Xerox Holdings reported second-quarter 2026 revenue of $1.92 billion, up 22.0%, or 21.2% in constant currency. On a pro forma basis, revenue was down 6.5%.
GAAP net income was $13 million, or $0.07 per share, up $119 million, or $0.94 per share, year-over-year. Adjusted net income was $55 million, or $0.38 per share, up $132 million, or $1.02 per share, year-over-year.
Adjusted operating income was $203 million, up $144 million year-over-year. Adjusted operating margin was 10.6%, up 690 basis points year-over-year. Operating cash flow was $37 million, up $48 million year-over-year, and free cash flow was $11 million, up $41 million year-over-year.
Xerox said Q2 2026 profitability metrics include $105 million of a pre-tax benefit from the recognition of IEEPA tariff receivables. This benefit is not included in operating cash flow or free cash flow for the quarter, as the sale of the receivables is currently accounted for within financing cash flow.
The company raised its Lexmark gross cost synergy target by $50 million to at least $350 million. Xerox expanded its 9-Series A3 lineup in June, adding new mid-range devices and making the portfolio available to all clients and channel partners. It also launched new A4 color devices in June under its new unified brand and logo, and said Print and IT Solutions total sales pipelines remain ahead of the prior year.
Xerox reduced total debt outstanding by more than $200 million during the quarter. This included $125 million of 13.00% 2026 Senior Notes retired at maturity, $93 million of 5.50% 2028 Senior Notes, and $6 million of 13.50% 2031 Senior Secured Notes.
Within segments, Print and Other revenue was $1,733 million, up 26.9%, with segment profit of $220 million. IT Solutions revenue was $194 million, down 8.9%, with segment profit of $7 million.
For full-year 2026, Xerox raised its guidance. The company now expects revenue of approximately $7.6 billion, up from above $7.5 billion previously. Adjusted operating income is now expected in a range of $555 million to $605 million, up from $450 million to $500 million. Free cash flow is expected to be approximately $250 million.
KEY QUOTE:
Our second-quarter results gave us another reason for confidence. We made progress on each of our three strategic priorities: stabilizing revenue, increasing profitability, and reducing leverage. As a result, we are raising both revenue and adjusted operating income guidance, as well as our Lexmark gross synergy targets. While we have more to prove, I like how our team is showing up and executing with urgency and discipline.
Louie Pastor, Chief Executive Officer at Xerox
