Research News and Market Data on XRX
October 29, 2026
Revenue Trajectory and Adjusted1 Operating Income Improve; Higher Input Costs and Market Headwinds Weigh on Full-Year Outlook
Financial Summary
Q3 2026
- Revenue of $1.87 billion, down 4.7 percent, or down 4.5 percent in constant currency1.
- GAAP net (loss)2 of $(1,015) million, or $(7.73) per share, down $255 million or $1.72 per share, year-over-year, respectively.
- Adjusted1 net income of $7 million, or $0.02 per share, down $20 million or $0.18 per share, year-over-year, respectively.
- Adjusted1 operating income of $124 million, up $59 million year-over-year.
- Adjusted1 operating margin of 6.6 percent, up 330 basis points year-over-year.
- Operating cash flow of $30 million, down $86 million year-over year.
- Free cash flow1 of $7 million, down $81 million year-over-year.
NORWALK, Conn.–(BUSINESS WIRE)–Oct. 29, 2026– Xerox Holdings Corporation (NASDAQ: XRX) today announced its 2026 third-quarter results.
“This quarter, Print equipment revenue grew and adjusted operating margin doubled as we continued to execute against our three priorities: stabilize revenue, increase profitability and reduce leverage,” said Louie Pastor, chief executive officer at Xerox. “We are seeing results in the areas where we have focused our execution, but the headwinds affecting our outlook have intensified, creating greater near-term pressure than we expected. As a result, we are lowering our full-year adjusted operating income and free cash flow guidance. We’re responding with actions and cost measures to mitigate these pressures, improve profitability, and preserve cash, including the suspension of our common and preferred dividends, while maintaining our focus on reducing debt.”
Progress Against Strategic Priorities
Q3 2026
- Double-digit equipment revenue growth in both Entry and Production
- Announced three new Production devices at PRINTING United Expo, as well as a partnership with Xeikon to enter the Packaging and Labels market
- $8 million non-cash debt reduction through our warrant program, retiring 2030 convertible notes
- Announced Exchange of $174 million in 5.50% 2028 Senior Notes for:
- $121 million of 10.25% 2030 Senior Secured Notes
- $9 million in equity
Third-Quarter Key Financial Results
| (in millions, except per share data) | Q3 2026 | Q3 2025 | B/(W)YOY | ||
| Revenue | $1,868 | $1,961 | (4.7)% AC(4.5)% CC1 | ||
| Gross Profit | $545 | $445 | $100 | ||
| Gross Margin | 29.2% | 22.7% | 650 bps | ||
| RD&E % | 3.0% | 3.8% | 80 bps | ||
| SAG % | 20.0% | 24.3% | 430 bps | ||
| Pre-Tax (Loss) | $(1,006) | $(300) | $(706) | ||
| Pre-Tax (Loss) Margin | (53.9)% | (15.3)% | NM | ||
| Gross Profit – Adjusted1 | $551 | $566 | $(15) | ||
| Gross Margin – Adjusted1 | 29.5% | 28.9% | 60 bps | ||
| Operating Income – Adjusted1 | $124 | $65 | $59 | ||
| Operating Income Margin – Adjusted1 | 6.6% | 3.3% | 330 bps | ||
| GAAP Diluted (Loss) per Share2 | $(7.73) | $(6.01) | $(1.72) | ||
| Diluted Earnings Per Share – Adjusted1 | $0.02 | $0.20 | $(0.18) |
Third-Quarter Segment Results
| (in millions) | Q3 2026 | Q3 2025 | B/(W)YOY | ||
| Revenue | |||||
| Print and Other | $1,688 | $1,739 | (2.9)% | ||
| IT Solutions | 187 | 226 | (17.3)% | ||
| Intersegment Elimination3 | (7) | (4) | NM | ||
| Total Revenue | $1,868 | $1,961 | (4.7)% | ||
| Profit | |||||
| Print and Other | $136 | $64 | 112.5% | ||
| IT Solutions | 8 | 18 | (55.6)% | ||
| Corporate Other4 | (20) | (17) | 17.6% | ||
| Total Profit | $124 | $65 | 90.8% |
| _____________ | ||
| 1. | Refer to the “Non-GAAP Financial Measures” section of this release for a discussion of these non-GAAP measures and their reconciliation to the reported GAAP measures. | |
| 2. | Third quarter 2026 includes an after-tax non-cash goodwill impairment charge of $955 million ($959 million pre-tax), or $6.87 per diluted share. Third quarter 2025 includes an inventory-related purchase accounting adjustment, related to the acquisition of Lexmark, of $85 million ($102 million pre-tax), or $0.67 per diluted share, as well as a tax expense charge of $467 million, or $3.69 per diluted share, related to the establishment of a valuation allowance against certain deferred tax assets to reflect their realizability. | |
| 3. | Reflects primarily IT hardware, software solutions and services, sold by the IT Solutions segment to the Print and Other segment. | |
| 4. | Corporate Other reflects certain administrative and general expenses, which primarily relate to corporate functions, and are not allocated to either of our reportable segments. | |
Updated 2026 Guidance
- Revenue: Approximately $7.6 billion
- Adjusted1,2 Operating Income: $450-475 million
- Free Cash Flow1,2: $50-100 million
Non-GAAP Measures
This release refers to the following non-GAAP financial measures:
- Adjusted1 EPS excludes Restructuring and related costs, net, Amortization of intangible assets, non-service retirement-related costs, Goodwill impairment charge, and other discrete adjustments from GAAP EPS, as applicable.
