HP Inc
HP Inc. (HPQ)
Overview
HP Inc. is a global information technology company headquartered in Palo Alto, California, best known as the world's second-largest personal computer vendor by unit sales (behind Lenovo) and a leading maker of printers and printing supplies. HP Inc. was created on November 1, 2015, when the original Hewlett-Packard split into two independent public companies: HP Inc., which kept the personal computing and printing businesses, and Hewlett Packard Enterprise (HPE), which took the enterprise servers, storage, networking, and services businesses. The company generated $55.3 billion in revenue in fiscal year 2025 (ended October 31, 2025), up about 3% year-over-year, with net income of roughly $2.5 billion. HP employs tens of thousands of people globally (headcount has been declining as the company executes multi-year cost-reduction and AI-driven efficiency programs, targeting several thousand more job cuts through 2028) and trades on the NYSE under ticker HPQ as an S&P 500 constituent.
What They Do & How They Make Money
HP makes money primarily by selling computing and printing hardware, then generating ongoing, higher-margin revenue from consumables and services tied to that hardware installed base. On the personal computing side, HP designs, manufactures, and sells consumer and commercial laptops, desktops, workstations, and displays under brands like Pavilion, Envy, Omen (gaming), Elite, Pro, and Z/ZBook (workstations); this is a high-volume, lower-margin, and highly competitive hardware business. On the printing side — historically HP's profit engine — the company sells printers (inkjet, laser, consumer, and commercial/industrial) at relatively thin margins or even at a loss in some cases, then earns the bulk of its printing profit from recurring sales of ink and toner supplies over the life of the device, a classic "razor and blades" model. HP has been pushing to convert more customers to subscription-based supplies programs (such as the HP All-In Plan and Instant Ink) to lock in recurring revenue and combat market share losses to third-party and refilled ink cartridges. The company also has a smaller 3D printing and digital manufacturing business and a "Corporate Investments" segment for incubating newer initiatives.
Business Segments
HP reports through two primary operating segments (with corporate investments/other as a smaller residual category):
- Personal Systems (~$38.5 billion, ~70% of FY2025 revenue): Commercial PCs (~$27.4 billion) and consumer PCs (~$11.1 billion), including desktops, notebooks, workstations, displays, and point-of-sale systems, plus related lifecycle and support services. This is HP's larger segment by revenue but typically carries thinner margins than Printing.
- Printing (~$16.7 billion, ~30% of FY2025 revenue): Supplies (~$10.9 billion — the single largest and highest-margin printing revenue line), Commercial Printing (~$4.6 billion), and Consumer Printing (~$1.2 billion). Supplies revenue (ink and toner) is disproportionately important to segment profitability relative to its share of segment revenue.
- Corporate Investments/Other: A small category covering business incubation, new ventures (including 3D printing initiatives), and other emerging technology investments not yet material to overall results.
Competitors
- Personal computing: Lenovo (global PC unit-share leader), Dell Technologies, Apple, Asus, Acer — competing on price, design, enterprise relationships, and increasingly on "AI PC" capabilities
- Printing hardware and supplies: Canon, Epson, Xerox, Brother — direct competitors in printers and cartridges, along with a large ecosystem of third-party/compatible ink and toner suppliers that erode HP's high-margin supplies business
- Workstations and commercial IT: Dell, Lenovo, and to a lesser extent boutique workstation makers
- 3D printing/additive manufacturing: Stratasys, 3D Systems, and other industrial 3D printing specialists
Competitive Position
HP's competitive position rests on scale, global brand recognition, and an entrenched printing installed base that generates durable, high-margin recurring revenue. Its combined PC-plus-printing portfolio gives it broad reach across consumer, small/medium business, and large enterprise customers, and its commercial relationships (IT procurement contracts, device-as-a-service offerings, and lifecycle support) create switching costs that pure hardware competitors without a large enterprise sales force struggle to replicate. In printing specifically, HP has invested in dynamic security and subscription models (Instant Ink, HP All-In Plan) to defend its supplies revenue against third-party cartridge competition, and it has pushed into industrial and 3D printing as adjacent growth areas.
However, HP's moat looks structurally narrow and under pressure. The PC market is a mature, commoditized, cyclical business with thin margins, intense price competition from Lenovo and Dell, and demand that is highly sensitive to macroeconomic conditions and corporate IT refresh cycles; memory and component cost inflation (notably from rising DRAM/NAND prices) has squeezed margins further. The printing business, while historically HP's most profitable segment, faces a secular decline in print volumes as the world moves toward digital documents, plus continued erosion from third-party ink/toner alternatives. Analysts have flagged consensus expectations for roughly flat revenue growth over the next several years — well below the broader technology sector — alongside declining profit margins and, in some periods, negative shareholder equity and elevated debt levels tied to years of share buybacks. Additional risks include leadership/execution uncertainty during ongoing restructuring, the pace and cost of AI-PC transition investments, and supply chain/component cost volatility. HP's turnaround narrative depends heavily on successfully shifting the printing business toward subscriptions and defending PC share while managing costs, but the company operates in two mature, highly competitive hardware categories with limited structural growth.