation of significant price volatility or supply constraints for certain components that are not available from multiple sources.
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We aim for an inclusive workforce that allows us to remain responsive to the marketplace, driving innovation to meet their evolving needs. Supported by leadership, the company’s global inclusion strategy focuses on locally implemented processes, while maintaining organizational consistency with policies, practices, and services.
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Sustainability and Environmental, Social, and Governance Activities At HP, we believe how we do things is just as important as what we do. Our Sustainable Impact goals reflect our efforts to tackle key issues in Climate, Human Rights, and Digital Equity.
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Programs, strategic partnerships, and Business Resource Groups are key components of our strategy to attract, develop, and retain talent and provide the foundation for a positive culture of inclusion and respect. Pay Equity People should be paid equitably for their work, regardless of their gender, race, or other personal characteristics.
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We promote ongoing learning and development, offer comprehensive compensation and benefits, and focus on health, safety, and well-being to set employees up to do their best work and achieve their career aspirations. To deliver on these priorities, HP senior leaders are accountable for meeting management by objective (“MBO”) goals for employee engagement, diversity and inclusion, and leadership development.
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We focus on reducing and effectively managing risks at HP-owned and partner-owned manufacturing facilities. The holistic wellbeing of our employees is vital to HP’s success.
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We saw similar strength in our internal inclusion index, and employees demonstrated their engagement by providing a high volume of written comments in this year’s survey. Beyond the annual survey, we regularly seek out employee feedback through a variety of pulse polls and take action to address their ideas, suggestions, and concerns.
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Our global wellness program is designed to serve the needs of our evolving workforce and culture through opportunities for employees to prioritize wellness across five pillars of well-being: emotional, financial, life balance, physical health, and social and community.
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We provide enterprise-wide skill development solutions and resources that focus on the critical skills all employees need to perform at their best in their jobs today and in the future.
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Information about our Executive Officers The following are our current executive officers: Manpreet S. Grewal; age 46; Chief Accounting Officer and Global Controller Mr. Grewal has served as Chief Accounting Officer and Global Controller since July 2025.
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In partnership with industry thought partners and internal experts, HP offers learning opportunities in key areas such as software development, artificial intelligence, data science, product management, communications, change agility, and strategic thinking. HP prioritizes skill development experiences that accommodate employee-specific needs and demanding schedules, with an emphasis on learning that drives immediate application and measurable behavior change.
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Previously, he served as Vice President, Controller & Chief Accounting Officer at United States Steel Corporation, a provider of steel products and solutions to various industries, since March 2020. Prior to U.S. Steel, Mr. Grewal served as Vice President, Controller and Chief Accounting Officer at Covanta, a renewable energy and waste management company, from 2017 to March 2020.
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Our goal is to provide the ability to work seamlessly across a diverse ecosystem of workplaces, enabled by enhanced tools and technology designed to optimize productivity and collaboration. Diversity, Equity, and Inclusion We strive to create an inclusive workplace where everyone can bring their unique perspectives to work and reach their full potential.
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Ketan Patel; age 51; President, Personal Systems Mr. Patel has served as President, Personal Systems since November 2025 and has over 20 years of experience at the Company.
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This commitment is at the heart of our innovation model, where people with diverse backgrounds, knowledge, and experiences collaborate to create breakthrough technologies and deliver valued solutions to our customers. We also strive to ensure equal opportunities and access for all employees.
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Most recently, he served as Senior Vice President and Chief Operating Officer, Global Personal Systems, since November 2022 and prior to that, as SVP and Managing Director of HP’s India Market since August 2020, as well as numerous other leadership positions in the Personal Systems business.
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We continue to work on removing barriers through external hiring and outreach and by providing internal programs and development opportunities and training for managers on inclusive leadership. Pay Equity People should be paid equitably for what they do and how they do it, regardless of their gender, race, or other protected characteristics.
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The independent analysis did not reveal any systemic issues and we addressed areas of potential concern as part of our off-cycle compensation process. Health, Safety, and Wellness The holistic wellbeing of our employees is vital to HP’s success.
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In addition to our regular annual wellbeing programs, we provide specialized programs and campaigns in line with employee needs at the time.
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Our campaign this year, “Elevate Your Everyday,” encouraged employees to challenge themselves to embrace new experiences and opportunities for personal development, all with the help of HP-provided mindfulness apps, targeted mental health support, individual assessments, and expanded financial wellbeing programs. 9 Table of Contents Information about our Executive Officers The following are our current executive officers: Alex Cho; age 52; President, Personal Systems Mr.
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Cho has served as President, Personal Systems since June 2018. From 2014 to 2018, Mr. Cho served as Global Head and General Manager of Commercial Personal Systems. Prior to that role, Mr. Cho served as the Vice President and General Manager of the LaserJet Supplies team from 2010 to 2014.
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Liebman has served as Global Controller since December 2023 and as Senior Vice President and Finance Chief Operations Officer at HP since February 2023. Prior to rejoining HP, she served as Senior Vice President at NTT Data Services, a provider of IT and business services, from March 2019 to January 2023.
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Before that she spent over 21 years at HP in various roles including Chief Audit Executive and Vice President of Enterprise Services Financial Operations. Ms. Liebman is a Certified Public Accountant. Enrique Lores; age 59; President and Chief Executive Officer Mr. Lores has served as President and Chief Executive Officer since November 2019.
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Ludgate served as Executive Vice President and Chief Human Resources Officer at 3M, a global technology company , from June 2018 until July 2021. Ms. Ludgate held a wide range of leadership positions during her 17 years with 3M, leading global teams in human resources, legal, compliance, and communications. David McQuarrie; age 49; Chief Commercial Officer Mr.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeBreaches of our facilities, network, or data security could disrupt the security of our systems and business applications, impair our ability to provide services to our customers and protect the privacy of their data, result in product development delays, compromise confidential or technical business information, harm our reputation or competitive position, result in theft or misuse of our IP or other assets, require us to allocate more resources to improve technologies, or otherwise adversely affect our business and financial results. 19 Table of Contents Additionally, the costs to combat cyber or other security threats can be significant, and our efforts to address these problems may not be successful and could result in interruptions, delays, cessation of service and loss of existing or potential customers that may impede our sales, manufacturing, distribution or other critical functions.
Biggest changeBreaches of our facilities, network, or data security could disrupt the security of our systems and business applications, impair our ability to provide services to our customers and protect the privacy of their data, result in product development delays, compromise confidential or technical business information, harm our reputation or competitive position, result in theft or misuse of our IP or other assets, require us to allocate more resources to improve technologies, or otherwise adversely affect our business and financial results.
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.
Even if we successfully develop new products, 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.
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 .
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 laws. • Working conditions, human rights and materials sourcing .
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 third-party products and software.
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.
Many of our significant distributors operate on narrow margins and have been negatively affected by business 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.
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.
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 restrictions on specific components in certain markets, other problems experienced by suppliers or problems we face during the transition to new suppliers.
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.
These deficiencies and other failures 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.
These deficiencies and other failures of AI systems, 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.
Litigation and regulatory proceedings are inherently uncertain, and adverse rulings 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.
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.
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, privacy, employment, or other social, economic, or political issues, we may experience brand or reputational harm or greater employee attrition .
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 believe the proliferation of AI, especially as it relates to our product and solutions offerings, will 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 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.
Risks associated with these transactions include the following: • We may not fully realize the anticipated benefits of any particular transaction, in the timeframe we expected or at all, such transaction 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. • Certain transactions have resulted, and in the future may result, in significant costs and expenses, including those related to compensation and benefit costs, goodwill and impairment charges, charges from elimination of duplicative facilities and contracts, inventory adjustments, assumed litigation and other liabilities, advisory fees, and payments to executive officers and key employees under retention plans. • Our due diligence may fail to identify significant issues with the target’s product quality, financial disclosures, accounting practices or internal controls, including as a result of being dependent on the veracity and completeness of statements and disclosures made or actions taken by third parties, or the assumptions or judgments we make with respect to our due diligence may be incorrect. • In order to finance a transaction, we may issue common stock (potentially creating dilution) or take on additional debt, which may adversely impact our credit rating. • These transactions could adversely impact our effective tax rate. • An acquisition target may have differing or inadequate cybersecurity and data protection controls. • These transactions may lead to litigation.
Risks associated with these transactions include the following: • In certain instances we have not, and we may not in the future, fully realize the anticipated benefits of particular transactions in the timeframe we expected or at all, such transactions 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. • Certain transactions have resulted, and in the future may result, in significant costs and expenses, including those related to compensation and benefit costs, goodwill and impairment charges, charges from elimination of duplicative facilities and contracts, inventory adjustments, assumed litigation and other liabilities, advisory fees, and payments to executive officers and key employees under retention plans. • Our due diligence may fail to identify significant issues with the target’s product quality, financial disclosures, accounting 19 Table of Contents practices or internal controls, including as a result of being dependent on the veracity and completeness of statements and disclosures made or actions taken by third parties, or the assumptions or judgments we make with respect to our due diligence may be incorrect. • In order to finance a transaction, we may issue common stock (potentially creating dilution) or take on additional debt, which may adversely impact our credit rating. • These transactions could adversely impact our effective tax rate. • An acquisition target may have differing or inadequate cybersecurity and data protection controls. • These transactions may lead to litigation.
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. 13 Table of Contents In addition, our business is subject to the following specific supply chain related risks: • Component shortages.
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. 12 Table of Contents In addition, our business is subject to the following specific supply chain related risks: • Component shortages.
MACROECONOMIC, INDUSTRY AND FINANCIAL RISKS Due to the international nature of our business, geopolitical or economic changes or events, uncertainty or other factors could harm our business and financial performance. Approximately 65% of our net revenue for fiscal year 2024 came from outside the United States. In addition, we operate in emerging markets, which can be more volatile.
MACROECONOMIC, INDUSTRY AND FINANCIAL RISKS Due to the international nature of our business, geopolitical or economic changes or events, uncertainty or other factors could harm our business and financial performance. Approximately 65% of our net revenue for fiscal year 2025 came from outside the United States. In addition, we operate in emerging markets, which can be more volatile.
