{"id":70304,"date":"2026-07-30T12:52:28","date_gmt":"2026-07-30T19:52:28","guid":{"rendered":"http:\/\/www.enxmag.com\/twii\/?p=70304"},"modified":"2026-07-30T12:52:30","modified_gmt":"2026-07-30T19:52:30","slug":"xeroxs-strong-q2-raises-full%e2%80%91year-2026-guidance","status":"publish","type":"post","link":"https:\/\/www.enxmag.com\/twii\/news\/2026\/07\/xeroxs-strong-q2-raises-full%e2%80%91year-2026-guidance\/","title":{"rendered":"Xerox’s Strong Q2 Raises Full\u2011Year 2026 Guidance"},"content":{"rendered":"\n

Stamford, CT (July 30, 2026)<\/em> \u2014 Xerox reported strong second\u2011quarter 2026 results, highlighted by substantial year\u2011over\u2011year revenue and profit growth, driven by the Lexmark acquisition, cost\u2011synergy execution, and a one\u2011time benefit from IEEPA tariff receivables.<\/p>\n\n\n\n

Revenue reached $1.92 billion, up 22% (21.2% in constant currency), though on a pro forma basis\u2014reflecting Lexmark\u2019s prior\u2011year results\u2014revenue declined 6.5%. The company posted GAAP net income of $13 million, a sharp improvement from a $106 million loss in Q2 2025. Adjusted net income rose to $55 million, and adjusted operating income surged to $203 million, up $144 million year\u2011over\u2011year.<\/p>\n\n\n\n

Xerox noted that profitability metrics include a $105 million pre\u2011tax benefit from recognizing IEEPA tariff receivables, which materially lifted margins. As the document states, \u201cProfitability metrics for Q2 2026 include $105 million of a pre-tax benefit from the recognition of IEEPA tariff receivables.\u201d<\/p>\n\n\n\n

\u201cOur second-quarter results gave us another reason for confidence,” said Louie Pastor, Xerox CEO. “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.\u201d<\/p>\n\n\n\n

Gross margin expanded significantly to 35.8%, up 720 basis points, reflecting integration synergies, cost discipline, and the unified operating model following the Lexmark acquisition. Adjusted gross margin reached 36.4%. Operating cash flow improved to $37 million, and free cash flow rose to $11 million, both benefiting from stronger profitability though excluding the $80 million cash proceeds from monetizing tariff receivables, which were classified as financing cash flow.<\/p>\n\n\n\n

Segment performance was mixed. The Print and Other segment generated $1.73 billion in revenue, up 26.9%, with profit rising to $220 million from $65 million. This segment benefited heavily from Lexmark\u2019s contribution and the IEEPA tariff benefit. Equipment sales increased 15.2%, though excluding Lexmark, equipment revenue declined due to lower installations and a shift toward entry\u2011level products. Post\u2011sale revenue rose 30.7%, again largely driven by Lexmark; excluding the acquisition, post\u2011sale revenue fell 6.8% due to lower service revenue, managed print declines, and reduced financing revenue.<\/p>\n\n\n\n

The IT Solutions segment saw revenue decline 8.9% to $194 million, reflecting lower IT product and service revenue and certain net classifications and deferrals. Segment profit fell to $7 million from $10 million.<\/p>\n\n\n\n

Xerox emphasized progress on strategic priorities, including raising Lexmark synergy targets by $50 million to at least $350 million, expanding its A3 and A4 product lines under the unified brand, and reducing total debt by more than $200 million through repayments of multiple note issuances.<\/p>\n\n\n\n

Pre\u2011tax income improved dramatically to $31 million, compared with a $60 million loss in Q2 2025. The improvement stemmed from higher revenue, gross profit expansion, cost\u2011reduction initiatives, and lower other expenses\u2014particularly a $39 million gain from early debt extinguishment.<\/p>\n\n\n\n

Given the strong quarter, Xerox raised full\u2011year 2026 guidance. The company now expects approximately $7.6 billion in revenue, $555\u2013$605 million in adjusted operating income, and about $250 million in free cash flow. As the release notes, adjusted operating income guidance \u201creflects a benefit from the recognition of a $105 million pre-tax IEEPA tariff receivable.\u201d<\/p>\n\n\n\n

