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Xerox

Xerox (XRX) Q1 2026 Earnings

Reported Apr 30, 2026 at 6:40 AM ET · SEC Source

Q1 26 EPS

$-0.43

MISS 56.36%

Est. $-0.28

Q1 26 Revenue

$1.85B

BEAT +5.67%

Est. $1.75B

vs S&P Since Q1 26

+25.6%

BEATING MARKET

XRX +30.2% vs S&P +4.6%

Market Reaction

Did XRX Beat Earnings? Q1 2026 Results

Xerox delivered a mixed first quarter for 2026, beating revenue expectations while falling well short on the bottom line, as the Lexmark acquisition continued to reshape the company's financial profile in complicated ways. Revenue climbed 26.7% year-… Read more Xerox delivered a mixed first quarter for 2026, beating revenue expectations while falling well short on the bottom line, as the Lexmark acquisition continued to reshape the company's financial profile in complicated ways. Revenue climbed 26.7% year-over-year to $1.85 billion, topping the $1.75 billion consensus by 5.67%, but the headline growth masked a 3.7% pro forma decline that underscores how much the legacy business continues to shrink. Adjusted EPS came in at -$0.43, missing the -$0.28 consensus by 56.36%, though management pointed to a normalized figure of -$0.11 after adjusting for tax effects on U.S. And U.K. Losses. The most constructive signal was adjusted operating income rising to $72 million from $22 million a year earlier, with margin expanding 240 basis points to 3.9%, largely on Lexmark contribution. Shares rose roughly 15.6% in the days following the report. Xerox reaffirmed full-year guidance of revenue above $7.5 billion, adjusted operating income of $450 million to $500 million, and free cash flow of approximately $250 million, with management expecting more than $400 million of cash generation across the remaining three quarters.

Key Takeaways

  • • Lexmark acquisition contributed approximately 38 percentage points to equipment sales growth and 35.3 percentage points to post-sale revenue growth
  • • Adjusted operating margin expanded 240 basis points year-over-year to 3.9%, with approximately 300 basis points from Lexmark
  • • Transformation-related cost reductions and productivity actions improved profitability
  • • SAG as a percentage of revenue improved to 23.3% from 25.9%
  • • $56 million gain on early extinguishment of 2028 Senior Notes
  • • Post-sale gross margin improved 500 basis points to 34.6%

XRX Forward Guidance & Outlook

Xerox reaffirmed its full-year 2026 guidance: revenue above $7.5 billion in constant currency, adjusted operating income in the range of $450 million to $500 million, and free cash flow of approximately $250 million. The company expects greater than $400 million of cash generation over the remaining three quarters. Full-year estimated pre-tax loss is approximately $170 million. Free cash flow guidance reflects higher interest expense from the TPG joint venture financing, partially offset by lower capex and working capital improvements. Lexmark integration synergies of at least $300 million remain on track. The February 2026 Supreme Court ruling on IEEPA tariffs is expected to have a net positive impact on cost structure, though partially offset by higher memory and oil prices. Q1 results and guidance do not reflect potential tariff refund benefits as the related process had not been clarified as of March 31.

24/7 Wall St

XRX YoY Financials

Q1 2026 vs Q1 2025, source: SEC Filings

24/7 Wall St

XRX Revenue by Segment

With YoY comparisons, source: SEC Filings

Q2 25 Q1 26

“This quarter's results demonstrated tangible progress as revenue and profit trajectory improved, adjusted operating margin expanded, and we further enhanced our liquidity.”

— Louie Pastor, Q1 2026 Earnings Press Release

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