XEROX CORP
For the period ended Mar 31, 2026. Filed May 7, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2026 · Filed May 7, 2026
XRX$1.08-2.7%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-09-30; filed 2025-11-10.
0001770450-25-000037
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCapital Resources and LiquidityFinancial Risk ManagementNon-GAAP Financial MeasuresCurrent report: 10-Q
Period ended 2026-03-31; filed 2026-05-07.
0001770450-26-000030
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCapital Resources and LiquidityFinancial Risk ManagementNon-GAAP Financial MeasuresThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 439 previous paragraphs and 298 current paragraphs.
131 unchanged; 60 reworded; 104 added; 229 removed; 19 previous and 3 current paragraphs rearranged.
Tables are not compared: 31 previous and 19 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (104)
Current report
Xerox 2026 Form 10-Q 39
Current report
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 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.
Current report
First quarter 2026 reflects the benefits of the Lexmark Acquisition and from Xerox’s Transformation 1 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.
Current report
Post sale revenue of $1,314 million in the first quarter 2026 increased 30.1% in actual currency and 26.5% in constant currency 2, as compared to first quarter 2025. First quarter 2026 post sale revenue reflected higher sales of supplies to our distributors and resellers 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 forma 3 basis, first quarter 2026 revenue decreased 3.8%, primarily reflecting the impacts noted above.
Current report
IT Solutions revenue of $154 million in the first quarter 2026 declined 5.5% in actual currency and 6.2% in constant currency 2, compared to the first quarter 2025. The decline was primarily driven by a mix of revenue subject to net classifications, revenue deferrals and impacts on demand resulting from component cost increases.
Current report
Pre-tax (loss) of $(73) million for the first quarter 2026 increased by $(6) million as compared to pre-tax (loss) of $(67) million in the first quarter 2025. Pre-tax (loss) margin of (4.0)% for the first quarter 2026 improved by 0.6-percentage points as compared to the 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-related 1 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, Selling, administrative and general expenses (SAG) and Research, development and engineering expenses (RD&E), driven by the Lexmark acquisition. On a pro forma 3 basis first quarter 2026 pre-tax (loss) margin improved by 1.7-percentage points primarily reflecting the impacts noted above.
Current report
First quarter 2026 adjusted 2 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 forma 3 basis first quarter 2026 adjusted 2 operating margin increased by 0.2-percentage points primarily reflecting the impacts noted above, as well as the impact of the Lexmark acquisition.
Current report
(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.
Current report
(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.
Current report
Xerox 2026 Form 10-Q 40
Current report
Recent Changes and Developments
Current report
Joint Venture Arrangement and Shared Services and License Agreement
Current report
In February 2026, Xerox Corporation and certain investors including certain funds and accounts managed by Angelo, Gordon & Co., L.P. (collectively, TPG) entered into a joint venture arrangement (the Joint Venture) pursuant to which TPG funded $405 million aggregate principal amount of senior secured term loans (the Term Loans) to, and purchased $45 million of Class A Units from, XRX Brandco Holdings LLC (IPCo Holdings) (the Joint Venture Financing).
Current report
Also in February 2026, in connection with the formation of the Joint Venture, Xerox Holdings, Xerox Corporation, IPCo Holdings and Xerox Brandco LLC (IPCo) entered into a Shared Services and License Agreement (the SSLA), pursuant to which (i) Xerox Holdings agreed to provide certain services to IPCo Holdings and IPCo and (ii) IPCo granted licenses to the Contributed IP to Xerox Corporation and, at the election of Xerox Holdings, certain of its subsidiaries (collectively, the Licensees).
Current report
Refer to Note 1 - Basis of Presentation in the Condensed Consolidated Financial Statements for additional information regarding the Joint Venture Arrangement and the Shared Services and License Agreement, as well as to Note 12 - Debt in the Condensed Consolidated Financial Statements for additional information regarding the Joint Venture Financing.
Current report
Warrant Dividend
Current report
In January 2026, the Board of Directors of Xerox Holdings Corporation approved a pro-rata distribution of warrants to holders of Xerox Holdings Corporation’s common stock, par value $1.00 per share, Series A Convertible Perpetual Voting Preferred Stock and 3.75% Convertible Senior Notes due 2030. Refer to Note 16 - Shareholders' Equity of Xerox Holdings in the Condensed Consolidated Financial Statements for additional information regarding the Warrant Dividend.
Current report
•an increase of 33.1% in Equipment sales revenue, including a 38.0-percentage point benefit from the Lexmark Acquisition, and a 2.4-percentage point favorable impact from currency. On a pro forma 1 basis equipment sales revenue declined 2.3%.
Current report
•a decrease of 5.5% in IT Products revenue, including a 0.7-percentage point favorable impact from currency.
Current report
First quarter 2026 Net (Loss) was $(105) million and increased by $(15) million as compared to the first quarter 2025 Net (loss) of $(90) million. Net (Loss) for the first quarter 2025 reflects the establishment of a valuation allowance of $59 million against certain deferred tax assets to reflect their realizability. First quarter 2026 Net (Loss) reflects higher SAG, Non-financing interest expense, Restructuring and related costs, net, RD&E, Amortization of
Current report
Xerox 2026 Form 10-Q 41 intangible assets, and Income tax expense, all of which was partially offset by higher revenues, higher gross profit, and lower Other expenses, net.
Current report
First quarter 2026 adjusted 1 Net (Loss) was $(51) million as compared to Adjusted 1 Net (Loss) of $(4) million during the first quarter 2025, and includes the results of Lexmark. Adjusted 1 Net (Loss) increased by $(47) million primarily reflecting higher SAG, Non-financing interest expense, Income tax expense, and RD&E, all of which was partially offset by higher revenues, and higher gross profit.
Current report
For the first quarter 2026 net cash used in operating activities was $144 million, net cash used in investing activities was $24 million, and net cash provided by financing activities was $242 million. Please refer to the Capital Resources and Liquidity section for additional information regarding our cash flows.
Current report
Xerox 2026 Form 10-Q 42
Current report
(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.
Current report
(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.
Current report
First quarter 2026 total revenue increased 26.7% as compared to first quarter 2025, and included a 31.9-percentage point benefit from the Lexmark Acquisition as well as a 3.1 percentage point benefit from currency. The Lexmark contribution was partially offset by lower revenue at legacy Xerox. Total revenue for legacy Xerox decreased 5.2% in actual currency, primarily reflecting lower installations, reduced equipment service revenue, and declines in managed print services and IT Solutions revenue, as well as the adverse impact of Transformation-related actions. On a pro forma 1 basis, first quarter 2026 total revenue declined 3.7% as compared to the first quarter 2025 primarily reflecting the impacts noted above, partially offset by growth from legacy Lexmark.
Current report
Refer to the Segment Review - Print and Other section below for a discussion of Equipment sales revenue and post sale revenue, and the Segment Review - IT Solutions section below for a discussion of IT Products and IT Services revenues.
