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Xerox Holdings Corporation’s $350 Million Lexmark Synergy Push: Can The Turnaround Hold?

Xerox Holdings Corporation’s second quarter of 2026 reflected mixed dynamics influenced by its recent Lexmark acquisition and ongoing business transformation initiatives. Reported revenue rose 22% year-over-year to $1.92 billion, driven primarily by Lexmark’s inclusion. However, on a pro forma basis—which excludes Lexmark’s impact—revenue declined nearly 7%, marking a deceleration from the prior quarter, though when adjusted for currency effects and previously flagged supply pull-forwards, the trajectory showed modest year-over-year improvement. Profitability advanced with adjusted operating margin increasing 690 basis points to 10.6%, bolstered by tariff receivable recognition amounting to $105 million in gross profit. Excluding this benefit, operating margins still improved by 140 basis points year-over-year to 5.1%. The company also raised its Lexmark synergy target to at least $350 million from $300 million, with half expected in 2026 and the balance over subsequent years, supporting margin expansion and offsetting inflationary pressures related to memory and oil costs.