As a result, we may invest less in certain areas of our business than our competitors, and our competitors may have greater financial, technical and marketing resources available for their products and services, compared to the resources allocated to 15 Table of Contents our competing products and services, or greater economies of scale, which could in turn result in our loss of market share.
As a result, we may invest less in certain areas of our business than our competitors, and our competitors may have 14 Table of Contents greater financial, technical and marketing resources available for their products and services, compared to the resources allocated to our competing products and services, or greater economies of scale, which could in turn result in our loss of market share.
Any failure by us to comply with the specific provisions in our customer contracts or any violation of government contracting regulations 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.
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.
Changes in our tax provisions, adverse tax audits, the adoption of new tax legislation, or exposure to additional tax liabilities could have a material impact on our financial performance. We are subject to income taxes in the United States and approximately 61 other countries, and we are subject to routine corporate income tax audits in many of these jurisdictions.
Changes in our tax provisions, adverse tax audits, the adoption of new tax legislation, or exposure to additional tax liabilities could have a material impact on our financial performance. We are subject to income taxes in the United States and approximately 60 other countries, and we are subject to routine corporate income tax audits in many of these jurisdictions.
For instance, the OECD has enacted model rules for a new global minimum tax framework (“BEPS Pillar Two”), and various governments around the world have enacted, or are in the process of enacting, legislation on these rules. 27 Table of Contents ITEM 1B. Unresolved Staff Comments. None.
For instance, the OECD has enacted model rules for a new global minimum tax framework (“BEPS Pillar Two”), and various governments around the world have enacted, or are in the process of enacting, legislation on these rules. 25 Table of Contents ITEM 1B. Unresolved Staff Comments. None.
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 provisions and other specific requirements relating to their formation, administration and performance.
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 provisions, executive orders and other specific requirements relating to their formation, administration and performance.
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. Our inventory management is complex, as we continue to sell a significant mix of products through distributors.
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. 16 Table of Contents Our inventory management is complex, as we continue to sell a significant mix of products through distributors.
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, increased interest rates, tariffs, 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.
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 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.
Additionally, further indebtedness may increase the risk of a future downgrade in our credit ratings, which could increase future debt costs, limit the future availability of debt financing and adversely affect our subscription based business. 24 Table of Contents The amount and frequency of our share repurchases and dividends are affected by a number of factors and may fluctuate.
Additionally, further indebtedness may increase the risk of a future downgrade in our credit ratings, which could increase future debt costs, limit the future availability of debt financing and adversely affect our subscription based business. The amount and frequency of our share repurchases and dividends are affected by a number of factors and may fluctuate.
Additionally, as a result of restructuring initiatives, 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 can require a significant amount of time and focus, which may divert attention from operating and growing our business.
Additionally, as a result of these 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.
While we are undertaking initiatives to diversify our manufacturing and supply chain footprint, such initiatives require significant investment and time and have been and can continue to be subject to regulatory, continuity, operational, geopolitical and other hurdles, and there can be no assurance that these initiatives will be successful.
While we are undertaking initiatives to diversify our manufacturing and supply chain footprint, such initiatives require significant investment and time and have been and can continue to be subject to regulatory, continuity, operational, geopolitical and other hurdles, and there can be no assurance that these initiatives will be successful. • International trade restrictions .
Some anti-takeover provisions contained in our certificate of incorporation and bylaws, as well as provisions of Delaware law, could impair a takeover attempt. Certain provisions in our certificate of incorporation and bylaws and the Delaware General Corporation Law may discourage, delay or prevent changes of control of HP judged as undesirable by our Board of Directors.
Some anti-takeover provisions contained in our certificate of incorporation and bylaws, as well as provisions of Delaware law, could impair a takeover attempt. 20 Table of Contents Certain provisions in our certificate of incorporation and bylaws and the Delaware General Corporation Law may discourage, delay or prevent changes of control of HP judged as undesirable by our Board of Directors.
Patent monetization campaigns have become increasingly aggressive, including those by patent holders for standardized technology, such as WiFi 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.
Patent monetization campaigns have become increasingly aggressive, including those by patent holders for standardized technology, such as Wi-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.
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.
The loss of, deterioration of our relationship 13 Table of Contents 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.
It may take considerable time for us to investigate and evaluate the full impact of incidents, particularly for sophisticated attacks. These factors may inhibit our ability to provide prompt, full, and reliable information about the incident to our customers, partners, regulators, and the public.
It may take considerable time for us to investigate and evaluate the full impact of incidents, particularly for sophisticated attacks. These factors may inhibit our 18 Table of Contents ability to provide prompt, full, and reliable information about the incident to our customers, partners, regulators, and the public.
Our processes and controls for reporting ESG matters across our operations and supply chain are evolving along with multiple disparate standards for identifying, measuring, and reporting ESG metrics, including ESG-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, 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.
Our processes and controls for reporting environmental and societal matters across our operations and supply chain are evolving along with multiple disparate standards for identifying, measuring, and reporting environmental and societal metrics, including sustainability-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 and the state of California’s climate change disclosure requirements), and such standards may change over time, which could result in revisions to our current goals, reported progress in achieving such goals, or ability to achieve such goals in the future.
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.
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.
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. 23 Table of Contents Climate change and associated regulatory and market impacts may have an adverse effect on our business.
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. Climate change and associated regulatory and market impacts may have an adverse effect on our business.
Such extreme climate related events are driving changes in market dynamics, stakeholder expectations, 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.
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 22 Table of Contents 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.
Certain service-oriented business models, such as the “device as a service” model under which customers rent 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.
Certain service-oriented business models, such as the “device as a service” model under which customers are 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.
Methodologies for reporting ESG 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.
Methodologies for reporting environmental and societal data may be updated and previously reported 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.
For more information about our restructuring plans, see Note 3, “Restructuring and Other Charges” to our Consolidated Financial Statements in Item 8. 20 Table of Contents We may not be able to execute acquisitions, divestitures and other significant transactions successfully and we may have difficulty or fail to successfully integrate acquired companies.
For more information about our restructuring and other plans, see Note 3, “Restructuring and Other Charges” to our Consolidated Financial Statements in Item 8. We may not be able to execute acquisitions, divestitures and other significant transactions successfully and we may have difficulty or fail to successfully integrate acquired companies.
We rely upon patent, copyright, trademark, trade secret and other IP laws in the United States, similar laws in other countries, and agreements with our employees, customers, suppliers and other parties, to establish and maintain IP rights in the products and services we sell, provide or otherwise use in our operations.
We rely upon patent, copyright, trademark, trade secret and other IP laws in the United States, similar laws in other countries, and agreements with our employees, customers, suppliers and other parties, to establish and maintain IP rights in the products and 17 Table of Contents services we sell, provide or otherwise use in our operations.
Global pandemics, such as COVID-19, 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.
Global 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.
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 intelligence and hybrid consumption.
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 intelligence, hybrid consumption and digital employee experience.
Our partner contracts 26 Table of Contents 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.
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 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.
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 including the assertion of patents related to standardized technologies, such as Wi-Fi or video.
If shortages or delays in component products occur, the price of certain components may increase, we may be exposed to quality issues, or the components may not be available at all.
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.
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.
Claims of IP infringement may require us to redesign affected products, enter into costly settlements or license agreements, pay damage awards, or face an 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.
Implementation of any restructuring plan 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.
Implementation of any such plans 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.
Moreover, new products and services may not be profitable, and even if they are profitable, the operating margins may not be as high as the historical or anticipated margins. 12 Table of Contents We expect the proliferation of AI to have a significant impact on our industry and the markets in which we compete, and the development and use of AI presents competitive, reputational, and liability risks.
Even if they are profitable, the operating margins may not be as high as the historical or anticipated margins. 11 Table of Contents We expect the proliferation of AI to have a significant impact on our industry and the markets in which we compete, and the development and use of AI presents competitive, reputational, and liability risks.
We also need to ensure our existing offerings in this space, such as managed services and print software, remain sufficiently differentiated.
We also seek to ensure our existing offerings in this space, such as managed services and print software, remain sufficiently differentiated and profitable.
In addition, regardless of the outcome, litigation and regulatory proceedings can be costly, time-consuming, disruptive to our operations, and distracting to management. We and Hewlett Packard Enterprise entered into a separation and distribution agreement and various other agreements in connection with the separation of the two businesses.
In addition, regardless of the outcome, litigation and regulatory proceedings can be costly, time-consuming, disruptive to our operations, distracting to management, and adversely impact our reputation. 24 Table of Contents We and Hewlett Packard Enterprise entered into a separation and distribution agreement and various other agreements in connection with the separation of the two businesses.
Such burdens or costs may result in 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.
Such burdens or costs have in the past resulted in, and may in the future result in, an adverse effect on our financial condition, results of operations and cash flows. We 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.
The success of our services business (such as our managed print services, digital services, consumer subscriptions and other workforce services in both Printing and Personal Systems) depends to a significant degree on attracting, retaining, and maintaining or increasing the level of revenues from our customers.
The success of our services business (such as our managed print and device services, lifecycle services, digital services, consumer subscriptions and other services and 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 credit risk is evaluated by the major independent rating agencies. A downgrade of our current credit rating could increase the cost of borrowing under our credit facilities, reduce access to capital markets and/or market capacity for our commercial paper or require the posting of additional collateral under some of our derivative contracts.
A downgrade of our current credit rating could increase the cost of borrowing under our credit facilities, reduce access to capital markets and/or market capacity for our commercial paper or require the posting of additional collateral under some of our derivative contracts.
Moreover, our actions to drive demand to AI products may result in cannibalization of demand for our traditional, non-AI products. In addition, AI algorithms may be flawed. Datasets may be insufficient or contain biased information.
Moreover, our actions to drive demand to AI products may result in cannibalization of demand for our traditional, non-AI 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.
The patent litigation environment has also become more challenging due to the emergence of venues adopting 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.