- Adjusted1 operating income and margin, which exclude the EPS adjustments noted above, except the tax expense charge related to the establishment of a valuation allowance against certain deferred tax assets, as well as the remainder of Other expenses (income), net from pre-tax (loss) and margin.
- Constant currency1 (CC) revenue change, which excludes the effects of currency translation.
- Free cash flow 1, which is operating cash flow less capital expenditures.
| _____________ | ||
| 1. | Refer to the “Non-GAAP Financial Measures” section of this release for a discussion of these non-GAAP measures and their reconciliation to the reported GAAP measures. | |
| 2. | Adjusted operating income guidance reflects a benefit from the recognition of a $105 million pre-tax IEEPA tariff receivable associated with the recent Supreme Court ruling on IEEPA tariffs. The benefit to free cash flow guidance, resulting from Xerox’s sale of the IEEPA tariff receivable to a third party, is $80 million. | |
Forward-Looking Statement
This presentation and other written or oral statements made from time to time by management contain “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995 and involve certain risks and uncertainties. The words “anticipate”, “believe”, “estimate”, “expect”, “intend”, “will”, “would”, “could”, “can”, “should”, “targeting”, “projecting”, “driving”, “future”, “plan”, “predict”, “may” and similar expressions are intended to identify forward-looking statements. The Company’s actual results may differ significantly from the results discussed in the forward-looking statements. These statements reflect management’s current beliefs and assumptions and are subject to a number of other factors that may cause actual results to differ materially.
Such factors include but are not limited to: applicable market conditions; global macroeconomic conditions, including inflation, slower growth or recession, delays or disruptions in the global supply chain, higher interest rates, and wars and other conflicts, including the current conflict between Russia and Ukraine; our ability to succeed in a competitive environment, including by developing new products and service offerings and preserving our existing products and market share as well as repositioning our business in the face of customer preference, technological, and other change, such as evolving return-to-office and hybrid working trends; failure of our customers, vendors, and logistics partners to perform their contractual obligations to us; our ability to attract, train, and retain key personnel; execution risks around our Reinvention; the risk of breaches of our security systems due to cyber, malware, or other intentional attacks that could expose us to liability, litigation, regulatory action or damage our reputation; our ability to obtain adequate pricing for our products and services and to maintain and improve our cost structure; changes in economic and political conditions, licensing requirements, and tax laws in the United States and in the foreign countries in which we do business; the risk that multi-year contracts with governmental entities could be terminated prior to the end of the contract term and that civil or criminal penalties and administrative sanctions could be imposed on us if we fail to comply with the terms of such contracts and applicable law; interest rates, cost of capital, and access to credit markets; risks related to our indebtedness; the imposition of new or incremental trade protection measures such as tariffs and import or export restrictions; funding requirements associated with our employee pension and retiree health benefit plans; changes in foreign currency exchange rates; the risk that we may be subject to new or heightened regulatory or operation risks as a result of our, or third parties,’ use or anticipated use of artificial intelligence technologies; the risk that our operations and products may not comply with applicable worldwide regulatory requirements, particularly environmental regulations and directives and anti-corruption laws; the outcome of litigation and regulatory proceedings to which we may be a party; laws, regulations, international agreements and other initiatives to limit greenhouse gas emissions or relating to climate change, as well as the physical effects of climate change; our ability to successfully integrate the Lexmark business and realize the anticipated benefits thereof, including expected synergies; and other factors that are set forth from time to time in the Company’s Securities and Exchange Commission filings, including the combined Annual Report on Form 10-K of Xerox Holdings and Xerox Corporation.
These forward-looking statements speak only as of the date hereof or of the date to which they refer, and the Company assumes no obligation to update or revise any forward-looking statements as a result of new information or future events or developments, except as required by law.
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©2026 Xerox Corporation. All rights reserved. Xerox® and the Xerox logo are trademarks of XRX Brandco LLC in the United States and/or other countries.
View source version on businesswire.com: https://www.businesswire.com/news/home/20261029664283/en/
Media Contact:
Justin Capella, Xerox, [email protected]
Investor Contact:
Greg Stein, Xerox, [email protected]
Source: Xerox Holdings Corporation