HP Inc. stock research
FY2025 Q1
HP (HPQ) Gross Margin — Quarter Ended Jan 31, 2025
In the current quarter, gross profit is revenue minus cost of revenue, and gross margin is the ratio of gross profit to revenue. The gross margin declined compared to both the prior quarter and the same quarter last year.
Gross margin takeaway
Quarter ended Jan 31, 2025 · FY2025 Q1
In the current quarter, gross profit is revenue minus cost of revenue, and gross margin is the ratio of gross profit to revenue. The gross margin declined compared to both the prior quarter and the same quarter last year.
- The strongest observable margin driver is the differential change between cost of revenue and revenue. Sequentially, revenue decreased while cost of revenue decreased less, pressuring margin. Year-over-year, revenue increased but cost of revenue increased more, also reducing margin.
- Compared to the immediately preceding quarter, revenue, gross profit, and cost of revenue were all lower, and gross margin weakened. Compared to the same quarter one year earlier, revenue was higher, but gross profit and gross margin were lower, while cost of revenue was higher.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
21.0%
Gross profit
$2.8B
Revenue
$13.5B
Cost of revenue
$10.7B
Quarter-over-quarter change
-0.3 pts
Year-over-year change
-0.9 pts
Quarterly gross margin trend
A four-quarter view of the revenue and direct-cost bridge behind gross margin.
| Period | Revenue | Gross profit | Cost of revenue | Gross margin |
|---|---|---|---|---|
| Apr 30, 2024 | $12.8B | $3.0B | $9.8B | 23.6% |
| Jul 31, 2024 | $13.5B | $2.9B | $10.6B | 21.5% |
| Oct 31, 2024 | $14.1B | $3.0B | $11.1B | 21.4% |
| Jan 31, 2025 | $13.5B | $2.8B | $10.7B | 21.0% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Oct 31, 2024
-0.3 pts
Year-over-year change
Jan 31, 2024
-0.9 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The strongest observable margin driver is the differential change between cost of revenue and revenue. Sequentially, revenue decreased while cost of revenue decreased less, pressuring margin. Year-over-year, revenue increased but cost of revenue increased more, also reducing margin.
Compared to the immediately preceding quarter, revenue, gross profit, and cost of revenue were all lower, and gross margin weakened. Compared to the same quarter one year earlier, revenue was higher, but gross profit and gross margin were lower, while cost of revenue was higher.
A concrete item to monitor is the trend of cost of revenue relative to revenue, as margin has declined on both sequential and year-over-year bases. The filing notes that the company's liquidity is subject to various risks, including those identified in the Risk Factors section.