The patent litigation environment has also become more challenging due to the increasing use of venues with procedural and substantive rules and practices more favorable for patent asserters, including the availability of preliminary and permanent injunctions for non-competitors.
Moreover, to the extent that we introduce new products in anticipation of seasonal demand trends, our discounting of existing products may adversely affect our gross margins.
Moreover, to the extent that we introduce new products in anticipation of seasonal demand trends, our discounting of existing products may adversely affect our gross margins. Many of the factors that create and affect seasonal trends are beyond our control.
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 costs resulting from higher labor and material costs borne by our manufacturers and suppliers that we are unable to pass on to our customers.
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 costs, 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.
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-ESG government initiatives may conflict with other regulatory requirements or our stakeholders’ expectations.
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.
Examples of such risks include the availability and cost of low- or non-carbon-based energy sources, the evolving regulatory requirements affecting product circularity, ESG standards or disclosures, the evolving consumer protection laws applicable to ESG matters, the availability of materials and suppliers that can meet our sustainability, diversity and other ESG goals and the availability of funds to invest in ESG initiatives in times where we are seeking to reduce costs. 21 Table of Contents Standards for tracking and reporting ESG matters continue to evolve.
Examples of such risks include the availability and cost of low- or non-carbon-based energy sources, evolving regulatory requirements affecting product circularity, environmental or societal standards or disclosures, evolving consumer protection laws, the availability of materials and suppliers that can meet our environmental, societal and other related goals and the availability of funds to invest in environmental and societal initiatives in times where we are seeking to reduce costs.
As these new laws, regulations, treaties and similar initiatives and programs are adopted and implemented, we will be required to comply or potentially face market access limitations or restrictions on our products entering certain jurisdictions, sanctions or other penalties, including fines.
As new laws, regulations, treaties, executive orders, directives, enforcement priorities and similar initiatives and programs are adopted and implemented, we are 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.
Foreign Corrupt Practices Act, U.S. export control and trade sanction laws, and similar anti-corruption and international trade laws, and adverse consequences for any failure to comply, including compliance by recently acquired companies, which may have less robust internal compliance procedures; and • fluctuations in freight costs, limitations on shipping and receiving capacity, and other disruptions in the transportation and shipping infrastructure at important geographic points for our products and shipments. 22 Table of Contents The factors described above also could disrupt our product and component manufacturing and key suppliers located outside of the United States and our supply chain.
Foreign Corrupt Practices Act, U.S. export control and trade sanction laws, and similar anti-corruption and international trade laws, and adverse consequences for any failure to comply, including compliance by recently acquired companies, which may have less robust internal compliance procedures; and • fluctuations in freight costs, limitations on shipping and receiving capacity, and other disruptions in the transportation and shipping infrastructure at important geographic points for our products and shipments.
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.
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.
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.
Standards for tracking and reporting environmental 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.
These statements reflect our current plans and aspirations and are not guarantees that we will be able to achieve them.
We have environmental and societal goals, which reflect our current plans and aspirations and are not guarantees that we will be able to achieve them.
Our efforts to mitigate the impact of these challenges, such as by seeking to increase our margin and market share and drive demand in subscription services and other recurring-revenue based business models, may not be successful, and shifting to recurring-revenue based business may require us to forego upfront revenue.
Our efforts to mitigate the impact of these challenges, such as by seeking to increase our margin and market share, particularly in big tank printers, and drive demand in software and subscription services or other recurring-revenue based business models, offering higher profitability, may not be successful.
For example, in fiscal year 2024 we experienced continued demand softness in printing products and solutions 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 and hybrid work, and increasing competition from generic alternatives.
For example, in fiscal year 2025 we experienced challenges from changing customer behaviors 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, hybrid work, increasing competition from generic alternatives and customer preferences shifting from traditional disposable ink cartridge printers to refillable big tank printers.
Quality and security issues, including those resulting from defects or security vulnerabilities in third-party components, can impair our relationships with new or existing customers and adversely affect our brand and reputation.
Quality and security issues, including those resulting from defects or security vulnerabilities in third-party components, can impair our relationships with new or existing customers and adversely affect our brand and reputation. The proliferation of social media may increase the likelihood, speed, and magnitude of negative brand and reputation events.
Any increased or unexpected costs or unanticipated delays in connection with the performance of these contracts, which may increase as services become more customized, could make these agreements less profitable or unprofitable.
Any increased or unexpected costs or unanticipated delays in connection with the performance of these contracts, such as increased costs resulting from new or increased tariffs or other trade restrictions, which may increase as services become more customized, have in the past made, and could in the future make, these agreements less profitable or unprofitable.
Third-party suppliers may have limited financial resources to withstand challenging business conditions, particularly as a result of increased interest rates or emerging market volatility, 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.
Third-party suppliers may have limited financial resources to withstand challenging business conditions, particularly as a result of increased interest rates, emerging market 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.
In order to be successful, we must attract, hire, retain, train, motivate, develop, and deploy qualified executives, engineers, technical staff and other key employees. Identifying, developing internally or hiring externally, training and retaining qualified executives, engineers and qualified sales representatives are critical to our future, and competition for experienced employees in the technology industry can be intense.
Identifying, developing internally or hiring externally, training and retaining qualified executives, engineers and qualified sales representatives are critical to our future, and competition for experienced employees in the technology industry can be intense.
Moreover, since each distribution method has distinct risks and gross margins, we may fail to implement the most advantageous balance in the delivery model for our products and services. 17 Table of Contents 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.
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.
For example, we rely on manufacturers in Taiwan to produce notebook computers and other suppliers in Asia for product assembly and manufacture and have manufacturing operations in Israel which support our Industrial Graphics business.
The factors described above also could disrupt our product and component manufacturing and key suppliers located outside of the United States and our supply chain. For example, we rely on manufacturers in Taiwan to produce notebook computers and other suppliers in Asia for product assembly and manufacture and have manufacturing operations in Israel which support our Industrial Graphics business.
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.
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.
These estimates and assumptions are subject to significant uncertainties, some of which are beyond our control. Should any of these estimates and assumptions change or prove to have been incorrect, it could adversely affect our results of operations, cash flows and financial condition.
Should any of these estimates and assumptions change or prove to have been incorrect, it could adversely affect our results of operations, cash flows and financial condition. Ineffective internal controls could impact our business and operating results.
If we fail to maintain the adequacy of our internal controls, including any failure to implement required new or improved controls, or if we experience difficulties in their implementation, our business and operating results could be harmed and the company could fail to meet its financial reporting obligations. 25 Table of Contents LEGAL AND REGULATORY RISKS Our business is subject to various federal, state, local and foreign laws and regulations that could adversely affect our business and results of operations and cash flows.
If we fail to maintain the adequacy of our internal controls, including any failure to implement required new or improved controls, or if we experience difficulties in their implementation, our business and operating results could be harmed and the company could fail to meet its financial reporting obligations.
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. 14 Table of Contents • Single-source suppliers.
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 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.
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. Some AI capabilities also present ethical issues, and we may be unsuccessful in identifying or resolving issues before they arise.
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.
Ineffective internal controls could impact our business and operating results. Our internal control over financial reporting may not prevent or detect misstatements because of its inherent limitations, including the possibility of human error, failure or interruption of information technology systems, the circumvention or overriding of controls, or fraud.
Our internal control over financial reporting may not prevent or detect misstatements because of its inherent limitations, including the possibility of human error, failure or interruption of information technology systems, the circumvention or overriding of controls, or fraud. Even effective internal controls can provide only reasonable assurance with respect to the preparation and fair presentation of financial statements.
Currencies other than the U.S. dollar, including the euro, the British pound, Indian rupee, Chinese yuan (renminbi) and the Japanese yen, can have an impact on our results as expressed in U.S. dollars.
Economic downturns also may lead to future restructuring actions and associated expenses. We are exposed to fluctuations in currency exchange rates, which could adversely impact our results. Currencies other than the U.S. dollar, including the euro, the British pound, Indian rupee, Chinese yuan (renminbi) and the Japanese yen, can have an impact on our results as expressed in U.S. dollars.
For example, during fiscal year 2024 we observed continued market uncertainty, cautious commercial spending on information technology hardware, including in China, lower discretionary consumer spending, increasing commodity costs, inflationary pressures, 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.
For example, during fiscal year 2025 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.
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. Prolonged or more severe economic weakness and uncertainty could also cause our expenses to vary materially from our expectations.
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.
Financial turmoil affecting the banking system and financial markets or significant financial services institution failures could negatively impact our treasury operations or those of our suppliers, vendors or customers, rapidly and without notice. Poor financial performance of asset markets and the adverse effects of fluctuating exchange rates could lead to higher pension and post-retirement benefit expenses.
Prolonged or more severe economic weakness and uncertainty could also cause our expenses to vary materially from our expectations. Financial turmoil affecting the banking system and financial markets or significant financial services institution failures could negatively impact our treasury operations or those of our suppliers, vendors or customers, rapidly and without notice.
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, our operations could be adversely affected.
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 or disable allegedly IP protected functionality, our operations could be adversely affected. 15 Table of Contents Even if we believe that IP claims are without merit, they can be time-consuming and costly to defend and may divert management’s attention and resources away from our business.
We are subject to third party claims that we or customers indemnified by us are infringing upon such parties’ IP rights.
Third-party claims of IP infringement are commonplace in our industry and may limit or disrupt our ability to sell our products and services. We are subject to third party claims that we or customers indemnified by us are infringing upon IP rights.
We also rely on Intel, AMD and NVIDIA 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.
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, AMD, and NVIDIA, or other suppliers to provide us with a sufficient supply of processors for the majority of our PCs and workstations.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeOur cybersecurity risks are evaluated by senior leadership, including as part of our enterprise risk assessments that are reviewed by the Audit Committee and our Board of Directors, and our Internal Audit function, which is an objective, independent assurance and advisory organization that helps HP achieve business objectives and conducts regular assessments, audits, and testing of the cybersecurity program and its associated controls. 28 Table of Contents As of the date of this Form 10-K, risks from cybersecurity threats, including as a result of any previous cybersecurity incidents, have not materially affected us, including our business strategy, results of operations or financial condition.