Current report
(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.
Current report
Xerox 2026 Form 10-Q 43
Current report
(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.
Current report
(2)Includes the gross margin of IT Solutions.
Current report
(3)Refer to the “Non-GAAP Financial Measures” section for an explanation of the non-GAAP financial measure.
Current report
First quarter 2026 gross margin of 29.7% increased by 0.5-percentage points as compared to first quarter of 2025, which included an approximate 0.9-percentage point benefit related to the Lexmark Acquisition. The increase in the first quarter 2026 primarily reflects higher revenue and gross profit, as well as the benefits associated with Transformation-related cost and productivity actions. These benefits were partially offset by the adverse impact related to product cost increases and an unfavorable revenue mix, including lower equipment service revenue and managed print services. Excluding the impact of the Lexmark acquisition, gross margin declined 0.4-percentage points. On a pro forma 1 basis, first quarter 2026 gross margin of 29.7% increased by 0.2-percentage points.
Current report
First quarter 2026 equipment gross margin of 10.8% decreased by 17.1-percentage points as compared to first quarter of 2025, and included a 12.2-percentage point adverse impact from the Lexmark acquisition. Excluding the impact of Lexmark, equipment gross margin declined 4.9-percentage points. The decrease in the first quarter 2026 primarily reflects lower gross profit, including the adverse impact of product cost increases, as well as incremental tariff-related costs and unfavorable freight costs. These impacts were partially offset by benefits associated with Transformation-related cost and productivity actions and the absence of a charge recognized in the first quarter of 2025 related to the exit of certain production print manufacturing operations. On a pro forma 1 basis, first quarter 2026 equipment gross margin of 10.8% decreased by 0.3-percentage points.
Current report
First quarter 2026 Post sale gross margin of 34.6% increased by 5.0-percentage points as compared to first quarter of 2025, which included a 4.4-percentage point benefit related to the Lexmark acquisition. Excluding the impact of the Lexmark acquisition, post sale gross margin increased 0.6-percentage points. The increase in the first quarter 2026 primarily reflects higher revenue and gross profit, including the benefits associated with Transformation-related cost and productivity actions. These benefits were partially offset by the adverse impact related to product cost increases, a fixed asset-related purchase accounting adjustment related to the Lexmark acquisition, unfavorable revenue mix, including lower equipment service revenue and managed print services, rental and other revenues, as well as lower financing fees. On a pro forma 1 basis, first quarter 2026 post sale gross margin of 34.6% increased 0.5 -percentage points.
Current report
(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.
Current report
Xerox 2026 Form 10-Q 44
Current report
First quarter 2026 RD&E as a percentage of revenue of 3.5% increased 0.6-percentage points as compared to first quarter 2025, and included a 0.9-percentage point adverse impact from the Lexmark acquisition. The increase in RD&E spending outpaced the increase in revenue primarily due to the Lexmark Acquisition.
Current report
First quarter 2026 RD&E of $64 million increased by $22 million compared to first quarter 2025, due to the Lexmark acquisition, partially offset by productivity and cost savings related to Transformation actions. On a pro forma 1 basis, RD&E decreased by $10 million for the three months ended March 31, 2026, primarily due to productivity and cost savings related to Transformation actions.
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Removed paragraphs (229)
Previous report
Third quarter results were impacted by macroeconomic challenges. We experienced continued disruption associated with tariff and government funding-related uncertainty, which primarily affected transactional Print equipment revenues, and to a lesser extent, supplies revenue. Throughout the quarter, we observed continued delays in purchasing decisions among clients, particularly those reliant on federal, state and local government funding. General economic uncertainty also resulted in delays in purchases among our commercial client base and distributors. However, page volume trends remain consistent, and branded supplies usage was in line with expectations, both of which indicate unchanged demand for printed pages. 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.
Previous report
Post-sale revenue of approximately $1.6 billion increased 32.7% in actual currency, or 31.3% in constant currency 1, as compared to third quarter 2024. Third quarter 2025 post-sale revenue included a 30.2-percentage point benefit and a 10.3-percentage point benefit from the Lexmark Acquisition and ITSavvy, respectively. Excluding these acquisitions, post sale revenue declined 7.8-percentage points in actual currency reflecting lower managed print services 4 revenue, driven by lower outsourcing and print services, and lower supplies 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 growth of the legacy Xerox IT Solutions business and the benefits of currency. On a pro forma 2 basis, third quarter 2025 revenue decreased 5.5%, due to the impacts noted above, and timing of certain enterprise deals within Lexmark.
Previous report
Pre-tax loss of $300 million for the third quarter 2025 decreased by $787 million as compared to pre-tax loss of $1,087 million in the third quarter 2024. Pre-tax loss margin decreased 55.8% for the third quarter 2025 as compared to the third quarter 2024 and included a 1.4-percentage point benefit and a 4.2-percentage point adverse impact from the Lexmark Acquisition and ITSavvy, respectively. The improvement in the third quarter 2025 is primarily due to the pre-tax non-cash goodwill impairment charge of $1.1 billion in the third quarter 2024, and benefits associated with Reinvention-related cost and productivity actions and recent pricing initiatives. These benefits were partially offset by lower gross profit, including the adverse impact related to the Lexmark Acquisition, unfavorable revenue mix, product cost increases and incremental tariff-related costs, as well as higher Other expenses, net, which included higher non-financing interest expense related to the recently completed borrowings in support of the Lexmark Acquisition. In addition, selling, general and administrative expenses increased due to the Lexmark Acquisition and ITSavvy. On a pro forma 2 basis third quarter 2025 pre-tax loss decreased by $891 million as compared to the third quarter 2024, due to the impacts noted above.
Previous report
Adjusted 1 operating income of $65 million decreased by $15 million as compared to third quarter 2024 primarily due to lower gross profit, which includes higher product costs and incremental tariff-related costs, as well as unfavorable revenue mix driven by lower outsourcing revenue. These impacts were partially offset by benefits from the Lexmark Acquisition and ITSavvy, productivity and cost savings related to the Company's Reinvention, as well as recent price increases. On a pro forma 2 basis third quarter 2025 adjusted 1 operating income decreased $87 million, due primarily to the impacts noted above.
Previous report
(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.
Previous report
(4)Includes revenues from Services, maintenance and rentals. IT Solutions and digital services are not included in managed print services.
Previous report
Recent Developments
Previous report
We continue to expect Earnings per share accretion associated with the Lexmark Acquisition, 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. Refer to Note 6 - Acquisition in the condensed consolidated financial statements for additional information regarding the Lexmark Acquisition.
Previous report
Segments
Previous report
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 two reportable segments - Print and Other, and Xerox Financial Services (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. As noted above, Lexmark was acquired during third quarter 2025. The results of Lexmark are included in the Print and Other segment. Refer to Note 4 - Segment Reporting in the Condensed Consolidated Financial Statements for additional information regarding this change.
