Xerox (XRX) Citi’s 2026 Global TMT Conference summary

Revenue stabilization and growth strategy

• Revenue is guided at $7.5 billion for the year, with $1 billion each from IT solutions/digital services and production print, and $5.5 billion from traditional office print, which faces the most secular headwinds.

• Growth in the challenged office print segment is targeted through a gainshare and mix shift strategy, leveraging the Lexmark acquisition for end-to-end technology control and service differentiation.

• Enhanced reliability, AI-driven predictive maintenance, and improved customer experience are expected to drive market share gains and margin expansion.

• Pipeline momentum is attributed to this differentiated value proposition, with recent wins including a $5 million annual global managed print services engagement.

• Market share gains are focused on A4 and A3 segments, with a mix shift from mid-range to low-end products, impacting equipment margins but improving overall engagement profitability.

Synergy realization and cost management

• Lexmark integration has delivered $146 million in run-rate cost savings in the first six months, with synergy targets raised to $350 million as new opportunities are identified.

• Unified sales force and transition to internally developed technology are key drivers of further cost reductions and gross margin expansion.

• Manufacturing shifts to Mexico leverage existing Lexmark footprint, minimizing incremental investment and reducing product costs by $3-$10 per unit.

• Security chips in printers protect high-margin post-sale annuities by ensuring use of authentic supplies for up to eight years.

• Additional savings are expected from systems and culture integration, with confidence in exceeding current synergy targets.

IT solutions and digital services outlook

• IT solutions business, bolstered by the ITsavvy acquisition, is being integrated to create a scalable platform and drive cross-sell opportunities to a 200,000-customer base.

• AI is a significant tailwind, boosting hardware sales and enabling new AI-driven service offerings such as IaaS and Network-as-a-Service, which improve both revenue and margins.

• The business is 75% hardware resale and 25% services, with AI adoption driving demand for AI-enabled devices and more efficient service delivery.

• Cross-sell initiatives are gaining traction, with $134 million in IT solutions pipeline sourced from print-side relationships.

• Despite hardware market volatility, AI is expected to support long-term growth in IT solutions.