Xerox : Q1 Quarterly Results (b49dfe)

About this update from Xerox Holdings Corporation

Earnings Presentation Q1 2026 Results April 30, 2026 Q1 2026 Key Financial Measures 2026 % Change: 26.7% @ AC, 23.6% @ CC 1 ; Pro Forma 1 (PF) % change: (3.7)% @ AC 2026 2025 $1.46 $1.85 Revenue ($B) 2026 2025 1.5% 3.9% Adjusted 1 Operating Margin $(109) $(165) 2025 2026 Q1 2026 Q4 2026E $(89) $(144) Total Debt to TTM Adj 1 EBITDA Net Debt to TTM Adj 1 EBITDA Operating Cash Flow Free Cash Flow 1 ($M) 4.5x 5.6x 6.0x 7.0x Leverage Framework 2 1 Adjusted measures, Pro Forma Measures, Free Cash Flow and Constant Currency (CC): see Non-GAAP Financial Measures. 2 Q4 2026E assumes: adjusted EBITDA of $765 million (midpoint of 2026 adjusted operating income guidance + D&A / Stock-based compensation of $290 million); total debt of $4,301 million (Q1 debt balance less remaining 2026 debt obligations 3 of $146 million); and cash & cash equivalents of $886 million (Q1 cash & cash equivalents + $415 million implied free cash fl ow guidance for the remainder of 2026 less remaining 2026 debt obligations and dividends). Q1 2026 TTM adjusted EBITDA includes Q2 2025 legacy Lexmark results. We are not assuming additional debt repurchases or benefits from the warrant distribution. Strategic Priorities for 2026 Stabilize Revenue Grow market share through a more vertically integrated entry-level portfolio, cost-efficient and serviceable mid-range, and Production launches in new & adjacent segments Leverage improved account coverage and integrated sales engine to accelerate IT Solutions & Digital Services adoption across Xerox's existing client base Increase Profitability Deliver $250-300 million of in-year gross cost reductions through integration synergies and Transformation initiatives Drive structural efficiency through optimization of captive shared service centers, consolidation of IT systems, and operational simplification Reduce Leverage Optimize free cash flow 1 through working capital discipline and utilization of finance receivables funding programs Reduce debt through cash flow generation, opportunistic repurchases, and warrant distribution benefits 1 Adjusted Measures and Free Cash Flow: see Non-GAAP Financial Measures. 4 Financial Results Summary Gross Margin - Adj 3 30.3% 29.7% (60) bps RD&E % 3.5% 2.9% SAG % 23.3% 25.9% Operating Margin - Adj 3 3.9% 1.5% 20 bps Tax Rate - Adj 3 (218.8)% 60.0% (in millions, except per share data) P&L Measures Q1 2026 Q1 2025 % Chg YOY PF 3 % Chg YOY Print & Other $1,692 $1,294 IT Solutions 156 164 Intersegment elimination 1 (2) (1) Revenue 1,846 1,457 27% AC/ (4)% AC 24% CC 3 Q1 Q1 PF 3 B/(W) P&L Ratios 2026 2025 YOY Print & Other 87 41 IT Solutions 6 5 Corporate Other 2 (21) (24) Op. Income - Adj 3 72 22 227% Non-financing interest 84 33 155% Net (Loss) 4 (105) (90) NM Net Income - Adj 3 (51) (4) NM GAAP (Loss) per Share 4 (0.84) (0.75) NM Loss per Share - Adj 3 (0.43) (0.06) NM expense 1 Reflects primarily IT hardware, software solutions & services sold by the IT Solutions segment to the Print and Other segment. 2 Reflects certain G&A expenses primarily related to corporate functions that are not allocated to reportable segments. 3 Adj Measures and Constant Currency (CC): see Non-GAAP Financial Measures. Pro Forma Measures: see Pro Forma Financial Measures. Q1 2026 adj. tax rate reflects the geographic mix of earnings, an inability to benefit from current-year losses, and one-time discrete items. 4 Q1 2026 GAAP (Loss) per share includes a 5 gain on the early extinguishment of debt. Q1 2025 GAAP (Loss) per share includes a tax expense charge related to the establishment of valuation allowances and financing-related charges related to a debt offering. For more details, please see the non-GAAP section of this quarter's earnings press release. Print & Other Segment Results % Chg YOY (in millions) Q1 2026 Q1 2025 AC CC 1 PF 1 % Chg YOY AC Total Installs vs Equipment Revenue YOY 4 30% 10% (10%) (30%) 1Q25 2Q25 3Q25 4Q25 1Q26 Equipment Revenue (AC) Total Installs Equipment 378 284 33.1% 30.7% (2.3)% Post Sale 1,314 1,010 30.1% 26.5% (3.8)% Total Revenue $1,692 $1,294 30.8% 27.4% (3.5)% Gross Profit - Adj 1,2 530 406 30.5% 28.0% (6.2)% Margin 3 31.3% 31.4% (90) bps Segment Profit 87 41 112.2% 108.7% (7.4)% Margin 3 5.1% 3.2% (30) bps Color B&W Total Installs Revenue (AC) Entry (37)% 17% (2)% Mid-Range (19)% (22)% (20)% High-End 35% (76)% 31% Total (31)% 14% (5)% (2)% Q1 Installs & Equipment Revenue B/(W) YOY 4 1 Adjusted Measures, Pro Forma Measures and Constant Currency (CC): see Non-GAAP Financial Measures. 2 Gross margin adjustments consist of a fixed asset-related purchase accounting adjustment related to the Lexmark acquisition of $11 million in Q1 2026, and inventory-related impacts associated with the exit of certain Production Print manufacturing operations of $7 million in Q1 2025. 3 Gross and segment profit are net of Intersegment Elimination. 4 Q3 2025 and beyond installs and Equipment revenue includes Lexmark. Q2 2025 and prior represents legacy Xerox. 6 Pro Forma 1 Non-GAAP IT Solutions Gross Billings Pro Forma 1 Non-GAAP Gross Billings ($M) +27% $263 +8% $218 +21% $225 $202 $207 +13% $198 $186 0% $187 $175 $300 $250 $200 $150 Q1'24 Q2'24 Q3'24 Q4'24 Q1'25 Q2'25 Q3'25 Q4'25 Q1'26 - 2024 - - 2025 - 2026 Q1'24 Q2'24 Q3'24 Q4'24 FY 2024 Q1'25 Q2'25 Q3'25 Q4'25 FY 2025 Q1'26 Pro Forma 1 Non-GAAP Gross Billings $186 $202 $207 $175 $773 $187 $218 $263 $198 $867 $225 Less: Agent Arrangements and Other ² - - - - - $23 $7 $37 $40 $106 $69 Revenue - - - - - $164 $213 $226 $158 $761 $156 Segment Profit 3 - - - - - $5 $10 $18 $9 $42 $6 ¹ 2024 reflects the ITsavvy acquisition as if it had been completed on 1/1/24. 2025 and Q1 2026 reflects actual results. ² Agent arrangements reflect sales of third-party supplier service contracts, SaaS arrangements and certain fulfillment contracts, per ASC 606 principal-vs-agent guidance and other deferrals and accruals. Pro forma gross billings is shown to provide a 7 consistent view of underlying business activity across periods. Mix is expected to stabilize over the 3-5-year contract renewal cycle. 