XEROX CORP
For the period ended Jun 30, 2026. Filed Aug 6, 2026.
View on SEC.govAbout this filing
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.
Jun 30, 2026 · Filed Aug 6, 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 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 MeasuresCurrent report: 10-Q
Period ended 2026-06-30; filed 2026-08-06.
0001770450-26-000040
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 298 previous paragraphs and 350 current paragraphs.
180 unchanged; 81 reworded; 76 added; 31 removed; 6 previous and 13 current paragraphs rearranged.
Tables are not compared: 19 previous and 27 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 (76)
Current report
In the second quarter 2026, overall market trends remained stable compared to the prior year, with demand broadly consistent with recent quarters. The Supreme Court ruling on IEEPA tariffs provided a meaningful benefit to our cost structure in the second quarter 2026, which we recognized as a receivable and subsequently sold for $80 million in cash. However, ongoing tariff payments, combined with higher memory and oil prices, continue to present headwinds to our cost structure. To date, none of these factors have materially impacted overall demand, apart from certain international markets with exposure to the Middle East conflict.
Current report
Second quarter 2026 reflects the continued benefits of the Lexmark Acquisition and Xerox's transformation efforts. Pro forma 1 gross margins expanded year-over-year for the second 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 in the second half of 2026 and beyond.
Current report
Pre-tax Income of $31 million for the second quarter 2026 increased by $91 million as compared to pre-tax (loss) of $(60) million in the second quarter 2025. Pre-tax margin of 1.6% for the second quarter 2026 improved by 5.4-percentage points as compared to the second quarter 2025 pre-tax (loss) of (3.8)% and included an approximate 5.5-percentage point benefit related to the IEEPA tariff receivables and a 3.8-percentage point benefit from the Lexmark Acquisition. On a pro forma 1 basis, second quarter 2026 pre-tax income margin improved by 4.1-percentage points.
Current report
Second quarter 2026 adjusted 2 operating income margin of 10.6% increased by 6.9-percentage points compared to second quarter 2025, and included a 6.6-percentage point benefit related to the IEEPA a tariff receivables, as well as an approximate 2.0-percentage point benefit from the Lexmark Acquisition. On a pro forma 1 basis, second quarter 2026 adjusted 2 operating income margin increased by 5.4-percentage points.
Current report
•a decrease of 10.0% in IT Solutions revenue, including a 1.0-percentage point unfavorable impact from currency.
Current report
Total revenue of $3.77 billion for the six months ended June 30, 2026 increased 24.2% as compared to the prior year period, including a 31.7-percentage point benefit from the Lexmark Acquisition, as well as a 1.8-percentage point favorable impact from currency. On a pro forma 1 basis total revenue declined 5.1%. Total revenue reflected the following:
Current report
•an increase of 30.4% in Post sale revenue, including a 36.4-percentage point benefit from the Lexmark Acquisition, as well as a 2.3-percentage point favorable impact from currency. On a pro forma 1 basis post sale revenue declined 3.9%.
Current report
•an increase of 23.4% in Equipment sales revenue, including a 35.3-percentage point benefit from the Lexmark Acquisition, and a 1.2-percentage point favorable impact from currency. On a pro forma 1 basis equipment sales revenue declined 8.1%.
Current report
•a decrease of 8.0% in IT Solutions revenue, including a 0.2-percentage point unfavorable impact from currency.
Current report
Net Income for the second quarter 2026 was $13 million as compared to a Net (Loss) of $(106) million for the second quarter 2025. Net income for the second quarter 2026, which includes the results of Lexmark, increased by $119 million as compared to the second quarter 2025 primarily reflecting higher revenues and higher gross profit, as well as lower Other expenses (income), net and Income tax expense. These benefits were partially offset by higher SAG, Non-financing interest expense, RD&E, Amortization of intangible assets, and Restructuring and related costs, net. Second quarter 2026 adjusted 1 Net Income was $55 million as compared to adjusted 1 Net (Loss) of $(77) million for the second quarter 2025. Adjusted 1 Net Income (Loss), which includes the results of Lexmark, increased by $132 million primarily reflecting primarily reflecting higher revenues and higher gross profit, as well as lower Income tax expense. These benefits were partially offset by higher SAG, Non-financing interest expense, Other expenses (income), net, and RD&E.
Current report
Net (Loss) for the six months ended June 30, 2026 was $(92) million as compared to the prior year period Net (Loss) of $(196) million, which reflected the establishment of a valuation allowance of $59 million against certain deferred tax assets to reflect their realizability in 2025. Net (Loss) for the six months ended June 30, 2026, which includes the results of Lexmark, decreased by $104 million primarily reflecting higher revenues and higher gross profit, as well as lower Other expenses (income), net and Income tax expense. These benefits were partially offset by higher SAG, Non-financing interest expense, Restructuring and related costs, net, RD&E, and Amortization of intangible assets. Adjusted 1 Net Income for the six months ended June 30, 2026 was $4 million as compared to the prior year period adjusted 1 Net (Loss) of $(81) million. Adjusted 1 Net Income (Loss), which includes the results of
Current report
Lexmark, increased by $85 million primarily reflecting higher revenues and higher gross profit, as well as lower Other expenses (income), net and Income tax expense. These benefits were partially offset by higher SAG, Non-financing interest expense, RD&E, and Other expenses (income), net.