Previous report
Valuation Allowance
Previous report
During the first and third quarter of 2025, valuation allowances were recorded primarily related to certain deferred tax assets in the United States. Refer to Note 1 - Basis of Presentation in the Condensed Consolidated Financial Statements for additional information regarding the valuation allowance.
Previous report
Tax Law Change
Previous report
On July 4, 2025, H.R. 1, the One Big Beautiful Bill Act (the Act), was signed into law. Refer to Note 1 - Basis of Presentation in the Condensed Consolidated Financial Statements for additional information regarding the Act.
Previous report
•an increase of 13.0% in Equipment sales revenue, including a 26.0-percentage point benefit from the Lexmark Acquisition, and a 0.9-percentage point favorable impact from currency. On a pro forma 1 basis equipment sales revenue declined 16.3%.
Previous report
Total revenue of $4.99 billion for the nine months ended September 30, 2025 increased 8.4% as compared to the prior year period, including a 9.7-percentage point benefit and a 7.7-percentage point benefit from the Lexmark Acquisition and ITSavvy, respectively, as well as a 0.2-percentage point favorable impact from currency. On a pro forma 1 basis total revenue declined 7.2%. Total revenue reflected the following:
Previous report
•an increase of 10.2% in Post sale revenue, including a 9.9-percentage point benefit and a 3.4-percentage point benefit from the Lexmark Acquisition and ITSavvy, respectively, as well as a 0.2-percentage point favorable impact from currency. On a pro forma 1 basis post sale revenue declined 6.8%.
Previous report
•an increase of 1.8% in Equipment sales revenue, including an 8.9-percentage point benefit from the Lexmark Acquisition, and a 0.2-percentage point favorable impact from currency. On a pro forma 1 basis equipment sales revenue declined 8.6%.
Previous report
Third quarter 2025 Net (Loss) was $760 million and improved by $445 million as compared to the third quarter 2024 Net (loss) of $1,205 million. Net (Loss) for the third quarter 2024 reflects an after-tax Goodwill impairment charge of $1,015 million ($1,058 million pre-tax). Net (Loss) for the third quarter 2025 includes the results of ITSavvy and the Lexmark Acquisition, and primarily reflects higher income tax expense, as a result of the establishment of a valuation allowance of $478 million against certain deferred tax assets to reflect their realizability. Third quarter 2025 Net (Loss) also reflects lower gross profit, and higher Selling, administrative and general expenses, Other expenses, net, Research, development and engineering expenses (RD&E), Amortization of intangible assets, and Restructuring and related costs, net, all of which was partially offset by higher revenues. Third quarter 2025 adjusted 1 Net Income was $27 million as compared to Adjusted 1 Net Income of $34 million during the third quarter 2024. Adjusted 1 Net Income was lower by $7 million primarily reflecting higher Selling, administrative and general expenses, Other expenses, net, and RD&E, all of which was partially offset by higher revenues, as well as lower Income tax expense.
Previous report
Net (Loss) for the nine months ended September 30, 2025 of $956 million and improved $344 million as compared to the prior year period Net (Loss) of $1,300 million. Net (Loss) for the nine months ended September 30, 2024 reflects an after-tax Goodwill impairment charge of $1,015 million ($1,058 million pre-tax). Net (Loss) for the nine months ended September 30, 2025 includes the results of ITSavvy and the Lexmark Acquisition from July 1, 2025, and primarily reflects higher Income tax expense, as a result of the establishment of valuation allowances of $537 million against certain deferred tax assets to reflect their realizability. The change also reflected lower gross profit, and higher Other expenses, net, Selling, administrative and general expenses, Amortization of intangible assets, and RD&E. These negative impacts were partially offset by higher revenues, as well as lower Divestitures, as the prior year included the divestiture of certain direct business operations in Latin America, and lower Restructuring and related costs, net. Adjusted 1 Net (loss) for the nine months ended September 30, 2025 was $54 million as compared to the prior year period adjusted 1 net income of $86 million. Adjusted 1 Net (loss) was higher by $140 million primarily reflecting lower gross profit, as well as higher Other expenses, net, Income tax expense and RD&E. These negative impacts were partially offset by higher revenues and lower Selling, administrative and general expenses.
Previous report
Cash flows from operating activities during the nine months ended September 30, 2025 were a source of $16 million and decreased $144 million as compared to the prior year period. The decrease primarily related to lower profitability, as well as lower net proceeds from the on-going sales of finance receivables under the finance receivables funding agreements, and the impacts of one-time cash costs related to the Lexmark Acquisition, all of which were partially offset by the timing of working capital 1, lower finance receivable originations, lower payments for accrued compensation, and lower payments for restructuring.
Previous report
Cash used in investing activities during the nine months ended September 30, 2025 was $694 million, primarily reflecting the Lexmark Acquisition of $675 million, net of cash acquired, as well as capital expenditures of $67 million, and the investment in a noncontrolling interest of $9 million, all of which were partially offset by $33 million
Previous report
Cash provided by financing activities during the nine months ended September 30, 2025 was $577 million, reflecting proceeds from the issuance of our First Lien Senior Secured Notes of $400 million (First Lien Notes), the issuance of our Second Lien Senior Secured Notes of $500 million (Second Lien Notes), the issuance of $250 million of our Senior Secured Notes due July 2030 (the 2030 Notes), the issuance of our $125 million Senior Unsecured Notes due June 2026 (the 2026 Notes), $100 million from the ABL Facility and $4 million from the TLB Facility, all of which was offset by deferred debt issuance costs of $41 million and discounts of $17 million. Payments on debt reflected $388 million on the 5.000% Senior Notes due in August 2025, $102 million on the Term Loan B facility (TLB Facility), $83 million on secured promissory notes and $72 million on secured financing arrangements. Dividend payments were $65 million, and other financing, net was $28 million, reflecting $22 million for payments of financing commitment fees related to the Lexmark Acquisition, $6 million related to the settlement of stock-based compensation and $9 million related to finance leases, all of which was offset by $11 million for the issuance of warrants in connection with the issuance of the 2030 Notes.
Previous report
(1)Working capital, net reflects Accounts receivable, Billed portion of finance receivables, Inventories and Accounts payable.
Previous report
Outlook
Previous report
Xerox's 2025 guidance includes six months of activity associated with the Lexmark Acquisition, which was effective July 1, 2025. We expect Revenue to grow 13% in constant currency 1. While we expect profitability to improve, the impacts of tariff-related expenses of approximately $35 million, net of mitigation efforts, partially offset by Lexmark-related contributions of $100 million to $110 million, will result in modestly lower margins. We now expect operating cash flows, excluding one-time items related to the Lexmark Acquisition of $70 million, to be approximately $245 million, which is a decrease from our previous guidance of approximately $345 million. The decrease reflects a higher level of cash tariff expenses and one-time costs associated with the implementation of synergy savings. We continue to expect capital expenditures to be approximately $95 million in 2025, which reflects the inclusion of Lexmark.
