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Xerox Releases First-Quarter ResultsApril 30, 2026 6:30 AM
Business Wire
Returns to year-over-year adjusted1 operating margin growth with 240 basis points expansion; revenue trajectory improved and liquidity strengthened in Q1
Financial Summary
Q1 2026
Revenue of $1.85 billion, up 26.7 percent, or 23.6 percent in constant currency1. On a pro forma2 basis, revenue is down 3.7 percent.
GAAP net (loss) of $(105) million, or $(0.84) per share, down $15 million or $0.09 per share, year-over-year, respectively.
Normalized Adjusted3 net (loss) of $(10) million, or $(0.11) per share, down $3 million or $0.02 per share, year-over-year, respectively.
Adjusted1 net (loss) of $(51) million, or $(0.43) per share, down $47 million or $0.37 per share, year-over-year, respectively.
Adjusted1 operating income of $72 million, up $50 million year-over-year.
Adjusted1 operating margin of 3.9 percent, up 240 basis points year-over-year.
Operating cash flow of $(144) million, down $55 million year-over year, reflecting expected Q1 seasonality.
Free cash flow1 of $(165) million, down $56 million year-over-year. Full-year free cash flow guidance of approximately $250 million is unchanged, implying greater than $400 million of cash generation over the remaining three quarters.
Xerox Holdings Corporation (NASDAQ: XRX) today announced its 2026 first-quarter results.
“This quarter’s results demonstrated tangible progress as revenue and profit trajectory improved, adjusted1 operating margin expanded, and we further enhanced our liquidity,” said Louie Pastor, chief executive officer at Xerox. “When I took this role, I was unequivocal that we must be clear about our priorities — stabilize revenue, increase profitability and reduce leverage — and establish credibility by executing on them one quarter at a time. I am genuinely optimistic about the future of this business and confident we are closer to an inflection point than the external narrative suggests. Reaffirming our 2026 guidance reflects that confidence.”
Strategic Milestones
Q1 2026
Lexmark synergies on plan; reaffirm at least $300 million of integration synergies
Print sales pipeline materially higher vs. this time last year
Production Installs increased 31% year-over-year, partly fueled by the Proficio launch
Q1 IT Solutions bookings and billings growth of 32% and 21%, respectively
Raised $450 million through a newly formed IP joint venture with TPG Angelo Gordon
Repurchased $101 million face value of 2028 Senior Notes
First-Quarter Key Financial Results
(in millions, except per share data)
Q1 2026
Q1 2025
B/(W)
YOY
Pro Forma2 B/(W) YOY
Revenue
$1,846
$1,457
26.7% AC
23.6% CC1
(3.7)% AC
Gross Profit
$549
$426
$123
$(16)
Gross Margin
29.7%
29.2%
50 bps
20 bps
RD&E %
3.5%
2.9%
(60) bps
SAG %
23.3%
25.9%
260 bps
Pre-Tax (Loss)
$(73)
$(67)
$(6)
Pre-Tax (Loss) Margin
(4.0)%
(4.6)%
60 bps
Gross Profit - Adjusted1
$560
$433
$127
$(33)
Gross Margin - Adjusted1
30.3%
29.7%
60 bps
(60) bps
Operating Income - Adjusted1
$72
$22
$50
Operating Income Margin - Adjusted1
3.9%
1.5%
240 bps
GAAP Diluted (Loss) per Share
$(0.84)
$(0.75)
$(0.09)
Normalized Diluted (Loss) Per Share – Adjusted3
$(0.11)
$(0.09)
$(0.02)
Diluted (Loss) Per Share - Adjusted1
$(0.43)
$(0.06)
$(0.37)
First-Quarter Segment Results
(in millions)
Q1 2026
Q1 2025
B/(W)
YOY
Pro Forma2 B/(W) YOY
Revenue
Print and Other
$1,692
$1,294
30.8%
(3.5)%
IT Solutions
156
164
(4.9)%
(4.9)%
Intersegment Elimination4
(2)
(1)
NM
NM
Total Revenue
$1,846
$1,457
26.7%
(3.7)%
Profit
Print and Other
$87
$41
112.2%
(7.4)%
IT Solutions
6
5
20.0%
20.0%
Corporate Other 5
(21)
(24)
(12.5)%
(25.0)%
Total Profit
$72
$22
NM
1.4%
____________
1.
Refer to the “Non-GAAP Financial Measures” section of this release for a discussion of these non-GAAP measures and their reconciliation to the reported GAAP measures.
2.
Refer to the "Pro Forma Basis" section for an explanation of this measure. Reflects the inclusion of Lexmark's estimated results from January 1, 2025 through March 31, 2025. Lexmark's actual results are included in Xerox's reported results beginning on July 1, 2025, the effective date of the acquisition. ITsavvy results for the full first quarter of 2026 and 2025 are included in our consolidated results. Accordingly, there are no pro forma impacts related to the IT Solutions segment.
3.
Normalized adjusted net (loss) includes tax benefits of $41 million in Q1 2026 and ($3) million in Q1 2025, which are not included in adjusted earnings. This represents the tax effects associated with pre-tax (losses) generated in U.S. and UK entities subject to full valuation allowances.
4.
Reflects primarily IT hardware, software solutions and services, sold by the IT Solutions segment to the Print and Other segment.
5.
Corporate Other reflects certain administrative and general expenses, which primarily relate to corporate functions, and are not allocated to either of our reportable segments.
2026 Guidance 1
Revenue: Above $7.5 billion
Adjusted 2 Operating Income: $450-$500 million
Free cash flow2: ~ $250 million
Non-GAAP Measures
This release refers to the following non-GAAP financial measures:
Adjusted2 EPS, which excludes Restructuring and related costs, net, Amortization of intangible assets, non-service retirement-related costs, gain on early extinguishment of debt, and other discrete adjustments from GAAP EPS, as applicable.
Adjusted 2 operating income and margin, which exclude the EPS adjustments noted above, except the tax expense charge related to the establishment of a valuation allowance against certain deferred tax assets, as well as the remainder of Other (income) expenses, net from pre-tax loss and margin.
Constant currency (CC) revenue change, which excludes the effects of currency translation.
Free cash flow 2, which is operating cash flow less capital expenditures.
_____________
1 Our Q1 results and guidance do not reflect any potential refund benefits associated with the recent Supreme Court ruling on IEEPA tariffs as the related refund process had not been clarified as of March 31st.
2 Refer to the “Non-GAAP Financial Measures” section of this release for a discussion of these non-GAAP measures and their reconciliation to the reported GAAP measures.
Forward-Looking Statement
This presentation and other written or oral statements made from time to time by management contain “forward looking statements” as defined in the Private Securities Litigation Reform Act of 1995 and involve certain risks and uncertainties. The words “anticipate”, “believe”, “estimate”, “expect”, “intend”, “will”, “would”, “could”, “can”, “should”, “targeting”, “projecting”, “driving”, “future”, “plan”, “predict”, “may” and similar expressions are intended to identify forward-looking statements. The Company’s actual results may differ significantly from the results discussed in the forward-looking statements. These statements reflect management’s current beliefs and assumptions and are subject to a number of other factors that may cause actual results to differ materially.
Such factors include but are not limited to: applicable market conditions; global macroeconomic conditions, including inflation, slower growth or recession, delays or disruptions in the global supply chain, higher interest rates, and wars and other conflicts; our ability to succeed in a competitive environment, including by developing new products and service offerings and preserving our existing products and market share as well as repositioning our business in the face of customer preference, technological, and other change, such as evolving return-to-office and hybrid working trends; failure of our customers, vendors, and logistics partners to perform their contractual obligations to us; our ability to attract, train, and retain key personnel; execution risks around our Transformation; the risk of breaches of our security systems due to cyber, malware, or other intentional attacks that could expose us to liability, litigation, regulatory action or damage our reputation; our ability to obtain adequate pricing for our products and services and to maintain and improve our cost structure; changes in economic and political conditions, licensing requirements, and tax laws in the United States and in the foreign countries in which we do business; the risk that multi-year contracts with governmental entities could be terminated prior to the end of the contract term and that civil or criminal penalties and administrative sanctions could be imposed on us if we fail to comply with the terms of such contracts and applicable law; interest rates, cost of capital, and access to credit markets; risks related to our indebtedness; the imposition of new or incremental trade protection measures such as tariffs and import or export restrictions; funding requirements associated with our employee pension and retiree health benefit plans; changes in foreign currency exchange rates; the risk that we may be subject to new or heightened regulatory or operation risks as a result of our, or third parties,’ use or anticipated use of artificial intelligence technologies; the risk that our operations and products may not comply with applicable worldwide regulatory requirements, particularly environmental regulations and directives and anti-corruption laws; the outcome of litigation and regulatory proceedings to which we may be a party; laws, regulations, international agreements and other initiatives to limit greenhouse gas emissions or relating to climate change, as well as the physical effects of climate change; our ability to successfully integrate the Lexmark business and realize the anticipated benefits thereof, including expected synergies; and other factors that are set forth from time to time in the Company’s Securities and Exchange Commission filings, including the combined Annual Report on Form 10-K of Xerox Holdings and Xerox Corporation.
These forward-looking statements speak only as of the date hereof or of the date to which they refer, and the Company assumes no obligation to update or revise any forward-looking statements as a result of new information or future events or developments, except as required by law.
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Xerox® is a trademark of Xerox in the United States and/or other countries.
XEROX HOLDINGS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF LOSS (UNAUDITED)
Three Months Ended
March 31,
(in millions, except per-share data)
2026
2025
Revenues
Sales
$
920
$
557
Services, maintenance, rentals and other
926
900
Total Revenues
1,846
1,457
Costs and Expenses
Cost of sales
600
382
Cost of services, maintenance, rentals and other
697
649
Research, development and engineering expenses
64
42
Selling, administrative and general expenses
430
378
Restructuring and related costs, net
45
(1
)
Amortization of intangible assets
30
10
Divestitures
—
(4
)
Non-financing interest expense
84
33
Other (income) expenses, net
(31
)
35
Total Costs and Expenses
1,919
1,524
Loss before Income Taxes(1)
(73
)
(67
)
Income tax expense
32
23
Net Loss
(105
)
(90
)
Less: Preferred stock dividends, net
(4
)
(4
)
Net Loss attributable to Common Shareholders
$
(109
)
$
(94
)
Basic Loss per Share
$
(0.84
)
$
(0.75
)
Diluted Loss per Share
$
(0.84
)
$
(0.75
)
__________
(1)
Referred to as "Pre-tax (loss)" throughout the remainder of this document.
XEROX HOLDINGS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (UNAUDITED)
Three Months Ended
March 31,
(in millions)
2026
2025
Net Loss
$
(105
)
$
(90
)
Other Comprehensive (Loss) Income, Net
Translation adjustments, net
(77
)
105
Unrealized gains (losses), net
4
(2
)
Changes in defined benefit plans, net
40
(21
)
Other Comprehensive (Loss) Income, Net
(33
)
82
Comprehensive Loss, Net
$
(138
)
$
(8
)
XEROX HOLDINGS CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(in millions, except share data in thousands)
March 31, 2026
December 31, 2025
Assets
Cash and cash equivalents
$
585
$
512
Accounts receivable (net of allowance of $73 and $73, respectively)
1,218
1,122
Billed portion of finance receivables (net of allowance of $3 and $3, respectively)
43
46
Finance receivables, net
476
510
Inventories
1,043
1,016
Other current assets
415
362
Total current assets
3,780
3,568
Finance receivables due after one year (net of allowance of $42 and $42, respectively)
797
846
Equipment on operating leases, net
292
299
Land, buildings and equipment, net
378
390
Intangible assets, net
891
921
Goodwill, net
2,201
2,222
Deferred tax assets
96
98
Other long-term assets
1,467
1,479
Total Assets
$
9,902
$
9,823
Liabilities and Equity
Short-term debt and current portion of long-term debt
$
165
$
231
Accounts payable
1,548
1,498
Accrued compensation and benefits costs
223
235
Accrued expenses and other current liabilities
1,266
1,258
Total current liabilities
3,202
3,222
Long-term debt
4,281
4,016
Pension and other benefit liabilities
1,037
1,068
Post-retirement medical benefits
156
159
Other long-term liabilities
697
685
Total Liabilities
9,373
9,150
Noncontrolling Interests
10
10
Convertible Preferred Stock
214
214
Common stock
131
128
Additional paid-in capital
1,192
1,183
Retained earnings
2,320
2,444
Accumulated other comprehensive loss
(3,344
)
(3,311
)
Xerox Holdings shareholders’ equity
299
444
Noncontrolling interests
6
5
Total Equity
305
449
Total Liabilities and Equity
$
9,902
$
9,823
Shares of Common Stock Issued and Outstanding
130,776
128,044
XEROX HOLDINGS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
Three Months Ended
March 31,
(in millions)
2026
2025
Cash Flows from Operating Activities
Net Loss
$
(105
)
$
(90
)
Adjustments to reconcile Net loss to Net cash used in operating activities:
Depreciation and amortization
100
60
Provisions
18
18
Gain on early extinguishment of debt
(56
)
—
Net gain on sales of businesses and assets
2
(3
)
Divestitures
—
(4
)
Stock-based compensation
9
12
Restructuring and asset impairment charges
44
(1
)
Payments for restructurings
(21
)
(18
)
Non-service retirement-related costs
21
18
Contributions to retirement plans
(36
)
(34
)
Increase in accounts receivable and billed portion of finance receivables
(106
)
(12
)
Increase in inventories
(49
)
(137
)
Increase in equipment on operating leases
(32
)
(30
)
Decrease in finance receivables
66
128
Increase in other current and long-term assets
(38
)
(16
)
Increase in accounts payable
58
89
Decrease in accrued compensation
(8
)
(30
)
Decrease in other current and long-term liabilities
(9
)
(48
)
Net change in income tax assets and liabilities
12
(2
)
Other operating, net
(14
)
11
Net cash used in operating activities
(144
)
(89
)
Cash Flows from Investing Activities
Cost of additions to land, buildings, equipment and software
(21
)
(20
)
Proceeds from sales of businesses and assets
2
27
Acquisitions, net of cash acquired
—
1
Other investing, net
(5
)
(2
)
Net cash (used in) provided by investing activities
(24
)
6
Cash Flows from Financing Activities
Net proceeds (payments) on debt
255
(104
)
Dividends
(10
)
(39
)
Other financing, net
(3
)
(16
)
Net cash provided by (used in) financing activities
242
(159
)
Effect of exchange rate changes on cash, cash equivalents and restricted cash
(2
)
1
Increase (decrease) in cash, cash equivalents and restricted cash
72
(241
)
Cash, cash equivalents and restricted cash at beginning of period
565
631
Cash, Cash Equivalents and Restricted Cash at End of Period
$
637
$
390
First Quarter 2026 Overview
In the first quarter of 2026, overall market trends improved compared to 2025, when demand was affected by DOGE-related spending reductions, tariff uncertainty, and the government shutdown. The February 2026 Supreme Court ruling on tariffs is expected to have a net positive impact on Xerox’s cost structure. However, those benefits are expected to be slightly more than offset by higher memory prices, and oil prices. To date, none of these factors have impacted overall demand, apart from certain international markets with exposure to the Middle East conflict.
First quarter 2026 reflects the benefits of the Lexmark acquisition and Xerox’s Transformation1 efforts. These gains are complemented by a more unified go-to-market model, increasing partner validation, and strategic initiatives to enhance long-term profitability, positioning the company for sustained operational and financial improvements.
Equipment sales of $378 million in the first quarter 2026 increased 33.1% in actual currency and 30.7% in constant currency2, compared to the first quarter 2025, and included a 38.0-percentage point benefit from the Lexmark acquisition. Total equipment installations increased 98.0%, including the impact of the Lexmark acquisition, partially offset by declines in legacy Xerox installations, primarily in the entry-and mid-range color equipment categories. Excluding the Lexmark acquisition, equipment sales declined 4.9% in actual currency due to lower installations, partially offset by entry market lead generation initiatives. On a pro forma3 basis, first quarter 2026 equipment sales revenue declined 2.3%, primarily reflecting the impacts noted above, partially offset by modest growth from Lexmark.
Post sale revenue of $1,314 million in the first quarter 2026 increased 30.1% in actual currency and 26.5% in constant currency2, compared to the first quarter 2025, and included a 35.3-percentage point benefit from the Lexmark acquisition. Excluding the Lexmark acquisition, post sale revenue declined 5.2% in actual currency primarily reflecting lower equipment service revenue and managed print services. Post sale revenue was also adversely impacted by intentional reductions in non-strategic revenue, including the exit of certain production print manufacturing operations in prior years, as well as a decline in financing revenue reflecting the continued sales of finance receivables to our various funding affiliates and lower originations. On a pro forma3 basis, first quarter 2026 revenue decreased 3.8%, primarily reflecting the impacts noted above.
IT Solutions revenue of $154 million in the first quarter 2026 declined 5.5% in actual currency and 6.2% in constant currency2, compared to the first quarter 2025. The decline was primarily driven by a mix of revenue subject to net classifications, revenue deferrals and impacts from component cost increases.
