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Xerox Releases Third-Quarter Results

By Business Wire | October 29, 2026, 6:30 AM

Revenue Trajectory and Adjusted1 Operating Income Improve; Higher Input Costs and Market Headwinds Weigh on Full-Year Outlook



Financial Summary

Q3 2026

  • Revenue of $1.87 billion, down 4.7 percent, or down 4.5 percent in constant currency1.
  • GAAP net (loss)2 of $(1,015) million, or $(7.73) per share, down $255 million or $1.72 per share, year-over-year, respectively.
  • Adjusted1 net income of $7 million, or $0.02 per share, down $20 million or $0.18 per share, year-over-year, respectively.
  • Adjusted1 operating income of $124 million, up $59 million year-over-year.
  • Adjusted1 operating margin of 6.6 percent, up 330 basis points year-over-year.
  • Operating cash flow of $30 million, down $86 million year-over year.
  • Free cash flow1 of $7 million, down $81 million year-over-year.

NORWALK, Conn.--(BUSINESS WIRE)--Xerox Holdings Corporation (NASDAQ: XRX) today announced its 2026 third-quarter results.

“This quarter, Print equipment revenue grew and adjusted operating margin doubled as we continued to execute against our three priorities: stabilize revenue, increase profitability and reduce leverage,” said Louie Pastor, chief executive officer at Xerox. “We are seeing results in the areas where we have focused our execution, but the headwinds affecting our outlook have intensified, creating greater near-term pressure than we expected. As a result, we are lowering our full-year adjusted operating income and free cash flow guidance. We’re responding with actions and cost measures to mitigate these pressures, improve profitability, and preserve cash, including the suspension of our common and preferred dividends, while maintaining our focus on reducing debt.”

Progress Against Strategic Priorities

Q3 2026

  • Double-digit equipment revenue growth in both Entry and Production
  • Announced three new Production devices at PRINTING United Expo, as well as a partnership with Xeikon to enter the Packaging and Labels market
  • $8 million non-cash debt reduction through our warrant program, retiring 2030 convertible notes
  • Announced Exchange of $174 million in 5.50% 2028 Senior Notes for:
    • $121 million of 10.25% 2030 Senior Secured Notes
    • $9 million in equity

Third-Quarter Key Financial Results

(in millions, except per share data)

Q3 2026

 

Q3 2025

 

B/(W)

YOY

Revenue

$1,868

 

$1,961

 

(4.7)% AC

(4.5)% CC1

Gross Profit

$545

 

$445

 

$100

Gross Margin

29.2%

 

22.7%

 

650 bps

RD&E %

3.0%

 

3.8%

 

80 bps

SAG %

20.0%

 

24.3%

 

430 bps

Pre-Tax (Loss)

$(1,006)

 

$(300)

 

$(706)

Pre-Tax (Loss) Margin

(53.9)%

 

(15.3)%

 

NM

Gross Profit - Adjusted1

$551

 

$566

 

$(15)

Gross Margin - Adjusted1

29.5%

 

28.9%

 

60 bps

Operating Income - Adjusted1

$124

 

$65

 

$59

Operating Income Margin - Adjusted1

6.6%

 

3.3%

 

330 bps

GAAP Diluted (Loss) per Share2

$(7.73)

 

$(6.01)

 

$(1.72)

Diluted Earnings Per Share - Adjusted1

$0.02

 

$0.20

 

$(0.18)

Third-Quarter Segment Results

(in millions)

Q3 2026

 

Q3 2025

 

B/(W)

YOY

Revenue

 

 

 

 

 

Print and Other

$1,688

 

$1,739

 

(2.9)%

IT Solutions

187

 

226

 

(17.3)%

Intersegment Elimination3

(7)

 

(4)

 

NM

Total Revenue

$1,868

 

$1,961

 

(4.7)%

Profit

 

 

 

 

 

Print and Other

$136

 

$64

 

112.5%

IT Solutions

8

 

18

 

(55.6)%

Corporate Other4

(20)

 

(17)

 

17.6%

Total Profit

$124

 

$65

 

90.8%

_____________

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.

