HP outlines $2.8B–$3B free cash flow target for 2026 amid memory cost headwinds and AI PC momentum

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• We are pleased with our first quarter results and the solid progress we made on delivering against our financial commitments. We drove better-than-expected top line growth, fueled by continued refresh momentum in Personal Systems and in our key growth areas.

  80% confidence

• HP projects PC unit TAM to decline double digits in 2026

  80% confidence

• CEO search involves a broad candidate pool

  80% confidence

• The Board's priority is to identify the right leader to guide HP through its next phase of evolution

  80% confidence

• We have included a significant increase in memory costs in our guidance. We have seen memory costs increase roughly 100% sequentially, and we do forecast that to further increase as we move into the fiscal year.

  80% confidence

• HP does not anticipate negative impacts from recent U.S. Supreme Court tariff-related rulings

  80% confidence

• Print share gains achieved and OpEx expected to be flat for FY '26, with ongoing cost-saving efforts

  80% confidence

• Demand resilience driven by Windows 11 and AI PCs, with growth opportunities in peripherals following refresh cycles

  80% confidence

• Print operating margins for both Q2 and the full year expected to be near the top end of the long-term range

  80% confidence

• We did see a moderate amount of customer demand pull-in in the quarter, particularly in Consumer

  80% confidence

• OpenAI partnership puts HP at the forefront of enterprise AI deployments

  80% confidence

• Memory costs represent 35% of the PC BOM

  80% confidence

• We recognize that the environment remains fluid, and we are pulling every lever available to offset these unprecedented headwinds

  80% confidence

• We did have some memory cost increases in Q1, but it was roughly in line with what we had outlined at the beginning of the year. The increases are more going forward.

  80% confidence

• PS margins expected to be below the long-term range for the remainder of the year

  80% confidence

• HP has secured long-term agreements covering memory requirements for fiscal '26, qualified new suppliers, and accelerated product configuration changes

  80% confidence

• HP is positioned to expand market share and ensure pricing reflects value delivered, especially navigating near-term challenges

  80% confidence

• We returned over $600 million to shareholders just in our first quarter and confirmed continued commitment to returning 100% of free cash flow to shareholders

  80% confidence

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