Xerox Provides Updates on Q1 Results and Tariff Impact

Xerox Provides Updates on Q1 Results and Tariff Impact

Xerox just released its financial results for the first quarter of 2025, which also outlined the company’s stance and responses to the recent tariff issues.

Revenue declined from USD 1,502 million to USD 1,457 million year-over-year, marking the smallest decrease since Q1 2024, when a sharp decline of more than 10% was recorded. The Print & Other segment generated total revenue of USD 1,294 million, down 9.4%, of which USD 1,010 million came from post-sale services, representing a decline of 11.2%.

As an update on the pending acquisition of Lexmark, Xerox also disclosed Lexmark’s performance in 2024. Revenue increased by 9% to USD 2,247 million, and operating income surged by 39% to USD 235 million. The acquisition is proceeding as planned, and the remaining regulatory clearances are expected to be completed by the end of June.

In the first quarter, Xerox reported stable demand for print and IT products, which remained temporarily unaffected by recent tariff policies. However, the surcharges were expected to take effect in April and impact customers on a phased basis. The extent of this impact is generally difficult to estimate, particularly if new policies continue to be introduced unpredictably. Overall, Xerox forecasts that demand may remain stable in Q2. Performance in the second half of the year will depend on the tariff surcharges and how the market absorbs these cost increases.

Excluding China, Xerox reported that only a small portion—approximately 10%—of its U.S. sales were affected by reciprocal tariffs. Products subject to China tariffs are expected to be further reduced through ongoing initiatives to decrease China-sourced components by the end of 2025. Nevertheless, operating income remains vulnerable to incremental tariff costs, which are projected to decrease by USD 50 million in 2025. If tariffs on Chinese imports can be reduced from the current 145% to 60%, the negative impact could be further mitigated.

Related:

• Xerox to Acquire Lexmark from Ninestar
• Xerox Toner Faces More than Rumor Challenges
• Xerox Sued for Misleading Investors Amid Financial Decline
• Ninestar Records Robust Profit Improvement in Q3 2024
• Lexmark Introduces 9-series A3 Printer

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