3 Segment profit does not reflect the impact of Corporate Other SAG and G&A expenses that are not allocated to either of our reportable segments.* Quarters might not sum to annuals due to rounding. % Chg YOY (in millions) Q1 2026 Q1 2025 AC CC 1 Products 105 105 0.0% 0.0% Services 49 58 (15.5)% (16.8)% Intersegment revenue 2 2 1 NM NM Total Revenue $156 $164 (4.9)% (5.9)% IT Solutions Segment Results IT Solutions: Key Performance Indicators / Trends Gross Billings grew 21% YOY in Q1 2026: Double-digit growth in Infrastructure & Networking equipment and software Double-digit growth in PCs Double-digit growth in Cloud & Hosting Strong Orders and Print Cross-sale Activity Q1 2026 Gross Bookings increased 32% YOY In Q1 2026, roughly $32 million of opportunities sourced from legacy Xerox Print clients Gross Profit 3 30 28 7.1% 6.2% Margin 3 19.5% 17.2% Segment Profit 3 6 5 20.0% 17.1% Margin 3 3.9% 3.1% 1 Constant Currency (CC): see Non-GAAP Financial Measures. 2 Reflects revenue, primarily IT hardware, software solutions and services, sold by the IT Solutions segment to the Print and Other segment. 3 Gross and segment profit and margin are net of Intersegment Elimination. Cash Flow (in millions) Q1 2026 Q1 2025 Pre-tax (Loss) (73) (67) Non-Cash Add-Backs 1 138 100 Restructuring Payments (21) (18) Pension Contributions (36) (34) Working Capital, net 2 (97) (60) Change in Finance Assets 3 34 98 Other 4 (89) (108) Cash used in Operations (144) (89) Cash (used in) provided by Investing (24) 6 Cash provided by (used in) Financing 242 (159) Ending Cash, Cash Equivalents and Restricted Cash 5 637 390 Free Cash Flow 6 (165) (109) 1 Non-cash add-backs include depreciation & amortization (including equipment on operating lease), provisions, stock-based compensation, non-service retirement-related costs, restructuring and asset impairment charges and gain on sales of businesses and assets (as applicable). 2 Working Capital, net includes accounts receivable, accounts payable and inventory. 3 Includes equipment on operating leases (excluding its related depreciation) and finance receivables. 4 Includes other current and long-term assets and liabilities, accrued compensation, derivative assets and liabilities, other operating, net, distributions from net income of unconsolidated affiliates and changes in cash tax liabilities. 5 Includes restricted cash of $52 million in Q1 2026 and $54 million in Q1 2025. 6 Free Cash Flow: see Non-GAAP Financial Measures. Debt and Cash 1 (in billions) Q1 2026 Q4 2025 Total Debt $(4.4) $(4.2) Less: Cash 1 $0.6 $0.6 Net Debt $(3.8) $(3.6) Less: Financing Allocated Debt $1.4 $1.5 Capital Structure Secured Debt Senior Unsecured Notes 2039 2035 2031 2030 2029 2028 2027 $125 2026 $569 $531 $157 $132 $146 $250 $674 $350 $606 $481 $172 $646 $846 $1,050 $1,177 Q1 Principal Debt Maturity Ladder ($M) Net Core Debt $(2.4) $(2.1) Total Debt to TTM Adj. 2 EBITDA 3 7.0x 6.7x Net Debt to TTM Adj. 2 EBITDA 3 6.0x 5.8x Net Core Debt to TTM Adj. 2 EBITDA 3 3.8x 3.4x No major debt maturities until August 2028 - only ~ $300 million due through December 2027 1 Cash, cash equivalents and restricted cash. 2 Adjusted Measures: see Non-GAAP Financial Measures. 3 Q1 2026 and Q4 2025 TTM adjusted EBITDA includes the impact of certain legacy Lexmark results for periods prior to the acquisition, as applicable. Refer to the Non-GAAP and Pro Forma Financial Measures. Debt Details Instrument Principal ($M) Maturity Rate Amortization JV Senior Secured Term Loan $405 Feb-31 S + 812.5 ~$18.2M quarterly starting in Q4 2026 JV Preferred Equity $45 Feb-31 S + 1175 ~$2.0M quarterly starting in Q4 2026 Total JV Secured Debt $450 ABL Revolver - May-28 S + 175 Term Loan B $705 Nov-29 S + 400 Partial quarterly payment of ~$6.0M in Q2 2027; ~$22.5M quarterly starting in Q3 2027 1L Notes $400 Oct-30 10.25% 2L Notes $500 Apr-31 13.50% Total Xerox Corp Secured Debt (ex-JV Debt) (1) $1,605 Senior Notes (Bridge) $125 Jun-26 13.00% 2028 Senior Notes $649 Aug-28 5.50% 2029 Senior Notes $500 Nov-29 8.88% 2030 Convertible Senior Notes $400 Mar-30 3.75% 2030 Step-Up Senior Notes $250 Jun-30 13.00% $6.25M quarterly from Q1 2027 - Q3 2029; $12.5M quarterly thereafter 2035 Senior Notes $250 Mar-35 4.80% 2039 Senior Notes $350 Dec-39 6.75% Total Unsecured Debt $2,524 Principal Debt Balance $4,579 Total Debt Issuance Costs, Unamortized Interest, and Other ($133) Total Debt $4,446 1 $2 billion secured debt cap under debt covenants. 2026 Full-Year Guidance 1 Above $7.5B Revenue S T A B I L I Z E R E V E N U E $450-500M Adj. 2 Operating Income I N C R E A S E P R O F I T A B I L I T Y ~$250M Free Cash Flow 2 R E D U C E L E V E R A G E K E Y A S S U M P T I O N S Revenue Expected growth reflects full year of Lexmark, momentum in IT Solutions Gross Billings, and growth in Digital Services, partially offset by ongoing mid-range Print headwinds and lower XFS revenue reflecting a smaller finance receivables portfolio. Adj. 2 Operating Income Expected year-over-year improvement in adjusted operating income is driven primarily by $250-300 million of gross cost reductions, inclusive of integration synergies (~$150-200 million) and Transformation initiatives (~$100 million), partially offset by lower finance-related gross profit and higher product costs. Free Cash Flow 2 Expected year-over-year improvement in free cash flow is driven by improved adjusted operating income, partially offset by higher interest expense and a reduction in finance receivable forward flow benefits. 1 Our Q1 results and guidance do not reflect any potential refund benefits associated with the recent Supreme Court ruling on IEEPA tariffs as the related refund process had not been clarified as of March 31 st . 