HP Inc. (HPQ): BCG Matrix [Dec-2025 Updated]

You're looking for the real story on HP Inc.'s portfolio as we close out 2025, and frankly, the BCG Matrix tells it clearly: the future is being built on AI PCs in Personal Systems, which are now a clear Star, while the Printing segment's supplies continue to be the reliable Cash Cow, banking $2.9 billion in free cash flow last year. Still, we can't ignore the Dogs-declining consumer hardware-or the high-potential Question Marks like 3D Printing and growing subscription services that demand serious capital to capture share. Dive below for the defintely authoritative breakdown of where HPQ is winning, where it's milking the asset, and where the next big bets lie.

Background of HP Inc. (HPQ)

You're looking at HP Inc. (HPQ), a company that traces its roots all the way back to the legendary Silicon Valley garage startup founded by Bill Hewlett and Dave Packard in 1939. Today, HPQ designs and sells personal computers, printers, and related technology and services across more than 180 countries, operating through its two main divisions: Personal Systems and Printing. It's a stalwart in the S&P 500, but its recent performance shows a company navigating a dynamic, sometimes tough, market.

Looking at the full fiscal year 2025, HPQ posted net revenue of $55.3 billion, which was a 3.2% increase from the prior year period. That momentum carried into the fourth quarter of 2025, where total revenue hit $14.6 billion, marking a 4% year-over-year jump. Honestly, the story here is one of divergent segment performance, which you'll need to keep in mind for the matrix analysis.

The Personal Systems segment, which covers your commercial and consumer PCs, was the clear growth engine in the fourth quarter, bringing in $10.4 billion in revenue, up 8% year-over-year, and achieving a 5.8% operating margin. The Printing segment, however, faced headwinds, recording Q4 revenue of $4.3 billion, which was down 4% compared to the same quarter last year. Still, Print remains a strong profit contributor, posting an operating profit of $805 million for an operating margin of 18.9% in Q4, with Supplies making up about 65% of that segment's revenue.

Financially, HPQ generated $2.9 billion in free cash flow for the full fiscal year 2025, and the company showed its commitment to shareholders by returning $1.9 billion through dividends and share repurchases. In fact, the board declared a quarterly cash dividend of $0.30 per share heading into the next fiscal year. Plus, the leadership is pushing a company-wide initiative focused on AI adoption, targeting gross run rate savings of approximately $1 billion by the end of fiscal 2028 to strengthen the foundation for future growth.

HP Inc. (HPQ) - BCG Matrix: Stars

The Personal Systems segment at HP Inc. exhibits characteristics aligning with the Stars quadrant, defined by leadership in a growing market, particularly driven by next-generation computing demand. This segment is consuming cash to fuel its growth but maintains a strong market position.

Commercial Personal Systems (PS) net revenue grew by 7% in Q4 FY2025, showing a performance that outpaced the overall Personal Systems market growth of 8% year-over-year (or 7% in constant currency) for the quarter. This marks the seventh consecutive quarter of revenue growth for the Personal Systems segment. The growth was broad-based, with Consumer PS net revenue increasing by 10% and total units growing by 7% in the same period.

The acceleration in this category is heavily influenced by emerging technologies. AI PCs, representing a high-growth category, constituted over 30% of Q4 shipments. Revenue generated from these AI PCs doubled year-over-year. This indicates strong early adoption and a premium mix shift within the portfolio.

Market share gains are being secured by focusing on high-value areas. This includes commercial premium devices and workstations, which are key drivers of the segment's performance. The Personal Systems operating margin for Q4 FY2025 settled at 5.8%, right within HP Inc.'s target range.

Here's a quick look at the Q4 FY2025 Personal Systems segment performance:

Looking ahead, the installed base still running on the older operating system provides a significant runway. With 40% of the installed base still on Windows 10 at the end of Q4, the Windows 11 refresh cycle is expected to provide a strong, near-term tailwind for continued PS growth into 2026. Management forecasts the PC market to grow in the low single digits for fiscal year 2026, supported by this refresh cycle and AI PC adoption.

The key drivers supporting the Star positioning are:

• Commercial PS revenue growth of 7% in Q4 FY2025.
• AI PC shipments exceeding 30% of the total mix in Q4.
• AI PC revenue growth was doubled year-over-year.
• Full fiscal year 2025 PS revenue increased by 6.5%.
• The Windows 11 refresh cycle is a tailwind into 2026.

HP Inc. (HPQ) - BCG Matrix: Cash Cows

You're looking at the engine room of HP Inc.'s financial stability, the segment that consistently delivers the cash needed to fund everything else. That engine is the Printing business, specifically its Supplies component, which fits the Cash Cow profile perfectly: high market share in a mature, slow-growth market.

Printing Supplies, which account for 65% of Printing segment revenue in the fourth quarter of fiscal year 2025, maintain the number one market share position. This dominance in consumables is what drives the segment's superior profitability, even as the overall market matures.

The entire Printing segment delivered a robust 18.9% operating margin in Q4 FY2025, making it a major source of profit for HP Inc. This high margin is the direct result of that strong market share in the supplies business. You see the impact clearly when you look at the overall cash generation.

HP Inc. generated $2.9 billion in free cash flow in fiscal year 2025, a figure largely supported by this high-margin segment. This cash is the lifeblood of the corporation, funding strategic moves elsewhere.