Previous report
(1)Reflects the inclusion of Lexmark as if it was acquired on January 1, 2024, and ITSavvy was acquired on January 1, 2023. Refer to the "Pro Forma Basis" section for an explanation of this measure. See "Currency Impact" section for a description of Constant Currency.
Previous report
(3)Includes financing revenue generated from direct and indirectly financed Xerox equipment sale transactions of $32 million and $38 million for the three months ended September 30, 2025 and 2024, respectively and $97 million and $118 million for the nine months ended September 30, 2025 and 2024, respectively.
Previous report
(4)Services, maintenance, rentals and other revenue include IT services support of $57 million and $31 million for the three months ended September 30, 2025 and 2024, respectively, and $172 million and $86 million for the nine months ended September 30, 2025 and 2024, respectively, provided by our IT Solutions segment.
Previous report
Third quarter 2025 total revenue increased 28.3% as compared to third quarter 2024, and included a 29.3-percentage point benefit and an 8.0-percentage point benefit from the Lexmark Acquisition and ITSavvy, respectively, as well as a 1.3-percentage point benefit from currency. The increase in the third quarter 2025 was partially offset by lower equipment sales and post sale revenue for legacy Xerox. Total revenue for legacy Xerox declined 9.0-percentage points in actual currency primarily due to lower installations, managed print services 1, and supplies revenue, as well as the adverse impact from Reinvention-related actions and macroeconomic and policy-related uncertainty. These factors were partially offset by legacy IT Solutions growth. On a pro forma 2 basis, third quarter 2025 total revenue declined 7.8% as compared to the third quarter 2024 due to the impacts noted above, as well as backlog 3 fluctuations and the timing of certain enterprise deals within Lexmark.
Previous report
Total revenue for the nine months ended September 30, 2025 increased 8.4%, as compared to the prior year period, and included a 9.7-percentage point benefit and an 7.7-percentage point benefit from the Lexmark Acquisition and ITSavvy, respectively, as well as a 0.2-percentage point benefit from currency. The increase for the nine months ended September 30, 2025 was partially offset by lower equipment sales and post sale revenue for legacy Xerox. Total revenue for legacy Xerox declined 9.0-percentage points in actual currency due primarily to lower installations, managed print services 1 and supplies revenue declines, as well as the adverse impact from Reinvention-related actions and macroeconomic and policy-related uncertainty. These factors were partially offset by legacy IT Solutions growth. On a pro forma 2 basis, total revenue for the nine months ended September 30, 2025 declined 7.2% due to the impacts noted above, as well as backlog 3 fluctuations and the timing of certain enterprise deals within Lexmark.
Previous report
Third quarter 2025 equipment sales revenue increased 12.1% at constant currency 4 and included a 26.0-percentage point benefit from the Lexmark Acquisition. The increase at constant currency 4 reflects higher installations driven by the inclusion of Lexmark. Excluding Lexmark, equipment sales declined 13.0-percentage points in actual currency due to lower installations and the adverse impact from Reinvention-related actions, including the exit of certain production print manufacturing operations in 2024. On a pro forma 2 basis, third quarter 2025 equipment sales revenue declined 16.3% as compared to the third quarter 2024, due to the impacts noted above, as well as backlog 3 fluctuations and timing of certain enterprise deals within Lexmark.
Previous report
Total equipment sales revenue for the nine months ended September 30, 2025 increased 1.6% at constant currency 4 and included an 8.9-percentage point benefit from the Lexmark Acquisition. The increase at constant currency 4 reflects higher installations driven by the inclusion of Lexmark. Excluding Lexmark, equipment sales declined 7.1-percentage points in actual currency due to lower installations and the adverse impact from Reinvention-related actions, including the exit of certain production print manufacturing operations in 2024, as well as unfavorable product mix. On a pro forma 2 basis, equipment sales revenue for the nine months ended September 30, 2025 declined 8.6% as compared to the prior year period, due to the impacts noted above, as well as backlog 3 fluctuations and timing of certain enterprise deals within Lexmark.
Previous report
Third quarter 2025 Post sale revenue increased 31.3% at constant currency 4 and included a 30.2-percentage point benefit and a 10.3-percentage point benefit from ITSavvy and the Lexmark Acquisition, respectively. Excluding these acquisitions, post sale revenue declined 7.8-percentage points in actual currency reflecting lower managed print services 1 revenue, driven by lower outsourcing and print services, and lower supplies 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 growth of the legacy IT Solutions business. On a pro forma 2 basis, third quarter 2025 post sale revenue decreased 5.5% as compared to the third quarter 2024.
Previous report
Total post sales revenue for the nine months ended September 30, 2025 increased 10.0% at constant currency 4 and included a 9.9-percentage point benefit and a 3.4-percentage point benefit from the Lexmark Acquisition and ITSavvy, respectively. Excluding these acquisitions, post sale revenue declined 3.1-percentage points in actual currency reflecting lower managed print services 1 revenue, driven by lower outsourcing and print services, and lower supplies 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 growth of the legacy IT Solutions business and modest growth in digital services revenue. On a pro forma 2 basis, post sales revenue for the nine months ended September 30, 2025 decreased 6.8% as compared to the prior year period, due to the impacts noted above.
Previous report
(1)Includes revenues from service, maintenance and rentals. IT solutions and digital services are not included in managed print services.
Previous report
(2)Reflects the inclusion of Lexmark as if it was acquired on January 1, 2024, and ITSavvy was acquired on January 1, 2023. Refer to the "Pro Forma Basis" section for an explanation of this measure. See "Currency Impact" section for a description of Constant Currency.
Previous report
(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.
Previous report
Post sale revenue for the three and nine months ended September 30, 2025 reflected the following:
Previous report
•Services, maintenance, rentals and other revenue includes maintenance and outsourcing revenue (including bundled supplies), the services portion of our IT Solutions offering, digital services revenue, rentals, financing, and other revenues.
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Reworded paragraphs (60)
Previous wording
Xerox Holdings' other direct subsidiary is Myriad Ventures Fund I LP (Myriad), which was established solely to invest in startups and early/mid-stage growth companies aligned with the Company’s innovation focus areas and targeted adjacencies. Myriad is fully consolidated by Xerox Holdings. At September 30, 2025 and December 31, 2024 investments of Myriad were $42 million and $40 million, respectively. Due to its immaterial nature, and for ease of discussion, Myriad's results are included within the following discussion.
Current wording
Xerox Holdings' other direct subsidiary is Xerox Ventures LLC, which holds an investment in Myriad Ventures Fund I LP (Myriad). Myriad is fully consolidated by Xerox Holdings. At March 31, 2026 and December 31, 2025 investments of Myriad were $45 million and $41 million, respectively. For ease of discussion, the following MD&A includes the results of Xerox Ventures LLC as they are immaterial to earnings and the balance sheet.