Third quarter 2026 includes an after-tax non-cash goodwill impairment charge of $955 million ($959 million pre-tax), or $6.87 per diluted share. Third quarter 2025 includes an inventory-related purchase accounting adjustment, related to the acquisition of Lexmark, of $85 million ($102 million pre-tax), or $0.67 per diluted share, as well as 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.

3.

Reflects primarily IT hardware, software solutions and services, sold by the IT Solutions segment to the Print and Other segment.

4.

Corporate Other reflects certain administrative and general expenses, which primarily relate to corporate functions, and are not allocated to either of our reportable segments.

Updated 2026 Guidance

  • Revenue: Approximately $7.6 billion
  • Adjusted1,2 Operating Income: $450-475 million
  • Free Cash Flow1,2: $50-100 million

Non-GAAP Measures

This release refers to the following non-GAAP financial measures:

  • Adjusted1 EPS excludes Restructuring and related costs, net, Amortization of intangible assets, non-service retirement-related costs, Goodwill impairment charge, and other discrete adjustments from GAAP EPS, as applicable.
  • Adjusted1 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 (income), net from pre-tax (loss) and margin.
  • Constant currency1 (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.

2.

Adjusted operating income guidance reflects a benefit from the recognition of a $105 million pre-tax IEEPA tariff receivable associated with the recent Supreme Court ruling on IEEPA tariffs. The benefit to free cash flow guidance, resulting from Xerox’s sale of the IEEPA tariff receivable to a third party, is $80 million.

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.

©2026 Xerox Corporation. All rights reserved. Xerox® and the Xerox logo are trademarks of XRX Brandco LLC in the United States and/or other countries.

XEROX HOLDINGS CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF (LOSS) (UNAUDITED)

 

 

 

Three Months Ended

September 30,

 

Nine Months Ended

September 30,

(in millions, except per-share data)

 

 

2026

 

 

 

2025

 

 

 

2026

 

 

 

2025

 

Revenues

 

 

 

 

 

 

 

 

Sales

 

$

954

 

 

$

993

 

 

$

2,870

 

 

$

2,215

 

Services, maintenance, rentals and other

 

 

914

 

 

 

968

 

 

 

2,766

 

 

 

2,779

 

Total Revenues

 

 

1,868

 

 

 

1,961

 

 

 

5,636

 

 

 

4,994

 

Costs and Expenses

 

 

 

 

 

 

 

 

Cost of sales

 

 

652

 

 

 

788

 

 

 

1,831

 

 

 

1,650

 

Cost of services, maintenance, rentals and other

 

 

671

 

 

 

728

 

 

 

2,023

 

 

 

2,022

 

Research, development and engineering expenses

 

 

56

 

 

 

74

 

 

 

187

 

 

 

159

 

Selling, administrative and general expenses

 

 

374

 

 

 

477

 

 

 

1,236

 

 

 

1,223

 

Goodwill impairment

 

 

959

 

 

 

—

 

 

 

959

 

 

 

—

 

Restructuring and related costs, net

 

 

14

 

 

 

59

 

 

 

82

 

 

 

68

 

Amortization of intangible assets

 

 

31

 

 

 

30

 

 

 

91

 

 

 

50

 

Divestitures

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(4

)

Non-financing interest expense

 

 

93

 

 

 

80

 

 

 

277

 

 

 

168

 

Other expenses (income), net

 

 

24

 

 

 

25

 

 

 

(2

)

 

 

85

 

Total Costs and Expenses

 

 

2,874

 

 

 

2,261

 

 

 

6,684

 

 

 

5,421

 

(Loss) before Income Taxes(1)

 

 

(1,006

)

 

 

(300

)

 

 

(1,048

)

 

 

(427

)

Income tax expense

 

 

9

 

 

 

460

 

 

 

59

 

 

 

529

 

Net (Loss)

 

 

(1,015

)

 

 

(760

)

 

 

(1,107

)

 

 

(956

)

Less: Preferred stock dividends, net

 

 

(4

)

 

 

(4

)

 

 

(11

)

 

 

(11

)

Net (Loss) attributable to Common Shareholders

 

$

(1,019

)

 

$

(764

)

 

$

(1,118

)

 

$

(967

)

 

 

 

 

 

 

 

 

 

Basic (Loss) per Share

 

$

(7.73

)

 

$

(6.01

)

 

