📊 HP Inc - Q4 FY2025 Predictions ✅ HIGH CONFIDENCE

🎤 Earnings Call: November 25, 2025 (Tomorrow!)
💰
Q4 Revenue Prediction
$14.85B
Range: $14.5B - $15.2B
+6% YoY Growth
📈
Q4 EPS Prediction
$0.90
Range: $0.85 - $0.95
Diluted per share
💻
Personal Systems
$10.45B
Range: $10.2B - $10.7B
+7% YoY Growth
🖨️
Printing
$4.38B
Range: $4.25B - $4.5B
Flat YoY (0%)

Q4 FY2025 Overview

🎯 Key Prediction Summary

HP Inc is positioned for a strong Q4 FY2025, driven by Commercial PC momentum (AI PCs + Windows 10 EOL), seasonal tailwinds (holiday + enterprise budget flush), cost savings beginning to flow through, and margin recovery from Q2 trough.

Revenue Trend Analysis (Q1-Q4 FY2025)

$13.50B
Q1
$13.22B
Q2
$13.80B
Q3 (Est)
$14.85B
Q4 (Pred)

📈 Full Year FY2025 Outlook

  • Total Revenue $54.5B - $55.5B (+3-4% YoY)
  • EPS (Diluted) $3.40 - $3.55
  • Free Cash Flow $4.5B - $5.0B
  • FCF Yield ~15%+

💻 Personal Systems: $10.45B (+7% YoY)

🏢 Commercial Personal Systems KEY DRIVER

Predicted Revenue: $7,500M (+9% YoY)

Sub-Segment Breakdown:

  • Commercial Notebooks $4,200M (+10% YoY)
  • Commercial Desktops $2,100M (+6% YoY)
  • Workstations $1,200M (+12% YoY)
🤖 AI PC Momentum

Elite & Pro AI PCs gaining traction, 15-20% of Commercial notebook revenue

⏰ Windows 10 EOL

Critical catalyst - enterprises must upgrade before Oct 2025 support end

💼 Q4 Budget Flush

Use-it-or-lose-it IT budgets, calendar year-end spending surge

📈 Market Share Gains

HP gaining in enterprise segment vs competitors

🏠 Consumer Personal Systems SEASONAL

Predicted Revenue: $2,950M (+4% YoY)

  • Consumer Notebooks $2,400M (+5% YoY)
  • Consumer Desktops $550M (+1% YoY)

HP is intentionally rebalancing Consumer PS toward more profitable mix by reducing low-margin volume and improving ASPs through premium/gaming focus.

📊 PS Operating Margin Prediction

5.5 - 6.0%
Improvement from Q2's 4.5% trough
↗️ +100-150 bps
58% Margin Recovery

🖨️ Printing: $4.38B (Flat YoY, 0%)

🧴 Supplies (Ink & Toner) HIGH MARGIN

Predicted Revenue: $2,850M (-1% YoY)

  • Ink Revenue ~$2,000M (-2% YoY)
  • Toner Revenue ~$850M (+1% YoY)

🎯 Q4 Seasonal Factors:

✅ Holiday printing surge: greeting cards, photo prints, gift tags, crafts
✅ Year-end office demand: reports, presentations, tax documents
⚠️ Offset by secular decline: long-term usage trends negative
💰 Pricing power: HP maintaining discipline despite volume pressure

🖨️ Printer Hardware

Predicted Revenue: $1,530M (+2% YoY)

  • Consumer Printing Hardware $300M (+5% YoY)
  • Commercial Printing Hardware $1,230M (+1% YoY)
💡 Strategic Insight: Hardware is a razor/razorblade model - HP accepts lower hardware margins to drive high-margin supplies revenue. Q4 hardware placements set up FY2026 supplies stream.