2 Adjusted Measures and Pro Forma Measures: see Non-GAAP and Pro Forma Financial Measures. Lexmark Synergies and Implementation Timeline Expected Phasing of Synergy Realization $ in millions 2025A $146 2026E $250 2027E ≥$300 $35 $150-200 $75-100 $69 $50 <$25 Key Milestones In-Year One-time Cash Cost to Achieve YOY Benefit from Cost Synergies Cumulative Run-Rate Gross Cost Synergies Initial elimination of duplicative overhead Rationalization of third party spend Supply Chain and R&D optimization Go-to-market realignment Cost absorption through enhanced scale Real Estate consolidation IT infrastructure simplification Optimized MPS delivery structure Frequently Asked Questions CEO Transition What drove the CEO transition? How will things change under Louie's leadership? The appointment of Louie Pastor as Chief Executive Officer reflects the progress made under his leadership, including material structural cost reductions, accelerated integration execution, a growing revenue pipeline, and the successful execution of two significant balance sheet initiatives - the TPG Angelo Gordon joint venture and the warrant distribution. As part of this transition, Xerox consolidated the CEO and COO roles - a deliberate decision reflecting a focused commitment to cost discipline, operational efficiency, and speed of execution. Under Louie's leadership, investors should expect a clear focus on three priorities - stabilize revenue, increase profitability, and reduce leverage - executed with transparency, accountability, and a hands-on operating style. Integration Progress How is the integration with Lexmark progressing? The integration remains on track with cumulative synergies expected to be at least $300 million, including $150-200 million in-year in 2026. We view these savings as a multi-year journey with tailwinds extending well beyond 2027. Operationally, we have unified our go-to-market organizations under a single commercial engine, with leadership in place across three regional theaters - North America, Western Europe, and Rest of World - drawing from both legacy Xerox and Lexmark. We also continue to take greater ownership of our product design and manufacturing and are launching new devices, which should yield gross margin benefits starting later this year. Early commercial proof points are encouraging, including better-than-expected demand for legacy Lexmark equipment in Q1. Drivers of Q1 Improvement / 2026 Outlook Trends improved in Q1. What are the drivers? What are your expectations for 2026? On a pro forma basis 1 , Q1 2026 revenue declined 4% year-over-year versus a 9% decline in Q4 2025. This is a material improvement driven by higher demand, a more stable U.S. macro environment, fewer one-time headwinds, and a modest pull-forward of approximately 1% in post-sale revenue, primarily in Supplies. Adjusted 1 operating margin expanded 240 basis points year-over-year, reflecting the cost discipline our team has maintained through a complex integration and the cumulative benefits of Transformation initiatives and integration savings. Based on this strong start and an improving sales pipeline, we are reaffirming 2026 guidance with increased confidence. IP Joint Venture Rationale Why did Xerox decide to contribute its IP into a Joint Venture with TPG Angelo Gordon? Xerox entered into the partnership to further capitalize the business during its seasonally lower liquidity period. Proceeds are unrestricted and usable for general corporate purposes, including augmenting liquidity, accelerating Transformation and integration efforts, and opportunistically addressing our capital structure which we demonstrated by retiring $101 million of face value of our 2028 Senior Unsecured Notes at a significant discount. The partnership with TPG Angelo Gordon is also an endorsement of our strategy and the strength of the Xerox brand globally. Appendix Operating Trends 2024 2025 2026 (in millions, except EPS) Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q4 FY Q1 Total Revenue $1,502 $1,578 $1,528 $1,613 $6,221 $1,457 $1,576 $1,961 $2,028 $7,022 $1,846 % Change (12.4)% (10.0)% (7.5)% (8.6)% (9.7)% (3.0)% (0.1)% 28.3% 25.7% 12.9% 26.7% CC 1 % Change (13.2)% (9.6)% (7.3)% (8.0)% (9.5)% (1.1)% (1.1)% 27.0% 23.6% 12.2% 23.6% Adj 1 Operating Income $33 $85 $80 $104 $302 $22 $59 $65 $102 $248 $72 Adj 1 Operating Margin 2.2% 5.4% 5.2% 6.4% 4.9% 1.5% 3.7% 3.3% 5.0% 3.5% 3.9% GAAP (Loss) EPS 2 ($0.94) $0.11 ($9.71) ($0.20) ($10.75) ($0.75) ($0.87) ($6.01) ($0.60) ($8.25) ($0.84) Adj 1 EPS (Loss) $0.06 $0.29 $0.25 $0.36 $0.97 ($0.06) ($0.64) $0.20 ($0.10) ($0.60) ($0.43) Operating Cash Flow ($79) $123 $116 $351 $511 ($89) ($11) $159 $208 $224 ($144) Free Cash Flow 1 ($89) $115 $107 $334 $467 ($109) ($30) $131 $184 $133 ($165) ¹ Adjusted measures, Free Cash Flow and Constant Currency (CC): see Non-GAAP Financial Measures. 2 Q1 2026 GAAP Loss per share includes a gain on the early extinguishment of debt. Full year 2025 GAAP Loss per share: Q1 includes a tax expense charge and financing-related charges; Q2 includes interest and financing-related charges and a tax expense; Q3 2025 includes an inventory-related purchase accounting adjustment and a tax expense charge. Full year 2024 GAAP Loss per share: Q1 includes a Transformation-related charge; Q3 includes a non-cash goodwill impairment charge and a tax expense charge; Q4 includes the write-off of intangibles, and Transformation & transaction-related costs. For details, please see the non-GAAP section of the latest earnings press release. Non-GAAP Financial Measures We have reported our financial results in accordance with generally accepted accounting principles (GAAP). In addition, we have discussed our financial results using the non-GAAP measures described below. We believe these non-GAAP measures allow investors to better understand the trends in our business and to better understand and compare our results. Management regularly uses our supplemental non-GAAP financial measures internally to understand, manage and evaluate our business and make operating decisions. These non-GAAP measures are among the primary factors management uses in planning for and forecasting future periods. Compensation of our executives is based in part on the performance of our business based on these non-GAAP measures. Accordingly, we believe it is necessary to adjust several reported amounts, determined in accordance with GAAP, to exclude the effects of certain items as well as their related income tax effects. However, these non-GAAP financial measures should be viewed in addition to, and not as