Xerox (XRX) Morgan Stanley Technology, Media & Telecom Conference 2026 summary

Strategic direction and integration

• Recent combination with Lexmark brings proprietary A4 technology, in-house manufacturing, and Global Business Services, enabling significant cost synergies and operational efficiencies.

• The combined entity leverages complementary market strengths, with Lexmark's enterprise and Asia presence and Xerox's brand recognition, opening new growth opportunities in under-indexed regions.

• The strategy remains focused on stabilizing revenue, expanding margins, and deleveraging, supported by acquisitions like ITsavvy and Lexmark.

• Cross-selling IT solutions to a broader customer base is a key growth lever, aiming to increase wallet share and diversify beyond print.

• Execution and focus are emphasized to avoid distractions and ensure alignment with core goals.

Print and IT solutions outlook

• Print market is declining low to mid-single digits, but opportunities exist in under-penetrated segments and regions, especially Asia and color printing.

• IT solutions business is growing 5%-7% annually, with ambitions to expand from 10%-15% to 20% of total business in the midterm.

• Cross-selling to 200,000 print customers from a base of 12,000 IT customers is expected to drive significant growth.

• Demand remains strong in large enterprise and government sectors, with education and SMBs being more variable.

• Gross billings and cross-selling penetration are key milestones for tracking IT solutions progress.

Margin expansion and cost synergies

• Margin expansion is targeted through higher-value IT products and over $1 billion in reinvention savings, including $300+ million in Lexmark acquisition synergies.

• In-house manufacturing in Mexico reduces costs and avoids tariffs, improving A3 product margins.

• Reinvention initiatives have shifted from workforce reduction to consolidation and operational execution, with all major building blocks now in place.

• Memory cost inflation is managed by advising customers on refresh timing and passing through costs where necessary.

• Operating margin targets are set at 10%+, driven by disciplined cost management and synergy realization.