$

(8.57

)

 

$

(7.67

)

Diluted (Loss) per Share

 

$

(7.73

)

 

$

(6.01

)

 

$

(8.57

)

 

$

(7.67

)

_____________

(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

September 30,

 

Nine Months Ended

September 30,

(in millions)

 

 

2026

 

 

 

2025

 

 

 

2026

 

 

 

2025

 

Net (Loss)

 

$

(1,015

)

 

$

(760

)

 

$

(1,107

)

 

$

(956

)

 

 

 

 

 

 

 

 

 

Other Comprehensive (Loss) Income, Net

 

 

 

 

 

 

 

 

Translation adjustments, net

 

 

(19

)

 

 

(42

)

 

 

(95

)

 

 

292

 

Unrealized gains (losses), net

 

 

3

 

 

 

(2

)

 

 

11

 

 

 

(8

)

Changes in defined benefit plans, net

 

 

19

 

 

 

35

 

 

 

64

 

 

 

(42

)

Other Comprehensive Income (Loss), Net

 

 

3

 

 

 

(9

)

 

 

(20

)

 

 

242

 

 

 

 

 

 

 

 

 

 

Comprehensive (Loss), Net

 

$

(1,012

)

 

$

(769

)

 

$

(1,127

)

 

$

(714

)

XEROX HOLDINGS CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

 

(in millions, except share data in thousands)

 

September 30, 2026

 

December 31, 2025

Assets

 

 

 

 

Cash and cash equivalents

 

$

412

 

 

$

512

 

Accounts receivable, net

 

 

1,153

 

 

 

1,122

 

Billed portion of finance receivables, net

 

 

36

 

 

 

46

 

Finance receivables, net

 

 

438

 

 

 

510

 

Inventories

 

 

1,063

 

 

 

1,016

 

Other current assets

 

 

536

 

 

 

362

 

Total current assets

 

 

3,638

 

 

 

3,568

 

Finance receivables due after one year, net

 

 

735

 

 

 

846

 

Equipment on operating leases, net

 

 

272

 

 

 

299

 

Land, buildings and equipment, net

 

 

365

 

 

 

390

 

Intangible assets, net

 

 

827

 

 

 

921

 

Goodwill, net

 

 

1,273

 

 

 

2,222

 

Deferred tax assets

 

 

68

 

 

 

98

 

Other long-term assets

 

 

1,449

 

 

 

1,479

 

Total Assets

 

$

8,627

 

 

$

9,823

 

Liabilities and (Deficit) Equity

 

 

 

 

Short-term debt and current portion of long-term debt

 

$

157

 

 

$

231

 

Financing liability – tariff receivables monetization

 

 

81

 

 

 

—

 

Accounts payable

 

 

1,484

 

 

 

1,498

 

Accrued compensation and benefits costs

 

 

217

 

 

 

235

 

Accrued expenses and other current liabilities

 

 

1,262

 

 

 

1,258

 

Total current liabilities

 

 

3,201

 

 

 

3,222

 

Long-term debt

 

 

4,063

 

 

 

4,016

 

Pension and other benefit liabilities

 

 

989

 

 

 

1,068

 

Post-retirement medical benefits

 

 

146

 

 

 

159

 

Other long-term liabilities

 

 

681

 

 

 

685

 

Total Liabilities

 

 

9,080

 

 

 

9,150

 

 

 

 

 

 

Noncontrolling Interests

 

 

10

 

 

 

10

 

 

 

 

 

 

Convertible Preferred Stock

 

 

214

 

 

 

214

 

 

 

 

 

 

Common stock

 

 

133

 

 

 

128

 

Additional paid-in capital

 

 

1,212

 

 

 

1,183

 

Retained earnings

 

 

1,303

 

 

 

2,444

 

Accumulated other comprehensive (loss)

 

 

(3,331

)

 

 

(3,311

)

Xerox Holdings shareholders’ (deficit) equity

 

 

(683

)

 

 

444

 

Noncontrolling interests

 

 

6

 

 

 

5

 

Total (Deficit) Equity

 

 

(677

)

 

 

449

 

Total Liabilities and (Deficit) Equity

 

$

8,627

 

 

$

9,823

 

 

 

 

 

 