Pre-tax (loss) of $(73) million for the first quarter 2026 increased by $6 million compared to pre-tax (loss) of $(67) million in the first quarter 2025. Pre-tax (loss) margin of (4.0)% improved 0.6-percentage points compared to first quarter 2025 pre-tax (loss) margin of (4.6)% and included a 2.3-percentage point benefit from the Lexmark acquisition. The improvement in the first quarter 2026 pre-tax (loss) margin was primarily due to higher revenue and gross profit, including Transformation-related1 cost reductions, productivity actions, and lower Other (income) expenses, net. The decrease in Other (income) expenses, net reflects a gain on the early repayment of a portion of the 2028 Senior Unsecured Notes in the first quarter 2026, and the absence of commitment fees incurred in the first quarter 2025 related to borrowings in support of the Lexmark acquisition. These benefits were partially offset by higher Restructuring and related costs, net and higher Amortization of intangible assets, SAG and RD&E, driven by the Lexmark acquisition. On a pro forma3 basis first quarter 2026 pre-tax (loss) margin improved by 1.7-percentage points primarily reflecting the impacts noted above.
First quarter 2026 adjusted2 operating income margin of 3.9% increased by 2.4-percentage points compared to first quarter 2025, and included an approximate 3.0-percentage point benefit from the Lexmark acquisition. The increase primarily reflects productivity and cost savings related to Transformation actions, and the benefit of the Lexmark acquisition. These benefits were partially offset by lower legacy Xerox revenue, as well as reduced gross profit, reflecting product cost increases and an unfavorable revenue mix, including declines in managed print services and equipment service revenue. On a pro forma3 basis first quarter 2026 adjusted2 operating margin increased by 0.2-percentage points primarily reflecting the impacts noted above, as well as the impact of the Lexmark acquisition.
For full-year 2026, we continue to expect revenue above $7.5 billion in constant currency2, adjusted2 operating income in the range of $450 million to $500 million, and free cash flow2 of approximately $250 million. Free cash flow2 guidance reflects higher interest expense related to funding from the Joint Venture Financing arrangement entered into with TPG in the first quarter of 2026, partially offset by a reduction in capital expenditures and improvements in working capital and other items. The remainder of our guidance assumptions remain unchanged.
__________
(1)
In the first quarter of 2026, Xerox Holdings Corporation renamed “Reinvention-related costs” to “Transformation-related costs.” This change in terminology did not affect the nature of the costs.
(2)
Refer to the "Non-GAAP Financial Measures" section for an explanation of the non-GAAP financial measure.
(3)
Refer to the "Pro Forma Basis" section for an explanation of this measure. Reflects the inclusion of Lexmark's estimated results from January 1, 2025 through March 31, 2025. Lexmark's actual results are included in Xerox's reported results beginning on July 1, 2025, the effective date of the acquisition.
Financial Review
Revenues
Three Months Ended
March 31,
% of Total Revenue
(in millions)
2026
2025
%
Change
CC % Change
Pro Forma(1) % Change
2026
2025
Equipment sales
$
378
$
284
33.1%
30.7%
(2.3)%
21%
20%
Post sale revenue(2)
1,314
1,010
30.1%
26.5%
(3.8)%
71%
69%
IT Solutions(3)
154
163
(5.5)%
(6.2)%
(5.5)%
8%
11%
Total Revenue
$
1,846
$
1,457
26.7%
23.6%
(3.7)%
100%
100%
Reconciliation to Condensed Consolidated Statements of Loss:
Equipment sales
$
378
$
284
33.1%
30.7%
(2.3)%
Supplies, paper and other sales(2)
437
168
160.1%
155.7%
(2.0)%
IT Products(3)
105
105
—%
—%
—%
Sales
$
920
$
557
65.2%
30.7%
(1.9)%
Services, maintenance, rentals and other(2)
$
816
$
763
6.9%
3.2%
(3.0)%
Xerox Financial Services(2)
61
79
(22.8)%
(26.5)%
(22.8)%
IT Services(3)
49
58
(15.5)%
(16.8)%
(15.5)%
Services, maintenance, rentals and other
$
926
$
900
2.9%
(0.3)%
(5.3)%
Segments(4)
Print and Other
$
1,692
$
1,294
30.8%
27.4%
(3.5)%
92%
89%
IT Solutions
156
164
(4.9)%
(5.9)%
(4.9)%
8%
11%
Intersegment elimination (5)
(2
)
(1
)
NM
NM
NM
—%
—%
Total Revenue
$
1,846
$
1,457
26.7%
23.6%
(3.7)%
100%
100%
__________
CC - See "Constant Currency" in the Non-GAAP Financial Measures section for a description of constant currency.
(1)
Refer to the "Pro Forma Basis" section for an explanation of this measure. Reflects the inclusion of Lexmark's estimated results from January 1, 2025 through March 31, 2025. Lexmark's actual results are included in Xerox's reported results beginning on July 1, 2025, the effective date of the acquisition. ITsavvy results for the full first quarter of 2026 and 2025 are included in our consolidated results. Accordingly, there are no pro forma impacts related to the IT Solutions segment.
(2)
Post sale revenue includes Supplies, paper and other sales, Service, maintenance, rentals and other, and Xerox Financial Services. Refer to Reportable Segments - Print and Other, for further information.
(3)
IT Solutions includes IT Products and IT Services provided by the IT Solutions segment. Refer to Reportable Segments - IT Solutions, for further information.
(4)
Refer to Appendix II, Reportable Segments, for definitions.
(5)
Primarily reflects IT hardware, software solutions and services sold by the IT Solutions segment to the Print and Other segment.
Costs, Expenses and Other Income
Summary of Key Financial Ratios
The following is a summary of key financial ratios used to assess our performance:
Three Months Ended
March 31,
(in millions)
2026
2025
B/(W)
Pro Forma(1)
B/(W)
Gross Profit
$
549
$
426
$123
$(16)
RD&E
64
42
(22)
10
SAG
430
378
(52)
29
Equipment Gross Margin
10.8
%
27.9
%
(17.1)
pts.
(0.3)
pts.
Post sale Gross Margin
34.6
%
29.6
%
5.0
pts.
0.5
pts.
Total Gross Margin
29.7
%
29.2
%
0.5
pts.
0.2
pts.
RD&E as a % of Revenue
3.5
%
2.9
%
(0.6)
pts.
0.4
pts.
SAG as a % of Revenue
23.3
%
25.9
%
2.6
pts.
0.7
pts.
Pre-tax (Loss)
$
(73
)
$
(67
)
$(6)
$36
Pre-tax (Loss) Margin
(4.0
)%
(4.6
)%
0.6
pts.
1.7
pts.
Adjusted(2) Operating Income
$
72
$
22
$50
$1
Adjusted(2) Operating Income Margin
3.9
%
1.5
%
2.4
pts.
0.2
pts.
_____________
(1)
Refer to the "Pro Forma Basis" section for an explanation of this measure. Reflects the inclusion of Lexmark's estimated results from January 1, 2025 through March 31, 2025. Lexmark's actual results are included in Xerox's reported results beginning on July 1, 2025, the effective date of the acquisition.
(2)
Refer to the "Non-GAAP Financial Measures" section for an explanation of the non-GAAP financial measure.
Other (Income) Expenses, Net
Three Months Ended
March 31,
(in millions)
2026
2025
Interest income
$
(3
)
$
(2
)
Non-service retirement-related costs
21
18
Currency losses, net
5
—
Gain on early extinguishment of debt
(56
)
—
Commitment fee expense
—
18
All other expenses, net
2
1
Other (income) expenses, net
$
(31
)
$
35
Reportable Segments
Our business is organized to ensure we focus on efficiently managing operations while serving our customers and the markets in which we operate. We have two operating and reportable segments – Print and Other and IT Solutions.
Segment Review
Three Months Ended March 31,
(in millions)
Print and Other
IT Solutions
Total Segment
Intersegment Elimination(1)
Corporate Other(2)
Total
2026
Revenues
$
1,692
$
156
$
1,848
$
(2
)
$
—
$
1,846
% of Total Revenue
92
%
8
%
100
%
Segment Profit
$
87
$
6
$
93
—
$
(21
)
$
72
Segment Margin(3)
5.1
%
3.9
%
5.0
%
3.9
%
2025
Revenues
$
1,294
$
164
$
1,458
$
(1
)
$
—
$
1,457
% of Total Revenue
89
%
11
%
100
%
Segment Profit
$
41
$
5
$
46
—
$
(24
)
$
22
Segment Margin(3)
3.2
%
3.1
%
3.2
%
1.5
%
2025 Pro Forma(4)
Revenues
$
1,753
$
164
$
1,917
$
(1
)
$
—
$
1,916
% of Total Revenue
91
%
9
%
100
%
Segment Profit
$
94
$
5
$
99
—
$
(28
)
$
71
Segment Margin(3)
5.4
%
3.1
%
5.2
%
NM
3.7
%
_____________
(1)
Reflects primarily IT hardware, software solutions and services, sold by the IT Solutions segment to the Print and Other segment.
(2)
Corporate Other reflects certain administrative and general expenses, which primarily relate to corporate functions, and are not allocated to either of our reportable segments.
(3)
Segment margin is based on total revenue. IT Solutions segment margin is net of Intersegment Elimination.
(4)
Reflects the inclusion of Lexmark's estimated results from January 1, 2025 through March 31, 2025. Lexmark's actual results are included in Xerox's reported results beginning on July 1, 2025, the effective date of the acquisition. Refer to the "Pro Forma Basis" section for an explanation of this measure. ITsavvy results for the full first quarter of 2026 and 2025 are included in our consolidated results. Accordingly, there are no pro forma impacts related to the IT Solutions segment.
Print and Other
The Print and Other segment includes the design, development and sale of document management systems, supplies, and services as well as associated financing and technology-related offerings, digital and print-related software products and services. This segment also includes our recent Lexmark Acquisition, and Xerox Financial Services. Refer to Appendix II, Reportable Segments, for definitions.
Revenue
Three Months Ended
March 31,
(in millions)
2026
2025
%
Change
CC % Change
Pro Forma(1) % Change
Equipment sales
$
378
$
284
33.1%
30.7%
(2.3)%
Supplies, paper and other sales
437
168
160.1%
155.7%
(2.0)%
Services, maintenance, rentals and other
816
763
6.9%
3.2%
(3.0)%
Xerox Financial Services
61
79
(22.8)%
(26.5)%
(22.8)%
Post sale revenue
1,314
1,010
30.1%
26.5%
(3.8)%
Total Print and Other Revenue
$
1,692
$
1,294
30.8%
27.4%
(3.5)%
__________
CC - See "Constant Currency" in the Non-GAAP Financial Measures section for a description of constant currency.
(1)
Refer to the "Pro Forma Basis" section for an explanation of this measure. Reflects the inclusion of Lexmark's estimated results from January 1, 2025 through March 31, 2025. Lexmark's actual results are included in Xerox's reported results beginning on July 1, 2025, the effective date of the acquisition.
Detail by product group is shown below.
Three Months Ended
March 31,
% of Equipment Sales
As Reported
As Reported
(in millions)
2026
2025
%
Change
CC % Change
2026
2025
Entry
$
135
$
43
214.0%
212.7%
36%
15%
Mid-range
198
198
—%
(2.1)%
52%
70%
High-end
40
40
—%
(1.0)%
11%
14%
Other
5
3
66.7%
66.7%
1%
1%
Equipment Sales (1)
$
378
$
284
33.1%
30.7%
100%
100%
_____________
CC - See "Constant Currency" in the Non-GAAP Financial Measures section for a description of constant currency.
(1)
Refer to Appendix II, Reportable Segments, for definitions.
IT Solutions
The IT Solutions segment provides clients of all sizes integrated IT infrastructure solutions, delivering business outcomes through its suite of Device Lifecycle Solutions, and Managed IT Services. The IT Solutions business leverages its professional services and engineering capabilities, along with an extensive partner ecosystem to design, develop and deliver comprehensive Network and Security Solutions, and Infrastructure and Cloud Solutions. This segment provides services to clients in the U.S., Canada, the U.K., and Western Europe. Refer to Appendix II, Reportable Segments, for definitions.
Revenue
Three Months Ended
March 31,
(in millions)
2026
2025
%
Change
CC % Change
IT Products(1)
$
105
$
105
—%
—%
IT Services(2)
49
58
(15.5)%
(16.8)%
Intersegment revenue (3)
2
1
NM
NM
Total IT Solutions
$
156
$
164
(4.9)%
(5.9)%
__________
CC - See "Constant Currency" in the Non-GAAP Financial Measures section for a description of constant currency.
(1)
IT Products reflect the sale of IT hardware and software solutions. Hardware product sales include the sale of notebooks, network communications and other endpoint devices, desktop computers and other IT hardware. Software product sales include deployments of cloud and security solutions, endpoint security application suites, operating systems, other applications and network management solutions.
(2)
IT Services reflect revenue associated with the implementation of IT solutions, including product lifecycle, deployment and network monitoring services, and managed services.
(3)
Reflects primarily IT hardware, software solutions and services sold by the IT Solutions segment to the Print and Other segment.
Forward-Looking Statements
This press release and other written or oral statements made from time to time by management contain “forward looking statements” as defined in the Private Securities Litigation Reform Act of 1995 and involve certain risks and uncertainties. The words “anticipate”, “believe”, “estimate”, “expect”, “intend”, “will”, “would”, “could”, “can”, “should”, “targeting”, “projecting”, “driving”, “future”, “plan”, “predict”, “may” and similar expressions are intended to identify forward-looking statements. The Company’s actual results may differ significantly from the results discussed in the forward-looking statements. These statements reflect management’s current beliefs and assumptions and are subject to a number of other factors that may cause actual results to differ materially.
Such factors include but are not limited to: applicable market conditions; global macroeconomic conditions, including inflation, slower growth or recession, delays or disruptions in the global supply chain, higher interest rates, and wars and other conflicts, our ability to succeed in a competitive environment, including by developing new products and service offerings and preserving our existing products and market share as well as repositioning our business in the face of customer preference, technological, and other change, such as evolving return-to-office and hybrid working trends; failure of our customers, vendors, and logistics partners to perform their contractual obligations to us; our ability to attract, train, and retain key personnel; execution risks around our Transformation; the risk of breaches of our security systems due to cyber, malware, or other intentional attacks that could expose us to liability, litigation, regulatory action or damage our reputation; our ability to obtain adequate pricing for our products and services and to maintain and improve our cost structure; changes in economic and political conditions, licensing requirements, and tax laws in the United States and in the foreign countries in which we do business; the risk that multi-year contracts with governmental entities could be terminated prior to the end of the contract term and that civil or criminal penalties and administrative sanctions could be imposed on us if we fail to comply with the terms of such contracts and applicable law; interest rates, cost of capital, and access to credit markets; risks related to our indebtedness; the imposition of new or incremental trade protection measures such as tariffs and import or export restrictions; funding requirements associated with our employee pension and retiree health benefit plans; changes in foreign currency exchange rates; the risk that we may be subject to new or heightened regulatory or operation risks as a result of our, or third parties,’ use or anticipated use of artificial intelligence technologies; the risk that our operations and products may not comply with applicable worldwide regulatory requirements, particularly environmental regulations and directives and anti-corruption laws; the outcome of litigation and regulatory proceedings to which we may be a party; laws, regulations, international agreements and other initiatives to limit greenhouse gas emissions or relating to climate change, as well as the physical effects of climate change; our ability to successfully integrate the Lexmark business and realize the anticipated benefits thereof, including expected synergies; and other factors that are set forth from time to time in the Company’s Securities and Exchange Commission filings, including the combined Annual Report on Form 10-K of Xerox Holdings and Xerox Corporation.
These forward-looking statements speak only as of the date hereof or of the date to which they refer, and the Company assumes no obligation to update or revise any forward-looking statements as a result of new information or future events or developments, except as required by law.
Non-GAAP Financial Measures
We have reported our financial results in accordance with generally accepted accounting principles (GAAP). In addition, we have discussed our financial results using the non-GAAP measures described below. We believe these non-GAAP measures allow investors to better understand the trends in our business and to better understand and compare our results. Management regularly uses our supplemental non-GAAP financial measures internally to understand, manage and evaluate our business and make operating decisions. These non-GAAP measures are among the primary factors management uses in planning for and forecasting future periods. Compensation of our executives is based in part on the performance of our business based on these non-GAAP measures. Accordingly, we believe it is necessary to adjust several reported amounts, determined in accordance with GAAP, to exclude the effects of certain items as well as their related income tax effects.
However, these non-GAAP financial measures should be viewed in addition to, and not as a substitute for, the Company’s reported results prepared in accordance with GAAP. Our non-GAAP financial measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures and should be read only in conjunction with our Condensed Consolidated Financial Statements prepared in accordance with GAAP.
Reconciliations of these non-GAAP financial measures to the most directly comparable financial measures calculated and presented in accordance with GAAP are set forth below, as well as in the first quarter 2026 presentation slides available at www.xerox.com/investor.
Adjusted Earnings Measures
Adjusted Net (Loss) and (Loss) per share (Adjusted EPS)
Adjusted Effective Tax Rate
Normalized Adjusted Net (Loss) and (Loss) per share
The above measures were adjusted for the following items:
Restructuring and related costs, net: Restructuring and related costs, net include restructuring and asset impairment charges as well as costs associated with our Transformation programs beyond those normally included in restructuring and asset impairment charges. Restructuring consists of costs primarily related to severance and benefits paid to employees pursuant to formal restructuring and workforce reduction plans. Asset impairment includes costs incurred for those assets sold, abandoned or made obsolete as a result of our restructuring actions, exiting from a business or other strategic business changes. Additional costs for our Transformation programs are primarily related to the implementation of strategic actions and initiatives and include third-party professional service costs as well as one-time incremental costs. All of these costs can vary significantly in terms of amount and frequency based on the nature of the actions as well as the changing needs of the business. Accordingly, due to that significant variability, we will exclude these charges since we do not believe they provide meaningful insight into our current or past operating performance nor do we believe they are reflective of our expected future operating expenses as such charges are expected to yield future benefits and savings with respect to our operational performance.
