Xerox Q2 revenue beats on Lexmark acquisition boost

Overview

• US document management firm's Q2 revenue rose 22% yr/yr, beating analyst expectations

• Company raised full-year 2026 revenue and adjusted operating income guidance

• Q2 results benefited from Lexmark acquisition and $105 mln IEEPA tariff receivable gain

Outlook

• Xerox raises 2026 revenue guidance to approximately $7.6 bln

• Company lifts 2026 adjusted operating income forecast to $555-$605 mln

• Xerox expects 2026 free cash flow of approximately $250 mln

Result Drivers

• LEXMARK ACQUISITION - Reported revenue and margin gains driven by Lexmark acquisition, though pro forma revenue declined

• TARIFF RECEIVABLES - $105 mln pre-tax benefit from IEEPA tariff receivables materially boosted profitability

• COST SYNERGIES AND PRODUCTIVITY - Margin expansion supported by cost synergies, productivity actions, and unified operating model

Company press release: ID:nBw5Cvt98a

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "hold" and the breakdown of recommendations is no "strong buy" or "buy", 2 "hold" and 1 "sell" or "strong sell"

• The average consensus recommendation for the office equipment peer group is "buy."

• Wall Street's median 12-month price target for Xerox Holdings Corp is $2.75, about 4.2% above its July 29 closing price of $2.64

• The stock recently traded at 7 times the next 12-month earnings vs. a P/E of 2 three months ago

Reuters Recommended Reads

• July 29 - Diebold Nixdorf Q2 revenue rises, reaffirms 2026 outlook

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• July 29 - Sonos Q3 profit jumps 52% on IEEPA tariff refunds

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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)