Current report
Gross margin for the six months ended June 30, 2026 of 32.8% increased by 3.9-percentage points as compared to the prior year period, which included an approximate 2.8-percentage point benefit related to the IEEPA tariff receivables and a 1.2-percentage point benefit related to the Lexmark Acquisition. The increase for the six months ended June 30, 2026 primarily reflects higher revenue and gross profit, which includes the benefits from the IEEPA tariff receivables 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 increased 2.7-percentage points. On a pro forma 1 basis, gross margin for the six months ended June 30, 2026 of 32.8% increased by 3.6-percentage points, driven by the IEEPA tariff receivables.
Current report
Equipment gross margin for six months ended June 30, 2026 of 15.2% decreased by 10.6-percentage points as compared to prior year period, and included a 12.3-percentage point adverse impact from the Lexmark Acquisition. Excluding the impact of Lexmark, equipment gross margin for the six months ended June 30, 2026 increased 1.7-percentage points, and included a 5.9-percentage point benefit related to the IEEPA tariff receivables, as well as the benefits associated with Transformation-related cost and productivity actions and the absence of a charge recognized in the second quarter of 2025 related to the exit of certain production print manufacturing operations. The benefits were partially offset by lower gross profit, including the adverse impact of product cost increases and unfavorable revenue mix. On a pro forma 1 basis, six months ended June 30, 2026, equipment gross margin of 15.2% increased by 6.4-percentage points, primarily reflecting the impacts noted above.
Current report
Post sale gross margin for the six months ended June 30, 2026 of 37.3% increased by 7.6-percentage points as compared to the prior year period, which included a 4.7-percentage point benefit related to the Lexmark Acquisition, and included a 1.7-percentage point benefit related to the IEEPA tariff receivables. Excluding the impact of the Lexmark Acquisition, post sale gross margin increased 2.9-percentage points. The increase for the six months ended June 30, 2026 primarily reflects higher revenue and gross profit, including the benefits from the IEEPA tariff receivables and Transformation-related cost and productivity actions. These benefits were partially offset by the adverse impact related to a fixed asset-related purchase accounting adjustment related to the Lexmark Acquisition, higher incentive compensation expense and benefit costs, unfavorable revenue mix, including lower equipment service revenue and managed print services, rental and other revenues, as well as lower financing fees, and product cost increases. On a pro forma 1 basis, six months ended June 30, 2026 post sale gross margin of 37.3% increased 2.7-percentage points, primarily reflecting the impacts noted above.
Current report
Second quarter 2026 RD&E of $67 million increased by $24 million as compared to second quarter 2025 and for the six months ended June 30, 2026, RD&E of $131 million increased by $46 million. The increase for both the three and six months ended June 30, 2026 as compared to their respective prior year periods primarily reflected the impact of the Lexmark Acquisition, partially offset by productivity and cost savings related to Transformation actions.
Current report
On a pro forma 1 basis, RD&E decreased by $7 million for the second quarter 2026, and decreased by $17 million for the six months ended June 30, 2026. The decrease for both the three and six months ended June 30, 2026 as compared to their respective prior year periods, primarily reflected productivity and cost savings related to Transformation actions.
Current report
Second quarter 2026 SAG of $432 million increased by $64 million as compared to second quarter 2025, primarily reflecting the impact of the Lexmark Acquisition, higher incentive compensation expense and benefit costs. These impacts were partially offset by productivity and cost savings related to Transformation actions, including lower marketing spend, as well as lower litigation expense. On a pro forma 1 basis, second quarter 2026 SAG decreased $31 million, primarily reflecting Transformation actions and higher legacy Lexmark SAG expenses in the second quarter of 2025.
Current report
For the six months ended June 30, 2026, SAG as a percentage of revenue of 22.9% decreased by 1.7-percentage points as compared to the prior year period, including a 2.4-percentage point benefit from the Lexmark Acquisition. The decrease primarily reflects revenue growth that outpaced the increase in SAG spending.
Current report
Other Expenses (Income), Net
Current report
Net (Gain) loss on early extinguishment of debt
Current report
Change in fair value of warrant liability
Current report
For the three and six months ended June 30, 2026 the change in fair value of the warrant liability of $14 million and $9 million, respectively, relates to the warrant dividend issued in the first quarter of 2026 and reflects an increase in the fair value of the warrant liability during the respective periods. Refer to Note 16 - Shareholders' Equity of Xerox Holdings in the Condensed Consolidated Financial Statements for additional information regarding the warrant dividend.