Amortization of intangible assets: The amortization of intangible assets is driven by our acquisition activity which can vary in size, nature and timing as compared to other companies within our industry and from period to period. The use of intangible assets contributed to our revenues earned during the periods presented and will contribute to our future period revenues as well. Amortization of intangible assets will recur in future periods.
Non-service retirement-related costs: Our defined benefit pension and retiree health costs include several elements impacted by changes in plan assets and obligations that are primarily driven by changes in the debt and equity markets as well as those that are predominantly legacy in nature and related to employees who are no longer providing current service to the Company (e.g. retirees and ex-employees). These elements include (i) interest cost, (ii) expected return on plan assets, (iii) amortization of prior plan amendments, (iv) amortized actuarial gains/losses and (v) the impacts of any plan settlements/curtailments. Accordingly, we consider these elements of our periodic retirement plan costs to be outside the operational performance of the business or legacy costs and not necessarily indicative of current or future cash flow requirements. This approach is consistent with the classification of these costs as non-operating in Other (income) expenses, net. Adjusted earnings will continue to include the service cost elements of our retirement costs, which are related to current employee service as well as the cost of our defined contribution plans.
Transaction and related costs, net: Transaction and related costs, net are costs and expenses primarily associated with certain major or significant strategic M&A projects. These costs are primarily for third-party legal, accounting, consulting and other similar types of professional services as well as potential legal settlements that may arise in connection with those M&A transactions. These costs are considered incremental to our normal operating charges and were incurred or are expected to be incurred solely as a result of the planned transactions. Accordingly, we exclude these expenses from our Adjusted Earnings Measures in order to evaluate our performance on a comparable basis.
Discrete, unusual or infrequent items: We excluded the following item(s), when applicable, given their discrete, unusual or infrequent nature and their impact on the comparability of our results for the period to prior periods and future expected trends.
Inventory-related impact - exit of certain Production Print manufacturing operations
Gain on early extinguishment of debt
Divestitures
Transformation-related costs
Lexmark - fixed asset-related purchase accounting adjustment
Commitment fee expense
PARC donation - income tax
Deferred tax asset valuation allowance
Adjusted Operating Income and Margin
We calculate and utilize adjusted operating income and margin measures by adjusting our reported pre-tax (loss) and margin amounts. In addition to the costs and expenses noted above as adjustments for our adjusted earnings measures, adjusted operating income and margin also exclude the remaining amounts included in Other (income) expenses, net, which include certain other non-operating costs and expenses. We exclude these amounts in order to evaluate our current and past operating performance and to better understand the expected future trends in our business.
Adjusted Gross Profit and Margin
We calculate non-GAAP gross Profit and Margin by excluding the inventory impact related to the exit of certain Production Print manufacturing operations, included in Cost of services, maintenance, rentals and other, as well as fixed asset-related purchase accounting adjustments related to the recent acquisition of Lexmark.
Constant Currency (CC)
To better understand trends in our business, we believe that it is helpful to adjust revenue to exclude the impact of changes in the translation of foreign currencies into U.S. dollars. We refer to this adjusted revenue as “constant currency.” This impact is calculated by translating current period activity in local currency using the comparable prior year period's currency translation rate. This impact is calculated for all countries where the functional currency is not the U.S. dollar. Management believes the constant currency measure provides investors an additional perspective on revenue trends. Currency impact can be determined as the difference between actual growth rates and constant currency growth rates.
Free Cash Flow
To better understand trends in our business, we believe that it is helpful to adjust operating cash flows by subtracting amounts related to capital expenditures. Management believes this measure gives investors an additional perspective on cash flow from operating activities in excess of amounts required for reinvestment. It provides a measure of our ability to repurchase debt, fund acquisitions, and pay dividends.
Adjusted Net (Loss) and (Loss) per share reconciliation
Three Months Ended March 31,
2026
2025
(in millions, except per share amounts)
Net
Loss
Diluted
EPS
Net
Loss
Diluted
EPS
Reported(1)
$
(105
)
$
(0.84
)
$
(90
)
$
(0.75
)
Adjustments:
Inventory-related impact - exit of certain production print manufacturing operations
—
7
Restructuring and related costs, net
45
(1
)
Amortization of intangible assets
30
10
Divestitures
—
(4
)
Gain on early extinguishment of debt(2)
(56
)
—
Non-service retirement-related costs
21
18
Transformation-related costs(3)
2
6
Transaction and related costs, net
4
3
Lexmark - fixed asset-related purchase accounting adjustment
11
—
Commitment fee expense(4)
—
18
PARC Donation Income Tax
—
9
Deferred tax asset valuation allowance(5)
8
50
Income tax on adjustments(6)
(11
)
(30
)
Adjusted
$
(51
)
$
(0.43
)
$
(4
)
$
(0.06
)
Tax effects associated with U.S. and U.K. losses (7)
41
(3
)
Normalized Adjusted
$
(10
)
$
(0.11
)
$
(7
)
$
(0.09
)
Dividends on preferred stock used in adjusted EPS calculation(8)
$
4
$
4
Weighted average shares for adjusted EPS(8)
129
125
Fully diluted shares at end of period(9)
131
_____________
(1)
Net Loss and Loss per Share. First quarter 2026 Net Loss and Diluted Loss per Share included a $56 million gain on the early extinguishment of debt, or $0.43 per diluted share. First quarter 2025 Net Loss and Diluted Loss per Share include a charge to tax expense related to the establishment of $59 million of valuation allowances, or $0.47 per diluted share, and $14 million of after-tax financing-related charges, or $0.14 per diluted share, related to our recently completed debt offering.
(2)
Reflects the early repayment of a portion of our 5.500% Senior Unsecured Notes due August 2028 (the "2028 Senior Unsecured Notes").
(3)
In the first quarter of 2026, Xerox Holdings Corporation renamed “Reinvention-related costs” to “Transformation-related costs.” This change in terminology did not affect the nature of the costs.
(4)
Primarily reflects fees associated with the 2025 private offering of $400 million in aggregate principal amount of 10.25% Senior Secured First Lien Notes and $400 million aggregate principal amount of 13.5% Senior Secured Second Lien Notes Due in 2031.
(5)
Reflects the establishment of a valuation allowance against certain deferred tax assets to reflect their realizability.
(6)
Refer to Adjusted Effective Tax Rate reconciliation.
(7)
Normalized adjusted net (loss) includes tax benefits of $41 million in Q1 2026 and ($3) million in Q1 2025, which are not included in adjusted earnings. This represents the tax effects associated with pre-tax (losses) generated in U.S. and UK entities subject to full valuation allowances.
(8)
For those periods that include the preferred stock dividend, the average shares for the calculations of diluted EPS exclude the 7 million shares associated with our Series A convertible preferred stock.
(9)
Reflects common shares outstanding at March 31, 2026, plus potential dilutive common shares used for the calculation of adjusted diluted EPS for the first quarter 2026. Excludes potentially dilutive common shares associated with our Series A convertible preferred stock, shares granted under stock-based compensation programs, as well as warrants and convertible notes, all of which were anti-dilutive for the first quarter 2026.
Adjusted Effective Tax Rate reconciliation
Three Months Ended March 31,
2026
2025
(in millions)
Pre-Tax Loss
Income Tax Expense
Effective Tax Rate
Pre-Tax Loss
Income Tax Expense
Effective Tax
Rate
Reported(1)
$
(73
)
$
32
(43.8
)%
$
(67
)
$
23
(34.3
)%
Income tax on PARC donation(2)
—
—
—
(9
)
Deferred tax asset valuation allowance(2)
—
(8
)
—
(50
)
Non-GAAP adjustments(2)
57
11
57
30
Adjusted
$
(16
)
$
35
(218.8
)%
$
(10
)
$
(6
)
60.0
%
___________
(1)
Pre-tax loss and income tax expense.
(2)
Refer to Adjusted Net Income and EPS reconciliation for details.
Adjusted Operating Income and Margin reconciliation
Three Months Ended March 31,
2026
2025
(in millions)
(Loss)
Profit
Revenue
Margin
(Loss)
Profit
Revenue
Margin
Reported(1)
$
(105
)
$
1,846
$
(90
)
$
1,457
Income tax expense
32
23
Pre-tax loss
$
(73
)
$
1,846
(4.0
)%
$
(67
)
$
1,457
(4.6
)%
Adjustments:
Inventory-related impact - exit of certain production print manufacturing operations
—
7
Lexmark - fixed asset-related purchase accounting adjustment
11
—
Restructuring and related costs, net
45
(1
)
Amortization of intangible assets
30
10
Divestitures
—
(4
)
Transformation-related costs(2)
2
6
Transaction and related costs, net
4
3
Non-financing interest expense(3)
84
33
Other (income) expenses, net (4)
(31
)
35
Adjusted
$
72
$
1,846
3.9
%
$
22
$
1,457
1.5
%
_____________
(1)
Net (Loss) and Revenues.
(2)
In the first quarter of 2026, Xerox Holdings Corporation renamed “Reinvention-related costs” to “Transformation-related costs.” This change in terminology did not affect the nature of the costs.
(3)
Reflects interest expense primarily related to the recently completed borrowings in support of the Lexmark acquisition financing, repayment of existing borrowings and general corporate purposes, as well as interest related to the funding from the Joint Venture Financing arrangement entered into with TPG in the first quarter of 2026.
(4)
Includes non-service retirement-related costs, as well as a gain of $56 million related to the early repayment of a portion of our 5.500% Senior Unsecured Notes due August 2028 (the "2028 Senior Unsecured Notes").
Adjusted Gross Profit and Margin
Three Months Ended March 31,
(in millions)
2026
2025
Revenue(1)
$
1,846
$
1,457
Cost of revenue (1)
(1,297
)
(1,031
)
Gross Profit and Margin
549
29.7
%
426
29.2
%
Adjustment
Inventory impact related to the exit of certain Production Print manufacturing operations
—
7
Lexmark - fixed asset-related purchase accounting adjustment
11
—
Adjusted Gross Profit and Margin
$
560
30.3
%
$
433
29.7
%
_____________
(1)
Total Revenues and cost of revenues
Free Cash Flow reconciliation
Three Months Ended March 31,
(in millions)
2026
2025
Reported(1)
$
(144
)
$
(89
)
Capital expenditures
(21
)
(20
)
Free Cash Flow
$
(165
)
$
(109
)
_____________
(1)
Net cash used in operating activities.
GUIDANCE
Adjusted Operating Income
(in millions)
Fiscal Year 2026
Estimated Pre-tax (loss)
~ $(170)
Adjustments:
Restructuring and related costs, net
70
Amortization of intangible assets
120
Non-financing interest expense
340
Other expenses, net(1)
115
Estimated Adjusted Operating Income(2)
~ $450 - $500
_____________
(1)
Other expenses, net includes approximately $85 million related to non-service retirement-related costs.
(2)
Adjusted pre-tax income reflects the adjusted operating income guidance midpoint of $475 million.
Free Cash Flow
(in millions)
Fiscal Year 2026
Estimated Net cash provided by operating activities
~$350
Capital expenditures
(100)
Estimated Free Cash Flow
~$250
Pro Forma Basis
To better understand the trends in our business, we discuss our 2026 operating results by comparing them against 2025 pro forma results. The 2025 pro forma results include estimated results of Lexmark. Lexmark is included in our 2025 results as of July 1, 2025, the effective date of acquisition.
We refer to comparisons against these adjusted results as “pro-forma” basis comparisons. The pro forma information has been prepared in accordance with Article 11 of Regulation S-X, "Pro Forma Financial information.” The pro forma information is presented to facilitate comparisons with our results following the acquisition. Lexmark's 2025 historical results have been adjusted to reflect the costs of financing the transactions, fair value adjustments related to inventory, real and personal property (equipment and computer hardware and software) and intangible assets. In addition, adjustments were made to conform Lexmark's accounting policies to those of Xerox, including deferred revenue and inventory. In accordance with Article 11 of Regulation S-X, these proforma results exclude adjustments associated with transaction related costs which are already included in the historical financial statements.
We believe comparisons on a pro-forma basis are more meaningful than the actual comparisons given the size and nature of the Lexmark acquisition. We believe the pro forma basis comparisons allow investors to have a better understanding and additional perspective of the expected trends in our business as well as the impact of the Lexmark acquisition on the Company’s operations. The pro forma financial information is based upon available information and assumptions that we believe are reasonable and is for illustrative purposes only. The pro forma combined financial information below should be read in conjunction with the consolidated financial statements and related notes to our 2025 Form 10-K.
Certain pro forma monetary amounts, percentages, and other financial figures included in the Company’s first quarter 2026 earnings materials, including the prepared remarks, investor presentation, and press release have been subject to rounding adjustments. Accordingly, minor differences may exist among such materials. These variances, which result solely from rounding, are not considered material.
Pro Forma Revenues and Key Financial Ratios
Three Months Ended March 31,
(in millions)
As Reported
Pro Forma(1)
Change
B/(W)
Pro Forma(1) Change
B/(W)
2026
2025
2025
Equipment sales
$
378
$
284
$
387
33.1%
(2.3)%
Post sale revenue
1,314
1,010
1,366
30.1%
(3.8)%
IT Solutions
154
163
163
(5.5)%
(5.5)%
Total Revenue
$
1,846
$
1,457
$
1,916
26.7%
(3.7)%
Reconciliation to Condensed Consolidated Statements of Loss:
Equipment sales
$
378
$
284
$
387
33.1%
(2.3)%
Supplies, paper and other sales
437
168
446
160.1%
(2.0)%
IT Products
105
105
105
—%
—%
Sales
$
920
$
557
$
938
65.2%
(1.9)%
Services, maintenance, rentals and other
$
816
$
763
$
841
6.9%
(3.0)%
Xerox Financial Services
61
79
79
(22.8)%
(22.8)%
IT Services
49
58
58
(15.5)%
(15.5)%
Services, maintenance, rentals and other
$
926
$
900
$
978
2.9%
(5.3)%
Segments(2)
Print and Other
$
1,692
$
1,294
$
1,753
30.8%
(3.5)%
IT Solutions
156
164
164
(4.9)%
(4.9)%
Intersegment elimination (3)
(2
)
(1
)
(1
)
NM
NM
Total Revenue
$
1,846
$
1,457
$
1,916
26.7%
(3.7)%
Total Gross Profit
$
549
$
426
$
565
$123
$(16)
Gross Margin
Equipment
10.8
%
27.9
%
11.1
%
(17.1)
(0.3)
pts.
Post sale
34.6
%
29.6
%
34.1
%
5.0
0.5
pts.
Total Gross Margin
29.7
%
29.2
%
29.5
%
0.5
0.2
pts.
RD&E
$
64
$
42
$
74
$(22)
$10
RD&E as a % of Revenue
3.5
%
2.9
%
3.9
%
(0.6)
0.4
pts.
SAG
430
378
$
459
$(52)
$29
SAG as a % of Revenue
23.3
%
25.9
%
24.0
%
2.6
0.7
pts.
__________
(1)
Reflects the inclusion of Lexmark's estimated results from January 1, 2025 through March 31, 2025. Lexmark's actual results are included in Xerox's reported results beginning on July 1, 2025, the effective date of the acquisition. ITsavvy results for the full first quarter of 2026 and 2025 are included in our consolidated results. Accordingly, there are no pro forma impacts related to the IT Solutions segment.
(2)
Refer to Appendix II, Reportable Segments, for definitions.
(3)
Primarily reflects IT hardware, software solutions and services sold by the IT Solutions segment to the Print and Other segment.
Pro Forma Print and Other Revenue
Three Months Ended
March 31,
As Reported
Pro Forma(1)
%
Change
Pro Forma(1) % Change
(in millions)
2026
2025
2025
Equipment sales
$
378
$
284
$
387
33.1%
(2.3)%
Supplies, paper and other sales
437
168
446
160.1%
(2.0)%
Services, maintenance, rentals and other
816
763
841
6.9%
(3.0)%
Xerox Financial Services
61
79
79
(22.8)%
(22.8)%
Post sale revenue
$
1,314
$
1,010
$
1,366
30.1%
(3.8)%
Total Print and Other Revenue
$
1,692
$
1,294
$
1,753
30.8%
(3.5)%
_____________
(1)
Reflects the inclusion of Lexmark's estimated results from January 1, 2025 through March 31, 2025. Lexmark's actual results are included in Xerox's reported results beginning on July 1, 2025, the effective date of the acquisition.
Pro Forma Adjusted Gross Profit and Margin
Three Months Ended March 31,
As Reported
Pro Forma(2)
(in millions)
2026
2025
Revenue(1)
$
1,846
$
1,916
Cost of revenue(1)
(1,297
)
(1,351
)
Gross Profit and Margin
549
29.7
%
565
29.5
%
Adjustment
Inventory impact related to the exit of certain Production Print manufacturing operations
—
7
Lexmark - fixed asset-related purchase accounting adjustment
11
21
Adjusted Gross Profit and Margin
$
560
30.3
%
$
593
30.9
%
_____________
(1)
Total Revenues and cost of revenues
(2)
Reflects the inclusion of Lexmark's estimated results from January 1, 2025 through March 31, 2025. Lexmark's actual results are included in Xerox's reported results beginning on July 1, 2025, the effective date of the acquisition.