Shares of Common Stock Issued and Outstanding

 

 

132,694

 

 

 

128,044

 

XEROX HOLDINGS CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

 

 

 

Three Months Ended

September 30,

 

Nine Months Ended

September 30,

(in millions)

 

 

2026

 

 

 

2025

 

 

 

2026

 

 

 

2025

 

Cash Flows from Operating Activities

 

 

 

 

 

 

 

 

Net (Loss)

 

$

(1,015

)

 

$

(760

)

 

$

(1,107

)

 

$

(956

)

 

 

 

 

 

 

 

 

 

Adjustments to reconcile Net (loss) to Net cash provided by (used in) operating activities:

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

95

 

 

 

107

 

 

 

296

 

 

 

224

 

Provisions

 

 

13

 

 

 

19

 

 

 

49

 

 

 

67

 

Net (gain) loss on early extinguishment of debt

 

 

(5

)

 

 

—

 

 

 

(100

)

 

 

4

 

Inventory-related purchase accounting adjustment - noncash

 

 

—

 

 

 

102

 

 

 

—

 

 

 

102

 

Effective settlement of a pre-existing relationship between Lexmark and Xerox

 

 

—

 

 

 

(43

)

 

 

—

 

 

 

(43

)

Net (gain) loss on sales of businesses and assets

 

 

(1

)

 

 

(1

)

 

 

1

 

 

 

(6

)

Divestitures

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(4

)

Stock-based compensation

 

 

11

 

 

 

7

 

 

 

29

 

 

 

33

 

Goodwill impairment

 

 

959

 

 

 

—

 

 

 

959

 

 

 

—

 

Restructuring and asset impairment charges

 

 

13

 

 

 

59

 

 

 

78

 

 

 

69

 

Payments for restructurings

 

 

(20

)

 

 

(8

)

 

 

(60

)

 

 

(41

)

Non-service retirement-related costs

 

 

21

 

 

 

20

 

 

 

63

 

 

 

57

 

Contributions to retirement plans

 

 

(46

)

 

 

(56

)

 

 

(118

)

 

 

(123

)

Decrease (increase) in accounts receivable and billed portion of finance receivables

 

 

34

 

 

 

3

 

 

 

(52

)

 

 

(41

)

(Increase) decrease in inventories

 

 

(37

)

 

 

37

 

 

 

(97

)

 

 

(123

)

Increase in equipment on operating leases

 

 

(25

)

 

 

(36

)

 

 

(92

)

 

 

(88

)

(Increase) decrease in finance receivables

 

 

(5

)

 

 

126

 

 

 

152

 

 

 

338

 

Decrease (increase) in other current and long-term assets

 

 

42

 

 

 

(12

)

 

 

(78

)

 

 

4

 

Increase (decrease) in accounts payable

 

 

30

 

 

 

(21

)

 

 

—

 

 

 

4

 

(Decrease) increase in accrued compensation

 

 

(28

)

 

 

12

 

 

 

(10

)

 

 

(39

)

(Decrease) increase in other current and long-term liabilities

 

 

(7

)

 

 

98

 

 

 

(1

)

 

 

58

 

Net change in income tax assets and liabilities

 

 

(1

)

 

 

444

 

 

 

5

 

 

 

479

 

Other operating, net

 

 

2

 

 

 

19

 

 

 

6

 

 

 

41

 

Net cash provided by (used in) operating activities

 

 

30

 

 

 

116

 

 

 

(77

)

 

 

16

 

Cash Flows from Investing Activities

 

 

 

 

 

 

 

 

Cost of additions to land, buildings, equipment and software

 

 

(23

)

 

 

(28

)

 

 

(70

)

 

 

(67

)

Proceeds from sales of businesses and assets

 

 

2

 

 

 

26

 

 

 

10

 

 

 

56

 

Acquisitions, net of cash acquired

 

 

—

 

 

 

(675

)

 

 

19

 

 

 

(674

)

Other investing, net

 

 

(3

)

 

 

(5

)

 

 

(16

)

 

 

(9

)

Net cash used in investing activities

 

 

(24

)

 

 

(682

)

 

 

(57

)

 

 

(694

)

Cash Flows from Financing Activities

 

 

 

 

 

 

 

 