a substitute for, the Company's reported results prepared in accordance with GAAP. Our non-GAAP financial measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures and should be read only in conjunction with our Condensed Consolidated Financial Statements prepared in accordance with GAAP. A reconciliation of the estimated post-acquisition impact on Adjusted Net (Loss) and EPS, Adjusted Operating Income and Margin, and Free Cash Flow to the closest GAAP financial measures, Net (Loss), EPS, Pre-tax Margin, and Operating Cash Flow, are not provided. GAAP measures for those periods are not available without unreasonable effort, in part as the timing of synergies and costs to achieve synergies related to the acquisitions are not available at this time. Adjusted Net (Loss) and EPS (Restructuring and related costs, net, Amortization of intangible assets, and other discrete, unusual or infrequent items); Adjusted Operating Income and Margin (Costs and expenses noted above as adjustments for our Adjusted Net (Loss) and EPS measure, as well as amounts included in Other (income) expenses, net, and certain other non-operating costs and expenses, and other discrete, unusual or infrequent items); Free Cash Flow (Capital expenditures). Reconciliations of the non-GAAP financial measures below to the most directly comparable financial measures calculated and presented in accordance with GAAP are set forth below. Adjusted Earnings (Loss) Measures Adjusted Net Income and Earnings per share (Adjusted EPS) Adjusted Effective Tax Rate The above measures were adjusted for the following items: Restructuring and related costs, net : Restructuring and related costs, net include restructuring and asset impairment charges as well as costs associated with our Transformation programs beyond those normally included in restructuring and asset impairment charges. Restructuring consists of costs primarily related to severance and benefits paid to employees pursuant to formal restructuring and workforce reduction plans. Asset impairment includes costs incurred for those assets sold, abandoned or made obsolete as a result of our restructuring actions, exiting from a business or other strategic business changes. Additional costs for our Transformation programs are primarily related to the implementation of strategic actions and initiatives and include third-party professional service costs as well as one-time incremental costs. All of these costs can vary significantly in terms of amount and frequency based on the nature of the actions as well as the changing needs of the business. Accordingly, due to that significant variability, we will exclude these charges since we do not believe they provide meaningful insight into our current or past operating performance nor do we believe they are reflective of our expected future operating expenses as such charges are expected to yield future benefits and savings with respect to our operational performance. Amortization of intangible assets : The amortization of intangible assets is driven by our acquisition activity which can vary in size, nature and timing as compared to other companies within our industry and from period to period. The use of intangible assets contributed to our revenues earned during the periods presented and will contribute to our future period revenues as well. Amortization of intangible assets will recur in future periods Non-service retirement-related costs : Our defined benefit pension and retiree health costs include several elements impacted by changes in plan assets and obligations that are primarily driven by changes in the debt and equity markets as well as those that are predominantly legacy in nature and related to employees who are no longer providing current service to the Company (e.g. retirees and ex-employees). These elements include (i) interest cost, (ii) expected return on plan assets, (iii) amortization of prior plan amendments, (iv) amortized actuarial gains/losses and (v) the impacts of any plan settlements/curtailments. Accordingly, we consider these elements of our periodic retirement plan costs to be outside the operational performance of the business or legacy costs and not necessarily indicative of current or future cash flow requirements. This approach is consistent with the classification of these costs as non-operating in Other (income) expenses, net. Adjusted earnings will continue to include the service cost elements of our retirement costs, which is related to current employee service as well as the cost of our defined contribution plans. Transaction and related costs, net : Transaction and related costs, net are costs and expenses primarily associated with certain major or significant strategic M&A projects. These costs are primarily for third-party legal, accounting, Non-GAAP Financial Measures consulting and other similar type professional services as well as potential legal settlements that may arise in connection with those M&A transactions. These costs are considered incremental to our normal operating charges and were incurred or are expected to be incurred solely as a result of the planned transactions. Accordingly, we are excluding these expenses from our Adjusted Earnings Measures in order to evaluate our performance on a comparable basis. Discrete, unusual or infrequent items : We exclude these item(s), when applicable, given their discrete, unusual or infrequent nature and their impact on the comparability of our results for the period to prior periods and future expected trends. Stock-based compensation Goodwill impairment charge Inventory-related impact - exit of certain Production Print manufacturing operations Transformation-related costs Lexmark - settlement of pre-existing employment agreements Lexmark - inventory-related purchase accounting adjustment Lexmark - fixed asset-related purchase accounting adjustment Lexmark acquisition financing - escrow interest, net Deferred tax valuation allowance Divestitures Loss (gain) on early extinguishment of debt Income tax on PARC donation Income tax on goodwill impairment Commitment fee expense Adjusted Operating Income and Margin We