Pro Forma Adjusted Operating Income and Margin reconciliation
Three Months Ended March 31,
As Reported
Pro Forma(2)
2026
2025
2025
Change
Pro Forma(2) Change
(in millions)
(Loss)
Profit
(Loss)
Profit
(Loss)
Profit
Reported(1)
$
(105
)
$
(90
)
$
(132
)
$
(15
)
$
27
Income tax expense
32
23
23
9
9
Pre-tax loss
$
(73
)
$
(67
)
$
(109
)
$
(6
)
$
36
Adjustments:
Inventory-related impact - exit of certain production print manufacturing operations
—
7
7
(7
)
(7
)
Lexmark - fixed asset-related purchase accounting adjustment
11
—
21
11
(10
)
Transformation-related costs(3)
2
6
6
(4
)
(4
)
Restructuring and related costs, net
45
(1
)
(2
)
46
47
Amortization of intangible assets
30
10
31
20
(1
)
Divestitures
—
(4
)
(4
)
4
4
Transaction and related costs, net
4
3
5
1
(1
)
Non-financing interest expense(4)
84
33
33
51
51
Other (income) expenses, net (5)
(31
)
35
83
(66
)
(114
)
Adjusted
$
72
$
22
$
71
$
50
$
1
Revenue
1,846
1,457
$
1,916
$
389
$
(70
)
Pre-tax Loss Margin
(4.0
)%
(4.6
)%
(5.7
)%
0.6
pts.
1.7
pts.
Adjusted Operating Income Margin
3.9
%
1.5
%
3.7
%
2.4
pts.
0.2
pts.
_____________
(1)
Net (Loss)
(2)
Reflects the inclusion of Lexmark's estimated results from January 1, 2025 through March 31, 2025. Lexmark's actual results are included in Xerox's reported results beginning on July 1, 2025, the effective date of the acquisition.
(3)
In the first quarter of 2026, Xerox Holdings Corporation renamed “Reinvention-related costs” to “Transformation-related costs.” This change in terminology did not affect the nature of the costs.
(4)
Reflects interest expense primarily related to the recently completed borrowings in support of the Lexmark acquisition financing, repayment of existing borrowings and general corporate purposes, as well as interest related to the funding from the Joint Venture Financing arrangement entered into with TPG in the first quarter of 2026.
(5)
Includes non-service retirement-related costs as well as a gain of $56 million related to the early repayment of a portion of our 5.500% Senior Unsecured Notes due August 2028 (the "2028 Senior Unsecured Notes").
APPENDIX I
Xerox Holdings Corporation
Loss per Share
(in millions, except per-share data, shares in thousands)
Three Months Ended
March 31,
2026
2025
Basic Loss per Share:
Net Loss
$
(105
)
$
(90
)
Accrued dividends on preferred stock
(4
)
(4
)
Adjusted net loss available to common shareholders
$
(109
)
$
(94
)
Weighted average common shares outstanding
128,985
125,194
Basic Loss per Share
$
(0.84
)
$
(0.75
)
Diluted Loss per Share:
Net Loss
$
(105
)
$
(90
)
Accrued dividends on preferred stock
(4
)
(4
)
Adjusted net loss available to common shareholders
$
(109
)
$
(94
)
Weighted average common shares outstanding
128,985
125,194
Common shares issuable with respect to:
Stock Options
—
—
Restricted stock and performance shares
—
—
Convertible preferred stock
—
—
Warrants
—
—
Convertible Notes
—
—
Adjusted weighted average common shares outstanding
128,985
125,194
Diluted Loss per Share
$
(0.84
)
$
(0.75
)
The following securities were not included in the computation of diluted loss per share as they were either contingently issuable shares or shares that if included would have been anti-dilutive:
Stock options
119
147
Restricted stock and performance shares
9,440
16,415
Convertible preferred stock
6,742
6,742
Warrants
82,464
—
Convertible Notes
19,196
19,196
Total Anti-Dilutive Securities
117,961
42,500
Dividends per Common Share
$
0.025
$
0.125
APPENDIX II
Xerox Holdings Corporation
Reportable Segments
Our reportable segments are aligned with how we manage the business and view the markets we serve. During the first quarter of 2025, the Company updated its determination of reportable segments to align with a change in how the Chief Operating Decision Maker (CODM), our Chief Executive Officer (CEO), allocates resources and assesses performance against the Company’s key growth strategies. As such, it was determined that there are two reportable segments - Print and Other, and IT Solutions. Prior to this change, the Company had determined that there were two reportable segments - Print and Other and Xerox Financial Solutions (XFS). As a result of this change, prior period reportable segment results and related disclosures have been conformed to reflect the Company’s current reportable segments. Refer to Reportable Segments - Segment Review, for additional information related to these two segments.
During 2024, the Company acquired ITsavvy Acquisition Company, Inc. (ITsavvy), a technology infrastructure solutions provider. As a result of this acquisition, during the first quarter of 2025, we reassessed our operating and reportable segments and determined that, based on the information provided to our CODM, as well as the CEO's management and assessment of the Company's operations, we had two operating and reportable segments – Print and Other, and IT Solutions. We also determined that there were no other businesses that met the requirements to be considered separate operating segments, including our former operating/reporting segment, XFS, whose results are now included in the Print and Other operating/reporting segment.
Our Print and Other segment includes the design, development and sale of document management systems, supplies and services, as well as associated financing and technology-related offerings, digital and print-related software products and services. The segment also includes the delivery of managed services that involve a continuum of solutions and services that help our customers optimize their print and communications infrastructure, apply automation and simplification to maximize productivity, and ensure the highest levels of security. This segment also includes the Lexmark acquisition. In addition, the segment includes Xerox Financial Services, a global financing solutions provider, primarily enabling the sale of our equipment and services (previously reported XFS segment), which includes commissions and other payments for the exclusive right to provide lease financing for Xerox products. The product groupings range from:
“Entry”, which include A4 devices and desktop printers and multifunction devices that primarily serve small and medium workgroups/work teams.
“Mid-Range”, which include A3 devices that generally serve large workgroup/work team environments as well as products in the Light Production product groups serving centralized print centers, print for pay and low volume production print establishments.
“High-End”, which include production printing and publishing systems that generally serve the graphic communications marketplace and print centers in large enterprises.
Customers range from small and mid-sized businesses to large enterprises. Customers also include graphic communication enterprises as well as channel partners including distributors and resellers.
Our IT Solutions segment provides clients of all sizes integrated IT infrastructure solutions, delivering business outcomes through its suite of Device Lifecycle Solutions, and Managed IT Services. The IT Solutions business leverages its professional services and engineering capabilities, along with an extensive partner ecosystem to design, develop and deliver comprehensive Network and Security Solutions, and Infrastructure and Cloud Solutions. This segment provides services to clients in the U.S., Canada, the U.K., and Western Europe.
View source version on businesswire.com: https://www.businesswire.com/news/home/20260430805409/en/
Media Contact:
Justin Capella, Xerox, Justin.Capella@xerox.com
Investor Contact:
Greg Stein, Xerox, Greg.Stein@xerox.com
Original: Xerox Releases First-Quarter Results
US Market News
4月前
Xerox Releases Fourth-Quarter and Full-Year ResultsJanuary 29, 2026 6:30 AM
Business Wire
Integration momentum drives Q4 results in line with guidance; adjusted(1) operating income expected to grow more than $200 million in 2026
Financial Summary
Q4 2025
Revenue of $2.03 billion, up 25.7 percent, or 23.6 percent in constant currency(1). On a pro forma(2) basis, revenue down 9.0 percent.
GAAP net (loss) of $(73) million, or $(0.60) per share, an increased loss of $52 million or $(0.40) per share, year-over-year, respectively.
Adjusted(1) net (loss) of $(8) million, or $(0.10) per share, down $57 million or $(0.46) per share, year-over-year, respectively.
Adjusted(1) operating margin of 5.0 percent, down 140 basis points year-over-year.
Operating cash flow of $208 million, down $143 million year-over-year.
Free cash flow(1) of $184 million, down $150 million year-over-year.
FY 2025
Revenue of $7.02 billion, up 12.9 percent, or 12.2 percent in constant currency(1). On a pro forma(2) basis, revenue down 7.6 percent.
GAAP net (loss) of $(1.03) billion, or $(8.25) per share, an improvement of approximately $0.3 billion or $2.50 per share, year-over-year, respectively. 2024 includes an after-tax non-cash goodwill impairment charge of $1.0 billion, or $8.17 per share.
Adjusted(1) net (loss) of $(62) million, or $(0.60) per share, down $197 million or $1.57 per share, year-over-year, respectively.
Adjusted(1) operating margin of 3.5 percent, down 140 basis points year-over-year.
Operating cash flow of $224 million, down $287 million year-over-year.
Free cash flow(1) of $133 million, down $334 million year-over-year.
* 2025 free cash flow guidance did not anticipate the accounting treatment of pre-existing intercompany balances between Xerox and Lexmark. U.S. GAAP requires it to be recorded within operating cash flow instead of being treated as part of the purchase price within investing. Because of this, following Q3 earnings we reclassified $43 million from investing cash flow to operating cash flow. This adjustment had no impact on actual cash, no impact on underlying cash generation, and no impact on Q4 free cash flow.
Xerox Holdings Corporation (NASDAQ: XRX) today announced its 2025 fourth-quarter and full-year results and guidance for 2026.
“We continue to execute with discipline in a difficult macro backdrop, including the lingering effects of government uncertainty and rising memory costs. The Lexmark integration is advancing ahead of plan, and the teams are delivering tangible synergies,” said Steve Bandrowczak, chief executive officer at Xerox. “These efforts contributed to a better-than-expected operating income and free cash flow performance this quarter. As demand trends begin to stabilize, we’re seeing new opportunities emerge, leading to a pipeline that is larger than it was this time last year.”
Strategic Milestones
Q4/FY 2025
Lexmark synergy realization ahead of plan; reaffirm at least $300 million integration synergy target
IT Solutions pro forma bookings*, billings*, and revenue grew double digits in 2025
Announced the launch of the Xerox™ TriShield 360 Cyber Solution within IT Solutions
Channel expansion strategy paying dividends with onboarding of 12 new U.S. dealers in 2025
Paid down $366 million of debt, net, since the close of the Lexmark acquisition on July 1, 2025
* Inclusive of ~$24 million of intercompany transactions.
Fourth-Quarter Key Financial Results
(in millions, except per share data)
Q4 2025
Q4 2024
B/(W)
YOY
Pro Forma2
B/(W) YOY
Revenue
$2,028
$1,613
25.7% AC
23.6% CC1
(9.0)% AC
Gross Profit
$579
$502
$77
$(135)
Gross Margin
28.6%
31.1%
(250) bps
(350) bps
RD&E %
3.5%
2.9%
(60) bps
SAG %
21.3%
23.4%
210 bps
Pre-Tax (Loss)3
$(61)
$(4)
$(57)
Pre-Tax (Loss) Margin3
(3.0)%
(0.2)%
(280) bps
Gross Profit - Adjusted1
$594
$509
$85
$(144)
Gross Margin - Adjusted1
29.3%
31.6%
(230) bps
(380) bps
Operating Income - Adjusted1
$102
$104
$(2)
Operating Income Margin - Adjusted1
5.0%
6.4%
(140) bps
GAAP Diluted (Loss) per Share3
$(0.60)
$(0.20)
$(0.40)
Diluted (Loss) Per Share - Adjusted1
$(0.10)
$0.36
$(0.46)
Full-Year Key Financial Results
(in millions, except per share data)
FY 2025
FY 2024
B/(W)
YOY
Pro Forma2
B/(W) YOY
Revenue
$7,022
$6,221
12.9% AC
12.2% CC
(7.6)% AC
Gross Profit
$1,901
$1,960
$(59)
$(314)
Gross Margin
27.1%
31.5%
(440) bps
(140) bps
RD&E %
3.3%
3.1%
(20) bps
SAG %
23.6%
24.7%
110 bps
Pre-Tax (Loss)3
$(488)
$(1,216)
$728
Pre-Tax (Loss) Margin3
(6.9)%
(19.5)%
NM
Gross Profit - Adjusted1
$2,052
$2,011
$41
$(427)
Gross Margin - Adjusted1
29.2%
32.3%
(310) bps
(270) bps
Operating Income - Adjusted1
$248
$302
$(54)
Operating Income Margin - Adjusted1
3.5%
4.9%
(140) bps
GAAP Diluted (Loss) per Share3
$(8.25)
$(10.75)
$2.50
Diluted (Loss) Per Share - Adjusted1
$(0.60)
$0.97
$(1.57)
Fourth-Quarter Segment Results
(in millions)
Q4 2025
Q4 2024
B/(W)
YOY
Pro Forma2
B/(W) YOY
Revenue
Print and Other
$1,873
$1,500
24.9%
(9.0)%
IT Solutions
158
114
38.6%
(8.1)%
Intersegment Elimination4
(3)
(1)
NM
NM
Total Revenue
$2,028
$1,613
25.7%
(9.0)%
Profit
Print and Other
$109
$128
(14.8)%
(50.5)%
IT Solutions
9
-
NM
NM
Corporate Other 5
(16)
(24)
(33.3)%
(40.7)%
Total Profit
$102
$104
(1.9)%
(48.0)%
Full-Year Segment Results
(in millions)
FY 2025
FY 2024
B/(W)
YOY
Pro Forma2
B/(W) YOY
Revenue
Print and Other
$6,272
$5,864
7.0%
(8.2)%
IT Solutions
761
358
112.6%
(0.8)%
Intersegment Elimination4
(11)
(1)
NM
NM
Total Revenue
$7,022
$6,221
12.9%
(7.6)%
Profit
Print and Other
$279
$396
(29.5)%
(40.5)%
IT Solutions
42
-
NM
162.5%
Corporate Other 5
(73)
(94)
(22.3)%
(25.2)%
Total Profit
$248
$302
(17.9)%
(37.6)%
1.
Refer to the “Non-GAAP Financial Measures” section of this release for a discussion of these non-GAAP measures and their reconciliation to the reported GAAP measures.
2.
Refer to the “Pro Forma Basis” section for an explanation of this measure. Reflects the inclusion of Lexmark's estimated results from October 1, 2024 through December 31, 2024 and ITsavvy's estimated results from October 1, 2024 through November 19, 2024. ITsavvy's actual results are included in Xerox's reported results beginning on November 20, 2024, the effective date of the acquisition.
3.
Refer to the “Non-GAAP Financial Measures - Adjusted Net Income and EPS reconciliation” section of this release for a discussion of significant items impacting full-year 2025 and 2024, as well as their related impacts on Diluted EPS. Full-year 2024 included a pre-tax non-cash goodwill impairment charge of approximately $1.1 billion (approximately $1.0 billion after-tax), or $8.17 per share.
4.
Reflects primarily IT hardware, software solutions and services, sold by the IT Solutions segment to the Print and Other segment.
5.
Corporate Other reflects certain administrative and general expenses, which primarily relate to corporate functions, and are not allocated to either of our reportable segments
2026 Guidance
Revenue: Above $7.5 billion
Adjusted 1 Operating Income: $450-$500 million
Free cash flow1: ~ $250 million
Non-GAAP Measures
This release refers to the following non-GAAP financial measures:
Adjusted1 EPS, which excludes the Goodwill impairment charge, a tax expense charge related to the establishment of a valuation allowance against certain deferred tax assets, Reinvention-related costs, as well as Restructuring and related costs, net, Amortization of intangible assets, non-service retirement-related costs, and other discrete adjustments from GAAP EPS, as applicable.
Adjusted 1 operating income and margin, which exclude the EPS adjustments noted above, except the tax expense charge related to the establishment of a valuation allowance against certain deferred tax assets, as well as the remainder of Other expenses, net from pre-tax (loss) and margin.
Constant currency (CC) revenue change, which excludes the effects of currency translation.
Free cash flow 1, which is operating cash flow less capital expenditures.
1 Refer to the “Non-GAAP Financial Measures” section of this release for a discussion of these non-GAAP measures and their reconciliation to the reported GAAP measures.
Forward-Looking Statement
This presentation and other written or oral statements made from time to time by management contain “forward looking statements” as defined in the Private Securities Litigation Reform Act of 1995 and involve certain risks and uncertainties. The words “anticipate”, “believe”, “estimate”, “expect”, “intend”, “will”, “would”, “could”, “can”, “should”, “targeting”, “projecting”, “driving”, “future”, “plan”, “predict”, “may” and similar expressions are intended to identify forward-looking statements. The Company’s actual results may differ significantly from the results discussed in the forward-looking statements. These statements reflect management’s current beliefs and assumptions and are subject to a number of other factors that may cause actual results to differ materially.
