Xerox Holdings closed the year 2025 with a clear strategic shift toward performance driven by digital transformation, technology investments and artificial intelligence.
The company reported quarterly revenue of $2.03 billion, representing a 26 percent increase, largely supported by the integration of Lexmark and IT Savvy. Core pro forma revenues declined about 8 percent for the full year. Xerox is accelerating its pivot to IT services and AI-led automation to offset structural pressure in its legacy print business. Xerox has reported revenue of $1,457 million in Q1-2025, $1,576 million in Q2-2025 and $1,961 million in Q3-2025.
Chief Executive Officer Steve Bandrowczak, speaking during the earnings call, said the business is stabilizing following disruptions from a government shutdown and supply chain constraints. Xerox is prioritizing a digital-first roadmap focused on cross-selling IT services, cybersecurity and automation solutions to its base of around 200,000 customers.
Digital Transformation Driving IT Services Growth
A key driver of Xerox’s performance strategy is the expansion of its IT solutions portfolio. The company is transitioning from a hardware-centric model to a services-led approach, positioning IT services as a core growth engine for 2026. By integrating traditional print capabilities with modern IT infrastructure, Xerox is unlocking new revenue streams in cloud management, managed services and cybersecurity. The acquisition of ITsavvy in November 2024 for $400 million has helped Xerox in doubling IT Solutions (ITS) revenue.
The company highlighted the growing role of its GoInspire platform, a digital marketing and analytics solution that uses data-driven insights to improve customer engagement and win rates. This platform supports Xerox’s strategy of delivering a unified technology stack that manages both physical and digital document workflows, increasing customer value and long-term contract potential.
John McDermott is the Chief Information Officer (CIO) of Xerox, replacing Patricia Cusick, from January 2026.
In June 2024, Tata Consultancy Services (TCS) has announced its tech contract with Xerox aimed at accelerating Xerox’s shift to a simplified, services-led and software-enabled operating model. TCS will consolidate technology services, migrate legacy data centers to the Azure public cloud, deploy a cloud-based digital ERP platform, and integrate generative AI into operations to improve efficiency and support sustainable growth. TCS designed a new agile, cloud-first operating model and build an AI-first enterprise platform for Xerox, leveraging its AI, cloud, enterprise solutions and cognitive business operations capabilities, in collaboration with leading hyperscalers and AI partners.
AI Automation and Internal Efficiency Gains
Artificial intelligence is playing a central role in Xerox’s internal transformation. The company has established a dedicated AI center of excellence to scale automation across global operations. This initiative focuses on deploying agentic AI and robotic process automation in areas such as order-to-cash, finance and human resources.
Xerox expects these technology investments to improve productivity, reduce costs and support its medium-term goal of lowering gross leverage to around 3.0x. Automation is also helping offset rising component costs and manufacturing headwinds, protecting margins as the company reshapes its operating model.
Technology Investment in Cybersecurity and Operations
Cybersecurity is emerging as a key differentiator in Xerox’s technology roadmap. The company plans to expand AI-driven security capabilities across its document management and network solutions, including automated monitoring of document-sharing environments. These investments are designed to strengthen Xerox’s value proposition as enterprises demand more secure and compliant digital workflows.
Steve Bandrowczak said disciplined technology investment is critical as the company navigates a 140 basis point decline in adjusted operating income margins, which stood at 3.5 percent for the full year. Xerox generated $133 million in cash flow in 2025, with capital allocation focused on debt reduction and scaling higher-margin digital services.
Operational efficiency programs, including Project Speed-style initiatives, are helping Xerox manage exits from select production print segments and declining finance receivables, while laying the foundation for more sustainable performance in the second half of 2026. The July-2025 acquisition of Lexmark for $1.5 billion is expected to accelerate Reinvention goals and unlock more than $300 million of gross cost synergies.
2026 Strategy and AI-Led Growth Outlook
Looking ahead, Xerox has issued 2026 revenue guidance of more than $7.5 billion, representing about 7 percent growth. This outlook assumes stabilization in supply usage and gradual improvement in page volume trends. The company’s Perfecta strategy aims to restore core profitability through a balanced mix of print innovation and expanding IT services.
Xerox is also investing in cloud-based and hybrid workplace solutions, embedding AI-driven workflow assistants into its latest devices. This approach positions hardware as an entry point to recurring digital and cloud services, keeping Xerox relevant as work environments evolve.
The company is investing at the intersection of print, digital and AI to define the future of workplace technology. By accelerating digital transformation, expanding IT services and deploying AI automation at scale, Xerox is positioning itself to improve performance and competitiveness in a rapidly changing enterprise technology market.
FASNA SHABEER