Biggest changeOur cybersecurity risks are evaluated by senior leadership, including as part of our enterprise risk assessments that are reviewed by the Audit Committee and our Board of Directors, and our Internal Audit function, which is an objective, independent assurance and 26 Table of Contents advisory organization that helps HP achieve business objectives and conducts regular assessments, audits, and testing of the cybersecurity program and its associated controls.
Our Chief Information Security Officer (“CISO”) has responsibility for HP’s global cybersecurity program, including infrastructure and technology platforms, overseeing governance, regulatory and compliance, operations, strategy, and architecture. The CISO reports to our Chief Financial Officer.
Our Chief Information Security Officer (“CISO”), who has extensive cybersecurity knowledge and skills gained from over 20 years of experience as a CISO at the Company and elsewhere, has responsibility for HP’s global cybersecurity program, including infrastructure and technology platforms, overseeing governance, regulatory and compliance, operations, strategy, and architecture. The CISO reports to our Chief Financial Officer.
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As of the date of this Form 10-K, risks from cybersecurity threats, including as a result of any previous cybersecurity incidents, have not materially affected us, including our business strategy, results of operations or financial condition.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeHeadquarters of Geographic Operations The locations of our geographic headquarters are as follows: Americas Europe, Middle East, Africa Asia Pacific Palo Alto, United States Geneva, Switzerland Singapore 29 Table of Contents Product Development and Manufacturing The locations of our major product development and manufacturing facilities are as follows: Americas United States —Corvallis, San Diego, Boise, Vancouver, Spring, Fort Collins, Fountain Valley Mexico— Tijuana Europe, Middle East, Africa Israel— Kiryat-Gat, Rehovot, Netanya Spain— Barcelona Asia Pacific China— Chongqing, Shanghai India —Bangalore Malaysia— Penang Singapore— Singapore South Korea— Pangyo Taiwan— Taipei Technology office Spain— Barcelona United Kingdom— Bristol United States— Corvallis, Palo Alto, Scotts Valley
Biggest changeThe locations of our geographic headquarters are as follows: Americas Europe, Middle East, Africa Asia Pacific Palo Alto, United States Geneva, Switzerland Singapore 27 Table of Contents Product Development and Manufacturing The locations of our major product development and manufacturing facilities are as follows: Americas Europe, Middle East, Africa Asia Pacific Mexico— Tijuana United States —Boise, Corvallis, Fort Collins, Fountain Valley, Palo Alto, San Diego, Scotts Valley, Spring, Vancouver Israel— Kiryat-Gat, Rehovot, Netanya Spain— Barcelona China— Chongqing, Shanghai India —Bangalore Malaysia— Penang Singapore— Singapore South Korea— Pangyo Taiwan— Taipei
Principal Executive Offices Our principal executive offices, including our global headquarters, which we lease, are located at 1501 Page Mill Road, Palo Alto, California, United States.
Headquarters Our global headquarters, including our principal executive offices, are located at 1501 Page Mill Road, Palo Alto, California, United States.
ITEM 2. Properties. As of October 31, 2024, we owned or leased approximately 17.2 million square feet of space worldwide, a summary of which is provided below.
ITEM 2. Properties. As of October 31, 2025, we owned or leased approximately 16.9 million square feet of space worldwide, a summary of which is provided below.
Fiscal year ended October 31, 2024 Owned Leased Total (square feet in millions) Administration and support 1.9 5.3 7.2 (Percentage) 26 % 74 % 100 % Manufacturing plants, research and development facilities and warehouse operations 2.5 4.8 7.3 (Percentage) 34 % 66 % 100 % Total (1) 4.4 10.1 14.5 (Percentage) 30 % 70 % 100 % (1) Excludes 2.7 million square feet of vacated space, of which 1.8 million square feet is leased to third parties.
Fiscal year ended October 31, 2025 Owned Leased Total (square feet in millions) Administration and support 1.9 5.0 6.9 (Percentage) 28 % 72 % 100 % Manufacturing, research and development facilities and warehouse operations 2.4 4.9 7.3 (Percentage) 33 % 67 % 100 % Total (1) 4.3 9.9 14.2 (Percentage) 30 % 70 % 100 % (1) Excludes 2.7 million square feet of vacated space, of which 1.9 million square feet is leased to third parties.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe comparisons in the graph below are based on historical data and are not indicative of, or intended to forecast, future performance of our common stock. 10/19 10/20 10/21 10/22 10/23 10/24 HP Inc. $ 100.00 $ 107.25 $ 186.21 $ 174.60 $ 172.55 $ 240.79 S&P 500 Index $ 100.00 $ 109.70 $ 156.75 $ 133.82 $ 147.36 $ 203.35 S&P Information Technology Index $ 100.00 $ 134.47 $ 197.56 $ 157.53 $ 206.12 $ 311.72 32 Table of Contents
Biggest changeThe comparisons in the graph below are based on historical data and are not indicative of, or intended to forecast, future performance of our common stock. 10/20 10/21 10/22 10/23 10/24 10/25 HP Inc. $ 100.00 $ 173.62 $ 162.80 $ 160.88 $ 224.51 $ 182.07 S&P 500 Index $ 100.00 $ 142.89 $ 122.00 $ 134.35 $ 185.38 $ 225.10 S&P Information Technology Index $ 100.00 $ 146.93 $ 117.16 $ 153.30 $ 231.83 $ 318.88 30 Table of Contents
In the fourth quarter of fiscal year 2024, we returned $0.9 billion to shareholders through the repurchase of 25.4 million shares on the open market. 31 Table of Contents Stock Performance Graph and Cumulative Total Return The graph below shows the cumulative total stockholder return assuming the investment of $100 at the market close on October 31, 2019 (and the reinvestment of dividends thereafter) in each of HP common stock, the S&P 500 Index, and the S&P Information Technology Index.
In the fourth quarter of fiscal year 2025, we returned $0.5 billion to shareholders through the repurchase of 18.3 million shares on the open market. 29 Table of Contents Stock Performance Graph and Cumulative Total Return The graph below shows the cumulative total stockholder return assuming the investment of $100 at the market close on October 31, 2020 (and the reinvestment of dividends thereafter) in each of HP common stock, the S&P 500 Index, and the S&P Information Technology Index.
As of December 2, 2024, there were approximately 45,149 stockholders of record. Recent Sales of Unregistered Securities There were no unregistered sales of equity securities in fiscal year 2024.
As of December 1, 2025, there were approximately 42,937 stockholders of record. Recent Sales of Unregistered Securities There were no unregistered sales of equity securities in fiscal year 2025.
Issuer Purchases of Equity Securities Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares that May Yet Be Purchased under the Plans or Programs Period In thousands, except per share amounts August 2024 5,410 $ 34.62 5,410 $ 9,974,455 September 2024 9,433 $ 34.66 9,433 $ 9,647,496 October 2024 10,575 $ 36.46 10,575 $ 9,261,940 Total 25,418 25,418 The Company’s share repurchase program, which does not have a specific expiration date, authorizes repurchases in the open market or in private transactions.
Issuer Purchases of Equity Securities Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares that May Yet Be Purchased under the Plans or Programs Period In thousands, except per share amounts August 2025 5,721 $ 26.22 5,721 $ 8,761,940 September 2025 5,779 $ 28.17 5,779 $ 8,599,150 October 2025 6,830 $ 27.41 6,830 $ 8,411,940 Total 18,330 18,330 The Company’s share repurchase program, which does not have a specific expiration date, authorizes repurchases in the open market or in private transactions.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeResults of operations in dollars and as a percentage of net revenue were as follows: For the fiscal years ended October 31 2024 2023 2022 Dollars % of Net Revenue Dollars % of Net Revenue Dollars % of Net Revenue Dollars in millions Net revenue: Products $ 50,453 94.2 % $ 50,660 94.3 % $ 60,041 95.4 % Services 3,106 5.8 % 3,058 5.7 % 2,869 4.6 % Total net revenue 53,559 100.0 % 53,718 100.0 % 62,910 100.0 % Cost of net revenue: Products (1) 39,952 79.2 % 40,484 79.9 % 48,881 81.4 % Services (2) 1,789 57.6 % 1,726 56.4 % 1,766 61.6 % Total cost of net revenue 41,741 77.9 % 42,210 78.6 % 50,647 80.5 % Gross margin 11,818 22.1 % 11,508 21.4 % 12,263 19.5 % Research and development 1,640 3.1 % 1,578 2.9 % 1,653 2.6 % Selling, general and administrative 5,658 10.6 % 5,357 10.0 % 5,264 8.4 % Restructuring and other charges 301 0.5 % 527 1.0 % 218 0.3 % Acquisition and divestiture charges 83 0.2 % 240 0.4 % 318 0.5 % Amortization of intangible assets 318 0.6 % 350 0.7 % 228 0.4 % Russia exit charges — — % — — % 23 — % Total operating expenses 8,000 15.0 % 8,052 15.0 % 7,704 12.2 % Earnings from operations 3,818 7.1 % 3,456 6.4 % 4,559 7.2 % Interest and other, net (539) (1.0) % (519) (0.9) % (235) (0.4) % Earnings before taxes 3,279 6.1 % 2,937 5.5 % 4,324 6.8 % (Provision for) benefit from taxes (504) (0.9) % 326 0.6 % (1,192) (1.9) % Net earnings $ 2,775 5.2 % $ 3,263 6.1 % $ 3,132 4.9 % (1) Products cost of net revenue as a percentage of net revenue is calculated as a percentage of product net revenue.