Net (payments) proceeds on debt

 

 

(2

)

 

 

124

 

 

 

68

 

 

 

670

 

Tariff monetization financing, net

 

 

(14

)

 

 

—

 

 

 

66

 

 

 

—

 

Dividends

 

 

(8

)

 

 

(7

)

 

 

(24

)

 

 

(65

)

Other financing, net

 

 

(3

)

 

 

1

 

 

 

(9

)

 

 

(28

)

Net cash (used in) provided by financing activities

 

 

(27

)

 

 

118

 

 

 

101

 

 

 

577

 

Effect of exchange rate changes on cash, cash equivalents and restricted cash

 

 

(1

)

 

 

(2

)

 

 

(2

)

 

 

5

 

Decrease in cash, cash equivalents and restricted cash

 

 

(22

)

 

 

(450

)

 

 

(35

)

 

 

(96

)

Cash, cash equivalents and restricted cash at beginning of period

 

 

552

 

 

 

985

 

 

 

565

 

 

 

631

 

Cash, Cash Equivalents and Restricted Cash at End of Period

 

$

530

 

 

$

535

 

 

$

530

 

 

$

535

 

Third Quarter 2026 Overview

In the third quarter of 2026, overall market trends remained stable compared to the prior year, with demand broadly consistent with recent quarters. Despite a difficult backdrop, we continue to make progress on our three priorities - stabilize revenue, increase profitability, and reduce leverage.

Third quarter 2026 reflects the continued benefits of the Lexmark acquisition and Xerox's transformation efforts. Revenue declines moderated by 180 basis points sequentially on a pro forma1 basis. Adjusted2 operating income margins expanded year-over-year for the third consecutive quarter, driven by integration synergies, cost discipline, and an increasingly unified operating model. These gains are complemented by new product launches under the unified Xerox brand, growing partner validation, and a more focused go-to-market approach which is collectively positioning the company for continued operational and financial improvement. We also reduced leverage further in the quarter.

Equipment sales revenue of $393 million in the third quarter 2026 increased 2.6% in actual currency and 2.9% in constant currency2, compared to the third quarter 2025. Total equipment installations increased 9.0% driven by growth in Entry and High-end categories.

Post sale revenue of $1,295 million in the third quarter 2026 decreased 4.5% in actual currency and 4.4% in constant currency2, compared to the third quarter 2025. The decline in constant currency2 primarily reflects lower equipment service revenue and managed print services, as well as lower supplies and rental revenue. Post sale revenue was also adversely impacted by a decline in financing revenue reflecting the continued sales of finance receivables to our various funding affiliates and lower originations.

IT Solutions revenue of $180 million in the third quarter 2026 declined 18.9% in actual currency and 18.5% in constant currency2, compared to the third quarter 2025. The decrease primarily reflects the timing of large prior-year public sector product placements.

Pre-tax (loss) of $(1,006) million for the third quarter 2026 decreased by $706 million compared to a pre-tax (loss) of $(300) million in the third quarter 2025. Third quarter 2026 includes a pre-tax, non-cash goodwill impairment charge of $959 million ($955 million after-tax) or $6.87 per share. During the third quarter 2026, we lowered our future projections for the Print and Other reporting unit due to continued macro uncertainty and sustained memory price increases. These factors, and their resulting effect on discounted future cash flows, reduced the valuation of the Print and Other segment, resulting in a goodwill impairment charge in the third quarter 2026. Pre-tax (loss) margin of (53.9)% decreased by 38.6-percentage points compared to third quarter 2025 pre-tax (loss) margin of (15.3)%. The decrease in the third quarter 2026 pre-tax (loss) margin was primarily driven by the goodwill impairment charge as well as lower revenue, excluding a licensing agreement, and higher non-financing interest expense. These impacts were partially offset by higher gross profit, including a favorable impact resulting from the prior year purchase accounting adjustment related to the Lexmark acquisition, benefits from Transformation-related cost and productivity actions, and lower tariff-related costs. The improvement also reflected lower Selling, administrative and general expenses, primarily due to Transformation-related cost and productivity actions, lower incentive compensation expense and lower bad debt expense, as well as lower Restructuring and related costs, net, and Research, development and engineering expenses, reflecting Transformation-related cost and productivity actions.

