Description

Xerox’s Lexmark Deal: Can $200 Million In Synergies Offset Print Declines?

Xerox Holdings Corporation reported first-quarter fiscal 2026 results that reflect ongoing integration efforts from its Lexmark acquisition and early signs of operational improvement amid a challenging market environment. Total revenue reached $1.85 billion, representing a 27% increase year-over-year on a reported basis and 24% growth in constant currency. However, on a pro forma basis that excludes the Lexmark acquisition, revenue declined 4%, albeit a notable improvement versus a 9% decline in the previous quarter. The company attributed some of the revenue benefit to a pull-forward of supplies sales driven partly by geopolitical concerns affecting customer and channel inventory strategies. Adjusted operating margin increased to 3.9%, up 240 basis points year-over-year, marking the first margin expansion in five quarters. This improvement was mainly supported by Lexmark’s contribution, cost transformation initiatives yielding $150 million to $200 million in integration synergies for the year, and a reduction in marketing expenses.