Biggest changeResults of operations in dollars and as a percentage of net revenue were as follows: For the fiscal years ended October 31 2025 2024 2023 Dollars % of Net Revenue Dollars % of Net Revenue Dollars % of Net Revenue Dollars in millions Net revenue: Products $ 52,002 94.0 % $ 50,453 94.2 % $ 50,660 94.3 % Services 3,293 6.0 % 3,106 5.8 % 3,058 5.7 % Total net revenue 55,295 100.0 % 53,559 100.0 % 53,718 100.0 % Cost of net revenue: Products (1) 41,993 80.8 % 39,952 79.2 % 40,484 79.9 % Services (2) 1,910 58.0 % 1,789 57.6 % 1,726 56.4 % Total cost of net revenue 43,903 79.4 % 41,741 77.9 % 42,210 78.6 % Gross margin 11,392 20.6 % 11,818 22.1 % 11,508 21.4 % Research and development 1,602 2.9 % 1,640 3.1 % 1,578 2.9 % Selling, general and administrative 5,821 10.5 % 5,658 10.6 % 5,357 10.0 % Restructuring and other charges 405 0.8 % 301 0.5 % 527 1.0 % Acquisition and divestiture charges 45 0.1 % 83 0.2 % 240 0.4 % Amortization of intangible assets 345 0.6 % 318 0.6 % 350 0.7 % Total operating expenses 8,218 14.9 % 8,000 15.0 % 8,052 15.0 % Earnings from operations 3,174 5.7 % 3,818 7.1 % 3,456 6.4 % Interest and other, net (506) (0.9) % (539) (1.0) % (519) (0.9) % Earnings before taxes 2,668 4.8 % 3,279 6.1 % 2,937 5.5 % (Provision for) benefit from taxes (139) (0.2) % (504) (0.9) % 326 0.6 % Net earnings $ 2,529 4.6 % $ 2,775 5.2 % $ 3,263 6.1 % (1) Products cost of net revenue as a percentage of net revenue is calculated as a percentage of product net revenue.
For more information on our borrowings, see Note 11, “Borrowings”, to the Consolidated Financial Statements in Item 8 of Part II of this report, which is incorporated herein by reference. 44 Credit ratings 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.
For more information on our borrowings, see Note 11, “Borrowings”, to the Consolidated Financial Statements in Item 8 of Part II of this report, which is incorporated herein by reference. Credit ratings 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.
For more information on our Fiscal 2023 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.
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.
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. 46 Off-balance sheet arrangements As part of our ongoing business, we have not participated in transactions that generate material relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special purpose entities, which would have been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes.
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. 43 Off-balance sheet arrangements As part of our ongoing business, we have not participated in transactions that generate material relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special purpose entities, which would have been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes.
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, 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.
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 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.
We have third-party short-term financing arrangements intended to facilitate the working capital requirements of certain customers and HP. For more information on our third-party short-term financing arrangements, see Note 7 “Supplementary Financial Information” to the Consolidated Financial Statements in Item 8, which is incorporated herein by reference. 47 Table of Contents
We have third-party short-term financing arrangements intended to facilitate the working capital requirements of certain customers and HP. For more information on our third-party short-term financing arrangements, see Note 7 “Supplementary Financial Information” to the Consolidated Financial Statements in Item 8, which is incorporated herein by reference. 44 Table of Contents
This discussion should be read in conjunction with our Consolidated Financial Statements and the related notes that appear elsewhere in this document. This section generally discusses the results of operations for the fiscal year ended October 31, 2024 compared to the fiscal year ended October 31, 2023.
This discussion should be read in conjunction with our Consolidated Financial Statements and the related notes that appear elsewhere in this document. This section generally discusses the results of operations for the fiscal year ended October 31, 2025 compared to the fiscal year ended October 31, 2024.
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.
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. 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 2026.
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. 45 Table of Contents HP INC.
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. 42 Table of Contents HP INC.
(2) Services cost of net revenue as a percentage of net revenue is calculated as a percentage of services net revenue. 38 Net Revenue Products net revenue includes revenue from the sale of hardware, supplies, subscriptions and software licenses. Services net revenue includes revenue from our service offerings and support on hardware devices.
(2) Services cost of net revenue as a percentage of net revenue is calculated as a percentage of services net revenue. 36 Net Revenue Products net revenue includes revenue from the sale of hardware, supplies, subscriptions and software licenses. Services net revenue includes revenue from our service offerings and support on hardware devices.
We are subject to income taxes in the United States and approximately 61 other countries, and we are subject to routine corporate income tax audits in many of these jurisdictions.
We are subject to income taxes in the United States and approximately 60 other countries, and we are subject to routine corporate income tax audits in many of these jurisdictions.
We believe we have recorded adequate provisions for any such matters and, as of October 31, 2024, it was not reasonably possible that a material loss had been incurred in excess of the amounts recognized in our financial statements. 37 Table of Contents HP INC.
We believe we have recorded adequate provisions for any such matters and, as of October 31, 2025, it was not reasonably possible that a material loss had been incurred in excess of the amounts recognized in our financial statements. 35 Table of Contents HP INC.
For a discussion of fiscal year ended October 31, 2023 compared to the fiscal year ended October 31, 2022, please refer to Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the fiscal year ended October 31, 2023. 34 Table of Contents HP INC.
For a discussion of fiscal year ended October 31, 2024 compared to the fiscal year ended October 31, 2023, please refer to Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the fiscal year ended October 31, 2024. 32 Table of Contents HP INC.
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 unfavorable revenue linearity. DOS measures the average number of days from procurement to sale of our product.
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 lower factoring. DOS measures the average number of days from procurement to sale of our product.
The impact of our outstanding interest rate swaps as of October 31, 2024 was factored into the calculation of the future interest payments on debt.
The impact of our outstanding interest rate swaps as of October 31, 2025 was factored into the calculation of the future interest payments on debt.
It is calculated by dividing the change in revenue of each business unit from the prior period by total segment revenue for the prior-year period. Fiscal year 2024 compared with fiscal year 2023 Printing net revenue decreased 3.8% (decreased 3.2% on a constant currency basis) for fiscal year 2024 as compared to the prior-year period.
It is calculated by dividing the change in revenue of each business unit from the prior period by total segment revenue for the prior-year period. Fiscal year 2025 compared with fiscal year 2024 Printing net revenue decreased 3.7% (decreased 2.7% on a constant currency basis) for fiscal year 2025 as compared to the prior-year period.
Corporate Investments The loss from operations in Corporate Investments for the fiscal year 2024 was primarily due to expenses associated with our incubation projects and investments in digital enablement. 41 LIQUIDITY AND CAPITAL RESOURCES We use cash generated by operations as our primary source of liquidity.
Corporate Investments The loss from operations in Corporate Investments for fiscal year 2025 was primarily due to expenses associated with our incubation projects and investments in digital enablement. 39 LIQUIDITY AND CAPITAL RESOURCES We use cash generated by operations as our primary source of liquidity.
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.
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.
For a reconciliation of our effective tax rate to the U.S. federal statutory rate of 21% in fiscal year 2024, and further explanation of our provision for income taxes, see Note 6, “Taxes on Earnings” to the Consolidated Financial Statements in Item 8, which is incorporated herein by reference. 39 In fiscal year 2024, we recorded $214 million of net income tax benefits related to non-recurring items in the provision for taxes.
For a reconciliation of our effective tax rate to the U.S. federal statutory rate of 21% in fiscal year 2025, and further explanation of our provision for income taxes, see Note 6, “Taxes on Earnings” to the Consolidated Financial Statements in Item 8, which is incorporated herein by reference. 37 In fiscal year 2025, we recorded $415 million of net income tax benefits related to non-recurring items in the provision for taxes.
We also continue to work on optimizing our sales coverage models, aligning our sales incentives with our strategic goals, improving channel execution and inventory, production and backlog management, strengthening our capabilities in our areas of strategic focus, effective cost management, strengthening our pricing strategy, and developing and capitalizing on market opportunities.
We also continue to work on optimizing our sales coverage models, aligning our sales incentives with our strategic goals, improving channel execution and inventory, production and backlog management, strengthening our capabilities in our areas of strategic focus, effective cost management, strengthening our pricing strategy, and developing and capitalizing on market opportunities. 33 Table of Contents HP INC.
A summary of our significant accounting policies is included in Note 1, “Summary of Significant Accounting Policies” to the Consolidated Financial Statements in Item 8, which is incorporated herein by reference. Management believes the following accounting policies reflect the critical accounting estimates used in the preparation of our Consolidated Financial Statements. 36 Table of Contents HP INC.
A summary of our significant accounting policies is included in Note 1, “Summary of Significant Accounting Policies” to the Consolidated Financial Statements in Item 8, which is incorporated herein by reference. Management believes the following accounting policies reflect the critical accounting estimates used in the preparation of our Consolidated Financial Statements.
We are consolidating 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.
We have consolidated 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.
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 reducing portfolio complexity, improving continuity of supply, and increasing our forecast accuracy across our business to drive reduction in our cost of sales and operating expenses.
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 reduced portfolio complexity, improved continuity of supply, and increased our forecast accuracy across our business to drive reduction in our cost of sales and operating expenses.
Even though open purchase orders are considered enforceable and legally binding, the terms generally allow us the option to cancel, reschedule, and adjust terms based on our business needs prior to the delivery of goods or performance of services. (4) Retirement and Post-Retirement Benefit Plan Contributions.
Even though open purchase orders are considered enforceable and legally binding, the terms generally allow us the option to cancel, reschedule, and adjust terms based on our business needs prior to the delivery of goods or performance of services.
The table below presents the cash conversion cycle: As of October 31 2024 2023 2022 Days of sales outstanding in accounts receivable (“DSO”) 33 28 28 Days of supply in inventory (“DOS”) 63 57 57 Days of purchases outstanding in accounts payable (“DPO”) (138) (117) (114) Cash conversion cycle (42) (32) (29) October 31, 2024 as compared to October 31, 2023 The cash conversion cycle is the sum of days of DSO and DOS less DPO.