Previous wording
Our results include Lexmark International II, LLC (Lexmark) from July 1, 2025, the effective date of the acquisition (the Lexmark Acquisition), as well as the results of ITSavvy LLC (ITSavvy), acquired on November 20, 2024. In order to provide a clearer comparison of our results to the prior year, we are also providing a discussion and analysis on a pro forma basis. See the “Pro Forma Basis” section below for further explanation and discussion of pro forma results. In addition, the following discussion includes references to "legacy Xerox", which reflects the financial results of Xerox, excluding the impact of the Lexmark Acquisition and ITSavvy, as applicable.
Current wording
Our results include Lexmark International II, LLC (Lexmark) from July 1, 2025, the effective date of the Lexmark Acquisition. In order to provide a clearer comparison of our results to the prior year, we are also providing a discussion and analysis on a pro forma basis. See the “Pro Forma Basis” section below for further explanation and discussion of pro forma results. In addition, the following discussion includes references to "legacy Xerox", which reflects the financial results of Xerox, excluding the impact of the Lexmark Acquisition, as applicable.
Previous wording
Equipment sales of $383 million in the third quarter 2025 increased 13.0% in actual currency, or 12.1% in constant currency 1, as compared to the third quarter 2024. Third quarter 2025 equipment sales included a 26.0-percentage point benefit from the Lexmark Acquisition. Total equipment installations increased approximately 55.0% including Lexmark, offset by legacy Xerox declines concentrated in the high-end and entry level equipment categories. Excluding Lexmark, equipment sales declined 13.0% in actual currency reflecting lower installations, including the exit of certain production print manufacturing operations in 2024. On a pro forma 2 basis, third quarter 2025 revenue declined 16.3%, due to the impacts noted above, as well as backlog 3 fluctuations and timing of certain enterprise
Current wording
Equipment sales of $378 million in the first quarter 2026 increased 33.1% in actual currency and 30.7% in constant currency 2, as compared to the first quarter 2025. First quarter 2026 equipment sales included a 38.0-percentage point benefit from the Lexmark Acquisition. Total equipment installations increased approximately 98.0% including the impact of the Lexmark Acquisition, partially offset by declines in legacy Xerox installations, 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 forma 3 basis, first quarter 2026 revenue declined 2.3%, primarily reflecting the impacts noted above, partially offset by modest growth from Lexmark.
Previous wording
On July 1, 2025, Xerox Corporation completed its previously announced acquisition of all of the issued and outstanding equity of Lexmark International II, LLC (Lexmark) from Ninestar Group Company Limited.
Current wording
On July 1, 2025, Xerox Corporation completed its previously announced acquisition of all of the issued and outstanding equity of Lexmark International II, LLC (Lexmark) from Ninestar Group Company Limited. Refer to Note 6 - Acquisition in the Condensed Consolidated Financial Statements for additional information regarding the Lexmark Acquisition.
Previous wording
Total revenue of $1.96 billion for third quarter 2025 increased 28.3% from third quarter 2024, including a 29.3-percentage point benefit and an 8.0-percentage point benefit from the Lexmark Acquisition and ITSavvy, respectively, as well as a 1.3-percentage point favorable impact from currency. On a pro forma 1 basis total revenue declined 7.8%. Total revenue reflected the following:
Current wording
Total revenue of $1.85 billion for first quarter 2026 increased 26.7% from first quarter 2025, including a 31.9-percentage point benefit from the Lexmark Acquisition, as well as a 3.1-percentage point favorable impact from currency. On a pro forma 1 basis total revenue declined 3.7%. Total revenue reflected the following:
Previous wording
•an increase of 32.7% in Post sale revenue, including a 30.2-percentage point benefit and a 10.3-percentage point benefit from the Lexmark Acquisition and ITSavvy, respectively, as well as a 1.4-percentage point favorable impact from currency. On a pro forma 1 basis post sale revenue declined 5.5%.
Current wording
•an increase of 30.1% in Post sale revenue, including a 35.3-percentage point benefit from the Lexmark Acquisition, as well as a 3.6-percentage point favorable impact from currency. On a pro forma 1 basis post sale revenue declined 3.8%.
Previous wording
(1)Refer to the “Non-GAAP Financial Measures" section for an explanation of the non-GAAP financial measure.
Current wording
(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.
Previous wording
Net loss and adjusted 1 Net income (loss) were as follows:
Current wording
Net (loss) and adjusted 1 Net (loss) were as follows:
Previous wording
(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.
Current wording
(3)IT Solutions includes IT Products and IT Services provided by the IT Solutions segment. Refer to Reportable Segments - IT Solutions for further information.
Previous wording
(6)Refer to Note 4 - Segment Reporting in the Condensed Consolidated Financial Statements for additional information regarding our reportable segments.
Current wording
(4)Refer to Note 4 - Segment Reporting in the Condensed Consolidated Financial Statements for additional information regarding our reportable segments.
Previous wording
Third quarter 2025 SAG as a percentage of revenue of 24.3% increased by 0.1-percentage points as compared to third quarter 2024, including a 0.7-percentage point benefit and a 1.1-percentage point benefit from the Lexmark Acquisition and ITSavvy, respectively. The increase in SAG spending outpaced the increase in revenue.
Current wording
First quarter 2026 SAG as a percentage of revenue of 23.3% decreased by 2.6-percentage points as compared to first quarter 2025, including a 2.4-percentage point benefit from the Lexmark Acquisition. The increase in revenue outpaced the increase in SAG spending.
Previous wording
(1)Restructuring and severance costs for the three and nine months ended September 30, 2025, include approximately $77 million for worldwide headcount reductions as a result of our efforts to integrate and consolidate certain operations of the legacy Xerox and Lexmark businesses.
Current wording
(1)Restructuring and severance costs for the three months ended March 31, 2026 and 2025 include worldwide headcount reductions of approximately 775 and 130, respectively, as a result of our efforts to integrate and consolidate certain operations of the legacy Xerox and Lexmark businesses.
Previous wording
(2)Primarily related to the sale, exit and abandonment of leased and owned facilities, net of any potential sublease income and recoveries. Asset impairments of owned assets include cash proceeds resulting from asset sales and recoveries of $16 million and $35 million for the three and nine months ended September 30, 2025, respectively.
Current wording
(2)Primarily related to the sale, exit and abandonment of leased and owned facilities, net of any potential sublease income and recoveries. Asset impairments of owned assets include cash proceeds resulting from asset sales and recoveries of $1 million and $19 million for the three months ended March 31, 2026 and 2025, respectively.
Previous wording
(4)Reversals of prior charges primarily include net changes in estimated reserves from initiatives accrued for in prior periods, including Reinvention.
Current wording
(4)Reversals of prior charges primarily include net changes in estimated reserves from initiatives accrued for in prior periods.
Previous wording
(6)Amounts primarily reflect severance and other related costs we are contractually required to pay in connection with employees transferred as part of the shared service arrangement entered into with third party providers.
