‘The second half is when we expect to see both higher price increases and when we think the situation will have more impact, and this is why we are starting now taking actions to mitigate that so we can over-deliver versus the plans that we have shared today,’ HP CEO Enrique Lores said in response to a question from CRN.
HP CEO Enrique Lores said the company had its sixth consecutive quarter of revenue gains with fourth-quarter net revenue up 4.2 percent to $14.6 billion and annual net revenue growth of 3.2 percent with AI PCs leading to stronger sales, he told investors during the company’s earnings call Tuesday.
“Momentum in the Windows 11 refresh and AI PC adoption drove commercial growth year over year, both of which we expect to continue into fiscal year 2026,” he told analysts.
He said by deploying AI PCs internally along with curated applications as “customer zero” of its AI initiative, the company has witnessed a 16 percent increase in productivity. Meanwhile demand for AI PCs is ramping up as the devices reached 30 percent of HP’s shipments during the quarter. That was amid a higher-than-expected 8 percent jump in sales in PCs for the quarter, which as a category jumped to $10.4 billion.
For the latest fiscal year, HP saw sales of $55.3 billion, up 3.2 percent year over year. Quarterly sales were $14.6 billion, up 4.2 percent. HP said it used $850 million in cash during fiscal 2025 to repurchase approximately 29.5 million shares of common stock in the open market. When combined with the $1.1 billion of cash used to pay dividends, HP returned 66 percent of its free cash flow to shareholders in fiscal 2025.
Lores said the company’s integration of AI with its internal processes in product and software development and customer support is expected to come with thousands of job cuts.
“We see multiple areas where we think the impact will be relevant. I have shared that we expect to see between this impact in between 4,000 and 6,000 employees, but this will be the gross impact, because we also expect to have to hire new people to invest and to grow in the areas where the company is going to be going,” he said.
Against those positives, Lores said the looming memory shortage is expected to have a temporary impact that is likely to be most acutely felt in the second half of the company’s next fiscal year.
“We think that in the first half we have enough inventory in hand to be able to maintain our original plan,” he said in response to a question from CRN. “The second half is when we expect to see both higher price increases and when we think the situation will have more impact, and this is why we are starting now taking actions to mitigate that so we can over-deliver versus the plans that we have shared today.”
He said the company is implementing aggressive actions like qualifying lower cost suppliers, reducing memory configurations and taking price actions now. Earlier this year, HP completed a massive supply chain restructuring that shifted all North American-bound PC production outside of China.
“From a supply perspective, we are in a good position because of the relationships and long-term contracts that we have with many suppliers,” he said. “We are going to qualify new suppliers where we don’t have big business today, and also we are going to be leveraging the breadth of our portfolio to optimize configurations to make sure that customers get what they need.”
