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NEW YORK - On Thursday, Xerox Holdings Corporation (NASDAQ:XRX) reported a second-quarter adjusted loss of $0.64 per share, falling significantly short of analyst expectations for a profit of $0.07 per share.
Revenue remained relatively stable at $1.58 billion, slightly above the consensus estimate of $1.55 billion but down 0.1% YoY, or 1.1% in constant currency.
Xerox shares slipped 0.57% in pre-market trading following the results.
The document technology company’s quarterly performance reflected ongoing challenges from tariffs and increased product costs. Adjusted operating margin fell to 3.7%, down 170 basis points YoY, while gross margin declined to 28.6% from 33.0% a year earlier.
"Our second quarter reflects the improved resiliency of financial results afforded by Reinvention. Growth in IT and Digital Solutions helped deliver stable revenue, and a focus on costs preserved profitability amid a volatile operating landscape," said Steve Bandrowczak, chief executive officer at Xerox.
The company’s Print and Other segment revenue declined 8.6% to $1.37 billion, while the IT Solutions segment saw significant growth of 153.6% to $213 million, largely due to the recent acquisition of ITsavvy. Equipment sales fell 5.6% to $336 million, reflecting lower installations partly due to soft demand amid tariff and trade-related uncertainty.
Operating cash flow was negative $11 million, down $134 million from the previous year, while free cash flow was negative $30 million, a decrease of $145 million YoY.
Xerox maintained its full-year 2025 guidance, which includes the recently completed Lexmark acquisition. The company expects revenue growth of 16-17% in constant currency, adjusted operating margin of approximately 4.5%, and free cash flow of around $250 million.
The guidance reflects $30-35 million of expected tariff-related expenses and modest Lexmark-related synergies. Free cash flow guidance includes $60-65 million of cash tariff expenses and $50-75 million of one-time costs associated with synergy implementation.
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