Such factors include but are not limited to: applicable market conditions; global macroeconomic conditions, including inflation, slower growth or recession, delays or disruptions in the global supply chain, higher interest rates, and wars and other conflicts, including the current conflict between Russia and Ukraine; our ability to succeed in a competitive environment, including by developing new products and service offerings and preserving our existing products and market share as well as repositioning our business in the face of customer preference, technological, and other change, such as evolving return-to-office and hybrid working trends; failure of our customers, vendors, and logistics partners to perform their contractual obligations to us; our ability to attract, train, and retain key personnel; execution risks around our Reinvention; the risk of breaches of our security systems due to cyber, malware, or other intentional attacks that could expose us to liability, litigation, regulatory action or damage our reputation; our ability to obtain adequate pricing for our products and services and to maintain and improve our cost structure; changes in economic and political conditions, licensing requirements, and tax laws in the United States and in the foreign countries in which we do business; the risk that multi-year contracts with governmental entities could be terminated prior to the end of the contract term and that civil or criminal penalties and administrative sanctions could be imposed on us if we fail to comply with the terms of such contracts and applicable law; interest rates, cost of capital, and access to credit markets; risks related to our indebtedness; the imposition of new or incremental trade protection measures such as tariffs and import or export restrictions; funding requirements associated with our employee pension and retiree health benefit plans; changes in foreign currency exchange rates; the risk that we may be subject to new or heightened regulatory or operation risks as a result of our, or third parties,’ use or anticipated use of artificial intelligence technologies; the risk that our operations and products may not comply with applicable worldwide regulatory requirements, particularly environmental regulations and directives and anti-corruption laws; the outcome of litigation and regulatory proceedings to which we may be a party; laws, regulations, international agreements and other initiatives to limit greenhouse gas emissions or relating to climate change, as well as the physical effects of climate change; our ability to successfully integrate the Lexmark business and realize the anticipated benefits thereof, including expected synergies; and other factors that are set forth from time to time in the Company’s Securities and Exchange Commission filings, including the combined Annual Report on Form 10-K of Xerox Holdings and Xerox Corporation.
These forward-looking statements speak only as of the date hereof or of the date to which they refer, and the Company assumes no obligation to update or revise any forward-looking statements as a result of new information or future events or developments, except as required by law.
Note: To receive RSS news feeds, visit https://www.news.xerox.com. For open commentary, industry perspectives and views, visit http://www.linkedin.com/company/xerox or http://www.youtube.com/XeroxCorp.
Xerox® is a trademark of Xerox in the United States and/or other countries.
XEROX HOLDINGS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF LOSS (UNAUDITED)
Three Months Ended
December 31,
Year Ended
December 31,
(in millions, except per-share data)
2025
2024
2025
2024
Revenues
Sales
$
1,068
$
656
$
3,283
$
2,378
Services, maintenance, rentals and other(1)
960
957
3,739
3,843
Total Revenues
2,028
1,613
7,022
6,221
Costs and Expenses
Cost of sales
717
445
2,367
1,562
Cost of services, maintenance, rentals and other(1)
732
666
2,754
2,699
Research, development and engineering expenses
71
47
230
191
Selling, administrative and general expenses
431
377
1,654
1,537
Goodwill impairment
—
—
—
1,058
Restructuring and related costs, net
(2
)
5
66
112
Amortization of intangible assets
33
43
83
73
Divestitures
—
(4
)
(4
)
47
Other expenses, net
107
38
360
158
Total Costs and Expenses
2,089
1,617
7,510
7,437
Loss before Income Taxes(2)
(61
)
(4
)
(488
)
(1,216
)
Income tax expense
12
17
541
105
Net Loss
(73
)
(21
)
(1,029
)
(1,321
)
Less: Preferred stock dividends, net
(3
)
(3
)
(14
)
(14
)
Net Loss attributable to Common Shareholders
$
(76
)
$
(24
)
$
(1,043
)
$
(1,335
)
Basic Loss per Share
$
(0.60
)
$
(0.20
)
$
(8.25
)
$
(10.75
)
Diluted Loss per Share
$
(0.60
)
$
(0.20
)
$
(8.25
)
$
(10.75
)
(1)
Services, maintenance, rentals and other revenues include financing revenue generated from direct and indirectly financed Xerox equipment sale transactions of $29 million and $33 million for the three months ended December 31, 2025 and 2024, respectively, and $126 million and $151 million for the year ended December 31, 2025 and 2024, respectively. Cost of services, maintenance, rentals and other include the related cost of financing of $20 million and $24 million for the three months ended December 31, 2025 and 2024, respectively, and $86 million and $106 million for the year ended December 31, 2025 and 2024, respectively.
(2)
Referred to as “Pre-tax loss” throughout the remainder of this document.
XEROX HOLDINGS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED)
Three Months Ended
December 31,
Year Ended
December 31,
(in millions)
2025
2024
2025
2024
Net Loss
$
(73
)
$
(21
)
$
(1,029
)
$
(1,321
)
Other Comprehensive Income (Loss), Net
Translation adjustments, net
13
(260
)
305
(120
)
Unrealized (losses) gains, net
(2
)
5
(10
)
9
Changes in defined benefit plans, net
135
70
93
88
Other Comprehensive Income (Loss), Net
146
(185
)
388
(23
)
Comprehensive Income (Loss), Net
$
73
$
(206
)
$
(641
)
$
(1,344
)
XEROX HOLDINGS CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(in millions, except share data in thousands)
December 31, 2025
December 31, 2024
Assets
Cash and cash equivalents
$
512
$
576
Accounts receivable (net of allowance of $73 and $69, respectively)
1,148
796
Billed portion of finance receivables (net of allowance of $3 and $2, respectively)
46
48
Finance receivables, net
510
608
Inventories
1,016
695
Other current assets
378
212
Total current assets
3,610
2,935
Finance receivables due after one year (net of allowance of $42 and $55, respectively)
846
1,089
Equipment on operating leases, net
299
245
Land, buildings and equipment, net
390
251
Intangible assets, net
921
236
Goodwill, net
2,194
1,937
Deferred tax assets
81
615
Other long-term assets
1,479
1,057
Total Assets
$
9,820
$
8,365
Liabilities and Equity
Short-term debt and current portion of long-term debt
$
231
$
585
Accounts payable
1,498
1,023
Accrued compensation and benefits costs
235
227
Accrued expenses and other current liabilities
1,267
784
Total current liabilities
3,231
2,619
Long-term debt
4,016
2,814
Pension and other benefit liabilities
1,054
1,088
Post-retirement medical benefits
173
154
Other long-term liabilities
673
386
Total Liabilities
9,147
7,061
Noncontrolling Interests
10
10
Convertible Preferred Stock
214
214
Common stock
128
124
Additional paid-in capital
1,183
1,137
Retained earnings
2,444
3,514
Accumulated other comprehensive loss
(3,311
)
(3,699
)
Xerox Holdings shareholders’ equity
444
1,076
Noncontrolling interests
5
4
Total Equity
449
1,080
Total Liabilities and Equity
$
9,820
$
8,365
Shares of Common Stock Issued and Outstanding
128,044
124,435
XEROX HOLDINGS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
Three Months Ended
December 31,
Year Ended
December 31,
(in millions)
2025
2024
2025
2024
Cash Flows from Operating Activities
Net Loss
$
(73
)
$
(21
)
$
(1,029
)
$
(1,321
)
Adjustments to reconcile Net loss to Net cash provided by operating activities:
Depreciation and amortization
107
97
331
274
Provisions
18
18
85
110
Inventory-related purchase accounting adjustment - noncash
—
—
102
—
Effective settlement of pre-existing relationship between Lexmark and Xerox
—
—
(43
)
—
Net gain on sales of businesses and assets
1
(5
)
(5
)
(8
)
Divestitures
—
(4
)
(4
)
47
Stock-based compensation
12
14
45
52
Goodwill impairment
—
—
—
1,058
Restructuring and asset impairment charges
(2
)
7
67
87
Payments for restructurings
(28
)
(20
)
(69
)
(78
)
Non-service retirement-related costs
21
6
78
80
Contributions to retirement plans
(38
)
(31
)
(161
)
(145
)
(Increase) decrease in accounts receivable and billed portion of finance receivables
(16
)
53
(57
)
71
Decrease (increase) in inventories
111
14
(12
)
(122
)
Increase in equipment on operating leases
(38
)
(29
)
(126
)
(107
)
Decrease in finance receivables
151
167
489
663
Decrease (increase) in other current and long-term assets
17
(30
)
21
(14
)
Increase (decrease) in accounts payable
20
95
24
(48
)
Decrease in accrued compensation
(14
)
—
(53
)
(78
)
(Decrease) increase in other current and long-term liabilities
(16
)
36
42
(47
)
Net change in income tax assets and liabilities
(3
)
(4
)
476
40
Net change in derivative assets and liabilities
(11
)
1
(12
)
10
Other operating, net
(11
)
(13
)
35
(13
)
Net cash provided by operating activities
208
351
224
511
Cash Flows from Investing Activities
Cost of additions to land, buildings, equipment and software
(24
)
(17
)
(91
)
(44
)
Proceeds from sales of businesses and assets
23
8
79
35
Acquisitions, net of cash acquired
—
(161
)
(674
)
(161
)
Other investing, net
(3
)
(2
)
(12
)
(28
)
Net cash used in investing activities
(4
)
(172
)
(698
)
(198
)
Cash Flows from Financing Activities
Net (payments) proceeds on debt
(166
)
(78
)
504
(85
)
Purchases of capped calls
—
—
—
(23
)
Dividends
(6
)
(34
)
(71
)
(141
)
Payments to acquire treasury stock, including fees
—
(5
)
—
(8
)
Other financing, net
(1
)
(5
)
(29
)
(14
)
Net cash (used in) provided by financing activities
(173
)
(122
)
404
(271
)
Effect of exchange rate changes on cash, cash equivalents and restricted cash
(1
)
(16
)
4
(28
)
Increase (decrease) in cash, cash equivalents and restricted cash
30
41
(66
)
14
Cash, cash equivalents and restricted cash at beginning of period
535
590
631
617
Cash, Cash Equivalents and Restricted Cash at End of Period
$
565
$
631
$
565
$
631
Fourth Quarter 2025 Overview
Fourth quarter results continued to be impacted by macroeconomic challenges, including ongoing uncertainty related to tariffs and government funding. These headwinds weighted on transactional Print equipment sales while the recent increase in DRAM (dynamic random-access memory) prices have increased product costs and are having the greatest impact on our IT Solutions business. We anticipate a modest impact on our Print business in the first half of the year with more significant impact on pricing and availability in the second half of the year. We are taking actions to mitigate these cost pressures.
While macroeconomic headwinds continue to impact results, activity picked up following the end of the government shutdown, page volume declines moderated, and branded supplies usage was stable with revenue flat year-over-year, excluding Lexmark. We enter 2026 with a higher pipeline than this time last year, and cancellation rates and renewal rates improved in 2025, giving us confidence in improving underlying trends in 2026. In addition, actions undertaken through Reinvention, have provided Xerox with a flexible, simplified operating structure, allowing the company to more quickly adapt in an uncertain operating landscape.
Equipment sales of $485 million in the fourth quarter 2025 increased 23.4% in actual currency, or 21.1% in constant currency1, as compared to the fourth quarter 2024, and included a 35.2-percentage point benefit from the acquisition of Lexmark. Total equipment installations increased 96.4% including Lexmark, offset by legacy Xerox declines concentrated in the high-end and mid-range level equipment categories. Excluding Lexmark, equipment sales declined 11.8% in actual currency reflecting lower installations, including the exit of certain production print manufacturing operations in prior years. On a pro forma2 basis, fourth quarter 2025 revenue declined 10.4%, due to the impacts noted above, as well as backlog3 fluctuations.
Post-sale revenue of approximately $1.54 billion increased 26.5% in actual currency, or 24.3% in constant currency1, as compared to fourth quarter 2024. Fourth quarter 2025 post-sale revenue included a 30.9-percentage point benefit and a 4.5-percentage point benefit from the acquisitions of Lexmark and ITsavvy, respectively. Excluding these acquisitions, post sale revenue declined 8.9-percentage points in actual currency reflecting lower managed print services4 revenue, driven by lower outsourcing, print services, and rental revenue. Post sale revenue was also adversely affected by intentional reductions in non-strategic revenue, such as paper and financing revenue, and the effects of geographic and offering simplification. These impacts were partially offset by the benefits of currency and a modest increase in supplies revenue. On a pro forma2 basis, fourth quarter 2025 revenue decreased 8.6%, due to the impacts noted above, partially offset by the benefit of higher sales to distributors in the fourth quarter 2025.
Pre-tax (loss) of $(61) million for the fourth quarter 2025 increased by $57 million as compared to pre-tax (loss) of $(4) million in the fourth quarter 2024. Pre-tax (loss) margin of (3.0)% increased 2.8-percentage points as compared to fourth quarter 2024 pre-tax (loss) margin of (0.2)% and included a 1.3-percentage point benefit from the Lexmark acquisition and a 0.5-percentage point benefit from ITsavvy. The increase in the fourth quarter 2025 pre-tax (loss) margin is primarily due to higher Other expenses, net, which included higher non-financing interest expense related to the recently completed borrowings in support of the Lexmark acquisition, repayment of existing borrowings, and general corporate purposes, higher RD&E and SAG due to the Lexmark acquisition and ITsavvy, as well as the impact of product cost increases and incremental tariff-related costs. These impacts were partially offset by higher gross profit, benefits associated with Reinvention-related cost and productivity actions, and recent pricing initiatives. On a pro forma2 basis fourth quarter 2025 pre-tax (loss) improved by $99 million, while fourth quarter 2025 pre-tax (loss) margin improved by 4.2-percentage points mainly due to the impacts noted above.
Adjusted1 operating income of $102 million decreased by $2 million as compared to fourth quarter 2024 primarily due to higher product costs and incremental tariff-related costs, lower financing revenue, as well as unfavorable revenue mix driven by lower outsourcing revenue. These impacts were partially offset by productivity and cost savings related to the Company's Reinvention, as well as recent price increases which helped mitigate higher tariffs. On a pro forma2 basis fourth quarter 2025 adjusted2 operating income decreased $94 million, due primarily to the impacts noted above.
We expect revenue above $7.5 billion in actual currency, adjusted1 operating income in the range of $450 million to $500 million, and free cash flow1 of approximately $250 million in 2026. Guidance reflects approximately $50 million of revenue headwinds and approximately $40 million of adjusted1 operating income headwinds from Xerox Financial Services, primarily due to forward flow dynamics. Free cash flow1 guidance reflects approximately $335 million of forward flow benefits, $290 million of net interest expense, and $160 million of pension contributions.
Lexmark Acquisition
On July 1, 2025, Xerox Corporation completed its previously announced acquisition of all of the issued and outstanding equity securities of Lexmark International II, LLC (Lexmark) from Ninestar Group Company Limited (the Seller), for total consideration transferred from Lexmark of approximately $768 million, which included Cash and cash equivalents acquired of $93 million. As part of the Lexmark Acquisition, we effectively settled a pre-existing net payable of $43 million with Lexmark. The settlement is presented as an operating cash outflow to reflect the nature of the underlying net liability.
We continue to expect over $1/share of accretion associated with the Lexmark transaction, despite a slightly higher than expected cost of funding. Based on U.S. tariffs currently proposed, we expect no material impact from tariffs on Lexmark’s results. Lexmark has a large manufacturing facility in Juarez, Mexico that can support all expected imports of branded product into the U.S. market on a USMCA compliant basis.
Reportable Segment Change
Beginning in the first quarter of 2025, the Company made a change to its reportable segments - Print and Other, and IT Solutions to align with a change in how the Chief Operating Decision Maker, our Chief Executive Officer, allocates resources and assesses performance against the Company’s key growth strategies. Prior to this change, the company had two reportable segments - Print and Other, and XFS. As a result of this change, prior period reportable segment results have been conformed to reflect the Company’s current reportable segments. See APPENDIX II - Reportable Segments.
(1)
Refer to the “Non-GAAP Financial Measures” section for an explanation of the non-GAAP financial measure.
(2)
Refer to the “Pro Forma Basis” section for an explanation of this measure. Reflects the inclusion of Lexmark's estimated results from October 1, 2024 through December 31, 2024 and ITsavvy's estimated results from October 1, 2024 through November 19, 2024. ITsavvy's actual results are included in Xerox's reported results beginning on November 20, 2024, the effective date of the acquisition.
(3)
Order backlog is measured as the value of unfulfilled sales orders, shipped and non-shipped, received from our customers waiting to be installed, including orders with future installation dates. It includes printing devices as well as IT hardware.
(4)
Previously known as contractual print services, and includes revenues from service, maintenance and rentals. IT solutions and digital services are not included in managed print services.