Current report
Commitment fee expense
Current report
Pre-tax Income (Loss) Margin
Current report
Pre-tax margin (loss) for the six months ended June 30, 2026 of (1.1)% improved by 3.1-percentage points as compared to the prior period pre-tax margin (loss) of (4.2)% which included a 3.1-percentage point benefit from the Lexmark Acquisition. Pre-tax margin (loss) for the six months ended June 30, 2026 reflected higher revenue and gross profit, which includes an approximate 2.8-percentage point benefit related to the IEEPA tariff receivables as well as the benefits associated with Transformation-related cost and productivity actions, and lower Other expenses (income), net. The decrease in Other expenses (income), net included a gain on the early repayment of a portion of our 5.50% Senior Unsecured Notes due 2028, and a portion of our 13.50% Senior Unsecured Notes due 2031, as well as the absence of commitment fees incurred during 2025 related to borrowings in support of the Lexmark Acquisition. These benefits were offset by higher SAG and non-financing interest expense, as well as higher Restructuring and related costs, net, RD&E, and Amortization of intangible assets driven by the Lexmark Acquisition. On a pro forma 1 basis, pre-tax margin (loss) for the six months ended June 30, 2026, improved by 2.9-percentage points primarily reflecting the impacts noted above.
Current report
Adjusted 1 operating income margin for the six months ended June 30, 2026 of 7.3% increased by 4.6-percentage points as compared to the prior year period, and included a 3.3-percentage point benefit related to the IEEPA tariff receivables and an approximate 2.5-percentage point benefit from the Lexmark Acquisition. Excluding the impact of the IEEPA tariff receivables and the Lexmark Acquisition, the decrease reflects lower revenue, including post sale
Current report
The effective tax rate for the six months ended June 30, 2026 was (119.0)% and resulted in tax expense of $50 million on a pre-tax (loss). On an adjusted 1 basis, the effective tax rate for the six months ended June 30, 2026 was 93.8%, which resulted in tax expense of $60 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
Current report
The effective tax rate for the six months ended June 30, 2025 was (54.3)% and resulted in a tax expense of $69 million on a pre-tax (loss). On an adjusted 1 basis, the effective tax rate for the six months ended June 30, 2025 was 1,112.5%, which resulted in tax expense of $89 million. Both these rates were higher than the U.S. federal statutory tax rate of 21.0% primarily due to the establishment of a valuation allowance in the first quarter 2025 against certain deferred tax assets as well as not benefiting certain current year losses and expenses and the geographical mix of earnings.
Current report
Net Income (Loss)
Current report
Second quarter 2026 Net Income was $13 million, or $0.07 per diluted share, and included a $39 million net gain on the early extinguishment of debt, or $0.29 per diluted share. On an adjusted 1 basis, Net Income was $55 million, or $0.38 per diluted share.
Current report
Second quarter 2025 Net (Loss) was $(106) million, or $(0.87) per diluted share and included $22 million ($17 million after-tax) of financing-related charges, net, or $0.13 per diluted share, related to the borrowings in support of the Lexmark Acquisition, and $28 million of tax expense related to non-deductible interest expense, or $0.22 per diluted share. On an adjusted 1 basis, Net (Loss) was $(77) million, or $(0.64) per diluted share.
Current report
Net (Loss) for the six months ended June 30, 2026 was $(92) million, or $(0.77) per diluted share, and included a $95 million net gain on the early extinguishment of debt, or $0.73 per diluted share. On an adjusted 1 basis, Net Income for the six months ended June 30, 2026 was $4 million, or $(0.03) per diluted share. The loss per diluted share reflects the impact of preferred stock dividends of $7 million.
Current report
Other Comprehensive Income (Loss)
Current report
Equipment sales
Current report
During the six months ended June 30, 2026, equipment sales revenue increased 23.4% as compared to prior year period, and included a 35.3-percentage point benefit from the Lexmark Acquisition as well as a 1.2-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 11.9% in actual currency due to lower installations and a mix shift toward Entry products. On a pro forma 2 basis, equipment sales revenue for six
Current report
(2)Prior year equipment sales revenues by product group were recast in the second quarter of 2026 to conform to the current year's presentation. Refer to the Equipment Sales Revenue - Revision section below.
Current report
•Mid-Range 1 increased 5% driven by the contribution of Lexmark. Excluding the Lexmark Acquisition, installations were down primarily due to declines in both color and black-and-white MFPs.
Current report
•High-End 1 decreased 19% primarily reflecting declines in Light Production and EPC Low offerings.
Current report
•Entry increased 134% driven by the contribution of Lexmark. Excluding the Lexmark Acquisition, installations declined primarily due to black-and-white printers partially offset growth in color and black-and white printers.
Showing the first 40 of 76 passages. Open the source sections for the rest.
Removed paragraphs (31)
Previous report
Xerox 2026 Form 10-Q 39
Previous 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.
Previous 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.
Previous 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.
Previous 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.
Previous 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.
Previous report
Xerox 2026 Form 10-Q 40
Previous report
•a decrease of 5.5% in IT Products revenue, including a 0.7-percentage point favorable impact from currency.
Previous 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
Previous 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.
Previous 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.
Previous 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.
Previous report
Other (Income) Expenses, Net
Previous report
First quarter 2026 gain on early extinguishment of debt of $56 million reflects the early repayment of a portion of our 5.500% Senior Unsecured Notes due August 2028.
Previous report
Pre-tax (Loss) Margin
Previous report
Net (Loss)
Previous report
First quarter 2026 Net (Loss) was $(105) million, or $(0.84) per diluted share, and included a $56 million gain on the early extinguishment of debt, or $0.43 per diluted share. On an adjusted 1 basis, Net (Loss) was $(51) million, or $(0.43) per diluted share.
