Xerox has released its Quarter 2 2026 results.
Xerox is reporting revenue of US$1.92 billion and an adjusted operating margin of 10.6%. Access to Xerox’s documents can be found here.
The results give a glimpse into the continued effect of the Xerox-Lexmark merger, but looking at a Quarter performance in isolation, or even a Half Year of financials, when a major acquisition has taken place, is not often prudent.
The main takeaway from Xerox’s Q2 2026 results is that the company is making progress on its transformation, but the underlying print business remains under pressure. The headline numbers look much stronger than the underlying business trends.
Here are the key interpretations:
Revenue growth is acquisition-driven
Headline revenue increased by around 22% year-on-year (depending on which accounting rules are used), but this is primarily because Xerox now includes a full quarter of Lexmark, which was acquired in July 2025. Without the acquisition, the combined Xerox/Lexmark revenue actually declined on a pro forma basis by 6.5%.
Print demand continues to decline
Equipment sales remain weak and managed print services continue to face pressure as customers print less and delay hardware refreshes. Even after combining Xerox and Lexmark, underlying print revenues fell.
However, global trends are not in the hands of Xerox to overturn, especially in Q2 2026. Xerox is focusing on scale and consolidation to offset declining print volumes.
Profitability is improving, but there are caveats
Adjusted operating profit improved significantly, helped by:
- Lexmark synergies
- Ongoing cost reduction (“Reinvention”)
- Productivity improvements
However, the quarter also benefited from a one-off tariff-related recovery of approximately US$105 million, making operating performance appear stronger than normal.
Xerox has begun reducing debt, but interest costs remain high and free cash flow is still relatively modest.
Channel partners should expect continued focus on managed services
Channel partners can expect Xerox’s strategy of growing recurring revenue through Managed Print Services (MPS), IT services and workflow automation to continue, as the company strives to increase the lifetime value of each customer.
Louie Pastor, chief executive officer at Xerox, remains positive for the future, and acknowledges the work ahead, saying:
“Our second-quarter results gave us another reason for confidence. 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.”