📊 Printing Operating Margin

19.5 - 20.0%
Stable, high-margin business model
✅ Consistent

Why Margins Remain Strong:

  • Supplies Mix ~65% of Printing revenue
  • Subscription Models Instant Ink stability
  • Pricing Discipline Maintained despite volume pressure

💰 Q4 Profitability & Margin Analysis

📊 Gross Margin Prediction: 22.5 - 23.0%

Quarter Gross Margin Trend
Q1 FY2025 ~22.8% Baseline
Q2 FY2025 ~22.3% ↓ Pressure
Q3 FY2025 ~22.5% ↗️ Stabilizing
Q4 Prediction 22.7% ↗️ Improving
✅ Volume Leverage

Q4 seasonality improving absorption

✅ AI PC Premium

Higher-margin products in mix

✅ Cost Savings

Future Ready transformation delivering

⚠️ Commodity Costs

DRAM, NAND, processors elevated

💼 Operating Expense Breakdown

Q4 OpEx: $2.4 - $2.5B (16.0-16.5% of revenue)

~$800M
🔬 R&D
5.4% of revenue
~$1,100M
📢 Sales & Marketing
7.4% of revenue
~$550M
🏢 G&A
3.7% of revenue

📈 EPS Bridge to $0.90

Revenue $14,850M
↓
Gross Profit (22.7%) $3,371M
↓
Operating Expenses (16.3%) ($2,421M)
↓
Operating Income $950M
↓
Interest & Other, net ($50M)
↓
Tax (18% effective rate) ($162M)
↓
Net Income $738M
↓
EPS (Diluted) - 820M shares $0.90

💵 Q4 Cash Flow Predictions

💰
Operating Cash Flow
$1.9B
Range: $1.8B - $2.0B
Strongest quarter
💎
Free Cash Flow
$1.7B
Range: $1.6B - $1.8B
~230% of net income

📊 Q4 Cash Flow Drivers

✅ Positive Factors

  • Working Capital Release: Inventory reduction, receivables collection
  • Seasonal Strength: Q4 revenue boost improves cash generation
  • Strong Collections: Enterprise customers paying year-end invoices
  • Lower CapEx: Disciplined capital allocation (~$200M)

⚠️ Uses of Cash

  • Share Buybacks: Ongoing capital return program
  • Dividends: Quarterly dividend payment (~$200M)
  • Debt Service: Interest payments
  • Restructuring: Future Ready transformation costs

📅 Full Year FY2025 Cash Flow Outlook

$5.0 - $5.3B
Operating Cash Flow
$4.5 - $4.8B
Free Cash Flow
~15%+
FCF Yield
💰 Cash Generation Machine: HP remains a strong cash generator with excellent FCF conversion supporting robust shareholder returns through buybacks and dividends.

🚀 Growth Catalysts & Risk Analysis

✅ Positive Catalysts (Upside Potential)

🎄 Holiday Season Demand

Consumer PC purchases, printer/supplies seasonal strength, gaming PCs (Omen/Victus)

🏢 Enterprise Q4 Budget Flush

Use-it-or-lose-it IT budgets, calendar year-end refresh cycles, deferred H1 purchases

🤖 AI PC Momentum

HP's AI PC portfolio (Pro, Elite, Z workstations) gaining traction with premium pricing

⏰ Windows 10 End-of-Life

Critical catalyst - enterprises must upgrade by October 2025, large installed base refresh

💰 Cost Savings Realization

Future Ready transformation delivering results, operating leverage from volume

📊 Easier YoY Comparisons

Q4 FY24 was relatively soft, setting up for beat-and-raise potential

⚠️ Headwinds & Risk Factors

💸 Commodity Cost Pressure

Memory, processors remain elevated. Partially offset by pricing discipline

🌍 Tariff Impacts

Ongoing headwind mentioned in Q1-Q2, may persist into Q4

💱 Currency Volatility

~65% of revenue is international, dollar strength creates headwind

📉 Printing Secular Decline

Installed base erosion continues, hybrid work reducing usage

🥊 Competitive Intensity

Commercial Printing pricing pressure, PC market remains competitive

🌐 Macro Uncertainty

Enterprise spending sensitivity, consumer confidence levels

🎲 Risk Assessment Matrix

Risk Factor Probability Impact Overall Risk
Macro deterioration affecting IT budgets Medium High High
Weaker consumer holiday spending Medium Medium Medium
Supply chain disruptions Low Medium Low
Intensified competitive pricing High Medium Medium
Worse than expected tariff impacts Medium Medium Medium
Currency headwinds (strong dollar) High Medium Medium

🎯 Bottom Line Prediction

HP likely to meet or slightly beat Q4 expectations with revenue of $14.5-15.2B and EPS of $0.85-0.95. Key watch items: margin trajectory and FY2026 guidance will be critical for stock reaction. The combination of Windows 10 EOL, AI PC momentum, and seasonal strength should drive solid performance, though commodity costs and competitive dynamics remain headwinds.