Previous report
Other Comprehensive (Loss) Income
Previous report
First quarter 2026 Print and Other segment revenue increased 30.8% as compared to first quarter 2025 and included a 3.4-percentage point benefit from currency. The increase was due to the Lexmark Acquisition.
Previous report
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 report
(3)Reflects primarily IT hardware, software solutions and services sold by the IT Solutions segment to the Print and Other segment.
Previous report
First quarter 2026 SAG of $24 million increased by $1 million as compared to first quarter 2025, primarily due to higher benefits costs, as well as higher compensation expense.
Previous report
First quarter 2026 IT Solutions segment margin of 3.9% increased 0.8-percentage points as compared to first quarter of 2025, primarily driven by higher gross profit, partially offset by lower revenues and higher administrative expenses.
Previous report
•Adjusted Net (Loss) and (Loss) per Share (EPS)
Previous report
Adjusted Net (Loss) and EPS reconciliation:
Previous report
(1)Net (Loss) and (Loss) per Share. First quarter 2026 Net (Loss) and Diluted (Loss) per Share included a $56 million gain on the early extinguishment of debt, or $0.43 per diluted share. First quarter 2025 Net (Loss) and Diluted (Loss) per Share included a charge to tax expense related to the establishment of $59 million of valuation allowances, or $0.47 per diluted share, and $14 million of after-tax financing-related charges, or $0.14 per diluted share, related to a debt offering.
Previous report
(4)Reflects a purchase accounting adjustment related to the Lexmark Acquisition.
Previous report
(2)Reflects a purchase accounting adjustment related to the Lexmark Acquisition.
Previous report
(2)Reflects a purchase accounting adjustment related to the Lexmark Acquisition.
Reworded paragraphs (81)
Previous 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.
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 June 30, 2026 and December 31, 2025 investments in Myriad were $50 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
To understand the trends in the business, we believe that it is helpful to analyze the impact of changes in the translation of foreign currencies into U.S. Dollars on revenue and expenses. We refer to this analysis as "constant currency", “currency impact” or “the impact from currency”. This impact is calculated by translating current period activity in local currency using the comparable prior year period's currency translation rate. This impact is calculated for all countries where the functional currency is the local country currency. We do not hedge the translation effect of revenues or expenses denominated in currencies where the local currency is the functional currency. Management believes the constant currency measure provides investors an additional perspective on revenue trends. Currency impact can be determined as the difference between actual growth rates and constant currency growth rates.
Current wording
To understand the trends in the business, we believe that it is helpful to analyze the impact of changes in the translation of foreign currencies into U.S. Dollars on revenue and expenses. We refer to this analysis as "constant currency", "currency impact" or "the impact from currency". This impact is calculated by translating current period activity in local currency using the comparable prior year period's currency translation rate. This impact is calculated for all countries where the functional currency is the local country currency. We do not hedge the translation effect of revenues or expenses denominated in currencies where the local currency is the functional currency. Management believes the constant currency measure provides an additional perspective on revenue trends. Currency impact can be determined as the difference between actual growth rates and constant currency growth rates.
Previous 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.
Current wording
Equipment sales of $387 million in the second quarter 2026 increased 15.2% in actual currency and 15.0% in constant currency 2, as compared to the second quarter 2025. Second quarter 2026 equipment sales included a 33.1-percentage point benefit from the Lexmark Acquisition. Total equipment installations increased approximately 97.0% including the impact of the Lexmark Acquisition, partially offset by declines in legacy Xerox installations, primarily in the entry, and mid-range color equipment categories. Excluding the Lexmark Acquisition, equipment sales declined 17.9% in actual currency due to lower installations and a mix shift toward Entry products. On a pro
Previous wording
Xerox 2026 Form 10-Q 42
Current wording
Xerox 2026 Form 10-Q 42 forma 1 basis, second quarter 2026 revenue declined 13.0%, primarily reflecting the impacts noted above, partially offset by modest growth from Lexmark.
Previous wording
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 wording
Post sale revenue of $1,346 million in the second quarter 2026 increased 30.7% in actual currency and 29.7% in constant currency 2, as compared to second quarter 2025, and included a 37.5-percentage point benefit from the Lexmark Acquisition. Excluding the Lexmark Acquisition, post sale revenue declined 6.8% 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 1 basis, second quarter 2026 revenue decreased 3.9%, primarily reflecting the impacts noted above.
Previous wording
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 wording
IT Solutions revenue of $189 million in the second quarter 2026 declined 10.0% in actual currency and 9.0% in constant currency 2, as compared to the second quarter 2025. The decline was primarily driven by a mix of revenue subject to net classifications and revenue deferrals.
Previous wording
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 wording
Also in February 2026, in connection with the formation of the Joint Venture, Xerox Holdings, Xerox Corporation, IPCo Holdings and XRX 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).
Previous wording
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 wording
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'
Previous 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:
Current wording
Total revenue of $1.92 billion for second quarter 2026 increased 22.0% from second quarter 2025, including a 31.6-percentage point benefit from the Lexmark Acquisition, as well as a 0.8-percentage point favorable impact from currency. On a pro forma 1 basis total revenue declined 6.5%. Total revenue reflected the following:
Previous 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%.
