Xerox Cuts 2026 Profit Outlook; Board Suspends Dividends

Xerox Holdings Corporation lowered its 2026 adjusted operating income and free cash flow forecasts and said its board suspended common and preferred dividends amid rising costs and a weaker outlook.

For full-year 2026, Xerox now forecasts adjusted operating income of $450 million-$475 million, down from $555 million-$605 million. Its free cash flow forecast fell to $50 million-$100 million from about $250 million, while its revenue outlook remained about $7.6 billion. Xerox classifies adjusted operating income and free cash flow as non-GAAP measures.

The adjusted operating income forecast includes a $105 million pretax benefit from recognizing an IEEPA tariff receivable. The free cash flow forecast includes an $80 million benefit from selling that receivable. Xerox defines free cash flow as operating cash flow less capital expenditures.

The company cited higher-than-expected input costs, an equipment mix shift from Mid-range to Entry, a weaker market outlook and lower-than-expected IT Solutions profit as factors behind the outlook. CEO Louie Pastor said, “The headwinds affecting our outlook have intensified.”

For the quarter ended Sept. 30, revenue was $1.868 billion, down 4.7% from a year earlier. Adjusted operating income was $124 million, up $59 million year over year, and the adjusted operating margin was 6.6%.

Xerox recorded a net loss of $1.015 billion, or $7.73 per diluted share. The loss included a $959 million pretax, noncash goodwill impairment charge, equal to $955 million after tax.

The board’s suspension announcement did not say whether it would affect a previously declared common dividend of $0.025 per share. Xerox had set that payment for Oct. 30 for shareholders of record Sept. 30.