calculate and utilize adjusted operating income and margin measures by adjusting our reported pre-tax (loss) and margin amounts. In addition to the costs and expenses noted as adjustments for our adjusted earnings measures, adjusted operating income and margin also exclude the remaining amounts included in Other (income) expenses, net, which include certain other non-operating costs and expenses. We exclude these amounts in order to evaluate our current and past operating performance and to better understand the expected future trends in our business. Adjusted Gross Profit and Margin We calculate non-GAAP gross Profit and Margin by excluding the inventory impact related to the exit of certain Production Print manufacturing operations, included in Cost of services, maintenance and rentals. We also exclude certain accounting adjustments associated with the Lexmark transaction. Adjusted EBITDA Earnings before interest, taxes, depreciation and amortization adjusted for additional items, when applicable, given their discrete, unusual or infrequent nature and their impact on comparability of our results for the period to prior periods and future expected trends. Constant Currency (CC) To better understand trends in our business, we believe that it is helpful to adjust revenue to exclude the impact of changes in the translation of foreign currencies into U.S. dollars. We refer to this adjusted revenue as "constant currency." This impact is calculated by translating current period activity in local currency using the comparable prior year period's currency translation rate. This impact is calculated for all countries where the functional currency is not the U.S. dollar. Management believes the constant currency measure provides investors an additional perspective on revenue trends. Currency impact can be determined as the difference between actual growth rates and constant currency growth rates. Free Cash Flow To better understand trends in our business, we believe that it is helpful to adjust operating cash flows by subtracting amounts related to capital expenditures. Management believes this measure gives investors an additional perspective on cash flow from operating activities in excess of amounts required for reinvestment. It provides a measure of our ability to fund acquisitions, repay debt and pay dividends. Adjusted Net Income (Loss) and EPS Reconciliation FY-24 Q1-25 Q2-25 Q3-25 Q4-25 FY-25 Q1-26 Net (Loss) (in millions, except per share amounts) Income EPS Net (Loss) EPS Net (Loss) EPS Net (Loss) Income EPS Net (Loss) EPS Net (Loss) EPS Net (Loss) EPS Reported (1) $(1,321) $(10.75) $ (90) $ (0.75) $ (106) $ (0.87) $ (760) $ (6.01) $ (73) $ (0.60) $(1,029) $ (8.25) $ (105) $ (0.84) Goodwill impairment 1,058 - - - - - - Inventory-related impact - exit of certain Production Print manufacturing operations (2) 51 7 10 3 4 24 - Restructuring and related costs, net 112 (1) 10 59 (2) 66 45 Amortization of intangible assets 73 10 10 30 33 83 30 Divestitures 47 (4) - - - (4) - Non-service retirement-related costs 80 18 19 20 21 78 21 Transaction and related costs, net (31) 3 6 23 - 32 4 Loss (gain) on early extinguishment of debt (2) - 4 - 1 5 (56) Transformation-related costs (3) 12 6 3 3 5 17 2 Commitment fee expense (4) - 18 4 - - 22 - Income tax on goodwill impairment (5) (43) - - - - - - Income tax on PARC donation (5) - 9 - 11 - 20 - Lexmark - settlement of pre-existing employment agreements - - - 24 3 27 - Lexmark - inventory-related purchase accounting adjustment (6) - - - 102 - 102 - Lexmark - fixed asset-related purchase accounting adjustment - - - 16 13 29 11 Lexmark acquisition financing - escrow interest, net (7) - - 12 - - 12 - Deferred tax asset valuation allowance 169 50 - 467 - 517 8 Income tax on adjustments (5) (70) (30) (49) 29 (13) (63) (11) Adjusted $ 135 $ 0.97 $ (4) $ (0.06) $ (77) $ (0.64) $ 27 $ 0.20 $ (8) $ (0.10) $ (62) $ (0.60) $ (51) $ (0.43) Tax effects associated with U.S. and U.K. losses (8) (3) 41 Normalized Adjusted $ (7) $ (0.09) $ (10) $ (0.11) Dividends on preferred stock used in adjusted EPS calculation (9) $ 14 $ 4 $ 3 $ 4 $ 3 $ 14 $ 4 Weighted average shares for adjusted EPS (9) 126 125 126 129 128 127 129 (1) Q1 2026 Net (Loss) and Diluted (Loss) per share includes a gain on the extinguishment of debt. Full-year 2025 Net (Loss) and Diluted (Loss) per Share, include the following: Q3 2025 includes an inventory-related purchase accounting adjustment and a tax expense charge; Q2 2025 includes interest and financing-related charges, net, and tax expense related to interest expense that was not deductible according to tax guidelines in place as of 6/30/25; Q1 2025 includes a charge to tax expense and after-tax financing-related charges. Full-year 2024 Net (Loss) and Diluted (Loss) per Share, include the following: a Reinvention-related charge; insurance proceeds from a legal settlement; non-cash goodwill impairment charge; write-off of intangibles and Reinvention-related and acquisition charges. For details, please see the non-GAAP section of this quarter's earnings press release. (2) Reflects inventory-related charges and the cancellation of related purchase contracts as a result of the exit of certain production print manufacturing operations. (3) In the first quarter of 2026, Xerox Holdings Corporation renamed "Reinvention-related costs" to "Transformation-related costs." This change in terminology did not affect the nature of the costs. (4) Primarily reflects fees associated with the recently completed private offering of $400 million in aggregate principal amount of 10.25% Senior Secured First Lien Notes and $400 million aggregate principal amount of 13.5% Senior Secured Second Lien Notes Due in 2031. (5) Refer to Adjusted Effective Tax Rate Reconciliation. (6) Reflects a purchase accounting adjustment related to the acquisition of Lexmark, for cost associated with a net inventory write up. (7) Reflects net interest expense on net proceeds received from debt issuances which were placed in escrow to fund the Lexmark Acquisition. (8) Normalized adjusted net loss includes tax benefits of $41 million in Q1 2026 and ($3) million