Financial Review
Revenues
Three Months Ended
December 31,
% of Total Revenue
(in millions)
2025
2024
%
Change
CC %
Change
Pro
Forma(1) %
Change
2025
2024
Equipment sales
$
485
$
393
23.4
%
21.1
%
(10.4
)%
24
%
24
%
Post sale revenue
1,543
1,220
26.5
%
24.3
%
(8.6
)%
76
%
76
%
Total Revenue
$
2,028
$
1,613
25.7
%
23.6
%
(9.0
)%
100
%
100
%
Reconciliation to Condensed Consolidated Statements of Loss:
Sales
$
1,068
$
656
62.8
%
60.4
%
(9.1
)%
Less: IT Products(2)
(100
)
(74
)
35.1
%
36.1
%
(14.5
)%
Less: Supplies, paper and other sales
(483
)
(189
)
155.6
%
152.0
%
(6.6
)%
Equipment Sales
$
485
$
393
23.4
%
21.1
%
(10.4
)%
Services, maintenance, rentals and other(3),(4)
$
960
$
957
0.3
%
(1.7
)%
(8.9
)%
Add: IT Products(2)
100
74
35.1
%
36.1
%
(14.5
)%
Add: Supplies, paper and other sales
483
189
155.6
%
152.0
%
(6.6
)%
Post Sale Revenue
$
1,543
$
1,220
26.5
%
24.3
%
(8.6
)%
Segments
Print and Other
$
1,873
$
1,500
24.9
%
22.4
%
(9.0
)%
92
%
93
%
IT Solutions
158
114
38.6
%
38.9
%
(8.1
)%
8
%
7
%
Intersegment elimination (5)
(3
)
(1
)
NM
NM
NM
—
%
—
%
Total Revenue(6)
$
2,028
$
1,613
25.7
%
23.6
%
(9.0
)%
100
%
100
%
CC - See “Constant Currency” in the Non-GAAP Financial Measures section for a description of constant currency.
(1)
Refer to the “Pro Forma Basis” section for an explanation of this measure. Reflects the inclusion of Lexmark's estimated results from October 1, 2024 through December 31, 2024 and ITsavvy's estimated results from October 1, 2024 through November 19, 2024. ITsavvy's actual results are included in Xerox's reported results beginning on November 20, 2024, the effective date of the acquisition.
(2)
IT Products reflect IT hardware, software solutions and services, provided by the IT Solutions segment. Refer to Reportable Segments - IT Solutions, for further information.
(3)
Services, maintenance, rentals and other revenues include financing revenue generated from direct and indirectly financed Xerox equipment sale transactions of $29 million and $33 million for the three months ended December 31, 2025 and 2024, respectively.
(4)
Services, maintenance, rentals and other revenue include IT services support of $55 million and $39 million for the three months ended December 31, 2025 and 2024, respectively, provided by our IT Solutions segment.
(5)
Reflects primarily IT hardware, software solutions and services, sold by the IT Solutions segment to the Print and Other segment.
(6)
Refer to Appendix II, Reportable Segments, for definitions.
Costs, Expenses and Other Income
Summary of Key Financial Ratios
The following is a summary of key financial ratios used to assess our performance:
Three Months Ended
December 31,
(in millions)
2025
2024
B/(W)
Pro Forma(1)
B/(W)
Gross Profit
$
579
$
502
$
77
$
(136
)
RD&E
71
47
(24
)
9
SAG
431
377
(54
)
50
Equipment Gross Margin
12.0
%
27.4
%
(15.4
)
pts.
(2.8
)
pts.
Post sale Gross Margin
33.7
%
32.4
%
1.3
pts.
(3.9
)
pts.
Total Gross Margin
28.6
%
31.1
%
(2.5
)
pts.
(3.5
)
pts.
RD&E as a % of Revenue
3.5
%
2.9
%
(0.6
)
pts.
0.1
pts.
SAG as a % of Revenue
21.3
%
23.4
%
2.1
pts.
0.3
pts.
Pre-tax (Loss)
$
(61
)
$
(4
)
$
(57
)
$
99
Pre-tax (Loss) Margin
(3.0
)%
(0.2
)%
(2.8
)
pts.
4.2
pts.
Adjusted(2) Operating Income
$
102
$
104
$
(2
)
$
(94
)
Adjusted(2) Operating Income Margin
5.0
%
6.4
%
(1.4
)
pts.
(3.8
)
pts.
(1)
Refer to the “Pro Forma Basis” section for an explanation of this measure. Reflects the inclusion of Lexmark's estimated results from October 1, 2024 through December 31, 2024 and ITsavvy's estimated results from October 1, 2024 through November 19, 2024. ITsavvy's actual results are included in Xerox's reported results beginning on November 20, 2024, the effective date of the acquisition.
(2)
Refer to the “Non-GAAP Financial Measures” section for an explanation of the non-GAAP financial measure.
Other Expenses, Net
Three Months Ended
December 31,
(in millions)
2025
2024
Non-financing interest expense
$
80
$
31
Interest income
(3
)
(4
)
Non-service retirement-related costs
21
6
Currency losses, net
6
—
Gains on sales of businesses and assets
—
(5
)
Litigation matters
6
(1
)
Forfeitures from defined contribution plan
(10
)
—
All other expenses, net
7
11
Other expenses, net
$
107
$
38
Reportable Segments
Our business is organized to ensure we focus on efficiently managing operations while serving our customers and the markets in which we operate. We have two operating and reportable segments – Print and Other and IT Solutions.
Segment Review
Three Months Ended December 31,
(in millions)
Print and Other
IT Solutions
Total Segment
Intersegment
Elimination(1)
Corporate
Other(2)
Total
2025
Revenues
$
1,873
$
158
$
2,031
$
(3
)
$
—
$
2,028
% of Total Revenue
92
%
8
%
100
%
Segment Profit
$
109
$
9
$
118
—
$
(16
)
$
102
Segment Margin(3)
5.8
%
5.8
%
5.0
%
2024
Revenues
$
1,500
$
114
$
1,614
$
(1
)
$
—
$
1,613
% of Total Revenue
93
%
7
%
100
%
Segment Profit
$
128
$
—
$
128
—
$
(24
)
$
104
Segment Margin(3)
8.5
%
—
%
6.4
%
2024 Pro Forma(4)
Revenues
$
2,058
$
172
$
2,230
$
(1
)
$
—
$
2,229
% of Total Revenue
92
%
8
%
100
%
Segment Profit
$
220
$
3
$
223
—
$
(27
)
$
196
Segment Margin(3)
10.7
%
1.7
%
NM
8.8
%
(1)
Reflects primarily IT hardware, software solutions and services, sold by the IT Solutions segment to the Print and Other segment.
(2)
Corporate Other reflects certain administrative and general expenses, which primarily relate to corporate functions, and are not allocated to either of our reportable segments.
(3)
Segment margin is based on total revenue. IT Solutions segment margin is net of Intersegment Elimination.
(4)
Refer to the “Pro Forma Basis” section for an explanation of this measure. Reflects the inclusion of Lexmark's estimated results from October 1, 2024 through December 31, 2024 and ITsavvy's estimated results from October 1, 2024 through November 19, 2024. ITsavvy's actual results are included in Xerox's reported results beginning on November 20, 2024, the effective date of the acquisition.
Print and Other
The Print and Other segment includes the design, development and sale of document management systems, supplies and services, as well as financing and technology-related offerings, digital and print-related software products and services. The segment also includes the delivery of managed services that involve a continuum of solutions and services that help our customers optimize their print and communications infrastructure, apply automation and simplification to maximize productivity, and ensure the highest levels of security. This segment also includes our recent Lexmark Acquisition. In addition, the segment includes Xerox Financial Services, a global financing solutions provider, primarily enabling the sale of our equipment and services (previously reported XFS segment), which includes commissions and other payments for the exclusive right to provide lease financing for Xerox products.
Revenue
Three Months Ended
December 31,
(in millions)
2025
2024
%
Change
Pro
Forma(1) %
Change
Equipment sales
$
485
$
393
23.4
%
(10.4
)%
Post sale revenue (2)
1,388
1,107
25.4
%
(8.5
)%
Total Print and Other Revenue
$
1,873
$
1,500
24.9
%
(9.0
)%
(1)
Refer to the “Pro Forma Basis” section for an explanation of this measure. Reflects the inclusion of Lexmark's estimated results from October 1, 2024 through December 31, 2024 and ITsavvy's estimated results from October 1, 2024 through November 19, 2024. ITsavvy's actual results are included in Xerox's reported results beginning on November 20, 2024, the effective date of the acquisition.
(2)
Post sale revenue includes financing revenue generated from direct and indirectly financed Xerox equipment sale transactions of $29 million and $33 million for the fourth quarter 2025 and 2024, respectively.
Detail by product group is shown below.
Three Months Ended
December 31,
% of Equipment Sales
As Reported
Pro
Forma(1)
As Reported
Pro
Forma(1)
(in millions)
2025
2024
%
Change
CC %
Change
%
Change
2025
2024
2024
Entry
$
168
$
60
180.0
%
180.3
%
102.4
%
35
%
15
%
15
%
Mid-range
258
260
(0.8
)%
(2.3
)%
(27.9
)%
53
%
66
%
66
%
High-end
52
68
(23.5
)%
(24.6
)%
(44.7
)%
11
%
17
%
18
%
Other
7
5
40.0
%
40.0
%
16.7
%
1
%
2
%
1
%
Equipment Sales (1)
$
485
$
393
23.4
%
21.1
%
(10.4
)%
100
%
100
%
100
%
CC - See “Constant Currency” in the Non-GAAP Financial Measures section for a description of constant currency.
(1)
Refer to Appendix II, Reportable Segments, for definitions.
IT Solutions
The IT Solutions segment provides clients with global infrastructure technology solutions, with a focus on delivering business outcomes through a frictionless sales and service delivery experience. IT Solutions’ offerings include the provision of hardware, software and associated services as well as product lifecycle, deployment and network monitoring services, and other managed IT services. It is comprised of our ITsavvy acquisition, as well as our Canadian IT Services provider Powerland, and our legacy XBS IT solutions.
Revenue
Three Months Ended
December 31,
(in millions)
2025
2024
%
Change
Pro
Forma(1) %
Change
IT Products(2)
$
100
$
74
35.1
%
(14.5
)%
IT Services(3)
55
39
41.0
%
1.9
%
Intersegment revenue (4)
3
1
NM
NM
Total IT Solutions
$
158
$
114
38.6
%
(8.1
)%
(1)
Refer to the “Pro Forma Basis” section for an explanation of this measure. Reflects the inclusion of Lexmark's estimated results from October 1, 2024 through December 31, 2024 and ITsavvy's estimated results from October 1, 2024 through November 19, 2024. ITsavvy's actual results are included in Xerox's reported results beginning on November 20, 2024, the effective date of the acquisition.
(2)
IT Products reflect the sale of IT hardware and software solutions. Hardware product sales include the sale of notebooks, network communications and other endpoint devices, desktop computers and other IT hardware. Software product sales include deployments of cloud and security solutions, endpoint security application suites, operating systems, other applications and network management solutions.
(3)
IT Services reflect revenue associated with the implementation of IT solutions, including product lifecycle, deployment and network monitoring services, and managed services.
(4)
Reflects primarily IT hardware, software solutions and services, sold by the IT Solutions segment to the Print and Other segment.
2025 Segment Review
The following are our 2025 segment results on a pro forma1 basis reflecting the recent acquisition of Lexmark. Pro forma1 segment results for the third and fourth quarter 2025 are not applicable as Lexmark's results are included in our reported results as of July 1, 2025, the effective date of the acquisition.
(in millions)
Print and
Other
IT
Solutions
Total
Segment
Intersegment
Elimination(2)
Corporate
Other(3)
Total
Q1 2025
Revenues
$
1,747
$
164
$
1,911
$
(1
)
$
—
$
1,910
Segment Profit
70
5
75
—
(28
)
47
Segment Margin(4)
4.0
%
3.1
%
2.5
%
Q2 2025
Revenues
$
1,854
$
213
$
2,067
$
(3
)
$
—
$
2,064
Segment Profit
99
10
109
—
(19
)
90
Segment Margin(4)
5.3
%
4.8
%
4.4
%
2025
Revenues
$
3,601
$
377
$
3,978
$
(4
)
$
—
$
3,974
Segment Profit
169
15
184
—
(47
)
137
Segment Margin(4)
4.7
%
4.0
%
3.4
%
(1)
Refer to the “Pro Forma Basis” section for an explanation of this measure. Reflects the inclusion of Lexmark's estimated results from October 1, 2024 through December 31, 2024 and ITsavvy's estimated results from October 1, 2024 through November 19, 2024. ITsavvy's actual results are included in Xerox's reported results beginning on November 20, 2024, the effective date of the acquisition.
(2)
Reflects primarily IT hardware, software solutions and services, sold by the IT Solutions segment to the Print and Other segment.
(3)
Corporate Other reflects certain administrative and general expenses, which primarily relate to corporate functions, and are not allocated to either of our reportable segments.
(4)
Segment margin is based on total revenue.
Forward-Looking Statements
This press release and other written or oral statements made from time to time by management contain “forward looking statements” as defined in the Private Securities Litigation Reform Act of 1995 and involve certain risks and uncertainties. The words “anticipate”, “believe”, “estimate”, “expect”, “intend”, “will”, “would”, “could”, “can”, “should”, “targeting”, “projecting”, “driving”, “future”, “plan”, “predict”, “may” and similar expressions are intended to identify forward-looking statements. The Company’s actual results may differ significantly from the results discussed in the forward-looking statements. These statements reflect management’s current beliefs and assumptions and are subject to a number of other factors that may cause actual results to differ materially.
Such factors include but are not limited to: applicable market conditions; global macroeconomic conditions, including inflation, slower growth or recession, delays or disruptions in the global supply chain, higher interest rates, and wars and other conflicts, including the current conflict between Russia and Ukraine; our ability to succeed in a competitive environment, including by developing new products and service offerings and preserving our existing products and market share as well as repositioning our business in the face of customer preference, technological, and other change, such as evolving return-to-office and hybrid working trends; failure of our customers, vendors, and logistics partners to perform their contractual obligations to us; our ability to attract, train, and retain key personnel; execution risks around our Reinvention; the risk of breaches of our security systems due to cyber, malware, or other intentional attacks that could expose us to liability, litigation, regulatory action or damage our reputation; our ability to obtain adequate pricing for our products and services and to maintain and improve our cost structure; changes in economic and political conditions, licensing requirements, and tax laws in the United States and in the foreign countries in which we do business; the risk that multi-year contracts with governmental entities could be terminated prior to the end of the contract term and that civil or criminal penalties and administrative sanctions could be imposed on us if we fail to comply with the terms of such contracts and applicable law; interest rates, cost of capital, and access to credit markets; risks related to our indebtedness; the imposition of new or incremental trade protection measures such as tariffs and import or export restrictions; funding requirements associated with our employee pension and retiree health benefit plans; changes in foreign currency exchange rates; the risk that we may be subject to new or heightened regulatory or operation risks as a result of our, or third parties,’ use or anticipated use of artificial intelligence technologies; the risk that our operations and products may not comply with applicable worldwide regulatory requirements, particularly environmental regulations and directives and anti-corruption laws; the outcome of litigation and regulatory proceedings to which we may be a party; laws, regulations, international agreements and other initiatives to limit greenhouse gas emissions or relating to climate change, as well as the physical effects of climate change; our ability to successfully integrate the Lexmark business and realize the anticipated benefits thereof, including expected synergies; and other factors that are set forth from time to time in the Company’s Securities and Exchange Commission filings, including the combined Annual Report on Form 10-K of Xerox Holdings and Xerox Corporation.
These forward-looking statements speak only as of the date hereof or of the date to which they refer, and the Company assumes no obligation to update or revise any forward-looking statements as a result of new information or future events or developments, except as required by law.
Non-GAAP Financial Measures
We have reported our financial results in accordance with generally accepted accounting principles (GAAP). In addition, we have discussed our financial results using the non-GAAP measures described below. We believe these non-GAAP measures allow investors to better understand the trends in our business and to better understand and compare our results. Management regularly uses our supplemental non-GAAP financial measures internally to understand, manage and evaluate our business and make operating decisions. These non-GAAP measures are among the primary factors management uses in planning for and forecasting future periods. Compensation of our executives is based in part on the performance of our business based on these non-GAAP measures. Accordingly, we believe it is necessary to adjust several reported amounts, determined in accordance with GAAP, to exclude the effects of certain items as well as their related income tax effects.
However, these non-GAAP financial measures should be viewed in addition to, and not as a substitute for, the Company’s reported results prepared in accordance with GAAP. Our non-GAAP financial measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures and should be read only in conjunction with our Condensed Consolidated Financial Statements prepared in accordance with GAAP.
Reconciliations of these non-GAAP financial measures to the most directly comparable financial measures calculated and presented in accordance with GAAP are set forth below, as well as in the fourth quarter 2025 presentation slides available at www.xerox.com/investor.
Adjusted Earnings Measures
Adjusted Net Income and Earnings per share (Adjusted EPS)
Adjusted Effective Tax Rate
The above measures were adjusted for the following items:
Restructuring and related costs, net: Restructuring and related costs, net include restructuring and asset impairment charges as well as costs associated with our transformation programs beyond those normally included in restructuring and asset impairment charges. Restructuring consists of costs primarily related to severance and benefits paid to employees pursuant to formal restructuring and workforce reduction plans. Asset impairment includes costs incurred for those assets sold, abandoned or made obsolete as a result of our restructuring actions, exiting from a business or other strategic business changes. Additional costs for our transformation programs are primarily related to the implementation of strategic actions and initiatives and include third-party professional service costs as well as one-time incremental costs. All of these costs can vary significantly in terms of amount and frequency based on the nature of the actions as well as the changing needs of the business. Accordingly, due to that significant variability, we exclude these charges since we do not believe they provide meaningful insight into our current or past operating performance nor do we believe they are reflective of our expected future operating expenses as such charges are expected to yield future benefits and savings with respect to our operational performance.
Amortization of intangible assets: The amortization of intangible assets is driven by our acquisition activity which can vary in size, nature and timing as compared to other companies within our industry and from period to period. The use of intangible assets contributed to our revenues earned during the periods presented and will contribute to our future period revenues as well. Amortization of intangible assets will recur in future periods.