Current wording
•an increase of 30.7% in Post sale revenue, including a 37.5-percentage point benefit from the Lexmark Acquisition, as well as a 1.0-percentage point favorable impact from currency. On a pro forma 1 basis post sale revenue declined 3.9%.
Previous wording
•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 wording
•an increase of 15.2% in Equipment sales revenue, including a 33.1-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 13.0%.
Previous wording
Net (loss) and adjusted 1 Net (loss) were as follows:
Current wording
Net Income (Loss) and adjusted 1 Net Income (Loss) were as follows:
Previous wording
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 wording
For the six months ended June 30, 2026, net cash used in operating activities was $107 million, net cash used in investing activities was $33 million, and net cash provided by financing activities was $128 million. Refer to the Capital Resources and Liquidity section for additional information regarding our cash flows.
Previous wording
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 wording
Second quarter 2026 total revenue increased 22.0% as compared to second quarter 2025, and included a 31.6-percentage point benefit from the Lexmark Acquisition as well as a 0.8-percentage point benefit from currency. The Lexmark contribution was partially offset by lower revenue at legacy Xerox. Total revenue for legacy Xerox decreased 9.6% 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, second quarter 2026 total revenue declined 6.5% as compared to the second quarter 2025 primarily reflecting the impacts noted above, partially offset by growth from legacy Lexmark.
Previous wording
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 wording
Second quarter 2026 gross margin of 35.8% increased by 7.2-percentage points as compared to second quarter of 2025, which included an approximate 5.5-percentage point benefit related to the IEEPA tariff receivables and a 1.6-percentage point benefit related to the Lexmark Acquisition. The increase in the second quarter 2026 reflects higher revenue and gross profit, which includes the benefits from the IEEPA tariff receivables as well as the benefits associated with Transformation-related cost and productivity actions. These benefits were partially offset by the adverse impact related to an unfavorable revenue mix, including lower equipment service revenue and managed print services, as well as product cost increases. Excluding the impact of the Lexmark Acquisition, gross margin increased 5.6-percentage points reflecting the impacts noted above. On a pro forma 1 basis, second quarter 2026 gross margin of 35.8% increased by 6.9-percentage points driven by the IEEPA tariff receivables.
Previous wording
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 wording
Second quarter 2026 equipment gross margin of 19.5% decreased by 4.5-percentage points as compared to second quarter of 2025, and included a 12.5-percentage point adverse impact from the Lexmark Acquisition. Excluding the impact of Lexmark, second quarter 2026 equipment gross margin increased 8.0-percentage points and included a 13.3-percentage point benefit related to the IEEPA tariff receivables, as well as the benefits associated with Transformation-related cost and productivity actions and the absence of a charge recognized in the second quarter of 2025 related to the exit of certain production print manufacturing operations. These benefits were partially offset by the adverse impact of product cost increases and unfavorable revenue mix. On a pro forma 1 basis, second quarter 2026 equipment gross margin of 19.5% increased by 12.8-percentage points, primarily reflecting the impacts noted above.
Previous wording
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 wording
Second quarter 2026 post sale gross margin of 39.9% increased by 10.0-percentage points as compared to second quarter of 2025, which included a 5.1-percentage point benefit related to the Lexmark Acquisition, and a 3.4-percentage point benefit related to the IEEPA tariff receivables. Excluding the impact of the Lexmark Acquisition, post sale gross margin increased 4.9-percentage points. The increase in the second quarter 2026 primarily reflects higher revenue and gross profit, including the benefits from the IEEPA tariff receivables and Transformation-related cost and productivity actions. These benefits were partially offset by unfavorable revenue mix, including lower equipment service revenue and managed print services, rental and other revenues, as well as lower financing fees, and higher benefits costs and higher incentive compensation expense. On a pro forma 1 basis, second quarter 2026 post sale gross margin of 39.9% increased 4.8-percentage points, primarily reflecting the impacts noted above.
Previous wording
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 wording
Second quarter 2026 RD&E as a percentage of revenue of 3.5% increased 0.8-percentage points as compared to second quarter 2025, and included a 0.8-percentage point adverse impact from the Lexmark Acquisition. For the six months ended June 30, 2026, RD&E as a percentage of revenue of 3.5% increased 0.7-percentage points as compared to the prior year period, and included a 0.9-percentage point adverse impact from the Lexmark Acquisition. The increase for both the three and six months ended June 30, 2026 as compared to their respective prior year periods reflected the impact of the Lexmark Acquisition, as the increase in RD&E spending outpaced the increase in revenue.
Previous 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.
Current wording
Second quarter 2026 SAG as a percentage of revenue of 22.5% decreased by 0.9-percentage points as compared to second quarter 2025, including a 2.4-percentage point benefit from the Lexmark Acquisition. The decrease primarily reflects revenue growth that outpaced the increase in SAG spending.
Previous wording
First quarter 2026 SAG of $430 million increased by $52 million as compared to first quarter 2025, primarily reflecting the impact of the Lexmark acquisition and unfavorable translation currency. These impacts were partially offset by productivity and cost savings related to Transformation actions, including lower marketing spend, as well as reductions in incentive compensation and bad debt expense. On a pro forma 1 basis, first quarter 2026 SAG decreased $29 million, due to the impacts noted above.