Here's a quick look at the key financial metrics supporting this Cash Cow status:

This segment provides the capital for investment, despite the market facing a projected low single-digit decline. Because the growth is low, HP Inc. doesn't need massive promotional spending to defend share; instead, it focuses on efficiency.

The cash flow supports several critical corporate functions. You can see where that capital is being deployed:

• Funding the administrative costs of the entire corporation.
• Servicing corporate debt obligations.
• Paying dividends to shareholders-the quarterly dividend was increased to $0.30 per share for the next period.
• Providing the necessary capital to invest in Question Marks, like AI-enabled devices.

The strategy here is to maintain the current level of productivity, or 'milk' the gains passively. Investments are targeted at supporting infrastructure to improve efficiency and increase that cash flow even further, like the company-wide initiative targeting an estimated $1 billion in gross run-rate cost savings by the end of fiscal 2028.

Finance: draft 13-week cash view by Friday.

HP Inc. (HPQ) - BCG Matrix: Dogs

You're looking at the parts of HP Inc. (HPQ) that are struggling to gain traction in slow-moving markets. These are the Dogs quadrant candidates, characterized by low market share and low growth. The focus here shifts from growth investment to disciplined management and potential exit strategies.

The Printing segment, particularly the hardware side, clearly shows the characteristics of this quadrant. Traditional Consumer Printing Hardware saw revenue decline by 9% year-over-year in Q4 FY2025. This segment, which includes legacy transactional printing models, is facing a secular contraction outside of subscription services. Total hardware units for the entire Printing segment were down 12% in Q4 FY2025, with both Consumer and Commercial Printing units showing similar drops. The segment's operating margin for Q4 FY2025 was 18.9%, which, while high compared to Personal Systems, is attached to a shrinking revenue base.

Here's a snapshot of the Printing segment's Q4 FY2025 performance, highlighting the unit decline that signals low market share/growth for hardware:

Low-end, commodity Personal Systems face intense competition and margin pressure from rising component costs. While the overall Personal Systems (PS) segment showed revenue growth of 8% in Q4 FY2025, the lower-end, commodity devices are where the pressure is most acute. The operating margin for the entire PS segment in Q4 FY2025 was 5.8%, and the projection for the full fiscal year 2026 operating rate is at the low end of 5%-7%. This tight margin profile for a significant portion of the PS business places it near the Dog territory, especially if growth stalls.

The required actions for these units involve strict cost control, as expensive turn-around plans usually do not help. HP Inc. is actively pursuing cost reduction, which is a clear signal of managing these low-return areas. The company announced a restructuring plan that estimates:

• Restructuring costs of approximately $250 million in fiscal 2026.
• Targeting gross run-rate savings of approximately $1 billion by the end of fiscal 2028.
• Anticipating approximately $300 million of those gross savings by the end of fiscal 2026.

These low-growth, low-margin products require minimal investment but are candidates for aggressive cost-cutting. For instance, the Supplies net revenue, which supports the high-margin printing ecosystem, was down 4% in Q4 FY2025, indicating that even the cash-generating component is softening.

HP Inc. (HPQ) - BCG Matrix: Question Marks

QUESTION MARKS (high growth products (brands), low market share):

These parts of a business have high growth prospects but a low market share. They consume a lot of cash but bring little in return. Question Marks lose a company money. However, since these business units are growing rapidly, they have the potential to turn into Stars in a high-growth market. Companies are advised to invest in Question Marks if the products have potential for growth, or to sell if they do not.

For HP Inc. (HPQ), the Question Marks quadrant is populated by several strategic growth initiatives that are expanding rapidly but still represent a smaller portion of the total fiscal year 2025 revenue of $55.3 billion. These areas are critical because they collectively grew double-digit year-over-year for fiscal 2025 and generated gross margins above the core business, signaling future potential that warrants heavy investment to capture market share.

The key growth areas, which together accounted for over a third of the total revenue for fiscal 2025, require significant capital allocation to move them toward Star status. These segments are characterized by high market attractiveness (growth) but currently low relative market share, fitting the classic Question Mark profile.

Industrial Graphics and 3D Printing represent a significant portion of this high-growth focus. Specifically, Industrial Graphics momentum continued, exceeding $1.8 billion in annual revenue, supported by the ninth consecutive quarter of year-over-year growth. The 3D segment also experienced double-digit growth, particularly driven by applications in drone and robotics manufacturing.

Within the Print portfolio, Consumer Print Subscriptions, which includes offerings like the All In Plan, is showing strong adoption. This subscription revenue stream is close to $1 billion in annual revenue, having delivered double-digit revenue growth for the year, with All-in Plan subscribers growing double-digit sequentially.

Workforce Solutions and Advanced Compute Solutions are also posting double-digit growth rates. Advanced Compute Solutions, which includes data science workstations, saw its revenue growth accelerate due to strong performance in those specific areas. Workforce Solutions secured key wins, adding 10 new customers from the world's 200 largest companies, demonstrating traction in enterprise digital experience management.

Here's a quick look at the reported financial metrics for these key growth drivers in fiscal 2025:

The strategy for these Question Marks is clear: invest heavily to rapidly increase market share, or divest if the path to scale is not viable. The fact that these areas deliver gross margins above the core business provides a strong financial incentive to commit the necessary resources to convert them into future Stars.

• Industrial Graphics: $1.8 billion+ annual revenue.
• Consumer Subscriptions: Annual revenue approaching $1 billion.
• 3D Printing: Showing double-digit growth.
• Workforce Solutions: Posted double-digit growth.
• Advanced Compute: Posted double-digit growth.