The table below presents the cash conversion cycle: As of October 31 2025 2024 2023 Days of sales outstanding in accounts receivable (“DSO”) 35 33 28 Days of supply in inventory (“DOS”) 66 63 57 Days of purchases outstanding in accounts payable (“DPO”) (139) (138) (117) Cash conversion cycle (38) (42) (32) October 31, 2025 as compared to October 31, 2024 The cash conversion cycle is the sum of days of DSO and DOS less DPO.
As of October 31, 2024, we had approximately $1.0 billion 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.
Uncertain Tax Positions As of October 31, 2025, we had approximately $797 million 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.
Capital resources Debt Levels As of October 31 2024 2023 Dollars in millions Short-term debt $ 1,406 $ 230 Long-term debt $ 8,263 $ 9,254 Weighted-average interest rate 4.5 % 4.2 % We maintain debt levels that we establish through consideration of a number of factors, including cash flow expectations, cash requirements for operations, investment plans (including acquisitions), share repurchase activities, our cost of capital and targeted capital structure.
Capital resources Debt Levels As of October 31 2025 2024 Dollars in millions Short-term debt $ 845 $ 1,406 Long-term debt $ 8,821 $ 8,263 Weighted-average interest rate 4.6 % 4.5 % 41 We maintain debt levels that we establish through consideration of a number of factors, including cash flow expectations, cash requirements for operations, investment plans (including acquisitions), share repurchase activities, our cost of capital and targeted capital structure.
Printing For the fiscal years ended October 31 2024 2023 2022 Dollars in millions Net revenue $ 17,338 $ 18,029 $ 18,902 Earnings from operations $ 3,290 $ 3,399 $ 3,619 Earnings from operations as a % of net revenue 19.0% 18.9% 19.1% The components of the net revenue and weighted net revenue change by business unit were as follows: For the fiscal years ended October 31 Net Revenue Weighted Net Revenue Change Percentage Points (1) 2024 2023 2022 2024 2023 In millions Supplies $ 11,295 $ 11,452 $ 11,761 (0.9) (1.6) Commercial Printing 4,841 5,250 5,339 (2.2) (0.5) Consumer Printing 1,202 1,327 1,802 (0.7) (2.5) Total Printing $ 17,338 $ 18,029 $ 18,902 (3.8) (4.6) (1) Weighted Net Revenue Change Percentage Points measures the contribution of each business unit towards overall segment revenue growth.
Printing For the fiscal years ended October 31 2025 2024 2023 Dollars in millions Net revenue $ 16,702 $ 17,338 $ 18,029 Earnings from operations $ 3,118 $ 3,290 $ 3,399 Earnings from operations as a % of net revenue 18.7% 19.0% 18.9% The components of the net revenue and weighted net revenue change by business unit were as follows: For the fiscal years ended October 31 Net Revenue Weighted Net Revenue Change Percentage Points (1) 2025 2024 2023 2025 2024 In millions Supplies $ 10,916 $ 11,295 $ 11,452 (2.2) (0.9) Commercial Printing 4,633 4,841 5,250 (1.2) (2.2) Consumer Printing 1,153 1,202 1,327 (0.3) (0.7) Total Printing $ 16,702 $ 17,338 $ 18,029 (3.7) (3.8) (1) Weighted Net Revenue Change Percentage Points measures the contribution of each business unit towards overall segment revenue growth.
It is calculated by dividing the change in revenue of each business unit from the prior-year period by total segment revenue for the prior-year period. Fiscal year 2024 compared with fiscal year 2023 Personal Systems net revenue increased 1.4% (increased 1.3% on a constant currency basis) in the fiscal year 2024, as compared to the prior-year period.
It is calculated by dividing the change in revenue of each business unit from the prior-year period by total segment revenue for the prior-year period. Fiscal year 2025 compared with fiscal year 2024 Personal Systems net revenue increased 6.5% (increased 6.7% on a constant currency basis) in the fiscal year 2025, as compared to the prior-year period.
For more information, 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.
Restructuring and other charges Restructuring and other charges relate primarily to the Fiscal 2023 Plan. For more information, 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.
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.
We expect 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.
The decrease in ASPs was driven by competitive pricing and unfavorable mix shifts, partially offset by favorable foreign currency impacts. 40 Personal Systems earnings from operations as a percentage of net revenue increased by 0.1 percentage points driven by an increase in gross margin, partially offset by an increase in operating expenses as a percentage of revenue.
The increase in ASPs was driven by disciplined pricing and favorable mix shifts, partially offset by unfavorable currency impacts. 38 Personal Systems earnings from operations as a percentage of net revenue decreased by 0.9 percentage points driven by a decrease in gross margin, partially offset by a decrease in operating expenses as a percentage of revenue.
Transformation Update 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 is expected to run through end of fiscal 2025.
Transformation Update 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.
Personal Systems For the fiscal years ended October 31 2024 2023 2022 Dollars in millions Net revenue $ 36,195 $ 35,684 $ 44,011 Earnings from operations $ 2,194 $ 2,129 $ 2,761 Earnings from operations as a % of net revenue 6.1% 6.0 % 6.3% The components of net revenue and the weighted net revenue change by business unit were as follows: For the fiscal years ended October 31 Net Revenue Weighted Net Revenue Change Percentage Points (1) 2024 2023 2022 2024 2023 In millions Commercial PS $ 25,486 $ 24,712 $ 29,616 2.1 (11.1) Consumer PS 10,709 10,972 14,395 (0.7) (7.8) Total Personal Systems $ 36,195 $ 35,684 $ 44,011 1.4 (18.9) (1) Weighted Net Revenue Change Percentage Points measures contribution of each business unit towards overall segment revenue growth.
Personal Systems For the fiscal years ended October 31 2025 2024 2023 Dollars in millions Net revenue $ 38,532 $ 36,195 $ 35,684 Earnings from operations $ 2,054 $ 2,253 $ 2,129 Earnings from operations as a % of net revenue 5.3% 6.2 % 6.0% The components of net revenue and the weighted net revenue change by business unit were as follows: For the fiscal years ended October 31 Net Revenue Weighted Net Revenue Change Percentage Points (1) 2025 2024 2023 2025 2024 In millions Commercial PS $ 27,438 $ 25,486 $ 24,712 5.4 2.1 Consumer PS 11,094 10,709 10,972 1.1 (0.7) Total Personal Systems $ 38,532 $ 36,195 $ 35,684 6.5 1.4 (1) Weighted Net Revenue Change Percentage Points measures contribution of each business unit towards overall segment revenue growth.
The decline in net revenue was primarily driven by Commercial Printing, Consumer Printing and Supplies as well as unfavorable foreign currency impacts. Net revenue for Supplies decreased 1.4% primarily due to decline in the installed base and usage as well as foreign currency impacts, partially offset by disciplined pricing.
The decline in net revenue was driven by Supplies, Commercial Printing and Consumer Printing as well as unfavorable currency impacts. Net revenue for Supplies decreased 3.4% primarily due to decline in the installed base and usage and currency impacts, partially offset by disciplined pricing. Printer unit volume decreased 4.2% due to demand softness and hardware ASPs decreased 1.5%.
Net revenue for Consumer Printing decreased 9.4%, primarily due to a 6.2% decrease in printer unit volume and a 3.3% decrease in ASP’s. The decrease in ASPs was primarily driven by competitive pricing, partially offset by favorable mix shifts.
Printer hardware ASPs decreased primarily due to unfavorable mix shifts towards Consumer Printing and unfavorable currency impacts. Net revenue for Commercial Printing decreased by 4.3%, primarily due to a 6.2% decrease in printer unit volume, partially offset by a 0.1% increase in ASPs. The increase in ASPs was primarily driven by favorable mix shifts, partially offset by competitive pricing.
In fiscal year 2025, we expect to contribute approximately $36 million to our non-U.S. pension plans, $30 million to cover benefit payments to U.S. non-qualified pension plan participants and $4 million to cover benefit claims for our post-retirement benefit plans.
Retirement and Post-Retirement Benefit Plan Contributions In fiscal year 2026, we expect to contribute approximately $43 million to our non-U.S. pension plans, $31 million to cover benefit payments to U.S. non-qualified pension plan participants and $3 million to cover benefit claims for our post-retirement benefit plans.
Specific challenges we face at the segment level are set forth below. • In Personal Systems, we face challenges with a competitive pricing environment, variability in commodity costs, and demand softness in certain geographic regions. • In Printing, we face challenges from changing customer behaviors as well as competitors with a favorable foreign currency environment and non-original supplies (which includes imitation, refill, or remanufactured alternatives).
Specific challenges we face at the segment level are set forth below. • In Personal Systems, we face challenges with a competitive pricing environment, variability in commodity costs, especially increasing memory and storage costs, and the uncertainty of the market’s ability to absorb price increases. • In Printing, we face challenges from changing customer behaviors as well as competitors with a favorable foreign currency environment and non-original supplies (which includes imitation, refill, or remanufactured alternatives).
A detailed discussion of the factors contributing to the changes in segment gross margins is included under “Segment Information” below. Operating Expenses Research and development (“R&D”) R&D expense increased 3.9% in fiscal year 2024, primarily due to continued investments in innovation, partially offset by disciplined cost management including Future Ready transformation savings.
A detailed discussion of the factors contributing to the changes in segment gross margins is included under “Segment Information” below. Operating Expenses Research and development (“R&D”) R&D expense decreased 2.3% in fiscal year 2025, primarily due to disciplined cost savings.
In fiscal year 2024, total net revenue decreased 0.3% (decreased 0.2% on a constant currency basis) as compared to the prior-year period. Net revenue from the United States decreased 0.2% and remained at $18.8 billion, and outside of the United States decreased 0.3% to $34.8 billion.
In fiscal year 2025, total net revenue increased 3.2% (increased 3.7% on a constant currency basis) as compared to the prior-year period. Net revenue from the United States increased 2.2% to $19.2 billion, and outside of the United States increased 3.8% to $36.1 billion.
The net revenue increase was primarily due to a 3.3% increase in PC unit volume driven by Commercial PS, partially offset by a 1.4% decrease in average selling price (“ASPs”). The decrease in ASPs is primarily due to competitive pricing, partially offset by favorable mix shifts.
