Brian Luke

Brian Luke inquired about HP's approach to price increases in response to higher memory costs, asking if they would be across the entire portfolio or more tactical, and if any quantification was possible. He also asked about the Windows 11 refresh, its expected tailwind beyond fiscal year 2026, and the impact of tariff considerations.

Answer

CEO Enrique Lores stated that pricing actions would be case-by-case, country-by-country, and category-by-category, but with an impact across the board. He confirmed that 60% of the installed base has moved to Windows 11, with significant opportunity remaining in SMB, Europe, and Asia, expecting the tailwind to last for several quarters. CFO Karen Parkhill added that AI PCs would be a continued catalyst, with 40-50% of shipments expected to be AI PCs next year.

Brian Luke asked if HP's planned price increases due to higher memory prices would be across the entire portfolio or more tactical, and if any quantification of these increases could be provided. He also inquired about the expected duration of the Windows 11 refresh tailwind beyond fiscal year 2026 and the potential impact of tariff considerations.

Answer

Enrique Lores, CEO, stated that pricing actions would be evaluated case by case, country by country, and category by category, with the impact expected across the board but varying in intensity. Regarding Windows 11, Mr. Lores confirmed approximately 60% of the installed base has migrated, with SMB, Europe, and Asia representing significant remaining opportunities, expecting the tailwind to last beyond the first half of fiscal year 2026. Karen Parkhill, CFO, added that AI PCs are a continued catalyst, with shipments expected to increase to 40-50% next year.

Brian Luke from UBS inquired if the Windows end-of-life is the primary PC refresh driver or if businesses are now clearer on spec requirements. He also requested an update on AI PC adoption rates and pricing premiums.

Answer

CEO Enrique Lores responded that both factors are driving the refresh, noting an acceleration in the Windows 11 cycle and customer demand for later-generation products for AI and communication. He updated the AI PC penetration forecast to ~25% by the end of the year, maintained the 40-50% projection for two years out, and reiterated the expected 5-10% average selling price premium.