Current wording
For the six months ended June 30, 2026, SAG of $862 million increased by $116 million as compared to the prior year period, primarily reflecting the impact of the Lexmark Acquisition, as well as higher incentive compensation expense and benefit costs, and unfavorable translation currency. These impacts were partially offset by productivity and cost savings related to Transformation actions, including lower marketing spend, as well as lower bad debt expense. On a pro forma 1 basis, six months ended June 30, 2026, SAG decreased $60 million, primarily reflecting Transformation actions and higher legacy Lexmark SAG expenses in the second quarter of 2025.
Previous 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.
Current wording
(1)Includes worldwide headcount reductions for restructuring and severance costs of approximately 475 and 115 for the three months ended June 30, 2026 and 2025, respectively, and approximately 1,255 and 340 for the six months ended June 30, 2026 and 2025, 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 $1 million and $19 million for the three months ended March 31, 2026 and 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 $5 million and $0 million for the three months ended June 30, 2026 and 2025, respectively, and $6 million and $19 million for the six months ended June 30, 2026 and 2025, respectively.
Previous 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.
Current wording
Second quarter 2026 primarily impacted the Print and Other segment in several functional areas, with approximately 40% focused on gross margin improvements, approximately 50% focused on SAG reductions, and the remainder focused on RD&E reductions. Second quarter 2025 actions impacted several functional areas, with approximately 85% focused on gross margin improvements and the remainder focused on SAG reductions.
Previous 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.
Current wording
The Restructuring and related costs, net reserve balance for all programs as of June 30, 2026 was $154 million, of which $82 million is expected to be paid over the next twelve months. Refer to Note 10 - Restructuring Programs in the Condensed Consolidated Financial Statements for additional information regarding our restructuring programs.
Previous 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.
Current wording
Second quarter 2026 non-financing interest expense of $100 million was $45 million higher than second quarter 2025. For the six months ended June 30, 2026, non-financing interest expense of $184 million increased by $96 million from the prior year period. The increase, as compared to the respective prior year periods, reflected higher interest rates on 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 three and six months ended June 30, 2026 increased $40 million and $88 million, respectively, compared to the respective prior year periods.
Previous wording
Worldwide employment was approximately 22,900 as of March 31, 2026, which was consistent with December 31, 2025. Increases to headcount in the first quarter 2026 were largely offset by the impact of Transformation actions, including workforce reduction actions.
Current wording
Worldwide employment was approximately 23,000 as of June 30, 2026, which was relatively consistent with December 31, 2025. Increases to headcount during 2026 were largely offset by the impact of Transformation actions, including workforce reduction actions.
Previous 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.
Current wording
Second quarter 2026 non-service retirement-related costs of $21 million increased by $2 million as compared to the second quarter 2025, and for the six months ended June 30, 2026, non-service retirement-related costs of $42 million increased by $5 million from the prior year period. The increase as compared to each of the prior year respective periods primarily reflects 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
First quarter 2026 currency losses, net increased $5 million as compared to the first quarter 2025, primarily due to fluctuations in the EUR/USD exchange rate and hedging costs incurred in connection with the recent acquisition of Lexmark.
Current wording
Second quarter 2026 currency losses, net of $8 million increased $7 million as compared to the second quarter 2025, and for the six months ended June 30, 2026, currency losses of $13 million increased by $12 million from the prior year period. The increase as compared to each of the prior year respective periods primarily reflects fluctuations in the CNY/USD and EUR/USD exchange rates and hedging costs incurred in connection with the recent acquisition of Lexmark.
Previous wording
Gain on early extinguishment of debt
Current wording
For the three and six months ended June 30, 2026, the net (gain) on early extinguishment of debt of $(39) million and $(95) million, respectively, primarily reflects the early repayment of a portion of our 5.500% Senior Unsecured Notes due 2028, as well as a portion of our 13.50% Senior Secured Notes due 2031. The net loss on early extinguishment of debt for the three and six months ended June 30, 2025 of $4 million, respectively, reflects the write-off of deferred debt issuance costs and unamortized discount, as well as other extinguishment costs related to the repayment of Senior Notes.
Previous 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.
Current wording
Commitment fee expense for the three and six months ended June 30, 2025, primarily reflects fees associated with the Lexmark Acquisition financing which includes: the private offering of $400 million in aggregate principal amount of 10.250% Senior Secured First Lien Notes due 2030; $500 million aggregate principal amount of 13.500% Senior Secured Second Lien Notes due 2031; $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.
Previous wording
First quarter 2026 pre-tax (loss) margin of (4.0)% improved by 0.6-percentage points as compared to first quarter of 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, reflecting Transformation-related cost and productivity actions, as well as lower Other (income) expenses, net. The decrease in Other (income) expenses, net reflects a gain on the early repayment 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, higher Amortization of intangible assets, as well as higher SAG and RD&E driven by the Lexmark acquisition. On a pro forma 1 basis first quarter 2026 pre-tax (loss) margin improved by 1.7-percentage points primarily reflecting the impacts noted above.