Current wording
(5)Amounts primarily reflect severance and other related costs we are contractually required to pay in connection with employees transferred as part of the shared service arrangement entered into with third party providers.
Previous wording
Third quarter 2025 primarily impacted the Print and Other segment in several functional areas, with approximately 45% focused on gross margin improvements, approximately 50% focused on SAG reductions, and the remainder focused on RD&E reductions. Third quarter 2024 actions impacted several functional areas, with approximately 65% focused on gross margins improvements, approximately 30% focused on SAG reductions, and the remainder focused on RD&E optimization.
Current wording
First quarter 2026 primarily impacted the Print and Other segment in several functional areas, with approximately 20% focused on gross margin improvements, approximately 75% focused on SAG reductions, and the remainder focused on RD&E reductions. First quarter 2025 actions impacted several functional areas, with approximately 30% focused on gross margin improvements, approximately 60% focused on SAG reductions, and the remainder focused on RD&E optimization.
Previous wording
The Restructuring and related costs, net reserve balance for all programs as of September 30, 2025 was $157 million, of which $96 million is expected to be paid over the next twelve months.
Current wording
The Restructuring and related costs, net reserve balance for all programs as of March 31, 2026 was $148 million, of which $81 million is expected to be paid over the next twelve months.
Previous wording
Third quarter 2025 non-financing interest expense of $80 million was $49 million higher than third quarter 2024, and non-financing interest expense for the nine months ended September 30, 2025 of $168 million increased by $80 million from the prior year period. The increase, as compared to the respective prior year periods, reflects recently completed borrowings in support of the Lexmark Acquisition, repayment of existing borrowings, and general corporate purposes. Contributing to the increase is a lower debt level allocated to Xerox Financial Services, which reflects a continued reduction in the average finance receivables balance associated with the sales of finance receivables in recent quarters to our various funding affiliates, as well as lower originations.
Current wording
First quarter 2026 non-financing interest expense of $84 million was $51 million higher than first quarter 2025. The increase, as compared to the prior year period, reflects higher interest rates on the recently completed borrowings in support of the Lexmark acquisition, as well as funding from the Joint Venture Financing arrangement entered into with TPG in the first quarter of 2026. Also contributing to the increase is a lower debt level allocated to Xerox Financial Services, which reflects a continued reduction in the average finance receivables balance associated with the sales of finance receivables to our various funding affiliates, as well as lower originations. When non-financing interest expense is combined with financing interest expense, total interest expense for the first quarter 2026 of $103 million increased by $48 million compared to the first quarter 2025. Refer to Note 12 - Debt in the Condensed Consolidated Financial Statements for additional information regarding debt activity and interest expense.
Previous wording
Non-service retirement-related costs for the third quarter 2025 of $20 million decreased by $5 million as compared to the third quarter 2024, and for the nine months ended September 30, 2025 non-service retirement-related costs of $57 million decreased $17 million as compared to the prior year periods The decrease as compared to the respective prior year periods was primarily due to the absence of settlement expense in the current year, as well as higher returns on plan assets, both of which were partially offset by higher interest costs associated with higher discount rates. Refer to Note 16 - Employee Benefit Plans in the Condensed Consolidated Financial Statements for additional information regarding service and non-service retirement-related costs.
Current wording
First quarter 2026 non-service retirement-related costs of $21 million increased by $3 million as compared to the first quarter 2025, primarily higher interest costs, as well as higher actuarial losses, both of which were partially offset by higher expected returns on plan assets. Refer to Note 15 - Employee Benefit Plans in the Condensed Consolidated Financial Statements for additional information regarding service and non-service retirement-related costs.
Previous wording
Loss (Gain) on early extinguishment of debt
Current wording
Gain on early extinguishment of debt
Previous wording
(3)Primarily reflects fees related to financing transactions for the Lexmark Acquisition, 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.
Current wording
First quarter 2025 commitment fee expense primarily reflects fees associated with the private offering of $400 million in aggregate principal amount of 10.250% Senior Secured First Lien Notes and $400 million aggregate principal amount of 13.500% Senior Secured Second Lien Notes Due in 2031.
Previous wording
Third quarter 2025 adjusted 1 operating income margin of 3.3% decreased by 1.9-percentage points as compared to third quarter of 2024, which included an approximate 1.9-percentage point benefit from the Lexmark Acquisition and ITSavvy. Excluding these acquisitions, the decrease reflects lower gross profit, due to product cost increases and incremental tariff-related costs, as well as unfavorable revenue mix driven by lower outsourcing and print service revenue, as well as lower equipment sales. These impacts were partially offset by productivity and cost savings related to the Company's Reinvention and price increases. On a pro forma 2 basis third quarter 2025 adjusted 1 operating margin of 3.3% decreased by 3.8-percentage points due primarily to the impacts noted above, as well as the Lexmark Acquisition and ITSavvy.
Current wording
First quarter 2026 adjusted 1 operating income margin of 3.9% increased by 2.4-percentage points as compared to first quarter 2025, and included an approximate 3.0-percentage point benefit from the Lexmark acquisition. Excluding this acquisition, the decrease reflects lower revenue, including equipment sales and post sale revenue, and lower gross profit, due to product cost increases and an unfavorable revenue mix, including lower outsourcing, rental, and other revenues, as well as lower financing fees. These impacts were partially offset by productivity and cost savings related to Transformation, and lower RD&E and SAG expenses. On a pro forma 2 basis first quarter 2026 adjusted 1 operating margin increased by 0.2-percentage points primarily reflecting the impacts noted above, as well as the impact of the Lexmark acquisition.
Previous wording
The effective tax rate for the nine months ended September 30, 2025 was (123.9)% and resulted in a tax expense, primarily due to the establishment of a valuation allowance on certain deferred tax assets, as well the inability to benefit from certain current year losses. On an adjusted 1 basis, the effective tax rate for the nine months ended September 30, 2025 was (350.0)%. Both these rates were higher than the U.S. federal statutory tax rate of 21.0% primarily due to the inability to benefit from certain current year losses, and the geographical mix of earnings.
Current wording
First quarter 2026 effective tax rate was (43.8)% and resulted in tax expense of $32 million. On an adjusted 1 basis, the first quarter 2026 effective tax rate was (218.8)%, which resulted in tax expense of $35 million. Both of these rates were higher than the U.S. federal statutory tax rate of 21.0% primarily due the inability to benefit from certain current year losses and expenses, as well as the geographical mix of earnings.
Previous wording
(1)Refer to the Adjusted Net Income (Loss) and EPS reconciliation table in the "Non-GAAP Financial Measures" section. For the calculations of basic and diluted loss per share, refer to Note 20 - Loss per Share in the Notes to the Condensed Consolidated Financial Statements.
Current wording
(1)Refer to the Adjusted Net (Loss) and EPS reconciliation table in the "Non-GAAP Financial Measures" section. For the calculations of basic and diluted loss per share, refer to Note 20 - (Loss) per Share in the Notes to the Condensed Consolidated Financial Statements.