Overall, Q2 2026 reflects meaningful operational improvement, successful integration of Lexmark, and strengthened financial performance despite ongoing cost headwinds.<\/p>\n","protected":false},"excerpt":{"rendered":"

Stamford, CT (July 30, 2026) \u2014 Xerox reported strong second\u2011quarter 2026 results, highlighted by substantial year\u2011over\u2011year revenue and profit growth, driven by the Lexmark acquisition, cost\u2011synergy execution, and a one\u2011time benefit from IEEPA tariff receivables. Revenue reached $1.92 billion, up 22% (21.2% in constant currency), though on a pro forma basis\u2014reflecting Lexmark\u2019s prior\u2011year results\u2014revenue declined 6.5%. The company posted GAAP net income of $13 million, a sharp improvement from a $106 million loss in Q2 2025. Adjusted net income rose to $55 million, and adjusted operating income surged to $203 million, up $144 million year\u2011over\u2011year. Xerox noted that profitability metrics include a $105 million pre\u2011tax benefit from recognizing IEEPA tariff receivables, which materially lifted margins. As the document states, \u201cProfitability metrics for Q2 2026 include $105 million of a pre-tax benefit from the recognition of IEEPA tariff receivables.\u201d \u201cOur second-quarter results gave us another reason for confidence,” said Louie Pastor, Xerox CEO. “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.\u201d Gross margin expanded significantly to 35.8%, up 720 basis points, reflecting integration synergies, cost discipline, and the unified operating model following the Lexmark acquisition. Adjusted gross margin reached 36.4%. Operating cash flow improved to $37 million, and free cash flow rose to $11 million, both benefiting from stronger profitability though excluding the $80 million cash proceeds from monetizing tariff receivables, which were classified as financing cash flow. Segment performance was mixed. The Print and Other segment generated $1.73 billion in revenue, up 26.9%, with profit rising to $220 million from $65 million. This segment benefited heavily from Lexmark\u2019s contribution and the IEEPA tariff benefit. Equipment sales increased 15.2%, though excluding Lexmark, equipment revenue declined due to lower installations and a shift toward entry\u2011level products. Post\u2011sale revenue rose 30.7%, again largely driven by Lexmark; excluding the acquisition, post\u2011sale revenue fell 6.8% due to lower service revenue, managed print declines, and reduced financing revenue. The IT Solutions segment saw revenue decline 8.9% to $194 million, reflecting lower IT product and service revenue and certain net classifications and deferrals. Segment profit fell to $7 million from $10 million. Xerox emphasized progress on strategic priorities, including raising Lexmark synergy targets by $50 million to at least $350 million, expanding its A3 and A4 product lines under the unified brand, and reducing total debt by more than $200 million through repayments of multiple note issuances. Pre\u2011tax income improved dramatically to $31 million, compared with a $60 million loss in Q2 2025. The improvement stemmed from higher revenue, gross profit expansion, cost\u2011reduction initiatives, and lower other expenses\u2014particularly a $39 million gain from early debt extinguishment. Given the strong quarter, Xerox raised full\u2011year 2026 guidance. The company now expects approximately $7.6 billion in revenue, $555\u2013$605 million in adjusted operating income, and about $250 million in free cash flow. As the release notes, adjusted operating income guidance \u201creflects a benefit from the recognition of a $105 million pre-tax IEEPA tariff receivable.\u201d Overall, Q2 2026 reflects meaningful operational improvement, successful integration of Lexmark, and strengthened financial performance despite ongoing cost headwinds.<\/p>\n","protected":false},"author":66,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[86],"tags":[362],"_links":{"self":[{"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/posts\/70304"}],"collection":[{"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/users\/66"}],"replies":[{"embeddable":true,"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/comments?post=70304"}],"version-history":[{"count":2,"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/posts\/70304\/revisions"}],"predecessor-version":[{"id":70306,"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/posts\/70304\/revisions\/70306"}],"wp:attachment":[{"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/media?parent=70304"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/categories?post=70304"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/tags?post=70304"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}