HP surpasses third-quarter revenue expectations driven by AI PC adoption and Windows 11 upgrade success

HP, a leading technology company, has reported a third-quarter revenue of $13.93 billion, surpassing Wall Street estimates, according to Reuters. The growth, approximately 3%, is attributed to increasing demand for artificial intelligence-powered personal computers and the Windows 11 upgrade cycle.

In the printing segment, revenue decreased 4% to $4 billion, while the personal systems unit, which encompasses both consumer and commercial PCs, saw a 6% growth to $9.93 billion in the third quarter.

The growth in the personal systems unit is a testament to the strong PC refresh cycle expected following the end of Windows 10 support in October. Evolving US trade policies are forcing PC makers, including HP, to continuously rebalance their supply chains. HP has relocated almost all of its production intended for the North American market from China to Southeast Asia, Mexico, and some US locations in recent months. Only a few insignificant, low-volume items remain in China for HP.

CFO Karen Parkhill stated that HP remains confident in the strength of the PC market opportunity and expects continued momentum from Windows 11 refresh and AI PC adoption. The company's third-quarter adjusted profit per share was 75 cents, aligning with estimates.

HP's expectations for fourth-quarter adjusted profit exclude about 12 cents per share for restructuring, deal-related costs, intangible amortization, and tax items. HP forecasts fourth-quarter adjusted profit per share between 87 cents and 97 cents, aligning with analysts' estimates of 92 cents. However, HP's shares were down about 2% in extended trading following the fourth-quarter forecast announcement.

PC makers, including HP and Dell, are expected to benefit from this PC refresh cycle as users and organizations seek to maintain security and access to the latest features. The specific Southeast Asian countries where HP has relocated its production are not named in the available information.

The news comes as a positive sign for HP, indicating a strong market demand for its products and a successful transition in its supply chain strategies. As the company continues to navigate the evolving tech landscape, it remains poised for continued growth and innovation.

HP surpasses third-quarter revenue expectations driven by AI PC adoption and Windows 11 upgrade success