The net revenue increase was primarily due to a 4.3% increase in unit volume driven by the Windows-based PC operating system refresh, and a 3.1% increase in average selling price (“ASPs”). The increase in ASPs is primarily due to favorable mix shift towards Commercial PS and disciplined pricing, partially offset by unfavorable currency impact.
Net revenue for Commercial Printing decreased by 7.8%, primarily due to an 8.8% decrease in printer unit volume and a 1.8% decrease in ASPs. The decrease in ASPs was primarily driven by competitive pricing, partially offset by favorable mix shifts.
Net revenue for Consumer Printing decreased 4.1%, primarily due to a 3.1% decrease in printer unit volume and a 1.4% decrease in ASPs. The decrease in ASPs was primarily driven by unfavorable currency impacts and mix shifts, partially offset by disciplined pricing.
Liquidity Our cash, cash equivalents and restricted cash and total debt were as follows: As of October 31 2024 2023 In millions Cash and cash equivalents $ 3,238 $ 3,107 Restricted cash $ 15 $ 125 Total debt $ 9,669 $ 9,484 Our key cash flow metrics were as follows: For the fiscal years ended October 31 2024 2023 2022 In millions Net cash provided by operating activities $ 3,749 $ 3,571 $ 4,463 Net cash used in investing activities (646) (590) (3,549) Net cash used in financing activities (3,082) (2,894) (2,068) Net increase (decrease) in cash, cash equivalents, and restricted cash $ 21 $ 87 $ (1,154) Operating activities Net cash provided by operating activities increased by $0.2 billion for fiscal year 2024 due to favorable working capital impacts, 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. 42 Key working capital metrics Management utilizes current cash conversion cycle information to manage our working capital level.
Liquidity Our cash, cash equivalents and restricted cash and total debt were as follows: As of October 31 2025 2024 In millions Cash and cash equivalents $ 3,690 $ 3,238 Restricted cash $ 15 $ 15 Total debt $ 9,666 $ 9,669 Our key cash flow metrics were as follows: For the fiscal years ended October 31 2025 2024 2023 In millions Net cash provided by operating activities $ 3,697 $ 3,749 $ 3,571 Net cash used in investing activities (1,177) (646) (590) Net cash used in financing activities (2,060) (3,082) (2,894) Net increase in cash, cash equivalents, and restricted cash $ 460 $ 21 $ 87 Operating activities Net cash provided by operating activities decreased by $0.1 billion for fiscal year 2025 primarily due to working capital impacts and lower net earnings, partially offset by changes in receivables from contract manufacturers. 40 Key working capital metrics Management utilizes current cash conversion cycle information to manage our working capital level.
Commercial PS revenue increased 3.1% primarily driven by a 5.7% increase in units due to market recovery, partially offset by a 1.6% decrease in ASPs. The decrease in ASPs was driven by unfavorable mix shifts and competitive pricing.
Commercial PS net revenue increased 7.7% primarily due to a 6.4% increase in units due to market expansion and a 2.7% increase in ASPs. The increase in ASPs was driven by favorable mix shifts and disciplined pricing, partially offset by unfavorable currency impacts.
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 manufacturing volumes in Personal Systems as well as favorable changes in payment terms.
DPO is calculated by dividing ending accounts payable by a 90-day average of cost of goods sold. The increase in DPO was primarily due to higher purchasing volumes.
DOS is calculated by dividing ending inventory by a 90-day average of cost of goods sold. The increase in DOS is primarily due to strategic buys in Personal Systems and higher in-transit shipments. DPO measures the average number of days our accounts payable balances are outstanding.
DOS is calculated by dividing ending inventory by a 90-day average of cost of goods sold. The increase in DOS was primarily due to higher Personal Systems volume driven by Windows-based PC operating system refresh demand, tariff mitigation and supply chain resiliency actions. DPO measures the average number of days our accounts payable balances are outstanding.
We use estimates to determine the expected variable consideration for such programs based on historical experience, expected consumer behavior and market conditions.
AND SUBSIDIARIES Management’s Discussion and Analysis of Financial Condition and Results of Operations estimates to determine the expected variable consideration for such programs based on historical experience, expected consumer behavior and market conditions.
Funds borrowed under the revolving credit facility may be used for general corporate purposes. Available borrowing resources As of October 31, 2024, we had available borrowing resources of $0.9 billion from uncommitted lines of credit in addition to funds available under the revolving credit facility.
Available borrowing resources As of October 31, 2025, we had available borrowing resources of $1.1 billion from uncommitted lines of credit in addition to funds available under the revolving credit facility.
We 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 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.
Financing activities Net cash used in financing activities increased by $0.2 billion in fiscal year 2024 compared to the prior-year period, primarily due to higher share repurchases of $2.0 billion, partially offset by lower net debt repayment of $1.6 billion and collateral returned for derivative instruments of $0.2 billion in the prior-year period. 43 Share repurchases and dividends In fiscal year 2024, HP returned $3.2 billion to shareholders in the form of share repurchases of $2.1 billion and cash dividends of $1.1 billion.
Financing activities Net cash used in financing activities decreased by $1.0 billion in fiscal year 2025 compared to the prior-year period, primarily due to a $1.3 billion decrease in share repurchases, partially offset by higher net debt repayment of $0.2 billion.
Acquisition and divestiture charges 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.
Acquisition and divestiture charges 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. Acquisition and divestiture charges decreased by $38 million in the fiscal year 2025, primarily due to reduced integration activities.
AND SUBSIDIARIES Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued) CONTRACTUAL AND OTHER OBLIGATIONS Our contractual and other obligations as of October 31, 2024, were as follows: Payments Due by Period Total Short-term Long-term In millions Principal payments on debt (1) $ 9,717 $ 1,406 $ 8,311 Interest payments on debt (2) 2,724 404 2,320 Purchase obligations (3) 1,366 896 470 Operating lease obligations 1,361 513 848 Finance lease obligations 31 13 18 Total (4)(5)(6) $ 15,199 $ 3,232 $ 11,967 (1) Amounts represent the principal cash payments relating to our short-term and long-term debt and do not include any fair value adjustments, discounts or premiums.
AND SUBSIDIARIES Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued) CONTRACTUAL AND OTHER OBLIGATIONS Our contractual and other obligations as of October 31, 2025, were as follows: Payments Due by Period Total Short-term Long-term In millions Principal payments on debt (1) $ 9,688 $ 831 $ 8,857 Interest payments on debt (2) 2,775 406 2,369 Purchase obligations (3) 1,085 509 576 Operating lease obligations 1,387 474 913 Finance lease obligations 35 16 19 Total $ 14,970 $ 2,236 $ 12,734 (1) Amounts represent the principal cash payments relating to our short-term and long-term debt and do not include any fair value adjustments, discounts or premiums.
Gross Margin In fiscal year 2024, gross margin increased by 0.7 percentage points, primarily driven by products gross margin due to lower supply chain costs, and cost savings, including Future Ready transformation savings, partially offset by competitive pricing in Printer hardware and Personal Systems, and mix shifts towards Personal Systems while services gross margin decreased.
Gross Margin In fiscal year 2025, gross margin decreased by 1.5 percentage points primarily driven by products gross margin due to higher commodity and tariff costs, mix shifts towards Personal Systems and unfavorable currency impacts, partially offset by disciplined pricing actions and cost savings including Future Ready transformation savings. Services gross margin decreased due to unfavorable mix shifts.
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, other volume-based incentives and expected returns).
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). We use 34 Table of Contents HP INC.
We are also exposed to fluctuations in foreign currency exchange rates. We have a large global presence, with approximately 65% of our net revenue from outside the United States.
We have a large global presence, with approximately 65% of our net revenue from outside the United States. As a result, our financial results can be, and particularly in recent periods have been, negatively impacted by fluctuations in foreign currency exchange rates.
Gross margin increased primarily due to lower supply chain cost, favorable mix shifts as well as Future Ready transformation savings, partially offset by competitive pricing. Operating expenses as a percentage of revenue increased primarily due to higher litigation costs, go-to-market initiatives and continued investments in innovation, partially offset by disciplined cost management including Future Ready transformation savings.
Gross margin decreased primarily due to higher commodity and tariff costs, partially offset by disciplined pricing actions. Operating expenses as a percentage of revenue decreased primarily due to lower variable compensation and litigation charges as well as cost savings including Future Ready transformation savings.
Short-term debt increased by $1.2 billion and long-term debt decreased by $1.0 billion for fiscal year 2024 as compared to prior-year period. These changes are due to reclassification of Global Notes due in June 2025 to short-term.
Short-term debt decreased by $0.6 billion and long-term debt increased by $0.6 billion for fiscal year 2025 as compared to the prior-year period.
AND SUBSIDIARIES Management’s Discussion and Analysis of Financial Condition and Results of Operations To address these challenges, we continue to pursue innovation with a view towards developing new products and services aligned with generating market demand and meeting the needs of our customers and partners.
We also obtain many Printing components from single source suppliers due to technology, availability, price, quality, or other considerations. To address these challenges, we continue to pursue innovation with a view towards developing new products and services aligned with generating market demand and meeting the needs of our customers and partners.
AND SUBSIDIARIES Management’s Discussion and Analysis of Financial Condition and Results of Operations Revenue Recognition - Variable Consideration We recognize revenue depicting the transfer of promised goods or services to customers in an amount that may include variable consideration.
Revenue Recognition - Variable Consideration 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.
Selling, general and administrative (“SG&A”) SG&A expense increased 5.6% in fiscal year 2024, primarily due to higher litigation costs and go-to-market initiatives, partially offset by disciplined cost management including Future Ready transformation savings. Restructuring and other charges Restructuring and other charges relate primarily to the Fiscal 2023 Plan.
Selling, general and administrative (“SG&A”) SG&A expense increased 2.9% in fiscal year 2025, primarily due to higher litigation costs, partially offset by lower variable compensation and the receipt of a new government grant in the current period as well as cost savings including Future Ready transformation savings.