in Q1 2025, which are not included in adjusted earnings. This represents the tax effects associated with pre-tax losses generated in U.S. and UK entities subject to full valuation allowances. (9) For those periods that include the preferred stock dividend the average shares for the calculations of diluted EPS exclude 7 million shares associated with our Series A convertible preferred stock, as applicable. Adjusted Effective Tax Rate Reconciliation Q1-26 Q1-25 Income Pre-Tax Income Tax Effective Pre-Tax Tax Expense Effective (in millions) Loss Expense Tax Rate Loss (Benefit) Tax Rate Reported (1) $ (73) $ 32 (43.8%) $ (67) $ 23 (34.3%) Income tax on PARC donation - - - (9) Deferred tax asset valuation allowance - (8) - (50) Non-GAAP adjustments (2) 57 11 57 30 Adjusted $ (16) $ 35 (218.8%) $ (10) $ (6) 60.0% (1) Pre-Tax Loss and Income Tax Expense (Benefit). (2) Refer to Adjusted Net (Loss) Income and EPS reconciliations for details. Adjusted Gross Profit and Margin Reconciliation (in millions) FY-24 Q1-25 Q2-25 Q3-25 Q4-25 FY-25 Q1-26 Revenue (1) $ 6,221 $ 1,457 $ 1,576 $ 1,961 $ 2,028 $ 7,022 $ 1,846 Cost of revenue (1) 4,261 1,031 1,125 1,516 1,449 5,121 1,297 Gross Profit and Margin 1,960 31.5% 426 29.2% 451 28.6% 445 22.7% 579 28.6% 1,901 27.1% 549 29.7% Adjustment: Inventory-related impact - exit of certain Production Print manufacturing operations 51 7 10 3 4 24 - Lexmark - inventory-related purchase accounting adjustment (2) - - - 102 - 102 - Lexmark - fixed asset-related purchase accounting adjustment - - - 16 11 25 11 Adjusted Gross Profit and Margin $ 2,011 32.3% $ 433 29.7% $ 461 29.3% $ 566 28.9% $ 594 29.3% $ 2,052 29.2% $ 560 30.3% (1) Total revenues and cost of revenue (2) Reflects a purchasing accounting adjustment related to the acqusition of Lexmark, for cost associated with a net inventory write up Adjusted Gross Profit and Margin Reconciliation - Print and Other (in millions) FY-24 Q1-25 Q2-25 Q3-25 Q4-25 FY-25 Q1-26 Revenue (1) $ 5,864 $ 1,294 $ 1,366 $ 1,739 $ 1,873 $ 6,272 $ 1,692 Cost of revenue (1) 3,960 895 950 1,338 1,331 4,511 1,173 Gross Profit and Margin 1,904 32.5% 399 30.8% 416 30.5% 401 23.1% 542 28.9% 1,761 28.1% 519 30.7% Adjustment: Inventory-related impact - exit of certain Production Print manufacturing operations 51 7 10 3 4 24 - Lexmark - inventory-related purchase accounting adjustment (2) - - - 102 - 102 - Lexmark - fixed asset-related purchase accounting adjustment - - - 16 11 25 11 Adjusted Gross Profit and Margin $ 1,955 33.3% $ 406 31.4% $ 426 31.2% $ 522 30.0% $ 557 29.8% $ 1,912 30.5% $ 530 31.3% (1) Total revenues and cost of revenue (2) Reflects a purchasing accounting adjustment related to the acqusition of Lexmark, for cost associated with a net inventory write up Adjusted Operating Income and Margin Reconciliation FY-24 Q1-25 Q2-25 Q3-25 Q4-25 FY-25 Q1-26 (Loss) (Loss) (Loss) (Loss) (Loss) (Loss) (Loss) (in millions) Profit Revenue Margin Profit Revenue Margin Profit Revenue Margin Profit Revenue Margin Profit Revenue Margin Profit Revenue Margin Profit Revenue Margin Reported (1) $ (1,321) $ 6,221 $ (90) $ 1,457 $ (106) $ 1,576 $ (760) $ 1,961 $ (73) $ 2,028 $ (1,029) $ 7,022 $ (105) $ 1,846 Income tax (benefit) expense 105 23 46 460 12 541 32 Pre-tax (loss) income $ (1,216) $ 6,221 (19.5%) $ (67) $ 1,457 (4.6%) $ (60) $ 1,576 (3.8%) $ (300) $ 1,961 (15.3%) $ (61) $ 2,028 (3.0%) $ (488) $ 7,022 (6.9%) $ (73) $ 1,846 (4.0%) Adjustments: Goodwill impairment 1,058 - - - - - - Restructuring and related costs, net 112 (1) 10 59 (2) 66 45 Amortization of intangible assets 73 10 10 30 33 83 30 Divestitures 47 (4) - - - (4) - Transformation-related costs (2) 12 6 3 3 5 17 2 Transaction and related costs, net 7 3 6 23 2 34 4 Inventory impact related to the exit of certain Production Print manufacturing operations (3) 51 7 10 3 4 24 - Lexmark - inventory-related purchase accounting adjustment (4) - - - 102 - 102 - Lexmark - fixed asset-related purchase accounting adjustment - - - 16 13 29 11 Lexmark - settlement of pre-existing employment agreements - - - 24 1 25 - Non-financing interest expense 119 33 55 80 80 248 84 Other expenses, net (5) 39 35 25 25 27 112 (31) Adjusted $ 302 $ 6,221 4.9% $ 22 $ 1,457 1.5% $ 59 $ 1,576 3.7% $ 65 $ 1,961 3.3% $ 102 $ 2,028 5.0% $ 248 $ 7,022 3.5% $ 72 $ 1,846 3.9% (1) Net Income (Loss) (2) In the first quarter of 2026, Xerox Holdings Corporation renamed "Reinvention-related costs" to "Transformation-related costs." This change in terminology did not affect the nature of the costs. (3) Reflects inventory-related charges and the cancellation of related purchase contracts as a result of the exit of certain production print manufacturing operations. (4) Reflects a purchase accounting adjustment related to the recent acquisition of Lexmark, for cost associated with a net inventory write up. (5) Includes non-service retirement-related costs. Q1 2026 includes a gain of $56 million related to the early repayment of a portion of our 5.5% Senior Unsecured Notes due August 2028 (the "2028 Senior Unsecured Notes"). Adjusted EBITDA and Margin Reconciliation FY-24 Q1-25 Q2-25 Q3-25 Q4-25 FY-25 Q1-26 (Loss) (Loss) (Loss) (Loss) (Loss) (Loss) (in millions) Profit Revenue Margin Profit Revenue Margin Profit Revenue Margin Profit Revenue Margin Profit Revenue Margin Profit Revenue Margin Profit Revenue Margin Reported (1) $ (1,321) $ 6,221 $ (90) $ 1,457 $ (106) $ 1,576 $ (760) $ 1,961 $ (73) $ 2,028 (1,029) $ 7,022 $ (105) $ 1,846 Adjustments: Non-financing interest expense 119 33 55 80 80 248 84 Other expenses, net (2) 39 35 25 25 27 112 (31) Income tax (benefit) expense 105 23 46 460 12 541 32 Depreciation and amortization (3) 274 60 57 107 107 331 100 Goodwill impairment 1,058 - - - - - - EBITDA (4) $ 274 $ 6,221 4.4% $ 61 $ 1,457 4.2% $ 77 $ 1,576 4.9% $ (88) $ 1,961 (4.5)% $ 153 $ 2,028 7.5% $ 203 $ 7,022 2.9% $ 80 $ 1,846 4.3% Adjustments: Stock-based compensation 52 12 14 7 12 45 9 Restructuring and related costs, net (5) 112 (1) 10 59 (2) 66 45 PARC donation - - - - - - - Divestitures 47 (4) - - - (4) - Transformation-related costs (6) 12 6 3 3 5 17 2 Transaction and related costs, net 