Xerox swings to Q2 profit on $80M tariff gain and Lexmark synergies; revenue up 22% YoY

Filed August 6, 2026 · Period ending June 30, 2026 · Compared to 10-Q Aug 7, 2025 · ~2 min read

Key Changes

• high

  Net income swung from a $106M loss in Q2 2025 to $13M profit in Q2 2026, driven by an $80M IEEPA tariff receivable gain (monetized for cash), $39M in debt extinguishment gains, and Lexmark integration synergies. Adjusted net income improved $132M to $55M.

  MD&A: Net Income verify on EDGAR →
• high

  Gross margin expanded 7.2 percentage points to 35.8%, with 5.5 points from the one-time tariff gain and 1.6 points from Lexmark. Pro forma gross margin (normalizing for Lexmark) rose 6.9 points, indicating sustained cost discipline.

  MD&A: Gross Margin verify on EDGAR →
• high

  Pro forma revenue declined 6.5% despite the 22% reported increase, as legacy Xerox equipment sales fell 17.9% (excluding Lexmark) and post-sale revenue dropped 6.8% organically. The combined entity's organic trajectory remains negative.

  MD&A: Pro Forma Revenue verify on EDGAR →