Xerox Holdings Corporation (NASDAQ:XRX) reported a steep adjusted loss of $0.64 per share for the second quarter, sharply missing Wall Street’s forecast of a $0.07 profit. The disappointing results were driven by ongoing tariff pressures and elevated product costs that dragged on profitability.
Revenue for the quarter came in at $1.58 billion, essentially flat year over year but slightly ahead of analysts’ expectations of $1.55 billion. On a constant currency basis, revenue declined by 1.1%. In pre-market trading, Xerox shares dipped 0.57% in response to the earnings.
The company’s adjusted operating margin dropped to 3.7%, a decrease of 170 basis points compared to the same period last year. Gross margin also took a hit, falling to 28.6% from 33.0%, reflecting the pressure from trade tariffs and rising production expenses.
“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 CEO Steve Bandrowczak.
Xerox’s Print and Other segment revenue fell 8.6% to $1.37 billion, as demand softened due to trade-related uncertainty. On the other hand, its IT Solutions segment surged 153.6% to $213 million, primarily fueled by the recent acquisition of ITsavvy.
Equipment sales were also down 5.6% to $336 million, impacted by a drop in installations. Operating cash flow for the quarter was negative $11 million—$134 million lower than the prior year—while free cash flow was negative $30 million, down $145 million from a year ago.
Despite the weak quarter, Xerox reaffirmed its full-year 2025 outlook, which now includes the completed acquisition of Lexmark. The company continues to project revenue growth of 16–17% in constant currency, an adjusted operating margin of around 4.5%, and approximately $250 million in free cash flow.
This guidance accounts for $30–35 million in expected tariff-related expenses and modest cost synergies from Lexmark. It also includes $60–65 million in cash outflows tied to tariffs and $50–75 million in one-time costs related to integration efforts.
Xerox Holdings Corporation stock price
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