Current wording
Second quarter 2026 pre-tax income margin of 1.6% improved by 5.4-percentage points as compared to second quarter of 2025 pre-tax (loss) margin of (3.8)% which included a 3.8-percentage point benefit from the Lexmark Acquisition. The improvement in the second quarter 2026 pre-tax margin income was primarily due to higher revenue and gross profit, which includes an approximate 5.5-percentage point benefit related to the IEEPA tariff receivables as well as the benefits associated with Transformation-related cost and productivity actions, and lower Other expenses (income), net. The decrease in Other expenses (income), net reflects a gain on the early repayment of our 5.50% Senior Unsecured Notes due 2028, as well as a portion of our 13.50% Senior Unsecured Notes due 2031, offset in part by the change in fair value of the warrant dividend liability. These benefits were partially offset by higher SAG and non-financing interest expense, as well as higher RD&E, Amortization of intangible assets, and Restructuring and related costs, net driven by the Lexmark Acquisition. On a pro forma 1 basis second quarter 2026 pre-tax margin improved by 4.1-percentage points primarily reflecting the impacts noted above.
Previous 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.
Current wording
Second quarter 2026 adjusted 1 operating income margin of 10.6% increased by 6.9-percentage points as compared to second quarter 2025, and included a 6.6-percentage point benefit related to the IEEPA tariff receivables and an approximate 2.0-percentage point benefit from the Lexmark Acquisition. Excluding the impact of the IEEPA tariff receivables and the Lexmark Acquisition, the decrease reflects lower revenue, including post sale revenue and equipment sales revenue, reflecting an unfavorable revenue mix, including lower outsourcing, service, rental, and other revenues, as well as higher incentive compensation, product cost increases and lower financing fees. These impacts were partially offset by lower SAG expenses as well as productivity and cost savings related to Transformation. On a pro forma 2 basis second quarter 2026 adjusted 1 operating margin increased by 5.4-percentage points primarily reflecting the impacts noted above.
Previous wording
Xerox 2026 Form 10-Q 52
Current wording
Xerox 2026 Form 10-Q 52 revenue and equipment sales and lower gross profit, due to as well 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 SAG and RD&E expenses. On a pro forma 2 basis adjusted 1 operating margin for the six months ended June 30, 2026 increased by 2.8-percentage points primarily reflecting the impacts noted above, as well as the impact of the Lexmark Acquisition.
Previous 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.
Current wording
Second quarter 2026 effective tax rate was 58.1% and resulted in tax expense of $18 million. On an adjusted 1 basis, the second quarter 2026 effective tax rate was 31.3%, which resulted in tax expense of $25 million. Both of these rates were higher than the U.S. federal statutory tax rate of 21.0% primarily due Xerox's inability to benefit from certain current year losses and expenses, as well as the geographical mix of earnings.
Previous wording
First quarter 2025 effective tax rate was a (34.3)%. This rate was higher than the U.S. federal statutory tax rate of 21.0% but resulted in tax expense of $23 million, primarily due to the establishment of a valuation allowance against certain deferred tax assets and lower tax benefits of some current year losses and expenses, partially offset by the geographical mix of earnings. On an adjusted 1 basis, first quarter 2025 effective tax rate was 60.0%, which resulted in a tax (benefit) of $(6) million and was higher than the U.S. federal statutory tax rate of 21.0% primarily due to lower benefits of certain current year losses and expenses.
Current wording
Second quarter 2025 effective tax rate was (76.7)% and resulted in a tax expense of $46 million on a pre-tax (loss). On an adjusted 1 basis, the second quarter 2025 effective tax rate was 527.8%, which resulted in tax expense of $95 million. Both these rates were higher than the U.S. federal statutory tax rate of 21.0% primarily due to not benefiting certain current year losses and expenses, as well as the geographical mix of earnings.
Previous wording
First quarter 2025 Net (Loss) was $(90) million, or $(0.75) per diluted share, and included a charge to tax expense related to the establishment of $59 million of valuation allowances, or $0.47 per diluted share, and $14 million of after-tax financing-related charges, or $0.14 per diluted share, related to a debt offering. On an adjusted 1 basis, Net (Loss) was $(4) million, or $(0.06) per diluted share.
Current wording
Net (Loss) for the six months ended June 30, 2025 was $(196) million, or $(1.62) per diluted share and include a charge to tax expense related to the establishment of $59 million of valuation allowances, or $0.47 per diluted share, financing-related charges, net of $40 million ($30 million after-tax), or $0.24 per diluted share, related to the borrowings in support of the Lexmark Acquisition financing, and tax expense of $28 million, or $0.22 per diluted share, related to non-deductible interest expense. On an adjusted 1 basis, Net (Loss) was $(81) million, or $(0.71) per diluted share.
Previous wording
Refer to Note 20 - (Loss) per Share in the Condensed Consolidated Financial Statements for additional information regarding the calculation of basic and diluted loss per share.
Current wording
Refer to Note 20 - Income (Loss) per Share in the Condensed Consolidated Financial Statements for additional information regarding the calculation of basic and diluted loss per share.
Previous 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.
Current 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 - Income (Loss) per Share in the Notes to the Condensed Consolidated Financial Statements.
Previous 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).