Previous wording
Third quarter 2025 Other Comprehensive (Loss), Net was $(9) million and included the following: i) net translation adjustment (losses) of $(42) million reflecting the weakening of all of our major foreign currencies against the U.S. Dollar during the quarter; ii) net unrealized (losses) of $(2) million, and iii) net gains of $35 million from the changes in defined benefit plans primarily reflecting the positive impact of currency, and the amortization of net actuarial losses. This compares to Other Comprehensive Income, Net of $173 million for the third quarter 2024, which included the following: i) net translation adjustment gains of $192 million reflecting the strengthening of all of our major foreign currencies against the U.S. Dollar during the quarter; ii) net unrealized gains of $5 million, and iii) net (losses) from the changes in defined benefit plans of $(24) million, reflecting the negative impact of currency, partially offset by amortization of actuarial losses, as well as actuarial gains.
Current wording
First quarter 2026 Other Comprehensive (Loss), Net was $(33) million and included the following: i) net translation adjustment (losses) of $(77) million reflecting the weakening of all of our major foreign currencies against the U.S. Dollar during the quarter; ii) $40 million of net gains from the changes in defined benefit plans primarily reflecting the positive impact of currency, and the amortization of net actuarial losses; and iii) $4 million of net unrealized gains. This compares to Other Comprehensive Income, Net of $82 million for the first quarter 2025, which included the following: i) net translation adjustment gains of $105 million reflecting the strengthening of all of our major foreign currencies against the U.S. Dollar during the quarter; ii) $(21) million of net (losses) from the changes in defined benefit plans reflecting the negative impact of currency, partially offset by amortization of actuarial losses; and iii) $(2) million of net unrealized (losses).
Previous wording
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.
Current wording
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. This segment also includes our recent Lexmark Acquisition, and Xerox Financial Services. In addition to direct sales and end-user customers, we utilize distributors and resellers to sell our equipment, supplies, parts, and maintenance services to end-user customers.
Previous wording
Equipment sales revenue increased 13.0% during the third quarter 2025 as compared to third quarter 2024, which included a 26.0-percentage point benefit from the Lexmark Acquisition as well as a 0.9-percentage point benefit from currency. The increase in constant currency 1 was attributable to higher installations resulting from the Lexmark Acquisition. Excluding the Lexmark Acquisition, equipment sales declined 13.0-percentage points in actual currency due to lower installations, and Reinvention-related actions including the exit of certain production print manufacturing operations in the prior year, partially offset by higher pricing. On a pro forma 2 basis, third quarter 2025 revenue decreased 16.3%, due to the impacts noted above, as well as backlog 3 fluctuations and timing of certain enterprise deals at Lexmark.
Current wording
Equipment sales revenue increased 33.1% during the first quarter 2026 as compared to first quarter 2025, which included a 38.0-percentage point benefit from the Lexmark acquisition and a 2.4-percentage point benefit from currency. The increase in constant currency 1 was driven by higher installations resulting from the Lexmark acquisition. Excluding the Lexmark acquisition, equipment sales declined 4.9% in actual currency due to lower installations, partially offset by the benefit of entry product marketing initiatives. On a pro forma 1 basis, first quarter 2026 equipment sales revenue declined 2.3%, primarily reflecting the impacts noted above, partially offset by modest growth from Lexmark.
Previous wording
Xerox 2025 Form 10-Q 50 deals and OEM orders within Lexmark. Lexmark's equipment sales can be more volatile on a quarter-to-quarter basis, as a higher percentage comes from large channel and OEM partners.
Current wording
Xerox 2026 Form 10-Q 50
Previous wording
The change at constant currency 1 reflects the Lexmark Acquisition, the decision to the exit certain production print manufacturing operations made in the prior year period and the effects of geographic simplification, as well as the following:
Current wording
The change at constant currency 1 primarily reflects the Lexmark Acquisition, as well as the following:
Previous wording
•Entry - The increase for the three and nine months ended September 30, 2025 as compared to the respective prior year periods primarily reflects the Lexmark Acquisition. Excluding the Lexmark Acquisition, the decrease reflects lower installations in black-and-white, as well as a higher mix of sales to indirect channel partners.
Current wording
•Entry - The increase in the three months ended March 31, 2026 primarily reflects the Lexmark Acquisition. Excluding the Lexmark Acquisition, the decrease was driven by a shift in mix from color to black-and-white as installations remained relatively consistent compared to the prior year period.
Previous wording
•Mid-range - The decrease for the three months ended September 30, 2025 as compared to third quarter 2024 reflects declines in black-and-white installations, partially offset by the incremental installations from Lexmark and growth in color. The increase for the nine months ended September 30, 2025 as compared to the prior year period reflects the incremental installations as a result of the Lexmark Acquisition, as well as growth in color revenues driven by higher installs, partially offset by lower black-and-white installs.
Current wording
•Mid-range - The decrease for the three months ended March 31, 2026 reflects declines in installations, partially offset by a shift mix to color.
Previous wording
Installs reflect new placements of devices only (i.e., measure does not take into account removal of devices which may occur as a result of contract renewals or cancellations). Revenue associated with equipment installations may be reflected up-front in Equipment sales or over time either through rental income or as part of our services revenues (which are both reported within our post sale revenues), depending on the terms and conditions of our agreements with customers. Installs include activity for Xerox and non-Xerox branded products.
Current wording
Installs reflect new placements of devices to end-user customers, and sales to distributors and resellers. Revenue associated with equipment installations may be reflected up-front in Equipment sales or over time either through rental income or as part of our services revenues (which are both reported within our Post sale revenues), depending on the terms and conditions of our agreements with customers. Installs include activity for Xerox and non-Xerox branded products.
Previous wording
•High-Enddecreased 28% primarily reflecting declines in Entry Production Color Mid and black-and white High End Cut Sheet products, the decision to the exit certain production print manufacturing operations made in the prior year period.
Current wording
•High-Endincreased 31% primarily reflecting growth in Entry Production Color Mid and High, partially offset by the decision to exit certain production print manufacturing operations in prior years.
Previous wording
Post sale revenue primarily reflects revenues from managed print services 1, supplies, paper and financing. These revenues are associated not only with the population of devices in the field, which is affected by installs and removals, but also by the page volumes generated from the usage of such devices and the revenue per printed page. Post sale revenue also includes revenues from IT Solutions, comprised of IT products and services, Digital services, as well as gains, commissions, and servicing revenue associated with the sale of finance receivables.
Current wording
Post sale revenue primarily reflects revenues from managed print services, supplies, paper and financing. These revenues are associated not only with the population of devices in the field, which is affected by installs and removals, but also by the page volumes generated from the usage of such devices and the revenue per printed page. Post sale revenue also includes revenues from the sale of Digital services, as well as gains, commissions, and servicing revenue associated with the sale of finance receivables.
