HP Inc. Delivers Solid Q2 Growth Amid Dynamic Landscape
HP Inc. reported solid top-line growth in its second quarter 2025 earnings, driven by continued momentum in the Personal Systems Commercial business, despite facing additional tariff costs that impacted non-GAAP operating profit.
Against a backdrop of a highly dynamic landscape, HP delivered revenue growth for the fourth consecutive quarter with a 5% increase in constant currency year-over-year. The company saw strong growth in Personal Systems, particularly in Commercial and high-value categories, driving momentum in its key growth areas.
HP's President and Chief Executive Officer Enrique Lores highlighted the importance of the company's Future of Work strategy, which has driven meaningful results in the quarter. However, the rapidly changing external landscape, including shifts in trade policies and additional tariffs, had a net impact of approximately 100 basis points on HP's non-GAAP operating profit, mainly impacting Personal Systems.
This resulted in a roughly $0.12 impact on HP's non-GAAP earnings per share, according to Lores. Despite this, the company swiftly responded to these changing market dynamics by taking cost actions, pricing adjustments, and accelerating the transition of its manufacturing footprint.
HP continues to diversify its manufacturing locations to best respond to geopolitical changes with agility. The company has expanded its manufacturing footprint for both PCs and printers to different locations, including Vietnam, Thailand, India, Mexico, and the U.S. By the end of June, HP expects all of its products sold in North America will be built outside of China, significantly accelerating its previous plan.
In Personal Systems, revenue grew 8% in constant currency, above expectations, driven by strong commercial performance. PC Commercial revenue grew 9% year-over-year, including strong growth in North America and Asia. HP also saw continued strength in AI PC demand and the Windows 11 Refresh, which the company believes will carry forward.
HP drove share gains year-over-year in Commercial PC, particularly in premium, workstations, AI PCs, and Gaming. The company also grew its services business with new wins in healthcare, financial services, and retail.
HP's Chief Financial Officer Karen Parkhill noted that the company has been able to partially offset tariff-related impacts through cost actions, pricing adjustments, and accelerating manufacturing transitions. However, it takes time and investment to fully mitigate such impacts.