Non-service retirement-related costs: Our defined benefit pension and retiree health costs include several elements impacted by changes in plan assets and obligations that are primarily driven by changes in the debt and equity markets as well as those that are predominantly legacy in nature and related to employees who are no longer providing current service to the Company (e.g. retirees and ex-employees). These elements include (i) interest cost, (ii) expected return on plan assets, (iii) amortization of prior plan amendments, (iv) amortized actuarial gains/losses and (v) the impacts of any plan settlements/curtailments. Accordingly, we consider these elements of our periodic retirement plan costs to be outside the operational performance of the business or legacy costs and not necessarily indicative of current or future cash flow requirements. This approach is consistent with the classification of these costs as non-operating in Other expenses, net. Adjusted earnings will continue to include the service cost elements of our retirement costs, which is related to current employee service as well as the cost of our defined contribution plans.
Transaction and related costs, net: Transaction and related costs, net are costs and expenses primarily associated with certain major or significant strategic M&A projects. These costs are primarily for third-party legal, accounting, consulting and similar types of professional services as well as potential legal settlements that may arise in connection with those M&A transactions. These costs are considered incremental to our normal operating charges and were incurred or are expected to be incurred solely as a result of the planned transactions. Accordingly, we exclude these expenses from our Adjusted Earnings Measures in order to evaluate our performance on a comparable basis.
Discrete, unusual or infrequent items: We exclude these item(s), when applicable, given their discrete, unusual or infrequent nature and their impact on the comparability of our results for the period to prior periods and future expected trends.
Goodwill impairment charge
Inventory-related impact - exit of certain Production Print manufacturing operations
Divestitures
Loss on early extinguishment of debt
Reinvention-related costs
Lexmark - settlement of pre-existing employment agreements
Lexmark - inventory-related purchase accounting adjustment
Lexmark - fixed asset-related purchase accounting adjustment
Lexmark acquisition financing - escrow interest, net
Commitment fee expense
PARC donation - income tax
Deferred tax asset valuation allowance
Adjusted Operating Income and Margin
We calculate and utilize adjusted operating income and margin measures by adjusting our reported pre-tax (loss) and margin amounts. In addition to the costs and expenses noted above as adjustments for our adjusted earnings measures, adjusted operating income and margin also exclude the remaining amounts included in Other expenses, net, which are primarily non-financing interest expense and certain other non-operating costs and expenses. We exclude these amounts in order to evaluate our current and past operating performance and to better understand the expected future trends in our business.
Adjusted Gross Profit and Margin
We calculate non-GAAP gross Profit and Margin by excluding the inventory impact related to the exit of certain Production Print manufacturing operations, included in Cost of services, maintenance, rentals and other, as well as fixed asset and inventory-related purchase accounting adjustments related to the recent acquisition of Lexmark.
Constant Currency (CC)
To better understand trends in our business, we believe that it is helpful to adjust revenue to exclude the impact of changes in the translation of foreign currencies into U.S. dollars. We refer to this adjusted revenue as “constant currency.” This impact is calculated by translating current period activity in local currency using the comparable prior year period's currency translation rate. This impact is calculated for all countries where the functional currency is not the U.S. dollar. Management believes the constant currency measure provides investors an additional perspective on revenue trends. Currency impact can be determined as the difference between actual growth rates and constant currency growth rates.
Free Cash Flow
To better understand trends in our business, we believe that it is helpful to adjust operating cash flows by subtracting amounts related to capital expenditures. Management believes this measure gives investors an additional perspective on cash flow from operating activities in excess of amounts required for reinvestment. It provides a measure of our ability to fund acquisitions and pay dividends.
Adjusted Net Income and EPS reconciliation
Three Months Ended December 31,
Year Ended December 31,
2025
2024
2025
2024
(in millions, except per share amounts)
Net
(Loss)
Diluted
EPS
Net (Loss)
Income
Diluted
EPS
Net
(Loss)
Diluted
EPS
Net (Loss)
Income
Diluted
EPS
Reported(1)
$
(73
)
$
(0.60
)
$
(21
)
$
(0.20
)
$
(1,029
)
$
(8.25
)
$
(1,321
)
$
(10.75
)
Adjustments:
Goodwill Impairment
—
—
—
1,058
Inventory-related impact - exit of certain production print manufacturing operations
4
7
24
51
Restructuring and related costs, net
(2
)
5
66
112
Amortization of intangible assets
33
43
83
73
Divestitures
—
(4
)
(4
)
47
Loss on early extinguishment of debt
1
1
5
(2
)
Non-service retirement-related costs
21
6
78
80
Reinvention-related costs
5
12
17
12
Transaction and related costs, net
2
7
34
(31
)
Lexmark - settlement of pre-existing employment agreements
1
—
25
—
Lexmark - inventory-related purchase accounting adjustment(2)
—
—
102
—
Lexmark - fixed asset-related purchase accounting adjustment
13
—
29
—
Lexmark acquisition financing - escrow interest, net (3)
—
—
12
—
Commitment fee expense(4)
—
—
22
—
Goodwill Impairment Income Tax
—
—
—
(43
)
PARC Donation Income Tax
—
—
20
—
Deferred tax asset valuation allowance(5)
—
8
517
169
Income tax on adjustments(6)
(13
)
(15
)
(63
)
(70
)
Adjusted
$
(8
)
$
(0.10
)
$
49
$
0.36
$
(62
)
$
(0.60
)
$
135
$
0.97
Dividends on preferred stock used in adjusted EPS calculation(7)
$
3
$
3
$
14
$
14
Weighted average shares for adjusted EPS(7)
128
127
126
126
Fully diluted shares at end of period(8)
128
(1)
Full-year 2025 Net (Loss) and Diluted (Loss) per Share include the following: Q1-25 charge to tax expense related to the establishment of $59 million of valuation allowances, or $0.47 per diluted share, and $14 million of after-tax financing-related charges, or $0.14 per diluted share, related to our debt offering; Q2-25 charge of $22 million ($17 million after-tax) of interest and financing-related charges, net, or $0.17 per diluted share, related to recently completed borrowings in support of the Lexmark acquisition financing, repayment of existing borrowings, and general corporate purposes, and $28 million of tax expense, or $0.22 per diluted share, related to interest expense that was not deductible according to tax guidelines in place as of June 30, 2025; Q3-25 inventory-related purchase accounting adjustment, related to the recent acquisition of Lexmark, of $85 million ($102 million pre-tax) or $0.67 per diluted share, and a tax expense charge of $467 million, or $3.69 per diluted share, related to the establishment of a valuation allowance against certain deferred tax assets to reflect their realizability. Fourth quarter 2024 Net (Loss) and Diluted (Loss) per Share, include a $37 million pre-tax ($28 million after-tax) write-off of intangibles, or $0.22 per share, and $19 million of pre-tax ($15 million after-tax) Reinvention and transaction-related costs, net or $0.12 per share. Full-year 2024 Net (Loss) and Diluted (Loss) per Share include the following: Q1-24 $100 million after-tax Reinvention-related charge, or $0.81 per share, primarily related to the exit of certain Production Print manufacturing operations and geographic simplification; Q2-24 $23 million ($17 million after-tax), or $0.14 per share, related to insurance proceeds from a legal settlement for the reimbursement of certain legal and other professional costs, associated with the terminated proposal to acquire HP Inc. in early 2020; Q3-24 an approximately $1.0 billion after-tax (approximately $1.1 billion pre-tax) non-cash goodwill impairment charge, or $8.17 per diluted share, a tax expense charge of $161 million, or $1.30 per diluted share, related to the establishment of a valuation allowance against certain deferred tax assets to reflect their realizability; Q4-24 $37 million pre-tax ($28 million after-tax) write-off of intangibles, or $0.22 per share, and $19 million of pre-tax ($15 million after-tax) Reinvention and transaction-related costs, net or $0.12 per share. The tax expense charges related to the establishment of valuation allowances in the third quarter 2025 and 2024, respectively, were excluded due to their unique nature and significant impacts which are not considered part of our core operations.
(2)
Reflects a purchase accounting adjustment related to the recent acquisition of Lexmark, for cost associated with a net inventory write up.
(3)
Reflects net interest expense on net proceeds received from debt issuances which were placed in escrow to fund the Lexmark Acquisition.
(4)
Primarily reflects fees related to recently completed borrowings in support of the Lexmark acquisition financing, repayment of existing borrowings, and general corporate purposes, which includes: the private offering of $400 million in aggregate principal amount of 10.250% Senior Secured First Lien Notes due 2030 and $500 million aggregate principal amount of 13.500% Senior Secured Second Lien Notes Due in 2031; the private offering of $250 million aggregate principal amount of 13.00% Senior Notes due 2030; and an incremental term loan borrowing of $327 million under the First Lien Term Loan Credit Agreement.
(5)
Reflects the establishment of a valuation allowance against certain deferred tax assets to reflect their realizability.
(6)
Refer to Adjusted Effective Tax Rate reconciliation.
(7)
For those periods that include the preferred stock dividend, the average shares for the calculations of diluted EPS exclude the 7 million shares associated with our Series A convertible preferred stock.
(8)
Reflects common shares outstanding at December 31, 2025, plus potential dilutive common shares used for the calculation of adjusted diluted EPS for the fourth quarter 2025. Excludes potentially dilutive common shares associated with our Series A convertible preferred stock, as well shares granted under stock-based compensation programs, all of which were anti-dilutive for the fourth quarter 2025.
Adjusted Effective Tax Rate reconciliation
Three Months Ended December 31,
2025
2024
(in millions)
Pre-Tax
(Loss)
Income
Income Tax
Expense
Effective Tax
Rate
Pre-Tax
(Loss)
Income
Income Tax
Expense
Effective Tax
Rate
Reported(1)
$
(61
)
$
12
(19.7
)%
$
(4
)
$
17
(425.0
)%
Deferred tax asset valuation allowance(2)
—
—
—
(8
)
Non-GAAP adjustments(2)
78
13
77
15
Adjusted
$
17
$
25
147.1
%
$
73
$
24
32.9
%
Year Ended December 31,
2025
2024
(in millions)
Pre-Tax
(Loss)
Income
Income Tax
Expense
Effective Tax
Rate
Pre-Tax
(Loss)
Income
Income Tax
Expense
Effective Tax
Rate
Reported(1)
$
(488
)
$
541
(110.9
)%
$
(1,216
)
$
105
(8.6
)%
Goodwill impairment
—
—
1,058
43
Income tax on PARC donation(2)
—
(20
)
—
—
Deferred tax asset valuation allowance(2)
—
(517
)
—
(169
)
Non-GAAP adjustments(2)
493
63
342
70
Adjusted
$
5
$
67
1,340.0
%
$
184
$
49
26.6
%
(1)
Pre-tax (loss) and income tax expense.
(2)
Refer to Adjusted Net Income and EPS reconciliation for details.
Adjusted Operating Income and Margin reconciliation
Three Months Ended December 31,
2025
2024
(in millions)
(Loss)
Profit
Revenue
Margin
(Loss)
Profit
Revenue
Margin
Reported(1)
$
(73
)
$
2,028
$
(21
)
$
1,613
Income tax expense
12
17
Pre-tax loss
$
(61
)
$
2,028
(3.0
)%
$
(4
)
$
1,613
(0.2
)%
Adjustments:
Inventory-related impact - exit of certain production print manufacturing operations
4
7
Lexmark - fixed asset-related purchase accounting adjustment
13
—
Restructuring and related costs, net
(2
)
5
Amortization of intangible assets
33
43
Divestitures
—
(4
)
Reinvention-related costs
5
12
Transaction and related costs, net
2
7
Lexmark - settlement of pre-existing employment agreements
1
—
Other expenses, net (2)
107
38
Adjusted
$
102
$
2,028
5.0
%
$
104
$
1,613
6.4
%
Year Ended December 31,
2025
2024
(in millions)
(Loss)
Profit
Revenue
Margin
(Loss)
Profit
Revenue
Margin
Reported(1)
$
(1,029
)
$
7,022
$
(1,321
)
$
6,221
Income tax expense
541
105
Pre-tax loss
$
(488
)
$
7,022
(6.9
)%
$
(1,216
)
$
6,221
(19.5
)%
Adjustments:
Inventory-related impact - exit of certain production print manufacturing operations
24
51
Lexmark - fixed asset-related purchase accounting adjustment
29
—
Lexmark - inventory-related purchase accounting adjustment(3)
102
—
Goodwill impairment
—
1,058
Restructuring and related costs, net
66
112
Amortization of intangible assets
83
73
Divestitures
(4
)
47
Reinvention-related costs
17
12
Transaction and related costs, net
34
7
Lexmark - settlement of pre-existing employment agreements
25
—
Other expenses, net (2)
360
158
Adjusted
$
248
$
7,022
3.5
%
$
302
$
6,221
4.9
%
(1)
Net (Loss) and Revenues.
(2)
Includes non-service retirement-related costs. In addition, fourth quarter and full-year 2025 include $80 million and $248 million of non-financing interest expense, respectively, as compared to fourth quarter and full-year 2024 of $31 million and $119 million, respectively. The increases in the fourth quarter and full-year 2025 relate to the recently completed borrowings in support of the Lexmark acquisition financing, repayment of existing borrowings, and general corporate purposes.
(3)
Reflects a purchase accounting adjustment related to the recent acquisition of Lexmark, for cost associated with a net inventory write up.
Adjusted Gross Profit and Margin
Three Months Ended December 31,
(in millions)
2025
2024
Revenue(1)
$
2,028
$
1,613
Cost of revenue (1)
(1,449
)
(1,111
)
Gross Profit and Margin
579
28.6
%
502
31.1
%
Adjustment
Inventory impact related to the exit of certain Production Print manufacturing operations
4
7
Lexmark - fixed asset-related purchase accounting adjustment
11
—
Adjusted Gross Profit and Margin
$
594
29.3
%
$
509
31.6
%
Year Ended December 31,
(in millions)
2025
2024
Revenue(1)
$
7,022
$
6,221
Cost of revenue (1)
(5,121
)
(4,261
)
Gross Profit and Margin
1,901
27.1
%
1,960
31.5
%
Adjustment
Inventory impact related to the exit of certain Production Print manufacturing operations
24
51
Lexmark - inventory-related purchase accounting adjustment(2)
102
—
Lexmark - fixed asset-related purchase accounting adjustment
25
—
Adjusted Gross Profit and Margin
$
2,052
29.2
%
$
2,011
32.3
%
(1)
Total Revenues and cost of revenues
(2)
Reflects a purchase accounting adjustment related to the recent acquisition of Lexmark, for cost associated with a net inventory write up.
Free Cash Flow reconciliation
Three Months Ended December 31,
Year Ended December 31,
(in millions)
2025
2024
2025
2024
Reported(1)
$
208
$
351
$
224
$
511
Capital expenditures
(24
)
(17
)
(91
)
(44
)
Free Cash Flow
$
184
$
334
$
133
$
467
(1)
Net cash provided by operating activities.
GUIDANCE
Adjusted Operating Income
FY 2026
(in millions)
Profit
Estimated(1)
~ $(100)
Adjustments:
Restructuring and related costs, net
30
Amortization of intangible assets
120
Other expenses, net(2)
425
Adjusted (3)
~ $450 - $500
(1)
Pre-tax (loss)
(2)
Other expenses, net includes approximately $290 million of non-financing interest expense, net, and approximately $80 million related to non-service retirement-related costs.
(3)
Adjusted pre-tax income reflects the adjusted operating income guidance midpoint of $475 million.
Free Cash Flow
(in millions)
FY 2026
Operating Cash Flow (1)
~$360
Capital expenditures
(110)
Free Cash Flow
~$250
(1)
Net cash provided by operating activities.
Pro Forma Basis
To better understand the trends in our business, we discuss our 2025 operating results by comparing them against 2024 pro forma results, which include estimated results for both Lexmark and ITsavvy for the comparable period presented. ITsavvy is included in our 2025 reported results as the effective date of acquisition was November 20, 2024. Lexmark is included in our 2025 results as of July 1, 2025, the effective date of acquisition. Accordingly, we have included ITsavvy and Lexmark's 2024 pro forma results for comparable periods presented. We refer to comparisons against these adjusted 2024 results as “pro-forma” basis comparisons. ITsavvy and Lexmark's 2024 historical results have been adjusted to reflect fair value adjustments related to inventory, real and personal property (equipment and computer hardware and software), right of use assets and liabilities, and intangible assets. In addition, adjustments were made to conform both ITsavvy and Lexmark's accounting policies to those of Xerox, including accrued rebates, inventory and other material non-recurring costs associated with the acquisitions. We believe comparisons on a pro-forma basis are more meaningful than the actual comparisons given the size and nature of these acquisitions. We believe the pro forma basis comparisons allow investors to have a better understanding and additional perspective of the expected trends in our business as well as the impact of these acquisitions on the Company’s operations.
Certain pro forma monetary amounts, percentages, and other financial figures included in the Company’s fourth quarter 2025 earnings materials, including the prepared remarks, investor presentation, and press release have been subject to rounding adjustments. Accordingly, minor differences may exist among such materials. These variances, which result solely from rounding, are not considered material.
