Xerox Holdings (XRX) has opened 2026 earnings season on a weak footing, with Q1 2026 coming on the heels of Q4 2025 revenue of US$2.0 billion, a basic EPS loss of US$0.59 and net income loss of US$76 million, compared with Q4 2024 revenue of US$1.6 billion, a basic EPS loss of US$0.19 and net income loss of US$24 million. Over the past few quarters, revenue has moved from US$1.5 billion in Q3 2024 to US$1.6 billion in Q4 2024 and then US$1.5 billion, US$2.0 billion and US$2.0 billion across Q1, Q2 and Q3 2025, while quarterly EPS losses have ranged from US$0.75 to US$9.72, underscoring pressure on margins and keeping the focus firmly on whether this latest update shows any sign of earnings stabilising.

See our full analysis for Xerox Holdings.

With the headline numbers on the table, the next step is to see how this earnings profile lines up against the widely held narratives about Xerox, testing which stories about its profitability and outlook still hold up and which ones the latest figures start to challenge.

Losses Stack Up Over Trailing 12 Months

• Over the trailing 12 months to Q4 2025, Xerox booked about US$7.0b of revenue and a net income loss of US$1.0b, with basic EPS at a loss of US$8.25.
• Analysts' consensus view expects organizational changes and acquisitions to help margins and cash generation in time. However, the trailing loss growth of about 42.9% per year and the US$1.0b loss highlight how far current profitability is from that bullish margin improvement story.
  • The consensus narrative talks about cost savings and improved free cash flow, while the data shows operating performance that has not covered debt or the dividend over the last year.
  • Plans for more than 100 reinvention initiatives sit against a recent history where earnings have stayed negative and the company has remained unprofitable.

Revenue Holds Near US$2.0b While Profitability Lags

• Quarterly revenue moved between US$1.5b and US$2.0b from Q3 2024 through Q4 2025, but every one of those quarters came with a net income loss, ranging from US$24 million to US$1.2b.
• Supporters pointing to acquisitions like ITsavvy and Lexmark as potential stabilizers of revenue and operating income margins face a mixed picture. Revenue has hovered in a relatively tight band, but losses, including the US$764 million and US$1.2b hits in Q3 2025 and Q3 2024, show the bearish concern about earnings pressure is still well grounded.
  • Bears highlight the 9.7% revenue decline in 2024 and reduced sales force productivity, which align with the pattern of continued net losses across these quarters.
  • The rationalization of high end production print and reduced finance receivable benefits in the narrative are consistent with the data showing no profitable quarter in this period.

Skeptics watching these recurring losses may want to see how the more cautious case stacks up against the numbers 🐻 Xerox Holdings Bear Case.

Valuation Gap Versus DCF Fair Value

• The current share price of US$2.25 sits far below the stated DCF fair value of about US$13.93, even as the company reports a recent annual loss of about US$1.0b and remains unprofitable.
• Supporters of a more optimistic stance argue that new operating units and cost programs could eventually close that valuation gap. At the same time, the combination of multi year loss growth of about 42.9% and expectations for roughly 1% annual revenue decline means the bullish case would need a significant shift in earnings power compared with what the trailing 12 month figures show.
  • Elevated share price volatility and high leverage relative to operating cash flow in the risk summary sit awkwardly alongside the large gap between the share price and DCF fair value.
  • The dividend yield of about 4.44% is not covered by earnings, which also challenges the idea that the current valuation simply reflects temporary issues.

Next Steps

To see how these results tie into long-term growth, risks, and valuation, check out the full range of community narratives for Xerox Holdings on Simply Wall St. Add the company to your watchlist or portfolio so you'll be alerted when the story evolves.

Cautious after reviewing these results, or seeing potential for a turnaround, either way it helps to look through the details yourself and weigh both sides using our 2 key rewards and 4 important warning signs

See What Else Is Out There

Recurring net income losses, trailing 12 month EPS of US$8.25 in the red and an uncovered dividend all point to meaningful earnings and balance sheet pressure.

If you are concerned about those ongoing losses and want ideas with steadier finances and less downside risk, check out the 74 resilient stocks with low risk scores.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.