Third quarter 2026 adjusted2 operating income margin of 6.6% increased by 3.3-percentage points compared to third quarter 2025. The increase reflects higher gross profit and lower Selling, administrative and general expenses, both of which are attributable to the factors discussed above. These benefits were partially offset by lower revenue and product cost increases.

For full-year 2026, we expect revenue of approximately $7.6 billion, adjusted2 operating income in the range of $450 million to $475 million, down from $555 million to $605 million, and free cash flow2 of approximately $50 to $100 million, down from $250 million. Updated adjusted2 operating income guidance reflects higher than expected input costs, mix shift from Mid-range to Entry, a weaker market outlook, and lower than expected IT Solutions profit. Updated free cash flow2 guidance reflects lower adjusted2 operating income and lower than expected finance receivable and IEEPA tariff receivable proceeds, as some of these benefits get pushed out to 2027. In October 2026, we announced the exchange of $174 million aggregate principal amount of 5.50% Senior Notes due 2028 for $121 million aggregate principal amount of 10.25% Senior Secured Notes due 2030 and $9 million of equity.

_____________

(1)

 

To better understand the trends in our business, comparisons of third quarter 2026 results to third quarter 2025 reflect Xerox’s reported results for both periods. Comparisons of second quarter 2026 results to second quarter 2025 are based on pro forma second quarter 2025 results, which include the estimated results of Lexmark for the period from April 1, 2025 through June 30, 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.

Financial Review

Revenues

 

 

 

Three Months Ended

September 30,

 

 

 

 

 

% of Total Revenue

(in millions)

 

 

2026

 

 

 

2025

 

 

%

Change

 

CC % Change

 

2026

 

2025

Equipment sales

 

$

393

 

 

$

383

 

 

2.6

%

 

2.9

%

 

21

%

 

20

%

Post sale revenue(1)

 

 

1,295

 

 

 

1,356

 

 

(4.5

)%

 

(4.4

)%

 

69

%

 

69

%

IT Solutions(2)

 

 

180

 

 

 

222

 

 

(18.9

)%

 

(18.5

)%

 

10

%

 

11

%

Total Revenue

 

$

1,868

 

 

$

1,961

 

 

(4.7

)%

 

(4.5

)%

 

100

%

 

100

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Reconciliation to Condensed Consolidated Statements of (Loss):

Equipment sales

 

$

393

 

 

$

383

 

 

2.6

%

 

2.9

%

 

 

 

 

Supplies, paper and other sales(1)

 

 

434

 

 

 

445

 

 

(2.5

)%

 

(2.9

)%

 

 

 

 

IT Products(2)

 

 

127

 

 

 

165

 

 

(23.0

)%

 

(22.4

)%

 

 

 

 

Sales

 

$

954

 

 

$

993

 

 

(3.9

)%

 

(3.9

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Services, maintenance, rentals and other(1)

 

$

806

 

 

$

840

 

 

(4.0

)%

 

(3.6

)%

 

 

 

 

Xerox Financial Services(1)

 

 

55

 

 

 

71

 

 

(22.5

)%

 

(22.5

)%

 

 

 

 

IT Services(2)

 

 

53

 

 

 

57

 

 

(7.0

)%

 

(7.0

)%

 

 

 

 

Services, maintenance, rentals and other

 

$

914

 

 

$

968

 

 

(5.6

)%

 

(5.2

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Segments(3)

 

 

 

 

 

 

 

 

 

 

 

 

Print and Other

 

$

1,688

 

 

$

1,739

 

 

(2.9

)%

 

(2.8

)%

 

90

%

 

89

%

IT Solutions

 

 

187

 

 

 

226

 

 

(17.3

)%

 

(16.8

)%

 

10

%

 

11

%

Intersegment elimination (4)

 

 

(7

)

 

 

(4

)

 

NM

 

 

NM

 

 

—

%

 

—

%

Total Revenue

 

$

1,868

 

 

$

1,961

 

 

(4.7

)%

 

(4.5

)%

 

100

%

 

100

%


Contacts

Media Contact:
Justin Capella, Xerox, Justin.Capella@xerox.com

Investor Contact:
Greg Stein, Xerox, Greg.Stein@xerox.com


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