HP reports Q1 revenue down 19% YoY to $13.8B, vs. $14.1B est., Personal Systems net revenue down 24% YoY to $9.2B, and Printing net revenue down 5% YoY to $4.6B
Context & Ripple Effects
This report is the bottom of a cycle HP itself set up. At the peak, HP's notebook sales were still growing 32% year-over-year as pandemic-era demand pulled purchases forward; a year later Printing was the bright spot, up 24% YoY, while Personal Systems had already gone flat.
By this quarter the reversal is complete: total revenue of $13.8B misses the $14.1B estimate, and Personal Systems — now roughly two-thirds of HP's business — absorbs the damage with a 24% decline while Printing falls only 5%. The subsequent coverage shows how long the trough lasted: the next quarter was worse still at minus 22%, before HP finally narrowed its decline to 4.4% a year later.
First-order effects
- Personal Systems is the immediate casualty — its 24% YoY fall to $9.2B accounts for nearly all of HP's $13.2B+ revenue shortfall versus the prior-year quarter.
- HP misses consensus ($14.1B est. vs. $13.8B actual), putting direct pressure on the stock and on management's guidance for the rest of FY2023.
Second-order effects
- Printing's relative resilience (minus 5%) makes it the stabilizer of the portfolio, shifting HP's margin story toward supplies and away from hardware unit volumes.
- With PC demand deflating across the industry after the pandemic pull-forward, HP and rival OEMs face intensifying price competition for a shrinking pool of refresh purchases.
Third-order effects
- If the pattern holds, PC makers exit the pandemic era structurally smaller than their 2021 peaks — HP's own arc (from $15.3B quarters in mid-2021 to sub-$13.9B now) suggests demand normalized below the inflated baseline rather than merely pausing.
- Sustained weakness concentrates pressure on HP to diversify beyond commodity PCs and print hardware, since two-thirds exposure to a cyclical, commoditizing segment leaves little buffer against demand shocks.
The trend: The PC market is working through a post-pandemic demand air pocket, with HP's quarterly results tracking the cycle from 2021 boom to a 2023 trough before stabilization in 2024.