Xerox Holdings Corporation and its subsidiary Xerox Corporation reported a net loss of $1.05 billion for the first quarter ended March 31, 2026, compared to a net loss of $0.9 billion in the same period last year. The loss was primarily driven by higher costs and expenses, including restructuring costs, non-financing interest expense, and amortization of intangible assets, which were partially offset by higher revenues and gross profit.
The company's revenue for the quarter increased 26.7% to $1.85 billion, reflecting a 31.9% benefit from the Lexmark acquisition and a 3.1% favorable impact from currency. Equipment sales grew 33.1% in actual currency and 30.7% in constant currency, while post-sale revenue increased 30.1% in actual currency and 26.5% in constant currency. However, IT Solutions revenue declined 5.5% in actual currency and 6.2% in constant currency.
The company's gross margin improved to 29.7% in the first quarter 2026, up 0.5 percentage points from the previous year, driven by higher revenue and gross profit. However, equipment gross margin decreased by 17.1 percentage points due to the Lexmark acquisition and product cost increases. Post-sale gross margin increased by 5.0 percentage points, primarily reflecting higher revenue and gross profit.
Xerox Holdings Corporation and Xerox Corporation have entered into a joint venture arrangement with TPG, which provided $405 million in financing and purchased $45 million in Class A Units from XRX Brandco Holdings LLC (IPCo Holdings), a variable interest entity (VIE) that holds the Xerox brand intellectual property. The company also entered into a Shared Services and License Agreement (SSLA) with IPCo Holdings, under which Xerox Holdings will provide certain services and grant licenses to use the Xerox brand intellectual property.
The company's cash, cash equivalents, and restricted cash increased to $637 million at the end of the quarter, reflecting net cash used in operating activities and investing activities, as well as net cash provided by financing activities. The company's total debt at the end of the quarter was $4.45 billion, with a net availability of approximately $289 million under its revolving credit facility.