Previous wording
•Supplies, paper and other sales revenue includes unbundled supplies, paper and other sales.
Current wording
Supplies, paper and other sales includes unbundled supplies, paper and other sales. First quarter 2026 revenues increased 160.1% and included a 163.7-percentage point benefit from the Lexmark acquisition and a 4.4-percentage point benefit from currency. The increase in constant currency 1 was primarily driven by supplies sales from the Lexmark acquisition as well as higher supplies sales to our distributors and resellers. Excluding the Lexmark acquisition, revenue decreased 3.6% in actual currency due to lower supplies, paper and other sales reflecting in part the prior-year sale of our European paper business. On a pro forma 2 basis, first quarter 2026 revenue decreased 2.0%, primarily reflecting the impacts noted above.
Previous wording
Third quarter 2025 SAG of $385 million increased by $52 million as compared to third quarter 2024, primarily due to expenses related to the Lexmark Acquisition, including post-acquisition expenses associated with the settlement of pre-existing employment agreements, benefit-related expenses and unfavorable currency. These impacts were partially offset by productivity and cost savings related to the Company's Reinvention and lower incentive compensation expenses.
Current wording
First quarter 2026 SAG of $379 million increased by $57 million as compared to first quarter 2025, primarily due to expenses related to the Lexmark Acquisition and unfavorable currency. These impacts were partially offset by productivity and cost savings related to the Company's Transformation initiatives including lower marketing spend, as well as reductions in incentive compensation and bad debt expense.
Previous wording
Third quarter 2025 Print and Other segment margin of 3.7% decreased by 3.4-percentage points as compared to third quarter of 2024, primarily due to lower gross profit, impacted by higher product and incremental tariff-related costs, as well as higher SAG and RD&E expenses. These adverse impacts were partially offset by higher revenue, primarily as a result of the Lexmark Acquisition, as well as Reinvention-related cost and productivity actions, and recent pricing initiatives. On a pro forma 1 basis, Print and Other segment margin of 3.7% decreased by 5.3-percentage points as compared to third quarter of 2024, due to the impacts noted above, as well as the timing of certain enterprise deals at Lexmark.
Current wording
First quarter 2026 Print and Other segment margin of 5.1% increased 1.9-percentage points as compared to first quarter of 2025, primarily due to higher gross profit, partially offset by higher SAG and RD&E expenses. Segment margin expansion was driven by the contribution of Lexmark, as well as Transformation-related cost and productivity actions. On a pro forma 1 basis, Print and Other segment margin of 5.1% decreased by 0.3-percentage points as compared to first quarter of 2025, due to declines from legacy Xerox.
Previous wording
(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.
Current wording
(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.
Previous wording
(3)IT Services reflect revenue associated with the implementation of IT solutions, including product lifecycle, deployment and network monitoring services, and other managed IT services.
Current wording
(2)IT Services reflect revenue associated with the implementation of IT solutions, including product lifecycle, deployment and network monitoring services, and managed services.
Previous wording
Xerox 2025 Form 10-Q 53 related to the sales of two surplus facilities, $6 million related to a change in lease classification for certain vehicles, $9 million from divestitures, and $7 million from the sale of patents.
Current wording
Xerox 2026 Form 10-Q 53
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Current report — wording carried from elsewhere
•Gain on early extinguishment of debt
Current report — wording carried from elsewhere
(5)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.
Current report — wording carried from elsewhere
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 Annual Report on Form 10-K.
Rearranged previous paragraphs (19)
Previous report — wording carried elsewhere
(1)Refer to the “Non-GAAP Financial Measures” section for an explanation of the non-GAAP financial measure.
Previous report — wording carried elsewhere
(1)Refer to the “Non-GAAP Financial Measures” section for an explanation of the non-GAAP financial measure.
Previous report — wording carried elsewhere
(4)Refer to the "Non-GAAP Financial Measures" section for an explanation of the non-GAAP financial measure.
Previous report — wording carried elsewhere
•IT products revenue includes 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.
Previous report — wording carried elsewhere
Other Comprehensive Income, Net for the nine months ended September 30, 2025 was $242 million and included the following: i) net translation adjustment gains of $292 million reflecting the strengthening of all of our major foreign currencies against the U.S. Dollar; ii) net (losses) from the changes in defined benefit plans of $(42) million primarily reflecting the negative impact of currency, partially offset by the amortization of net actuarial losses; and iii) net unrealized (losses) of $(8) million. This compares to Other Comprehensive Income, Net for the nine months ended September 30, 2024 of $162 million, which included the following: i) net translation adjustment gains of $140 million reflecting the strengthening of the British Pound and the Euro against the U.S. Dollar; ii) net gains from the changes in defined benefit plans of $18 million primarily reflecting the amortization of actuarial losses, as well as actuarial gains, partially offset by the negative impact of currency, and iii) net unrealized gains of $4 million.
Previous report — wording carried elsewhere
(1)Reflects primarily IT hardware, software solutions and services, sold by the IT Solutions segment to the Print and Other segment.
Previous report — wording carried elsewhere
(2)Corporate Other reflects certain administrative and general expenses, which primarily relate to corporate functions, and are not allocated to
Previous report — wording carried elsewhere
(3)Segment margin is based on total revenue. IT Solutions segment margin is net of Intersegment Elimination.
Previous report — wording carried elsewhere
(1)Refer to the “Currency Impact” section for a description of constant currency.
Previous report — wording carried elsewhere
CC - See "Currency Impact" section for a description of constant currency.
Previous report — wording carried elsewhere
(1)Refer to the “Currency Impact” section for a description of constant currency.
Previous report — wording carried elsewhere
Refer to Note 13 - Debt in the Condensed Consolidated Financial Statements for additional information regarding debt activity.
Previous report — wording carried elsewhere
Cash, Cash Equivalents and Restricted Cash
Previous report — wording carried elsewhere
Refer to Note 12 - Supplementary Financial Information in the Condensed Consolidated Financial Statements for additional information regarding Cash, cash equivalents and restricted cash.
Previous report — wording carried elsewhere
Xerox 2025 Form 10-Q 76 as fluctuations in the currency and interest rate markets during the period. The related cash flow impacts of all of our derivative activities are reflected as cash flows from operating activities.
Previous report — wording carried elsewhere
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,
Previous report — wording carried elsewhere
The following pro forma information has been prepared in accordance with Article 11 of Regulation S-X, "Pro Forma Financial Information”. The pro forma combined statements of operations for the three and nine months ended September 30, 2025 and 2024 combine the Consolidated Statements of Operations of Xerox giving effect to the Lexmark Acquisition and ITSavvy as if they had occurred on January 1, 2024 and 2023 respectively. The pro forma information is presented to facilitate comparisons with our results following these acquisitions.
Previous report — wording carried elsewhere
Pro Forma Adjusted Operating Income and Margin reconciliation
Previous report — wording carried elsewhere
(5)Includes non-service retirement-related costs.