Current wording
Second quarter 2026 Other Comprehensive Income, Net was $10 million and included the following: i) $5 million of net gains from the changes in defined benefit plans primarily reflecting the amortization of net actuarial losses, partially offset by actuarial losses and the negative impact of currency; ii) $4 million of net unrealized gains; and iii) net translation adjustment gains of $1 million reflecting the strengthening of the Chinese Yuan and Mexican Peso against the U.S. Dollar, partially offset by the weakening of the Canadian Dollar, Euro, and the Philippine Peso against the U.S. Dollar during the quarter. This compares to Other Comprehensive Income, Net of $169 million for the second quarter 2025, which included the following: i) net translation adjustment gains of $229 million reflecting the strengthening of all of our major foreign currencies against the U.S. Dollar during the quarter; ii) $(56) million of net (losses) from the changes in defined benefit plans reflecting the negative impact of currency, partially offset by the amortization of actuarial losses; and iii) $(4) million of net unrealized (losses).
Previous wording
Refer to Note 18 - Other Comprehensive (Loss) Income in the Condensed Consolidated Financial Statements for the components of Other Comprehensive (Loss) Income, Note 13 - Financial Instruments in the Condensed Consolidated Financial Statements for additional information regarding unrealized gains (losses), net, and Note 15 - Employee Benefit Plans in the Condensed Consolidated Financial Statements for additional information regarding net changes in our defined benefit plans.
Current wording
Refer to Note 18 - Other Comprehensive Income (Loss) in the Condensed Consolidated Financial Statements for the components of Other Comprehensive Income (Loss), Note 13 - Financial Instruments in the Condensed Consolidated Financial Statements for additional information regarding Unrealized gains (losses), net, and Note 15 - Employee Benefit Plans in the Condensed Consolidated Financial Statements for additional information regarding net changes in our defined benefit plans.
Showing the first 40 of 81 pairs. Open the source sections for the rest.
Rearranged current paragraphs (13)
Current report — wording carried from elsewhere
Equity of Xerox Holdings in the Condensed Consolidated Financial Statements for additional information regarding the Warrant Dividend.
Current report — wording carried from elsewhere
(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 — wording carried from elsewhere
(3)IT Solutions includes IT Products and IT Services provided by the IT Solutions segment. Refer to Reportable Segments - IT Solutions for further information.
Current report — wording carried from elsewhere
(4)Refer to Note 4 - Segment Reporting in the Condensed Consolidated Financial Statements for additional information regarding our reportable segments.
Current report — wording carried from elsewhere
(5)Primarily reflects IT hardware, software solutions and services sold by the IT Solutions segment to the Print and Other segment.
Current report — wording carried from elsewhere
Total revenue for the six months ended June 30, 2026 increased 24.2% as compared to the prior year period and included a 31.7-percentage point benefit from the Lexmark Acquisition as well as a 1.8-percentage point benefit from currency. The Lexmark contribution was partially offset by lower revenue at legacy Xerox. Total revenue for legacy Xerox decreased 7.5% 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, total revenue for the six months ended June 30, 2026 declined 5.1% as compared to the prior period, primarily reflecting the impacts noted above, partially offset by growth from legacy Lexmark
Current report — wording carried from elsewhere
(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 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.
Current report — wording carried from elsewhere
Refer to Note 12 - Debt in the Condensed Consolidated Financial Statements for additional information regarding debt activity and interest expense.
Current report — wording carried from elsewhere
(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 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.
Current report — wording carried from elsewhere
Other Comprehensive (Loss) for the six months ended June 30, 2026 was $(23) million and included the following: i) net translation adjustment (losses) of $(76) million reflecting the weakening of the Canadian Dollar, Euro, and British Pound against the U.S. Dollar, partially offset by the strengthening of the Chinese Yuan and Mexican Peso against the U.S. Dollar; ii) $45 million of net gains from the changes in defined benefit plans primarily reflecting the amortization of net actuarial losses, and the positive impact of currency; and iii) $8 million of net unrealized gains. This compares to Other Comprehensive Income, Net of $251 million for the six months ended June 30, 2025, which included the following: i) net translation adjustment gains of $334 million reflecting the strengthening of all of our major foreign currencies against the U.S. Dollar; ii) $(77) 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) $(6) million of net unrealized (losses).
Current report — wording carried from elsewhere
(1)Primarily reflects IT hardware, software solutions and services, sold by the IT Solutions segment to the Print and Other segment.
Current report — wording carried from elsewhere
Installs for the six months ended June 30, 2026, as compared to the prior year period, reflect the following:
Current report — wording carried from elsewhere
Xerox 2026 Form 10-Q 63 any debt covenants. Our capacity to borrow under the ABL Facility may be adversely impacted by the terms of the ABL Facility and certain other agreements that govern our indebtedness.
Rearranged previous paragraphs (6)
Previous report — wording carried elsewhere
(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.
Previous report — wording carried elsewhere
Refer to Note 10 - Restructuring Programs in the Condensed Consolidated Financial Statements for additional information regarding our restructuring programs.
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
•Gain on early extinguishment of debt
Previous report — wording carried elsewhere
(2)Reflects the early repayment of a portion of our 5.500% Senior Unsecured Notes due August 2028.
Previous report — wording carried elsewhere
(1)Pre-tax (loss) and Income tax expense.