7 3 6 23 2 34 4 Inventory impact related to the exit of certain Production Print manufacturing operations (7) 51 7 10 3 4 24 - Lexmark - inventory-related purchase accounting adjustment (8) - - - 102 - 102 - Lexmark - settlement of pre-existing employment agreements - - - 24 1 25 - Adjusted EBITDA (9) $ 555 $ 6,221 8.9% $ 84 $ 1,457 5.8% $ 120 $ 1,576 7.6% $ 133 $ 1,961 6.8% $ 175 $ 2,028 8.6% $ 512 $ 7,022 7.3% $ 140 $ 1,846 7.6% (1) Net Income (Loss) (2) Other expenses, net, includes certain other non-operating costs, expenses, gains and losses. Q1 2026 includes a gain of $56 million related to the early repayment of a portion of our 5.5% Senior Unsecured Notes due August 2028 (the "2028 Senior Unsecured Notes"). Prior period amounts have been conformed to the current presentation. (3) Excludes amortization of customer contract costs (4) EBITDA includes Financing Revenues and Cost of financing, for all periods presented as these amounts are associated with XFS. (5) Restructuring and related costs, net include restructuring and asset impairment charges as well as costs associated with our transformation programs beyond those normally included in restructuring and asset impairment charges. (6) In the first quarter of 2026, Xerox Holdings Corporation renamed "Reinvention-related costs" to "Transformation-related costs." This change in terminology did not affect the nature of the costs. (7) Reflects inventory-related charges and the cancellation of related purchase contracts as a result of the exit of certain production print manufacturing operations. (8) Reflects a purchase accounting adjustment related to the recent acquisition of Lexmark, for cost associated with a net inventory write up. (9) EBITDA & Adj. EBITDA included above are internal measures used by Management to assess performance. The amounts and related calculation are different than consolidated EBITDA determined as part of our Credit Facility financial maintenance covenants. Free Cash Flow Reconciliation (in millions) FY-24 Q1-25 Q2-25 Q3-25 Q4-25 FY-25 Q1-26 Net cash provided by (used in) operating activities $511 ($89) ($11) $159 $208 $224 ($144) Less: capital expenditures 44 20 19 28 24 91 21 Free Cash Flow $467 ($109) ($30) $131 $184 $133 ($165) Adjusted Operating Income - Guidance (in millions) FY 2026 Estimated Pre-tax (loss) ~$(170) Adjustments: Restructuring and related costs, net 70 Amortization of intangible assets 120 Non-financing interest expense 340 Other expenses, net (1) 115 Estimated Adjusted Operating Income (2) ~$450-500 (1) Other expenses, net includes approximately $85 million related to non-service retirement-related costs. (2) Adjusted pre-tax income reflects the the adjusted operating income midpoint of $475 million Free Cash Flow - Guidance Estimated Net cash provided by operating activites ~$350 (in millions) FY 2026 Less: capital expenditures 100 Estimated Free Cash Flow ~$250 Pro Forma Financial Measures To better understand the trends in our business, we discuss our 2026 operating results by comparing them against 2025 pro forma results. The 2025 pro forma results include estimated results of Lexmark. Lexmark is included in our 2025 results as of July 1, 2025, the effective date of acquisition. We refer to comparisons against these adjusted results as "pro-forma" basis comparisons. The pro forma information has been prepared in accordance with Article 11 of Regulation S-X, "Pro Forma Financial information." The pro forma information is presented to facilitate comparisons with our results following the acquisition. Lexmark's 2025 historical results have been adjusted to reflect the costs of financing the transactions, fair value adjustments related to inventory, real and personal property (equipment and computer hardware and software) and intangible assets. In addition, adjustments were made to conform Lexmark's accounting policies to those of Xerox, including deferred revenue and inventory. In accordance with Article 11 of Regulation S-X, these proforma results exclude adjustments associated with transaction related costs which are already included in the historical financial statements. We believe comparisons on a pro-forma basis are more meaningful than the actual comparisons given the size and nature of the Lexmark acquisition. We believe the pro forma basis comparisons allow investors to have a better understanding and additional perspective of the expected trends in our business as well as the impact of the Lexmark acquisition on the Company's operations. The pro forma financial information is based upon available information and assumptions that we believe are reasonable and is for illustrative purposes only. The pro forma combined financial information below should be read in conjunction with the consolidated financial statements and related notes to our 2025 Form 10-K. Management believes that these non-GAAP financial measures provide an additional means of analyzing the current periods' results against the corresponding prior periods' results. However, these non-GAAP financial measures should be viewed in addition to, and not as a substitute for, the Company's reported results prepared in accordance with GAAP. Our non-GAAP financial measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures and should be read only in conjunction with our consolidated financial statements prepared in accordance with GAAP. Our management regularly uses our supplemental non-GAAP financial measures internally to understand, manage and evaluate our business and make operating decisions. These non-GAAP measures are among the primary factors management uses in planning for and forecasting future periods. Compensation of our executives is based in part on the performance of our business based on these non-GAAP measures. A reconciliation of these non-GAAP financial measures and the most directly comparable measures calculated and presented in accordance with GAAP are set forth on the following tables. Certain pro forma monetary amounts, percentages, and other financial figures included in the Company's first quarter 2026 earnings materials, including the prepared remarks, investor