Pro Forma Revenues and Key Financial Ratios
Three Months Ended December 31,
(in millions)
As Reported
Pro Forma(4)
Change
B/(W)
Pro Forma(4)
Change
B/(W)
2025
2024
2024
Revenues
Equipment sales
$
485
$
393
$
541
23.4
%
(10.4
)%
Post sale revenue
1,543
1,220
1,688
26.5
%
(8.6
)%
Total Revenues
$
2,028
$
1,613
$
2,229
25.7
%
(9.0
)%
Sales
$
1,068
$
656
$
1,175
62.8
%
(9.1
)%
Less: IT Products(1)
(100
)
(74
)
(117
)
35.1
%
(14.5
)%
Less: Supplies, paper and other sales
(483
)
(189
)
(517
)
155.6
%
(6.6
)%
Equipment Sales
$
485
$
393
$
541
23.4
%
(10.4
)%
Services, maintenance, rentals and other(2),(3)
$
960
$
957
$
1,054
0.3
%
(8.9
)%
Add: IT Products(1)
100
74
117
35.1
%
(14.5
)%
Add: Supplies, paper and other sales
483
189
517
155.6
%
(6.6
)%
Post Sale Revenue
$
1,543
$
1,220
$
1,688
26.5
%
(8.6
)%
Segments
Print and Other
$
1,873
$
1,500
$
2,058
24.9
%
(9.0
)%
IT Solutions
158
114
172
38.6
%
(8.1
)%
Intersegment elimination (5)
(3
)
(1
)
(1
)
NM
NM
Total Revenue
$
2,028
$
1,613
$
2,229
25.7
%
(9.0
)%
Total Gross Profit
$
579
$
502
$
715
$
77
$
(136
)
Gross Margin
Equipment
12.0
%
27.4
%
14.8
%
(15.4
)
(2.8
)
pts.
Post sale
33.7
%
32.4
%
37.6
%
1.3
(3.9
)
pts.
Total Gross Margin
28.6
%
31.1
%
32.1
%
(2.5
)
(3.5
)
pts.
RD&E
$
71
$
47
$
80
$
(24
)
$
9
RD&E as a % of Revenue
3.5
%
2.9
%
3.6
%
(0.6
)
0.1
pts.
SAG
431
377
$
481
$
(54
)
$
50
SAG as a % of Revenue
21.3
%
23.4
%
21.6
%
2.1
0.3
pts.
(1)
IT Products reflect IT hardware, software solutions and services, provided by the IT Solutions segment. Refer to Reportable Segments - IT Solutions for further information.
(2)
Services, maintenance, rentals and other revenue include financing revenue generated from direct and indirectly financed Xerox equipment sale transactions of $29 million and $33 million for the three months ended December 31, 2025 and 2024, respectively.
(3)
Services, maintenance, rentals and other revenue include IT services support of $55 million and $39 million for the three months ended December 31, 2025 and 2024, respectively, provided by our IT Solutions segment.
(4)
Reflects the inclusion of Lexmark's estimated results from October 1, 2024 through December 31, 2024 and ITsavvy's estimated results from October 1, 2024 through November 19, 2024. ITsavvy's actual results are included in Xerox's reported results beginning on November 20, 2024, the effective date of the acquisition.
(5)
Reflects primarily IT hardware, software solutions and services, sold by the IT Solutions segment to the Print and Other segment.
Pro Forma Total Revenue
Year Ended December 31,
(in millions)
Pro Forma(1)
Pro Forma(1)
Change
B/(W)
2025
2024
Revenues
Equipment sales
$
1,700
$
1,861
(8.7
)%
Post sale revenue
6,262
6,759
(7.4
)%
Total Revenues
$
7,962
$
8,620
(7.6
)%
(1)
Reflects the inclusion of Lexmark and ITsavvy as if they were acquired on January 1, 2024.
Pro Forma Gross Margin
Year Ended December 31,
(in millions)
Pro Forma(1)
Pro Forma(1)
Change
B/(W)
2025
2024
Total Gross Profit
$
2,276
$
2,590
$
(314
)
Gross Margin
Equipment
19.7
%
17.8
%
1.9
pts.
Post sale
31.0
%
33.4
%
(2.4
)
pts.
Total Gross Margin
28.6
%
30.0
%
(1.4
)
pts.
(1)
Reflects the inclusion of Lexmark and ITsavvy as if they were acquired on January 1, 2024.
Pro Forma Print and Other Revenue
Three Months Ended
December 31,
As Reported
Pro Forma(1)
%
Change
Pro
Forma(1) %
Change
(in millions)
2025
2024
2024
Equipment sales
$
485
$
393
$
541
23.4
%
(10.4
)%
Post sale revenue (2)
1,388
1,107
1,517
25.4
%
(8.5
)%
Total Print and Other Revenue
$
1,873
$
1,500
$
2,058
24.9
%
(9.0
)%
(1)
Reflects the inclusion of Lexmark's estimated results from October 1, 2024 through December 31, 2024 and ITsavvy's estimated results from October 1, 2024 through November 19, 2024. ITsavvy's actual results are included in Xerox's reported results beginning on November 20, 2024, the effective date of the acquisition.
(2)
Post sale revenue includes financing revenue generated from direct and indirectly financed Xerox equipment sale transactions of $29 million and $33 million for the As Reported three months ended December 31, 2025 and 2024, respectively.
Detail by product group is shown below.
Three Months Ended
December 31,
As Reported
Pro Forma(1)
%
Change
Pro
Forma(1) %
Change
Pro
Forma(1) %
of
Equipment
Sales
(in millions)
2025
2024
2024
Entry
$
168
$
60
$
83
180.0
%
102.4
%
15
%
Mid-range
258
260
358
(0.8
)%
(27.9
)%
66
%
High-end
52
68
94
(23.5
)%
(44.7
)%
18
%
Other
7
5
6
40.0
%
16.7
%
1
%
Equipment Sales (2)
$
485
$
393
$
541
23.4
%
(10.4
)%
100
%
(1)
Reflects the inclusion of Lexmark's estimated results from October 1, 2024 through December 31, 2024 and ITsavvy's estimated results from October 1, 2024 through November 19, 2024. ITsavvy's actual results are included in Xerox's reported results beginning on November 20, 2024, the effective date of the acquisition.
(2)
Refer to Appendix II, Reportable Segments, for definitions.
Pro Forma IT Solutions Revenue
Three Months Ended
December 31,
As Reported
Pro Forma(1)
%
Change
Pro
Forma(1) %
Change
(in millions)
2025
2024
2024
IT Products(2)
$
100
$
74
$
117
35.1
%
(14.5
)%
IT Services(3)
55
39
54
41.0
%
1.9
%
Intersegment revenue (4)
3
1
1
NM
NM
Total IT Solutions
$
158
$
114
$
172
38.6
%
(8.1
)%
(1)
Reflects the inclusion of Lexmark's estimated results from October 1, 2024 through December 31, 2024 and ITsavvy's estimated results from October 1, 2024 through November 19, 2024. ITsavvy's actual results are included in Xerox's reported results beginning on November 20, 2024, the effective date of the acquisition.
(2)
IT Products reflect the sale of IT hardware and software solutions. Hardware product sales include the sale of notebooks, network communications and other endpoint devices, desktop computers and other IT hardware. Software product sales include deployments of cloud and security solutions, endpoint security application suites, operating systems, other applications and network management solutions.
(3)
IT Services reflect revenue associated with the implementation of IT solutions, including product lifecycle, deployment and network monitoring services, and managed services.
(4)
Reflects primarily IT hardware, software solutions and services, sold by the IT Solutions segment to the Print and Other segment.
Pro Forma Non-GAAP Financial Measures
Management believes that these non-GAAP financial measures provide an additional means of analyzing the current periods’ results against the corresponding prior periods’ results. However, these non-GAAP financial measures should be viewed in addition to, and not as a substitute for, the Company’s reported results prepared in accordance with GAAP. Our non-GAAP financial measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures and should be read only in conjunction with our consolidated financial statements prepared in accordance with GAAP. Our management regularly uses our supplemental non-GAAP financial measures internally to understand, manage and evaluate our business and make operating decisions. These non-GAAP measures are among the primary factors management uses in planning for and forecasting future periods. Compensation of our executives is based in part on the performance of our business based on these non-GAAP measures. A reconciliation of these non-GAAP financial measures and the most directly comparable measures calculated and presented in accordance with GAAP are set forth on the following tables:
Pro Forma Adjusted Gross Profit and Margin
Three Months Ended December 31,
Pro Forma(2)
Pro Forma(2)
(in millions)
2025
2024
Revenue(1)
$
2,028
$
2,229
Cost of revenue(1)
(1,449
)
(1,514
)
Gross Profit and Margin
579
28.6
%
715
32.1
%
Adjustment
Inventory impact related to the exit of certain Production Print manufacturing operations
4
7
Lexmark - inventory-related purchase accounting adjustment(3)
—
—
Lexmark - fixed asset-related purchase accounting adjustment
11
16
Adjusted Gross Profit and Margin
$
594
29.3
%
$
738
33.1
%
Year Ended December 31,
Pro Forma(2)
Pro Forma(2)
(in millions)
2025
2024
Revenue(1)
$
7,962
$
8,620
Cost of revenue(1)
(5,686
)
(6,030
)
Gross Profit and Margin
2,276
28.6
%
2,590
30.0
%
Adjustment
Inventory impact related to the exit of certain Production Print manufacturing operations
24
51
Lexmark - inventory-related purchase accounting adjustment(3)
—
92
Lexmark - fixed asset-related purchase accounting adjustment
64
60
Adjusted Gross Profit and Margin
$
2,364
29.7
%
$
2,793
32.4
%
(1)
Total Revenues and cost of revenues
(2)
Fourth quarter 2024 reflects the inclusion of Lexmark's estimated results from October 1, 2024 through December 31, 2024 and ITsavvy's estimated results from October 1, 2024 through November 19, 2024. ITsavvy's actual results are included in Xerox's reported results beginning on November 20, 2024, the effective date of the acquisition. Full-year 2025 and 2024 reflects the inclusion of Lexmark and ITsavvy as if they were acquired on January 1, 2024.
(3)
Reflects a purchase accounting adjustment related to the recent acquisition of Lexmark, for cost associated with a net inventory write up.
Pro Forma Adjusted Operating Income and Margin reconciliation
Three Months Ended December 31,
As Reported
Pro Forma(2)
2025
2024
2024
Change
Pro Forma(2)
Change
(in millions)
(Loss)
Profit
(Loss)
Profit
(Loss)
Profit
Reported(1)
$
(73
)
$
(21
)
$
(218
)
$
(52
)
$
145
Income tax expense
12
17
58
(5
)
(46
)
Pre-tax loss
$
(61
)
$
(4
)
$
(160
)
$
(57
)
$
99
Adjustments:
Inventory-related impact - exit of certain production print manufacturing operations
4
7
7
(3
)
(3
)
Lexmark - fixed asset-related purchase accounting adjustment
13
—
16
13
(3
)
Reinvention-related costs
5
12
12
(7
)
(7
)
Restructuring and related costs, net
(2
)
5
5
(7
)
(7
)
Amortization of intangible assets
33
43
226
(10
)
(193
)
Divestitures
—
(4
)
(4
)
4
4
Transaction and related costs, net
2
7
7
(5
)
(5
)
Lexmark - settlement of pre-existing employment agreements
1
—
—
1
1
Other expenses, net (3)
107
38
87
69
20
Adjusted
$
102
$
104
$
196
$
(2
)
$
(94
)
Revenue
2,028
1,613
$
2,229
$
415
$
(201
)
Pre-tax Loss Margin
(3.0
)%
(0.2
)%
(7.2
)%
(2.8
)
pts.
4.2
pts.
Adjusted Operating Income Margin
5.0
%
6.4
%
8.8
%
(1.4
)
pts.
(3.8
)
pts.
(1)
Net (Loss)
(2)
Reflects the inclusion of Lexmark's estimated results from October 1, 2024 through December 31, 2024 and ITsavvy's estimated results from October 1, 2024 through November 19, 2024. ITsavvy's actual results are included in Xerox's reported results beginning on November 20, 2024, the effective date of the acquisition.
(3)
Includes non-service retirement-related costs. In addition, fourth quarter 2025 includes $80 million of non-financing interest expense, as compared to $31 million for the fourth quarter 2024, related to the recently completed borrowings in support of the Lexmark acquisition financing, repayment of existing borrowings, and general corporate purposes.
APPENDIX I
Xerox Holdings Corporation
Loss per Share
(in millions, except per-share data, shares in thousands)
Three Months Ended
December 31,
Year Ended
December 31,
2025
2024
2025
2024
Basic Loss per Share:
Net Loss
$
(73
)
$
(21
)
$
(1,029
)
$
(1,321
)
Accrued dividends on preferred stock
(3
)
(3
)
(14
)
(14
)
Adjusted net loss available to common shareholders
$
(76
)
$
(24
)
$
(1,043
)
$
(1,335
)
Weighted average common shares outstanding
128,036
124,401
126,473
124,210
Basic Loss per Share
$
(0.60
)
$
(0.20
)
$
(8.25
)
$
(10.75
)
Diluted Loss per Share:
Net Loss
$
(73
)
$
(21
)
$
(1,029
)
$
(1,321
)
Accrued dividends on preferred stock
(3
)
(3
)
(14
)
(14
)
Adjusted net loss available to common shareholders
$
(76
)
$
(24
)
$
(1,043
)
$
(1,335
)
Weighted average common shares outstanding
128,036
124,401
126,473
124,210
Common shares issuable with respect to:
Stock Options
—
—
—
—
Restricted stock and performance shares
—
—
—
—
Convertible preferred stock
—
—
—
—
Adjusted weighted average common shares outstanding
128,036
124,401
126,473
124,210
Diluted Loss per Share
$
(0.60
)
$
(0.20
)
$
(8.25
)
$
(10.75
)
The following securities were not included in the computation of diluted loss per share as they were either contingently issuable shares or shares that if included would have been anti-dilutive:
Stock options
127
147
127
147
Restricted stock and performance shares
14,340
8,623
14,340
8,623
Convertible preferred stock
6,742
6,742
6,742
6,742
Convertible notes
19,196
19,196
19,196
19,196
Total Anti-Dilutive Securities
40,405
34,708
40,405
34,708
Dividends per Common Share
$
0.025
$
0.25
$
0.20
$
1.00
APPENDIX II
Xerox Holdings Corporation
Reportable Segments
Our reportable segments are aligned with how we manage the business and view the markets we serve. During the first quarter of 2025, the Company updated its determination of reportable segments to align with a change in how the Chief Operating Decision Maker (CODM), our Chief Executive Officer (CEO), allocates resources and assesses performance against the Company’s key growth strategies. As such, it was determined that there are two reportable segments - Print and Other, and IT Solutions. Prior to this change, the company had determined that there were two reportable segments - Print and Other, and Xerox Financial Solutions (XFS). As a result of this change, prior period reportable segment results have been conformed to reflect the Company’s current reportable segments. Refer to Reportable Segments - Segment Review, for additional information related to these two segments.
During 2024, the Company acquired ITsavvy Acquisition Company, Inc. (ITsavvy), a technology infrastructure solutions provider. As a result of this acquisition, during the first quarter of 2025, we reassessed our operating and reportable segments and determined that, based on the information provided to our CODM, as well as the CEO's management and assessment of the Company's operations, we had two operating and reportable segments - Print and Other, and IT Solutions. We also determined that there were no other businesses that met the requirements to be considered separate operating segments, including our former operating/reporting segment, XFS, whose results are now included in the Print and Other operating/reporting segment.
Our Print and Other segment includes the design, development and sale of document management systems, supplies and services, as well as financing and technology-related offerings, digital and print-related software products and services. The segment also includes the delivery of managed services that involve a continuum of solutions and services that help our customers optimize their print and communications infrastructure, apply automation and simplification to maximize productivity, and ensure the highest levels of security. This segment also includes our recent acquisition of Lexmark. In addition, the segment includes Xerox Financial Services, a global financing solutions provider, primarily enabling the sale of our equipment and services (previously reported XFS segment), which includes commissions and other payments for the exclusive right to provide lease financing for Xerox products. The product groupings range from:
“Entry”, which include A4 devices and desktop printers and multifunction devices that primarily serve small and medium workgroups/work teams.
“Mid-Range”, which include A3 devices that generally serve large workgroup/work team environments as well as products in the Light Production product groups serving centralized print centers, print for pay and low volume production print establishments.
“High-End”, which include production printing and publishing systems that generally serve the graphic communications marketplace and print centers in large enterprises.
Customers range from small and mid-sized businesses to large enterprises. Customers also include graphic communication enterprises as well as channel partners including distributors and resellers.
Our IT Solutions segment provides clients with global infrastructure technology solutions, with a focus on delivering business outcomes through a frictionless sales and service delivery experience. IT Solutions’ offerings include the provision of hardware, software and associated services as well as product lifecycle, deployment and network monitoring services, and other managed IT services. It is comprised of our recent acquisition of ITsavvy, as well as our Canadian IT Services provider Powerland, and our legacy XBS IT solutions.
View source version on businesswire.com: https://www.businesswire.com/news/home/20260129945668/en/
Media Contact:
Justin Capella, Xerox, +1-203-258-6535, Justin.Capella@xerox.com
Investor Contact:
Greg Stein, Xerox, +1-203-598-9080, Greg.Stein@xerox.com
Original: Xerox Releases Fourth-Quarter and Full-Year Results
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