Companies /Industrials

Xerox Holdings Corp

NASDAQ: XRX Business Equipment & Supplies
$2.97
▼ $0.01 (−0.34%) today
Markets closed · 5:04pm ET

Q2 2025 Earnings

Reported Jul 31, 2025, 6:32am ET · SEC source
$-0.64
Miss −1,014.29%
EPS · est. $0.07
$1.6B
Beat +1.97%
Revenue · est. $1.5B
−6.7%
Trailing market
XRX vs S&P since report
1 quarter
Consecutive EPS beats

Market Reaction

% change · around the report
−16%−8%0Jul 31Aug 1report 6:32am ETearnings−2.7%−19.5%
−16%−8%0Jul 31Aug 1earnings−2.7%−19.5%
XRX −19.5%S&P 500 −2.7%
−16%−8%0Jul 31Aug 1report 6:32am ETearnings−3.4%−19.5%
−16%−8%0Jul 31Aug 1earnings−3.4%−19.5%
XRX −19.5%NASDAQ −3.4%
−20%−10%0+10%Jul 30Aug 7report 6:32am ETearnings−1.1%−15.8%
−20%−10%0+10%Jul 30Aug 7earnings−1.1%−15.8%
XRX −15.8%S&P 500 −1.1%
−20%−10%0+10%Jul 30Aug 7report 6:32am ETearnings−1.0%−15.8%
−20%−10%0+10%Jul 30Aug 7earnings−1.0%−15.8%
XRX −15.8%NASDAQ −1.0%
−22.41%
Day of report
−2.72%
Next session
+4.20%
One week
−5.43%
30 days

S&P 500 over the same 30 days: +1.30%.

Did XRX Beat Earnings? Q2 2025 Results

Xerox delivered a deeply disappointing second quarter, swinging to an adjusted loss of $0.64 per share against a consensus estimate of $0.07, a miss of more than 1,000%, even as revenue of $1.58 billion edged modestly ahead of the $1.55 billion analysts had expected and held essentially flat year-over-year, down just 0.1%. The headline EPS collapse was driven by a sharp contraction in gross margin, which fell 440 basis points to 28.6%, compounded by higher interest expense tied to Lexmark acquisition financing and an outsized tax burden, all of which pushed GAAP net loss to $106 million compared to net income of $18 million a year ago. Shares fell sharply on the results, with the stock down roughly 51% year-to-date entering the print. Looking ahead, the company's revised 2025 guidance now incorporates six months of Lexmark activity, targeting constant-currency revenue growth of 16 to 17% and free cash flow of approximately $250 million, though management cautioned that $50 to $75 million in one-time synergy costs will weigh on near-term results.

Key Takeaways
  • Growth in IT and Digital Solutions offset print revenue declines to deliver near-flat total revenue
  • ITsavvy acquisition contributed 10.6 percentage points to post-sale revenue growth
  • Reinvention-related productivity and cost savings lowered SAG expenses by $25 million YoY
  • Equipment gross margin contracted 10.5 percentage points to 24.0% due to product cost increases and tariff-related costs
  • Total equipment installations declined approximately 12% YoY with weakness concentrated in high-end and entry-level
  • Soft demand in April and May amid peak tariff and trade uncertainty weighed on equipment sales
  • Higher non-financing interest expense from Lexmark acquisition-related borrowings increased Other expenses, net

“Completing the Lexmark acquisition marks an important milestone in the company's Reinvention, creating a vertically integrated market leader with a broader, differentiated set of workflow and technology solutions for our clients and partners.”

Xerox CEO, on the earnings call

Forward Guidance & Outlook

Xerox's revised 2025 guidance now includes six months of Lexmark activity beginning July 1. The company expects revenue growth of 16-17% in constant currency (approximately $7.3 billion at the high end), adjusted operating margin of around 4.5%, and free cash flow of approximately $250 million. Guidance incorporates $30-$35 million of tariff-related expenses net of mitigation, modest Lexmark synergies, and a slightly more conservative print equipment demand outlook. Free cash flow guidance includes $60-$65 million of cash tariff expenses and $50-$75 million of one-time synergy implementation costs. Tariff impacts reflect rates proposed to take effect August 1, and the company expects most tariff expenses to be offset over time through pricing and other mitigation. Management continues to expect over $1/share of accretion from Lexmark despite slightly higher than expected funding costs, and expects to lay the foundation for growth in revenue, adjusted operating income, and free cash flow in 2026.

XRX YoY Financials

Q2 2025 vs Q2 2024 · SEC filings Q2 2024 Q2 2025
$0$500.0M$1.0B$1.5B$1.6B$1.6BRevenue$520.0M$451.0MGross Profit$67.0M$59.0MOperating Income
$0$500.0M$1.0B$1.5BRevenueGross ProfitOperating Income

XRX Revenue by Segment

Print and Other$1.4B−8.6%
Equipment Sales - Mid-range$235.0M
IT Solutions$213.0M+153.6%
Equipment Sales - Entry$51.0M−8.9%
IT Products$153.0M+173.2%
Equipment Sales - High-end$44.0M−26.7%
IT Services$57.0M+103.6%

Figures from SEC filings and company reports. Not investment advice.