presentation, and press release have been subject to rounding adjustments. Accordingly, minor differences may exist among such materials. These variances, which result solely from rounding, are not considered material. Pro Forma Revenue - Print and Other As reported Pro Forma (1) Pro Forma (1) % (in millions) Q1-26 Q1-25 Q1-25 % Change Change Equipment sales $ 378 $ 284 $ 387 33.1% (2.3)% Supplies, paper and other sales 437 168 446 160.1% (2.0)% Service, maintenance, rentals and other 816 763 841 6.9% (3.0)% Xerox Financial Services 61 79 79 (22.8)% (22.8)% Post sale revenue $ 1,314 $ 1,010 $ 1,366 30.1% (3.8)% Total Print and Other Revenue $ 1,692 $ 1,294 $ 1,753 30.8% (3.5)% (1) Reflects the inclusion of Lexmark's estimated results from January 1, 2025 through March 31, 2025. Lexmark's actual results are included in Xerox's reported results beginning on July 1, 2025, the effective date of the acquisition. Pro Forma Segment Revenue and Profit As re ported Pro Forma (2) (in millions) Q1-26 Q1-25 Q1-25 % Change Pro Forma (2) % Change Revenue Print & Other $ 1,692 $ 1,294 $ 1,753 30.8% (3.5)% IT Solutions 156 164 164 (4.9)% (4.9)% Intersegment elimination (1) (2) (1) (1) NM NM Total Revenues $ 1,846 $ 1,457 $ 1,916 26.7% (3.7)% Adjusted Gross Profit Print & Other $ 530 $ 406 $ 565 30.5% (6.2)% IT Solutions 30 28 28 7.1% 7.1% Total Adjusted Gross Profit $ 560 $ 434 $ 593 29.0% (5.6)% Adjusted Gross Profit Margin Print & Other 31.3% 31.4% 32.2% (0.1) pts (0.9) pts IT Solutions 19.5% 17.2% 17.2% 2.3 pts 2.3 pts Total Adjusted Gross Profit Margin 30.3% 29.7% 30.9% 0.6 pts (0.6) pts Segment Profit Print & Other $ 87 $ 41 $ 94 112.2% (7.4)% IT Solutions 6 5 5 20.0% 20.0% Corporate (21) (24) (28) (12.5)% (25.0)% Total Adjusted Operating Profit $ 72 $ 22 $ 71 227.3% 1.4% Adjusted Operating Profit Margin Print & Other 5.1% 3.2% 5.4% 1.9 pts (0.3) pts IT Solutions 3.9% 3.1% 3.1% 0.8 pts 0.8 pts Total Adjusted Operating Profit Margin 3.9% 1.5% 3.7% 2.4 pts 0.2 pts (1) Reflects primarily IT hardware, software solutions and services, sold by the IT Solutions segment to the Print and Other segment. (2) Reflects the lnclusion of Lexmark estimated results from January 1, 2025 through March 31, 2025 Pro Forma Adjusted Operating Income and Margin Reconciliation As Reported Pro Forma (2) (in millions) Q1-26 (Loss) Profit Q1-25 (Loss) Profit Q1-25 (Loss) Profit Change Pro Forma (2) Change Reported (1) $ (105) $ (90) $ (132) $ (15) $ 27 Income tax expense 32 23 23 9 9 Pre-tax (loss) income $ (73) $ (67) $ (109) $ (6) $ 36 Adjustments: Restructuring and related costs, net 45 (1) (2) 46 47 Amortization of intangible assets 30 10 31 20 (1) Divestitures - (4) (4) 4 4 Transformation-related costs (3) 2 6 6 (4) (4) Transaction and related costs, net 4 3 5 1 (1) Inventory impact related to the exit of certain Production Print manufacturing operations (4) - 7 7 (7) (7) Lexmark - f ixed asset-related purchase accounting adjustment 11 - 21 11 (10) Non-financing interest expense (5) 84 33 33 51 51 Other (income) expenses, net (6) (31) 35 83 (66) (114) Adjusted $ 72 $ 22 $ 71 $ 50 $ 1 Revenue $ 1,846 $ 1,457 $ 1,916 $ 389 $ (70) Adjusted Operating Income Margin 3.9% 1.5% 3.7% 2.4 pts 0.2 pts (1) Net (Loss) (2) Reflects the inclusion of Lexmark's estimated results from January 1, 2025 through March 31, 2025. Lexmark's actual results are included in Xerox's reported results beginning on July 1, 2025, the effective date of the acquisition. (3) In the first quarter of 2026, Xerox Holdings Corporation renamed "Reinvention-related costs" to "Transformation-related costs." This change in terminology did not affect the nature of the costs. (4) Reflects inventory-related charges and the cancellation of related purchase contracts as a result of the exit of certain production print manufacturing operations. (5) Reflects interest expense primarily related to the recently completed borrowings in support of the Lexmark acquisition financing, repayment of existing borrowings and general corporate purposes, as well as interest related to the funding from the Joint Venture Financing arrangement entered into with TPG in the first quarter of 2026. (6) Includes non-service retirement-related costs as well as a gain of $56 million related to the early repayment of a portion of our 5.5% Senior Unsecured Notes due August 2028 (the "2028 Senior Unsecured Notes"). Unaudited Lexmark Historical Financial Results Q1-24 Q2-24 Q3-24 Q4-24 FY-24 Q1-25 Q2-25 (3) Revenue (1) 541 546 567 593 2,247 511 517 COGS 391 370 386 404 1,550 357 364 Gross Profit 150 177 181 189 697 154 154 Operating Expenses 138 70 124 978 1,311 121 152 Operating Income 12 106 57 (789) (614) 34 1 Adjusted Operating Income (2) 30 72 72 61 235 51 53 Margin 5.5% 13.2% 12.7% 10.3% 10.5% 10.0% 10.3% Adjusted EBITDA (2) 45 87 84 75 291 59 66 Margin 8.3% 15.9% 14.8% 12.6% 13.0% 11.5% 12.8% Earnings Before Income Taxes (5) 84 35 (814) (700) 13 (12) Provision for Income Taxes (15) 38 16 4 43 11 39 Net Income 9 46 19 (817) (743) 2 (51) Reconciliations Lexmark Net Income (Loss) 9 46 19 (817) (743) 2 (51) Depreciation and Amortization 26 26 23 24 99 18 23 Provision (Benefit) for Income Taxes (15) 38 16 4 43 11 39 Interest Expense, Net 18 20 20 20 78 19 20 Goodwill Impairment - - - 681 681 - - Tradename Impairment - - - 160 160 - - Gain / (Loss) on Foreign Exchange (1) (1) - - (2) - 1 Other Non-Operating Income / (Expense) - 3 1 6 10 2 (7) EBITDA 37 132 79 78 326 52 25 Restructuring Expense (1) (3) (1) (1) (6) - - (Gain) / Loss on Foreign Exchange - (1) 4 (3) - 4 9 (Gain) / Loss on Fixed Assets 2 (43) 1 1 (39) - - One-Time Costs 7 2 1 - 10 3 32 Adjusted EBITDA (2) 45 87 84 75 291 59 66 Adjusted EBITDA (2) 45 87 84 75 291 59 66 Depreciation (15) (15) (12) (14) (56) (8) (13) Adjusted Operating Income (2) 30 72 72 61 235 51 53 (1) Total revenue includes sales of equipment and supplies to Xerox of $257 million in 2024 and $81 million in H1 2025; (2) Adjusted EBITDA and Adjusted Operating Income included above are internal measures used by Management to assess performance; (3) Preliminary © 2026 Xerox Corporation. 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