Xerox Cuts 2026 Profit and Cash-Flow Outlook

The Tip Desk · November 10, 2026 · 4 min read

The company now sees full-year adjusted operating income of $450 million to $475 million and free cash flow of $50 million to $100 million after a $955 million goodwill write-down.

Xerox Holdings Corporation (XRX) lowered its full-year 2026 adjusted operating income and free cash flow outlook after a $955 million after-tax goodwill impairment on the Print and Other reporting unit, even as adjusted operating income rose year over year for a third straight quarter.

The document-equipment maker now expects full-year adjusted operating income of $450 million to $475 million, down from a prior range of $555 million to $605 million, and free cash flow of $50 million to $100 million, down from about $250 million. Revenue guidance of approximately $7.6 billion was restated. The company said the profit cut reflected higher-than-expected input costs, a mix shift from Mid-range to Entry, a weaker market outlook, and lower-than-expected IT Solutions profit. The cash-flow cut reflected lower adjusted operating income and lower-than-expected finance receivable and IEEPA tariff receivable proceeds, with some of those benefits pushed into 2027.

Chief executive Louie Pastor said headwinds affecting the outlook had intensified, creating greater near-term pressure than expected, and that the company was responding with cost measures, including suspension of common and preferred dividends, while keeping its focus on reducing debt.

Third-quarter revenue was $1.87 billion, down 4.7%, or 4.5% in constant currency. The company said revenue declines moderated by 180 basis points sequentially on a pro forma basis. Adjusted operating income was $124 million, up $59 million from a year earlier, and adjusted operating margin was 6.6%, up 330 basis points. GAAP net loss was $1.015 billion, or $7.73 a share, including the $959 million pre-tax goodwill charge. Adjusted net income was $7 million, or $0.02 a share.

During the quarter the company lowered future projections for Print and Other due to continued macro uncertainty and sustained memory price increases, which reduced the unit’s valuation and triggered the impairment. Pre-tax loss was $1.006 billion, or a 53.9% margin. The company said the pre-tax loss-margin decline was driven primarily by the goodwill charge, lower revenue excluding a licensing agreement, and higher non-financing interest expense, partly offset by higher gross profit, Transformation-related cost actions, and lower tariff-related costs.

Equipment sales revenue was $393 million, up 2.6%, or 2.9% in constant currency, with total equipment installations up 9.0% on Entry and High-end growth. Entry equipment sales were $156 million, up 20.9%. Mid-range equipment sales were $151 million, down 15.2%. High-end equipment sales were $81 million, up 14.1%. Post-sale revenue was $1.295 billion, down 4.5%, or 4.4% in constant currency, which the company attributed to lower equipment service and managed print services, supplies and rental revenue, and lower financing revenue from sales of finance receivables and lower originations.

Print and Other segment revenue was $1.688 billion, down 2.9%, or 2.8% in constant currency. Segment profit was $136 million, up 112.5% from $64 million, and segment margin was 8.1%. IT Solutions revenue was $187 million, down 17.3%, or 16.8% in constant currency, which the company said primarily reflected the timing of large prior-year public sector product placements. IT Solutions profit was $8 million, down 55.6% from $18 million, and segment margin was 4.4%.

Operating cash flow was $30 million, down $86 million year over year. Free cash flow was $7 million, down $81 million year over year. Cash and cash equivalents were $412 million at Sept. 30, 2026.

In October the company announced an exchange of $174 million of 5.50% 2028 Senior Notes for $121 million of 10.25% 2030 Senior Secured Notes and $9 million of equity, and an $8 million non-cash debt reduction through a warrant program that retired 2030 convertible notes.

Updated adjusted operating income guidance includes a $105 million pre-tax benefit from an IEEPA tariff receivable tied to a recent Supreme Court ruling on IEEPA tariffs. The benefit to free cash flow guidance from selling that receivable to a third party is $80 million.