Q1 2026 Xerox Holdings Corp Earnings Call Transcript
Key Points
- Xerox Holdings Corp (XRX) reported a significant revenue increase of nearly 27% in actual currency and 24% in constant currency, driven by the Lexmark acquisition.
- The company achieved a quarterly adjusted operating margin increase for the first time in five quarters, with a 240 basis point year-over-year improvement.
- Xerox Holdings Corp (XRX) is seeing strong demand for new production devices, particularly the Profisio, developed in partnership with Fujifilm.
- The IT solutions business delivered solid growth, with bookings up 32% and billings up 21%, contributing to year-over-year profit growth.
- The company reaffirmed its 2026 financial guidance, expressing confidence in meeting revenue and profitability targets, supported by strategic initiatives and partnerships.
- On a pro forma basis, revenue declined 4%, indicating underlying challenges despite the acquisition-driven growth.
- The mid-range print segment remains soft, presenting ongoing challenges in a key market area.
- Memory lead times have extended, and higher memory prices have compressed margins, impacting profitability in the IT solutions segment.
- Increased oil prices are affecting costs related to toner, plastic, metal, and transportation, offsetting some benefits from tariff rulings.
- The company faces a high gross leverage of seven times trailing 12 months EBITDA, with a focus on reducing leverage as a priority.
Welcome to the Xerox Holdings Corporation first quarter 2026 earnings release conference call. (Operator Instructions)
At this time, I would like to turn the meeting over to Mr. Greg Stein. Senior Vice President and Head of Investor Relations.
Good morning, everyone. I am Greg Stein, Senior Vice President and Head of Investor Relations at Xerox Holdings Corporation. Welcome to the Xerox Holdings Corporation first quarter 2026 earnings release conference call hosted by Louie Pastor, Chief Executive Officer. He is joined by Chuck Butler, Chief Financial Officer.
At the request of Xerox Holdings Corporation, today's conference call is being recorded. Other recording and/or rebroadcasting of this call are prohibited without the express permission of Xerox. During this call, Xerox executives will refer to slides that are available on the web at www.xerox.com/investor and will make comments
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