Consumer PS net revenue decreased 2.4% driven by a 2.5% decrease in ASPs and a 0.3% decrease in units due to demand softness, especially in China.
Consumer PS net revenue increased 3.6% primarily due to by a 2.3% increase in ASPs and a 1.2% increase in units.
Provision for taxes Our effective tax rate was 15.4% in fiscal year 2024. The effective tax rate differs from the U.S. federal statutory rate of 21% primarily due to impacts of changes in valuation allowances and favorable tax rates associated with certain earnings from HP’s operations in lower-tax jurisdictions throughout the world.
Provision for taxes Our effective tax rate was 5.2% in fiscal year 2025. The effective tax rate differs from the U.S. federal statutory rate of 21% primarily due to decreases in uncertain tax positions.
On August 27, 2024, HP’s Board of Directors increased HP’s total share repurchase authorization to $10.0 billion, inclusive of the amount remaining under previously authorized share repurchases. As of October 31, 2024, HP had approximately $9.3 billion remaining under the share repurchase authorizations approved by HP’s Board of Directors.
Share repurchases and dividends In fiscal year 2025, HP returned $1.9 billion to shareholders in the form of cash dividends of $1.1 billion and share repurchases of $0.8 billion. As of October 31, 2025, HP had approximately $8.4 billion remaining under the share repurchase authorizations approved by HP’s Board of Directors.
Investing activities Net cash used in investing activities increased $0.1 billion for fiscal year 2024 as compared to the prior-year period, primarily due to payments made in connection with acquisitions.
Investing activities Net cash used in investing activities increased $0.5 billion for fiscal year 2025 as compared to the prior-year period, primarily due to higher investment in property, plant, equipment and purchased intangible of $0.3 billion, collateral posted for derivative instruments of $0.3 billion.
This amount included $198 million related to changes in valuation allowances, $60 million related to restructuring charges, $14 million related to the filing of tax returns in various jurisdictions, and $11 million related to acquisition charges. These benefits were partially offset by $39 million of uncertain tax position charges and $25 million related to changes in tax rates.
This amount included $273 million related to changes in uncertain tax positions, $80 million related to restructuring charges, $44 million related to changes in valuation allowances, $28 million related to the filing of tax returns in various jurisdictions, $22 million related to audit settlements in various jurisdictions, and $16 million related to litigation charges.
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), uncertainty in the markets, volatility in exchange rates, inflationary trends and evolving dynamics in the global trade environment.
AND SUBSIDIARIES Management’s Discussion and Analysis of Financial Condition and Results of Operations Macroeconomic Environment Our business and financial performance depend significantly on worldwide economic conditions. We face global macroeconomic challenges such as ongoing geopolitical tensions, uncertainty in the markets, volatility in exchange rates, inflationary trends and evolving dynamics in the global trade environment.
Printing earnings from operations as a percentage of net revenue increased by 0.1 percentage points driven by an increase in gross margin, partially offset by higher operating expenses as a percentage of revenue. The increase in gross margin was primarily driven by favorable mix shifts as well as cost savings including Future Ready transformation savings, partially offset by competitive pricing.
Printing earnings from operations as a percentage of net revenue decreased by 0.3 percentage points driven by a decrease in gross margin, while operating expenses as a percentage of revenue remained flat.
Future changes to this organizational structure may result 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.
Based on our assessment, we do not anticipate a material impact on our effective tax and cash tax rates. Segment Information A description of the products and services for each segment can be found in Note 2, “Segment Information,” to the Consolidated Financial Statements in Item 8, which is incorporated herein by reference.
For more information on our outstanding debt, see Note 11, “Borrowings”, to the Consolidated Financial Statements in Item 8 of Part II of this report, which is incorporated herein by reference. As of October 31, 2024, we maintained a $5.0 billion sustainability-linked senior unsecured committed revolving credit facility maturing August 1, 2029.
As of October 31, 2025, we maintained a $5.0 billion sustainability-linked senior unsecured committed revolving credit facility maturing August 1, 2029. Funds borrowed under the revolving credit facility may be used for general corporate purposes.
The decrease in products net revenue was primarily driven by lower hardware units in Printing and competitive pricing in Printer hardware and Personal Systems, partially offset by market recovery in Commercial PS and higher net revenue in key growth areas. Services net revenue remained flat.
The increase in net revenue was primarily driven by products net revenue due to increased units in Personal Systems as well as an increase in services net revenue due to support services on hardware devices, partially offset by a decline in Printing net revenue and unfavorable currency impacts.
Removed
We have focused on growing our hybrid systems, gaming, workforce solutions, consumer subscriptions, industrial graphics and our 3D and personalization businesses at a rate faster than our core business with accretive margins in the longer term.
Added
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.
Removed
We believe our ability to innovate will help us gain momentum in growth areas like hybrid systems and gaming, and we see significant opportunities to drive greater recurring revenues across Personal Systems and Printing. Our Workforce Solutions organization drives integration across our commercial services, software and security portfolio.
Added
We also experience seasonality in the sale of our products and services which may be affected by general economic conditions. Since April 2025, new, substantial tariffs have been imposed on imports to the United States. We continue to evaluate and implement further mitigating actions, including potential supply chain resiliency movements and cost and pricing measures, as the tariff environment evolves.
Removed
We continue to build on strong portfolios like Instant Ink to grow our Consumer Subscription business. In Industrial Graphics, we are driving the shift from analog to digital in segments like labels and packaging. In 3D and Personalization, we are creating end-to-end solutions that we believe can capture more value with our differentiated technology.
Added
During fiscal year 2025, we experienced higher commodity and tariff costs, which were not fully mitigated by pricing and other actions enacted during the period. We anticipate commodity cost pressure to continue, including recent inflationary trends in memory and storage costs and potential supply constraints in our Personal Systems business.
Removed
We also obtain many Printing components from single source suppliers due to technology, availability, price, quality, or other considerations. 35 Table of Contents HP INC.
Added
New or sustained changes to tariffs and commodity costs could result in increased supply chain challenges, cost volatility, and consumer and economic uncertainty which may have a significant adverse impact to our results of operations and cash flows to the extent our efforts do not fully mitigate these effects. We are also exposed to fluctuations in foreign currency exchange rates.
Removed
Macroeconomic Environment Our business and financial performance depend significantly on worldwide economic conditions.
Added
We also reduced our structural cost through headcount reductions and achieved our overall headcount reduction goal. In November 2025, we announced our new plan to drive customer satisfaction, product innovation, and productivity through AI adoption and enablement (the “Fiscal 2026 Plan”). The Fiscal 2026 Plan is expected to run for three years through the end of fiscal year 2028.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

7 edited+0 added−0 removed12 unchanged
Biggest changeThe sensitivity analyses indicated that a hypothetical 10% adverse movement in interest rates would have resulted in a loss in the fair values of our debt and investments, net of interest rate swaps, of $164 million and $196 million as of October 31, 2024 and October 31, 2023, respectively. 48 Table of Contents
Biggest changeThe sensitivity analyses indicated that a hypothetical 10% adverse movement in interest rates would have resulted in a loss in the fair values of our debt and investments, net of interest rate swaps, of $157 million and $164 million as of October 31, 2025 and October 31, 2024, respectively. 45 Table of Contents
We have performed sensitivity analyses as of October 31, 2024 and 2023, using a modeling technique that measures the change in the fair values arising from a hypothetical 10% adverse movement in the levels of interest rates across the entire yield curve, with all other variables held constant. The analyses cover our debt, investments and interest rate swaps.
We have performed sensitivity analyses as of October 31, 2025 and 2024, using a modeling technique that measures the change in the fair values arising from a hypothetical 10% adverse movement in the levels of interest rates across the entire yield curve, with all other variables held constant. The analyses cover our debt, investments and interest rate swaps.
We have performed sensitivity analyses as of October 31, 2024 and 2023, using a modeling technique that measures the change in the fair values arising from a hypothetical 10% adverse movement in the levels of foreign currency exchange rates relative to the U.S. dollar, with all other variables held constant.
We have performed sensitivity analyses as of October 31, 2025 and 2024, using a modeling technique that measures the change in the fair values arising from a hypothetical 10% adverse movement in the levels of foreign currency exchange rates relative to the U.S. dollar, with all other variables held constant.
The analyses cover all of our foreign currency derivative contracts offset by underlying exposures. The foreign currency exchange rates we used in performing the sensitivity analysis were based on market rates in effect as of October 31, 2024 and 2023.
The analyses cover all of our foreign currency derivative contracts offset by underlying exposures. The foreign currency exchange rates we used in performing the sensitivity analysis were based on market rates in effect as of October 31, 2025 and 2024.
We transact business in over 40 currencies worldwide, of which the most significant foreign currencies to our operations for fiscal year 2024 were Euro, Chinese yuan renminbi, Japanese yen and British pound.
We transact business in over 40 currencies worldwide, of which the most significant foreign currencies to our operations for fiscal year 2025 were Euro, Chinese yuan renminbi, Japanese yen and British pound.
The analyses use actual or approximate maturities for the debt, investments and interest rate swaps. The discount rates used were based on the market interest rates in effect as of October 31, 2024 and 2023.
The analyses use actual or approximate maturities for the debt, investments and interest rate swaps. The discount rates used were based on the market interest rates in effect as of October 31, 2025 and 2024.
The sensitivity analyses indicated that a hypothetical 10% adverse movement in foreign currency exchange rates would result in a foreign exchang e loss of $94 million and $133 million as of October 31, 2024 and October 31, 2023, respectively. Interest rate risk We also are exposed to interest rate risk related to debt we have issued and our investment portfolio.
The sensitivity analyses indicated that a hypothetical 10% adverse movement in foreign currency exchange rates would result in a foreign exchang e loss of $134 million and $94 million as of October 31, 2025 and October 31, 2024, respectively. Interest rate risk We also are exposed to interest rate risk related to debt we have issued and our investment portfolio.

Other HPQ 10-K year-over-year comparisons